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A08483 Summary:

BILL NOA08483
 
SAME ASSAME AS S07438
 
SPONSORCahill
 
COSPNSRDinowitz, Glick, Seawright, Simon, Galef, Hevesi, Steck, Pretlow, Zinerman, Kelles, Gottfried, Mamdani, Epstein, Taylor, Thiele, Mitaynes, Rosenthal L, Niou, Gonzalez-Rojas, Stirpe, Gallagher, O'Donnell
 
MLTSPNSR
 
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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A08483 Actions:

BILL NOA08483
 
11/17/2021referred to economic development
01/05/2022referred to economic development
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A08483 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A8483
 
SPONSOR: Cahill
  TITLE OF BILL: 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, transpor- tation 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 expenditures 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 manufacturing 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 of the tax law relating to fuel sold to an airline for use in its airplanes   PURPOSE: 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 SPECIFIC 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 manufac- turing using non-highway diesel fuel and residual petroleum product. Section 9: Repeals exemptions from Petroleum Business Tax for kerosene, kero-jet fuel, residual petroleum product (bunker fuel), liquefied petroleum gases, and non-highway diesel motor fuel used for nonresiden- tial 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 aligning New York state tax policy by repealing some of the more egregious fossil fuel related tax expendi- tures 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.   LEGISLATIVE HISTORY: New Bill   FISCAL IMPACT ON THE STATE: 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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A08483 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          8483
 
                               2021-2022 Regular Sessions
 
                   IN ASSEMBLY
 
                                    November 17, 2021
                                       ___________
 
        Introduced by M. of A. CAHILL -- read once and referred to the Committee
          on Economic Development
 
        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
          of the  tax  law relating  to fuel sold to an airline for use  in  its
          airplanes
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD13295-03-1

        A. 8483                             2
 
          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 "Fossil Fuel Subsidy Elimination Act".
     3    § 2. Subdivisions 17, 18, 21, and 22 of section 352  of  the  economic
     4  development  law, as amended by section 1 of part K of chapter 59 of the
     5  laws of 2017, subdivision 18 as separately amended by section 1 of  part
     6  ZZ of chapter 59 of the laws of 2017, are amended to read as follows:
     7    17.  "Qualified  investment"  means an investment in tangible property
     8  (including a building or a structural component of a building) owned  by
     9  a business enterprise which:
    10    (a)  is depreciable pursuant to section one hundred sixty-seven of the
    11  internal revenue code;
    12    (b) has a useful life of four years or more;
    13    (c) is acquired by purchase as defined in section one  hundred  seven-
    14  ty-nine (d) of the internal revenue code;
    15    (d)  does  not  directly  produce, transmit, distribute, transport, or
    16  store fossil fuels or directly utilize fossil fuels for  the  production
    17  of  on-site  energy,  including thermal energy, for any purpose. For the
    18  purposes of this article, fossil fuel shall have the same definition  as
    19  in section 1-103 of the energy law;
    20    (e) has a situs in this state; and
    21    [(e)]  (f)  is placed in service in the state on or after the date the
    22  certificate of eligibility is issued to the business enterprise.
    23    18. "Regionally significant project" means (a) a manufacturer creating
    24  at least ten net new jobs in the state and  making  significant  capital
    25  investment  in  the  state; (b) a business creating at least ten net new
    26  jobs in agriculture in the state and making significant capital  invest-
    27  ment  in  the state, (c) a financial services firm, distribution center,
    28  or back office operation creating at least one hundred net new  jobs  in
    29  the  state and making significant capital investment in the state, (d) a
    30  scientific research and development firm creating at least ten  net  new
    31  jobs  in  the  state,  and  making significant capital investment in the
    32  state, (e) a life sciences company creating at least twenty net new jobs
    33  in the state and making significant capital investment in the  state  or
    34  (f)  an entertainment company creating or obtaining at least two hundred
    35  net new jobs in the state and making significant capital  investment  in
    36  the  state.  Other businesses creating one hundred fifty or more net new
    37  jobs in the state and making significant capital investment in the state
    38  may be considered eligible as a regionally significant  project  by  the
    39  commissioner  as  well.  A  regionally  significant project shall not be
    40  engaged in the production, transmission,  distribution,  transportation,
    41  storage,  sale,  purchase, or delivery of fossil fuels. The commissioner
    42  shall promulgate regulations pursuant to section three hundred fifty-six
    43  of this article to determine what additional criteria  a  business  must
    44  meet  to be eligible as a regionally significant project, including, but
    45  not limited to, whether a business exports a substantial portion of  its
    46  products  or  services outside of the state or outside of a metropolitan
    47  statistical area or county within the state.
    48    21. "Research and development expenditures" mean the expenses  of  the
    49  business  enterprise  that  are  qualified  research  expenses under the
    50  federal research and development credit under section forty-one  of  the
    51  internal  revenue  code  and are attributable to activities conducted in
    52  the state. If the federal research and development credit  has  expired,
    53  then the research and development expenditures shall be calculated as if

        A. 8483                             3
 
     1  the  federal research and development credit structure and definition in
     2  effect in federal tax year two  thousand  nine  were  still  in  effect.
     3  Research  and development expenditures does not include any expenses for
     4  tangible  personal  property that directly produces, transmits, distrib-
     5  utes, transports, or stores fossil fuels  or  directly  utilizes  fossil
     6  fuels  for  the  production of on-site energy, including thermal energy,
     7  for any purpose.
     8    22. "Scientific research and development"  means  conducting  research
     9  and  experimental  development  in  the  physical, engineering, and life
    10  sciences, including but not limited to agriculture,  electronics,  envi-
    11  ronmental,  biology,  botany, biotechnology, computers, chemistry, food,
    12  fisheries, forests, geology, health, mathematics,  medicine,  oceanogra-
    13  phy,  pharmacy, physics, veterinary, and other allied subjects.  For the
    14  purposes of this article, scientific research and development  does  not
    15  include  medical  or  veterinary  laboratory  testing facilities, or any
    16  research that contributes to the production, transmission, distribution,
    17  transportation, storage, sale, purchase, or delivery of fossil fuels.
    18    § 3. Subdivision 7 of section 355 of the economic development law,  as
    19  added  by  section  4  of  part  G of chapter 61 of the laws of 2011, is
    20  amended to read as follows:
    21    7. For availability of special excelsior jobs program rates  governing
    22  the  provision of [gas or] electric service, see subdivision twelve-d of
    23  section sixty-six of the public service law. Such special excelsior jobs
    24  program rates may remain available to participants as  defined  in  this
    25  article  for a period of up to ten years commencing in the first taxable
    26  year that the participant receives a certificate of tax credit,  or  the
    27  first  taxable  year  listed  on  its  preliminary schedule of benefits,
    28  whichever is later. Provided however, if a participant is  removed  from
    29  the  excelsior jobs program pursuant to this article, the excelsior jobs
    30  program rates may be denied.
    31    § 4. Subdivision 12-d of section 66 of  the  public  service  law,  as
    32  added  by  section  8  of  part  G of chapter 61 of the laws of 2011, is
    33  amended to read as follows:
    34    12-d. Notwithstanding any other provision of law, upon application  of
    35  [a  gas or] an electric corporation, the commission shall authorize such
    36  corporation to charge a special excelsior jobs program rate equal to the
    37  incremental cost of providing electric service to  participants  in  the
    38  excelsior  jobs  program as defined in article seventeen of the economic
    39  development law.
    40    § 5. Subdivision 2 of section 433 of the economic development law,  as
    41  added  by  section  1  of  part  A of chapter 68 of the laws of 2013, is
    42  amended to read as follows:
    43    2. The following types of businesses are prohibited from participating
    44  in the START-UP NY program.
    45    (a) retail and wholesale businesses;
    46    (b) restaurants;
    47    (c) real estate brokers;
    48    (d) law firms;
    49    (e) medical or dental practices;
    50    (f) real estate management companies;
    51    (g) hospitality;
    52    (h) finance and financial services;
    53    (i) businesses providing personal services;
    54    (j) businesses providing business administrative or support  services,
    55  unless  such  business  has received permission from the commissioner to
    56  apply to participate in the START-UP NY program upon demonstration  that

        A. 8483                             4
 
     1  the  business would create no fewer than one hundred net new jobs in the
     2  tax-free NY area;
     3    (k) accounting firms;
     4    (l) businesses providing utilities; [and]
     5    (m)  businesses engaged in the generation or distribution of electric-
     6  ity, the distribution of natural gas, or the production of steam associ-
     7  ated with the generation of electricity; and
     8    (n) businesses engaged in the production, transmission,  distribution,
     9  transportation,  or  storage of fossil fuels as defined in section 1-103
    10  of the energy law.
    11    § 6. Subparagraph (i) of paragraph (b) of  subdivision  1  of  section
    12  210-B of the tax law, as amended by section 2 of part P of chapter 59 of
    13  the laws of 2017, is amended to read as follows:
    14    (i)  A  credit shall be allowed under this subdivision with respect to
    15  tangible personal property and other tangible property, including build-
    16  ings and structural components  of  buildings,  which  are:  depreciable
    17  pursuant  to  section  one  hundred  sixty-seven of the internal revenue
    18  code, have a useful life of four years or more, are acquired by purchase
    19  as defined in section one  hundred  seventy-nine  (d)  of  the  internal
    20  revenue code, have a situs in this state and are (A) principally used by
    21  the  taxpayer  in  the production of goods by manufacturing, processing,
    22  assembling, refining, mining, extracting, farming,  agriculture,  horti-
    23  culture, floriculture, viticulture or commercial fishing, (B) industrial
    24  waste  treatment facilities or air pollution control facilities, used in
    25  the taxpayer's trade or business, (C) research and development property,
    26  or (D) principally used in the ordinary course of the  taxpayer's  trade
    27  or  business  as  a  broker or dealer in connection with the purchase or
    28  sale (which shall include but not be limited to the  issuance,  entering
    29  into,  assumption,  offset,  assignment,  termination,  or  transfer) of
    30  stocks, bonds or other securities as defined  in  section  four  hundred
    31  seventy-five  (c)(2)  of the Internal Revenue Code, or of commodities as
    32  defined in section four hundred seventy-five (e) of the Internal Revenue
    33  Code, (E) principally used in the  ordinary  course  of  the  taxpayer's
    34  trade  or business of providing investment advisory services for a regu-
    35  lated investment company as defined in section eight  hundred  fifty-one
    36  of the Internal Revenue Code, or lending, loan arrangement or loan orig-
    37  ination  services  to  customers in connection with the purchase or sale
    38  (which shall include but not be limited to the issuance, entering  into,
    39  assumption,  offset, assignment, termination, or transfer) of securities
    40  as defined in section four hundred seventy-five (c)(2) of  the  Internal
    41  Revenue Code, (F) principally used in the ordinary course of the taxpay-
    42  er's  business  as  an  exchange  registered  as  a  national securities
    43  exchange within the meaning of sections 3(a)(1) and 6(a) of the  Securi-
    44  ties Exchange Act of 1934 or a board of trade as defined in subparagraph
    45  one of paragraph (a) of section fourteen hundred ten of the not-for-pro-
    46  fit  corporation law or as an entity that is wholly owned by one or more
    47  such national securities exchanges or boards of trade and that  provides
    48  automation  or  technical services thereto, or (G) principally used as a
    49  qualified film production facility including qualified  film  production
    50  facilities  having a situs in an empire zone designated as such pursuant
    51  to article eighteen-B of the general municipal law, where  the  taxpayer
    52  is  providing  three  or  more services to any qualified film production
    53  company using the facility, including such services as a studio lighting
    54  grid, lighting and grip equipment, multi-line phone  service,  broadband
    55  information  technology  access,  industrial  scale electrical capacity,
    56  food services, security  services,  and  heating,  ventilation  and  air

        A. 8483                             5
 
     1  conditioning.  For purposes of clauses (D), (E) and (F) of this subpara-
     2  graph, property purchased by a  taxpayer  affiliated  with  a  regulated
     3  broker,  dealer,  registered  investment  advisor,  national  securities
     4  exchange  or  board of trade, is allowed a credit under this subdivision
     5  if the property is used by  its  affiliated  regulated  broker,  dealer,
     6  registered  investment advisor, national securities exchange or board of
     7  trade in accordance with this subdivision. For purposes  of  determining
     8  if  the property is principally used in qualifying uses, the uses by the
     9  taxpayer described in clauses (D) and (E) of this  subparagraph  may  be
    10  aggregated.  In addition, the uses by the taxpayer, its affiliated regu-
    11  lated broker, dealer and registered investment advisor under  either  or
    12  both  of  those clauses may be aggregated. Provided, however, a taxpayer
    13  shall not be allowed the credit provided by clauses (D), (E) and (F)  of
    14  this  subparagraph unless the property is first placed in service before
    15  October first, two thousand fifteen and (i) eighty percent  or  more  of
    16  the  employees  performing  the  administrative  and  support  functions
    17  resulting from or related to the qualifying uses of such  equipment  are
    18  located  in  this  state  or  (ii)  the average number of employees that
    19  perform the administrative  and  support  functions  resulting  from  or
    20  related to the qualifying uses of such equipment and are located in this
    21  state  during  the taxable year for which the credit is claimed is equal
    22  to or greater than ninety-five percent of the average number of  employ-
    23  ees  that  perform  these functions and are located in this state during
    24  the thirty-six months immediately preceding the year for which the cred-
    25  it is claimed, or (iii) the number of employees located  in  this  state
    26  during  the  taxable year for which the credit is claimed is equal to or
    27  greater than ninety percent of the number of employees located  in  this
    28  state on December thirty-first, nineteen hundred ninety-eight or, if the
    29  taxpayer  was  not  a calendar year taxpayer in nineteen hundred ninety-
    30  eight, the last day of its first  taxable  year  ending  after  December
    31  thirty-first,  nineteen  hundred  ninety-eight.  If the taxpayer becomes
    32  subject to tax in this state after the taxable year beginning  in  nine-
    33  teen  hundred ninety-eight, then the taxpayer is not required to satisfy
    34  the employment test provided in the preceding sentence of this  subpara-
    35  graph  for  its first taxable year. For purposes of clause (iii) of this
    36  subparagraph the employment test will be based on the number of  employ-
    37  ees  located in this state on the last day of the first taxable year the
    38  taxpayer is subject to tax in this state. If the uses  of  the  property
    39  must be aggregated to determine whether the property is principally used
    40  in  qualifying  uses, then either each affiliate using the property must
    41  satisfy this employment test or this employment test must  be  satisfied
    42  through the aggregation of the employees of the taxpayer, its affiliated
    43  regulated  broker,  dealer,  and registered investment adviser using the
    44  property. For purposes of clause  (A)  of  this  subparagraph,  tangible
    45  personal property and other tangible property shall not include property
    46  principally  used  by  the taxpayer in the production or distribution of
    47  electricity, natural gas after extraction from wells,  steam,  or  water
    48  delivered  through  pipes  and  mains. For purposes of this subdivision,
    49  tangible personal property and other tangible property does not  include
    50  property  that directly produces, transmits, distributes, transports, or
    51  stores fossil fuels as defined in section 1-103 of the  energy  law,  or
    52  directly  utilizes  fossil  fuels  for the production of on-site energy,
    53  including thermal energy, for any purpose.
    54    § 7. Subdivision (m) of section 301-a of the  tax  law,  as  added  by
    55  section  20  of  part K of chapter 61 of the laws of 2011, is amended to
    56  read as follows:

        A. 8483                             6
 
     1    (m) Special rate adjustment for certain vessels.  Notwithstanding  any
     2  provision of this section to the contrary, the use of non-highway diesel
     3  motor  fuel  in  the  engine  of a vessel to propel such vessel shall be
     4  subject to tax at the motor fuel and  highway  diesel  motor  fuel  rate
     5  provided  for in this section, and shall be subject to the provisions of
     6  section three hundred one-j of this article,  including  the  adjustment
     7  set  forth  in paragraph [four] three of subdivision (a) of such section
     8  three hundred one-j. A credit or refund shall be available to the extent
     9  tax paid on gallonage used to propel any such vessel exceeds the  amount
    10  of  tax  due  based on the tax rate set forth herein. Provided, however,
    11  that the commissioner shall require such documentary  proof  to  qualify
    12  for  any  credit or reimbursement provided hereunder as the commissioner
    13  deems appropriate.
    14    § 8. Paragraph 3 of subdivision (f) and paragraph 4 of subdivision (g)
    15  of section 301-a of the tax law are REPEALED.
    16    § 9. Subdivisions (a) and (d) of section 301-b of the tax law,  subdi-
    17  vision  (a)  as added by chapter 190 of the laws of 1990, paragraph 5 of
    18  subdivision (a) as amended by section 3 of part E of chapter 59  of  the
    19  laws  of  2012,  paragraphs  6,  7  and 8 of subdivision (a) as added by
    20  section 4 of part W-1 of chapter 109 of the laws of 2006,  and  subdivi-
    21  sion (d) as amended by section 21 of part K of chapter 61 of the laws of
    22  2011, are amended to read as follows:
    23    (a) Products. (1) [Kerosene sold or used by a petroleum business which
    24  is registered under article twelve-A of this chapter as a distributor of
    25  diesel  motor  fuel  so long as (i) such product has not been blended or
    26  mixed with any other product constituting diesel  motor  fuel  or  motor
    27  fuel  or  a residual petroleum product and (ii) such product is not used
    28  by the petroleum business as fuel to operate a motor vehicle or sold  by
    29  such petroleum business to a consumer for use as fuel to operate a motor
    30  vehicle.
    31    (2) Kero-jet fuel (i) sold by a petroleum business which is registered
    32  under  article twelve-A of this chapter as a distributor of diesel motor
    33  fuel to a consumer for use exclusively as jet  aircraft  fuel  or  to  a
    34  petroleum business registered under such article twelve-A as a "distrib-
    35  utor  of  kero-jet  fuel only" where such fixed base operator is engaged
    36  solely in making or offering to make retail sales not in bulk  of  kero-
    37  jet  fuel  directly into the fuel tank of an airplane for the purpose of
    38  operating such airplane, (ii) used by a petroleum  business,  registered
    39  under  article twelve-A of this chapter as a distributor of diesel motor
    40  fuel, exclusively as jet aircraft fuel, or (iii) sold at retail  not  in
    41  bulk  by  a petroleum business registered under article twelve-A of this
    42  chapter as a "distributor of kero-jet fuel  only"  where  such  fuel  is
    43  delivered  directly  into the fuel tank of a jet airplane for use in the
    44  operation of such airplane.
    45    (3)] Aviation gasoline, meeting the specifications set forth in Ameri-
    46  can Standard Testing Material Specification D910 or Military  Specifica-
    47  tion  MIL-G-5572,  which  is imported or caused to be imported into this
    48  state by a petroleum business which is registered under article twelve-A
    49  of this chapter as a distributor of motor  fuel  or  produced,  refined,
    50  manufactured or compounded in this state by such a petroleum business.
    51    [(4)  Residual  petroleum  product sold by a petroleum business regis-
    52  tered under this article as a residual  petroleum  product  business  if
    53  such  product  is  sold by such petroleum business to a consumer for use
    54  exclusively as bunker fuel for vessels or if such  product  is  used  by
    55  such petroleum business exclusively as bunker fuel in its own vessels.
    56    (5) Liquefied petroleum gases, such as butane, ethane or propane.

        A. 8483                             7

     1    (6)]  (2)  E85  imported  or  caused to be imported into this state or
     2  produced, refined, manufactured or compounded in this state by a  petro-
     3  leum  business  registered  under article twelve-A of this chapter, as a
     4  distributor of motor fuel, and then sold by such petroleum business  and
     5  delivered  to  a  filling  station  and placed in a storage tank of such
     6  filling station for such E85 to be dispensed directly into a motor vehi-
     7  cle for use in the operation of such vehicle.
     8    [(7)] (i) Partial B20 exemption. B20 imported or caused to be imported
     9  into this state or produced, refined, manufactured or compounded in this
    10  state by a petroleum business registered under article twelve-A of  this
    11  chapter,  as  a  distributor of diesel motor fuel, and then sold by such
    12  petroleum business.
    13    (ii) Calculation of partial  exemption.  The  amount  of  the  partial
    14  exemption  under  this  paragraph shall be determined by multiplying the
    15  quantity of B20 times twenty percent of the applicable  taxes  otherwise
    16  imposed by this article on such fuel.
    17    [(8)] (3) CNG or hydrogen.
    18    (d)  Sales  to consumers for heating purposes. [(1)] Total residential
    19  heating exemption. Non-highway diesel motor fuel  sold  by  a  petroleum
    20  business registered under article twelve-A of this chapter as a distrib-
    21  utor of diesel motor fuel or residual petroleum product sold by a petro-
    22  leum  business  registered  under  this  article as a residual petroleum
    23  product business to the consumer  exclusively  for  residential  heating
    24  purposes  only if such non-highway diesel motor fuel is delivered into a
    25  storage tank which is not equipped with a hose  or  other  apparatus  by
    26  which  such  fuel can be dispensed into the fuel tank of a motor vehicle
    27  and such storage tank is attached to the heating unit burning such fuel.
    28    [(2) Partial non-residential heating exemption. (A) Non-highway diesel
    29  motor fuel  sold  by  a  petroleum  business  registered  under  article
    30  twelve-A  of this chapter as a distributor of diesel motor fuel or resi-
    31  dual petroleum product sold by a  petroleum  business  registered  under
    32  this  article  as  a residual petroleum product business to the consumer
    33  exclusively for heating, other than residential heating purposes only if
    34  such non-highway diesel motor fuel is  delivered  into  a  storage  tank
    35  which  is not equipped with a hose or other apparatus by which such fuel
    36  can be dispensed into the fuel tank of a motor vehicle and such  storage
    37  tank  is  attached to the heating unit burning such fuel (B) Calculation
    38  of partial exemption. The partial exemption under this  paragraph  shall
    39  be  determined  by  multiplying the quantity of non-highway diesel motor
    40  fuel and residual petroleum product eligible for the exemption times the
    41  sum of the then current rate of the supplemental tax imposed by  section
    42  three  hundred  one-j  of this article and forty-six percent of the then
    43  current rate of the tax imposed by section three hundred one-a  of  this
    44  article,  with  respect to the specific non-highway diesel motor fuel or
    45  residual petroleum product rate, as the case may be.]
    46    § 10. The opening paragraph and paragraph  1  of  subdivision  (c)  of
    47  section  301-b  of  the  tax law, as added by chapter 190 of the laws of
    48  1990, are amended to read as follows:
    49    Sales to [New York state and] the federal government. (1)  Motor  fuel
    50  imported  or caused to be imported into this state or produced, refined,
    51  manufactured or compounded in this state by a petroleum business  regis-
    52  tered  under article twelve-A of this chapter, as a distributor of motor
    53  fuel, and then sold  by  such  petroleum  business  to  an  organization
    54  described in paragraph [one or] two of subdivision (a) of section eleven
    55  hundred  sixteen  of  this chapter where such motor fuel is used by such
    56  organization for its own use or consumption.

        A. 8483                             8
 
     1    § 11. The opening paragraph and subdivisions (a) and  (b)  of  section
     2  301-c  of  the tax law, the opening paragraph as amended by section 5 of
     3  part W-1 of chapter 109 of the laws of 2006, subdivision (a) as  amended
     4  by  section 23 of part K of chapter 61 of the laws of 2011, and subdivi-
     5  sion  (b)  as amended by chapter 330 of the laws of 1991, are amended to
     6  read as follows:
     7    A subsequent purchaser shall be eligible for reimbursement of tax with
     8  respect to the following gallonage, subsequently sold by such  purchaser
     9  in  accordance  with  subdivision  (a), (b), (e), (h), [(j), (k), (n) or
    10  (o)] (i), (k) or (l) of this  section  or  used  by  such  purchaser  in
    11  accordance  with subdivision (c), (d), (f), (g)[, (i), (l)] or [(m)] (j)
    12  of this section, which gallonage has been included in the measure of the
    13  tax imposed by this article on a petroleum business:
    14    (a) [Non-highway Diesel motor fuel used  for  heating  purposes.  (1)]
    15  Total  residential  heating reimbursement. Non-highway Diesel motor fuel
    16  purchased in this state and sold by such purchaser to a consumer for use
    17  exclusively for residential heating purposes but  only  where  (i)  such
    18  non-highway  diesel motor fuel is delivered into a storage tank which is
    19  not equipped with a hose or other apparatus by  which  such  non-highway
    20  Diesel motor fuel can be dispensed into the fuel tank of a motor vehicle
    21  and  such storage tank is attached to the heating unit burning such non-
    22  highway Diesel motor fuel, (ii) the tax imposed pursuant to this article
    23  has been paid with respect to such non-highway diesel motor fuel and the
    24  entire amount of such tax has been absorbed by such purchaser, and (iii)
    25  such purchaser possesses documentary proof satisfactory to  the  commis-
    26  sioner  evidencing  the absorption by it of the entire amount of the tax
    27  imposed pursuant to this article. Provided, however,  that  the  commis-
    28  sioner is authorized, in the event that the commissioner determines that
    29  it  would  not threaten the integrity of the administration and enforce-
    30  ment of the tax imposed by this article, to provide a reimbursement with
    31  respect to a retail sale to a consumer for residential heating  purposes
    32  of  less than ten gallons of non-highway diesel motor fuel provided such
    33  fuel is not dispensed into the tank of a motor vehicle.
    34    [(2) Partial non-residential heating  reimbursement.  (A)  Non-highway
    35  Diesel  motor fuel purchased in this state and sold by such purchaser to
    36  a consumer for use exclusively for heating, other than  for  residential
    37  heating  purposes, but only where (i) such non-highway diesel motor fuel
    38  is delivered into a storage tank which is not equipped with  a  hose  or
    39  other  apparatus  by  which  such  non-highway  Diesel motor fuel can be
    40  dispensed into the fuel tank of a motor vehicle and such storage tank is
    41  attached to the heating unit burning such non-highway Diesel motor fuel,
    42  (ii) the tax imposed pursuant to this article has been paid with respect
    43  to such non-highway diesel motor fuel and the entire amount of such  tax
    44  has  been absorbed by such purchaser, and (iii) such purchaser possesses
    45  documentary  proof  satisfactory  to  the  commissioner  evidencing  the
    46  absorption  by  it  of  the entire amount of the tax imposed pursuant to
    47  this article.
    48    (B) Calculation of partial reimbursement.  Notwithstanding  any  other
    49  provision  of  this  article, the amount of the reimbursement under this
    50  paragraph shall be determined by multiplying the quantity of non-highway
    51  diesel motor fuel eligible for the reimbursement times the  sum  of  the
    52  then  current  rate  of  the  supplemental  tax imposed by section three
    53  hundred one-j of this article and forty-six percent of the then  current
    54  rate  of the tax imposed by section three hundred one-a of this article,
    55  with respect to the non-highway diesel motor fuel rate, as the case  may
    56  be.]

        A. 8483                             9
 
     1    (b)  Sales  to [New York state and] the federal government. Motor fuel
     2  and diesel motor fuel purchased in this state and sold by such purchaser
     3  in this state to an organization described in paragraph [one or] two  of
     4  subdivision  (a) of section eleven hundred sixteen of this chapter where
     5  (i)  such motor fuel or diesel motor fuel is for such organization's own
     6  use or consumption, (ii) the tax imposed pursuant to  this  article  has
     7  been  paid  with respect to such motor fuel or diesel motor fuel and the
     8  entire amount of such tax has been absorbed by such purchaser and, (iii)
     9  such purchaser possesses documentary proof satisfactory to  the  commis-
    10  sioner  of  taxation  and finance evidencing the absorption by it of the
    11  entire amount of the tax imposed pursuant  to  this  article.  Provided,
    12  however,  that  the commissioner [of taxation and finance] shall require
    13  such documentary proof to qualify for any reimbursement of tax  provided
    14  by  this  section  as  the commissioner deems appropriate, including the
    15  expansion of any certification required pursuant to section two  hundred
    16  eighty-five-a  or two hundred eighty-five-b of this chapter to cover the
    17  taxes imposed pursuant to this article.
    18    § 11-a. The opening paragraph of section 301-c  of  the  tax  law,  as
    19  amended  by  chapter  468  of  the  laws  of 2000, is amended to read as
    20  follows:
    21    A subsequent purchaser shall be eligible for reimbursement of tax with
    22  respect to the following gallonage, subsequently sold by such  purchaser
    23  in accordance with subdivision (a), (b), (e), (h)[, (j)] or [(k)] (i) of
    24  this  section  or  used by such purchaser in accordance with subdivision
    25  (c), (d), (f), (g)[, (i), (l)] or  [(m)]  (j)  of  this  section,  which
    26  gallonage  has  been  included in the measure of the tax imposed by this
    27  article on a petroleum business:
    28    § 12. Subdivisions (i), (j) and (l) of section 301-c of  the  tax  law
    29  are REPEALED.
    30    §  13. Subdivisions (k), (m), (n), (o) and (p) of section 301-c of the
    31  tax law are relettered subdivisions (i), (j), (k), (l) and (m).
    32    § 14. Section 301-d of the tax law is REPEALED.
    33    § 15. Subdivision (f) of section 301-e is REPEALED.
    34    § 16. Subdivision (a) of section 301-j of the tax law, as  amended  by
    35  chapter  309 of the laws of 1996, paragraphs 1, 2, 3 and 4 as amended by
    36  section 29 of part K of chapter 61 of the laws of 2011,  is  amended  to
    37  read as follows:
    38    (a)  Imposition  of  tax.  (1)  In  addition  to  the taxes imposed by
    39  sections three hundred one-a and three hundred one-e  of  this  article,
    40  there  is  hereby  imposed  upon every petroleum business subject to tax
    41  imposed under section three hundred one-a  of  this  article  and  every
    42  aviation fuel business subject to the aviation gasoline component of the
    43  tax imposed under section three hundred one-e of this article, a supple-
    44  mental  monthly tax for each or any part of a taxable month at a rate of
    45  six and eight-tenths cents per  gallon  with  respect  to  the  products
    46  included  in  each  component of the taxes imposed by such section three
    47  hundred one-a and the aviation gasoline component of the tax imposed  by
    48  such section three hundred one-e of this article.
    49    (2)  [Provided,  however,  "commercial  gallonage,"  as  such  term is
    50  defined in subdivision (k) of section three  hundred  of  this  article,
    51  shall be exempt from the measure of the tax imposed under this section.
    52    (3)]  Provided, further, "railroad diesel," as such term is defined in
    53  subdivision (l) of section three  hundred  of  this  article,  shall  be
    54  exempt from the measure of the tax imposed under this section.
    55    [(4)]  (3)  Provided,  further, a separate per gallon rate shall apply
    56  with respect to highway diesel motor fuel. Such rate shall be determined

        A. 8483                            10
 
     1  by taking the adjusted rate per gallon of tax  imposed  under  paragraph
     2  one  of this subdivision as adjusted in accordance with paragraph [five]
     3  four of this subdivision and subtracting therefrom one  and  three-quar-
     4  ters  cents.    Commencing  January first, two thousand twelve, and each
     5  January thereafter, the per gallon rate  applicable  to  highway  diesel
     6  motor fuel shall be the adjusted rate under paragraph one of this subdi-
     7  vision  as  adjusted  in  accordance  with paragraph [five] four of this
     8  subdivision which commences on such date minus  one  and  three-quarters
     9  cents.  The  resulting  rate  under this paragraph shall be expressed in
    10  hundredths of a cent.
    11    [(5)] (4) Except as  herein  provided,  the  tax  imposed  under  this
    12  section  shall  be calculated in the same respective manner as the taxes
    13  imposed by section three hundred one-a and section three  hundred  one-e
    14  of  this article. Except [for section three hundred one-d and except] as
    15  otherwise provided in this section, all the provisions of  this  article
    16  applicable  to  the  taxes  imposed  by sections three hundred one-a and
    17  three hundred one-e of this article, shall apply  with  respect  to  the
    18  supplemental  tax  imposed  by  this section to the same extent as if it
    19  were respectively imposed by such sections.
    20    § 17. Subparagraph (A) of paragraph 2 of subsection (a) of section 606
    21  of the tax law, as amended by section 3 of part P of chapter 59  of  the
    22  laws of 2017, is amended to read as follows:
    23    (A)  A  credit  shall be allowed under this subsection with respect to
    24  tangible personal property and other tangible property, including build-
    25  ings and structural components  of  buildings,  which  are:  depreciable
    26  pursuant  to  section  one  hundred  sixty-seven of the internal revenue
    27  code, have a useful life of four years or more, are acquired by purchase
    28  as defined in section one  hundred  seventy-nine  (d)  of  the  internal
    29  revenue code, have a situs in this state and are (i) principally used by
    30  the  taxpayer  in  the production of goods by manufacturing, processing,
    31  assembling, refining, mining, extracting, farming,  agriculture,  horti-
    32  culture,  floriculture,  viticulture  or commercial fishing, (ii) indus-
    33  trial waste treatment facilities or air  pollution  control  facilities,
    34  used in the taxpayer's trade or business, (iii) research and development
    35  property, (iv) principally used in the ordinary course of the taxpayer's
    36  trade  or business as a broker or dealer in connection with the purchase
    37  or sale (which shall include but not be limited to the issuance,  enter-
    38  ing  into,  assumption, offset, assignment, termination, or transfer) of
    39  stocks, bonds or other securities as defined  in  section  four  hundred
    40  seventy-five  (c)(2)  of the Internal Revenue Code, or of commodities as
    41  defined in section 475(e) of the Internal Revenue Code, (v)  principally
    42  used  in  the  ordinary  course  of  the taxpayer's trade or business of
    43  providing investment advisory services for a regulated investment compa-
    44  ny as defined in section eight hundred fifty-one of the Internal Revenue
    45  Code, or lending, loan  arrangement  or  loan  origination  services  to
    46  customers  in  connection with the purchase or sale (which shall include
    47  but not be limited to the issuance, entering into,  assumption,  offset,
    48  assignment,  termination,  or  transfer)  of  securities  as  defined in
    49  section four hundred seventy-five (c)(2) of the Internal  Revenue  Code,
    50  or (vi) principally used as a qualified film production facility includ-
    51  ing  qualified  film  production  facilities having a situs in an empire
    52  zone designated as such pursuant to article eighteen-B  of  the  general
    53  municipal law, where the taxpayer is providing three or more services to
    54  any qualified film production company using the facility, including such
    55  services  as a studio lighting grid, lighting and grip equipment, multi-
    56  line phone service, broadband information technology access,  industrial

        A. 8483                            11
 
     1  scale  electrical  capacity, food services, security services, and heat-
     2  ing, ventilation and air conditioning. For purposes of clauses (iv)  and
     3  (v)  of  this  subparagraph, property purchased by a taxpayer affiliated
     4  with  a  regulated  broker,  dealer, or registered investment adviser is
     5  allowed a credit under this subsection if the property is  used  by  its
     6  affiliated  regulated broker, dealer or registered investment adviser in
     7  accordance with this subsection. For  purposes  of  determining  if  the
     8  property is principally used in qualifying uses, the uses by the taxpay-
     9  er  described in clauses (iv) and (v) of this subparagraph may be aggre-
    10  gated. In addition, the uses by the taxpayer, its  affiliated  regulated
    11  broker, dealer and registered investment adviser under either or both of
    12  those clauses may be aggregated. Provided, however, a taxpayer shall not
    13  be  allowed the credit provided by clauses (iv) and (v) of this subpara-
    14  graph unless (I) eighty percent or more of the employees performing  the
    15  administrative  and  support  functions resulting from or related to the
    16  qualifying uses of such equipment are located in this state, or (II) the
    17  average number of employees that perform the administrative and  support
    18  functions  resulting  from  or  related  to  the qualifying uses of such
    19  equipment and are located in this state  during  the  taxable  year  for
    20  which  the  credit  is  claimed  is equal to or greater than ninety-five
    21  percent of the average number of employees that perform these  functions
    22  and  are  located in this state during the thirty-six months immediately
    23  preceding the year for which the credit is claimed, or (III) the  number
    24  of employees located in this state during the taxable year for which the
    25  credit  is  claimed  is  equal  to or greater than ninety percent of the
    26  number of employees located in  this  state  on  December  thirty-first,
    27  nineteen  hundred  ninety-eight  or,  if the taxpayer was not a calendar
    28  year taxpayer in nineteen hundred ninety-eight,  the  last  day  of  its
    29  first  taxable year ending after December thirty-first, nineteen hundred
    30  ninety-eight. If the taxpayer becomes subject to tax in this state after
    31  the taxable year beginning in nineteen hundred  ninety-eight,  then  the
    32  taxpayer  is not required to satisfy the employment test provided in the
    33  preceding sentence of this subparagraph for its first taxable year.  For
    34  the  purposes  of  clause (III) of this subparagraph the employment test
    35  will be based on the number of employees located in this  state  on  the
    36  last  day  of  the  first taxable year the taxpayer is subject to tax in
    37  this state. If the uses of the property must be aggregated to  determine
    38  whether the property is principally used in qualifying uses, then either
    39  each  affiliate  using the property must satisfy this employment test or
    40  this employment test must be satisfied through the  aggregation  of  the
    41  employees  of the taxpayer, its affiliated regulated broker, dealer, and
    42  registered investment adviser using the property. For purposes of clause
    43  (i) of this subparagraph, tangible personal property and other  tangible
    44  property  shall not include property principally used by the taxpayer in
    45  the  production  or  distribution  of  electricity,  natural  gas  after
    46  extraction  from  wells,  steam,  or  water  delivered through pipes and
    47  mains. For purposes of this subsection, tangible personal  property  and
    48  other  tangible property does not include property that directly produc-
    49  es, transmits,  distributes,  transports,  or  stores  fossil  fuels  as
    50  defined  in section 1-103 of the energy law, or directly utilizes fossil
    51  fuels for the production of on-site energy,  including  thermal  energy,
    52  for any purpose.
    53    §  18. Paragraph 3 of subdivision (b) of section 21 of the tax law, as
    54  amended by chapter 420 of the laws of 2006, clause (i)  of  subparagraph
    55  (B)  as  amended  by  section 22 of part BB of chapter 56 of the laws of
    56  2015, is amended to read as follows:

        A. 8483                            12
 
     1    (3) Qualified tangible  property.  "Qualified  tangible  property"  is
     2  property  described  in  either subparagraph (A) or (B) and subparagraph
     3  (C) of this paragraph which:
     4    (A)  (i) is depreciable pursuant to section one hundred sixty-seven of
     5  the internal revenue code,
     6    (ii) has a useful life of four years or more,
     7    (iii) has been acquired by purchase as defined in section one  hundred
     8  seventy-nine (d) of the internal revenue code,
     9    (iv) has a situs on a qualified site in this state, and
    10    (v)  is  principally  used by the taxpayer for industrial, commercial,
    11  recreational  or  environmental  conservation  purposes  (including  the
    12  commercial development of residential housing); or
    13    (B) (i) is, or when occupied becomes, part of a dwelling whose primary
    14  ownership  structure  is covered under either article nine-B of the real
    15  property law or meets the requirements of  section  216  (b)(1)  of  the
    16  Internal  Revenue  Code  or  is part of an affordable housing project as
    17  defined in subdivision twenty-nine of section 27-1405  of  the  environ-
    18  mental  conservation law, where units are sold as single family homes or
    19  multiple family dwellings;
    20    (ii) has been acquired by purchase (as defined in section one  hundred
    21  seventy-nine (d) of the Internal Revenue Code);
    22    (iii) has a situs on a qualified site in this state; and
    23    (iv)  for  purposes of this subparagraph only, and notwithstanding any
    24  other section of law to the contrary,  property  qualifying  under  this
    25  subparagraph  shall  be deemed to be qualified tangible property for the
    26  purposes of paragraph one of subdivision (d) of  this  section;  and  in
    27  addition, for the purposes of this subdivision only, property qualifying
    28  under  this  subparagraph shall be deemed to have been placed in service
    29  for the purposes of paragraph three of subdivision (a) of  this  section
    30  when a certificate of occupancy is issued for such property; and
    31    (C)  does  not  directly  produce, transmit, distribute, transport, or
    32  store fossil fuels as defined in section 1-103 of  the  energy  law,  or
    33  directly  utilize  fossil  fuels  for  the production of on-site energy,
    34  including thermal energy, for any purpose.
    35    § 19. Subdivision 26 of section 210-B of the tax  law  is  amended  by
    36  adding a new paragraph (g) to read as follows:
    37    (g)  For  purposes  of  this  subdivision,  "qualified  rehabilitation
    38  expenditures" does not include expenditures for property  that  directly
    39  produces,  transmits, distributes, transports, or stores fossil fuels as
    40  defined in section 1-103 of the energy law, or directly utilizes  fossil
    41  fuels  for  the  production of on-site energy, including thermal energy,
    42  for any purpose.
    43    § 20. Subparagraphs (ix) and (x) of paragraph 3  and  paragraph  5  of
    44  subdivision  (c)  of  section  1105 of the tax law, subparagraph (ix) of
    45  paragraph 3 as added by chapter 395 of the laws  of  1998,  subparagraph
    46  (x)  of  paragraph  3 as added by section 1 of part FF of chapter 407 of
    47  the laws of 1999, and paragraph 5 as amended by chapter 321 of the  laws
    48  of 2005, are amended to read as follows:
    49    (ix) [such services rendered with respect to tangible property used or
    50  consumed directly and predominantly in the production for sale of gas or
    51  oil  by  manufacturing,  processing,  generating,  assembling, refining,
    52  mining, or extracting.
    53    (x)] such services rendered with  respect  to  property  described  in
    54  paragraph  twelve-a of subdivision (a) of section eleven hundred fifteen
    55  of this article.

        A. 8483                            13
 
     1    (5) Maintaining, servicing or repairing  real  property,  property  or
     2  land,  as  such  terms are defined in the real property tax law, whether
     3  the services are performed in or outside of a building, as distinguished
     4  from adding to or improving such real property, property or land,  by  a
     5  capital improvement as such term capital improvement is defined in para-
     6  graph  nine  of  subdivision  (b)  of section eleven hundred one of this
     7  article, but excluding (i) services rendered by an individual who is not
     8  in a regular trade or business offering his services to the public, (ii)
     9  [services rendered directly with respect to real property,  property  or
    10  land  used  or consumed directly and predominantly in the production for
    11  sale of gas or oil by manufacturing, processing, generating, assembling,
    12  refining, mining, or extracting, (iii)] services rendered  with  respect
    13  to real property, property or land used or consumed predominantly either
    14  in the production of tangible personal property, for sale, by farming or
    15  in  a  commercial  horse boarding operation, or in both and [(iv)] (iii)
    16  services of removal of waste material from a  facility  regulated  as  a
    17  transfer station or construction and demolition debris processing facil-
    18  ity  by  the department of environmental conservation, provided that the
    19  waste material to be removed was not generated by the facility.
    20    § 21. Subparagraph (xi) of paragraph 3 of subdivision (c)  of  section
    21  1105 of the tax law is REPEALED.
    22    § 22. Paragraph 9 of subdivision (a) of section 1115 of the tax law is
    23  REPEALED.
    24    §  23.  Paragraph  (ii)  of subdivision (b) of section 1115 of the tax
    25  law, as amended by section 30 of part Y of chapter 63  of  the  laws  of
    26  2000, is amended to read as follows:
    27    (ii)  [Gas,  electricity]  Electricity,  refrigeration  and steam, and
    28  [gas,] electric, refrigeration and steam service of whatever nature  for
    29  use  or consumption directly and exclusively in research and development
    30  in the experimental or laboratory sense shall be  exempt  from  the  tax
    31  imposed  under  subdivision  (b)  of section eleven hundred five and the
    32  compensating use tax imposed under section eleven hundred  ten  of  this
    33  article.  Such  research  and development shall not be deemed to include
    34  the ordinary testing or inspection of materials or products for  quality
    35  control,  efficiency  surveys,  management  studies,  consumer  surveys,
    36  advertising, promotions or research in connection with literary, histor-
    37  ical or similar projects.
    38    § 24. Paragraph 1 of subdivision (c) of section 1115 of the  tax  law,
    39  as  amended by section 7 of part B of chapter 63 of the laws of 2000, is
    40  amended to read as follows:
    41    (1) [Fuel, gas, electricity] Electricity, refrigeration and steam, and
    42  [gas,] electric, refrigeration and steam service of whatever nature  for
    43  use  or consumption directly and exclusively in the production of tangi-
    44  ble personal property, [gas,] electricity, refrigeration or  steam,  for
    45  sale,  by  manufacturing,  processing, assembling, generating, refining,
    46  mining or extracting shall be exempt from the taxes imposed under subdi-
    47  visions (a) and (b) of section eleven hundred five and the  compensating
    48  use tax imposed under section eleven hundred ten of this article.
    49    §  25.  Subdivision  (j) of section 1115 of the tax law, as amended by
    50  section 41 of part K of chapter 61 of the laws of 2011,  is  amended  to
    51  read as follows:
    52    (j) The exemptions provided in this section shall not apply to the tax
    53  required  to  be  prepaid  pursuant  to the provisions of section eleven
    54  hundred two of this article nor to the taxes imposed by sections  eleven
    55  hundred  five  and  eleven  hundred  ten of this article with respect to
    56  receipts from sales and uses of motor fuel or diesel motor fuel,[ except

        A. 8483                            14

     1  that the exemptions provided in paragraphs nine and forty-two of  subdi-
     2  vision (a) of this section shall apply to the tax required to be prepaid
     3  pursuant to the provisions of section eleven hundred two of this article
     4  and  to  the  taxes  imposed  by sections eleven hundred five and eleven
     5  hundred ten of this article with respect to sales and uses  of  kero-jet
     6  fuel,]  CNG,  hydrogen and E85, provided, however, the exemption allowed
     7  for E85 shall be subject to  the  additional  requirements  provided  in
     8  section  eleven  hundred  two  of  this article with respect to E85. The
     9  exemption provided in subdivision (c) of this  section  shall  apply  to
    10  sales  and uses of non-highway diesel motor fuel but only if all of such
    11  fuel is consumed other than on the public highways of  this  state.  The
    12  exemption  provided  in  subdivision  (c) of this section shall apply to
    13  sales and uses of non-highway diesel motor fuel for use  or  consumption
    14  either in the production for sale of tangible personal property by farm-
    15  ing  or in a commercial horse boarding operation, or in both but only if
    16  all of such fuel is consumed other than on the public highways  of  this
    17  state (except for the use of the public highways to reach adjacent farm-
    18  lands  or  adjacent lands used in a commercial horse boarding operation,
    19  or both).
    20    § 25-a. Subdivision (j) of section 1115 of the tax law, as amended  by
    21  section  41-a of part K of chapter 61 of the laws of 2011, is amended to
    22  read as follows:
    23    (j) The exemptions provided in this section shall not apply to the tax
    24  required to be prepaid pursuant to  the  provisions  of  section  eleven
    25  hundred  two of this article nor to the taxes imposed by sections eleven
    26  hundred five and eleven hundred ten of  this  article  with  respect  to
    27  receipts from sales and uses of motor fuel or diesel motor fuel[, except
    28  that the exemption provided in paragraph nine of subdivision (a) of this
    29  section  shall  apply  to the tax required to be prepaid pursuant to the
    30  provisions of section eleven hundred two of  this  article  and  to  the
    31  taxes  imposed by sections eleven hundred five and eleven hundred ten of
    32  this article with respect to sales  and  uses  of  kero-jet  fuel].  The
    33  exemption  provided  in  subdivision  (c) of this section shall apply to
    34  sales and uses of non-highway diesel motor fuel but only if all of  such
    35  fuel  is  consumed  other than on the public highways of this state. The
    36  exemption provided in subdivision (c) of this  section  shall  apply  to
    37  sales  and  uses of non-highway diesel motor fuel for use or consumption
    38  either in the production for sale of tangible personal property by farm-
    39  ing or in a commercial horse boarding operation, or in both but only  if
    40  all  of  such fuel is consumed other than on the public highways of this
    41  state (except for the use of the public highways to reach adjacent farm-
    42  lands or adjacent lands used in a commercial horse  boarding  operation,
    43  or both).
    44    §  26.  Subdivision  (s)  of  section 1115 of the tax law, as added by
    45  chapter 201 of the laws of 1995, is relettered subdivision (p).
    46    § 27. Subdivision (w) of section 1115 of the  tax  law,  as  added  by
    47  section  32  of  part Y of chapter 63 of the laws of 2000, is amended to
    48  read as follows:
    49    (w) Receipts from the sale of [gas or] electricity or [gas  or]  elec-
    50  tric service of whatever nature and consideration given or contracted to
    51  be  given for, or for the use of, [gas or] electricity or [gas or] elec-
    52  tric service of whatever nature purchased for use or consumption direct-
    53  ly and exclusively to provide [gas  or]  electric  service  of  whatever
    54  nature  consisting of operating [a gas pipeline or gas distribution line
    55  or] an electric transmission or  distribution  line  [and  ensuring  the
    56  necessary working pressure in an underground gas storage facility] shall

        A. 8483                            15
 
     1  be exempt from sales and compensating use taxes imposed by this article.
     2  Such exempt [gas or] electricity or [gas or] electric service of whatev-
     3  er  nature  shall  include,  but  shall not be limited to, such [gas or]
     4  electricity  or  [gas  or]  electric  service of whatever nature used or
     5  consumed directly and exclusively to (1) [ensure necessary working pres-
     6  sure in a gas pipeline used to transport, transmit  or  distribute  gas,
     7  (2)  operate  compressors  used to transport, transmit or distribute gas
     8  through such a gas pipeline or  distribution  line  or  used  to  ensure
     9  necessary working pressure in such a storage facility, (3) operate heat-
    10  ers  to  prevent gas in such a pipeline or distribution line from freez-
    11  ing, (4) operate equipment which removes impurities  and  moisture  from
    12  gas  in  such  a pipeline or distribution line, (5)] operate substations
    13  and equipment related to electric transmission  and  distribution  lines
    14  such   as  transformers,  capacitors,  meters,  switches,  communication
    15  devices and heating and cooling equipment,  and  [(6)]  (2)  ensure  the
    16  reliability  of  electricity or electric service transmitted or distrib-
    17  uted through such lines, for  example,  by  operating  reserve  capacity
    18  machinery and equipment.
    19    §  28.  Subdivision  (k)  of section 300 of the tax law, as amended by
    20  section 17 of part K of chapter 61 of the laws of 2011,  is  amended  to
    21  read as follows:
    22    (k)  "Commercial  gallonage"  means gallonage (1) which is non-highway
    23  diesel motor fuel or residual petroleum product, (2) [which is  included
    24  in  the  full  measure of the non-highway diesel motor fuel component or
    25  the residual petroleum  product  component  of  the  tax  imposed  under
    26  section  three  hundred  one-a of this article, (3)] which does not (and
    27  will not) qualify (A) [for the utility credit or reimbursement  provided
    28  for in section three hundred one-d of this article, (B)] as "manufactur-
    29  ing  gallonage",  as  such  term  is  defined in subdivision (m) of this
    30  section, [(C)] or (B)  for  the  not-for-profit  organization  exemption
    31  provided  for  in subdivision (h) of section three hundred one-b of this
    32  article, [or (D) for the heating exemption provided for in paragraph two
    33  of subdivision (d) of section three hundred one-b of this article or the
    34  heating reimbursement provided for in paragraph two of  subdivision  (a)
    35  of  section  three  hundred  one-c of this article,] and [(4)] (3) which
    36  will not be used nor has been used in the fuel tank connecting with  the
    37  engine of a vessel. No gallonage shall qualify as "commercial gallonage"
    38  where  such  gallonage  is  eligible  for  the  [(i)  utility  credit or
    39  reimbursement under such section three hundred one-d  of  this  article,
    40  (ii)  "manufacturing exemption" under paragraph three of subdivision (f)
    41  of section three hundred one-a of this  article,  (iii)]  not-for-profit
    42  organization  exemption  under  subdivision (h) of section three hundred
    43  one-b of this article[, or (iv) heating exemption provided for in  para-
    44  graph  two  of  subdivision  (d)  of section three hundred one-b of this
    45  article or the heating reimbursement provided for in  paragraph  two  of
    46  subdivision  (a)  of  section  three hundred one-c of this article]. The
    47  commissioner shall require such documentary proof  to  substantiate  the
    48  classification  of product as "commercial gallonage" as the commissioner
    49  deems appropriate.
    50    § 29. Paragraph 1 of subdivision (f) of section 301-b of the tax  law,
    51  as amended by section 21 of part K of chapter 61 of the laws of 2011, is
    52  amended to read as follows:
    53    (1)  Residual petroleum product and non-highway diesel motor fuel sold
    54  to an electric corporation, [as described in subdivision (a) of  section
    55  three hundred one-d of this article,] as defined in subdivision thirteen
    56  of  section two of the public service law, subject to the supervision of

        A. 8483                            16
 
     1  the department of public service, which is registered with  the  depart-
     2  ment  as a petroleum business tax direct pay permittee, and used by such
     3  electric corporation to fuel generators for the purpose of manufacturing
     4  or producing electricity where such electric corporation provides a copy
     5  of a direct pay permit authorized and issued by the commissioner, to the
     6  petroleum  business making such sale. If so registered, such corporation
     7  shall be a taxpayer under this article and (i) such electric corporation
     8  shall file a return monthly and pay the applicable tax under this  arti-
     9  cle,  after  the application of allowable credits, on all such purchases
    10  directly to the commissioner, (ii) such electric  corporation  shall  be
    11  subject to all of the provisions of this article relating to the respon-
    12  sibilities  and liabilities of taxpayers under this article with respect
    13  to such residual petroleum product and non-highway diesel motor fuel.
    14    § 30. Subdivision (y) of section 1511 of the  tax  law,  as  added  by
    15  chapter  472 of the laws of 2010, is amended by adding a new paragraph 7
    16  to read as follows:
    17    (7) For purposes of this subsection, "qualified rehabilitation expend-
    18  itures" does not include expenditures for property that directly produc-
    19  es, transmits,  distributes,  transports,  or  stores  fossil  fuels  as
    20  defined  in section 1-103 of the energy law, or directly utilizes fossil
    21  fuels for the production of on-site energy,  including  thermal  energy,
    22  for any purpose.
    23    §  31.  Paragraph (c) of subdivision 1 of section 3102-e of the public
    24  authorities law, as added by section 31 of part A of chapter 56  of  the
    25  laws of 1998, is amended to read as follows:
    26    (c)  "Qualified  emerging  technology  company"  shall  mean a company
    27  located in New York state: (1) whose primary products  or  services  are
    28  classified as emerging technologies and whose total annual product sales
    29  are ten million dollars or less; or (2) a company which has research and
    30  development activities in New York state and whose ratio of research and
    31  development  funds  to net sales equals or exceeds the average ratio for
    32  all surveyed companies classified as determined by the National  Science
    33  Foundation  in  the  most  recent  published  results from its Survey of
    34  Industry Research and Development, or any comparable successor survey as
    35  determined by the department, and whose total annual product  sales  are
    36  ten million dollars or less. Qualified emerging technology company shall
    37  not  include a company engaged in the production, transmission, distrib-
    38  ution, transportation, or storage of fossil fuels as defined in  section
    39  1-103 of the energy law.
    40    The  definition  of "research and development funds" shall be the same
    41  as that used by the National Science Foundation  in  the  aforementioned
    42  survey.
    43    §  32.  Subparagraph (vi) of paragraph (a) of subdivision 1 of section
    44  210 of the tax law, as amended by section 1 of part D of chapter  59  of
    45  the laws of 2019, is amended to read as follows:
    46    (vi)  for taxable years beginning on or after January first, two thou-
    47  sand fourteen, the amount prescribed by this paragraph  for  a  taxpayer
    48  that is a qualified New York manufacturer, shall be computed at the rate
    49  of  zero  percent  of  the  taxpayer's  business  income  base. The term
    50  "manufacturer" shall mean a taxpayer that during  the  taxable  year  is
    51  principally  engaged  in the production of goods by manufacturing, proc-
    52  essing, assembling, refining, mining, extracting, farming,  agriculture,
    53  horticulture,  floriculture, viticulture or commercial fishing. However,
    54  the generation and distribution  of  electricity,  the  distribution  of
    55  natural  gas,  [and]  the production of steam associated with the gener-
    56  ation of electricity, and the  production,  transmission,  distribution,

        A. 8483                            17
 
     1  transportation,  or  storage of fossil fuels as defined in section 1-103
     2  of the energy law shall not be qualifying activities for a  manufacturer
     3  under this subparagraph. Moreover, in the case of a combined report, the
     4  combined group shall be considered a "manufacturer" for purposes of this
     5  subparagraph only if the combined group during the taxable year is prin-
     6  cipally  engaged  in  the activities set forth in this paragraph, or any
     7  combination thereof. A taxpayer or, in the case of a combined report,  a
     8  combined  group  shall  be "principally engaged" in activities described
     9  above if, during the taxable year, more than fifty percent of the  gross
    10  receipts  of  the  taxpayer or combined group, respectively, are derived
    11  from receipts from the sale of goods produced  by  such  activities.  In
    12  computing  a  combined  group's  gross receipts, intercorporate receipts
    13  shall be eliminated. A "qualified New York manufacturer" is  a  manufac-
    14  turer  that  has property in New York that is described in clause (A) of
    15  subparagraph (i) of paragraph (b) of  subdivision  one  of  section  two
    16  hundred  ten-B of this article and either (I) the adjusted basis of such
    17  property for New York state tax purposes at the  close  of  the  taxable
    18  year  is  at  least  one  million  dollars  or  (II) all of its real and
    19  personal property is located in New York. A taxpayer or, in the case  of
    20  a  combined  report, a combined group, that does not satisfy the princi-
    21  pally engaged test may be a  qualified  New  York  manufacturer  if  the
    22  taxpayer  or the combined group employs during the taxable year at least
    23  two thousand five hundred employees in manufacturing in New York and the
    24  taxpayer or the combined group has property in the state used  in  manu-
    25  facturing,  the  adjusted basis of which for New York state tax purposes
    26  at the close of the  taxable  year  is  at  least  one  hundred  million
    27  dollars.
    28    §  33. Subparagraph 2 of paragraph (b) of subdivision 1 of section 210
    29  of the tax law, as amended by section 2 of part D of chapter 59  of  the
    30  laws of 2019, is amended to read as follows:
    31    (2)  For  purposes  of  subparagraph  one  of this paragraph, the term
    32  "manufacturer" shall mean a taxpayer that during  the  taxable  year  is
    33  principally  engaged  in the production of goods by manufacturing, proc-
    34  essing, assembling, refining, mining, extracting, farming,  agriculture,
    35  horticulture, floriculture, viticulture or commercial fishing; provided,
    36  however,  the production, transmission, distribution, transportation, or
    37  storage of fossil fuels as defined in section 1-103 of  the  energy  law
    38  shall not be qualifying activities for a manufacturer under this subpar-
    39  agraph.  Moreover,  for  purposes  of  computing  the  capital base in a
    40  combined report, the combined group shall be considered a "manufacturer"
    41  for purposes of this subparagraph only if the combined group during  the
    42  taxable  year is principally engaged in the activities set forth in this
    43  subparagraph, or any combination thereof. A taxpayer or, in the case  of
    44  a  combined  report,  a combined group shall be "principally engaged" in
    45  activities described above if, during the taxable year, more than  fifty
    46  percent of the gross receipts of the taxpayer or combined group, respec-
    47  tively,  are  derived  from  receipts from the sale of goods produced by
    48  such activities. In computing a combined group's gross receipts,  inter-
    49  corporate  receipts  shall be eliminated. A "qualified New York manufac-
    50  turer" is a manufacturer that has property in New York that is described
    51  in clause (A) of subparagraph (i) of paragraph (b) of subdivision one of
    52  section two hundred ten-B of this article and either  (i)  the  adjusted
    53  basis  of  that property for New York state tax purposes at the close of
    54  the taxable year is at least one million dollars or (ii) all of its real
    55  and personal property is located in New York. In addition, a  "qualified
    56  New  York  manufacturer" means a taxpayer that is defined as a qualified

        A. 8483                            18
 
     1  emerging technology company under paragraph (c) of  subdivision  one  of
     2  section  thirty-one  hundred two-e of the public authorities law regard-
     3  less of the ten million dollar limitation expressed in subparagraph  one
     4  of  such  paragraph.  A taxpayer or, in the case of a combined report, a
     5  combined group, that does not satisfy the principally engaged  test  may
     6  be  a  qualified  New  York manufacturer if the taxpayer or the combined
     7  group employs during the taxable year at least two thousand five hundred
     8  employees in manufacturing in New York and the taxpayer or the  combined
     9  group  has  property  in  the  state used in manufacturing, the adjusted
    10  basis of which for New York state tax purposes at the close of the taxa-
    11  ble year is at least one hundred million dollars.
    12    § 34. This act shall take effect immediately and shall apply to  taxa-
    13  ble  years  commencing  on or after the first of January next succeeding
    14  the date on which it shall have become a law; provided, however, that:
    15    (a) the amendments to paragraphs 6, 7 and  8  of  subdivision  (a)  of
    16  section  301-b  made  by  section  nine of this act shall not affect the
    17  repeal of such paragraphs and shall be deemed repealed therewith;
    18    (b) the amendments to the opening paragraph of section  301-c  of  the
    19  tax law made by section eleven of this act shall be subject to the expi-
    20  ration  and  reversion  of such paragraph pursuant to section 19 of part
    21  W-1 of chapter 109 of the laws of 2006, as amended, when upon such  date
    22  the provisions of section eleven-a of this act shall take effect;
    23    (c)  the  amendments to subdivisions (k) and (l) of section 301-c made
    24  by section thirteen of this act shall not  affect  the  repeal  of  such
    25  subdivisions and shall be deemed repealed therewith; and
    26    (d)  the  amendments to subdivision (j) of section 1115 of the tax law
    27  made by section twenty-five of this act shall be subject to the  expira-
    28  tion  and  reversion  of such subdivision pursuant to section 19 of part
    29  W-1 of chapter 109 of the laws of 2006, as amended, when upon such  date
    30  the provisions of section twenty-five-a of this act shall take effect.
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