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A07949 Summary:

BILL NOA07949A
 
SAME ASSAME AS S03389
 
SPONSORSimon
 
COSPNSRKelles, Levenberg, Seawright, Stern, Gonzalez-Rojas, Shimsky, Gallagher, Barrett, Rosenthal L, Thiele, Ardila, Epstein, Simone, Jackson, Stirpe, Hevesi, Glick, Forrest, Reyes, Kim, Steck, Shrestha, Dinowitz, Bichotte Hermelyn, Dickens, Colton, Burdick
 
MLTSPNSRDavila
 
Amd §§352, 355 & 433, Ec Dev L; amd §66, Pub Serv L; rpld §301-a sub (g) ¶4, sub (f) ¶3, §301-c subs (i), (j) & (l), §301-d, §301-e sub (f), §1105 sub (c) ¶3 sub¶ (xi), §1115 sub (a) ¶9, amd Tax L, generally; amd §3102-e, Pub Auth L
 
Limits the use of fossil fuels in the research or production of energy for purposes of the excelsior jobs program; prohibits businesses engaged in the production, transmission, distribution, transportation or storage of fossil fuels from participation in the START-UP NY program; eliminates property that directly produces, transmits, distributes, transports or stores fossil fuels from qualifying tangible property for purposes of the investment tax credit and the Brownfield redevelopment tax credit; relates to tax on sales of motor fuel and petroleum products and makes conforming changes; relates to the definition of qualified rehabilitation expenditures for purposes of the tax credit for rehabilitation of historic properties; relates to the definition of a qualified emerging technology company; relates to the definition of manufacturer for purposes of the calculation of special tax benefits for qualified New York manufacturers; repeals provisions relating to manufacturing gallonage for purposes of the imposition of certain taxes; repeals provisions relating to reimbursement; repeals provisions relating to a utility credit or reimbursement; repeals provisions relating to an aviation fuel business which services four or more cities; repeals provisions relating to services rendered with respect to certain property; repeals provisions relating to fuel sold to an airline for use in its airplanes.
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A07949 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A7949A
 
SPONSOR: Simon
  PURPOSE OR GENERAL IDEA OF BILL: The purpose of the bill is to repeal certain exemptions from sales and use tax and petroleum business tax, as well as tax incentives for a variety of economic development programs, that encourage the use of fossil fuels.   SUMMARY OF PROVISIONS: Section 1: Names the bill. Section 2-4: Removes incidental fossil fuel incentives within the Excelsior Jobs Program. Section 5: Adds fossil fuel businesses to the list of businesses prohib- ited from participating in the START-UP NY Program. Section 6: Removes incidental fossil fuel incentives from the Investment Tax Credit. Section 7: Conforming technical change. Section 8: Repeals an exemption from Petroleum Business Tax, for manu- facturing using non-highway diesel fuel and residual petroleum product. Section 9: Repeals exemptions from Petroleum Business Tax for kerosene, kerojet fuel, residual petroleum product (bunker fuel), liquefied petro- leum gases, and non-highway diesel motor fuel used for nonresidential heating purposes. Section 10: Repeals an exemption from Petroleum Business Tax for sales to the government of New York state. Section 11 and 11-a: Repeals a reimbursement for Petroleum Business Tax paid for non-highway diesel motor fuel used for non-residential heating purposes, and for motor fuel and diesel motor fuel sold to the govern- ment of New York state. Section 12: Repeals a reimbursement for Petroleum Business Tax paid for commercial gallonage, manufacturing gallonage, and gallonage used in mining and extracting. Section 13: Conforming technical change. Section 14: Repeals a credit or reimbursement for Petroleum Business Tax paid for residual petroleum product and non-highway diesel motor fuel used by an electric corporation. Section 15: Repeals an exemption from PetroleUm Business Tax for certain airlines. Section 16: Repeals an exemption from Petroleum Business Tax for commer- cial gallonage. Section 17: Removes incidental fossil fuel incentives from the Invest- ment Tax Credit. Section 18: Removes incidental fossil fuel incentives from the Brown- field Redevelopment Tax Credit. Section 19: Removes incidental fossil fuel incentives from the Rehabili- tation of Historic Properties Tax Credit. Section 20: Repeals an exemption from Sales and Use Tax for oil and gas production services. Section 21: Unrelated cleanup. Section 22: Repeals an exemption from Sales and Use Tax for airline fuel. Section 23: Repeals an exemption from Sales and Use Tax for gas used in research and development. Section 24: Repeals an exemption from Sales and Use Tax- for fuel and gas used in production of tangible personal property. Section 25 and 25-a: Conforming technical changes. Section 26: Unre- lated cleanup. Section 27: Repeals an exemption from Sales and Use Tax for gas used to maintain gas distribution infrastructure. Section 28: Conforming technical changes. Section 29: Conforming techni- cal change. Section 30: Removes incidental fossil fuel incentives from the Rehabili- tation of Historic Properties Tax Credit. Section 31: Excludes fossil fuel companies from the definition of quali- fied emerging technology companies and qualified emerging technology investments. Section 32 and 33: Excludes fossil fuel production, transmission, distribution, transportation, and storage from eligibility for special tax benefits for qualified New York manufacturers. Section 34: Effective date.   JUSTIFICATION: New York State spends over $1.5 billion every year on fossil fuel related tax expenditures, as well as an unknown sum on economic develop- ment tax expenditures that incidentally support the use of fossil fuels, distorting the market and subsidizing the emission of greenhouse gases that drive the climate crisis. Some of these tax expenditures may serve a compelling public interest such as offering heating assistance to low-income New Yorkers. However, a significant proportion of the spend- ing serves to prop-up outdated industries or reward energy inefficien- cies leading to a double cost to taxpayers - once for the direct tax expenditure and again for the environmental damage resulting from the continued burning of fossil fuels.This bill begins the process of align- ing New York state tax policy by repealing some of the more egregious fossil fuel related tax expenditures and ensuring economic development tax expenditures are not contributing to increased fossil fuel use. Repeal of these expenditures would save the state at least roughly $336 million annually, based on information available in the FY 2022 Annual Report on New York State Tax Expenditures, produced by the Division of Budget.   PRIOR LEGISLATIVE HISTORY: 2020-21: A8483 Cahill -referred to economic development   FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS: Potential savings of over $300 million annually.   EFFECTIVE DATE: This act shall take effect immediately and shall apply to all tax years commencing on or after the first of January next succeeding the date on which it shall have become a law.
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A07949 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         7949--A
 
                               2023-2024 Regular Sessions
 
                   IN ASSEMBLY
 
                                     August 18, 2023
                                       ___________
 
        Introduced  by  M.  of  A.  SIMON,  KELLES,  LEVENBERG  -- read once and
          referred  to  the  Committee  on  Economic  Development  --  committee
          discharged, bill amended, ordered reprinted as amended and recommitted
          to said committee
 
        AN ACT to amend the economic development law and the public service law,
          in  relation  to  limiting  the use of fossil fuels in the research or
          production of energy for purposes of the excelsior  jobs  program;  to
          amend  the  economic development law, in relation to prohibiting busi-
          nesses engaged in the production, transmission,  distribution,  trans-
          portation  or storage of fossil fuels from participation in the START-
          UP NY program; to amend  the  tax  law,  in  relation  to  eliminating
          property that directly produces, transmits, distributes, transports or
          stores  fossil fuels from qualifying tangible property for purposes of
          the investment tax credit and the Brownfield redevelopment tax credit;
          to amend the tax law, in relation to tax on sales of  motor  fuel  and
          petroleum    products and to make conforming changes; to amend the tax
          law, in relation to the definition of qualified rehabilitation expend-
          itures for purposes of the tax credit for rehabilitation  of  historic
          properties;  to  amend  the public authorities law, in relation to the
          definition of a qualified emerging technology company;  to  amend  the
          tax law, in relation to the definition of manufacturer for purposes of
          the  calculation  of  special  tax  benefits  for  qualified  New York
          manufacturers; to repeal paragraph 3 of subdivision (f) and  paragraph
          4 of subdivision (g) of section 301-a of the tax law relating to manu-
          facturing  gallonage for   purposes   of   the  imposition  of certain
          taxes;  to  repeal subdivisions (i), (j), and (l) of section 301-c  of
          the  tax law relating to  reimbursement;  to  repeal  section 301-d of
          the tax law relating to a utility credit or reimbursement;  to  repeal
          subdivision  (f)  of  section  301-e  of  the  tax  law relating to an
          aviation fuel business which services four or more cities; to   repeal
          subparagraph (xi) of paragraph 3 of subdivision (c) of section 1105 of
          the  tax  law  relating  to  services rendered with respect to certain
          property; and to repeal paragraph 9 of subdivision (a) of section 1115
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD08180-03-3

        A. 7949--A                          2
 
          of the  tax  law relating  to fuel sold to an airline for use  in  its
          airplanes
 
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
 
     1    Section 1. Short title. This act shall be known and may  be  cited  as
     2  the "Stop Climate Polluter Handouts Act".
     3    §  2.  Subdivisions  17, 18, 21, and 22 of section 352 of the economic
     4  development law, subdivisions 17, 18 and 21 as amended by section  1  of
     5  part  K  of chapter 59 of the laws of 2017, subdivision 18 as separately
     6  amended by section 1 of part ZZ of chapter  59  of  the  laws  of  2017,
     7  subdivision  22  as  amended  by  chapter  572  of the laws of 2022, are
     8  amended to read as follows:
     9    17. "Qualified investment" means an investment  in  tangible  property
    10  (including  a building or a structural component of a building) owned by
    11  a business enterprise which:
    12    (a) is depreciable pursuant to section one hundred sixty-seven of  the
    13  internal revenue code;
    14    (b) has a useful life of four years or more;
    15    (c)  is  acquired by purchase as defined in section one hundred seven-
    16  ty-nine (d) of the internal revenue code;
    17    (d) does not directly produce,  transmit,  distribute,  transport,  or
    18  store  fossil  fuels or directly utilize fossil fuels for the production
    19  of on-site energy, including thermal energy, for any  purpose.  For  the
    20  purposes  of this article, fossil fuel shall have the same definition as
    21  in section 1-103 of the energy law;
    22    (e) has a situs in this state; and
    23    [(e)] (f) is placed in service in the state on or after the  date  the
    24  certificate of eligibility is issued to the business enterprise.
    25    18. "Regionally significant project" means (a) a manufacturer creating
    26  at  least  ten  net new jobs in the state and making significant capital
    27  investment in the state; (b) a business creating at least  ten  net  new
    28  jobs  in agriculture in the state and making significant capital invest-
    29  ment in the state, (c) a financial services firm,  distribution  center,
    30  or  back  office operation creating at least one hundred net new jobs in
    31  the state and making significant capital investment in the state, (d)  a
    32  scientific  research  and development firm creating at least ten net new
    33  jobs in the state, and making  significant  capital  investment  in  the
    34  state, (e) a life sciences company creating at least twenty net new jobs
    35  in  the  state and making significant capital investment in the state or
    36  (f) an entertainment company creating or obtaining at least two  hundred
    37  net  new  jobs in the state and making significant capital investment in
    38  the state. Other businesses creating one hundred fifty or more  net  new
    39  jobs in the state and making significant capital investment in the state
    40  may  be  considered  eligible as a regionally significant project by the
    41  commissioner as well. A regionally  significant  project  shall  not  be
    42  engaged  in  the production, transmission, distribution, transportation,
    43  storage, sale, purchase, or delivery of fossil fuels.  The  commissioner
    44  shall promulgate regulations pursuant to section three hundred fifty-six
    45  of  this  article  to determine what additional criteria a business must
    46  meet to be eligible as a regionally significant project, including,  but
    47  not  limited to, whether a business exports a substantial portion of its
    48  products or services outside of the state or outside of  a  metropolitan
    49  statistical area or county within the state.

        A. 7949--A                          3
 
     1    21.  "Research  and development expenditures" mean the expenses of the
     2  business enterprise that  are  qualified  research  expenses  under  the
     3  federal  research  and development credit under section forty-one of the
     4  internal revenue code and are attributable to  activities  conducted  in
     5  the  state.  If the federal research and development credit has expired,
     6  then the research and development expenditures shall be calculated as if
     7  the federal research and development credit structure and definition  in
     8  effect  in  federal  tax  year  two  thousand nine were still in effect.
     9  Research and development expenditures does not include any expenses  for
    10  tangible  personal  property that directly produces, transmits, distrib-
    11  utes, transports, or stores fossil fuels  or  directly  utilizes  fossil
    12  fuels  for  the  production of on-site energy, including thermal energy,
    13  for any purpose.
    14    22. "Scientific research and development"  means  conducting  research
    15  and  experimental  development  in  the  physical, engineering, and life
    16  sciences, including but not limited to agriculture, animal fiber,  elec-
    17  tronics, environmental, biology, botany, biotechnology, computers, chem-
    18  istry, food, fisheries, forests, geology, health, mathematics, medicine,
    19  oceanography,  pharmacy,  physics,  plant  fiber,  veterinary, and other
    20  allied subjects. For the purposes of this article,  scientific  research
    21  and  development does not include medical or veterinary laboratory test-
    22  ing facilities, or any research  that  contributes  to  the  production,
    23  transmission,  distribution, transportation, storage, sale, purchase, or
    24  delivery of fossil fuels.
    25    § 3. Subdivision 7 of section 355 of the economic development law,  as
    26  amended  by  chapter  494  of  the  laws  of 2022, is amended to read as
    27  follows:
    28    7. For availability of special excelsior jobs program rates  governing
    29  the  provision of [gas or] electric service, see subdivision twelve-d of
    30  section sixty-six of the public service law. Such special excelsior jobs
    31  program rates may remain available to participants as  defined  in  this
    32  article  for a period of up to ten years commencing in the first taxable
    33  year that the participant receives a certificate of tax credit,  or  the
    34  first  taxable  year  listed  on  its  preliminary schedule of benefits,
    35  whichever is later. Notwithstanding any other provision of this section,
    36  such special excelsior job program rates shall  remain  available  to  a
    37  Green  CHIPS  project  which enters into a phase two of such project for
    38  the entirety of both of its schedules of benefits. Provided however,  if
    39  a  participant  is  removed  from the excelsior jobs program pursuant to
    40  this article, the excelsior jobs program rates may be denied.
    41    § 4. Subdivision 12-d of section 66 of  the  public  service  law,  as
    42  added  by  section  8  of  part  G of chapter 61 of the laws of 2011, is
    43  amended to read as follows:
    44    12-d. Notwithstanding any other provision of law, upon application  of
    45  [a  gas or] an electric corporation, the commission shall authorize such
    46  corporation to charge a special excelsior jobs program rate equal to the
    47  incremental cost of providing electric service to  participants  in  the
    48  excelsior  jobs  program as defined in article seventeen of the economic
    49  development law.
    50    § 5. Subdivision 2 of section 433 of the economic development law,  as
    51  added  by  section  1  of  part  A of chapter 68 of the laws of 2013, is
    52  amended to read as follows:
    53    2. The following types of businesses are prohibited from participating
    54  in the START-UP NY program.
    55    (a) retail and wholesale businesses;
    56    (b) restaurants;

        A. 7949--A                          4
 
     1    (c) real estate brokers;
     2    (d) law firms;
     3    (e) medical or dental practices;
     4    (f) real estate management companies;
     5    (g) hospitality;
     6    (h) finance and financial services;
     7    (i) businesses providing personal services;
     8    (j)  businesses providing business administrative or support services,
     9  unless such business has received permission from  the  commissioner  to
    10  apply  to participate in the START-UP NY program upon demonstration that
    11  the business would create no fewer than one hundred net new jobs in  the
    12  tax-free NY area;
    13    (k) accounting firms;
    14    (l) businesses providing utilities; [and]
    15    (m)  businesses engaged in the generation or distribution of electric-
    16  ity, the distribution of natural gas, or the production of steam associ-
    17  ated with the generation of electricity; and
    18    (n) businesses engaged in the production, transmission,  distribution,
    19  transportation,  or  storage of fossil fuels as defined in section 1-103
    20  of the energy law.
    21    § 6. Subparagraph (i) of paragraph (b) of  subdivision  1  of  section
    22  210-B of the tax law, as amended by section 2 of part P of chapter 59 of
    23  the laws of 2017, is amended to read as follows:
    24    (i)  A  credit shall be allowed under this subdivision with respect to
    25  tangible personal property and other tangible property, including build-
    26  ings and structural components  of  buildings,  which  are:  depreciable
    27  pursuant  to  section  one  hundred  sixty-seven of the internal revenue
    28  code, have a useful life of four years or more, are acquired by purchase
    29  as defined in section one  hundred  seventy-nine  (d)  of  the  internal
    30  revenue code, have a situs in this state and are (A) principally used by
    31  the  taxpayer  in  the production of goods by manufacturing, processing,
    32  assembling, refining, mining, extracting, farming,  agriculture,  horti-
    33  culture, floriculture, viticulture or commercial fishing, (B) industrial
    34  waste  treatment facilities or air pollution control facilities, used in
    35  the taxpayer's trade or business, (C) research and development property,
    36  or (D) principally used in the ordinary course of the  taxpayer's  trade
    37  or  business  as  a  broker or dealer in connection with the purchase or
    38  sale (which shall include but not be limited to the  issuance,  entering
    39  into,  assumption,  offset,  assignment,  termination,  or  transfer) of
    40  stocks, bonds or other securities as defined  in  section  four  hundred
    41  seventy-five  (c)(2)  of the Internal Revenue Code, or of commodities as
    42  defined in section four hundred seventy-five (e) of the Internal Revenue
    43  Code, (E) principally used in the  ordinary  course  of  the  taxpayer's
    44  trade  or business of providing investment advisory services for a regu-
    45  lated investment company as defined in section eight  hundred  fifty-one
    46  of the Internal Revenue Code, or lending, loan arrangement or loan orig-
    47  ination  services  to  customers in connection with the purchase or sale
    48  (which shall include but not be limited to the issuance, entering  into,
    49  assumption,  offset, assignment, termination, or transfer) of securities
    50  as defined in section four hundred seventy-five (c)(2) of  the  Internal
    51  Revenue Code, (F) principally used in the ordinary course of the taxpay-
    52  er's  business  as  an  exchange  registered  as  a  national securities
    53  exchange within the meaning of sections 3(a)(1) and 6(a) of the  Securi-
    54  ties Exchange Act of 1934 or a board of trade as defined in subparagraph
    55  one of paragraph (a) of section fourteen hundred ten of the not-for-pro-
    56  fit  corporation law or as an entity that is wholly owned by one or more

        A. 7949--A                          5
 
     1  such national securities exchanges or boards of trade and that  provides
     2  automation  or  technical services thereto, or (G) principally used as a
     3  qualified film production facility including qualified  film  production
     4  facilities  having a situs in an empire zone designated as such pursuant
     5  to article eighteen-B of the general municipal law, where  the  taxpayer
     6  is  providing  three  or  more services to any qualified film production
     7  company using the facility, including such services as a studio lighting
     8  grid, lighting and grip equipment, multi-line phone  service,  broadband
     9  information  technology  access,  industrial  scale electrical capacity,
    10  food services, security  services,  and  heating,  ventilation  and  air
    11  conditioning.  For purposes of clauses (D), (E) and (F) of this subpara-
    12  graph, property purchased by a  taxpayer  affiliated  with  a  regulated
    13  broker,  dealer,  registered  investment  advisor,  national  securities
    14  exchange or board of trade, is allowed a credit under  this  subdivision
    15  if  the  property  is  used  by its affiliated regulated broker, dealer,
    16  registered investment advisor, national securities exchange or board  of
    17  trade  in  accordance with this subdivision. For purposes of determining
    18  if the property is principally used in qualifying uses, the uses by  the
    19  taxpayer  described  in  clauses (D) and (E) of this subparagraph may be
    20  aggregated. In addition, the uses by the taxpayer, its affiliated  regu-
    21  lated  broker,  dealer and registered investment advisor under either or
    22  both of those clauses may be aggregated. Provided, however,  a  taxpayer
    23  shall  not be allowed the credit provided by clauses (D), (E) and (F) of
    24  this subparagraph unless the property is first placed in service  before
    25  October  first,  two  thousand fifteen and (i) eighty percent or more of
    26  the  employees  performing  the  administrative  and  support  functions
    27  resulting  from  or related to the qualifying uses of such equipment are
    28  located in this state or (ii)  the  average  number  of  employees  that
    29  perform  the  administrative  and  support  functions  resulting from or
    30  related to the qualifying uses of such equipment and are located in this
    31  state during the taxable year for which the credit is claimed  is  equal
    32  to  or greater than ninety-five percent of the average number of employ-
    33  ees that perform these functions and are located in  this  state  during
    34  the thirty-six months immediately preceding the year for which the cred-
    35  it  is  claimed,  or (iii) the number of employees located in this state
    36  during the taxable year for which the credit is claimed is equal  to  or
    37  greater  than  ninety percent of the number of employees located in this
    38  state on December thirty-first, nineteen hundred ninety-eight or, if the
    39  taxpayer was not a calendar year taxpayer in  nineteen  hundred  ninety-
    40  eight,  the  last  day  of  its first taxable year ending after December
    41  thirty-first, nineteen hundred ninety-eight.  If  the  taxpayer  becomes
    42  subject  to  tax in this state after the taxable year beginning in nine-
    43  teen hundred ninety-eight, then the taxpayer is not required to  satisfy
    44  the  employment test provided in the preceding sentence of this subpara-
    45  graph for its first taxable year. For purposes of clause (iii)  of  this
    46  subparagraph  the employment test will be based on the number of employ-
    47  ees located in this state on the last day of the first taxable year  the
    48  taxpayer  is  subject  to tax in this state. If the uses of the property
    49  must be aggregated to determine whether the property is principally used
    50  in qualifying uses, then either each affiliate using the  property  must
    51  satisfy  this  employment test or this employment test must be satisfied
    52  through the aggregation of the employees of the taxpayer, its affiliated
    53  regulated broker, dealer, and registered investment  adviser  using  the
    54  property.  For  purposes  of  clause  (A) of this subparagraph, tangible
    55  personal property and other tangible property shall not include property
    56  principally used by the taxpayer in the production  or  distribution  of

        A. 7949--A                          6
 
     1  electricity,  natural  gas  after extraction from wells, steam, or water
     2  delivered through pipes and mains. For  purposes  of  this  subdivision,
     3  tangible  personal property and other tangible property does not include
     4  property  that directly produces, transmits, distributes, transports, or
     5  stores fossil fuels as defined in section 1-103 of the  energy  law,  or
     6  directly  utilizes  fossil  fuels  for the production of on-site energy,
     7  including thermal energy, for any purpose.
     8    § 7. Subdivision (m) of section 301-a of the  tax  law,  as  added  by
     9  section  20  of  part K of chapter 61 of the laws of 2011, is amended to
    10  read as follows:
    11    (m) Special rate adjustment for certain vessels.  Notwithstanding  any
    12  provision of this section to the contrary, the use of non-highway diesel
    13  motor  fuel  in  the  engine  of a vessel to propel such vessel shall be
    14  subject to tax at the motor fuel and  highway  diesel  motor  fuel  rate
    15  provided  for in this section, and shall be subject to the provisions of
    16  section three hundred one-j of this article,  including  the  adjustment
    17  set  forth  in paragraph [four] three of subdivision (a) of such section
    18  three hundred one-j. A credit or refund shall be available to the extent
    19  tax paid on gallonage used to propel any such vessel exceeds the  amount
    20  of  tax  due  based on the tax rate set forth herein. Provided, however,
    21  that the commissioner shall require such documentary  proof  to  qualify
    22  for  any  credit or reimbursement provided hereunder as the commissioner
    23  deems appropriate.
    24    § 8. Paragraph 3 of subdivision (f) and paragraph 4 of subdivision (g)
    25  of section 301-a of the tax law are REPEALED.
    26    § 9. Subdivisions (a) and (d) of section 301-b of the tax law,  subdi-
    27  vision  (a)  as added by chapter 190 of the laws of 1990, paragraph 5 of
    28  subdivision (a) as amended by section 3 of part E of chapter 59  of  the
    29  laws  of  2012,  paragraphs  6,  7  and 8 of subdivision (a) as added by
    30  section 4 of part W-1 of chapter 109 of the laws of 2006,  and  subdivi-
    31  sion (d) as amended by section 21 of part K of chapter 61 of the laws of
    32  2011, are amended to read as follows:
    33    (a) Products. (1) [Kerosene sold or used by a petroleum business which
    34  is registered under article twelve-A of this chapter as a distributor of
    35  diesel  motor  fuel  so long as (i) such product has not been blended or
    36  mixed with any other product constituting diesel  motor  fuel  or  motor
    37  fuel  or  a residual petroleum product and (ii) such product is not used
    38  by the petroleum business as fuel to operate a motor vehicle or sold  by
    39  such petroleum business to a consumer for use as fuel to operate a motor
    40  vehicle.
    41    (2) Kero-jet fuel (i) sold by a petroleum business which is registered
    42  under  article twelve-A of this chapter as a distributor of diesel motor
    43  fuel to a consumer for use exclusively as jet  aircraft  fuel  or  to  a
    44  petroleum business registered under such article twelve-A as a "distrib-
    45  utor  of  kero-jet  fuel only" where such fixed base operator is engaged
    46  solely in making or offering to make retail sales not in bulk  of  kero-
    47  jet  fuel  directly into the fuel tank of an airplane for the purpose of
    48  operating such airplane, (ii) used by a petroleum  business,  registered
    49  under  article twelve-A of this chapter as a distributor of diesel motor
    50  fuel, exclusively as jet aircraft fuel, or (iii) sold at retail  not  in
    51  bulk  by  a petroleum business registered under article twelve-A of this
    52  chapter as a "distributor of kero-jet fuel  only"  where  such  fuel  is
    53  delivered  directly  into the fuel tank of a jet airplane for use in the
    54  operation of such airplane.
    55    (3)] Aviation gasoline, meeting the specifications set forth in Ameri-
    56  can Standard Testing Material Specification D910 or Military  Specifica-

        A. 7949--A                          7
 
     1  tion  MIL-G-5572,  which  is imported or caused to be imported into this
     2  state by a petroleum business which is registered under article twelve-A
     3  of this chapter as a distributor of motor  fuel  or  produced,  refined,
     4  manufactured or compounded in this state by such a petroleum business.
     5    [(4)  Residual  petroleum  product sold by a petroleum business regis-
     6  tered under this article as a residual  petroleum  product  business  if
     7  such  product  is  sold by such petroleum business to a consumer for use
     8  exclusively as bunker fuel for vessels or if such  product  is  used  by
     9  such petroleum business exclusively as bunker fuel in its own vessels.
    10    (5) Liquefied petroleum gases, such as butane, ethane or propane.
    11    (6)]  (2)  E85  imported  or  caused to be imported into this state or
    12  produced, refined, manufactured or compounded in this state by a  petro-
    13  leum  business  registered  under article twelve-A of this chapter, as a
    14  distributor of motor fuel, and then sold by such petroleum business  and
    15  delivered  to  a  filling  station  and placed in a storage tank of such
    16  filling station for such E85 to be dispensed directly into a motor vehi-
    17  cle for use in the operation of such vehicle.
    18    [(7)] (i) Partial B20 exemption. B20 imported or caused to be imported
    19  into this state or produced, refined, manufactured or compounded in this
    20  state by a petroleum business registered under article twelve-A of  this
    21  chapter,  as  a  distributor of diesel motor fuel, and then sold by such
    22  petroleum business.
    23    (ii) Calculation of partial  exemption.  The  amount  of  the  partial
    24  exemption  under  this  paragraph shall be determined by multiplying the
    25  quantity of B20 times twenty percent of the applicable  taxes  otherwise
    26  imposed by this article on such fuel.
    27    [(8)] (3) CNG or hydrogen.
    28    (d)  Sales  to consumers for heating purposes. [(1)] Total residential
    29  heating exemption. Non-highway diesel motor fuel  sold  by  a  petroleum
    30  business registered under article twelve-A of this chapter as a distrib-
    31  utor of diesel motor fuel or residual petroleum product sold by a petro-
    32  leum  business  registered  under  this  article as a residual petroleum
    33  product business to the consumer  exclusively  for  residential  heating
    34  purposes  only if such non-highway diesel motor fuel is delivered into a
    35  storage tank which is not equipped with a hose  or  other  apparatus  by
    36  which  such  fuel can be dispensed into the fuel tank of a motor vehicle
    37  and such storage tank is attached to the heating unit burning such fuel.
    38    [(2) Partial non-residential heating exemption. (A) Non-highway diesel
    39  motor fuel  sold  by  a  petroleum  business  registered  under  article
    40  twelve-A  of this chapter as a distributor of diesel motor fuel or resi-
    41  dual petroleum product sold by a  petroleum  business  registered  under
    42  this  article  as  a residual petroleum product business to the consumer
    43  exclusively for heating, other than residential heating purposes only if
    44  such non-highway diesel motor fuel is  delivered  into  a  storage  tank
    45  which  is not equipped with a hose or other apparatus by which such fuel
    46  can be dispensed into the fuel tank of a motor vehicle and such  storage
    47  tank  is  attached to the heating unit burning such fuel (B) Calculation
    48  of partial exemption. The partial exemption under this  paragraph  shall
    49  be  determined  by  multiplying the quantity of non-highway diesel motor
    50  fuel and residual petroleum product eligible for the exemption times the
    51  sum of the then current rate of the supplemental tax imposed by  section
    52  three  hundred  one-j  of this article and forty-six percent of the then
    53  current rate of the tax imposed by section three hundred one-a  of  this
    54  article,  with  respect to the specific non-highway diesel motor fuel or
    55  residual petroleum product rate, as the case may be.]

        A. 7949--A                          8
 
     1    § 10. The subdivision heading and paragraph 1 of  subdivision  (c)  of
     2  section  301-b  of  the  tax law, as added by chapter 190 of the laws of
     3  1990, are amended to read as follows:
     4    Sales  to  [New York state and] the federal government. (1) Motor fuel
     5  imported or caused to be imported into this state or produced,  refined,
     6  manufactured  or compounded in this state by a petroleum business regis-
     7  tered under article twelve-A of this chapter, as a distributor of  motor
     8  fuel,  and  then  sold  by  such  petroleum  business to an organization
     9  described in paragraph [one or] two of subdivision (a) of section eleven
    10  hundred sixteen of this chapter where such motor fuel is  used  by  such
    11  organization for its own use or consumption.
    12    §  11.  The  opening paragraph and subdivisions (a) and (b) of section
    13  301-c of the tax law, the opening paragraph as amended by section  2  of
    14  part  T of chapter 59 of the laws of 2022, subdivision (a) as amended by
    15  section 23 of part K of chapter 61 of the laws of 2011, and  subdivision
    16  (b)  as  amended by chapter 330 of the laws of 1991, are amended to read
    17  as follows:
    18    A subsequent purchaser shall be eligible for reimbursement of tax with
    19  respect to the following gallonage, subsequently sold by such  purchaser
    20  in  accordance  with  subdivision  (a), (b), (e), (h), [(j), (k), (n) or
    21  (o)] (i), (k) or (l) of this  section  or  used  by  such  purchaser  in
    22  accordance  with  subdivision (c), (d), (f), (g), [(i), (l), (m)] (j) or
    23  (q) of this section, which gallonage has been included in the measure of
    24  the tax imposed by this article on a petroleum business:
    25    (a) [Non-highway Diesel motor fuel used  for  heating  purposes.  (1)]
    26  Total  residential  heating reimbursement. Non-highway Diesel motor fuel
    27  purchased in this state and sold by such purchaser to a consumer for use
    28  exclusively for residential heating purposes but  only  where  (i)  such
    29  non-highway  diesel motor fuel is delivered into a storage tank which is
    30  not equipped with a hose or other apparatus by  which  such  non-highway
    31  Diesel motor fuel can be dispensed into the fuel tank of a motor vehicle
    32  and  such storage tank is attached to the heating unit burning such non-
    33  highway Diesel motor fuel, (ii) the tax imposed pursuant to this article
    34  has been paid with respect to such non-highway diesel motor fuel and the
    35  entire amount of such tax has been absorbed by such purchaser, and (iii)
    36  such purchaser possesses documentary proof satisfactory to  the  commis-
    37  sioner  evidencing  the absorption by it of the entire amount of the tax
    38  imposed pursuant to this article. Provided, however,  that  the  commis-
    39  sioner is authorized, in the event that the commissioner determines that
    40  it  would  not threaten the integrity of the administration and enforce-
    41  ment of the tax imposed by this article, to provide a reimbursement with
    42  respect to a retail sale to a consumer for residential heating  purposes
    43  of  less than ten gallons of non-highway diesel motor fuel provided such
    44  fuel is not dispensed into the tank of a motor vehicle.
    45    [(2) Partial non-residential heating  reimbursement.  (A)  Non-highway
    46  Diesel  motor fuel purchased in this state and sold by such purchaser to
    47  a consumer for use exclusively for heating, other than  for  residential
    48  heating  purposes, but only where (i) such non-highway diesel motor fuel
    49  is delivered into a storage tank which is not equipped with  a  hose  or
    50  other  apparatus  by  which  such  non-highway  Diesel motor fuel can be
    51  dispensed into the fuel tank of a motor vehicle and such storage tank is
    52  attached to the heating unit burning such non-highway Diesel motor fuel,
    53  (ii) the tax imposed pursuant to this article has been paid with respect
    54  to such non-highway diesel motor fuel and the entire amount of such  tax
    55  has  been absorbed by such purchaser, and (iii) such purchaser possesses
    56  documentary  proof  satisfactory  to  the  commissioner  evidencing  the

        A. 7949--A                          9

     1  absorption  by  it  of  the entire amount of the tax imposed pursuant to
     2  this article.
     3    (B)  Calculation  of  partial reimbursement. Notwithstanding any other
     4  provision of this article, the amount of the  reimbursement  under  this
     5  paragraph shall be determined by multiplying the quantity of non-highway
     6  diesel  motor  fuel  eligible for the reimbursement times the sum of the
     7  then current rate of the  supplemental  tax  imposed  by  section  three
     8  hundred  one-j of this article and forty-six percent of the then current
     9  rate of the tax imposed by section three hundred one-a of this  article,
    10  with  respect to the non-highway diesel motor fuel rate, as the case may
    11  be.]
    12    (b) Sales to [New York state and] the federal government.  Motor  fuel
    13  and diesel motor fuel purchased in this state and sold by such purchaser
    14  in  this state to an organization described in paragraph [one or] two of
    15  subdivision (a) of section eleven hundred sixteen of this chapter  where
    16  (i)  such motor fuel or diesel motor fuel is for such organization's own
    17  use or consumption, (ii) the tax imposed pursuant to  this  article  has
    18  been  paid  with respect to such motor fuel or diesel motor fuel and the
    19  entire amount of such tax has been absorbed by such purchaser and, (iii)
    20  such purchaser possesses documentary proof satisfactory to  the  commis-
    21  sioner  of  taxation  and finance evidencing the absorption by it of the
    22  entire amount of the tax imposed pursuant  to  this  article.  Provided,
    23  however,  that  the commissioner [of taxation and finance] shall require
    24  such documentary proof to qualify for any reimbursement of tax  provided
    25  by  this  section  as  the commissioner deems appropriate, including the
    26  expansion of any certification required pursuant to section two  hundred
    27  eighty-five-a  or two hundred eighty-five-b of this chapter to cover the
    28  taxes imposed pursuant to this article.
    29    § 11-a. The opening paragraph of section 301-c  of  the  tax  law,  as
    30  amended  by  section  3  of part T of chapter 59 of the laws of 2022, is
    31  amended to read as follows:
    32    A subsequent purchaser shall be eligible for reimbursement of tax with
    33  respect to the following gallonage, subsequently sold by such  purchaser
    34  in accordance with subdivision (a), (b), (e), (h), [(j)] or [(k)] (i) of
    35  this  section  or  used by such purchaser in accordance with subdivision
    36  (c), (d), (f), (g), [(i), (l), (m)] (j) or (q) of  this  section,  which
    37  gallonage  has  been  included in the measure of the tax imposed by this
    38  article on a petroleum business:
    39    § 12. Subdivisions (i), (j) and (l) of section 301-c of  the  tax  law
    40  are REPEALED.
    41    §  13. Subdivisions (k), (m), (n), (o) and (p) of section 301-c of the
    42  tax law are relettered subdivisions (i), (j), (k), (l) and (m).
    43    § 14. Section 301-d of the tax law is REPEALED.
    44    § 15. Subdivision (f) of section 301-e of the tax law is REPEALED.
    45    § 16. Subdivision (a) of section 301-j of the tax law, as  amended  by
    46  chapter  309 of the laws of 1996, paragraphs 1, 2, 3 and 4 as amended by
    47  section 29 of part K of chapter 61 of the laws of 2011,  is  amended  to
    48  read as follows:
    49    (a)  Imposition  of  tax.  (1)  In  addition  to  the taxes imposed by
    50  sections three hundred one-a and three hundred one-e  of  this  article,
    51  there  is  hereby  imposed  upon every petroleum business subject to tax
    52  imposed under section three hundred one-a  of  this  article  and  every
    53  aviation fuel business subject to the aviation gasoline component of the
    54  tax imposed under section three hundred one-e of this article, a supple-
    55  mental  monthly tax for each or any part of a taxable month at a rate of
    56  six and eight-tenths cents per  gallon  with  respect  to  the  products

        A. 7949--A                         10
 
     1  included  in  each  component of the taxes imposed by such section three
     2  hundred one-a and the aviation gasoline component of the tax imposed  by
     3  such section three hundred one-e of this article.
     4    (2)  [Provided,  however,  "commercial  gallonage,"  as  such  term is
     5  defined in subdivision (k) of section three  hundred  of  this  article,
     6  shall be exempt from the measure of the tax imposed under this section.
     7    (3)]  Provided, further, "railroad diesel," as such term is defined in
     8  subdivision (l) of section three  hundred  of  this  article,  shall  be
     9  exempt from the measure of the tax imposed under this section.
    10    [(4)]  (3)  Provided,  further, a separate per gallon rate shall apply
    11  with respect to highway diesel motor fuel. Such rate shall be determined
    12  by taking the adjusted rate per gallon of tax  imposed  under  paragraph
    13  one  of this subdivision as adjusted in accordance with paragraph [five]
    14  four of this subdivision and subtracting therefrom one  and  three-quar-
    15  ters  cents.    Commencing  January first, two thousand twelve, and each
    16  January thereafter, the per gallon rate  applicable  to  highway  diesel
    17  motor fuel shall be the adjusted rate under paragraph one of this subdi-
    18  vision  as  adjusted  in  accordance  with paragraph [five] four of this
    19  subdivision which commences on such date minus  one  and  three-quarters
    20  cents.  The  resulting  rate  under this paragraph shall be expressed in
    21  hundredths of a cent.
    22    [(5)] (4) Except as  herein  provided,  the  tax  imposed  under  this
    23  section  shall  be calculated in the same respective manner as the taxes
    24  imposed by section three hundred one-a and section three  hundred  one-e
    25  of  this article. Except [for section three hundred one-d and except] as
    26  otherwise provided in this section, all the provisions of  this  article
    27  applicable  to  the  taxes  imposed  by sections three hundred one-a and
    28  three hundred one-e of this article, shall apply  with  respect  to  the
    29  supplemental  tax  imposed  by  this section to the same extent as if it
    30  were respectively imposed by such sections.
    31    § 17. Subparagraph (A) of paragraph 2 of subsection (a) of section 606
    32  of the tax law, as amended by section 3 of part P of chapter 59  of  the
    33  laws of 2017, is amended to read as follows:
    34    (A)  A  credit  shall be allowed under this subsection with respect to
    35  tangible personal property and other tangible property, including build-
    36  ings and structural components  of  buildings,  which  are:  depreciable
    37  pursuant  to  section  one  hundred  sixty-seven of the internal revenue
    38  code, have a useful life of four years or more, are acquired by purchase
    39  as defined in section one  hundred  seventy-nine  (d)  of  the  internal
    40  revenue code, have a situs in this state and are (i) principally used by
    41  the  taxpayer  in  the production of goods by manufacturing, processing,
    42  assembling, refining, mining, extracting, farming,  agriculture,  horti-
    43  culture,  floriculture,  viticulture  or commercial fishing, (ii) indus-
    44  trial waste treatment facilities or air  pollution  control  facilities,
    45  used in the taxpayer's trade or business, (iii) research and development
    46  property, (iv) principally used in the ordinary course of the taxpayer's
    47  trade  or business as a broker or dealer in connection with the purchase
    48  or sale (which shall include but not be limited to the issuance,  enter-
    49  ing  into,  assumption, offset, assignment, termination, or transfer) of
    50  stocks, bonds or other securities as defined  in  section  four  hundred
    51  seventy-five  (c)(2)  of the Internal Revenue Code, or of commodities as
    52  defined in section 475(e) of the Internal Revenue Code, (v)  principally
    53  used  in  the  ordinary  course  of  the taxpayer's trade or business of
    54  providing investment advisory services for a regulated investment compa-
    55  ny as defined in section eight hundred fifty-one of the Internal Revenue
    56  Code, or lending, loan  arrangement  or  loan  origination  services  to

        A. 7949--A                         11
 
     1  customers  in  connection with the purchase or sale (which shall include
     2  but not be limited to the issuance, entering into,  assumption,  offset,
     3  assignment,  termination,  or  transfer)  of  securities  as  defined in
     4  section  four  hundred seventy-five (c)(2) of the Internal Revenue Code,
     5  or (vi) principally used as a qualified film production facility includ-
     6  ing qualified film production facilities having a  situs  in  an  empire
     7  zone  designated  as  such pursuant to article eighteen-B of the general
     8  municipal law, where the taxpayer is providing three or more services to
     9  any qualified film production company using the facility, including such
    10  services as a studio lighting grid, lighting and grip equipment,  multi-
    11  line  phone service, broadband information technology access, industrial
    12  scale electrical capacity, food services, security services,  and  heat-
    13  ing,  ventilation and air conditioning. For purposes of clauses (iv) and
    14  (v) of this subparagraph, property purchased by  a  taxpayer  affiliated
    15  with  a  regulated  broker,  dealer, or registered investment adviser is
    16  allowed a credit under this subsection if the property is  used  by  its
    17  affiliated  regulated broker, dealer or registered investment adviser in
    18  accordance with this subsection. For  purposes  of  determining  if  the
    19  property is principally used in qualifying uses, the uses by the taxpay-
    20  er  described in clauses (iv) and (v) of this subparagraph may be aggre-
    21  gated. In addition, the uses by the taxpayer, its  affiliated  regulated
    22  broker, dealer and registered investment adviser under either or both of
    23  those clauses may be aggregated. Provided, however, a taxpayer shall not
    24  be  allowed the credit provided by clauses (iv) and (v) of this subpara-
    25  graph unless (I) eighty percent or more of the employees performing  the
    26  administrative  and  support  functions resulting from or related to the
    27  qualifying uses of such equipment are located in this state, or (II) the
    28  average number of employees that perform the administrative and  support
    29  functions  resulting  from  or  related  to  the qualifying uses of such
    30  equipment and are located in this state  during  the  taxable  year  for
    31  which  the  credit  is  claimed  is equal to or greater than ninety-five
    32  percent of the average number of employees that perform these  functions
    33  and  are  located in this state during the thirty-six months immediately
    34  preceding the year for which the credit is claimed, or (III) the  number
    35  of employees located in this state during the taxable year for which the
    36  credit  is  claimed  is  equal  to or greater than ninety percent of the
    37  number of employees located in  this  state  on  December  thirty-first,
    38  nineteen  hundred  ninety-eight  or,  if the taxpayer was not a calendar
    39  year taxpayer in nineteen hundred ninety-eight,  the  last  day  of  its
    40  first  taxable year ending after December thirty-first, nineteen hundred
    41  ninety-eight. If the taxpayer becomes subject to tax in this state after
    42  the taxable year beginning in nineteen hundred  ninety-eight,  then  the
    43  taxpayer  is not required to satisfy the employment test provided in the
    44  preceding sentence of this subparagraph for its first taxable year.  For
    45  the  purposes  of  clause (III) of this subparagraph the employment test
    46  will be based on the number of employees located in this  state  on  the
    47  last  day  of  the  first taxable year the taxpayer is subject to tax in
    48  this state. If the uses of the property must be aggregated to  determine
    49  whether the property is principally used in qualifying uses, then either
    50  each  affiliate  using the property must satisfy this employment test or
    51  this employment test must be satisfied through the  aggregation  of  the
    52  employees  of the taxpayer, its affiliated regulated broker, dealer, and
    53  registered investment adviser using the property. For purposes of clause
    54  (i) of this subparagraph, tangible personal property and other  tangible
    55  property  shall not include property principally used by the taxpayer in
    56  the  production  or  distribution  of  electricity,  natural  gas  after

        A. 7949--A                         12
 
     1  extraction  from  wells,  steam,  or  water  delivered through pipes and
     2  mains. For purposes of this subsection, tangible personal  property  and
     3  other  tangible property does not include property that directly produc-
     4  es,  transmits,  distributes,  transports,  or  stores  fossil  fuels as
     5  defined in section 1-103 of the energy law, or directly utilizes  fossil
     6  fuels  for  the  production of on-site energy, including thermal energy,
     7  for any purpose.
     8    § 18. Paragraph 3 of subdivision (b) of section 21 of the tax law,  as
     9  amended  by  chapter 420 of the laws of 2006, clause (i) of subparagraph
    10  (B) as amended by section 22 of part BB of chapter 56  of  the  laws  of
    11  2015, is amended to read as follows:
    12    (3)  Qualified  tangible  property.  "Qualified  tangible property" is
    13  property described in either subparagraph (A) or  (B)  and  subparagraph
    14  (C) of this paragraph which:
    15    (A)  (i) is depreciable pursuant to section one hundred sixty-seven of
    16  the internal revenue code,
    17    (ii) has a useful life of four years or more,
    18    (iii) has been acquired by purchase as defined in section one  hundred
    19  seventy-nine (d) of the internal revenue code,
    20    (iv) has a situs on a qualified site in this state, and
    21    (v)  is  principally  used by the taxpayer for industrial, commercial,
    22  recreational  or  environmental  conservation  purposes  (including  the
    23  commercial development of residential housing); or
    24    (B) (i) is, or when occupied becomes, part of a dwelling whose primary
    25  ownership  structure  is covered under either article nine-B of the real
    26  property law or meets the requirements of  section  216  (b)(1)  of  the
    27  Internal  Revenue  Code  or  is part of an affordable housing project as
    28  defined in subdivision twenty-nine of section 27-1405  of  the  environ-
    29  mental  conservation law, where units are sold as single family homes or
    30  multiple family dwellings;
    31    (ii) has been acquired by purchase (as defined in section one  hundred
    32  seventy-nine (d) of the Internal Revenue Code);
    33    (iii) has a situs on a qualified site in this state; and
    34    (iv)  for  purposes of this subparagraph only, and notwithstanding any
    35  other section of law to the contrary,  property  qualifying  under  this
    36  subparagraph  shall  be deemed to be qualified tangible property for the
    37  purposes of paragraph one of subdivision (d) of  this  section;  and  in
    38  addition, for the purposes of this subdivision only, property qualifying
    39  under  this  subparagraph shall be deemed to have been placed in service
    40  for the purposes of paragraph three of subdivision (a) of  this  section
    41  when a certificate of occupancy is issued for such property; and
    42    (C)  does  not  directly  produce, transmit, distribute, transport, or
    43  store fossil fuels as defined in section 1-103 of  the  energy  law,  or
    44  directly  utilize  fossil  fuels  for  the production of on-site energy,
    45  including thermal energy, for any purpose.
    46    § 19. Subdivision 26 of section 210-B of the tax  law  is  amended  by
    47  adding a new paragraph (g) to read as follows:
    48    (g)  For  purposes  of  this  subdivision,  "qualified  rehabilitation
    49  expenditures" does not include expenditures for property  that  directly
    50  produces,  transmits, distributes, transports, or stores fossil fuels as
    51  defined in section 1-103 of the energy law, or directly utilizes  fossil
    52  fuels  for  the  production of on-site energy, including thermal energy,
    53  for any purpose.
    54    § 20. Subparagraphs (ix) and (x) of paragraph 3  and  paragraph  5  of
    55  subdivision  (c)  of  section  1105 of the tax law, subparagraph (ix) of
    56  paragraph 3 as added by chapter 395 of the laws  of  1998,  subparagraph

        A. 7949--A                         13
 
     1  (x)  of  paragraph  3 as added by section 1 of part FF of chapter 407 of
     2  the laws of 1999, and paragraph 5 as amended by chapter 321 of the  laws
     3  of 2005, are amended to read as follows:
     4    (ix) [such services rendered with respect to tangible property used or
     5  consumed directly and predominantly in the production for sale of gas or
     6  oil  by  manufacturing,  processing,  generating,  assembling, refining,
     7  mining, or extracting.
     8    (x)] such services rendered with  respect  to  property  described  in
     9  paragraph  twelve-a of subdivision (a) of section eleven hundred fifteen
    10  of this article.
    11    (5) Maintaining, servicing or repairing  real  property,  property  or
    12  land,  as  such  terms are defined in the real property tax law, whether
    13  the services are performed in or outside of a building, as distinguished
    14  from adding to or improving such real property, property or land,  by  a
    15  capital improvement as such term capital improvement is defined in para-
    16  graph  nine  of  subdivision  (b)  of section eleven hundred one of this
    17  article, but excluding (i) services rendered by an individual who is not
    18  in a regular trade or business offering his services to the public, (ii)
    19  [services rendered directly with respect to real property,  property  or
    20  land  used  or consumed directly and predominantly in the production for
    21  sale of gas or oil by manufacturing, processing, generating, assembling,
    22  refining, mining, or extracting, (iii)] services rendered  with  respect
    23  to real property, property or land used or consumed predominantly either
    24  in the production of tangible personal property, for sale, by farming or
    25  in  a  commercial  horse boarding operation, or in both and [(iv)] (iii)
    26  services of removal of waste material from a  facility  regulated  as  a
    27  transfer station or construction and demolition debris processing facil-
    28  ity  by  the department of environmental conservation, provided that the
    29  waste material to be removed was not generated by the facility.
    30    § 21. Subparagraph (xi) of paragraph 3 of subdivision (c)  of  section
    31  1105 of the tax law is REPEALED.
    32    § 22. Paragraph 9 of subdivision (a) of section 1115 of the tax law is
    33  REPEALED.
    34    §  23.  Paragraph  (ii)  of subdivision (b) of section 1115 of the tax
    35  law, as amended by section 30 of part Y of chapter 63  of  the  laws  of
    36  2000, is amended to read as follows:
    37    (ii)  [Gas,  electricity]  Electricity,  refrigeration  and steam, and
    38  [gas,] electric, refrigeration and steam service of whatever nature  for
    39  use  or consumption directly and exclusively in research and development
    40  in the experimental or laboratory sense shall be  exempt  from  the  tax
    41  imposed  under  subdivision  (b)  of section eleven hundred five and the
    42  compensating use tax imposed under section eleven hundred  ten  of  this
    43  article.  Such  research  and development shall not be deemed to include
    44  the ordinary testing or inspection of materials or products for  quality
    45  control,  efficiency  surveys,  management  studies,  consumer  surveys,
    46  advertising, promotions or research in connection with literary, histor-
    47  ical or similar projects.
    48    § 24. Paragraph 1 of subdivision (c) of section 1115 of the  tax  law,
    49  as  amended by section 7 of part B of chapter 63 of the laws of 2000, is
    50  amended to read as follows:
    51    (1) [Fuel, gas, electricity] Electricity, refrigeration and steam, and
    52  [gas,] electric, refrigeration and steam service of whatever nature  for
    53  use  or consumption directly and exclusively in the production of tangi-
    54  ble personal property, [gas,] electricity, refrigeration or  steam,  for
    55  sale,  by  manufacturing,  processing, assembling, generating, refining,
    56  mining or extracting shall be exempt from the taxes imposed under subdi-

        A. 7949--A                         14
 
     1  visions (a) and (b) of section eleven hundred five and the  compensating
     2  use tax imposed under section eleven hundred ten of this article.
     3    §  25.  Subdivision  (j) of section 1115 of the tax law, as amended by
     4  section 41 of part K of chapter 61 of the laws of 2011,  is  amended  to
     5  read as follows:
     6    (j) The exemptions provided in this section shall not apply to the tax
     7  required  to  be  prepaid  pursuant  to the provisions of section eleven
     8  hundred two of this article nor to the taxes imposed by sections  eleven
     9  hundred  five  and  eleven  hundred  ten of this article with respect to
    10  receipts from sales and uses of motor fuel or diesel motor fuel,[ except
    11  that the exemptions provided in paragraphs nine and forty-two of  subdi-
    12  vision (a) of this section shall apply to the tax required to be prepaid
    13  pursuant to the provisions of section eleven hundred two of this article
    14  and  to  the  taxes  imposed  by sections eleven hundred five and eleven
    15  hundred ten of this article with respect to sales and uses  of  kero-jet
    16  fuel,]  CNG,  hydrogen and E85, provided, however, the exemption allowed
    17  for E85 shall be subject to  the  additional  requirements  provided  in
    18  section  eleven  hundred  two  of  this article with respect to E85. The
    19  exemption provided in subdivision (c) of this  section  shall  apply  to
    20  sales  and uses of non-highway diesel motor fuel but only if all of such
    21  fuel is consumed other than on the public highways of  this  state.  The
    22  exemption  provided  in  subdivision  (c) of this section shall apply to
    23  sales and uses of non-highway diesel motor fuel for use  or  consumption
    24  either in the production for sale of tangible personal property by farm-
    25  ing  or in a commercial horse boarding operation, or in both but only if
    26  all of such fuel is consumed other than on the public highways  of  this
    27  state (except for the use of the public highways to reach adjacent farm-
    28  lands  or  adjacent lands used in a commercial horse boarding operation,
    29  or both).
    30    § 25-a. Subdivision (j) of section 1115 of the tax law, as amended  by
    31  section  41-a of part K of chapter 61 of the laws of 2011, is amended to
    32  read as follows:
    33    (j) The exemptions provided in this section shall not apply to the tax
    34  required to be prepaid pursuant to  the  provisions  of  section  eleven
    35  hundred  two of this article nor to the taxes imposed by sections eleven
    36  hundred five and eleven hundred ten of  this  article  with  respect  to
    37  receipts from sales and uses of motor fuel or diesel motor fuel[, except
    38  that the exemption provided in paragraph nine of subdivision (a) of this
    39  section  shall  apply  to the tax required to be prepaid pursuant to the
    40  provisions of section eleven hundred two of  this  article  and  to  the
    41  taxes  imposed by sections eleven hundred five and eleven hundred ten of
    42  this article with respect to sales  and  uses  of  kero-jet  fuel].  The
    43  exemption  provided  in  subdivision  (c) of this section shall apply to
    44  sales and uses of non-highway diesel motor fuel but only if all of  such
    45  fuel  is  consumed  other than on the public highways of this state. The
    46  exemption provided in subdivision (c) of this  section  shall  apply  to
    47  sales  and  uses of non-highway diesel motor fuel for use or consumption
    48  either in the production for sale of tangible personal property by farm-
    49  ing or in a commercial horse boarding operation, or in both but only  if
    50  all  of  such fuel is consumed other than on the public highways of this
    51  state (except for the use of the public highways to reach adjacent farm-
    52  lands or adjacent lands used in a commercial horse  boarding  operation,
    53  or both).
    54    §  26.  Subdivision  (s)  of  section 1115 of the tax law, as added by
    55  chapter 201 of the laws of 1995, is relettered subdivision (p).

        A. 7949--A                         15
 
     1    § 27. Subdivision (w) of section 1115 of the  tax  law,  as  added  by
     2  section  32  of  part Y of chapter 63 of the laws of 2000, is amended to
     3  read as follows:
     4    (w)  Receipts  from the sale of [gas or] electricity or [gas or] elec-
     5  tric service of whatever nature and consideration given or contracted to
     6  be given for, or for the use of, [gas or] electricity or [gas or]  elec-
     7  tric service of whatever nature purchased for use or consumption direct-
     8  ly  and  exclusively  to  provide  [gas or] electric service of whatever
     9  nature consisting of operating [a gas pipeline or gas distribution  line
    10  or]  an  electric  transmission  or  distribution line [and ensuring the
    11  necessary working pressure in an underground gas storage facility] shall
    12  be exempt from sales and compensating use taxes imposed by this article.
    13  Such exempt [gas or] electricity or [gas or] electric service of whatev-
    14  er nature shall include, but shall not be  limited  to,  such  [gas  or]
    15  electricity  or  [gas  or]  electric  service of whatever nature used or
    16  consumed directly and exclusively to (1) [ensure necessary working pres-
    17  sure in a gas pipeline used to transport, transmit  or  distribute  gas,
    18  (2)  operate  compressors  used to transport, transmit or distribute gas
    19  through such a gas pipeline or  distribution  line  or  used  to  ensure
    20  necessary working pressure in such a storage facility, (3) operate heat-
    21  ers  to  prevent gas in such a pipeline or distribution line from freez-
    22  ing, (4) operate equipment which removes impurities  and  moisture  from
    23  gas  in  such  a pipeline or distribution line, (5)] operate substations
    24  and equipment related to electric transmission  and  distribution  lines
    25  such   as  transformers,  capacitors,  meters,  switches,  communication
    26  devices and heating and cooling equipment,  and  [(6)]  (2)  ensure  the
    27  reliability  of  electricity or electric service transmitted or distrib-
    28  uted through such lines, for  example,  by  operating  reserve  capacity
    29  machinery and equipment.
    30    §  28.  Subdivision  (k)  of section 300 of the tax law, as amended by
    31  section 17 of part K of chapter 61 of the laws of 2011,  is  amended  to
    32  read as follows:
    33    (k)  "Commercial  gallonage"  means gallonage (1) which is non-highway
    34  diesel motor fuel or residual petroleum product, (2) [which is  included
    35  in  the  full  measure of the non-highway diesel motor fuel component or
    36  the residual petroleum  product  component  of  the  tax  imposed  under
    37  section  three  hundred  one-a of this article, (3)] which does not (and
    38  will not) qualify (A) [for the utility credit or reimbursement  provided
    39  for in section three hundred one-d of this article, (B)] as "manufactur-
    40  ing  gallonage",  as  such  term  is  defined in subdivision (m) of this
    41  section, [(C)] or (B)  for  the  not-for-profit  organization  exemption
    42  provided  for  in subdivision (h) of section three hundred one-b of this
    43  article, [or (D) for the heating exemption provided for in paragraph two
    44  of subdivision (d) of section three hundred one-b of this article or the
    45  heating reimbursement provided for in paragraph two of  subdivision  (a)
    46  of  section  three  hundred  one-c of this article,] and [(4)] (3) which
    47  will not be used nor has been used in the fuel tank connecting with  the
    48  engine of a vessel. No gallonage shall qualify as "commercial gallonage"
    49  where  such  gallonage  is  eligible  for  the  [(i)  utility  credit or
    50  reimbursement under such section three hundred one-d  of  this  article,
    51  (ii)  "manufacturing exemption" under paragraph three of subdivision (f)
    52  of section three hundred one-a of this  article,  (iii)]  not-for-profit
    53  organization  exemption  under  subdivision (h) of section three hundred
    54  one-b of this article[, or (iv) heating exemption provided for in  para-
    55  graph  two  of  subdivision  (d)  of section three hundred one-b of this
    56  article or the heating reimbursement provided for in  paragraph  two  of

        A. 7949--A                         16

     1  subdivision  (a)  of  section  three hundred one-c of this article]. The
     2  commissioner shall require such documentary proof  to  substantiate  the
     3  classification  of product as "commercial gallonage" as the commissioner
     4  deems appropriate.
     5    §  29. Paragraph 1 of subdivision (f) of section 301-b of the tax law,
     6  as amended by section 21 of part K of chapter 61 of the laws of 2011, is
     7  amended to read as follows:
     8    (1) Residual petroleum product and non-highway diesel motor fuel  sold
     9  to  an electric corporation, [as described in subdivision (a) of section
    10  three hundred one-d of this article,] as defined in subdivision thirteen
    11  of section two of the public service law, subject to the supervision  of
    12  the  department  of public service, which is registered with the depart-
    13  ment as a petroleum business tax direct pay permittee, and used by  such
    14  electric corporation to fuel generators for the purpose of manufacturing
    15  or producing electricity where such electric corporation provides a copy
    16  of a direct pay permit authorized and issued by the commissioner, to the
    17  petroleum  business making such sale. If so registered, such corporation
    18  shall be a taxpayer under this article and (i) such electric corporation
    19  shall file a return monthly and pay the applicable tax under this  arti-
    20  cle,  after  the application of allowable credits, on all such purchases
    21  directly to the commissioner, (ii) such electric  corporation  shall  be
    22  subject to all of the provisions of this article relating to the respon-
    23  sibilities  and liabilities of taxpayers under this article with respect
    24  to such residual petroleum product and non-highway diesel motor fuel.
    25    § 30. Subdivision (y) of section 1511 of the  tax  law,  as  added  by
    26  chapter  472 of the laws of 2010, is amended by adding a new paragraph 7
    27  to read as follows:
    28    (7)  For  purposes  of  this  subdivision,  "qualified  rehabilitation
    29  expenditures"  does  not include expenditures for property that directly
    30  produces, transmits, distributes, transports, or stores fossil fuels  as
    31  defined  in section 1-103 of the energy law, or directly utilizes fossil
    32  fuels for the production of on-site energy,  including  thermal  energy,
    33  for any purpose.
    34    §  31.  Paragraph (c) of subdivision 1 of section 3102-e of the public
    35  authorities law, as added by section 31 of part A of chapter 56  of  the
    36  laws of 1998, is amended to read as follows:
    37    (c)  "Qualified  emerging  technology  company"  shall  mean a company
    38  located in New York state: (1) whose primary products  or  services  are
    39  classified as emerging technologies and whose total annual product sales
    40  are ten million dollars or less; or (2) a company which has research and
    41  development activities in New York state and whose ratio of research and
    42  development  funds  to net sales equals or exceeds the average ratio for
    43  all surveyed companies classified as determined by the National  Science
    44  Foundation  in  the  most  recent  published  results from its Survey of
    45  Industry Research and Development, or any comparable successor survey as
    46  determined by the department, and whose total annual product  sales  are
    47  ten million dollars or less. Qualified emerging technology company shall
    48  not  include a company engaged in the production, transmission, distrib-
    49  ution, transportation, or storage of fossil fuels as defined in  section
    50  1-103 of the energy law.
    51    The  definition  of "research and development funds" shall be the same
    52  as that used by the National Science Foundation  in  the  aforementioned
    53  survey.
    54    §  32.  Subparagraph (vi) of paragraph (a) of subdivision 1 of section
    55  210 of the tax law, as amended by section 1 of part D of chapter  59  of
    56  the laws of 2019, is amended to read as follows:

        A. 7949--A                         17
 
     1    (vi)  for taxable years beginning on or after January first, two thou-
     2  sand fourteen, the amount prescribed by this paragraph  for  a  taxpayer
     3  that is a qualified New York manufacturer, shall be computed at the rate
     4  of  zero  percent  of  the  taxpayer's  business  income  base. The term
     5  "manufacturer"  shall  mean  a  taxpayer that during the taxable year is
     6  principally engaged in the production of goods by  manufacturing,  proc-
     7  essing,  assembling, refining, mining, extracting, farming, agriculture,
     8  horticulture, floriculture, viticulture or commercial fishing.  However,
     9  the  generation  and  distribution  of  electricity, the distribution of
    10  natural gas, [and] the production of steam associated  with  the  gener-
    11  ation  of  electricity,  and the production, transmission, distribution,
    12  transportation, or storage of fossil fuels as defined in  section  1-103
    13  of  the energy law shall not be qualifying activities for a manufacturer
    14  under this subparagraph. Moreover, in the case of a combined report, the
    15  combined group shall be considered a "manufacturer" for purposes of this
    16  subparagraph only if the combined group during the taxable year is prin-
    17  cipally engaged in the activities set forth in this  paragraph,  or  any
    18  combination  thereof. A taxpayer or, in the case of a combined report, a
    19  combined group shall be "principally engaged"  in  activities  described
    20  above  if, during the taxable year, more than fifty percent of the gross
    21  receipts of the taxpayer or combined group,  respectively,  are  derived
    22  from  receipts  from  the  sale of goods produced by such activities. In
    23  computing a combined group's  gross  receipts,  intercorporate  receipts
    24  shall  be  eliminated. A "qualified New York manufacturer" is a manufac-
    25  turer that has property in New York that is described in clause  (A)  of
    26  subparagraph  (i)  of  paragraph  (b)  of subdivision one of section two
    27  hundred ten-B of this article and either (I) the adjusted basis of  such
    28  property  for  New  York  state tax purposes at the close of the taxable
    29  year is at least one million  dollars  or  (II)  all  of  its  real  and
    30  personal  property is located in New York. A taxpayer or, in the case of
    31  a combined report, a combined group, that does not satisfy  the  princi-
    32  pally  engaged  test  may  be  a  qualified New York manufacturer if the
    33  taxpayer or the combined group employs during the taxable year at  least
    34  two thousand five hundred employees in manufacturing in New York and the
    35  taxpayer  or  the combined group has property in the state used in manu-
    36  facturing, the adjusted basis of which for New York state  tax  purposes
    37  at  the  close  of  the  taxable  year  is  at least one hundred million
    38  dollars.
    39    § 33. Subparagraph 2 of paragraph (b) of subdivision 1 of section  210
    40  of  the  tax law, as amended by section 2 of part D of chapter 59 of the
    41  laws of 2019, is amended to read as follows:
    42    (2) For purposes of subparagraph  one  of  this  paragraph,  the  term
    43  "manufacturer"  shall  mean  a  taxpayer that during the taxable year is
    44  principally engaged in the production of goods by  manufacturing,  proc-
    45  essing,  assembling, refining, mining, extracting, farming, agriculture,
    46  horticulture, floriculture, viticulture or commercial fishing; provided,
    47  however, the production, transmission, distribution, transportation,  or
    48  storage  of  fossil  fuels as defined in section 1-103 of the energy law
    49  shall not be qualifying activities for a manufacturer under this subpar-
    50  agraph. Moreover, for purposes  of  computing  the  capital  base  in  a
    51  combined report, the combined group shall be considered a "manufacturer"
    52  for  purposes of this subparagraph only if the combined group during the
    53  taxable year is principally engaged in the activities set forth in  this
    54  subparagraph,  or any combination thereof. A taxpayer or, in the case of
    55  a combined report, a combined group shall be  "principally  engaged"  in
    56  activities  described above if, during the taxable year, more than fifty

        A. 7949--A                         18
 
     1  percent of the gross receipts of the taxpayer or combined group, respec-
     2  tively, are derived from receipts from the sale  of  goods  produced  by
     3  such  activities. In computing a combined group's gross receipts, inter-
     4  corporate  receipts  shall be eliminated. A "qualified New York manufac-
     5  turer" is a manufacturer that has property in New York that is described
     6  in clause (A) of subparagraph (i) of paragraph (b) of subdivision one of
     7  section two hundred ten-B of this article and either  (i)  the  adjusted
     8  basis  of  that property for New York state tax purposes at the close of
     9  the taxable year is at least one million dollars or (ii) all of its real
    10  and personal property is located in New York. In addition, a  "qualified
    11  New  York  manufacturer" means a taxpayer that is defined as a qualified
    12  emerging technology company under paragraph (c) of  subdivision  one  of
    13  section  thirty-one  hundred two-e of the public authorities law regard-
    14  less of the ten million dollar limitation expressed in subparagraph  one
    15  of  such  paragraph.  A taxpayer or, in the case of a combined report, a
    16  combined group, that does not satisfy the principally engaged  test  may
    17  be  a  qualified  New  York manufacturer if the taxpayer or the combined
    18  group employs during the taxable year at least two thousand five hundred
    19  employees in manufacturing in New York and the taxpayer or the  combined
    20  group  has  property  in  the  state used in manufacturing, the adjusted
    21  basis of which for New York state tax purposes at the close of the taxa-
    22  ble year is at least one hundred million dollars.
    23    § 34. This act shall take effect immediately and shall apply to  taxa-
    24  ble  years  commencing  on or after the first of January next succeeding
    25  the date on which it shall have become a law; provided, however, that:
    26    (a) the amendments to paragraphs 6, 7 and  8  of  subdivision  (a)  of
    27  section  301-b  made  by  section  nine of this act shall not affect the
    28  repeal of such paragraphs and shall be deemed repealed therewith;
    29    (b) the amendments to the opening paragraph of section  301-c  of  the
    30  tax law made by section eleven of this act shall be subject to the expi-
    31  ration  and  reversion  of such paragraph pursuant to section 19 of part
    32  W-1 of chapter 109 of the laws of 2006, as amended, when upon such  date
    33  the provisions of section eleven-a of this act shall take effect;
    34    (c) the amendments to subdivisions (k) and (l) of section 301-c of the
    35  tax law made by section thirteen of this act shall not affect the repeal
    36  of such subdivisions and shall be deemed repealed therewith; and
    37    (d)  the  amendments to subdivision (j) of section 1115 of the tax law
    38  made by section twenty-five of this act shall be subject to the  expira-
    39  tion  and  reversion  of such subdivision pursuant to section 19 of part
    40  W-1 of chapter 109 of the laws of 2006, as amended, when upon such  date
    41  the provisions of section twenty-five-a of this act shall take effect.
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