B.__Eight cents per $1,000 of the financial institution's Maine assets; or

2.__Franchise tax on Maine assets only.__Thirty-nine cents per $1,000 of the financial institution's Maine assets.

Each financial institution subject to the tax under this chapter shall elect to calculate and pay tax under the method in subsection 1 or 2.__The financial institution shall make the election on its annual state tax return and the election cannot be revoked with respect to that tax year.__If a financial institution fails to make an election, the method established in subsection 1 must be used and is deemed an election for purposes of this section.

In each taxable year in which a financial institution sustains a book net operating loss, a credit must be allowed against the franchise tax on assets under subsection 1.__The credit must be computed by multiplying the book net operating loss by the applicable franchise tax rate imposed by subsection 1, paragraph A.__The total amount of any credit allowed may not exceed the franchise tax on assets due under subsection 1, paragraph B.__In any tax year in which there is excess credit, the excess credit must be carried forward for no more than the next 5 tax years and may be applied against the tax computed under subsection 1.

Sec. 2. 36 MRSA §5206-E, first ¶, as enacted by PL 1997, c. 404, §5 and affected by §10, is amended to read:

Except as otherwise specifically provided, a financial institution that is taxable both in and outside this State shall apportion its net income and end-of-year assets as provided in this section. A financial institution is considered taxable in a state if in that state the financial institution is subject to a net income tax, a franchise tax measured by net income, a franchise tax for the privilege of doing business or a corporate stock tax or that state has jurisdiction to subject the financial institution to a net income tax regardless of whether, in fact, the state does or does not tax the financial institution.

Sec. 3. 36 MRSA §5206-E, sub-§1, as amended by PL 1997, c. 746, §18 and affected by §24, is further amended to read:

1. Formula applicable. All of a financial institution's Maine net income is and end-of-year assets are apportioned to this State by multiplying the income and the assets by a