Bill Text: NY A07949 | 2023-2024 | General Assembly | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: 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.

Spectrum: Partisan Bill (Democrat 23-0)

Status: (Introduced) 2024-01-03 - referred to economic development [A07949 Detail]

Download: New_York-2023-A07949-Introduced.html



                STATE OF NEW YORK
        ________________________________________________________________________

                                          7949

                               2023-2024 Regular Sessions

                   IN ASSEMBLY

                                     August 18, 2023
                                       ___________

        Introduced  by  M.  of A. SIMON, KELLES -- 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.
                                                                   LBD08180-01-3

        A. 7949                             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,  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.
    50    21. "Research and development expenditures" mean the expenses  of  the
    51  business  enterprise  that  are  qualified  research  expenses under the
    52  federal research and development credit under section forty-one  of  the
    53  internal  revenue  code  and are attributable to activities conducted in

        A. 7949                             3

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

        A. 7949                             4

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

        A. 7949                             5

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

        A. 7949                             6

     1  stores fossil fuels as defined in section 1-103 of the  energy  law,  or
     2  directly  utilizes  fossil  fuels  for the production of on-site energy,
     3  including thermal energy, for any purpose.
     4    §  7.  Subdivision  (m)  of  section 301-a of the tax law, as added by
     5  section 20 of part K of chapter 61 of the laws of 2011,  is  amended  to
     6  read as follows:
     7    (m)  Special  rate adjustment for certain vessels. Notwithstanding any
     8  provision of this section to the contrary, the use of non-highway diesel
     9  motor fuel in the engine of a vessel to  propel  such  vessel  shall  be
    10  subject  to  tax  at  the  motor fuel and highway diesel motor fuel rate
    11  provided for in this section, and shall be subject to the provisions  of
    12  section  three  hundred  one-j of this article, including the adjustment
    13  set forth in paragraph [four] three of subdivision (a) of  such  section
    14  three hundred one-j. A credit or refund shall be available to the extent
    15  tax  paid on gallonage used to propel any such vessel exceeds the amount
    16  of tax due based on the tax rate set forth  herein.  Provided,  however,
    17  that  the  commissioner  shall require such documentary proof to qualify
    18  for any credit or reimbursement provided hereunder as  the  commissioner
    19  deems appropriate.
    20    § 8. Paragraph 3 of subdivision (f) and paragraph 4 of subdivision (g)
    21  of section 301-a of the tax law are REPEALED.
    22    §  9. Subdivisions (a) and (d) of section 301-b of the tax law, subdi-
    23  vision (a) as added by chapter 190 of the laws of 1990, paragraph  5  of
    24  subdivision  (a)  as amended by section 3 of part E of chapter 59 of the
    25  laws of 2012, paragraphs 6, 7 and 8  of  subdivision  (a)  as  added  by
    26  section  4  of part W-1 of chapter 109 of the laws of 2006, and subdivi-
    27  sion (d) as amended by section 21 of part K of chapter 61 of the laws of
    28  2011, are amended to read as follows:
    29    (a) Products. (1) [Kerosene sold or used by a petroleum business which
    30  is registered under article twelve-A of this chapter as a distributor of
    31  diesel motor fuel so long as (i) such product has not  been  blended  or
    32  mixed  with  any  other  product constituting diesel motor fuel or motor
    33  fuel or a residual petroleum product and (ii) such product is  not  used
    34  by  the petroleum business as fuel to operate a motor vehicle or sold by
    35  such petroleum business to a consumer for use as fuel to operate a motor
    36  vehicle.
    37    (2) Kero-jet fuel (i) sold by a petroleum business which is registered
    38  under article twelve-A of this chapter as a distributor of diesel  motor
    39  fuel  to  a  consumer  for  use exclusively as jet aircraft fuel or to a
    40  petroleum business registered under such article twelve-A as a "distrib-
    41  utor of kero-jet fuel only" where such fixed base  operator  is  engaged
    42  solely  in  making or offering to make retail sales not in bulk of kero-
    43  jet fuel directly into the fuel tank of an airplane for the  purpose  of
    44  operating  such  airplane, (ii) used by a petroleum business, registered
    45  under article twelve-A of this chapter as a distributor of diesel  motor
    46  fuel,  exclusively  as jet aircraft fuel, or (iii) sold at retail not in
    47  bulk by a petroleum business registered under article twelve-A  of  this
    48  chapter  as  a  "distributor  of  kero-jet fuel only" where such fuel is
    49  delivered directly into the fuel tank of a jet airplane for use  in  the
    50  operation of such airplane.
    51    (3)] Aviation gasoline, meeting the specifications set forth in Ameri-
    52  can  Standard Testing Material Specification D910 or Military Specifica-
    53  tion MIL-G-5572, which is imported or caused to be  imported  into  this
    54  state by a petroleum business which is registered under article twelve-A
    55  of  this  chapter  as  a distributor of motor fuel or produced, refined,
    56  manufactured or compounded in this state by such a petroleum business.

        A. 7949                             7

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

        A. 7949                             8

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

        A. 7949                             9

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

        A. 7949                            10

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

        A. 7949                            11

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

        A. 7949                            12

     1  es, transmits,  distributes,  transports,  or  stores  fossil  fuels  as
     2  defined  in section 1-103 of the energy law, or directly utilizes fossil
     3  fuels for the production of on-site energy,  including  thermal  energy,
     4  for any purpose.
     5    §  18. Paragraph 3 of subdivision (b) of section 21 of the tax law, as
     6  amended by chapter 420 of the laws of 2006, clause (i)  of  subparagraph
     7  (B)  as  amended  by  section 22 of part BB of chapter 56 of the laws of
     8  2015, is amended to read as follows:
     9    (3) Qualified tangible  property.  "Qualified  tangible  property"  is
    10  property  described  in  either subparagraph (A) or (B) and subparagraph
    11  (C) of this paragraph which:
    12    (A) (i) is depreciable pursuant to section one hundred sixty-seven  of
    13  the internal revenue code,
    14    (ii) has a useful life of four years or more,
    15    (iii)  has been acquired by purchase as defined in section one hundred
    16  seventy-nine (d) of the internal revenue code,
    17    (iv) has a situs on a qualified site in this state, and
    18    (v) is principally used by the taxpayer  for  industrial,  commercial,
    19  recreational  or  environmental  conservation  purposes  (including  the
    20  commercial development of residential housing); or
    21    (B) (i) is, or when occupied becomes, part of a dwelling whose primary
    22  ownership structure is covered under either article nine-B of  the  real
    23  property  law  or  meets  the  requirements of section 216 (b)(1) of the
    24  Internal Revenue Code or is part of an  affordable  housing  project  as
    25  defined  in  subdivision  twenty-nine of section 27-1405 of the environ-
    26  mental conservation law, where units are sold as single family homes  or
    27  multiple family dwellings;
    28    (ii)  has been acquired by purchase (as defined in section one hundred
    29  seventy-nine (d) of the Internal Revenue Code);
    30    (iii) has a situs on a qualified site in this state; and
    31    (iv) for purposes of this subparagraph only, and  notwithstanding  any
    32  other  section  of  law  to the contrary, property qualifying under this
    33  subparagraph shall be deemed to be qualified tangible property  for  the
    34  purposes  of  paragraph  one  of subdivision (d) of this section; and in
    35  addition, for the purposes of this subdivision only, property qualifying
    36  under this subparagraph shall be deemed to have been placed  in  service
    37  for  the  purposes of paragraph three of subdivision (a) of this section
    38  when a certificate of occupancy is issued for such property; and
    39    (C) does not directly produce,  transmit,  distribute,  transport,  or
    40  store  fossil  fuels  as  defined in section 1-103 of the energy law, or
    41  directly utilize fossil fuels for  the  production  of  on-site  energy,
    42  including thermal energy, for any purpose.
    43    §  19.  Subdivision  26  of section 210-B of the tax law is amended by
    44  adding a new paragraph (g) to read as follows:
    45    (g)  For  purposes  of  this  subdivision,  "qualified  rehabilitation
    46  expenditures"  does  not include expenditures for property that directly
    47  produces, transmits, distributes, transports, or stores fossil fuels  as
    48  defined  in section 1-103 of the energy law, or directly utilizes fossil
    49  fuels for the production of on-site energy,  including  thermal  energy,
    50  for any purpose.
    51    §  20.  Subparagraphs  (ix)  and (x) of paragraph 3 and paragraph 5 of
    52  subdivision (c) of section 1105 of the tax  law,  subparagraph  (ix)  of
    53  paragraph  3  as  added by chapter 395 of the laws of 1998, subparagraph
    54  (x) of paragraph 3 as added by section 1 of part FF of  chapter  407  of
    55  the  laws of 1999, and paragraph 5 as amended by chapter 321 of the laws
    56  of 2005, are amended to read as follows:

        A. 7949                            13

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

        A. 7949                            14

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

        A. 7949                            15

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

        A. 7949                            16

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

        A. 7949                            17

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

        A. 7949                            18

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