Maryland State Legislature Winds Down

By Valerie Connelly, VP Government Affairs and Public Relations

The 2023 Maryland General Assembly will draw to a close in just a few days after a 90-day session that featured new leadership at the state level as Governor Wes Moore was sworn in and his administrative staff was confirmed by the Senate. House and Senate Leadership priorities included action on issues like recreational cannabis legalization, criminal justice reform and education funding.  

For Choptank Electric Cooperative, the motion to adjourn “sine die” on Monday, April 10, at midnight will bring final action on bills that impact electric members and broadband customers alike. Our team in Annapolis has been working to pass the following bills: 

HB 678 – Sales and Use Tax – Electricity for Agricultural Purposes –

This bill exempts electricity from the 6% sales and use tax when used for agricultural purposes. This includes raising livestock or poultry; preparing, irrigating or tending the soil; or activities to plant, service, harvest, store, clean, dry or transport seeds or crops. The bill would add this new exemption to the list of items already exempt from sales and use tax when used for agricultural purposes.  
Under current law, farmers who operate buildings and equipment on a residential rate with an electric utility company are exempt from sales and use tax. Farmers who have installed new meters to help with distant irrigation or fans in livestock and poultry barns are considered “commercial” and are subject to the tax under recent rulings from the Office of the Comptroller. Passage of the bill, which was introduced by Del. Sheree Sample-Hughes of the mid-Shore, would bring clarity and fairness to the use of electricity for agricultural purposes.  

HB 551 – Broadband Expansion Incentive Act of 2023 –

This bill allows a broadband company, like Choptank Fiber, to put all grant money received toward the construction and installation of broadband service to customers rather than pay income tax on the grant funds. The bill also makes the purchase of network equipment used to provide internet service exempt from the sales and use tax. Based on equipment purchased by Choptank Fiber in 2021, not paying the tax would have allowed us to reach an additional 300 unserved members with our state grants. If passed, this bill, which was in Governor Moore’s first legislative package, will help close the broadband divide faster for Choptank members who are waiting for high-speed internet service.  

Capital Budget for Fiscal Year 2024 –

Choptank staff worked closely with the Rural Maryland Council to secure authorization in the new Capital Budget for up to $100 million for broadband infrastructure, which is expected to pass through from the federal government under the new Broadband Equity, Access and Deployment (BEAD) Program later this year. Authorization in the budget will allow the Office of Statewide Broadband to issue funds through its competitive grant process without delay. Fewer delays in funding allow Choptank Fiber and our contractors to continue working to connect the next member. The Eastern Shore Delegation weighed in with a letter to the Appropriations Committee to secure this very important funding for the residents of the Eastern Shore.  
For more information on final actions in the Maryland General Assembly, log onto:
> mgaleg.maryland.gov/mgawebsite