Relates to exempting dyed Diesel motor fuel used in farming or manufacturing.
TITLE OF BILL: An act to amend the tax law, in relation to exempting dyed Diesel motor fuel used in farming or manufacturing
PURPOSE: The purpose of this bill is to address an unintended taxation consequence on farms and other small businesses due to the recent implementation of federal regulations regarding the use of dyed non-highway, locomotive or marine (NRLM) diesel fuel.
SUMMARY OF PROVISIONS: Section one makes changes to section 282-a of tax law to allow those fuel vendors with a direct pay permit to purchase qualified dyed diesel motor fuel tax free from a fuel importer. In order to qualify for this exemption, the end use of the fuel needs to be either in farming or in manufacturing, processing or assembly.
Section two through five make technical changes regarding permit requirements and conforming definitions necessary to implement this policy change.
Section six establishes an effective date.
JUSTIFICATION: In the fall of 2007, the United States Environment Protection Agency implemented new regulations requiring that all non- road vehicles, including farm tractors and farm equipment utilize a lower sulfur diesel fuel than had been historically used in those vehicles. Due to existing New York State tax law, the new lower sulfur diesel fuel is considered enhanced diesel fuel and is taxed in a different manner than the higher diesel fuel. Previously, uses of the dyed higher sulfur diesel fuel were exempt from the State's three fuel taxes (the petroleum business tax, diesel motor fuel excise tax and sales tax) and fuel distributors were able to purchase the fuel without paying tax. The distributor then forward on the tax exemption directly to the exempt small businesses, such as farms.
The change in taxation status means that fuel distributors must pay all taxes on the fuel at the time of purchase, regardless of whether the end sale is an exempt use. This means small fuel distributors must layout almost $.40/gallon in taxes and then wait for four to five months for refund of those taxes. This creates a tremendous cash-flow issue for these small businesses. In fact, many of them cannot afford this cost and are now forwarding the up-front taxes to the exempt businesses, including farmers. Farms and small businesses must then front an additional $.40/gallon for four to five months until a refund can be obtained. This places a tremendous burden on these businesses and family farms.
The bill seeks to address this business climate issue by clarifying that none of the three state taxes will be required with the purchase
of dyed non-road diesel by a distributor where the end sales and uses of the diesel fuel will be by the specifically exempt categories, such as farms.
LEGISLATIVE HISTORY: 2010 - S.5122
FISCAL IMPLICATIONS: None to the state.
EFFECTIVE DATE: This act shall take effect on the first day of the sales tax quarterly period, as described in subdivision (b) of section 1136 of the tax law, next commencing at least ninety provided, however, that registered distributors days after this act becomes a law; of Diesel motor fuel may apply for direct payment permits thirty days after this act becomes a law.
STATE OF NEW YORK ________________________________________________________________________ S. 3536 A. 5664 2011-2012 Regular Sessions S E N A T E - A S S E M B L Y February 24, 2011 ___________IN SENATE -- Introduced by Sen. FUSCHILLO -- read twice and ordered printed, and when printed to be committed to the Committee on Higher Education IN ASSEMBLY -- Introduced by M. of A. SWEENEY -- read once and referred to the Committee on Higher Education AN ACT authorizing the lease of lands located at the state university of New York college at Farmingdale THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Legislative findings. The legislature finds that the devel- opment, construction and operation of a biotechnology and other technol- ogy-oriented office, research and manufacturing park upon the grounds of the state university of New York college at Farmingdale is necessary and appropriate to further the objectives and purposes of the state univer- sity of New York in its support of the college at Farmingdale and fulfills a necessary and desirable public purpose. The legislature further finds that granting the trustees of the state university of New York the authority and power to lease and otherwise contract to make available grounds and facilities of the campus of the state university of New York college at Farmingdale will ensure the development, construction and operation of such biotechnology and other technology- oriented office, research and manufacturing park and also promote the effective use of such grounds and facilities which support the educa- tional and research activities of the college at Farmingdale. S 2. As used in this act "BHBP" shall mean Broad Hollow Bioscience Park, Inc., which is a not-for-profit corporation organized pursuant to the laws of New York state, for the lease of lands described in section twelve of this act. For the purposes of this act, the biotechnology and other technology-oriented office, research and manufacturing park may include structures with offices, common space, research laboratories,EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD00084-05-1 S. 3536 2 A. 5664
manufacturing facilities, facilities for servicing businesses, incubator facilities and technical facilities related to biotechnology and other technology-oriented purposes. S 3. For the purposes of this act: (a) "project" shall mean work at the property authorized by this act to be leased to BHBP as described in section twelve of this act that involves the design, construction, reconstruction, demolition, excavating, rehabilitation, repair, reno- vation, alteration or improvement of biotechnology and other technolo- gy-oriented office, research and manufacturing park. (b) "project labor agreement" shall mean a pre-hire collective bargaining agreement between a contractor and a labor organization, establishing the labor organization as the collective bargaining repre- sentative for all persons who will perform work on the project, and which provides that only contractors and subcontractors who sign a pre- negotiated agreement with the labor organization can perform project work. S 4. Notwithstanding any other law to the contrary, the state univer- sity trustees are hereby authorized and empowered, without any public bidding, to lease and otherwise contract to make available to BHBP a portion of the lands of the state university of New York college at Farmingdale generally described in this act for the purpose of develop- ing, constructing and operating a biotechnology and other technology-or- iented office, research and manufacturing park, and for uses in support of campus activities; provided, however, that the development and opera- tion of a biotechnology and other technology-oriented office, research and manufacturing park shall be of benefit to the college at Farming- dale. Such lease or contract shall be for a period not exceeding 35 years without any fee simple conveyance and otherwise upon terms and conditions determined by such trustees, subject to the approval of the director of the division of the budget, the attorney general and the state comptroller. In the event that the real property that is the subject of such lease or contract shall cease to be used for the purpose described in this act, such lease or contract shall immediately termi- nate and the real property and any improvements thereon shall revert to the state university of New York. Any lease or contract entered into pursuant to this act shall provide that the real property that is the subject of such lease or contract and any improvements thereon shall revert to the state university of New York on the expiration of such contract or lease. S 5. Any contract or lease entered into pursuant to this act shall be deemed to be a state contract for the purposes of article 15-A of the executive law, and any contractor, subcontractor, lessee or subleasee entering into such contract or lease for the construction, demolition, reconstruction, excavation, rehabilitation, repair, renovation, alter- ation or improvement authorized pursuant to this act shall be deemed a state agency for the purposes of article 15-A of the executive law and subject to the provisions of such article. S 6. Notwithstanding any general, special or local law or judicial decision to the contrary, all work performed on a project authorized by this act where all or any portion thereof involves a lease or agreement for construction, demolition, reconstruction, excavation, rehabili- tation, repair, renovation, alteration or improvement shall be deemed public work and shall be subject to and performed in accordance with the provisions of article 8 of the labor law to the same extent and in the same manner as a contract of the state, and compliance with all the provisions of article 8 of the labor law shall be required of anyS. 3536 3 A. 5664
lessee, sublessee, contractor and/or subcontractor performing on the project including the enforcement of prevailing wage requirements by the fiscal officer as defined in paragraph e of subdivision 5 of section 220 of the labor law to the same extent as a contract of the state. S 7. Nothing in this act shall be deemed to waive or impair any rights or benefits of employees of the state university of New York that otherwise would be available to them pursuant to the terms of agreements between the certified representatives of such employees and the state of New York pursuant to article 14 of the civil service law; all work performed on such property that ordinarily would be performed by employ- ees subject to article 14 of the civil service law shall continue to be performed by such employees. S 8. Notwithstanding the provisions of any general, special, or local law or judicial decision to the contrary: (a) BHBP may require a contractor awarded a contract, subcontract, lease, grant, bond, covenant or other agreement for a project to enter into a project labor agreement during and for the work involved with such project when such requirement is part of BHBP request for proposals for the project and when BHBP determines that the record supporting the decision to enter into such an agreement establishes that the interests underlying the competitive bidding laws are best met by requiring a project labor agreement including: obtaining the best work at the lowest possible price; preventing favoritism, fraud and corruption; the impact of delay; the possibility of cost savings; and any local history of labor unrest. (b) If BHBP does not require a project labor agreement, then any contractor, subcontractor, lease, grant, bond, covenant or other agree- ments for a project shall be awarded pursuant to section 135 of the state finance law. S 9. Without limiting the determination of the terms and conditions of such contracts or leases, such term and conditions may provide for leas- ing, subleasing, construction, reconstruction, rehabilitation, improve- ment, operation and management of and provision of services and assist- ance and the granting of licenses, easements and other arrangements with regard to such grounds and facilities by BHBP, and parties contracting with BHBP, and, in connection with such activities, the obtaining of funding or financing, whether public or private, unsecured or secured (including, but not limited to, secured by leasehold mortgages and assignments of rents and leases), by BHBP and parties contracting with BHBP for the purposes of completing the project described in this act. S 10. Such lease shall include an indemnity provision whereby the lessee or sublessee promises to indemnify, hold harmless and defend the lessor against all claims, suits, actions, and liability to all persons on the leased premises, including tenant, tenant's agents, contractors, subcontractors, employees, customers, guests, licensees, invitees and members of the public, for damage to any such person's property, whether real or personal, or for personal injuries arising out of tenant's use or occupation of the demised premises. S 11. Any contracts entered into pursuant to this act between BHBP and parties contracting with BHBP shall be awarded by a competitive process. S 12. The property authorized by this act to be leased to BHBP is generally described as that parcel of real property with improvements thereon, consisting of a total of approximately 38.5 acres, situated on the campus of the state university of New York college at Farmingdale. The description in this section of the parcel to be made available pursuant to this act is not meant to be a legal description, but isS. 3536 4 A. 5664
intended only to identify the parcel: All the tract, piece or parcel of land situate in the Town of Huntington and Town of Babylon, County of Suffolk, State of New York, and being more particularly bounded as described as follows: All that tract, piece or parcel of land situate in the Town of Huntington and Town of Babylon, County of Suffolk, State of New York, and being more particularly bounded as described as follows: Beginning at a point on the westerly right of way of New York State Route 110 per NYSDOT Map 3T Parcel 3 at the southeast corner of a NYSDOT detention pond shown on Map 289 T Parcel 324, Thence South 00 deg. 22 min. 45 sec East along said westerly right of way, 573.44 ft to a point; Then through the lands now or formerly of the People of the State of New York for the State University of New York at Farmingdale Campus the following seven (7) courses 1) South 11 deg. 37 min. 49 sec. West 211.11 ft to a point of curvature; thence 2) along the arc of a tangent curve to the right of radius 390.49 ft. and length of 422.88 ft. to a point; thence 3) North 45 deg. 00 min. 49 sec. West 964.56 ft. to a point of curvature; thence 4) along the arc of a tangent curve to the left of radius 462.83 ft. and length of 724.84 ft. to a point; thence 5) North 44 deg. 41 min. 38 sec West 60.00 ft. to a point; thence 6) North 45 deg., 15 min. 20 sec. East 184.68 ft to a point; and 7) North 27 deg. 04 min. 59 sec. East 1,274.60 ft. to its intersection with the division line between the lands now or formally of Long Island Power Authority on the northeast and the lands now or formerly of the People of the State of New York for the State University of New York at Farmingdale Campus on the southwest; Thence along said division line the following two (2) courses: 1) South 63 deg. 20 min. 42 sec. East 300.00 ft to a point; and 2) South 60 deg. 51 min. 31 sec. East 300.28 ft. to its intersection with the divi- sion line between the lands now or formerly of Long Island Power Author- ity on the northeast and WRD Mellville, LLC in part by each, on the northeast, and the lands now or formerly of the People of the State of New York for the State University of New York at Farmingdale Campus on the southwest; Thence South 67 deg. 16 min. 36 sec. East along said division line, 336.05 ft to its intersection with the division line between the lands now or formerly of WRD Mellville, LLC on the east and lands now formerly of the People of the State of New York for the State University of New York at Farmingdale Campus on the west; Thence South 14 deg. 59 min. 39 sec East along said division line, 150.00 ft. to its intersection with the NYSDOT detention pond shown on Map 289T Parcel 324; Thence around the NYSDOT detention pond shown on Map 289T Parcel 324 the following three (3) courses: 1) North 66 deg. 52 min. 02 sec. West 160.84 ft. to a point, thence 2) South 00 deg. 25 min. 27 sec. East 424.00 ft to a point; And 3) North 89 deg. 34 min 33 sec. East 243.06 ft. to the point of beginning. S 13. The state university of New York shall not lease lands described in this act unless any such lease shall be executed within three years of the effective date of this act. S 14. Insofar as the provisions of this act are inconsistent with the provisions of any law, general, special or local, the provisions of this act shall be controlling. S 15. This act shall take effect immediately.