senate Bill S2811

Signed by Governor Amended

Enacts into law major components of legislation which are necessary to implement the state fiscal plan for the 2011-2012 state fiscal year

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Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed by Governor
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actions

  • 01 / Feb / 2011
    • REFERRED TO FINANCE
  • 25 / Feb / 2011
    • AMEND (T) AND RECOMMIT TO FINANCE
  • 25 / Feb / 2011
    • PRINT NUMBER 2811A
  • 12 / Mar / 2011
    • AMEND (T) AND RECOMMIT TO FINANCE
  • 12 / Mar / 2011
    • PRINT NUMBER 2811B
  • 30 / Mar / 2011
    • AMEND (T) AND RECOMMIT TO FINANCE
  • 30 / Mar / 2011
    • PRINT NUMBER 2811C
  • 30 / Mar / 2011
    • ORDERED TO THIRD READING CAL.285
  • 30 / Mar / 2011
    • MESSAGE OF NECESSITY
  • 30 / Mar / 2011
    • PASSED SENATE
  • 30 / Mar / 2011
    • DELIVERED TO ASSEMBLY
  • 30 / Mar / 2011
    • REFERRED TO WAYS AND MEANS
  • 30 / Mar / 2011
    • SUBSTITUTED FOR A4011C
  • 30 / Mar / 2011
    • ORDERED TO THIRD READING RULES CAL.15
  • 30 / Mar / 2011
    • MESSAGE OF NECESSITY - 3 DAY MESSAGE
  • 30 / Mar / 2011
    • PASSED ASSEMBLY
  • 30 / Mar / 2011
    • RETURNED TO SENATE
  • 30 / Mar / 2011
    • DELIVERED TO GOVERNOR
  • 31 / Mar / 2011
    • SIGNED CHAP.61

Summary

Relates to the dormancy period of miscellaneous unclaimed property, payment of abandoned property, publication of notices of abandoned property, and written reports pertaining to payment of abandoned property; relates to reports by the commissioner regarding abandoned property; relates to payments from the abandoned property fund; relates to extending the disclosure and penalty provisions for transactions that present the potential for tax avoidance; directs the crediting of lottery prizes of more than six hundred dollars against liability for any tax administered by the commissioner of taxation and finance; extends certain provisions relating to extending dates of application of investment tax credit; provides a credit against income tax for persons or entities investing in low-income housing; relates to the excelsior jobs program; conforms laws to the federal Dodd-Frank Wall Street Reform and Consumer Protection Act; extends certain provisions of laws relating to franchise tax; updates the tax classification of diesel motor fuel to be consistent with federal laws and makes the diesel tax structure consistent with this new tax treatment; makes a technical correction to the E85 definition; extends effectiveness related to alternative fuels tax exemptions; relates to the distribution of motor vehicle fees; relates to video lottery free play allowance program; relates to prize payout of certain instant lottery games; relates to prize payout for certain multi-jurisdictional lottery games; relates to multi-jurisdictional video lottery gaming; relates to licenses for simulcast facilities, sums relating to track simulcast, simulcast out-of-state thoroughbred races, simulcasting of races run by out-of-state harness tracks and distributions of wagers; extends related provisions; relates to application fees owed by retail dealers of businesses that sell tobacco products and owners of cigarette vending machines; establishes standards for electronic real property tax administration, allows the department of taxation and finance to use electronic communication means to furnish tax notices and other documents, mandatory electronic filing of tax documents, debit cards issued for tax refunds, and improves sales tax compliance; establishes the economic transformation and facility redevelopment program and providing tax benefits under that program.

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Bill Details

See Assembly Version of this Bill:
A4011
Versions:
S2811
S2811A
S2811B
S2811C
Legislative Cycle:
2011-2012
Law Section:
Budget Bills
Laws Affected:
Amd Various Laws, generally

Sponsor Memo

BILL NUMBER:S2811

TITLE OF BILL:

An act
to amend the abandoned property law, in relation to the dormancy period
of miscellaneous unclaimed property (Part A);
to amend part N of chapter 61 of the laws of 2005 amending the tax law
relating to certain transactions and related information and relating to
the voluntary compliance initiative; in relation to making permanent the
disclosure and penalty provisions for transactions that present the
potential for tax avoidance (Part B);
to amend the tax law, in relation
to the empire zones program (Part C);
to amend the tax law, in relation to directing the crediting of lottery
prizes of more than six hundred dollars against liability for any tax
administered by the commissioner of taxation and finance (Part D);
to amend chapter 56 of the laws of 1998, amending the tax law and other
laws relating to extending the dates of application of the investment
tax credit under articles 9-A, 22 and 32 of the tax law and to amend
chapter 63 of the laws of 2000, amending the tax law and other laws
relating to extending the dates of application of the investment tax
credit under article 33 of the tax law, in relation to extending the
effectiveness thereof (Part E);
to amend the public housing law, in relation to providing a credit
against income tax for persons or entities investing in low-income
housing (Part F);
to amend the economic development law, the tax law and the public
service law, in relation to the excelsior jobs program (Part G);
to amend the tax law, in relation to the exemption from the franchise tax
on insurance corporations under article thirty-three of such law for
town or county cooperative insurance corporations (Part H);
to amend the insurance law, the general municipal law and the tax law,
in relation to conforming to the federal Dodd-Frank Wall Street Reform
and Consumer Protection Act; and to repeal paragraphs 8 and 9 of
subsection (b) of section 2118 of the insurance law, relating thereto
(Part I);
to amend chapter 298 of the laws of 1985, amending the tax law relating
to the franchise tax on banking corporations imposed by the tax law,
authorized to be imposed by any city having a population of one million
or more by chapter 772 of the laws of 1966 and imposed by the
administrative code of the city of New York and relating to other
provisions of the tax law, chapter 883 of the laws of 1975 and the
administrative code of the city of New York which relates to such
franchise tax, to amend chapter 817 of the laws of 1987, amending the
tax law and the environmental conservation law, constituting the
business tax reform and rate reduction act of 1987, and to amend
chapter 525 of the laws of 1988, amending the tax law and the
administrative code of the city of New York relating to the imposition
of taxes in the city of New York, in relation to the effectiveness of
certain provisions of such chapters; and to amend the tax law and the
administrative code of the city of New York, in relation to extending
transitional provisions relating to the federal Gramm-Leach-Bliley act
(Part J);
to amend the tax law and the criminal procedure law, in relation to
updating the tax classification of diesel motor fuel to be consistent
with federal laws and make the diesel tax structure consistent with this


new tax treatment; and to repeal certain provisions of the tax law and
the administrative code of the city of New York relating thereto
(Part K);
to amend the tax law, in relation
to making a technical correction to
the E85 definition; and to
amend
chapter 109 of the laws of 2006, amending the tax law relating to
providing exemptions, reimbursements and credits from various taxes for
certain alternative fuels,
in
relation to extending the
alternative fuels tax exemptions
for one year (Part L);
to amend section 11 of part EE of chapter 63 of the laws of 2000,
amending the tax law and other laws relating to modifying the
distribution of funds from the motor vehicle fuel excise tax, in
relation to the distribution of motor vehicle fees (Part M);
to amend the tax law, in relation to restrictions on certain keno style
lottery games (Part N);
to amend the tax law, in relation to video lottery
free play allowance program (Part O);
to amend the tax law, in relation
to prize payout of certain instant lottery
games (Part P);
to amend the tax law, in relation to prize payout in certain
multi-jurisdictional lottery games (Part Q);
to amend the tax law, in relation to multi-jurisdictional video lottery
gaming (Part R); and
to amend the racing, pari-mutuel wagering and breeding law, in relation
to licenses for simulcast facilities, sums relating to track simulcast,
simulcast of out-of-state thoroughbred races, simulcasting of races run
by out-of-state harness tracks and distributions of wagers; to amend
chapter 281 of the laws of 1994 amending the racing, pari-mutuel
wagering and breeding law and other laws relating to simulcasting and
chapter 346 of the laws of 1990 amending the racing, pari-mutuel
wagering and breeding law and other laws relating to simulcasting and
the imposition of certain taxes, in relation to extending certain
provisions thereof;
and to amend the racing, pari-mutuel wagering and breeding law, in
relation to extending certain provisions thereof (Part S)

PURPOSE:

This bill contains provisions needed to implement the Revenue
portion of the 2011-12 Executive Budget.

This memorandum describes Parts A through S of the 2010-11 Article VII
Revenue bill which are described wholly within the parts listed below.

Part A - Reduce the dormancy period of miscellaneous abandoned
property.

Purpose:


This bill reduces the dormancy period of miscellaneous
abandoned property from either five or six years to three years.

Statement in Support, Summary of Provisions, Existing Law, and
Prior Legislative History:

This bill reduces the dormancy period from five years to three years
on condemnation awards, credit balances arising from loans, bank
accounts (demand deposit, savings, time deposit, deposit and
suspense). lost cash, money on deposit to secure funds, unredeemed
gift certificates, and various other types of funds such as bail,
certain trusts, escrow accounts. and child or spousal support which
is held by the court because it has not been claimed.

The bill also reduces the dormancy period from six years to three
years on surplus from the sale of pledged property.

These funds will be deposited with the comptroller and can be claimed
by the owner of the funds or the representative of his or her estate
at any time.

Budget Implications:

Enactment of this bill is necessary to implement the 2011-2012
Executive Budget because it generates $55 million in 2011-12 revenue
and $70 million in 2012-13 revenue.

Effective Date:

This bill takes effect immediately.

Part B - Make tax shelter reporting provisions permanent.

Purpose:

This bill makes permanent disclosure and penalty provisions
relating to transactions that present the potential for tax avoidance
in order to deter the use of tax shelters.

Statement in Support, Summary of Provisions, Existing Law, and
Prior Legislative History:

The bill amends Section 12 of Part N of Chapter 61 of the Laws of 2005
relating to the effective dates of tax shelter disclosure and penalty
provisions added to the Tax Law by Part N. The proposed amendment to
section 12 makes these tax shelter provisions permanent by removing
the sunset date in that provision, which is set to expire on July 1,
2011. The amendment would also remove the requirement for the
Commissioner of Taxation and Finance to prepare a report on the tax
shelter law by April 1, 2007, since that report has already been
prepared and submitted.

In 2005, the Tax Law was amended to provide new reporting requirements
with respect to the disclosure of information relating to
transactions that present the potential for tax avoidance (tax
shelters). These reporting requirements are similar to the tax
shelter disclosure requirements for federal income tax purposes.


Separate reporting requirements are imposed on those who utilize tax
shelters and those who promote the use of tax shelters. The
amendments also imposed penalties for nondisclosure, extended the
statute, of limitations for assessments relating to these
transactions, and created a Voluntary Compliance Initiative to allow
taxpayers to report and pay under reported tax liabilities and
interest attributable to these transactions with a waiver of
penalties. The authority for the Department to require the reporting
and disclosure of Federal and New York reportable and listed
transactions was originally scheduled to expire on July 1, 2007. but
was extended by chapter 60 of the laws of 2007 and chapter 57 of the
laws of 2008, so that it now expires on July 1, 2011.

In December 2006, the Department of Taxation and Finance adopted
regulations that define a New York reportable transaction for
purposes of Articles 9, 9-A, 22, 32, and 33 of the Tax Law and set
forth the disclosure requirements for participants in a New York
reportable transaction. In addition, in a memorandum dated June 13,
2007, the Tax
Department identified a specific New York Listed Transaction
concerning certain charitable contribution deductions.

Significant Voluntary Compliance Initiative participation from
taxpayers acknowledging participation in abusive tax shelters,
together with the ongoing discovery of new shelter schemes on both
the Federal and the State levels, shows a clear need to continue
requiring disclosure by New York taxpayers of that participation.

Budget Implications:

Enactment of this bill is necessary to implement the 2011-2012
Executive Budget, because it preserves $5 million in annual revenue
currently in the State Financial plan.

Effective Date:

This bill takes effect immediately.

Part C - Provide the Department of Economic Development with
continuing authority to monitor Empire Zone Program compliance and to
decertify non-complying businesses.

Purpose:

This bill amends the Tax Law to make clear that firms that are
decertified by the Department of Economic Development after July 1,
2010 shall be denied tax credits.

Statement in Support, Summary of Provisions, Existing Law, and
Prior Legislative History:

The Department of Economic Development (DED) is responsible for the
continued administration and performance monitoring of businesses for
taxable years succeeding the Empire Zone sunset of June 30, 2010.
This bill clarifies that if DED decertifies a business, the business
would not continue to qualify for Empire Zone benefits under the Tax
Law.


Under the law in effect prior to June 30, 2010 DED had the authority
to monitor the performance of businesses and decertify businesses
that failed to report or meet its performance objectives. This bill
continues that authority beyond the Program sunset of June 30, 2010.

This bill makes clear that DED is able to effectively decertify a
business that failed to report or meet the performance objectives
stated in its application, and upon which its certification was based.

Budget Implications:

Enactment of this bill is necessary to implement the 2011-2012
Executive Budget as it preserves current revenue by ensuring the
continued performance monitoring of the over 7,500 businesses that
remain in the Empire Zone Program.

Effective Date:

This bill takes effect immediately.

Part D - Authorize an offset of lottery winnings with outstanding
State tax liabilities.

Purpose:

This bill permits the crediting of lottery prizes exceeding six
hundred dollars against prize winners' liabilities for taxes owed to
New York.

Statement in Support, Summary of Provisions, Existing Law, and
Prior Legislative History:

Lottery winners should not be expected to take their winnings without
settling past-due debts, including tax liabilities, owed New York
State. This bill provides a simple and cost-effective method of
collecting tax liabilities from lottery prizes. The names of tax
debtors submitted to the Division of the Lottery (Lottery) would
include those against whom a warrant, a public record serving as a
judgment, had been filed, as well as those whose tax liabilities have
not yet been warranted but are legally fixed, final and not subject
to further administrative or legal review.

This bill adds a new Tax Law § 1613-c to authorize offsets of lottery
prizes exceeding six hundred dollars against past due tax liabilities
of those prize winners. Where Lottery has been notified of a prize
winner's liability for past-due support or for public assistance
benefits under Tax Law §§ 1613-a and 1613-b, offsets for support or
recovery of public assistance would be accorded priority over a tax
liability.

The bill's provisions would be implemented by an agreement between the
Director of the Lottery and the Commissioner of Taxation and Finance
which would detail procedures for effecting offsets through
computerized matching of tax liabilities against the names of prize
winners as well as provide reimbursement to Lottery for the cost of
carrying out such procedures.


The bill authorizes the Tax Department to disclose to Lottery the
names of tax debtors whose liabilities are fixed, final, not subject
to further administrative or legal review, but which have not yet
been publicly revealed in a filed tax warrant, which is a public
document serving as a judgment.

Current law does not specifically require the crediting of past due
tax liabilities against Lottery prizes. Although a division of the
Department of Taxation and Finance, the Division of the Lottery is
nonetheless separately administered. Its officers and employees are
not part of the Department of Taxation and Finance's payroll, and
therefore, under the Tax Law's secrecy provision, (e.g., Tax Law
697[e], 1146) the Tax Department, is not permitted to disclose names
of those whose tax debts have not yet been warranted to Lottery
personnel.

Budget Implications:

Enactment of this bill is necessary to implement
the 2011-2012 Executive Budget because it would increase tax
collections by $5 million in fiscal year 2011-12, and $10 million
annually thereafter.

Effective Date:

This bill takes effect on the first day of August next
succeeding the date on which it becomes a law.

Part E - Extend the financial services investment tax credit to
certain broker dealers for four years from October 1, 2011 to October
1, 2015.

Purpose:

This bill extends for four years the investment tax credit for certain
financial services taxpayers.

Statement in Support, Summary of Provisions, Existing Law, and
Prior Legislative History:

The financial services investment tax credit provisions have
encouraged taxpayers in the financial services industry to make
investments in qualifying property, including buildings, in New York
State. Thus, an extension of the credit for four years is appropriate.

Section 1 of the bill extends the end date of the period during which
qualifying property may be placed in service to qualify for the
investment tax credits applicable to financial services taxpayers
under Tax Law Articles 9-A, 22 and 32 from October 1, 2011 to October
1, 2015.

Section 2 of the bill extends the end date for the period during which
qualifying property may be placed in service to qualify for the
investment tax credit applicable to financial services taxpayers
under Tax Law Article 33 from October 1, 2011 to October 1, 2015.


First enacted in 1998 for Articles 9-A, 22 and 32, and in 2000 for
Article 33, the financial services investment tax credit is provided
to taxpayers for qualifying property that is principally used in the
ordinary course of the taxpayer's trade or business as a broker or
dealer in connection with the purchase or sale of stocks, bonds or
other securities.

These provisions also allow an investment tax credit for property that
is principally used in the ordinary course of the taxpayer's trade or
business of providing investment
advisory services for a regulated investment company (ie., a mutual
fund) or lending, loan arrangement or loan origination services to
customers in connection with the purchase or sale of securities.
Taxpayers do not qualify for the credit unless all or a substantial
portion of the employees performing the administrative or support
functions related to the use of the property (ie., the back office
personnel) are located in the State. The credit has always been
temporary. It was last extended in 2008 to provide that the property
must be placed in service before October 1, 2011 to qualify for the
investment tax credit.

Budget Implications:

Enactment of this bill is necessary to implement the 2011-2012
Executive Budget. The annual revenue foregone due to the extension of
this tax credit is already included in the State Financial Plan.

Effective Date:

This bill takes effect immediately and would apply to property placed
in service before October 1, 2015.

Part F - Authorize additional credits of $4 million for the Low-Income
Housing Credit.

Purpose:

This bill increases the aggregate amount of low-income housing tax
credit the Commissioner of Housing and Community Renewal may allocate.

Summary of Provisions, Existing Law, Prior Legislative History,
and Statement in Support:

The bill amends Public Housing Law § 22 to increase the aggregate
amount of low income housing tax credit the Commissioner may allocate
from $28 million to $32 million. Current statute provides for total
allocation authority of $28 million.

Budget Implications:

Enactment of this bill is necessary to implement the 2011-2012
Executive Budget.
However, the annual revenue foregone due to the increase in credit is
already included in the State Financial Plan.

Effective Date:


This bill takes effect immediately.

Part G -Improve the effectiveness of the Excelsior Jobs Program.

Purpose:

This bill improves the effectiveness of the Excelsior Jobs Program
(the Program) by enhancing the existing tax credits available to
applicants and adding an energy incentive to the program.

Statement in Support, Summary of Provisions, Existing Law and
Prior Legislative History:

To increase incentivizes for the creation of new jobs and investments
in New York, this bill strengthens the Excelsior Jobs program by
extending the current tax benefit period from five to ten years and
offering an enhanced package of tax credits by:

1) Revising the formula for the Excelsior Jobs Tax Credit to be based
upon the projected income tax receipts to New York State for each net
new hire, and basing the jobs credit on the product of the gross
wages paid and 6.85 percent (the State's highest income tax rate
after 2011);

2) Providing that, under the revised formula, the jobs credit will not
be lower than current law at any salary level;

3) Removing the $5,000 cap on the jobs credit;

4) Increasing the Excelsior Research & Development (R&D) Tax Credit to
be equal to 50 percent of the taxpayer's actual federal research and
development credit and capping the credit at three percent of R&D
expenditures;

5) Basing the Excelsior Real property Tax Credit on the value of a
property after improvements have been made in order to increase the
incentive for businesses to invest in property, plant and equipment;

6) Allowing participants in the Program to access existing New York
State research and development tax credits in addition to the
Excelsior tax credits; and

7) Authorizing utilities to offer discounted gas or electric rates to
participants in the Program.

The bill also makes various administrative changes that make the
program more responsive to eligible firms, in particular ensuring
that applicants may receive benefits upon reaching interim milestones.

Budget Implications:

Enactment of this bill is necessary to implement the 2011-12 Executive
Budget. There is no change to the Financial Plan from this bill
through SFY 2016-17. The Financial Plan impact of the extension of
the benefit period from five years to ten years begins in SFY 2017-18.

Effective Date:


This bill takes effect immediately.

Part H - Limit the exemption provided for town or county cooperative
insurance corporations under the Insurance Franchise Tax.

Purpose:

This bill limits the exemption from the franchise tax on insurance
corporations for certain town or county cooperative insurance
corporations in order to prevent unfair competition.

Statement in Support, Summary of Provisions, Existing Law and
Prior Legislative History:

The Tax Law currently exempts from taxation town and county
co-operative insurance companies that were in existence before 1937.
These companies originally were formed by persons desiring to provide
insurance on a co-operative basis in a specified geographic area
(e.g" one or more towns, or one to three adjoining counties) in order
to provide only certain types of insurance, such as fire insurance.
However, over the years, their authorization has been enveloped into
broader authority under the Insurance Law, enabling these companies
to expand both their geographic reach and the types of insurance they
offer. As a result, some of the town and county co-operative
insurance companies currently exempt from taxation have expanded
their business significantly beyond what was originally contemplated
when the exemption was enacted. These companies are competing with
other property and casualty companies doing business in New York
State, yet they have an unfair advantage because they pay no State
franchise tax. This bill is intended to level the playing field for
large cooperative insurance corporations and other property and
casualty companies, and limit the exemption to those companies whose
operations are more closely aligned with the original
intent of the exemption.

The bill amends the exemption for town and county co-operative
insurance corporations In Tax Law § 1512(a)(7) to provide that the
exemption will apply only to corporations that properly reported
direct written premiums to the Superintendent of Insurance of $25
million or less for the taxable year.

Tax Law § 1512(a)(7) now provides an exemption to a town or county
co-operative insurance corporation "as heretofore contemplated" by
Tax Law § 187 in effect immediately before January 1, 1974. The
legislative history of this exemption shows that it applied only to
town and county cooperative insurance companies in existence prior to
1937 (which is when the "heretofore contemplated" language was added
to the statute).

Budget Implications:

Enactment of this bill is necessary to implement the 2011-12 Executive
Budget as it would increase revenue by $22 million in SFY 2011-12 and
$16 million annually thereafter.

Effective Date:


This bill takes effect immediately and applies to taxable years
beginning on or after January 1, 2011.

Part 1- Conform the New York State Insurance and Tax laws to the
Federal Dodd-Frank Act excess lines tax provisions and authorize New
York State to participate in a national compact that collects and
remits excess lines taxes to the states.

Purpose:

This bill brings New York's excess line premium tax and tax on
independently procured insurance into conformance with the Federal
Dodd-Frank Wall Street Reform and Consumer Protection Act, including
the Nonadmitted and Reinsurance Reform Act of 2010, and allows New
York to enter into the Nonadmitted Insurance Multi-State Agreement
(NIMA) prepared by the National Association of Insurance Commissioners.

Statement in Support, Summary of Provisions, Existing Law, and
Prior Legislative History:

The Federal Dodd-Frank Wall Street Reform and Consumer Protection Act,
including the Nonadmitted and Reinsurance Reform Act of 2010 (NRRA)
contained in that Act, changes our current taxation of surplus lines
(or excess lines) and independently procured insurance by giving the
"home state" of the insured the sole authority to regulate and
collect taxes on these transactions. NRRA also gives states the
ability to
enter into a compact to allocate among the compact member states
premium taxes on surplus lines and independently procured insurance.

Section 1 of the bill a mends Insurance Law § 1101 (b)(1) to make a
conforming change to match the revisions provided for in section 3 of
the bill.

Section 2 of the bill amends Insurance Law § 1101 (b)(2)(H) to
include section 2117(j) as a section under which transactions with
respect to insurance contracts negotiated or placed shall not
constitute the doing of an insurance business if effected by mail
from outside New York by an unauthorized foreign or alien insurer.

Section 3 of the bill amends Insurance Law § 1101(b) by adding a new
paragraph (6) that states that the making of a swap shall not
constitute the doing of an insurance business in New York, and that
"swap" has the meaning as set forth in 7 U.S.C. § 1a.

Section 4 of the bill amends Insurance Law § 2101 by adding a new
subsection (w), which sets forth the definition of "state," and a new
subsection (x), which sets forth certain definitions with respect to
excess line insurance and excess line brokers.

Section 5 of the bill amends Insurance Law § 2101(c) by adding a new
paragraph (9) that excludes from the definition of "insurance broker"
a person who is not a resident of New York who sells, solicits, or
negotiates a property/casualty insurance contract to or for an
insured, with regard to an unauthorized insurer, provided that (1)
the insured's home state is a state other than New York; (2) the
person is otherwise licensed to sell, solicit, or negotiate excess


line insurance in the insured's home state; and (3) the person does
not perform the diligent search required by Insurance Law § 2118.

Section 6 of the bill amends Insurance Law § 2101 to change the
definition of "insurance producer" set forth in Insurance Law § 2101
(k) in the same manner as the amendments to the definition of
"insurance broker" in section 5 of the bill.

Section 7 of the bill amends Insurance Law § 2102(a)(1) by
adding a new subparagraph (8) to prohibit a person, firm,
association, or corporation from acting as an excess line broker in
New York without having authority to do so by virtue of a license
issued and in force pursuant to Insurance Law § 2105, provided,
however, that a person shall not be required to be licensed to act as
an excess line broker when the insured's home state is a state other
than New York and such person is otherwise licensed to sell,
solicit or negotiate excess line Insurance in the insured's home state.

Section 8 of the bill amends Insurance Law § 2105(a) to remove the
reference to being domiciled or maintaining an office in New York,
with respect to the issuance of an excess line broker license.

Section 9 of the bill amends Insurance Law § 2117 by adding a new
subsection (j) which states that notwithstanding section 2117(a),
a person who is not a New York resident may sell, solicit or
negotiate a property/casualty insurance contract to or for an
insured, with respect to an unauthorized insurer, provided that (1)
the insured's home state is a state other than New York; (2) the
person is licensed to sell, solicit, or negotiate excess line
insurance in the insured's home state; and (3) either the person is
licensed as an insurance broker in New York or the person does not
perform the diligent search required by Insurance Law § 2118.

Section 10 of the bill amends Insurance Law § 2118(b)(1) to reduce
from 45 to 30 the number of days within which an excess line broker
must submit the declarations page or cover note of an excess line
policy after the policy is procured.

Section 11 of the bill amends Insurance Law § 2118(b)(3) by adding a
new subparagraph (F), which states that an excess line broker seeking
to procure or place insurance in New York for an exempt commercial
purchaser is not required to satisfy any New York requirement to make
a due diligence search to determine whether the full amount or type
of insurance sought by the exempt commercial purchaser can be
obtained from authorized insurers if: (1) the excess line broker
procuring or placing the excess line insurance has disclosed to the
exempt commercial purchaser that the insurance mayor may not be
available from the authorized market that may provide greater
protection with more regulatory oversight; and (2) the exempt
commercial purchaser has subsequently requested in writing that the
licensee procure or place the insurance from an unauthorized insurer.

Section 12 of the bill amends Insurance Law § 2118(d)(1) to remove
language providing for allocation of premium tax, and to add new
language that sets forth the premium tax that an excess line broker
must pay if the Superintendent of Insurance ("Superintendent") enters
into a nonadmitted insurance multi-state agreement ("NIMA").


Section 12 of the bill also amends Insurance Law § 2118(d)(3) to
change the date by which premium taxes are due from March 15 of each
year, to quarterly on February 15, May 15, August 15, and November 15
of each year.

Section 13 of the bill amends Insurance Law § 2130(a)(5) to change the
date by which the Excess Line Association of New York ("ELANY") must
prepare and deliver to each excess line broker and to the
Superintendent the reports of excess line business from annually to
quarterly on February 7, May 7, August 7, and November 7 of each year.

Section 14 of the bill adds a new § 2138 to the Insurance Law granting
the Superintendent the authority to enter into NIMA on behalf of New
York, in consultation with the Commissioner of Taxation and Finance
(the "Commissioner"); adopt by regulation the premium tax allocation
schedule set forth in NIMA if the Superintendent enters into NIMA;
and withdraw from NIMA if the Superintendent, in consultation with
the Commissioner, determines that NIMA is no longer in the best
interests of the people of New York.

Section 15 of the bill amends Insurance Law § 9102 by repealing
subsections (b) and (c) to remove a provision regarding premium tax
allocation.

Section 16 of the bill adds a new General Municipal Law § 25, which
states that notwithstanding Insurance Law § 2118(b)(3)(F), a
municipality with a population of less than 100,000 persons may not
request that an excess line broker procure or place insurance from an
unauthorized insurer unless the excess line broker obtains the
declinations required by Insurance Law § 2118(b).

Section 17 of the bill amends Tax Law § 171-a(1) to allow the
Commissioner to deviate from standard procedure in collecting and
depositing taxes on independently procured insurance, so that this
tax can be paid to the clearinghouse contemplated by NIMA. The
portion owing to New York would thereafter be remitted by the
clearinghouse to the State.

Section 18 of the bill updates the definition of the term "taxable
insurance contract" in Tax Law § 1550(c) to correspond with NRRA so
that the tax on independently procured insurance is no longer
restricted to policies that cover risks in New York.

Section 19 of the bill amends the definitions in Tax Law § 1550 to
include the definition of "home state" used in NIMA.

Section 20 of the bill amends Tax Law § 1551 to limit the imposition
of the tax on independently procured insurance to persons whose home
state is New York, and allows for New York to tax risks located in
other states at the other states' tax rates under the terms of a
multi-state agreement.

Section 21 of the bill amends Tax Law § 1552 to provide that if New
York enters into NIMA that premiums for risks both within and without
the state will be allocated in accordance with NIMA's formula, and
specifies that taxes collected on behalf of states which have not
entered into a multi-state agreement will be retained by New York if


New York is the home state. This would also mean that if New York has
not entered into any multi-state agreement, all taxes would be
retained by New York if it is the home state.

Section 22 of the bill amends Tax Law § 1554 to allow for an exception
to the normal requirements for filing returns if New York enters into
a cooperative agreement under the NRRA.

Section 23 of the bill amends Tax Law § 1555 to allow information to
be shared under any cooperative agreement New York enters into with
other states.

Section 24 of the bill amends Tax Law § 1556 to grant the
Superintendent the authority to enter into NIMA on behalf of New York
in consultation with the Commissioner; adopt by regulation the
premium tax allocation schedule set forth in NIMA if the
Superintendent enters into NIMA; and withdraw from NIMA if the
Superintendent, in consultation with the Commissioner, determines
that NIMA is no longer in the best interests of the people of New York.

Section 25 of the bill amends Tax Law § 1557 to allow for deposits of
taxes on independently procured insurance to be made according to the
cooperative agreement.

Budget Implications:

Enactment of this bill is necessary to implement the 2011-2012
Executive Budget as it preserves current revenue. Failure to enact
this legislation will result in a decrease in New York State's tax
receipts.

Effective Date:

Section 26 of the bill states that the bill takes effect on July 21,
2011, except that sections 1, 2, and 3 of the bill take effect on
July 16, 2011 and sections 14 and 24 take effect immediately. It
further requires that excess line brokers make the payments required
by Insurance Law § 2118(d) to the Superintendent on or before
September 19, 2011 for the taxes on the policies procured by the
excess line brokers between January 1, 2011 and July 20, 2011.

Part J - Extend Gramm-Leach-Bliley provisions for two years and make
Bank Tax Extender permanent.

Purpose:

This bill makes the provisions of the New York State and New York City
bank taxes dealing with the taxation of commercial banks permanent
and extends the transitional provisions concerning the enactment and
implementation of the federal Gramm-Leach-Bliley Act for two years.

Statement in Support, Summary of Provisions, Existing Law, and
Prior Legislative History:

This bill makes permanent the provisions concerning the New York State
and New York City taxation of commercial banks which were first added
to the bank tax in 1985. In addition, the bill makes permanent the


provisions concerning the bad debt deduction and the allocation of
net gains and other income from trading and investment activities for
commercial banks for New York State and New York City franchise tax
purposes which were added in 1987 and 1988, respectively.

Further, the bill extends the transitional provisions in the State and
City bank taxes relating to the enactment and implementation of the
federal Gramm-Leach-Bliley Act for two additional years through and
including 2012. This federal act eliminated many of the prohibitions
against the affiliation of banks, insurance companies and securities
firms.

In 1985, significant changes were made to the franchise tax on banking
corporations under the Tax Law and the Administrative Code of the
City of New York. Many of those amendments, however, were made
subject to a sunset provision providing that they would no longer be
effective as to commercial banks for taxable years beginning on or
after January 1, 1990. This sunset provision has been extended
numerous times since 1990, and currently these provisions are set to
expire for taxable years beginning on or after January 1, 2011. In
addition, in order to prevent a windfall to New York, New York State
as part of the Business Tax Reform and Rate Reduction Act of 1987
decoupled from the changes made by the Federal Tax Reform Act of 1986
with regard to the bad debt deduction. The Act also clarified how the
portion of net gains and 'other income from trading and investment
entities are allocated to New York. Both of these changes were also
made to the New York City Administrative Code in 1988. These
amendments were subject to the same sunset as the 1985 amendments and
are currently scheduled to expire on January 1, 2011.

Starting in 2000, transitional provisions were added to both the Tax
Law and the New York City Administrative Code relating to the Federal
Gramm-Leach-Bliley Act which removed the prohibition against the
affiliation of banks, securities firms and insurance companies. These
transitional provisions were intended to provide some certainty to
banks and securities firms in relation to their taxable status under
the New York State and New York City taxes as they exercised the
expanded powers provided at the federal level. They are also
currently set to expire for taxable years beginning on or after
January 1, 2011.

Making permanent the bank tax provisions and providing a two-year
extender for the Gramm-Leach-Bliley Act transitional provisions
provides filing and accounting continuity for business taxpayers,
while allowing for the potential introduction of more comprehensive
corporate tax reform in the future.

Budget Implications:

Enactment of this bill is necessary, to implement the 2011-2012
Executive Budget as it preserves current revenue.

Effective Date:

This bill takes effect immediately.

Part K - Modernize certain fuel definitions.


Purpose:

This bill updates the manner in which diesel motor fuel is classified
for purposes of the taxes imposed on diesel motor fuel under the Tax
Law.

Statement in Support, Summary of Provisions, Existing Law and
Prior Legislative History:

Presently, the taxation of diesel motor fuel is dependent upon whether
it is considered "enhanced" or how it is labeled. Under current law,
"enhanced" diesel motor fuel is taxed on its "first sale" in the
State. As the "enhanced" diesel product moves down the distribution
chain the taxes are embedded in the price paid by subsequent
purchasers.
The final consumer bears the statutory incidence of the tax. The
purpose of this taxation method is to minimize the risk of tax
evasion by collecting the tax at the top of the distribution chain in
the State.

However, changes to the federal government's fuel tax structure,
including a fuel terminal based tax with dyed diesel fuel rules, and
EPA regulations limiting sulfur content in diesel fuels, have driven
changes in the petroleum marketplace regarding the labeling and
invoicing for sale of diesel fuel product. In addition, and most
significantly, a new State law (Chapter 203 of Laws of 2010),
requires that all heating oil sold in this State, effective July 1,
2012, contain no more than 15 parts per million (PPM) in sulfur
content. This is the same low sulfur standard required by federal
rules for highway diesel fuel and current New York requirements for
"enhanced" diesel motor fuel.

Currently, New York State Tax Law does not acknowledge these
marketplace changes.
The industry labeling of fuel as "diesel fuel" or "number 1 diesel
fuel" or "number 2 diesel fuel" applies to almost all diesel entering
the State, with the exception of heating oil. The above diesel labels
are used in New York State's current statutory definition for highway
destined fuel, but these terms are no longer useful in delineating
differences between diesel fuel used in highway vehicles and fuel
used for manufacturing, farming, electric generation, and
construction purposes.

In fact, the only delineator between highway and off-highway uses of
diesel fuel in either chemical composition or sales invoice labeling
is the injection of red dye into the fuel as, it leaves the fuel
terminal to be delivered for retail sale. This dyeing requirement,
imposed under the federal taxing system, is now the sole distinction
between intended highway and non-highway uses for diesel fuel in the
fuels marketplace. Because New York State does not piggyback on the
federal dyed fuel taxing system, the injection of red dye does not
change the tax treatment of the fuel under State law. This situation
is causing numerous
problems for the petroleum industry, their customers, and the Tax
Department, because the State's motor fuel tax, petroleum business
tax (PBT) and pre-paid sales taxes are now being applied to diesel
fuel intended for non-highway


uses that paid sales taxes are now being applied to diesel fuel
intended for non-highway uses that are either fully or
partially exempt from tax.

For example, manufacturers
and electric generators who purchase diesel fuel are no longer
eligible for PST exemptions under the current definitions. Also,
due to outdated statutory definitions related to the taxation of
diesel motor fuel, New York farmers are facing tax-induced
"cash flow: problems because they must pay the State's highway
fuel taxes when they purchase diesel fuel for farm use, a
tax-exempt purpose. New
York farmers must then apply to the Department for a refund. The time
for which they must await such a refund can exceed two months.

Moreover, if no action is taken to change New York's diesel fuel tax
definitions before July 2012, the recently enacted 15 PPM sulfur
content requirement for all heating oil sold in the state, roughly
1.4 billion gallons of number two heating oil sold in the State
annually, would initially be subject to the State's highway diesel
fuel taxes, even though residential heating fuel is exempt from State
taxes. Because this diesel fuel used for heating will initially be
taxed, under the new law many consumers will likely find themselves
in the same position farmers are in now, facing tax-induced "cash
flow" problems. That is, homeowners will have to pay the State's
highway fuel taxes when they purchase diesel fuel for heating use, an
exempt purpose, and then apply to the Department for a refund. On
average, the heating oil bill for two million households would be
increased by approximately $160 when the highway fuel taxes are
embedded in the price.

This bill changes the statutory definitions related to taxation of
diesel motor fuel. As noted above, taxation of diesel motor fuel is
currently based upon whether the diesel motor fuel is "enhanced." It
removes the concept of "enhancement" from the Tax Law, and amends the
Tax Law to incorporate the federal dyeing rules. This bill creates two
categories of diesel motor fuel: non-highway diesel motor fuel and
highway diesel motor fuel. Non-highway diesel motor fuel would be
defined as any diesel motor fuel that is designated for use other
than on a public highway and dyed in accordance with the federal
regulation for dyeing diesel motor fuel. Highway diesel motor fuel
would be defined as any diesel motor fuel that is not non-highway
diesel motor fuel. The definition of automotive fuel is repealed in
Article 12-A because Articles 12-A and 13-A now use the terms "motor
fuel" and "highway diesel motor fuel" in place of the term
"automotive fuel" to simplify the terms being used and to eliminate
confusion with other articles of the Tax Law.

The bill amends the definition of motor fuel to include E85 and fuel
grade ethanol. The definition of E85 is amended to more appropriately
describe it as a fuel blend consisting of ethanol that meets the ASTM
International active standard D5798 for fuel ethanol.
This would allow all motor fuel that was intended to receive tax
exemptions to qualify regardless of the technical aspects of the fuel
definition. Existing law defines E85 as consisting of 85 percent
ethanol and the remainder of which is motor fuel. However, E85
producers adjust the distribution based upon seasonal temperature


changes, which may cause the ethanol percentage to fall below 85
percent. This causes ambiguity about whether the exemption applies.
The amended definition eliminates this ambiguity.

The definitional changes noted above result in a change in how diesel
motor fuel is taxed. As a result, amendments to the Tax Law with
respect to the Department's administration of the diesel motor fuel
tax are necessary. For instance, amendments to registration, record
keeping and penalties are necessary to incorporate the new defined
terms.

Accordingly, Article 12-A related to taxation of automotive fuels, and
Article 13-A related to taxation of petroleum products are amended to
update the tax structure therein in accordance with the new
definitions.

Article 21, related to the highway use tax, is amended to make a
conforming change in order to continue to register all fuel carriers
including carriers of non-highway diesel motor fuel.

Article 28, the sales and compensating use tax, is amended to change
the references to automotive fuel to petroleum product to avoid
confusion with the use of that term as defined in Article 12-A and
13-A and in order to avoid the unintended consequence of changing the
sales tax base.

Article 37, related to crimes and other offenses as well as seizures
and forfeitures, is amended to conform to the definitional changes
made to the diesel fuel tax structure and to add a seizure provision
for diesel motor fuel which would parallel the existing seizure
provisions that already exist for motor fuel.

Conforming changes are made to sections of the Criminal Procedure Law
that were necessitated by the definitional changes made in Article
28. Also, various provisions of the Tax Law and the New York City
Administrative Code are repealed because they are either outdated or
have expired.

Finally, the current tax rates are codified into statute as a starting
point for indexing these rates.

Budget Implications:

Enactment of this bill is necessary to implement the 2011-2012
Executive Budget because it prevents an unintended tax increase.

Effective Date:

This bill takes effect September 1, 2011, and applies to sales made
and uses occurring on and after that date in accordance with the
applicable transitional provisions in sections 1106 and 1217 of the
Tax Law.

Part L - Extend the alternative fuels tax exemptions for one year.

Purpose:


This bill clarifies the definition of E85 and extends the sunset for
the tax exemptions for alternative fuels, including E85, compressed
natural gas (CNG), hydrogen, and B20 from September 1, 2011 to
September 1, 2012.

Statement in Support, Summary of Provisions. Existing Law and
Prior Legislative History:

Extending the exemptions for alternative fuel continues to provide an
incentive for the use of these products.

This bill amends the definition of E85 to more appropriately describe
it as a fuel blend consisting of ethanol and motor fuel, which meets
the American Society for Testing and Materials (ASTM) International
active standard 05798 for fuel ethanol. This allows all motor fuel
that was intended to receive the tax exemptions to qualify regardless
of technical aspects of the fuel definition.

Additionally, this bill extends the sunset date for the exemptions in
the Tax Law for alternative fuels from September 1, 2011 to September
1, 2012. Unless this sunset date is extended, the Tax Law will no
longer allow full exemptions for E85, CNG, and hydrogen, and partial
exemptions for B20 from the motor fuel taxes (Article 12-A), the
petroleum business taxes (Article 13-A), fuel use taxes (Article
21-A) and State and local sales and compensating use taxes (Articles
28 and 29).

Existing law defines E85 as consisting of 85 percent ethanol, the
remainder of which is motor fuel. Although commonly known as E85, the
ethanol percentage can fall below 85 percent due to seasonal
temperature changes that necessitate different blends. The amended
definition clarifies that the exemption is intended to accommodate
the industry practice just described.

Existing law includes an exemption for E85, CNG and hydrogen, and a
partial exemption for B20. This exemption is set to sunset on
September 1, 2011.

Budget Implications:

Enactment of this bill is necessary to implement the 2011-2012
Executive Budget because it would provide tax relief of $1.5 million
in 2011-12 and 2012-13.

Effective Date:

This bill takes effect immediately.

Part M - Simplify the distribution of Motor Vehicle fees.

Purpose:

This bill simplifies the distribution of motor vehicle receipts by
clarifying that all "taxes and fees now deposited into the general
fund" include fines, assessments and other monies received pursuant
to the Vehicle and Traffic Law.


Statement in Support, Summary of Provisions, Existing Law, and
Prior Legislative History:

Since 2006, $169.4 million of non-dedicated motor vehicle taxes and
fees have been directed to the Dedicated Funds Pool. If there is a
surplus, the remainder is directed to the General Fund. If there is a
shortfall, revenues from the General Fund are transferred to the
Dedicated Funds P601 to cover this shortfall. Currently, the Office
of the State Comptroller attributes some non-dedicated motor vehicle
receipts, such as fines and assessments, into the General Fund. These
non-dedicated receipts are distinct from the taxes and fees
categories covered by the current distribution statute.

This bill provides that funds now collected pursuant to the Vehicle
and Traffic law, and not otherwise dedicated to another fund, shall
be directed towards the Dedicated Funds Pool created by this statute.
This would not have a net impact on the General Fund or the Dedicated
Funds Pool because the fund will be maintained at $169.4 million and
any monies over that amount in the Dedicated Funds Pool will still be
transferred to the General Fund and any shortfall in the Dedicated
Funds Pool will be covered by the General Fund. This bill would only
simplify the current motor vehicle receipt distribution, eliminate
cash-flow complexities caused by current law and streamline the
accounting process associated with this Dedicated Funds Pool.

This bill amends section 11 of part EE of Chapter 63 of the laws of
2000 by removing the language "taxes and fees" and replacing it with
"all motor vehicle receipts."

Budget Implications:

Enactment of this bill is necessary to implement the 2011-2012
Executive Budget, as it increases General Fund motor vehicle revenues
by $78.1 million and decreases General Fund miscellaneous licenses
and fees by an equal amount.

Effective Date:

This bill takes effect April 1, 2011.

Part N - Eliminate restrictions on the operation of Quick Draw.

Purpose:

This bill removes Quick Draw restrictions: (1) limiting ticket sales
to bars and taverns where at least twenty-five (25) percent of gross
sales are from food; (2) that require a minimum of 2,500-square-feet
for establishments that do not serve alcohol; and (3) that require
that a person must be twenty-one years of age to play Quick Draw at
bars and taverns.

Statement in Support, Summary of Provisions, Existing Law, and
Prior Legislative History:

This bill amends Tax law §1612(a)(1) to remove restrictions on the
locations that can offer the Quick Draw lottery game or other
keno-style games and a restriction requiring that a person must be


twenty-one years of age to play Quick Draw at bars and taverns.
This bill seeks to increase Quick Draw earnings by removing these
operational restrictions limiting the locations at which Quick Draw
may be offered. The restrictions Imposed on Quick Draw by the 1995
authorizing legislation were experimental. In practice, these
restrictions have proved cumbersome and unnecessary, and have
substantially reduced the amount of earnings otherwise available from
the game. New York is the only state with these limitations on
keno-style games.

The 25 percent food sales requirement for businesses serving alcohol
is similar to a policy that previously was applied to those same
businesses under the Alcoholic Beverage Control Law but which has
long since been abandoned as unworkable. The 2,500-square-foot
limitation also has the effect of arbitrarily restraining Quick Draw
sales. Eliminating these restrictions will strengthen the game's
ability to produce sales and earnings.

The Quick Draw restrictions were intended to protect against the
possibility that Quick Draw would be abused by players. However,
after the initial excitement that accompanied introduction of the
game, Quick Draw has proved to be no more attractive than other
lottery games. Following the enactment of Quick Draw in 1995, the
State authorized video lottery gaming, which offers a much faster
paced form of gaming Therefore, the limitations applicable to Quick
Draw are no longer necessary.

Budget Implications:

Enactment of this bill is necessary to implement the 2011-2012
Executive Budget as it would increase revenue by $10.0 million in
SFY 2011-12 and $44.0 million annually thereafter.

Effective Date:

This bill takes effect immediately.

Part 0 - Authorize a Free Play Allowance Program.

Purpose:

The bill authorizes the Division of the (Lottery) to administer
a free play allowance credit program at video gaming (VLG) facilities,
capped at ten percent of net machine income.

Statement in Support, Summary of Provisions, Existing Law, and
Prior Legislative History:

This bill amends Tax Law § 1612(b)(1)(ii) by adding a new subdivision
(I) to clarify that free play allowance credits are not included in
the calculation of net machine income (NMI) or any distribution of
net machine income.

Additionally, the bill adds a new subdivision f to Tax Law . 1617-a to
authorize Lottery to administer a free-play allowance credit program
capped at ten percent of NMI at each VLG facility in the State. Free
play allows a player to play a video lottery game for a specified


dollar amount without paying any other consideration. For each
facility, Lottery shall authorize the use of free play allowance
credits if the VLG agent of such facility submits a written plan for
the use of free-play credits that Lottery determines is designed to
increase revenue for education. Lottery, in conjunction with the
Director of the Budget, may suspend the use of free-play allowance
credits if it is jointly determined that the use of the program has
not been effective in increasing revenue for education.

Free-play is an accepted promotional tool in the gaming industry. New
York's VLG facilities face competition from gaming facilities in
other jurisdictions that offer greater levels of free-play either
because they have free-play programs, or retain larger percentages of
gaming revenue. Pilot free-play allowance credit programs conducted
at Tioga Downs and Monticello Gaming and Raceway have been successful
at increasing NMI.

Budget Implication:

Enactment of this bill is necessary to implement the 2011-2012
Executive Budget because it increases revenue by $38 million annually
beginning in 2011-12.

Effective Date:

This bill takes effect immediately.

Part P - Allow two additional 75 percent Instant Lottery Games.

Purpose:

This bill allows the Lottery Division to offer an additional two
instant games with a 75 percent prize payout annually.

Statement in Support, Summary of Provisions, Existing Law, and
Prior Legislative History:

This bill amends Tax Law § 1612(a)(2) to allow the Lottery Division to
offer as many as five instant games in which up to 75 percent of
ticket sales receipts may be used for payment of prizes.

Under current law, the Lottery Division may offer as many as three
instant games during the fiscal year in which up to 75 percent of
ticket sales receipts may be used for payment of prizes.

By permitting the introduction of two additional instant games with
such prize payouts, the Lottery Division can further develop the
segment of instant gaming that is marketed at a higher price-point
(e.g., $30 tickets). This bill will increase the frequency of higher
price-point instant game launches to capitalize on the generally
greater interest and sales following the introduction of a new game.

Budget Implications:

Enactment of this bill is necessary to implement the 2011-2012
Executive Budget, as the bill increases revenue by an estimated $4
million in SFY 2011-12 and $4 million annually thereafter.


Effective Date:

This bill takes effect immediately.

Part Q - Allow for a higher prize pay-out on multi-jurisdictional
Lottery Games.

Purpose:

This bill permits the Lottery Division ("the Lottery") to continue
participating in joint, multi-jurisdiction and out-of-state lottery
gaming consortiums in the event these entities increase prize payout
percentages higher than the amount allowable under existing State
law.

Statement in Support, Summary of Provisions, Existing Law, and
Prior Legislative History:

This bill amends Tax Law § 1612(a)(3) to allow the Lottery to use a
percentage of ticket sales receipts exceeding 50% for payment of
prizes of any joint, multi-jurisdiction and out-of-state lottery if
at least two-thirds of the lottery jurisdictions participating in such.
lottery agree to a prize payout percentage that exceeds 50% of ticket
sales.

Existing law limits the amount that the Lottery may use for prize
payments for any joint, multi-jurisdiction and out-of-state lottery
games to 50% of ticket sales for such games.

Experience indicates that ticket sales increase substantially when
jackpots in the Mega Millions and powerball multi-jurisdiction
lottery games reach elevated levels. For example, recent
industry-wide game development discussions, for Mega Millions and
powerball specifically, have explored prize structure options that
could occasionally raise payouts into the 52-53% range. Currently,
only New York has a payout limitation lower than this range, which
means the Lottery is forced to veto improved game design options that
could increase profits. The proposed amendment is expected to result
in higher jackpots, which will lead to increased sales and greater
profits for aid to education.

Increasing prize payouts for Mega Millions and powerball when the
consortium of states involved in these games agree, will preserve the
State's revenue from multi-jurisdiction lottery games, because New
York may no longer be able to participate in Mega Millions or
powerball absent the ability to raise payout percentages as agreed to
by other lottery jurisdictions.

Budget Implications:

Enactment of this bill is necessary to implement the 2011-2012
Executive Budget, as it preserves revenue contained in the State's
Financial Plan.

Effective Date:

This bill takes effect immediately.


Part R - Authorize multi-jurisdictional Video Lottery gaming.

Purpose:

This bill permits the introduction of joint, multi-jurisdiction and
out-of-state video lottery gaming with the same prize payout
percentages as existing video lottery gaming.

Statement in Support, Summary of Provisions, Existing Law and
Prior Legislative History:

This bill amends Tax Law § 1612 to permit the introduction of joint,
multi-jurisdiction and out-of-state video lottery gaming with the
same prize payout percentages as existing video lottery gaming.

Authorizing the Lottery Division to offer joint, multi-jurisdiction
and out-of-state video lottery gaming will allow the Lottery Division
to introduce multi-jurisdiction, wide-area progressive video lottery
terminals with higher prize payouts.

It is expected that multi-jurisdiction video lottery games will
increase revenue to education because of the growing popularity of
progressive jackpot games. A multi-jurisdiction video lottery game
will allow for higher jackpot amounts while maintaining the standard
prize payout for video lottery games expected by its players.

Budget Implications:

Enactment of this bill is necessary to implement the 2011-2012
Executive Budget as the bill increases revenue by an estimated $2
million in SFY 2011-12 and $3 million annually thereafter.

Effective Date:

This bill takes effect immediately.

Part S - Extend for one year lower Pari-Mutuel tax rates and rules
governing simulcasting of out-of-state races.

Purpose:

This bill extends, for a period of one year, various provisions of the
Racing, Pari-Mutuel Wagering and Breeding (Racing) Law which expire
during the 2011-12 fiscal year.

Summary of Provisions, Existing Law, Prior Legislative History,
and Statement in Support:

Section 1 of the bill amends Racing Law § 1003(a) to extend in-home
simulcasting from June 30, 2011 to June 30, 2012.

Section 2 of the bill amends Racing Law § 1007(3)(d)(iii) to extend
the current percentage of total pools allocated to purses that a
track located in Westchester County receives from a franchised
corporation from June 30, 2011 to June 30,2012.


Section 3 of the bill amends the opening paragraph of Racing Law
§ 1014(1) to continue the provisions allowing simulcasting of
out-of-state thoroughbred races on any day the Saratoga thoroughbred
track is operating from June 30, 2011 to June 30, 2012, and to delay
the operation of these provisions in regard to the simulcasting of
out-of-state thoroughbred races on all days whether or not the
Saratoga thoroughbred track is operating until June 30, 2012.

Section 4 of the bill amends Racing Law § 1015(1) to extend the
provisions governing the simulcasting of races conducted at
out-of-state harness tracks from June 30, 2011 to June 30, 2012.

Section 5 of the bill amends the opening paragraph of Racing Law § 10
16(1) to extend the provisions governing the simulcasting of
out-of-state thoroughbred races on any day the Saratoga thoroughbred
track is closed from June 30, 2011 to June 30, 2012.

Section 6 of the bill amends the opening paragraph of Racing Law
§1018 to extend the current distribution of revenue from out-of-state
simulcasting during the Saratoga meet through September 8, 2011.

Section 7 of the bill amends § 32 of Chapter 281 of the Laws of 1994
to extend the current amount of off-track betting wagers on New York
Racing Association, Inc.
(NYRA) pools dedicated to purse enhancement from July 1, 2011 to July
1, 2012.

Section 8 of the bill amends § 54 of Chapter 346 of the Laws of 1990
to extend binding arbitration for disagreements from July 1, 2011 to
July 1, 2012.

Section 9 of the bill amends Racing Law § 238(1)(a) to extend the
current distribution of revenue from on-track wagering on NYRA races.

Section 10 of the bill amends Racing Law § 10 12(5) to extend the
authorization for account wagering from June 30, 2011 to June 30, 2012.

The extension of these provisions will maintain the pari-mutuel
betting and simulcasting structure that is currently in place in New
York State. These provisions were most recently extended in 2010.

Budget Implications:

Enactment of this bill is necessary to implement the 2011-2012
Executive Budget because it maintains the current pari-mutuel betting
structure in New York State.

Effective Date:

This bill takes effect immediately.

The provisions of this act shall take effect immediately, provided,
however, that the applicable effective date of each part of this act
shall be as specifically set forth in the last section of such part.


view bill text
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

    S. 2811                                                  A. 4011

                      S E N A T E - A S S E M B L Y

                            February 1, 2011
                               ___________

IN  SENATE -- A BUDGET BILL, submitted by the Governor pursuant to arti-
  cle seven of the Constitution -- read twice and ordered  printed,  and
  when printed to be committed to the Committee on Finance

IN  ASSEMBLY  --  A  BUDGET  BILL, submitted by the Governor pursuant to
  article seven of the Constitution -- read once  and  referred  to  the
  Committee on Ways and Means

AN  ACT to amend the abandoned property law, in relation to the dormancy
  period of miscellaneous unclaimed property (Part A); to amend  part  N
  of  chapter  61  of  the laws of 2005 amending the tax law relating to
  certain transactions and  related  information  and  relating  to  the
  voluntary  compliance  initiative; in relation to making permanent the
  disclosure and penalty provisions for transactions  that  present  the
  potential  for  tax  avoidance  (Part  B);  to  amend  the tax law, in
  relation to the empire zones program (Part C); to amend the  tax  law,
  in  relation to directing the crediting of lottery prizes of more than
  six hundred dollars against liability for any tax administered by  the
  commissioner  of taxation and finance (Part D); to amend chapter 56 of
  the laws of 1998, amending the tax law  and  other  laws  relating  to
  extending  the dates of application of the investment tax credit under
  articles 9-A, 22 and 32 of the tax law and to amend chapter 63 of  the
  laws  of 2000, amending the tax law and other laws relating to extend-
  ing the dates of application of the investment tax credit under  arti-
  cle  33  of  the  tax  law, in relation to extending the effectiveness
  thereof (Part E); to amend the public  housing  law,  in  relation  to
  providing  a credit against income tax for persons or entities invest-
  ing in low-income housing (Part F); to amend the economic  development
  law,  the  tax  law  and  the  public  service law, in relation to the
  excelsior jobs program (Part G); to amend the tax law, in relation  to
  the  exemption  from the franchise tax on insurance corporations under
  article thirty-three of such law for town or county cooperative insur-
  ance corporations (Part H); to amend the insurance  law,  the  general
  municipal law and the tax law, in relation to conforming to the feder-
  al  Dodd-Frank  Wall Street Reform and Consumer Protection Act; and to
  repeal paragraphs 8 and 9 of subsection (b) of  section  2118  of  the
  insurance  law, relating thereto (Part I); to amend chapter 298 of the
  laws of 1985, amending the tax law relating to the  franchise  tax  on

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD12574-01-1

S. 2811                             2                            A. 4011

  banking  corporations imposed by the tax law, authorized to be imposed
  by any city having a population of one million or more by chapter  772
  of the laws of 1966 and imposed by the administrative code of the city
  of  New  York and relating to other provisions of the tax law, chapter
  883 of the laws of 1975 and the administrative code of the city of New
  York which relates to such franchise tax, to amend chapter 817 of  the
  laws  of 1987, amending the tax law and the environmental conservation
  law, constituting the business tax reform and rate  reduction  act  of
  1987,  and  to amend chapter 525 of the laws of 1988, amending the tax
  law and the administrative code of the city of New  York  relating  to
  the  imposition  of  taxes in the city of New York, in relation to the
  effectiveness of certain provisions of such chapters; and to amend the
  tax law and the administrative code  of  the  city  of  New  York,  in
  relation  to extending transitional provisions relating to the federal
  Gramm-Leach-Bliley act (Part J); to amend the tax law and the criminal
  procedure law, in relation  to  updating  the  tax  classification  of
  diesel  motor  fuel  to  be  consistent with federal laws and make the
  diesel tax structure consistent with this new tax  treatment;  and  to
  repeal  certain  provisions of the tax law and the administrative code
  of the city of New York relating thereto (Part K); to  amend  the  tax
  law,  in  relation  to  making a technical correction to the E85 defi-
  nition; and to amend chapter 109 of the laws of 2006, amending the tax
  law relating to providing exemptions, reimbursements and credits  from
  various  taxes for certain alternative fuels, in relation to extending
  the alternative fuels tax exemptions for one year (Part L);  to  amend
  section  11 of part EE of chapter 63 of the laws of 2000, amending the
  tax law and other laws relating to modifying the distribution of funds
  from the motor vehicle fuel excise tax, in relation  to  the  distrib-
  ution  of  motor  vehicle  fees  (Part  M);  to  amend the tax law, in
  relation to restrictions on certain keno style lottery games (Part N);
  to amend the tax law, in relation to video lottery free play allowance
  program (Part O); to amend the tax law, in relation to prize payout of
  certain instant lottery games (Part P);  to  amend  the  tax  law,  in
  relation to prize payout in certain multi-jurisdictional lottery games
  (Part  Q);  to  amend the tax law, in relation to multi-jurisdictional
  video lottery gaming (Part R); and to amend  the  racing,  pari-mutuel
  wagering  and  breeding  law,  in  relation  to licenses for simulcast
  facilities, sums relating to track  simulcast,  simulcast  of  out-of-
  state  thoroughbred  races,  simulcasting of races run by out-of-state
  harness tracks and distributions of wagers; to amend  chapter  281  of
  the  laws of 1994 amending the racing, pari-mutuel wagering and breed-
  ing law and other laws relating to simulcasting and chapter 346 of the
  laws of 1990 amending the racing, pari-mutuel  wagering  and  breeding
  law  and  other  laws  relating  to simulcasting and the imposition of
  certain taxes, in relation to extending  certain  provisions  thereof;
  and  to  amend  the  racing, pari-mutuel wagering and breeding law, in
  relation to extending certain provisions thereof (Part S)

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1.  This  act enacts into law major components of legislation
which are necessary to implement the state fiscal plan for the 2011-2012
state fiscal year. Each component is  wholly  contained  within  a  Part
identified  as Parts A through S. The effective date for each particular

S. 2811                             3                            A. 4011

provision contained within such Part is set forth in the last section of
such Part. Any provision in any section contained within a Part, includ-
ing the effective date of the Part, which makes a reference to a section
"of  this  act", when used in connection with that particular component,
shall be deemed to mean and refer to the corresponding  section  of  the
Part  in  which  it  is  found. Section three of this act sets forth the
general effective date of this act.

                                 PART A

  Section 1. Paragraphs (a), (b) and (k) of subdivision 1 of section 300
of the abandoned property law, paragraph (a) as  amended  and  paragraph
(k)  as  relettered by chapter 15 of the laws of 1983, subparagraph (iv)
of paragraph (a) as amended and subparagraph (v)  of  paragraph  (a)  as
added  by  chapter  409 of the laws of 1994, paragraph (b) as amended by
chapter 881 of the laws of 1945 and paragraph (k) as amended by  chapter
78 of the laws of 1976, are amended to read as follows:
  (a)  Any amounts due on deposits or any amounts to which a shareholder
of a savings and loan association or a credit union is entitled, held or
owing by a banking organization, which shall have remained unclaimed for
[five] THREE years by the person or persons  appearing  to  be  entitled
thereto, including any interest or dividends credited thereon, excepting
  (i)  any such amount which has been reduced or increased, exclusive of
dividend or interest payment, within [five] THREE years, or
  (ii) any such amount which is represented by a  passbook  not  in  the
possession  of  the  banking  organization, which has been presented for
entry of dividend or interest credit within [five] THREE years, or
  (iii) any such amount with respect to which the  banking  organization
has on file written evidence received within [five] THREE years that the
person or persons appearing to be entitled to such amounts had knowledge
thereof, or
  (iv)  any such amount payable only at or by a branch office located in
a foreign country, or payable  in  currency  other  than  United  States
currency, or
  (v)  any  such amount that is separately identifiable and has been set
aside to meet the burial and related expenses of an individual, provided
however that said amount shall be deemed  abandoned  property  where  it
remains  unclaimed for [five] THREE years subsequent to the death of the
individual for whom the amount was deposited.
  (b) Any amounts, together with all accumulations of interest or  other
increment  thereon,  held  or  owing  by  a banking organization for the
payment of an interest in a bond and mortgage apportioned or transferred
by it pursuant to subdivision seven of former section one hundred eight-
y-eight of the banking law as it existed prior to July  first,  nineteen
hundred  thirty-seven, which shall have remained unclaimed by the person
or persons appearing to be entitled thereto for [five] THREE years after
the full and final liquidation of such mortgage, excepting
  (i) any such amount which has been reduced by payment to the person or
persons appearing to be entitled thereto within [five] THREE years, or
  (ii) any such amount which is represented by a  certificate  of  share
ownership  not  in  the  possession  of  the banking organization, which
certificate has been presented for transfer within [five]  THREE  years,
or
  (iii)  any  such amount with respect to which the banking organization
has on file written evidence received within [five] THREE years that the

S. 2811                             4                            A. 4011

person or persons appearing to be entitled to such amount had  knowledge
thereof.
  (k)  Lost  property  or  instruments as defined in section two hundred
fifty-one of the personal property law which shall have been held  by  a
safe  deposit  company  or  bank  for [five] THREE years pursuant to the
provisions of section two hundred fifty-six  of  the  personal  property
law.
  S  2.  Paragraphs  (a)  and (c) of subdivision 1 of section 600 of the
abandoned property law, paragraph (a) as amended by chapter 655  of  the
laws  of 1978 and paragraph (c) as amended by chapter 281 of the laws of
1980, are amended  to read as follows:
  (a) Any moneys including the monetary proceeds from the sale of tangi-
ble personal property and securities or other intangible  property  paid
into  court,  which,  except  as provided in section ten hundred OF THIS
CHAPTER, shall have remained in the hands of any  county  treasurer,  or
the  commissioner  of  finance of the city of New York, for [five] THREE
years, together with all accumulations of interest  or  other  increment
thereon, less such legal fees as he may be entitled to.
  (c)  Any  moneys  paid  to a support bureau of a family court, for the
support of a spouse or child, which shall have remained in  the  custody
of a county treasurer, or the commissioner of finance of the city of New
York,  for  [five]  THREE years, together with any interest due thereon,
less such legal fees as he may be entitled  to.  For  purposes  of  this
section,  "family  court"  includes  the domestic relations court of the
city of New York prior to the first day of September,  nineteen  hundred
sixty-two.
  S  3.  Subdivision 1 of section 1000 of the abandoned property law, as
amended by chapter 670 of the laws  of  1989,  is  amended  to  read  as
follows:
  1.  (a) Any moneys held or owing for the payment of an award made by a
court in any condemnation proceeding and payable by a public corporation
or other corporation possessing powers of condemnation, which shall have
remained unclaimed by the person or persons  appearing  to  be  entitled
thereto for [five] THREE years after confirmation by the court, together
with  any  interest  due  thereon,  less,  when an award is payable by a
public corporation, any amount due such public corporation at  the  time
of  title  vesting  for tax, water or any other liens on the same parcel
the award was for, with any interest due thereon,  and  any  amount  due
such  public  corporation at the time of title vesting or at the time of
confirmation, whichever is later, for an assessment on the  same  parcel
the  award was for, with any interest due thereon, shall be deemed aban-
doned property. In any condemnation proceedings in which the court shall
have not made an award, any moneys paid into court,  including  interest
thereon, shall be subject to the provisions of article six of this chap-
ter and this section shall have no application thereto.
  (b)  The  issuance of a warrant for such an award shall not prevent an
award from being deemed abandoned property if such warrant is  unclaimed
[five] THREE years after confirmation of such award by the court.
  S  4.  Subdivision  1 of section 1300 of the abandoned property law is
amended to read as follows:
  1. Any unclaimed moneys arising from the sale of any personal property
which shall have been pledged or mortgaged as security for the  loan  of
money  with  a  corporation, except a banking organization or a licensed
lender, heretofore or hereafter organized by or pursuant  to  a  special
statute  for  the  purpose of, and principally engaged in, giving aid to
individuals by loans of money at interest upon the pledge or mortgage of

S. 2811                             5                            A. 4011

personal property, and which has subjected itself to special  provisions
of the banking law, after deducting the amount of the loan, the interest
then  due  on  the  same  and any other lawful charges, which shall have
remained  in  its possession for [six] THREE years from the date of such
sale, shall be deemed abandoned property.
  S 5. Subdivisions 1 and 2 of section 1315 of  the  abandoned  property
law,  as  amended  by  section 2 of part II of chapter 57 of the laws of
2010, are amended to read as follows:
  1. Any unclaimed amount representing unredeemed gift certificates sold
after December thirty-first, nineteen  hundred  eighty-three,  including
gift  certificates  for merchandise only in which case the face value of
such certificate shall be deemed the amount deemed abandoned, and  owing
in  this  state,  or held by any corporation (other than a public corpo-
ration), joint stock company, individual, association  of  two  or  more
individuals,  committee  or  business trust in this state, and which has
remained unclaimed by the owner of such amount for [five]  THREE  years,
shall be deemed abandoned property.
  2.  Except  as  otherwise  provided  by  law,  any amount representing
unclaimed money or securities and held in escrow  or  otherwise  by  any
corporation  (other  than  a  public  corporation), joint stock company,
individual, association of two or more individuals, committee  or  busi-
ness  trust,  to ensure the performance of any duty or obligation, shall
be deemed abandoned property when:
  a. such amount is held or owing in this state, and
  b. such amount has remained unclaimed by the person or  persons  enti-
tled thereto for [five] THREE years, except
  c.  where  the  duty or obligation for which such amount was deposited
has not been performed and such  performance  is  still  required,  such
amounts shall not be deemed abandoned property.
  S 6. This act shall take effect immediately.

                                 PART B

  Section  1.  Section  12  of part N of chapter 61 of the laws of 2005,
amending the tax law relating to certain transactions and related infor-
mation and relating to the voluntary compliance initiative,  subdivision
(iii) as amended by section 16 of subpart J of part V-1 of chapter 57 of
the laws of 2009, is amended to read as follows:
  S  12. This act shall take effect immediately; provided, however, that
(i) section one of this act shall apply  to  all  disclosure  statements
described  in  paragraph  1  of subdivision (a) of section 25 of the tax
law, as added by section one of this act, that were required to be filed
with the internal revenue service at any time with  respect  to  "listed
transactions"  as  described in such paragraph 1, and shall apply to all
disclosure statements described in paragraph 1  of  subdivision  (a)  of
section  25  of  the  tax law, as added by section one of this act, that
were required to be filed with the internal revenue service with respect
to "reportable transactions" as described in  such  paragraph  1,  other
than  "listed transactions", in which a taxpayer participated during any
taxable year for which the statute of limitations for assessment has not
expired as of the date this act shall take effect, and  shall  apply  to
returns or statements described in such paragraph 1 required to be filed
by  taxpayers  (or  persons  as  described  in  such paragraph) with the
commissioner of taxation and finance on or after the sixtieth day  after
this act shall have become a law; AND

S. 2811                             6                            A. 4011

  (ii)  sections  two  through  four  and seven through nine of this act
shall apply to any tax liability for which the statute of limitations on
assessment has not expired as of the date this act shall  take  effect[;
and
  (iii)  provided,  further,  that  the  provisions  of this act, except
section five of this act, shall expire and be deemed  repealed  July  1,
2011.    The  commissioner  of  taxation  and  finance shall cause to be
prepared a written report on the tax shelter  law.  Notwithstanding  any
other  provision  of law to the contrary, such report shall include, but
not be limited to, statistical  information  regarding  the  listed  and
reportable  transactions  and  avoidance  transactions under this act. A
copy of such report shall be delivered to the  governor,  the  temporary
president  of  the senate, and the speaker of the assembly no later than
April 1, 2007; provided, that, such  expiration  and  repeal  shall  not
affect any requirement imposed pursuant to this act].
  S 2. This act shall take effect immediately.

                                 PART C

  Section  1.  Paragraphs (g) and (h) of subdivision 12-B of section 210
of the tax law, as added by section 8 of part R of  chapter  57  of  the
laws of 2010, are amended to read as follows:
  (g)  Notwithstanding  the expiration of the empire zones program under
article eighteen-B of the general municipal  law,  a  taxpayer  that  is
certified  as  a  qualified  investment project pursuant to such article
eighteen-B on the day immediately preceding the  day  the  empire  zones
program  expired,  AND  HAS  NOT  SUBSEQUENTLY  BEEN  DECERTIFIED BY THE
COMMISSIONER OF ECONOMIC DEVELOPMENT PURSUANT TO  SECTION  NINE  HUNDRED
FIFTY-NINE  OF  THE  GENERAL  MUNICIPAL  LAW AND REGULATIONS PROMULGATED
THEREUNDER, shall continue to be deemed  certified  under  such  article
eighteen-B  for  purposes  of  this subdivision for the remainder of the
taxable year in which the expiration occurred and for the next  succeed-
ing  nine  taxable  years.  In  addition, the areas designated as empire
zones in which the taxpayer  is  certified  as  a  qualified  investment
project  on  the  day  immediately  preceding  the  day the empire zones
program expired shall continue to be deemed empire zones for purposes of
this subdivision for the remainder of the  taxable  year  in  which  the
expiration occurred and for the next succeeding nine taxable years.
  (h)  Notwithstanding  the expiration of the empire zones program under
article eighteen-B of the general municipal law and except  as  provided
in paragraph (g) of this subdivision, a taxpayer that is certified as an
empire  zone  business  pursuant  to  such article eighteen-B on the day
immediately preceding the day the empire zones program expired, AND  HAS
NOT SUBSEQUENTLY BEEN DECERTIFIED BY THE COMMISSIONER OF ECONOMIC DEVEL-
OPMENT PURSUANT TO SECTION NINE HUNDRED FIFTY-NINE OF THE GENERAL MUNIC-
IPAL  LAW  AND  REGULATIONS PROMULGATED THEREUNDER, shall continue to be
deemed certified under such article  eighteen-B  for  purposes  of  this
subdivision  until April first, two thousand fourteen.  In addition, the
areas designated as empire zones in which the taxpayer is  certified  as
an  empire  zone  business  on the day immediately preceding the day the
empire zones program expired shall continue to be  deemed  empire  zones
for  purposes  of this subdivision until April first, two thousand four-
teen.
  S 2. Paragraph 7 of subsection (j) of section 606 of the tax  law,  as
added  by  section  9  of  part  R of chapter 57 of the laws of 2010, is
amended to read as follows:

S. 2811                             7                            A. 4011

  (7) Notwithstanding the expiration of the empire zones  program  under
article  eighteen-B  of  the  general  municipal law, a taxpayer that is
certified as an empire zone business pursuant to such article eighteen-B
on the day immediately  preceding  the  day  the  empire  zones  program
expired,  AND  HAS NOT SUBSEQUENTLY BEEN DECERTIFIED BY THE COMMISSIONER
OF ECONOMIC DEVELOPMENT PURSUANT TO SECTION NINE HUNDRED  FIFTY-NINE  OF
THE  GENERAL MUNICIPAL LAW AND REGULATIONS PROMULGATED THEREUNDER, shall
continue to be  deemed  certified  under  such  article  eighteen-B  for
purposes  of  this subdivision until April first, two thousand fourteen.
In addition, the areas designated as empire zones in which the  taxpayer
is certified as an empire zone business on the day immediately preceding
the  day  the  empire  zones program expired shall continue to be deemed
empire zones for purposes of this subdivision  until  April  first,  two
thousand fourteen.
  S  3. Paragraphs (d) and (e) of subdivision 12-C of section 210 of the
tax law, as added by section 10 of part R of chapter 57 of the  laws  of
2010, are amended to read as follows:
  (d)  Notwithstanding  the expiration of the empire zones program under
article eighteen-B of the general municipal  law,  a  taxpayer  that  is
certified  as  a  qualified  investment project pursuant to such article
eighteen-B on the day immediately preceding the  day  the  empire  zones
program  expired,  AND  HAS  NOT  SUBSEQUENTLY  BEEN  DECERTIFIED BY THE
COMMISSIONER OF ECONOMIC DEVELOPMENT PURSUANT TO  SECTION  NINE  HUNDRED
FIFTY-NINE  OF  THE  GENERAL  MUNICIPAL  LAW AND REGULATIONS PROMULGATED
THEREUNDER, shall continue to be deemed  certified  under  such  article
eighteen-B  for  purposes  of  this subdivision for the remainder of the
taxable year in which the expiration occurred and for the next  succeed-
ing  nine  taxable  years.  In  addition, the areas designated as empire
zones in which the taxpayer  is  certified  as  a  qualified  investment
project  on  the  day  immediately  preceding  the  day the empire zones
program expired shall continue to be deemed empire zones for purposes of
this subdivision for the remainder of the  taxable  year  in  which  the
expiration occurred and for the next succeeding nine taxable years.
  (e)  Notwithstanding  the expiration of the empire zones program under
article eighteen-B of the general municipal law and except  as  provided
in paragraph (d) of this subdivision, a taxpayer that is certified as an
empire  zone  business  pursuant  to  such article eighteen-B on the day
immediately preceding the day the empire zones program expired, AND  HAS
NOT SUBSEQUENTLY BEEN DECERTIFIED BY THE COMMISSIONER OF ECONOMIC DEVEL-
OPMENT PURSUANT TO SECTION NINE HUNDRED FIFTY-NINE OF THE GENERAL MUNIC-
IPAL  LAW  AND  REGULATIONS PROMULGATED THEREUNDER, shall continue to be
deemed in the empire zone in which the  taxpayer  was  certified  as  an
empire zone business on the day immediately preceding the day the empire
zones  program  expired  for each of the three years next succeeding the
taxable year for which the credit under  subdivision  twelve-B  OF  THIS
SECTION is allowed.
  S 4. Paragraph 4 of subsection (j-1) of section 606 of the tax law, as
added  by  section  11  of  part R of chapter 57 of the laws of 2010, is
amended to read as follows:
  (4) Notwithstanding the expiration of the empire zones  program  under
article  eighteen-B  of  the  general  municipal law, a taxpayer that is
certified as an empire zone business pursuant to such article eighteen-B
on the day immediately  preceding  the  day  the  empire  zones  program
expired,  AND  HAS NOT SUBSEQUENTLY BEEN DECERTIFIED BY THE COMMISSIONER
OF ECONOMIC DEVELOPMENT PURSUANT TO SECTION NINE HUNDRED  FIFTY-NINE  OF
THE  GENERAL MUNICIPAL LAW AND REGULATIONS PROMULGATED THEREUNDER, shall

S. 2811                             8                            A. 4011

continue to be deemed in the empire  zone  in  which  the  taxpayer  was
certified  as  an  empire zone business on the day immediately preceding
the day the empire zones program expired for each  of  the  three  years
next  succeeding  the  taxable year for which the credit under [subdivi-
sion] SUBSECTION (j) OF THIS SECTION is allowed.
  S 5. Subdivision (k) of section 14 of  the  tax  law,  as  amended  by
section  5  of  part  A of chapter 63 of the laws of 2005, is amended to
read as follows:
  (k) If the designation of an area as an empire zone is  no  longer  in
effect  because section nine hundred sixty-nine of the general municipal
law was not amended to extend the effective date of such designation  so
that the designations of all empire zones pursuant to article eighteen-B
of  the  general  municipal law have expired, a business enterprise that
was certified pursuant to article eighteen-B of  the  general  municipal
law  on  the day immediately preceding the day on which such designation
expired, AND HAS NOT SUBSEQUENTLY BEEN DECERTIFIED BY  THE  COMMISSIONER
OF  ECONOMIC  DEVELOPMENT PURSUANT TO SECTION NINE HUNDRED FIFTY-NINE OF
THE GENERAL MUNICIPAL LAW AND REGULATIONS PROMULGATED THEREUNDER,  shall
be  deemed to continue to be certified under such article eighteen-B for
purposes of this section, and sections  fifteen,  sixteen,  section  one
hundred  eighty-seven-j,  subdivisions  twenty-seven and twenty-eight of
section two hundred ten,  subsections  (bb)  and  (cc)  of  section  six
hundred six, [subdivision (z) of section eleven hundred fifteen,] SUBDI-
VISION  (D)  OF SECTION ELEVEN HUNDRED NINETEEN, subsections (o) and (p)
of section fourteen hundred fifty-six, and subdivisions (r) and  (s)  of
section  fifteen  hundred  eleven  of  this chapter. In addition, if the
designation of an area as an empire zone is no longer in effect  because
section  nine  hundred  sixty-nine  of the general municipal law was not
amended to extend the effective date of such  designation  so  that  the
designations  of  all empire zones pursuant to article eighteen-B of the
general municipal law have expired, all references to  empire  zones  in
the  provisions of this chapter listed in the previous sentence shall be
read as meaning areas designated as empire zones on the day  immediately
preceding the day on which such designation expired.
  S 6. Paragraph (f) of subdivision 20 of section 210 of the tax law, as
added  by  section  14  of  part R of chapter 57 of the laws of 2010, is
amended to read as follows:
  (f) If the designation of an area as an empire zone is  no  longer  in
effect  because the designations of all empire zones pursuant to article
eighteen-B of the general municipal law have expired,  a  taxpayer  that
has  made  a  contribution  of  money  on  or before the day immediately
preceding the day the empire zones expired to  a  community  development
project  approved  by  the commissioner of economic development shall be
deemed eligible to claim the empire zone capital credit  under  subpara-
graph three of paragraph (a) of this subdivision for additional contrib-
utions made prior to April first, two thousand fourteen and certified by
the  commissioner  of economic development to that community development
project as payment of a commitment made by the taxpayer to that communi-
ty development project before the empire zones  expired,  PROVIDED  THAT
THE  TAXPAYER  HAS NOT SUBSEQUENTLY BEEN DECERTIFIED BY THE COMMISSIONER
OF ECONOMIC DEVELOPMENT PURSUANT TO SECTION NINE HUNDRED  FIFTY-NINE  OF
THE GENERAL MUNICIPAL LAW AND REGULATIONS PROMULGATED THEREUNDER.
  S  7.  Paragraph 5 of subsection (l) of section 606 of the tax law, as
added by section 15 of part R of chapter 57 of  the  laws  of  2010,  is
amended to read as follows:

S. 2811                             9                            A. 4011

  (5)  If  the  designation of an area as an empire zone is no longer in
effect because the designations of all empire zones pursuant to  article
eighteen-B  of  the  general municipal law have expired, a taxpayer that
has made a contribution of  money  on  or  before  the  day  immediately
preceding  the  day  the empire zones expired to a community development
project approved by the commissioner of economic  development  shall  be
deemed  eligible  to claim the empire zone capital credit under subpara-
graph (C) of paragraph one of this subsection  for  additional  contrib-
utions made prior to April first, two thousand fourteen and certified by
the  commissioner  of economic development to that community development
project as payment of a commitment made by the taxpayer to that communi-
ty development project before the empire zones  expired,  PROVIDED  THAT
THE  TAXPAYER  HAS NOT SUBSEQUENTLY BEEN DECERTIFIED BY THE COMMISSIONER
OF ECONOMIC DEVELOPMENT PURSUANT TO SECTION NINE HUNDRED  FIFTY-NINE  OF
THE GENERAL MUNICIPAL LAW AND REGULATIONS PROMULGATED THEREUNDER.
  S  8. Paragraph 5 of subsection (d) of section 1456 of the tax law, as
added by section 16 of part R of chapter 57 of  the  laws  of  2010,  is
amended to read as follows:
  (5)  If  the  designation of an area as an empire zone is no longer in
effect because the designations of all empire zones pursuant to  article
eighteen-B  of  the  general municipal law have expired, a taxpayer that
has made a contribution of  money  on  or  before  the  day  immediately
preceding  the  day  the empire zones expired to a community development
project approved by the commissioner of economic  development  shall  be
deemed  eligible  to claim the empire zone capital credit under subpara-
graph (C) of paragraph one of this subsection  for  additional  contrib-
utions made prior to April first, two thousand fourteen and certified by
the  commissioner  of economic development to that community development
project as payment of a commitment made by the taxpayer to that communi-
ty development project before the empire zones  expired,  PROVIDED  THAT
THE  TAXPAYER  HAS NOT SUBSEQUENTLY BEEN DECERTIFIED BY THE COMMISSIONER
OF ECONOMIC DEVELOPMENT PURSUANT TO SECTION NINE HUNDRED  FIFTY-NINE  OF
THE GENERAL MUNICIPAL LAW AND REGULATIONS PROMULGATED THEREUNDER.
  S 9. Paragraph 5 of subdivision (h) of section 1511 of the tax law, as
added  by  section  17  of  part R of chapter 57 of the laws of 2010, is
amended to read as follows:
  (5) If the designation of an area as an empire zone is  no  longer  in
effect  because the designations of all empire zones pursuant to article
eighteen-B of the general municipal law have expired,  a  taxpayer  that
has  made  a  contribution  of  money  on  or before the day immediately
preceding the day the empire zones expired to  a  community  development
project  approved  by  the commissioner of economic development shall be
deemed eligible to claim the empire zone capital credit  under  subpara-
graph  (C)  of paragraph one of this subdivision for additional contrib-
utions made prior to April first, two thousand fourteen and certified by
the commissioner of economic development to that  community  development
project as payment of a commitment made by the taxpayer to that communi-
ty  development  project  before the empire zones expired, PROVIDED THAT
THE TAXPAYER HAS NOT SUBSEQUENTLY BEEN DECERTIFIED BY  THE  COMMISSIONER
OF  ECONOMIC  DEVELOPMENT PURSUANT TO SECTION NINE HUNDRED FIFTY-NINE OF
THE GENERAL MUNICIPAL LAW AND REGULATIONS PROMULGATED THEREUNDER.
  S 10. This act shall take effect immediately and shall be deemed to be
in full force and effect on and after August 11, 2010.

                                 PART D

S. 2811                            10                            A. 4011

  Section 1. The tax law is amended by adding a new  section  1613-c  to
read as follows:
  S  1613-C.  CREDITING  OF LOTTERY PRIZES AGAINST LIABILITIES FOR TAXES
ADMINISTERED BY THE COMMISSIONER. (1) THE DIRECTOR,  ON  BEHALF  OF  THE
DIVISION, SHALL ENTER INTO A WRITTEN AGREEMENT WITH THE COMMISSIONER, ON
BEHALF  OF  THE  DEPARTMENT,  WITHIN SIXTY DAYS OF THE EFFECTIVE DATE OF
THIS SECTION, WHICH WILL SET  FORTH  PROCEDURES  FOR  CREDITING  LOTTERY
PRIZES  OF  MORE  THAN SIX HUNDRED DOLLARS AWARDED TO HOLDERS OF WINNING
LOTTERY TICKETS, WHETHER INDIVIDUALS, CORPORATIONS, ASSOCIATIONS, COMPA-
NIES, PARTNERSHIPS, LIMITED LIABILITY PARTNERSHIPS OR  COMPANIES,  PART-
NERS, MEMBERS, MANAGERS, ESTATES, TRUST FIDUCIARIES OR ENTITIES, AGAINST
PAST  DUE  TAX LIABILITIES OWED BY SUCH HOLDERS FOR ANY TAX ADMINISTERED
BY THE COMMISSIONER, ABOUT WHICH THE DIRECTOR HAS BEEN NOTIFIED  BY  THE
COMMISSIONER PURSUANT TO THE PROVISIONS OF SUCH AGREEMENT.
  (2)  SUCH  AGREEMENT  SHALL  APPLY TO ANY PAST DUE TAX LIABILITY WHICH
ARISES FROM (I) AN ENFORCEABLE WARRANT OR JUDGMENT, (II) AN  ENFORCEABLE
DETERMINATION  OF  AN  ADMINISTRATIVE BODY WHICH IS NO LONGER SUBJECT TO
ADMINISTRATIVE OR JUDICIAL REVIEW, OR (III) AN  ASSESSMENT  OR  DETERMI-
NATION  (INCLUDING SELF-ASSESSMENT OR SELF-ASSESSED DETERMINATION) WHICH
HAS BECOME FINAL OR FINALLY AND IRREVOCABLY FIXED AND NO LONGER  SUBJECT
TO ADMINISTRATIVE OR JUDICIAL REVIEW.
  (3) SUCH AGREEMENT SHALL INCLUDE:
  (A)  THE PROCEDURE UNDER WHICH THE DEPARTMENT WILL NOTIFY THE DIVISION
OF TAX LIABILITIES, INCLUDING WHEN THE DIVISION WILL BE NOTIFIED AND THE
CONTENT OF THAT NOTIFICATION;
  (B) THE PROCEDURE FOR REIMBURSEMENT OF THE DIVISION BY THE  DEPARTMENT
FOR  THE COST OF CARRYING OUT THE PROCEDURES AUTHORIZED BY THIS SECTION;
AND
  (C) ANY OTHER MATTERS THE PARTIES TO THE AGREEMENT DEEM  NECESSARY  TO
CARRY OUT THE PROVISIONS OF THIS SECTION.
  (4) PRIOR TO AWARDING LOTTERY PRIZES OF MORE THAN SIX HUNDRED DOLLARS,
THE  DIVISION  SHALL  REVIEW  THE  MOST RECENT NOTICE OF TAX LIABILITIES
PROVIDED BY THE COMMISSIONER. FOR HOLDERS  OF  WINNING  LOTTERY  TICKETS
IDENTIFIED  ON  THAT NOTICE, THE DIVISION SHALL CREDIT TO THE DEPARTMENT
THE AMOUNT OF EACH HOLDER'S PRIZE NECESSARY TO SATISFY THAT HOLDER'S TAX
LIABILITY, AND THE REMAINDER OF THE PRIZE SHALL BE AWARDED TO THE HOLDER
OF THE WINNING TICKET.
  (5) IF THE DIVISION HAS ALSO RECEIVED A NOTICE OF LIABILITY OF A PRIZE
WINNER FOR PAST-DUE SUPPORT OR PUBLIC ASSISTANCE  BENEFITS  PURSUANT  TO
SECTION SIXTEEN HUNDRED THIRTEEN-A OR SIXTEEN HUNDRED THIRTEEN-B OF THIS
ARTICLE, THEN THE AMOUNT OF ANY PRIZE SHALL BE FIRST CREDITED OR APPLIED
TO  THE  INCOME  TAX REQUIRED TO BE WITHHELD BY LAW, THEN AS REQUIRED BY
SECTION SIXTEEN HUNDRED THIRTEEN-A OR SIXTEEN HUNDRED THIRTEEN-B OF THIS
ARTICLE, THEN TO THE PAST DUE TAX LIABILITY AS REQUIRED BY THIS SECTION.
THE BALANCE WILL THEN BE PAID TO THE HOLDER OF THE WINNING LOTTERY TICK-
ET.
  (6) THE DIVISION SHALL CERTIFY TO THE COMPTROLLER THE TOTAL AMOUNT  OF
THE  LOTTERY  PRIZE  TO BE CREDITED AGAINST PAST DUE TAX LIABILITIES AND
THE REMAINDER OF THE PRIZE TO BE AWARDED TO THE HOLDER  OF  THE  WINNING
LOTTERY TICKET.
  (7)  THE DIVISION SHALL NOTIFY THE HOLDER OF THE WINNING LOTTERY TICK-
ET, IN WRITING, OF THE  TOTAL  AMOUNT  OF  THE  LOTTERY  PRIZE  CREDITED
AGAINST  PAST  DUE  TAX LIABILITIES AND THE REMAINDER OF THE PRIZE TO BE
AWARDED TO THE HOLDER. THAT NOTICE MUST ALSO ADVISE THE HOLDER THAT  THE
DEPARTMENT  WILL  PROVIDE  SEPARATE NOTICE, IN WRITING, OF THE PROCEDURE
FOR AND TIME FRAME BY WHICH THE HOLDER MAY CONTEST SUCH CREDITING.

S. 2811                            11                            A. 4011

  (8) THE DEPARTMENT SHALL NOTIFY THE  HOLDER  OF  THE  WINNING  LOTTERY
TICKET, IN WRITING, OF THE AMOUNT OF A PRIZE TO BE CREDITED AGAINST PAST
DUE  TAX  LIABILITIES  AND THE PROCEDURE FOR AND TIME FRAME BY WHICH THE
HOLDER MAY CONTEST THE CREDITING OF THE PRIZE.
  (9) FROM THE TIME THE DIVISION IS NOTIFIED BY THE DEPARTMENT OF A PAST
DUE  TAX LIABILITY OF A HOLDER OF A WINNING LOTTERY TICKET, THE DIVISION
SHALL BE RELIEVED FROM ALL LIABILITY TO THE  HOLDER,  AND  THE  HOLDER'S
HEIRS,  REPRESENTATIVES, ESTATE, SUCCESSORS OR ASSIGNS FOR THE AMOUNT OF
A PRIZE CERTIFIED TO THE COMPTROLLER TO BE CREDITED AGAINST PAST DUE TAX
LIABILITIES AND THE HOLDER  AND  THE  HOLDER'S  HEIRS,  REPRESENTATIVES,
ESTATE,  SUCCESSOR  OR  ASSIGNS  SHALL HAVE NO RIGHT TO COMMENCE A COURT
ACTION OR PROCEEDING OR TO ANY OTHER LEGAL RECOURSE AGAINST THE DIVISION
TO RECOVER ANY AMOUNT  CERTIFIED  TO  THE  COMPTROLLER  TO  BE  CREDITED
AGAINST PAST DUE TAX LIABILITIES. PROVIDED HOWEVER, NOTHING HEREIN SHALL
BE  CONSTRUED  TO  PROHIBIT A HOLDER OF A WINNING LOTTERY TICKET AND THE
HOLDER'S HEIRS, REPRESENTATIVES,  ESTATE,  SUCCESSORS  OR  ASSIGNS  FROM
PROCEEDING  AGAINST  THE  DEPARTMENT  TO  RECOVER  THE PART OF THE PRIZE
CERTIFIED TO THE COMPTROLLER AND CREDITED TO PAST  DUE  TAX  LIABILITIES
WHICH  IS  GREATER  THAN  THE AMOUNT OF PAST DUE TAX LIABILITIES OWED BY
THAT HOLDER ON THE DATE OF CERTIFICATION.
  (10) NOTWITHSTANDING ANY LAW TO THE CONTRARY, THE DEPARTMENT  AND  ITS
OFFICERS  AND  EMPLOYEES MAY FURNISH TO THE DIVISION ANY ABSTRACT OF ANY
TAX RETURN OR REPORT, OR ANY INFORMATION CONCERNING AN ITEM CONTAINED IN
ANY SUCH RETURN OR REPORT OR  DISCLOSED  BY  ANY  INVESTIGATION  OF  TAX
LIABILITY  UNDER  THIS  CHAPTER,  BUT  ONLY FOR THE PURPOSE OF CREDITING
LOTTERY PRIZES AGAINST PAST DUE TAX LIABILITIES DESCRIBED IN SUBDIVISION
TWO OF THIS SECTION.
  S 2. This act shall take effect on the first of August next succeeding
the date on which it shall have become a law, provided that the  depart-
ment  of  taxation  and finance and the division of the lottery may take
steps to effectuate the written agreement between the  director  of  the
division  of  the  lottery  and the commissioner of taxation and finance
prior to such effective date.

                                 PART E

  Section 1. Paragraph c of subdivision 2 of section 124 of  part  A  of
chapter  56  of  the  laws  of 1998, amending the tax law and other laws
relating to extending the dates of application  of  the  investment  tax
credit  under  articles  9-A,  22  and  32 of the tax law, as amended by
section 1 of part YY-1 of chapter 57 of the laws of 2008, is amended  to
read as follows:
  c.  Sections  fifteen  through twenty-seven of this act shall apply to
property placed in service on or after October 1, 1998 and before  Octo-
ber 1, [2011] 2015.
  S  2.  Section 2 of part L of chapter 63 of the laws of 2000, amending
the tax law and other laws relating to extending the dates  of  applica-
tion  of  the  investment tax credit under article 33 of the tax law, as
amended by section 2 of part YY-1 of chapter 57 of the laws of 2008,  is
amended to read as follows:
  S 2. This act shall take effect immediately and shall apply to proper-
ty  placed  in service on or after January 1, 2002 and before October 1,
[2011] 2015.
  S 3. This act shall take effect immediately.

                                 PART F

S. 2811                            12                            A. 4011

  Section 1. Subdivision 4 of section 22 of the public housing  law,  as
amended  by  section  1  of part P of chapter 57 of the laws of 2010, is
amended to read as follows:
  4.  Statewide  limitation. The aggregate dollar amount of credit which
the commissioner may allocate to  eligible  low-income  buildings  under
this  article  shall  be  [twenty-eight] THIRTY-TWO million dollars. The
limitation provided by this subdivision applies only  to  allocation  of
the  aggregate dollar amount of credit by the commissioner, and does not
apply to allowance to a taxpayer of the credit with respect to an eligi-
ble low-income building for each year of the credit period.
  S 2. This act shall take effect immediately.

                                 PART G

  Section 1. Subdivision 12 of section 352 of the  economic  development
law, as added by section 1 of part MM of chapter 59 of the laws of 2010,
is amended to read as follows:
  12.  "Preliminary  schedule  of  benefits" means the maximum aggregate
amount of each component of the tax credit that  a  participant  in  the
excelsior  jobs program is eligible to receive pursuant to this article.
The schedule shall indicate the annual amount of each component  of  the
credit a participant may claim in each of its [five] TEN years of eligi-
bility.    The  preliminary  schedule of benefits shall be issued by the
department when the department approves the  application  for  admission
into  the  program.  The  commissioner may amend that schedule, provided
that the commissioner complies with the credit  caps  in  section  three
hundred fifty-nine of this article.
  S  2. Section 353 of the economic development law, as added by section
1 of part MM of chapter 59 of the laws of 2010, is amended  to  read  as
follows:
  S  353.  Eligibility criteria. 1. To be a participant in the excelsior
jobs program, a business entity shall operate in New York state predomi-
nantly:
  (a) as a financial services data center or a financial  services  back
office operation;
  (b) in manufacturing;
  (c) in software development and new media;
  (d) in scientific research and development;
  (e) in agriculture;
  (f)  in  the  creation  or  expansion of back office operations in the
state;
  (g) in a distribution center; or
  (h) in an  industry  with  significant  potential  for  private-sector
economic  growth  and  development  in  this state as established by the
commissioner in regulations promulgated pursuant  to  this  article.  In
promulgating  such  regulations  the  commissioner shall include job and
investment criteria.
  2. WHEN DETERMINING WHETHER AN APPLICANT IS OPERATING PREDOMINATELY IN
ONE OF THE INDUSTRIES LISTED IN SUBDIVISION ONE  OF  THIS  SECTION,  THE
COMMISSIONER  WILL  EXAMINE  THE  NATURE OF THE BUSINESS ACTIVITY AT THE
LOCATION FOR THE PROPOSED PROJECT AND  WILL  MAKE  ELIGIBILITY  DETERMI-
NATIONS BASED ON SUCH ACTIVITY.
  3.  For  the  purposes of this article, in order to participate in the
excelsior jobs program, a business  entity  operating  predominantly  in
manufacturing  must create at least twenty-five net new jobs; a business
entity operating predominately in agriculture must create at  least  ten

S. 2811                            13                            A. 4011

net  new  jobs; a business entity operating predominantly as a financial
service data center or financial services customer back office operation
must create at least one hundred net new jobs; a business entity operat-
ing  predominantly in scientific research and development must create at
least ten net new jobs; a business  entity  operating  predominantly  in
software  development  must create at least ten net new jobs; a business
entity creating or expanding back office operations  or  a  distribution
center in the state must create at least one hundred fifty net new jobs,
notwithstanding  subdivision  [four] FIVE of this section; or a business
entity must be a regionally significant project as defined in this arti-
cle; or
  [3.] 4. A business entity operating predominantly in one of the indus-
tries referenced in paragraphs (a) through (h)  of  subdivision  one  of
this section but which does not meet the job requirements of subdivision
[two]  THREE  of  this  section  must  have at least fifty full-time job
equivalents and must demonstrate that its benefit-cost ratio is at least
ten to one.
  [4.] 5. A not-for-profit business  entity,  a  business  entity  whose
primary  function  is  the  provision  of  services  including  personal
services, business services, or the provision of utilities, and a  busi-
ness  entity engaged predominantly in the retail or entertainment indus-
try, and a company engaged in the generation or  distribution  of  elec-
tricity,  the  distribution  of  natural gas, or the production of steam
associated with the  generation  of  electricity  are  not  eligible  to
receive the tax credit described in this article.
  [5.]  6.  A  business  entity  must  be  in compliance with all worker
protection and environmental laws and regulations. In addition, a  busi-
ness entity may not owe past due state taxes or local property taxes.
  S  3. Section 354 of the economic development law, as added by section
1 of part MM of chapter 59 of the laws of 2010, is amended  to  read  as
follows:
  S 354. Application and approval process. 1. A business enterprise must
submit  a  completed  application  as prescribed by the commissioner. An
application may be recommended by entities, including  but  not  limited
to,  those  created  pursuant to subdivision (e) of section nine hundred
fifty-seven of the general municipal law.
  2. As part of such application, each business enterprise must:
  (a) Agree to allow the department of taxation and finance to share its
tax information with the department. However, any information shared  as
a  result  of  this  agreement  shall not be available for disclosure or
inspection under the state freedom of information law.
  (b) Agree to allow the department  of  labor  to  share  its  tax  and
employer  information  with  the  department.  However,  any information
shared as a result of this agreement shall not be available for  disclo-
sure or inspection under the state freedom of information law.
  (c)  Allow  the  department and its agents access to any and all books
and records the department may require to monitor compliance.
  (d) Agree to be permanently [decertified from the empire zones program
if admitted into the excelsior jobs program,  effective  for  the  first
taxable  year  that the business enterprise may claim the excelsior jobs
program credit and for all subsequent taxable  years]  DISQUALIFIED  FOR
EMPIRE  ZONE  BENEFITS  AT  ANY  LOCATION  OR LOCATIONS THAT QUALIFY FOR
EXCELSIOR JOBS PROGRAM BENEFITS IF  ADMITTED  INTO  THE  EXCELSIOR  JOBS
PROGRAM.
  (e) Provide the following information to the department upon request:

S. 2811                            14                            A. 4011

  (i)  a  plan outlining the schedule for meeting the job and investment
requirements as set forth in subdivisions [two] THREE and  [three]  FOUR
of  section  three  hundred  fifty-three of this article. Such plan must
include details on job titles and expected salaries;
  (ii)  the  prior  three years of federal and state income or franchise
tax returns, unemployment insurance quarterly returns, real property tax
bills and audited financial statements;
  (iii) the amount and description of  projected  qualified  investments
for which it plans to claim the excelsior investment tax credit;
  (iv)  an  estimate of the portion of any federal research and develop-
ment tax credits, attributable to research  and  development  activities
conducted  in New York state, that it anticipates claiming for the years
it expects to claim the excelsior research and development credit; and
  (v) the employer identification or social  security  numbers  for  all
related  persons  to  the applicant, including those of any members of a
limited liability company or partners in a partnership.
  (f) Provide a clear and detailed presentation of all  related  persons
to the applicant to assure the department that jobs are not being shift-
ed within the state.
  (g)  Certify,  under  penalty  of  perjury,  that it is in substantial
compliance with all environmental, worker protection, and local,  state,
and federal tax laws.
  3.  After  reviewing a business enterprise's completed application and
determining that the business enterprise will meet  the  conditions  set
forth  in  subdivisions  [two]  THREE  and [three] FOUR of section three
hundred fifty-three of this article, the department may admit the appli-
cant into the program and provide the applicant with  a  certificate  of
eligibility  and a preliminary schedule of benefits by year based on the
applicant's projections as set forth in its application.  This  prelimi-
nary  schedule  of  benefits delineates the maximum possible benefits an
applicant may receive.
  4. In order to become a participant in the program, an applicant  must
submit  evidence  [of achieving job and investment requirements] THAT IT
SATISFIES THE ELIGIBILITY CRITERIA SPECIFIED IN  SECTION  THREE  HUNDRED
FIFTY-THREE  OF THIS ARTICLE AND SUBDIVISION TWO OF THIS SECTION in such
form as the commissioner may prescribe. After  reviewing  such  evidence
and finding it sufficient, the department shall certify the applicant as
a  participant and issue to that participant a certificate of tax credit
for one taxable year. To receive a certificate of tax credit for  subse-
quent  taxable  years,  the  participant must submit to the department a
performance report  DEMONSTRATING  THAT  THE  PARTICIPANT  CONTINUES  TO
SATISFY  THE  ELIGIBILITY  CRITERIA  SPECIFIED  IN SECTION THREE HUNDRED
FIFTY-THREE OF THIS ARTICLE AND SUBDIVISION TWO OF THIS SECTION. IF SUCH
ELIGIBILITY CRITERIA IS MET, A PARTICIPANT CAN RECEIVE TAX CREDITS BASED
ON INTERIM JOB, INVESTMENT OR RESEARCH  AND  DEVELOPMENT  MILESTONES.  A
participant's  increase  in employment, qualified investment, or federal
research and development tax credit attributable to research and  devel-
opment  activities in New York state above its projections listed in its
application shall not result in an increase in tax benefits  under  this
article.  However,  if  the participant's expenditures are less than the
estimated amounts, the credit shall be less than the estimate.
  5. A participant may claim tax benefits commencing in the first  taxa-
ble  year  that  the  business  enterprise receives a certificate of tax
credit or the first taxable year listed on its preliminary  schedule  of
benefits,  whichever is later. A participant may claim such benefits for
the next [four]  NINE  consecutive  taxable  years,  provided  that  the

S. 2811                            15                            A. 4011

participant  demonstrates to the department that it continues to satisfy
the eligibility criteria specified in section three hundred  fifty-three
of  this  article  and  subdivision two of this section in each of those
taxable years.
  S  4. Section 355 of the economic development law, as added by section
1 of part MM of chapter 59 of the laws of 2010, is amended  to  read  as
follows:
  S  355.  Excelsior  jobs program credit.  1. Excelsior jobs tax credit
component. A participant in the excelsior jobs program shall be eligible
to claim a credit for each net new job it creates in New York state. The
amount of such credit per job shall be equal to the [sum of the  follow-
ing:  five  percent  of the amount of remuneration equal to or less than
fifty thousand dollars; four percent of the amount  of  remuneration  in
excess  of fifty thousand dollars and equal to or less than seventy-five
thousand dollars; and 1.33 percent of  the  amount  of  remuneration  in
excess  of  seventy-five  thousand  dollars.  However, the amount of the
credit for each net new job shall  not  exceed  five  thousand  dollars]
PRODUCT OF THE GROSS WAGES PAID AND 6.85 PERCENT.
  2.  Excelsior  investment  tax  credit component. A participant in the
excelsior jobs program shall be eligible to claim a credit on  qualified
investments.  The  credit  shall  be equal to two percent of the cost or
other basis for federal income tax purposes of the qualified investment.
A participant may not claim both the  excelsior  investment  tax  credit
component  and the investment tax credit set forth in subdivision twelve
of section two hundred ten, subsection (a) of section six  hundred  six,
[or]  subsection  (i) of section fourteen hundred fifty-six, OR SUBDIVI-
SION (Q) OF SECTION FIFTEEN HUNDRED ELEVEN of the tax law for  the  same
property  in  any taxable year, EXCEPT THAT A PARTICIPANT MAY CLAIM BOTH
THE EXCELSIOR INVESTMENT TAX CREDIT COMPONENT  AND  THE  INVESTMENT  TAX
CREDIT  FOR  RESEARCH  AND DEVELOPMENT PROPERTY. In addition, a taxpayer
who or which is qualified to claim the excelsior investment  tax  credit
component and is also qualified to claim the brownfield tangible proper-
ty  credit  component  under section twenty-one of the tax law may claim
either the excelsior investment tax credit component  or  such  tangible
property  credit  component,  but  not  both with regard to a particular
piece of property. A credit may not be claimed until a  business  enter-
prise  has received a certificate of tax credit, provided that qualified
investments made on or after the issuance of the certificate  of  eligi-
bility  but  before the issuance of the certificate of tax credit to the
business enterprise, may be claimed in the first taxable year for  which
the  business  enterprise  is  allowed  to  claim  the  credit. Expenses
incurred prior to the date the certificate of eligibility is issued  are
not eligible to be included in the calculation of the credit.
  3.  Excelsior research and development tax credit component. A partic-
ipant in the excelsior jobs program shall be eligible to claim a  credit
equal to [ten] FIFTY percent of the portion of the participant's federal
research  and  development  tax credit that relates to the participant's
research and development expenditures in New York state during the taxa-
ble year; PROVIDED HOWEVER, THE EXCELSIOR RESEARCH AND  DEVELOPMENT  TAX
CREDIT  SHALL  NOT  EXCEED  THREE  PERCENT OF THE QUALIFIED RESEARCH AND
DEVELOPMENT EXPENDITURES ATTRIBUTABLE TO  ACTIVITIES  CONDUCTED  IN  NEW
YORK  STATE. If the federal research and development credit has expired,
then the research and development expenditures relating to  the  federal
research  and  development  credit shall be calculated as if the federal
research and development credit structure and definition  in  effect  in
two  thousand  nine  were  still  in effect.   NOTWITHSTANDING ANY OTHER

S. 2811                            16                            A. 4011

PROVISION OF THIS CHAPTER TO  THE  CONTRARY,  RESEARCH  AND  DEVELOPMENT
EXPENDITURES  IN  THIS STATE, INCLUDING SALARY OR WAGE EXPENSES FOR JOBS
RELATED TO RESEARCH AND DEVELOPMENT ACTIVITIES IN  THIS  STATE,  MAY  BE
USED  AS THE BASIS FOR THE EXCELSIOR RESEARCH AND DEVELOPMENT TAX CREDIT
COMPONENT AND THE  QUALIFIED  EMERGING  TECHNOLOGY  COMPANY  FACILITIES,
OPERATIONS AND TRAINING CREDIT UNDER THE TAX LAW.
  4. Excelsior real property tax credit COMPONENT.  (A) A participant in
the  excelsior jobs program who either qualified as a regionally signif-
icant project or is located in an investment zone shall be  eligible  to
claim a credit for a period of [five] TEN years.
  (B)  The  credit  IN  YEAR  ONE shall be equal to fifty percent of the
eligible real  property  taxes  on  the  real  property  comprising  the
regionally  significant  project or located in the investment zone [that
were assessed and paid in the year immediately prior to application]. In
the remaining years the  credit  shall  be  computed  according  to  the
following schedule:
  Year  two:  [forty] FORTY-FIVE percent of eligible real property taxes
on the real property comprising the regionally  significant  project  or
located  in the investment zone [that were assessed and paid in the year
immediately prior to application];
  Year three: [thirty] FORTY percent of eligible real property taxes  on
the  real  property  comprising  the  regionally  significant project or
located in the investment zone [that were assessed and paid in the  year
immediately prior to application];
  Year  four:  [twenty]  THIRTY-FIVE  percent  of eligible real property
taxes on real property comprising the regionally significant project  or
located  in the investment zone [that were assessed and paid in the year
immediately prior to application]; [and]
  Year five: [ten] THIRTY percent of eligible real property taxes on the
real property comprising the regionally significant project  or  located
in  the  investment  zone [that were assessed and paid in the year imme-
diately prior to application];
  YEAR SIX: TWENTY-FIVE PERCENT OF ELIGIBLE REAL PROPERTY TAXES  ON  THE
REAL  PROPERTY  COMPRISING THE REGIONALLY SIGNIFICANT PROJECT OR LOCATED
IN THE INVESTMENT ZONE;
  YEAR SEVEN: TWENTY PERCENT OF ELIGIBLE REAL PROPERTY TAXES ON THE REAL
PROPERTY COMPRISING THE REGIONALLY SIGNIFICANT PROJECT OR LOCATED IN THE
INVESTMENT ZONE;
  YEAR EIGHT: FIFTEEN PERCENT OF ELIGIBLE REAL  PROPERTY  TAXES  ON  THE
REAL  PROPERTY  COMPRISING THE REGIONALLY SIGNIFICANT PROJECT OR LOCATED
IN THE INVESTMENT ZONE;
  YEAR NINE: TEN PERCENT OF ELIGIBLE REAL PROPERTY  TAXES  ON  THE  REAL
PROPERTY COMPRISING THE REGIONALLY SIGNIFICANT PROJECT OR LOCATED IN THE
INVESTMENT ZONE; AND
  YEAR  TEN:  FIVE  PERCENT  OF ELIGIBLE REAL PROPERTY TAXES ON THE REAL
PROPERTY COMPRISING THE REGIONALLY SIGNIFICANT PROJECT OR LOCATED IN THE
INVESTMENT ZONE.
  (C) For purposes of this credit,  the  term  "eligible  real  property
taxes"  shall  have  the  same  meaning as in subdivision (e) of section
fifteen of the tax law, provided that such subdivision (e) shall be read
as if it specifically referenced the excelsior jobs program and  partic-
ipants in that program.
  (D)  IN  CALCULATING THE EXCELSIOR REAL PROPERTY TAX CREDIT AND DETER-
MINING THE MAXIMUM AGGREGATE AMOUNT OF  SUCH  CREDIT  COMPONENT  IN  THE
PRELIMINARY  SCHEDULE  OF  BENEFITS,  THE COMMISSIONER SHALL INCLUDE ANY
IMPROVEMENTS PROJECTED TO BE  MADE  BY  THE  TAXPAYER  TO  THE  PROPERTY

S. 2811                            17                            A. 4011

COMPRISING  THE REGIONALLY SIGNIFICANT PROJECT OR LOCATED IN THE INVEST-
MENT ZONE AS LISTED IN ITS APPLICATION FOR PARTICIPATION IN THE  EXCELS-
IOR JOBS PROGRAM.
  5.  Refundability of credits. The tax credit components established in
this section shall be refundable as  provided  in  the  tax  law.  If  a
participant  fails  to satisfy the eligibility criteria in any one year,
it will lose the ability to claim credit for that  year.  The  event  of
such  failure  shall not extend the original [five-year] TEN-YEAR eligi-
bility period.
  6. Claim of tax credit. The business enterprise shall  be  allowed  to
claim the credit as prescribed in section thirty-one of the tax law.
  7.  FOR AVAILABILITY OF SPECIAL EXCELSIOR JOBS PROGRAM RATES GOVERNING
THE PROVISION OF GAS OR ELECTRIC SERVICE, SEE  SUBDIVISION  TWELVE-D  OF
SECTION SIXTY-SIX OF THE PUBLIC SERVICE LAW. SUCH SPECIAL EXCELSIOR JOBS
PROGRAM  RATES  MAY  REMAIN AVAILABLE TO PARTICIPANTS AS DEFINED IN THIS
ARTICLE FOR A PERIOD OF UP TO TEN YEARS COMMENCING IN THE FIRST  TAXABLE
YEAR  THAT  THE PARTICIPANT RECEIVES A CERTIFICATE OF TAX CREDIT, OR THE
FIRST TAXABLE YEAR LISTED  ON  ITS  PRELIMINARY  SCHEDULE  OF  BENEFITS,
WHICHEVER  IS  LATER. PROVIDED HOWEVER, IF A PARTICIPANT IS REMOVED FROM
THE EXCELSIOR JOBS PROGRAM PURSUANT TO THIS ARTICLE, THE EXCELSIOR  JOBS
PROGRAM RATES MAY BE DENIED.
  S  5. Subdivision 3 of section 356 of the economic development law, as
added by section 1 of part MM of chapter 59 of  the  laws  of  2010,  is
amended to read as follows:
  3.  The  commissioner  shall  solely  determine the eligibility of any
applicant applying for entry into  the  program  and  shall  remove  any
participant from the program for failing to meet any of the requirements
set forth in subdivision two of section three hundred fifty-four of this
article,  or  for failing to meet the minimum job or investment require-
ments set forth in subdivisions [two] THREE and [three] FOUR of  section
three hundred fifty-three of this article.
  S  6. Section 359 of the economic development law, as added by section
1 of part MM of chapter 59 of the laws of 2010, is amended  to  read  as
follows:
  S  359.  Cap on tax credit.  The total amount of tax credits listed on
certificates of tax credit issued by the commissioner  for  any  taxable
year  may  not  exceed  the  limitations  set forth in this section. Any
amount of tax credits not awarded for a particular taxable year may  not
be  used  by  the  commissioner  to award tax credits in another taxable
year.

Credit components in the aggregate                With respect to
shall not exceed:                                 taxable years
                                                  beginning in:

$ 50 million                                      2011
$ 100 million                                     2012
$ 150 million                                     2013
$ 200 million                                     2014
$ 250 million                                     2015
$ [200] 250 million                               2016
$ [150] 250 million                               2017
$ [100] 250 million                               2018
$ [50] 250 million                                2019
$ 250 MILLION                                     2020
$ 200 MILLION                                     2021

S. 2811                            18                            A. 4011

$ 150 MILLION                                     2022
$ 100 MILLION                                     2023
$ 50 MILLION                                      2024
  Twenty-five  percent  of  tax credits shall be allocated to businesses
accepted into the program under  subdivision  [three]  FOUR  of  section
three  hundred  fifty-three  of this article and seventy-five percent of
tax credits shall be allocated to businesses accepted into  the  program
under  subdivision  [two]  THREE of section three hundred fifty-three of
this article.
  Provided, however, if by September thirtieth of a calendar  year,  the
department  has  not  allocated  the full amount of credits available in
that year to either: (i) businesses  accepted  into  the  program  under
subdivision  [three]  FOUR  of section three hundred fifty-three of this
article or (ii) businesses accepted into the program  under  subdivision
[two]  THREE  of  section three hundred fifty-three of this article, the
commissioner may allocate any remaining tax credits to businesses refer-
enced in paragraphs (i) and (ii) of this section  as  needed;  provided,
however, that under no circumstances may the statutory cap be exceeded.
  S  7.  Subdivisions  (a), (b) and (f) of section 31 of the tax law, as
added by section 2 of part MM of chapter 59 of the  laws  of  2010,  are
amended to read as follows:
  (a)  General.  A taxpayer subject to tax under article nine-A, twenty-
two, thirty-two or thirty-three of this chapter shall be allowed a cred-
it against such tax, pursuant to the provisions referenced  in  subdivi-
sion  (g) of this section. The amount of the credit, allowable for up to
[five] TEN consecutive taxable years, is the sum of the  following  four
credit components:
  (1) the excelsior jobs tax credit COMPONENT;
  (2) the excelsior investment tax credit COMPONENT;
  (3) the excelsior research and development tax credit COMPONENT; and
  (4) the excelsior real property tax credit COMPONENT.
  (b) To be eligible for the excelsior jobs program credit, the taxpayer
shall  have  been issued a "certificate of tax credit" by the department
of economic development pursuant to subdivision four  of  section  three
hundred  fifty-four  of  the economic development law, which certificate
shall set forth the amount of each credit component that may be  claimed
for  the  taxable  year. A taxpayer may claim such credit for [five] TEN
consecutive taxable years commencing in the first taxable year that  the
taxpayer  receives a certificate of tax credit or the first taxable year
listed on its preliminary schedule of benefits, whichever is later.  The
taxpayer shall be allowed to claim only the amount listed on the certif-
icate  of  tax  credit  for that taxable year. Such certificate [should]
MUST be attached to the taxpayer's return. No cost or  expense  paid  or
incurred  by the taxpayer shall be the basis for more than one component
of this credit or any other tax credit, EXCEPT AS  PROVIDED  IN  SECTION
THREE HUNDRED FIFTY-FIVE OF THE ECONOMIC DEVELOPMENT LAW.
  (f) Credit recapture. If a certificate of eligibility or a certificate
of  tax  credit  issued  by the department of economic development under
article seventeen of the economic development law  is  revoked  by  such
department  BECAUSE  THE TAXPAYER DOES NOT MEET THE ELIGIBILITY REQUIRE-
MENT SET FORTH IN SUBDIVISION SIX OF SECTION THREE  HUNDRED  FIFTY-THREE
OF  THE ECONOMIC DEVELOPMENT LAW, the amount of credit described in this
section and claimed by the taxpayer prior to that  revocation  shall  be
added  back  to  income in the taxable year in which any such revocation
becomes final.

S. 2811                            19                            A. 4011

  S 8. Section 66 of the public service law is amended by adding  a  new
subdivision 12-d to read as follows:
  12-D.  NOTWITHSTANDING ANY OTHER PROVISION OF LAW, UPON APPLICATION OF
A GAS OR ELECTRIC  CORPORATION,  THE  COMMISSION  SHALL  AUTHORIZE  SUCH
CORPORATION TO CHARGE A SPECIAL EXCELSIOR JOBS PROGRAM RATE EQUAL TO THE
INCREMENTAL  COST  OF PROVIDING SERVICE TO PARTICIPANTS IN THE EXCELSIOR
JOBS PROGRAM AS DEFINED IN ARTICLE SEVENTEEN OF THE ECONOMIC DEVELOPMENT
LAW.
  S 9. This act shall take effect immediately.

                                 PART H

  Section 1. Paragraph 7 of subdivision (a) of section 1512 of  the  tax
law,  as  amended by chapter 817 of the laws of 1987, is amended to read
as follows:
  (7) a town or county cooperative insurance corporation  as  heretofore
contemplated  by  section  one  hundred  eighty-seven of this chapter in
effect  immediately   prior   to   January   first,   nineteen   hundred
seventy-four, THAT ACCURATELY AND IN ACCORDANCE WITH LAW REPORTED TO THE
SUPERINTENDENT  OF INSURANCE TOTAL DIRECT PREMIUMS WRITTEN FOR THE TAXA-
BLE YEAR OF TWENTY-FIVE MILLION DOLLARS OR LESS.
  S 2. This act shall take effect immediately and apply to taxable years
beginning on or after January 1, 2011.

                                 PART I

  Section 1. The opening paragraph of paragraph 1 of subsection  (b)  of
section 1101 of the insurance law, as amended by chapter 614 of the laws
of 1997, is amended to read as follows:
  Except  as provided in paragraph two, three [or], three-a, OR SEVEN of
this subsection, any of the following acts in this  state,  effected  by
mail  from outside this state or otherwise, by any person, firm, associ-
ation, corporation or joint-stock  company  shall  constitute  doing  an
insurance  business in this state and shall constitute doing business in
the state within the meaning of section three hundred two of  the  civil
practice law and rules:
  S 2. Subparagraph (H) of paragraph 2 of subsection (b) of section 1101
of the insurance law is amended to read as follows:
  (H)  transactions  with  respect  to insurance contracts negotiated or
placed pursuant to subsection (b) [or], (c), OR (J) of section two thou-
sand one hundred seventeen of this chapter;
  S 3. Subsection (b) of section 1101 of the insurance law is amended by
adding a new paragraph 7 to read as follows:
  (7)(A) NOTWITHSTANDING THE FOREGOING, THE MAKING OF A SWAP  SHALL  NOT
CONSTITUTE DOING AN INSURANCE BUSINESS IN THIS STATE.
  (B)  FOR THE PURPOSES OF THIS PARAGRAPH, "SWAP" SHALL HAVE THE MEANING
SET FORTH IN 7 U.S.C. S 1A.
  S 4. Section 2101 of the insurance law is amended by  adding  two  new
subsections (w) and (x) to read as follows:
  (W)  IN  THIS  ARTICLE,  "STATE" MEANS THE DISTRICT OF COLUMBIA OR ANY
STATE OR TERRITORY OF THE UNITED STATES.
  (X) IN THIS ARTICLE, WITH RESPECT TO EXCESS LINE INSURANCE AND  EXCESS
LINE BROKERS:
  (1)  WITH RESPECT TO AN INSURED'S HOME STATE, "AFFILIATED GROUP" MEANS
ANY GROUP OF ENTITIES THAT ARE ALL AFFILIATED. FOR THE PURPOSES OF  THIS
PARAGRAPH:

S. 2811                            20                            A. 4011

  (A)  "AFFILIATE"  MEANS,  WITH  RESPECT TO AN INSURED, ANY ENTITY THAT
CONTROLS, IS CONTROLLED BY, OR IS UNDER COMMON CONTROL WITH THE INSURED;
AND
  (B) AN ENTITY HAS CONTROL OVER ANOTHER ENTITY IF THE ENTITY:
  (I) DIRECTLY OR INDIRECTLY OR ACTING THROUGH ONE OR MORE OTHER PERSONS
OWNS,  CONTROLS, OR HAS THE POWER TO VOTE TWENTY-FIVE PERCENT OR MORE OF
ANY CLASS OF VOTING SECURITIES OF THE OTHER ENTITY; OR
  (II) CONTROLS IN ANY MANNER THE ELECTION OF A MAJORITY OF  THE  DIREC-
TORS OR TRUSTEES OF THE OTHER ENTITY;
  (2)  "EXEMPT COMMERCIAL PURCHASER" MEANS ANY PERSON PURCHASING COMMER-
CIAL INSURANCE THAT, AT THE  TIME  OF  PLACEMENT,  MEETS  THE  FOLLOWING
REQUIREMENTS:
  (A)  THE PERSON EMPLOYS OR RETAINS A QUALIFIED RISK MANAGER TO NEGOTI-
ATE INSURANCE COVERAGE;
  (B)   THE   PERSON   HAS   PAID   AGGREGATE   NATIONWIDE    COMMERCIAL
PROPERTY/CASUALTY  INSURANCE  PREMIUMS IN EXCESS OF ONE HUNDRED THOUSAND
DOLLARS IN THE IMMEDIATELY PRECEDING TWELVE MONTHS; AND
  (C) (I) THE PERSON MEETS AT LEAST ONE OF THE FOLLOWING CRITERIA:
  (I) THE PERSON POSSESSES A NET  WORTH  IN  EXCESS  OF  TWENTY  MILLION
DOLLARS,  AS  SUCH  AMOUNT  IS  ADJUSTED  PURSUANT  TO ITEM (II) OF THIS
SUBPARAGRAPH;
  (II) THE PERSON GENERATES ANNUAL REVENUES IN EXCESS OF  FIFTY  MILLION
DOLLARS,  AS  SUCH  AMOUNT  IS  ADJUSTED  PURSUANT  TO ITEM (II) OF THIS
SUBPARAGRAPH;
  (III) THE PERSON EMPLOYS MORE THAN FIVE HUNDRED FULL-TIME OR FULL-TIME
EQUIVALENT EMPLOYEES PER INDIVIDUAL INSURED OR IS A MEMBER OF AN  AFFIL-
IATED GROUP EMPLOYING MORE THAN ONE THOUSAND EMPLOYEES IN THE AGGREGATE;
  (IV)  THE  PERSON  IS  A  NOT-FOR-PROFIT ORGANIZATION OR PUBLIC ENTITY
GENERATING ANNUAL BUDGETED  EXPENDITURES  OF  AT  LEAST  THIRTY  MILLION
DOLLARS,  AS  SUCH  AMOUNT  IS  ADJUSTED  PURSUANT  TO ITEM (II) OF THIS
SUBPARAGRAPH; OR
  (V) THE PERSON IS A MUNICIPALITY WITH A POPULATION IN EXCESS OF  FIFTY
THOUSAND PERSONS;
  (II)  EFFECTIVE  ON THE FIFTH JANUARY FIRST OCCURRING AFTER JULY TWEN-
TY-FIRST, TWO THOUSAND TEN AND EACH FIFTH JANUARY FIRST OCCURRING THERE-
AFTER, THE AMOUNTS IN CLAUSES (I), (II), AND (IV) OF ITEM  (I)  OF  THIS
SUBPARAGRAPH SHALL BE ADJUSTED TO REFLECT THE PERCENTAGE CHANGE FOR SUCH
FIVE-YEAR  PERIOD  IN  THE  CONSUMER PRICE INDEX FOR ALL URBAN CONSUMERS
PUBLISHED BY THE BUREAU OF LABOR STATISTICS OF THE UNITES STATES DEPART-
MENT OF LABOR;
  (3) "INSURED'S HOME STATE" MEANS:
  (A) THE STATE IN WHICH AN INSURED MAINTAINS  ITS  PRINCIPAL  PLACE  OF
BUSINESS  OR,  IN  THE CASE OF AN INDIVIDUAL, THE INDIVIDUAL'S PRINCIPAL
RESIDENCE;
  (B) IF ONE HUNDRED PERCENT OF THE INSURED RISK IS LOCATED  OUTSIDE  OF
THE  STATE  REFERRED  TO IN SUBPARAGRAPH (A) OF THIS PARAGRAPH, THEN THE
STATE TO WHICH THE GREATEST PERCENTAGE OF THE INSURED'S TAXABLE  PREMIUM
FOR THAT INSURANCE CONTRACT IS ALLOCATED;
  (C)  IF  MORE  THAN  ONE  INSURED  FROM  AN AFFILIATED GROUP ARE NAMED
INSUREDS ON A SINGLE INSURANCE CONTRACT, THEN THE INSURED'S HOME  STATE,
AS  DETERMINED  PURSUANT  TO  SUBPARAGRAPH (A) OF THIS PARAGRAPH, OF THE
MEMBER OF THE AFFILIATED GROUP THAT HAS THE LARGEST PERCENTAGE OF PREMI-
UM ATTRIBUTED TO IT UNDER SUCH INSURANCE CONTRACT; OR
  (D) IN THE CASE OF A GROUP POLICY:
  (I) WHEN THE GROUP POLICYHOLDER PAYS ONE HUNDRED PERCENT OF THE PREMI-
UM FROM ITS OWN FUNDS, THEN THE  INSURED'S  HOME  STATE,  AS  DETERMINED

S. 2811                            21                            A. 4011

PURSUANT TO SUBPARAGRAPH (A) OF THIS PARAGRAPH, OF THE GROUP POLICYHOLD-
ER; OR
  (II)  WHEN  THE GROUP POLICYHOLDER DOES NOT PAY ONE HUNDRED PERCENT OF
THE PREMIUM FROM ITS OWN FUNDS,  THEN  THE  HOME  STATE,  AS  DETERMINED
PURSUANT TO SUBPARAGRAPH (A) OF THIS PARAGRAPH, OF THE GROUP MEMBER;
  (4)  WITH  RESPECT  TO DETERMINING AN INSURED'S HOME STATE, "PRINCIPAL
PLACE OF BUSINESS" MEANS THE STATE WHERE:
  (A) THE INSURED MAINTAINS ITS HEADQUARTERS  AND  WHERE  THE  INSURED'S
HIGH-LEVEL  OFFICERS DIRECT, CONTROL, AND COORDINATE THE BUSINESS ACTIV-
ITIES; OR
  (B) IF THE INSURED'S HIGH-LEVEL OFFICERS DIRECT, CONTROL, AND  COORDI-
NATE THE BUSINESS ACTIVITIES IN MORE THAN ONE STATE, OR IF THE INSURED'S
PRINCIPAL PLACE OF BUSINESS IS LOCATED OUTSIDE ANY STATE, THEN THE STATE
TO  WHICH  THE  GREATEST PERCENTAGE OF THE INSURED'S TAXABLE PREMIUM FOR
THAT INSURANCE CONTRACT IS ALLOCATED;
  (5) WITH RESPECT TO DETERMINING AN INSURED'S  HOME  STATE,  "PRINCIPAL
RESIDENCE" MEANS THE STATE:
  (A)  WHERE  THE  INDIVIDUAL  RESIDES  FOR  THE GREATEST NUMBER OF DAYS
DURING A CALENDAR YEAR; OR
  (B) IF THE INSURED'S PRINCIPAL RESIDENCE IS LOCATED OUTSIDE ANY STATE,
THE STATE TO WHICH THE GREATEST  PERCENTAGE  OF  THE  INSURED'S  TAXABLE
PREMIUM FOR THAT INSURANCE CONTRACT IS ALLOCATED;
  (6) "PROPERTY/CASUALTY INSURANCE" MEANS ANY KIND OF INSURANCE AS SPEC-
IFIED  IN SUBSECTION (A) OF SECTION ONE THOUSAND ONE HUNDRED THIRTEEN OF
THIS CHAPTER, EXCEPT INSURANCE ISSUED PURSUANT TO  PARAGRAPH  ONE,  TWO,
THREE,  FIFTEEN, EIGHTEEN OR THIRTY-ONE OF SUBSECTION (A) OF SECTION ONE
THOUSAND ONE HUNDRED THIRTEEN OF THIS CHAPTER OR INSURANCE SUBSTANTIALLY
SIMILAR THERETO; AND
  (7) WITH RESPECT TO AN EXEMPT COMMERCIAL  PURCHASER,  "QUALIFIED  RISK
MANAGER"  MEANS, WITH RESPECT TO A POLICYHOLDER OF COMMERCIAL INSURANCE,
A PERSON WHO MEETS ALL OF THE FOLLOWING REQUIREMENTS:
  (A) THE PERSON IS AN EMPLOYEE OF, OR THIRD-PARTY  CONSULTANT  RETAINED
BY, THE COMMERCIAL POLICYHOLDER;
  (B)  THE  PERSON  PROVIDES  SKILLED  SERVICES IN LOSS PREVENTION, LOSS
REDUCTION, OR RISK AND INSURANCE  COVERAGE  ANALYSIS,  AND  PURCHASE  OF
INSURANCE;
  (C) THE PERSON:
  (I)(I) HAS A BACHELOR'S DEGREE OR HIGHER FROM AN ACCREDITED COLLEGE OR
UNIVERSITY IN RISK MANAGEMENT, BUSINESS ADMINISTRATION, FINANCE, ECONOM-
ICS,  OR ANY OTHER FIELD DETERMINED BY THE SUPERINTENDENT TO DEMONSTRATE
MINIMUM COMPETENCE IN RISK MANAGEMENT; AND
  (II)(AA) HAS THREE YEARS  OF  EXPERIENCE  IN  RISK  FINANCING,  CLAIMS
ADMINISTRATION,   LOSS  PREVENTION,  RISK  AND  INSURANCE  ANALYSIS,  OR
PURCHASING COMMERCIAL LINES OF INSURANCE; OR
  (BB) HAS:
  (AAA) A DESIGNATION AS A CHARTERED PROPERTY AND  CASUALTY  UNDERWRITER
(IN  THIS  CLAUSE REFERRED TO AS A "CPCU") ISSUED BY THE AMERICAN INSTI-
TUTE FOR CPCU/INSURANCE INSTITUTE OF AMERICA;
  (BBB) A DESIGNATION AS AN ASSOCIATE IN RISK MANAGEMENT (ARM) ISSUED BY
THE AMERICAN INSTITUTE FOR CPCU/INSURANCE INSTITUTE OF AMERICA;
  (CCC) A DESIGNATION AS CERTIFIED RISK  MANAGER  (CRM)  ISSUED  BY  THE
NATIONAL ALLIANCE FOR INSURANCE EDUCATION & RESEARCH;
  (DDD)  A DESIGNATION AS A RISK AND INSURANCE MANAGEMENT SOCIETY (RIMS)
FELLOW (RF) ISSUED BY THE GLOBAL RISK MANAGEMENT INSTITUTE; OR
  (EEE) ANY OTHER DESIGNATION, CERTIFICATION, OR LICENSE  DETERMINED  BY
THE SUPERINTENDENT TO DEMONSTRATE MINIMUM COMPETENCY IN RISK MANAGEMENT;

S. 2811                            22                            A. 4011

  (II)  (I)  HAS  AT  LEAST SEVEN YEARS OF EXPERIENCE IN RISK FINANCING,
CLAIMS ADMINISTRATION, LOSS  PREVENTION,  RISK  AND  INSURANCE  COVERAGE
ANALYSIS, OR PURCHASING COMMERCIAL LINES OF INSURANCE; AND
  (II)  HAS  ANY  ONE  OF THE DESIGNATIONS SPECIFIED IN SUBCLAUSES (AAA)
THROUGH (EEE) OF SUBITEM (BB) OF CLAUSE (II) OF ITEM (I) OF THIS SUBPAR-
AGRAPH;
  (III) HAS AT LEAST TEN YEARS OF EXPERIENCE IN RISK  FINANCING,  CLAIMS
ADMINISTRATION,  LOSS  PREVENTION, RISK AND INSURANCE COVERAGE ANALYSIS,
OR PURCHASING COMMERCIAL LINES OF INSURANCE; OR
  (IV) HAS A GRADUATE DEGREE FROM AN ACCREDITED COLLEGE OR UNIVERSITY IN
RISK MANAGEMENT, BUSINESS ADMINISTRATION,  FINANCE,  ECONOMICS,  OR  ANY
OTHER  FIELD  DETERMINED  BY  THE  SUPERINTENDENT TO DEMONSTRATE MINIMUM
COMPETENCE IN RISK MANAGEMENT.
  S 5. Paragraphs 7 and 8 of subsection  (c)  of  section  2101  of  the
insurance  law, as added by chapter 687 of the laws of 2003, are amended
and a new paragraph 9 is added to read as follows:
  (7) a person whose activities in this state are limited to advertising
without the intent to solicit insurance in this state  through  communi-
cations  in printed publications or other forms of electronic mass media
whose distribution is not limited to residents of  the  state,  provided
that the person does not sell, solicit or negotiate insurance that would
insure risks residing, located or to be performed in this state; [or]
  (8)  a  person who is not a resident of this state who sells, solicits
or negotiates a contract for commercial property/casualty  risks  to  an
insured  with  risks  located  in more than one state insured under that
contract, provided that such person is otherwise licensed as  an  insur-
ance  producer to sell, solicit or negotiate that insurance in the state
where the insured maintains its principal  place  of  business  and  the
contract of insurance insures risks located in that state[.]; OR
  (9)  A  PERSON WHO IS NOT A RESIDENT OF THIS STATE WHO SELLS, SOLICITS
OR NEGOTIATES A CONTRACT OF PROPERTY/CASUALTY INSURANCE, AS  DEFINED  IN
PARAGRAPH  SIX  OF SUBSECTION (X) OF THIS SECTION, TO OR FOR AN INSURED,
WITH REGARD TO AN UNAUTHORIZED INSURER, PROVIDED THAT: (A) THE INSURED'S
HOME STATE IS A STATE OTHER THAN THIS STATE; (B) SUCH PERSON  IS  OTHER-
WISE LICENSED TO SELL, SOLICIT OR NEGOTIATE EXCESS LINE INSURANCE IN THE
INSURED'S  HOME  STATE; AND (C) THE PERSON DOES NOT PERFORM THE DILIGENT
SEARCH REQUIRED BY SECTION TWO THOUSAND ONE  HUNDRED  EIGHTEEN  OF  THIS
ARTICLE.
  S  6.  Paragraphs  9  and  10 of subsection (k) of section 2101 of the
insurance law, as added by chapter 687 of the laws of 2003, are  amended
and a new paragraph 11 is added to read as follows:
  (9)  a  person who is not a resident of this state who sells, solicits
or negotiates a contract of insurance for  commercial  property/casualty
risks  to  an  insured with risks located in more than one state insured
under that contract, provided that such person is otherwise licensed  as
an  insurance  producer  to sell, solicit or negotiate that insurance in
the state where the insured maintains its principal  place  of  business
and the contract of insurance insures risks located in that state; [or]
  (10)  any  salaried  full-time employee who counsels or advises his or
her employer relative to the insurance interests of the employer  or  of
the  subsidiaries  or business affiliates of the employer, provided that
the employee does not sell or solicit insurance  or  receive  a  commis-
sion[.]; OR
  (11)  A PERSON WHO IS NOT A RESIDENT OF THIS STATE WHO SELLS, SOLICITS
OR NEGOTIATES A CONTRACT OF PROPERTY/CASUALTY INSURANCE, AS  DEFINED  IN
PARAGRAPH  SIX  OF SUBSECTION (X) OF THIS SECTION, TO OR FOR AN INSURED,

S. 2811                            23                            A. 4011

WITH REGARD TO AN UNAUTHORIZED INSURER, PROVIDED THAT: (A) THE INSURED'S
HOME STATE IS A STATE OTHER THAN THIS STATE; (B) SUCH PERSON  IS  OTHER-
WISE LICENSED TO SELL, SOLICIT OR NEGOTIATE EXCESS LINE INSURANCE IN THE
INSURED'S  HOME  STATE; AND (C) THE PERSON DOES NOT PERFORM THE DILIGENT
SEARCH REQUIRED BY SECTION TWO THOUSAND ONE  HUNDRED  EIGHTEEN  OF  THIS
ARTICLE.
  S  7.  Paragraph  1 of subsection (a) of section 2102 of the insurance
law, as amended by chapter 499 of the laws of 2009, is amended  to  read
as follows:
  (1)  (A)  No  person, firm, association or corporation shall act as an
insurance producer, insurance adjuster or life settlement broker in this
state without having authority to do so by virtue of  a  license  issued
and in force pursuant to the provisions of this chapter.
  (B) NO PERSON, FIRM, ASSOCIATION OR CORPORATION SHALL ACT AS AN EXCESS
LINE BROKER IN THIS STATE WITHOUT HAVING AUTHORITY TO DO SO BY VIRTUE OF
A  LICENSE  ISSUED  AND  IN  FORCE  PURSUANT TO SECTION TWO THOUSAND ONE
HUNDRED FIVE OF THIS ARTICLE, PROVIDED, HOWEVER, THAT SUCH PERSON, FIRM,
ASSOCIATION OR CORPORATION SHALL NOT BE REQUIRED TO BE LICENSED  TO  ACT
AS AN EXCESS LINE BROKER WHERE THE INSURED'S HOME STATE IS A STATE OTHER
THAN  THIS  STATE  AND  SUCH PERSON, FIRM, ASSOCIATION OR CORPORATION IS
OTHERWISE LICENSED TO SELL, SOLICIT OR NEGOTIATE EXCESS  LINE  INSURANCE
IN THE INSURED'S HOME STATE.
  S  8.  Subsection (a) of section 2105 of the insurance law, as amended
by chapter 626 of the laws of 2006, is amended to read as follows:
  (a) The superintendent may issue an excess line  broker's  license  to
any  person, firm, association or corporation who or which [is domiciled
or maintains an office in this state and] is licensed  as  an  insurance
broker  under  section two thousand one hundred four of this article, or
who or which is licensed as an excess line broker in the licensee's home
state, provided, however, that the applicant's home state grants non-re-
sident licenses to residents of this state on  the  same  basis,  except
that reciprocity is not required in regard to the placement of liability
insurance on behalf of a purchasing group or any of its members; author-
izing  such person, firm, association or corporation to procure, subject
to the restrictions herein provided, policies of insurance from insurers
which are not authorized to transact business in this state of the  kind
or  kinds  of  insurance  specified in paragraphs four through fourteen,
sixteen, seventeen, nineteen, twenty, twenty-two, twenty-seven,  twenty-
eight  and  thirty-one  of  subsection  (a)  of section one thousand one
hundred thirteen of this chapter and in subsection (h) of this  section,
provided,  however,  that the provisions of this section and section two
thousand one hundred eighteen of this article shall not apply  to  ocean
marine   insurance  and  other  contracts  of  insurance  enumerated  in
subsections (b) and (c) of section two thousand one hundred seventeen of
this article. Such license may be suspended or  revoked  by  the  super-
intendent  whenever in his OR HER judgment such suspension or revocation
will best promote the interests of the people of this state.
  S 9. Section 2117 of the insurance law is  amended  by  adding  a  new
subsection (j) to read as follows:
  (J)  NOTWITHSTANDING  SUBSECTION  (A) OF THIS SECTION, A PERSON WHO IS
NOT A RESIDENT OF THIS STATE MAY SELL, SOLICIT OR NEGOTIATE  A  CONTRACT
OF  PROPERTY/CASUALTY  INSURANCE TO OR FOR AN INSURED, WITH REGARD TO AN
UNAUTHORIZED INSURER, PROVIDED THAT: (1) THE INSURED'S HOME STATE  IS  A
STATE OTHER THAN THIS STATE; (2) THE PERSON IS LICENSED TO SELL, SOLICIT
OR  NEGOTIATE EXCESS LINE INSURANCE IN THE INSURED'S HOME STATE; AND (3)
EITHER THE PERSON IS LICENSED AS AN INSURANCE BROKER IN  THIS  STATE  OR

S. 2811                            24                            A. 4011

THE  PERSON DOES NOT PERFORM THE DILIGENT SEARCH REQUIRED BY SECTION TWO
THOUSAND ONE HUNDRED EIGHTEEN OF THIS ARTICLE.
  S  10.  Paragraph 1 of subsection (b) of section 2118 of the insurance
law, as amended by chapter 630 of the laws of 1988, is amended  to  read
as follows:
  (1)  Within  [forty-five]  THIRTY  days  after a policy is procured, a
licensee shall submit the declarations page or cover note of every poli-
cy procured under his or her license  to  the  excess  line  association
established  pursuant to section two thousand one hundred thirty of this
article for recording and stamping. In the event  that  no  declarations
page  or  cover  note  is available to the licensee, within [forty-five]
THIRTY days after the policy is procured, the licensee  shall  submit  a
binder  to the excess line association in lieu of such declarations page
or cover note.  In the event that a binder is submitted  to  the  excess
line  association,  the  licensee  shall submit the declarations page or
cover note to the excess line association promptly upon  receipt.  Every
insurance  document submitted to the excess line association pursuant to
this subsection shall set forth:
  (A) the name and address of the insured;
  (B) the gross premium charged;
  (C) the name of the unauthorized insurer; and
  (D) the kind of insurance procured.
  S 10-a. Paragraphs 8 and 9 of subsection (b) of section  2118  of  the
insurance law are REPEALED.
  S  11.  Subparagraph  (A)  of paragraph 3 of subsection (b) of section
2118 of the insurance law, as amended by chapter  498  of  the  laws  of
1996, is amended and a new subparagraph (F) is added to read as follows:
  (A)  [The]  EXCEPT  AS PROVIDED IN SUBPARAGRAPH (F) OF THIS PARAGRAPH,
submission of insurance documents to the excess line  association  shall
be accompanied by a statement subscribed to, and affirmed by, the licen-
see  or  sublicensee  as true under the penalties of perjury that, after
diligent effort, the full amount of  insurance  required  could  not  be
procured, from authorized insurers, each of which is authorized to write
insurance  of  the  kind  requested and which the licensee has reason to
believe might consider writing the type of coverage or class  of  insur-
ance involved, and further showing that the amount of insurance procured
from an unauthorized insurer is only the excess over the amount procura-
ble  from an authorized insurer. The licensee, however, shall be excused
from affirming that a diligent effort, as defined  above,  was  made  to
procure  the coverage from authorized insurers if the licensee's affida-
vit is accompanied by the affidavit of another broker  involved  in  the
placement  affirming  as true under the penalties of perjury that, after
diligent effort by the affirming broker, the  required  insurance  could
not  be  procured  from an authorized insurer which the affirming broker
had reason to believe might consider writing the  type  of  coverage  or
class of insurance involved. The licensee and the affirming broker shall
be  excused from affirming that a diligent effort was made if the super-
intendent determines, pursuant to paragraph  four  of  this  subsection,
that no declinations are required.
  (F) A LICENSEE SEEKING TO PROCURE OR PLACE INSURANCE IN THIS STATE FOR
AN  EXEMPT  COMMERCIAL  PURCHASER  SHALL  NOT BE REQUIRED TO SATISFY ANY
REQUIREMENT OF THIS STATE TO MAKE A DUE DILIGENCE  SEARCH  TO  DETERMINE
WHETHER  THE  FULL  AMOUNT  OR  TYPE  OF  INSURANCE SOUGHT BY THE EXEMPT
COMMERCIAL PURCHASER CAN BE OBTAINED FROM AUTHORIZED INSURERS IF:
  (I) THE LICENSEE PROCURING OR PLACING THE EXCESS  LINE  INSURANCE  HAS
DISCLOSED  TO  THE EXEMPT COMMERCIAL PURCHASER THAT THE INSURANCE MAY OR

S. 2811                            25                            A. 4011

MAY NOT BE AVAILABLE FROM THE AUTHORIZED MARKET THAT MAY PROVIDE GREATER
PROTECTION WITH MORE REGULATORY OVERSIGHT; AND
  (II)  THE  EXEMPT  COMMERCIAL  PURCHASER HAS SUBSEQUENTLY REQUESTED IN
WRITING THAT THE LICENSEE PROCURE OR PLACE THE INSURANCE FROM  AN  UNAU-
THORIZED INSURER.
  S  12. Subsection (d) of section 2118 of the insurance law, as amended
by chapter 220 of the laws of 1986, paragraph 1 as  amended  by  chapter
190 of the laws of 1990, is amended to read as follows:
  (d)  (1)  [Every]  (A) WHERE THIS STATE IS THE INSURED'S HOME STATE, A
person, firm,  association  or  corporation  licensed  pursuant  to  the
provisions  of  section  two  thousand  one hundred five of this article
shall pay to the superintendent a sum  equal  to  three  and  six-tenths
percent  of  the gross premiums charged the insureds by the insurers for
insurance procured by such licensee pursuant to such license,  less  the
amount of such premiums returned to such insureds.  [Where the insurance
covers  property  or  risks  located or resident both in and out of this
state, the sum payable shall be computed on that portion  of  the  gross
premiums  allocated  to this state pursuant to subsection (b) of section
nine thousand one hundred two of this chapter less the amount  of  gross
premiums allocated to this state and returned to the insured.]
  (B)  NOTWITHSTANDING SUBPARAGRAPH (A) OF THIS PARAGRAPH, IF THE SUPER-
INTENDENT ENTERS INTO A NONADMITTED INSURANCE MULTI-STATE  AGREEMENT  ON
BEHALF  OF THIS STATE PURSUANT TO SECTION TWO THOUSAND ONE HUNDRED THIR-
TY-EIGHT OF THIS ARTICLE, THEN, WHERE THIS STATE IS THE  INSURED'S  HOME
STATE,  A  PERSON, FIRM, ASSOCIATION OR CORPORATION LICENSED PURSUANT TO
THE PROVISIONS OF SECTION TWO THOUSAND ONE HUNDRED FIVE OF THIS  ARTICLE
SHALL  PAY  TO  THE SUPERINTENDENT, OR A CLEARINGHOUSE DESIGNATED BY THE
SUPERINTENDENT, A SUM EQUAL TO:
  (I) THREE AND SIX-TENTHS PERCENT OF THE GROSS  PREMIUMS  ALLOCATED  TO
THIS STATE BASED ON THE ALLOCATION SCHEDULE SET FORTH IN THE NONADMITTED
INSURANCE MULTI-STATE AGREEMENT AND ADOPTED BY THE SUPERINTENDENT PURSU-
ANT TO A REGULATION;
  (II)  THE PERCENTAGE SPECIFIED BY EACH OTHER STATE, WHICH HAS EXECUTED
THE NONADMITTED INSURANCE MULTI-STATE AGREEMENT AND HAS NOT WITHDRAWN OR
DEFAULTED, ON THE PORTION OF THE PREMIUM ALLOCATED TO THAT  OTHER  STATE
BASED  ON THE ALLOCATION SCHEDULE SET FORTH IN THE NONADMITTED INSURANCE
MULTI-STATE AGREEMENT AND ADOPTED BY THE SUPERINTENDENT  PURSUANT  TO  A
REGULATION; AND
  (III)  THREE  AND  SIX-TENTHS  PERCENT  OF  THE  GROSS PREMIUMS ON ANY
PORTION OF THE PREMIUM NOT ALLOCATED UNDER ITEMS (I) AND  (II)  OF  THIS
SUBPARAGRAPH.
  (2)  The amount of such payments which represents a sum equal to three
percent of fire insurance premiums shall be distributed  by  the  super-
intendent  as  prescribed  in  section nine thousand one hundred five of
this chapter, and the balance thereof shall be paid over by  the  super-
intendent to the state treasurer.
  (3)  Such  licensee  shall  be  required  to make such payments to the
superintendent QUARTERLY on the fifteenth day of [March of  each  year]:
(A)  FEBRUARY  FOR  THE QUARTER ENDING THE PRECEDING THIRTY-FIRST DAY OF
DECEMBER; (B) MAY FOR THE QUARTER ENDING THE PRECEDING THIRTY-FIRST  DAY
OF  MARCH; (C) AUGUST FOR THE QUARTER ENDING THE PRECEDING THIRTIETH DAY
OF JUNE; AND (D) NOVEMBER FOR THE QUARTER ENDING THE PRECEDING THIRTIETH
DAY OF SEPTEMBER, for the taxes on all policies procured by such  licen-
see, pursuant to such license, during the next preceding [calendar year]
QUARTER,  and  on  EACH  such PAYMENT date such licensee shall also file
with the superintendent a return in the form prescribed  by  the  super-

S. 2811                            26                            A. 4011

intendent,  showing  such information as may be necessary for the proper
distribution of such payments.
  S  13.  Paragraph 5 of subsection (a) of section 2130 of the insurance
law, as added by chapter 630 of the laws of 1988, is amended to read  as
follows:
  (5)  prepare  and  deliver  to each licensee and to the superintendent
[annually] the reports of excess line business ON THE  SEVENTH  DAY  OF:
(A)  FEBRUARY  FOR  THE QUARTER ENDING THE PRECEDING THIRTY-FIRST DAY OF
DECEMBER; (B) MAY FOR THE QUARTER ENDING THE PRECEDING THIRTY-FIRST  DAY
OF  MARCH; (C) AUGUST FOR THE QUARTER ENDING THE PRECEDING THIRTIETH DAY
OF JUNE; AND (D) NOVEMBER FOR THE QUARTER ENDING THE PRECEDING THIRTIETH
DAY OF SEPTEMBER, which reports  shall  include  a  delineation  of  the
classes  and  kinds  of  business procured during the preceding calendar
year in such form as the superintendent may prescribe;
  S 14. The insurance law is amended by adding a  new  section  2138  to
read as follows:
  S  2138.  NONADMITTED  INSURANCE  MULTI-STATE  AGREEMENT.  (A) FOR THE
PURPOSES OF IMPLEMENTING THE FEDERAL NONADMITTED AND REINSURANCE  REFORM
ACT  OF  2010, THE SUPERINTENDENT, IN CONSULTATION WITH THE COMMISSIONER
OF  TAXATION  AND  FINANCE,  MAY  ENTER  INTO  A  NONADMITTED  INSURANCE
MULTI-STATE AGREEMENT ON BEHALF OF THIS STATE IN ORDER TO:
  (1)  FACILITATE  THE  PAYMENT  AND ALLOCATION AMONGST STATES OF EXCESS
LINE PREMIUM TAXES AND TAXES ON INDEPENDENTLY PROCURED INSURANCE ATTRIB-
UTABLE TO THE PLACEMENT  OF  INSURANCE  WITH  UNAUTHORIZED  INSURERS  IN
ACCORDANCE  WITH  THE  PREMIUM  TAX  ALLOCATION  SCHEDULE AND ALLOCATION
FORMULA SET FORTH IN A NONADMITTED INSURANCE MULTI-STATE  AGREEMENT  AND
BASED ON RATES ESTABLISHED BY EACH STATE;
  (2)  ADOPT NATIONWIDE UNIFORM REQUIREMENTS, FORMS, AND PROCEDURES THAT
FACILITATE THE REPORTING, PAYMENT, COLLECTION, AND ALLOCATION OF  EXCESS
LINE  PREMIUM  TAXES  AND TAXES ON INDEPENDENTLY PROCURED INSURANCE WITH
REGARD TO INSURANCE PLACED WITH AN UNAUTHORIZED INSURER; AND
  (3) COORDINATE REPORTING OF EXCESS LINE PREMIUM  TAXES  AND  TAXES  ON
INDEPENDENTLY PROCURED INSURANCE AND TRANSACTION DATA AMONG STATES.
  (B) THE SUPERINTENDENT MAY PARTICIPATE IN THE CLEARINGHOUSE DESIGNATED
PURSUANT  TO  A  NONADMITTED  INSURANCE  MULTI-STATE  AGREEMENT THAT THE
SUPERINTENDENT HAS ENTERED INTO ON BEHALF OF THIS STATE FOR THE  PURPOSE
OF  COLLECTING  AND  ALLOCATING  TO STATES EXCESS LINE PREMIUM TAXES AND
TAXES ON INDEPENDENTLY  PROCURED  INSURANCE  WITH  REGARD  TO  INSURANCE
PLACED WITH AN UNAUTHORIZED INSURER.
  (C)   IF  THE  SUPERINTENDENT  ENTERS  INTO  A  NONADMITTED  INSURANCE
MULTI-STATE AGREEMENT ON BEHALF OF THIS STATE, THEN  THE  SUPERINTENDENT
SHALL  ADOPT BY REGULATION THE PREMIUM TAX ALLOCATION SCHEDULE SET FORTH
IN THE NONADMITTED INSURANCE MULTI-STATE AGREEMENT  AND  ANY  AMENDMENTS
THERETO.
  (D) THE SUPERINTENDENT MAY WITHDRAW THIS STATE FROM PARTICIPATION IN A
NONADMITTED  INSURANCE  MULTI-STATE  AGREEMENT  BY  PROVIDING SIXTY DAYS
WRITTEN NOTICE TO THE CLEARINGHOUSE DESIGNATED BY THE NONADMITTED INSUR-
ANCE MULTI-STATE AGREEMENT IF THE SUPERINTENDENT, IN  CONSULTATION  WITH
THE  COMMISSIONER  OF TAXATION AND FINANCE, DETERMINES THAT THIS STATE'S
PARTICIPATION IN THE NONADMITTED INSURANCE MULTI-STATE AGREEMENT  IS  NO
LONGER IN THE BEST INTERESTS OF THE PEOPLE OF THIS STATE.
  S  15. Section 9102 of the insurance law, as amended by chapter 190 of
the laws of 1990, subsection (c) as amended by chapter 73 of the laws of
1991, is amended to read as follows:
  S 9102. Allocation of premiums. [(a)] In  determining  the  amount  of
direct  premiums  taxable  in  this  state,  all  such premiums written,

S. 2811                            27                            A. 4011

procured, or received in this state shall be deemed written on  property
or risks located or resident in this state except such premiums properly
allocated and reported as taxable premiums of any other state or states.
  [(b)  (1)  In determining the amount of gross premiums taxable in this
state pursuant to paragraph one of subsection (d) of section  two  thou-
sand  one  hundred eighteen of this chapter, where a placement of excess
line insurance covers property or risks located or resident both in  and
out  of this state, the sum paid to the superintendent shall be computed
on that portion of the policy premium that is attributable  to  property
or  risks  located or resident in this state, as determined by reference
to an allocation schedule prescribed by the superintendent  in  a  regu-
lation.
  (2)  If  the  allocation  schedule  does not identify a classification
appropriate to the property or risk being insured, an alternative method
of equitable allocation shall be used for such coverage. In that circum-
stance, documented evidence of the underwriting bases and other criteria
used by the insurer shall be given significant weight by the superinten-
dent.
  (3) The licensee shall report the method of allocation utilized  in  a
form  and  in a manner prescribed by the superintendent in a regulation.
Where the licensee bases the allocation  on  an  alternative  method  of
equitable allocation, such licensee shall provide additional information
in support of the allocation as the superintendent may require.
  (4)  If  the superintendent reasonably determines that the information
provided is insufficient to substantiate the  method  of  allocation  or
that  the  method  used is incorrect, the superintendent shall determine
the sum to be paid in accordance  with  the  method  prescribed  by  the
superintendent  in the regulation. The superintendent's determination of
the sum to be paid shall finally and irrevocably  fix  the  tax  unless,
within  thirty  days  of  notification  of the superintendent's determi-
nation, the licensee requests a hearing to dispute such determination.
  (c) (1) Any licensee who allocated the premium tax for any of the  six
years prior to the effective date of this subsection shall not be liable
for  the  payment of any additional premium tax that would have been due
had the licensee not allocated,  unless  the  superintendent  determines
that the method of allocation was inequitable.
  (2)  The superintendent's determination under this subsection shall be
in accordance with the procedures in paragraph four of subsection (b) of
this section. Documented evidence of the underwriting  bases  and  other
criteria  used  by  the insurer shall be given significant weight by the
superintendent.
  (3) Nothing in this subsection shall entitle a licensee to a refund of
taxes previously paid.]
  S 16. The general municipal law is amended by adding a new section  25
to read as follows:
  S  25.  PROCUREMENT OF EXCESS LINE INSURANCE. NOTWITHSTANDING SUBPARA-
GRAPH (F) OF PARAGRAPH THREE OF SUBSECTION (B) OF SECTION  TWO  THOUSAND
ONE  HUNDRED  EIGHTEEN OF THE INSURANCE LAW, A MUNICIPALITY WITH A POPU-
LATION OF LESS THAN ONE HUNDRED THOUSAND PERSONS MAY NOT REQUEST THAT AN
EXCESS LINE BROKER PROCURE  OR  PLACE  INSURANCE  FROM  AN  UNAUTHORIZED
INSURER  UNLESS THE EXCESS LINE BROKER OBTAINS THE DECLINATIONS REQUIRED
BY SUBSECTION (B) OF SECTION TWO THOUSAND ONE HUNDRED  EIGHTEEN  OF  THE
INSURANCE LAW.
  S  17.  Subdivision  1  of section 171-a of the tax law, as amended by
section 1 of part R of chapter 60 of the laws of  2004,  is  amended  to
read as follows:

S. 2811                            28                            A. 4011

  1.  All  taxes,  interest, penalties and fees collected or received by
the commissioner or the commissioner's duly authorized agent under arti-
cles nine (except section one hundred eighty-two-a thereof and except as
otherwise  provided  in  section  two  hundred  five  thereof),  nine-A,
twelve-A  (except  as  otherwise provided in section two hundred eighty-
four-d thereof), thirteen, thirteen-A (except as otherwise  provided  in
section  three  hundred  twelve  thereof),  eighteen,  nineteen,  twenty
(except as otherwise provided in section four hundred eighty-two  there-
of),  twenty-one,  twenty-two,  twenty-six,  twenty-six-B,  twenty-eight
(except as otherwise provided in section eleven hundred  two  or  eleven
hundred  three thereof), twenty-eight-A, thirty-one (except as otherwise
provided in section fourteen hundred  twenty-one  thereof),  thirty-two,
thirty-three and thirty-three-A (EXCEPT AS OTHERWISE PROVIDED IN SECTION
FIFTEEN  HUNDRED FIFTY-SEVEN THEREOF) of this chapter shall be deposited
daily in one account with such  responsible  banks,  banking  houses  or
trust  companies  as may be designated by the comptroller, to the credit
of the comptroller. Such an account may be established in one or more of
such depositories. Such deposits shall be kept separate and  apart  from
all  other  money  in the possession of the comptroller. The comptroller
shall require adequate security from all such depositories. Of the total
revenue collected or received under such articles of this  chapter,  the
comptroller  shall  retain in the comptroller's hands such amount as the
commissioner may determine to be necessary for refunds or reimbursements
under such articles of this chapter [and article  ten  thereof]  out  of
which  amount the comptroller shall pay any refunds or reimbursements to
which taxpayers shall be entitled under the provisions of such  articles
of  this  chapter  [and  article  ten thereof]. The commissioner and the
comptroller shall maintain a system of accounts showing  the  amount  of
revenue  collected  or  received  from each of the taxes imposed by such
articles. The comptroller,  after  reserving  the  amount  to  pay  such
refunds  or  reimbursements,  shall,  on or before the tenth day of each
month, pay into the state treasury to the credit of the general fund all
revenue deposited under this section during the preceding calendar month
and remaining to the comptroller's  credit  on  the  last  day  of  such
preceding  month, (i) except that the comptroller shall pay to the state
department of social services that amount of overpayments of tax imposed
by article twenty-two of this chapter and the interest  on  such  amount
which  is certified to the comptroller by the commissioner as the amount
to be credited against past-due support pursuant to subdivision  six  of
section  one  hundred  seventy-one-c of this [chapter] ARTICLE, (ii) and
except that the comptroller shall pay  to  the  New  York  state  higher
education  services  corporation and the state university of New York or
the city university of New York respectively that amount of overpayments
of tax imposed by article twenty-two of this chapter and the interest on
such amount which is certified to the comptroller by the commissioner as
the amount to be credited against the amount of defaults in repayment of
guaranteed student loans and state university loans or  city  university
loans  pursuant to subdivision five of section one hundred seventy-one-d
and subdivision six of section one hundred seventy-one-e of this  [chap-
ter]  ARTICLE,  (iii)  and except further that, notwithstanding any law,
the comptroller shall credit to the revenue arrearage account,  pursuant
to  section  ninety-one-a of the state finance law, that amount of over-
payment of tax imposed by  article  nine,  nine-A,  twenty-two,  thirty,
thirty-A,  thirty-B, thirty-two or thirty-three of this chapter, and any
interest thereon, which is certified to the comptroller by  the  commis-
sioner as the amount to be credited against a past-due legally enforcea-

S. 2811                            29                            A. 4011

ble debt owed to a state agency pursuant to paragraph (a) of subdivision
six  of  section  one  hundred  seventy-one-f of this article, provided,
however, he shall credit to the special offset fiduciary account, pursu-
ant  to  section  ninety-one-c of the state finance law, any such amount
creditable as a liability as set forth in paragraph (b)  of  subdivision
six  of  section  one  hundred  seventy-one-f  of this article, (iv) and
except further that the comptroller shall pay to the city  of  New  York
that amount of overpayment of tax imposed by article nine, nine-A, twen-
ty-two,  thirty, thirty-A, thirty-B, thirty-two, or thirty-three of this
chapter and any interest thereon that is certified to the comptroller by
the commissioner as the amount to be credited against city of  New  York
tax  warrant judgment debt pursuant to section one hundred seventy-one-l
of this article, (v) and except further that the comptroller  shall  pay
to  a  non-obligated spouse that amount of overpayment of tax imposed by
article twenty-two of this chapter and the interest on such amount which
has been credited pursuant to section  one  hundred  seventy-one-c,  one
hundred  seventy-one-d,  one hundred seventy-one-e, one hundred seventy-
one-f or one hundred seventy-one-l of this article and which  is  certi-
fied  to the comptroller by the commissioner as the amount due such non-
obligated spouse pursuant to paragraph six of subsection (b) of  section
six  hundred  fifty-one  of this chapter; and (vi) the comptroller shall
deduct a like amount which the comptroller shall pay into  the  treasury
to  the  credit of the general fund from amounts subsequently payable to
the department of social services, the state university of New York, the
city university of New York, or the  higher  education  services  corpo-
ration,  or  the  revenue  arrearage account or special offset fiduciary
account pursuant to section ninety-one-a or ninety-one-c  of  the  state
finance  law, as the case may be, whichever had been credited the amount
originally withheld from such overpayment, and  (vii)  with  respect  to
amounts  originally  withheld  from such overpayment pursuant to section
one hundred seventy-one-l of this article and paid to the  city  of  New
York,  the  comptroller shall collect a like amount from the city of New
York.
  S 18. Subdivision (c) of section 1550 of the  tax  law,  as  added  by
chapter 190 of the laws of 1990, is amended to read as follows:
  (c)  The  term "taxable insurance contract" means a contract of insur-
ance of the [type] KIND described in [paragraphs four through  fourteen,
sixteen,  seventeen,  nineteen, twenty and twenty-two of] subsection (a)
of section [one thousand one hundred thirteen] TWO THOUSAND ONE  HUNDRED
FIVE  of the insurance law [that covers risks located or resident within
this state].
  S 19. Section 1550 of the tax law is amended by adding a new  subdivi-
sion (d) to read as follows:
  (D) THE TERM "HOME STATE" MEANS:
  (1) IN GENERAL. EXCEPT AS PROVIDED IN PARAGRAPHS TWO AND THREE OF THIS
SUBDIVISION, THE TERM "HOME STATE" MEANS, WITH RESPECT TO AN INSURED:
  (A)  THE  STATE  IN  WHICH AN INSURED MAINTAINS ITS PRINCIPAL PLACE OF
BUSINESS OR, IN THE CASE OF AN INDIVIDUAL,  THE  INDIVIDUAL'S  PRINCIPAL
RESIDENCE;
  (B)  IF  ONE HUNDRED PERCENT OF THE INSURED RISK IS LOCATED OUT OF THE
STATE REFERRED TO IN SUBPARAGRAPH (A) OF THIS PARAGRAPH,  THE  STATE  TO
WHICH  THE GREATEST PERCENTAGE OF THE INSURED'S TAXABLE PREMIUM FOR THAT
INSURANCE CONTRACT IS ALLOCATED;
  (C) IF MORE THAN ONE INSURED FROM AN AFFILIATED GROUP, AS  DEFINED  IN
SECTION  TWO  THOUSAND  ONE  HUNDRED ONE OF THE INSURANCE LAW, ARE NAMED
INSUREDS ON A SINGLE INSURANCE CONTRACT, THE HOME STATE OF THE MEMBER OF

S. 2811                            30                            A. 4011

THE AFFILIATED GROUP THAT HAS THE LARGEST PERCENTAGE OF  PREMIUM  ATTRI-
BUTED TO IT UNDER SUCH INSURANCE CONTRACT; OR
  (D) IN THE CASE OF A GROUP POLICY:
  (I)  IF THE GROUP POLICYHOLDER PAYS ONE HUNDRED PERCENT OF THE PREMIUM
FROM ITS OWN FUNDS, THE HOME STATE, AS DETERMINED PURSUANT  TO  SUBPARA-
GRAPH (A) OF THIS PARAGRAPH, OF THE GROUP POLICYHOLDER; OR
  (II) IF THE GROUP POLICYHOLDER DOES NOT PAY ONE HUNDRED PERCENT OF THE
PREMIUM  FROM  ITS  OWN FUNDS, THE HOME STATE, AS DETERMINED PURSUANT TO
SUBPARAGRAPH (A) OF THIS PARAGRAPH, OF THE GROUP MEMBER;
  (2) "PRINCIPAL PLACE OF BUSINESS" MEANS, WITH RESPECT  TO  DETERMINING
THE HOME STATE OF THE INSURED, THE STATE WHERE:
  (A)  THE  INSURED  MAINTAINS  ITS HEADQUARTERS AND WHERE THE INSURED'S
HIGH-LEVEL OFFICERS DIRECT, CONTROL AND COORDINATE THE  BUSINESS  ACTIV-
ITIES; OR
  (B)  IF  THE INSURED'S HIGH-LEVEL OFFICERS DIRECT, CONTROL AND COORDI-
NATE THE BUSINESS ACTIVITIES IN MORE THAN ONE STATE, OR IF THE INSURED'S
PRINCIPAL PLACE OF BUSINESS IS LOCATED OUTSIDE ANY STATE, THE  STATE  TO
WHICH  THE GREATEST PERCENTAGE OF THE INSURED'S TAXABLE PREMIUM FOR THAT
INSURANCE CONTRACT IS ALLOCATED.
  (3) "PRINCIPAL RESIDENCE" MEANS, WITH RESPECT TO DETERMINING THE  HOME
STATE OF THE INSURED, THE STATE WHERE:
  (A)  THE  INSURED  RESIDES  FOR  THE  GREATEST NUMBER OF DAYS DURING A
CALENDAR YEAR; OR
  (B) IF THE INSURED'S PRINCIPAL RESIDENCE IS LOCATED OUTSIDE ANY STATE,
THE STATE TO WHICH THE GREATEST  PERCENTAGE  OF  THE  INSURED'S  TAXABLE
PREMIUM FOR THAT INSURANCE CONTRACT IS ALLOCATED.
  S  20.  Section  1551  of the tax law, as amended by chapter 73 of the
laws of 1991, is amended to read as follows:
  S 1551. Imposition of tax. (A) There is hereby imposed on  any  person
WHOSE  HOME  STATE  IS  NEW  YORK  AND who purchases or renews a taxable
insurance contract from an insurer not authorized to  transact  business
in  this  state under a certificate of authority from the superintendent
of insurance a tax at the rate of three and six-tenths  percent  of  the
premiums  paid  or to be paid, less returns thereon, for such insurance.
Nothing in this article modifies  or  abrogates  any  provision  of  the
insurance law.
  (B)  NOTWITHSTANDING  SUBDIVISION  (A)  OF THIS SECTION, IF THE SUPER-
INTENDENT OF INSURANCE ENTERS INTO A NONADMITTED  INSURANCE  MULTI-STATE
AGREEMENT  PURSUANT  TO SECTION TWO THOUSAND ONE HUNDRED THIRTY-EIGHT OF
THE INSURANCE LAW, THERE IS HEREBY IMPOSED  ON  ANY  PERSON  WHOSE  HOME
STATE  IS  NEW  YORK  AND  WHO  PURCHASES  OR RENEWS A TAXABLE INSURANCE
CONTRACT FROM AN INSURER NOT AUTHORIZED TO  TRANSACT  BUSINESS  IN  THIS
STATE UNDER A CERTIFICATE OF AUTHORITY FROM THE SUPERINTENDENT OF INSUR-
ANCE A TAX AT A RATE EQUAL TO:
  (1)  THREE  AND  SIX-TENTHS PERCENT OF THE GROSS PREMIUMS ALLOCATED TO
THIS STATE BASED ON THE ALLOCATION SCHEDULE SET FORTH IN THE NONADMITTED
INSURANCE MULTI-STATE AGREEMENT AND ADOPTED  BY  THE  SUPERINTENDENT  OF
INSURANCE PURSUANT TO A REGULATION;
  (2) THE PERCENTAGE SPECIFIED BY EACH OTHER STATE THAT HAS EXECUTED THE
NONADMITTED  INSURANCE  MULTI-STATE  AGREEMENT  AND HAS NOT WITHDRAWN OR
DEFAULTED, ON THE PORTION OF THE PREMIUM ALLOCATED TO THAT  OTHER  STATE
BASED  ON THE ALLOCATION SCHEDULE SET FORTH IN THE NONADMITTED INSURANCE
MULTI-STATE AGREEMENT AND ADOPTED BY  THE  SUPERINTENDENT  OF  INSURANCE
PURSUANT TO A REGULATION;

S. 2811                            31                            A. 4011

  (3)  THREE AND SIX-TENTHS PERCENT OF THE GROSS PREMIUMS ON ANY PORTION
OF THE PREMIUM NOT ALLOCATED UNDER PARAGRAPHS ONE AND TWO OF THIS SUBDI-
VISION.
  S 21. Section 1552 of the tax law, as added by chapter 190 of the laws
of 1990, is amended to read as follows:
  S  1552.  Allocation.  (A) Where the taxable insurance contract covers
risks located or resident both  within  and  without  this  state[,  the
amount  of  premiums  allocable to risks resident or located within this
state shall be determined pursuant  to  rules  and  regulations  of  the
commissioner  of  taxation  and  finance. In promulgating such rules and
regulations, the commissioner of taxation and  finance  shall  give  due
consideration  to  the  rules  and regulations promulgated by the super-
intendent of insurance pursuant to subsection (b) of section nine  thou-
sand one hundred two of the insurance law] AND THE TAXPAYER'S HOME STATE
IS  NEW YORK, ONE HUNDRED PERCENT OF PREMIUMS SHALL BE ALLOCABLE TO THIS
STATE.
  (B) NOTWITHSTANDING SUBDIVISION (A) OF THIS  SECTION,  IF  THE  SUPER-
INTENDENT  OF  INSURANCE ENTERS INTO A NONADMITTED INSURANCE MULTI-STATE
AGREEMENT PURSUANT TO SECTION TWO THOUSAND ONE HUNDRED  THIRTY-EIGHT  OF
THE  INSURANCE  LAW,  THE  COMMISSIONER IS AUTHORIZED TO ADOPT THE ALLO-
CATION SCHEDULE INCLUDED IN SUCH AGREEMENT FOR THE PURPOSE OF ALLOCATING
RISK AND COMPUTING THE TAX DUE ON THE PORTION OF PREMIUM ATTRIBUTABLE TO
EACH RISK CLASSIFICATION AND TO EACH STATE WHERE  PROPERTIES,  RISKS  OR
EXPOSURES ARE LOCATED.
  (C)  IF THE SUPERINTENDENT OF INSURANCE HAS ENTERED INTO THE NONADMIT-
TED INSURANCE MULTI-STATE AGREEMENT, TO THE  EXTENT  THAT  OTHER  STATES
WHERE  PORTIONS  OF  THE  PROPERTIES, RISKS OR EXPOSURES RESIDE HAVE NOT
ENTERED INTO SUCH A MULTI-STATE  AGREEMENT  WITH  THIS  STATE,  THE  NET
PREMIUM TAX IMPOSED SHALL BE RETAINED BY THIS STATE IF THIS STATE IS THE
HOME STATE OF THE INSURED.
  S  22. Section 1554 of the tax law is amended by adding a new subdivi-
sion (e) to read as follows:
  (E) NOTWITHSTANDING ANY PROVISIONS OF THIS SECTION, THE  COMMISSIONER,
IN  CONSULTATION WITH THE SUPERINTENDENT OF INSURANCE, MAY PERMIT ANY OR
ALL PERSONS LIABLE FOR ANY TAX IMPOSED BY THIS ARTICLE TO FILE A  RETURN
WITH  A CLEARINGHOUSE OR OTHER ENTITY DESIGNATED BY A NONADMITTED INSUR-
ANCE MULTI-STATE AGREEMENT IN ACCORDANCE WITH ADMINISTRATIVE  PROVISIONS
CONTAINED WITHIN SUCH AN AGREEMENT.
  S  23. Section 1555 of the tax law is amended by adding a new subdivi-
sion (f) to read as follows:
  (F) NOTWITHSTANDING ANY PROVISIONS OF THIS SECTION,  THE  COMMISSIONER
MAY  PERMIT OTHER PERSONS OR ENTITIES TO INSPECT THE RETURNS FILED UNDER
THIS ARTICLE, OR MAY FURNISH TO SUCH PERSONS OR ENTITIES AN ABSTRACT  OF
ANY  RETURN  OR  SUPPLY  INFORMATION CONCERNING AN ITEM CONTAINED IN ANY
SUCH RETURN, OR DISCLOSED BY AN INVESTIGATION  OF  TAX  LIABILITY  UNDER
THIS  ARTICLE,  IF  THE  PERSONS  OR  ENTITIES ARE ENTITLED TO HAVE SUCH
INFORMATION UNDER THE  TERMS  OF  A  NONADMITTED  INSURANCE  MULTI-STATE
AGREEMENT ENTERED INTO BY THE SUPERINTENDENT OF INSURANCE.
  THE  COMMISSIONER  MAY,  PURSUANT  TO  THE TERMS OF SUCH AN AGREEMENT,
FORWARD TO THE PROPER OFFICERS OF ANOTHER MEMBER JURISDICTION ANY INFOR-
MATION IN THE COMMISSIONER'S POSSESSION RELATING TO  NONADMITTED  INSUR-
ANCE  PREMIUM TAXES AND MAY SHARE ANY INFORMATION RELATING TO THE ADMIN-
ISTRATION OF TAXES PURSUANT TO THE AGREEMENT  WITH  SUCH  OFFICERS.  THE
AGREEMENT  MAY PROVIDE FOR EACH MEMBER JURISDICTION TO AUDIT THE RECORDS
OF PERSONS BASED IN THE MEMBER JURISDICTION AND DETERMINE TAXES DUE EACH
MEMBER JURISDICTION.

S. 2811                            32                            A. 4011

  S 24. Section 1556 of the tax law, as added by chapter 190 of the laws
of 1990, is amended to read as follows:
  S  1556.  Procedural provisions. (A) The provisions of article twenty-
seven of this chapter shall apply to the provisions of this  article  in
the same manner and with the same force and effect as if the language of
such  article twenty-seven had been incorporated in full into this arti-
cle and had expressly referred to the tax under this article, except  to
the  extent  that  any  such  provision  is  either  inconsistent with a
provision of this article or is not relevant to this article.
  (B) NONADMITTED INSURANCE MULTI-STATE AGREEMENT.   IF THE  SUPERINTEN-
DENT  OF  INSURANCE HAS ENTERED INTO A NONADMITTED INSURANCE MULTI-STATE
AGREEMENT, THE COMMISSIONER MAY PARTICIPATE IN THE CLEARINGHOUSE  DESIG-
NATED PURSUANT TO SUCH AGREEMENT FOR THE PURPOSE OF COLLECTING AND ALLO-
CATING  TO  STATES  EXCESS LINE PREMIUM TAXES AND TAXES ON INDEPENDENTLY
PROCURED INSURANCE, WITH REGARD TO INSURANCE PLACED WITH AN UNAUTHORIZED
INSURER.
  S 25. Section 1557 of the tax law, as added by chapter 190 of the laws
of 1990, is amended to read as follows:
  S 1557. Deposit and disposition of revenue. All  taxes,  interest  and
penalties  collected  or  received  by  the commissioner of taxation and
finance under this article shall be deposited and disposed  of  pursuant
to  the provisions of section one hundred seventy-one-a of this chapter,
EXCEPT AS PROVIDED FOR BY SUBDIVISION (B)  OF  SECTION  FIFTEEN  HUNDRED
FIFTY-SIX OF THIS ARTICLE.
  S  26.  This  act  shall take effect July 21, 2011; provided, however,
that:
  (1) sections one, two and three of this act shall take effect July 16,
2011;
  (2) sections fourteen and twenty-four of this act  shall  take  effect
immediately;
  (3)  the amendments to subsection (b) of section 2118 of the insurance
law made by sections ten and eleven of this act  shall  not  affect  the
expiration  and  reversion  of  such  subsection  and shall be deemed to
expire therewith;
  (4) the amendments to paragraph 5 of subsection (a) of section 2130 of
the insurance law made by section thirteen of this act shall not  affect
the expiration of such section and shall be deemed to expire therewith;
  (5)  a  person,  firm, association or corporation licensed pursuant to
the provisions of section 2105 of  the  insurance  law  shall  make  the
payments required by subsection (d) of section 2118 of the insurance law
to  the  superintendent of insurance on or before September 19, 2011 for
the taxes on the policies procured by such licensee,  pursuant  to  such
license, between January 1, 2011 and July 20, 2011; and
  (6)  effective  immediately, the addition, amendment, or repeal of any
rules and regulations necessary for the implementation of  this  act  on
its  effective date are authorized and directed to be made and completed
on or before such effective date.

                                 PART J

  Section 1. Section 51 of chapter 298 of the laws of 1985, amending the
tax law relating to the franchise tax on banking corporations imposed by
the tax law, authorized to be imposed by any city having a population of
one million or more by chapter 772 of the laws of 1966  and  imposed  by
the  administrative  code  of the city of New York and relating to other
provisions of the tax law, chapter 883 of  the  laws  of  1975  and  the

S. 2811                            33                            A. 4011

administrative  code of the city of New York which relates to such fran-
chise tax, as amended by chapter 67 of the laws of 2010, is  amended  to
read as follows:
  S  51. This act shall take effect immediately and shall apply to taxa-
ble years beginning on or after January 1, 1985[, except that:
  (a) sections one through eight shall not apply to taxable years begin-
ning on or after January 1, 2011;
  (b) sections nine, twelve,  the  amendment  made  to  paragraph  9  of
subsection  (a)  of  section  1452  of  the tax law by section thirteen,
sections fifteen, sixteen,  eighteen,  nineteen,  twenty,  twenty-three,
twenty-seven,  thirty  and thirty-two, the amendment made to paragraph 9
of subdivision (a) of section 11-640 of the administrative code  of  the
city  of New York by section thirty-three, sections thirty-five, thirty-
six, thirty-eight, thirty-nine, forty, and forty-five shall not apply to
corporations other than savings banks and savings and loan  associations
for taxable years beginning on or after January 1, 2011.
  (c)   sections  twenty-one,  twenty-two,  twenty-four,  forty-one  and
forty-two shall not apply to corporations other than savings  banks  and
savings  and  loan  associations for taxable years beginning on or after
January 1, 2011, provided, however, that the provisions of such sections
which relate to the alternative minimum tax measured by  taxable  assets
shall  continue to apply to all taxpayers for taxable years beginning on
or after January 1, 2011;
  (d) the amendment to the section heading and the opening paragraph  of
section 11-643.3 of the administrative code of the city of New York made
by  section  forty-three  shall  not  apply  to  corporations other than
savings banks and savings and loan associations for taxable years begin-
ning on or after January 1, 2011 with respect  to  those  provisions  of
such  section  11-643.3 which relate to the basic tax measured by entire
net income; and
  (e) section twenty-eight, and the addition of new section 11-643.5  of
the  administrative  code of the city of New York made by section forty-
four shall not apply  to  corporations  other  than  savings  banks  and
savings  and  loan  associations for taxable years beginning on or after
January 1, 2011, provided, however, that the provisions of such sections
which relate to the alternative minimum taxes measured by assets, issued
capital stock and one hundred  twenty-five  dollars  shall  continue  to
apply  to  all taxpayers for taxable years beginning on or after January
1, 2011].
  S 2. Subdivisions (d) and (f) of section 110 of  chapter  817  of  the
laws  of  1987,  amending the tax law and the environmental conservation
law, constituting the business tax reform  and  rate  reduction  act  of
1987,  as amended by chapter 67 of the laws of 2010, are amended to read
as follows:
  (d) The provisions of section sixty-seven of this act  except  insofar
as  it  amends paragraph 10 of subsection (b) of section 1453 of the tax
law, seventy-one and seventy-four shall apply to taxable years beginning
after December 31, 1986[, provided, however, that new paragraphs 11  and
12  of subsection (b) of section 1453 of the tax law as added by section
sixty-seven of this act, the amendments made by section  seventy-one  of
this act, and new subsection (i) of section 1453 of the tax law as added
by  section  seventy-four  of  this act shall not apply to taxable years
beginning on or after January 1, 2011];
  (f) The provisions of section one hundred four of this act shall apply
to taxable years beginning after December 31, 1986[, and shall not apply
to corporations other than savings banks and savings  and  loan  associ-

S. 2811                            34                            A. 4011

ations  for  taxable  years  beginning  on  or  after  January  1, 2011,
provided, however, that the provisions of such section which  relate  to
the alternative minimum tax measured by taxable assets shall continue to
apply  to  all taxpayers for taxable years beginning on or after January
1, 2011].
  S 3.  Subdivisions (c) and (d) of section 68 of  chapter  525  of  the
laws  of  1988,  amending the tax law and the administrative code of the
city of New York relating to the imposition of taxes in the city of  New
York,  as amended by chapter 67 of the laws of 2010, are amended to read
as follows:
  (c) The provisions of sections one,  thirty-one,  thirty-two,  thirty-
three,  thirty-six,  thirty-seven, forty through forty-five, forty-seven
and forty-eight of this act shall apply to taxable years beginning after
December 31, 1986[, provided,  however,  that  the  amendments  made  by
sections  thirty-six  and forty-one of this act, and new subdivision (i)
of section 11-641 of the administrative code of the city of New York  as
added by section forty-four of this act shall not apply to taxable years
beginning on or after January 1, 2011];
  (d)  The  provisions  of  section forty-six of this act shall apply to
taxable years beginning after December 31, 1986[, and shall not apply to
corporations other than savings banks and savings and loan  associations
for  taxable  years  beginning  on  or  after January 1, 2011, provided,
however, that the provisions of such section which relate to the  alter-
native minimum tax measured by taxable assets shall continue to apply to
all taxpayers for taxable years beginning on or after January 1, 2011];
  S  4.  Paragraphs 1 and 2 of subsection (m) of section 1452 of the tax
law, as amended by chapter 24 of the laws of 2010, are amended  to  read
as follows:
  (1) Notwithstanding anything to the contrary contained in this section
other  than  subsection  (n)  of this section, a corporation that was in
existence before January  first,  two  thousand  [ten]  ELEVEN  and  was
subject to tax under article nine-A of this chapter for its last taxable
year  beginning  before  January first, two thousand [ten] ELEVEN, shall
continue to be taxable under such article for all taxable  years  begin-
ning  on  or  after  January first, two thousand [ten] ELEVEN and before
January first, two thousand [eleven] THIRTEEN.   The preceding  sentence
shall  not  apply to any taxable year during which such corporation is a
banking  corporation  described  in  paragraphs  one  through  eight  of
subsection (a) of this section. Notwithstanding anything to the contrary
contained  in  this section other than subsection (n) of this section, a
banking corporation or corporation that was in existence before  January
first, two thousand [ten] ELEVEN and was subject to tax under this arti-
cle  for its last taxable year beginning before January first, two thou-
sand [ten] ELEVEN, shall continue to be taxable under this  article  for
all  taxable  years  beginning  on  or after January first, two thousand
[ten] ELEVEN and before January first, two thousand [eleven] THIRTEEN or
in which the corporation satisfies the requirements for a corporation to
elect to be taxable under this article. Provided further,  that  nothing
in this subsection shall prohibit a corporation that elected pursuant to
subsection  (d)  of  this  section to be taxable under article nine-A of
this chapter  from  revoking  that  election  in  accordance  with  such
subsection (d).
  For  purposes  of this paragraph, a corporation shall be considered to
be subject to tax under article nine-A of this  chapter  for  a  taxable
year if such corporation was not a taxpayer but was properly included in
a  combined  report filed pursuant to section two hundred eleven of this

S. 2811                            35                            A. 4011

chapter for such taxable year and a corporation shall be  considered  to
be  subject  to tax under this article for a taxable year if such corpo-
ration was not a taxpayer but was properly included in a combined return
filed  pursuant  to  subsection  (f)  or (g) of section fourteen hundred
sixty-two of this article for such taxable year. A corporation that  was
in  existence  before January first, two thousand [ten] ELEVEN but first
becomes a taxpayer in a taxable  year  beginning  on  or  after  January
first,  two thousand [ten] ELEVEN and before January first, two thousand
[eleven] THIRTEEN, shall be considered for purposes of this paragraph to
have been subject to tax under article nine-A of this  chapter  for  its
last  taxable  year  beginning  before January first, two thousand [ten]
ELEVEN if such corporation would have been subject  to  tax  under  such
article  for  such  taxable  year  if it had been a taxpayer during such
taxable year. A corporation that was in existence before January  first,
two thousand [ten] ELEVEN but first becomes a taxpayer in a taxable year
beginning  on  or  after  January  first,  two thousand [ten] ELEVEN and
before January first, two thousand [eleven] THIRTEEN, shall  be  consid-
ered  for  purposes  of this paragraph to have been subject to tax under
this article for its last taxable year beginning before  January  first,
two thousand [ten] ELEVEN if such corporation would have been subject to
tax  under  this article for such taxable year if it had been a taxpayer
during such taxable year.
  (2) Notwithstanding anything to the contrary contained in this section
other than subsection (n) of this section, a corporation  formed  on  or
after January first, two thousand [ten] ELEVEN and before January first,
two thousand [eleven] THIRTEEN may elect to be subject to tax under this
article  or  under  article nine-A of this chapter for its first taxable
year beginning on or after January first, two thousand [ten] ELEVEN  and
before January first, two thousand [eleven] THIRTEEN in which either (i)
sixty-five  percent  or more of its voting stock is owned or controlled,
directly or indirectly by a  financial  holding  company,  provided  the
corporation  whose voting stock is so owned or controlled is principally
engaged in activities that are described in section 4(k)(4)  or  4(k)(5)
of  the  federal bank holding company act of nineteen hundred fifty-six,
as amended and the regulations promulgated pursuant to the authority  of
such  section,  or  (ii) it is a financial subsidiary. An election under
this paragraph may not be made by a corporation described in  paragraphs
one through eight of subsection (a) of this section or in subsection (e)
of  this section.  In addition, an election under this paragraph may not
be made by a corporation that is a party to a reorganization, as defined
in subsection (a) of section 368 of the internal revenue code  of  1986,
as  amended,  of  a  corporation  described  in  paragraph  one  of this
subsection if both corporations were sixty-five percent or more owned or
controlled, directly or indirectly, by the same interests at the time of
the reorganization.
  An election under this paragraph must be made by the  taxpayer  on  or
before  the  due  date  for filing its return (determined with regard to
extensions of time for filing) for  the  applicable  taxable  year.  The
election  to be taxed under article nine-A of this chapter shall be made
by the taxpayer by filing the report required pursuant  to  section  two
hundred  eleven  of this chapter and the election to be taxed under this
article shall be made by the taxpayer  by  filing  the  return  required
pursuant  to  section  fourteen  hundred  sixty-two of this article. Any
election made pursuant to this paragraph shall be irrevocable and  shall
apply  to  each  subsequent  taxable  year beginning on or after January
first, two thousand [ten] ELEVEN and before January first, two  thousand

S. 2811                            36                            A. 4011

[eleven]  THIRTEEN,  provided  that  the  stock ownership and activities
requirements described in subparagraph (i) of this paragraph are met  or
such  corporation  described  in  subparagraph  (ii)  of  this paragraph
continues as a financial subsidiary.
  S  5.  Paragraphs  1 and 2 of subdivision (l) of section 11-640 of the
administrative code of the city of New York, as amended by chapter 24 of
the laws of 2010, are amended to read as follows:
  (1) Notwithstanding anything to the contrary contained in this section
other than subdivision (m) of this section, a corporation  that  was  in
existence  before  January  first,  two  thousand  [ten]  ELEVEN and was
subject to tax under subchapter two of this chapter for its last taxable
year beginning before January first, two thousand  [ten]  ELEVEN,  shall
continue  to  be  taxable  under  such  subchapter for all taxable years
beginning on or after January  first,  two  thousand  [ten]  ELEVEN  and
before  January  first,  two thousand [eleven] THIRTEEN.   The preceding
sentence shall not apply to any taxable year during  which  such  corpo-
ration  is  a  banking  corporation  described in paragraphs one through
eight of subdivision (a) of this section.   Notwithstanding anything  to
the  contrary  contained  in  this section other than subdivision (m) of
this section, a banking corporation or corporation that was in existence
before January first, two thousand [ten] ELEVEN and was subject  to  tax
under this subchapter for its last taxable year beginning before January
first,  two  thousand  [ten]  ELEVEN, shall continue to be taxable under
this subchapter for all taxable years  beginning  on  or  after  January
first,  two thousand [ten] ELEVEN and before January first, two thousand
[eleven] THIRTEEN or in which the corporation satisfies the requirements
for a corporation to elect to be taxable under this subchapter. Provided
further, that nothing in this subdivision shall prohibit  a  corporation
that  elected  pursuant to subdivision (d) of this section to be taxable
under subchapter two of this chapter  from  revoking  that  election  in
accordance  with  subdivision  (d) of this section. For purposes of this
paragraph, a corporation shall be considered to be subject to tax  under
subchapter  two  of  this chapter for a taxable year if such corporation
was not a taxpayer but was properly included in a combined report  filed
pursuant  to subdivision four of section 11-605 of this chapter for such
taxable year and a corporation shall be considered to be subject to  tax
under  this  subchapter for a taxable year if such corporation was not a
taxpayer but was properly included in a combined report  filed  pursuant
to  subdivision (f) or (g) of section 11-646 of this part for such taxa-
ble year. A corporation that was in existence before January first,  two
thousand  [ten]  ELEVEN  but  first becomes a taxpayer in a taxable year
beginning on or after January  first,  two  thousand  [ten]  ELEVEN  and
before  January  first, two thousand [eleven] THIRTEEN, shall be consid-
ered for purposes of this paragraph to have been subject  to  tax  under
subchapter  two  of  this  chapter  for  its last taxable year beginning
before January first, two thousand  [ten]  ELEVEN  if  such  corporation
would  have  been  subject to tax under such subchapter for such taxable
year if it had been a taxpayer during such taxable year.  A  corporation
that  was  in  existence before January first, two thousand [ten] ELEVEN
but first becomes a taxpayer in a taxable year  beginning  on  or  after
January  first,  two thousand [ten] ELEVEN and before January first, two
thousand [eleven] THIRTEEN, shall be considered  for  purposes  of  this
paragraph to have been subject to tax under this subchapter for its last
taxable  year  beginning before January first, two thousand [ten] ELEVEN
if such corporation would have been subject to tax under this subchapter

S. 2811                            37                            A. 4011

for such taxable year if it had been  a  taxpayer  during  such  taxable
year.
  (2) Notwithstanding anything to the contrary contained in this section
other  than  subdivision (m) of this section, a corporation formed on or
after January first, two thousand [ten] ELEVEN and before January first,
two thousand [eleven] THIRTEEN may elect to be subject to tax under this
subchapter or under subchapter two of this chapter for its first taxable
year beginning on or after January first, two thousand [ten] ELEVEN  and
before January first, two thousand [eleven] THIRTEEN in which either (i)
sixty-five  percent  or more of its voting stock is owned or controlled,
directly or indirectly by a  financial  holding  company,  provided  the
corporation  whose voting stock is so owned or controlled is principally
engaged in activities that are described in section 4(k)(4)  or  4(k)(5)
of  the  federal bank holding company act of nineteen hundred fifty-six,
as amended and the regulations promulgated pursuant to the authority  of
such  section  or  (ii)  it is a financial subsidiary. An election under
this paragraph may not be made by a corporation described in  paragraphs
one  through  eight of subdivision (a) of this section or in subdivision
(e) of this section. In addition, an election under this  paragraph  may
not  be  made  by  a corporation that is a party to a reorganization, as
defined in subsection (a) of section 368 of the internal revenue code of
1986, as amended, of a corporation described in paragraph  one  of  this
subdivision  if  both corporations were sixty-five percent or more owned
or controlled, directly or indirectly by the same interests at the  time
of the reorganization.
  An  election  under  this paragraph must be made by the taxpayer on or
before the due date for filing its return  (determined  with  regard  to
extensions  of  time  for  filing)  for the applicable taxable year. The
election to be taxed under subchapter two of this chapter shall be  made
by  the  taxpayer  by filing the return required pursuant to subdivision
one of section 11-605 of this chapter and the election to be taxed under
this subchapter shall be made by  the  taxpayer  by  filing  the  return
required pursuant to subdivision (a) of section 11-646 of this part. Any
election  made pursuant to this paragraph shall be irrevocable and shall
apply to each subsequent taxable year  beginning  on  or  after  January
first,  two thousand [ten] ELEVEN and before January first, two thousand
[eleven] THIRTEEN, provided that  the  stock  ownership  and  activities
requirements  described in subparagraph (i) of this paragraph are met or
such corporation  described  in  subparagraph  (ii)  of  this  paragraph
continues as a financial subsidiary.
  S  6.  Subparagraph  (iv) of paragraph 2 of subdivision (f) of section
1462 of the tax law, as amended by chapter 24 of the laws  of  2010,  is
amended to read as follows:
  (iv)  (A)  Notwithstanding  any  provision of this paragraph, any bank
holding company exercising its corporate franchise or doing business  in
the  state  may  make  a  return on a combined basis without seeking the
permission of the commissioner with any banking  corporation  exercising
its corporate franchise or doing business in the state in a corporate or
organized  capacity  sixty-five percent or more of whose voting stock is
owned or controlled, directly or indirectly, by such bank holding compa-
ny, for the first taxable year beginning on or after January first,  two
thousand and before January first, two thousand [eleven] THIRTEEN during
which  such  bank holding company registers for the first time under the
federal bank holding company act, as amended, and also elects  to  be  a
financial holding company. In addition, for each subsequent taxable year
beginning  after  January  first, two thousand and before January first,

S. 2811                            38                            A. 4011

two thousand [eleven] THIRTEEN, any such bank holding company  may  file
on  a  combined basis without seeking the permission of the commissioner
with any banking corporation that is exercising its corporate  franchise
or  doing  business in the state and sixty-five percent or more of whose
voting stock is owned or controlled, directly  or  indirectly,  by  such
bank  holding  company  if either such banking corporation is exercising
its corporate franchise or doing business in the state in a corporate or
organized capacity for the first time  during  such  subsequent  taxable
year,  or sixty-five percent or more of the voting stock of such banking
corporation is owned or controlled, directly or indirectly, by such bank
holding company for the first time during such subsequent taxable  year.
Provided however, for each subsequent taxable year beginning after Janu-
ary  first, two thousand and before January first, two thousand [eleven]
THIRTEEN, a banking corporation described in either of the two preceding
sentences which filed on a combined basis with  any  such  bank  holding
company  in a previous taxable year, must continue to file on a combined
basis with such bank holding company if such banking corporation, during
such subsequent taxable year, continues to exercise its corporate  fran-
chise  or  do business in the state in a corporate or organized capacity
and sixty-five percent or more  of  such  banking  corporation's  voting
stock  continues  to  be owned or controlled, directly or indirectly, by
such bank holding company, unless the permission of the commissioner has
been obtained to file on a separate basis for  such  subsequent  taxable
year. Provided further, however, for each subsequent taxable year begin-
ning  after  January  first,  two thousand and before January first, two
thousand [eleven] THIRTEEN, a banking corporation described in either of
the first two sentences of this clause which did not file on a  combined
basis with any such bank holding company in a previous taxable year, may
not  file  on a combined basis with such bank holding company during any
such subsequent taxable year unless the permission of  the  commissioner
has  been obtained to file on a combined basis for such subsequent taxa-
ble year.
  (B) Notwithstanding any provision of this paragraph other than  clause
(A)  of this subparagraph, the commissioner may not require a bank hold-
ing company which, during a taxable year beginning on or  after  January
first,  two  thousand  and  before  January first, two thousand [eleven]
THIRTEEN, registers for the first time during such  taxable  year  under
the  federal bank holding company act, as amended, and also elects to be
a financial holding company, to make a return on a  combined  basis  for
any  taxable  year beginning on or after January first, two thousand and
before January first, two thousand  [eleven]  THIRTEEN  with  a  banking
corporation sixty-five percent or more of whose voting stock is owned or
controlled, directly or indirectly, by such bank holding company.
  S  7.  Subparagraph  (iv) of paragraph 2 of subdivision (f) of section
11-646 of the administrative code of the city of New York, as amended by
chapter 24 of the laws of 2010, is amended to read as follows:
  (iv) (A) Notwithstanding any provision of  this  paragraph,  any  bank
holding  company exercising its corporate franchise or doing business in
the city may make a return on  a  combined  basis  without  seeking  the
permission  of  the commissioner with any banking corporation exercising
its corporate franchise or doing business in the city in a corporate  or
organized  capacity  sixty-five percent or more of whose voting stock is
owned or controlled, directly or indirectly, by such bank holding compa-
ny, for the first taxable year beginning on or after January first,  two
thousand and before January first, two thousand [eleven] THIRTEEN during
which  such  bank holding company registers for the first time under the

S. 2811                            39                            A. 4011

federal bank holding company act, as amended, and also elects  to  be  a
financial holding company. In addition, for each subsequent taxable year
beginning  after  January  first, two thousand and before January first,
two  thousand  [eleven] THIRTEEN, any such bank holding company may file
on a combined basis without seeking the permission of  the  commissioner
with  any banking corporation that is exercising its corporate franchise
or doing business in the city and sixty-five percent or  more  of  whose
voting  stock  is  owned  or controlled, directly or indirectly, by such
bank holding company if either such banking  corporation  is  exercising
its  corporate franchise or doing business in the city in a corporate or
organized capacity for the first time  during  such  subsequent  taxable
year,  or sixty-five percent or more of the voting stock of such banking
corporation is owned or controlled, directly or indirectly, by such bank
holding company for the first time during such subsequent taxable  year.
Provided however, for each subsequent taxable year beginning after Janu-
ary  first, two thousand and before January first, two thousand [eleven]
THIRTEEN, a banking corporation described in either of the two preceding
sentences which filed on a combined basis with  any  such  bank  holding
company  in a previous taxable year, must continue to file on a combined
basis with such bank holding company if such banking corporation, during
such subsequent taxable year, continues to exercise its corporate  fran-
chise  or  do  business in the city in a corporate or organized capacity
and sixty-five percent or more  of  such  banking  corporation's  voting
stock  continues  to  be owned or controlled, directly or indirectly, by
such bank holding company, unless the permission of the commissioner has
been obtained to file on a separate basis for  such  subsequent  taxable
year. Provided further, however, for each subsequent taxable year begin-
ning  after  January  first,  two thousand and before January first, two
thousand [eleven] THIRTEEN, a banking corporation described in either of
the first two sentences of this clause which did not file on a  combined
basis with any such bank holding company in a previous taxable year, may
not  file  on a combined basis with such bank holding company during any
such subsequent taxable year unless the permission of  the  commissioner
has  been obtained to file on a combined basis for such subsequent taxa-
ble year.
  (B) Notwithstanding any provision of this paragraph other than  clause
(A)  of this subparagraph, the commissioner may not require a bank hold-
ing company which, during a taxable year beginning on or  after  January
first,  two  thousand  and  before  January first, two thousand [eleven]
THIRTEEN, registers for the first time during such  taxable  year  under
the  federal bank holding company act, as amended, and also elects to be
a financial holding company, to make a return on a  combined  basis  for
any  taxable  year beginning on or after January first, two thousand and
before January first, two thousand  [eleven]  THIRTEEN  with  a  banking
corporation sixty-five percent or more of whose voting stock is owned or
controlled, directly or indirectly, by such bank holding company.
  S 8. This act shall take effect immediately.

                                 PART K

  Section 1. Paragraph b of subdivision 1, subdivisions 2, 6, 14, 22 and
23  of  section  282  of  the  tax law, paragraph b of subdivision 1 and
subdivision 14 as amended by chapter 245 of the laws of  1989,  subdivi-
sion  2  as amended by chapter 509 of the laws of 1937, subdivision 6 as
amended by chapter 261 of the laws of 1988 and subdivisions 22 and 23 as

S. 2811                            40                            A. 4011

added by section 1 of part W-1 of chapter 109 of the laws of  2006,  are
amended to read as follows:
  b.  With respect to Diesel motor fuel, "distributor" means any person,
firm, association or corporation (i) who or which imports or  causes  to
be imported into the state, for use, distribution, storage or sale with-
in  the  state,  any  Diesel  motor  fuel;  (ii)  who or which produces,
refines, manufactures or compounds Diesel motor fuel within  the  state;
(iii)  [who  or which engages in the enhancement of Diesel motor fuel in
this state; (iv)] who or which makes a sale or use of Diesel motor  fuel
in this state other than: (A) a retail sale not in bulk or (B) the self-
use  of Diesel motor fuel which has been the subject of a retail sale to
such person; [(v)] (IV) who or which is registered by the department [of
taxation and finance] as a distributor of kero-jet fuel pursuant to  the
provisions  of  subdivision  two  of section two hundred eighty-two-a of
this article. For the purposes of this article when used with respect to
Diesel motor fuel, a "retail sale not  in  bulk"  means  the  making  or
offering  to  make  any  sale of Diesel motor fuel to a consumer of such
fuel which is delivered directly into a motor vehicle  for  use  in  the
operation  of  such vehicle. A "retail sale in bulk" means the making or
offering to make any sale of Diesel motor fuel to a  consumer  which  is
other  than a "retail sale not in bulk". Motor fuel or Diesel motor fuel
brought into the state in the ordinary fuel  tank  connecting  with  the
engine  of  a  motor  vehicle, aeroplane, motor boat or other conveyance
propelled by the use of such motor fuel or Diesel motor fuel, and to  be
used  only in the operation thereof, shall not be deemed imported within
the meaning of this article, if not removed from  such  tank  except  as
used in the propulsion of such engine.
  2.  "Motor  fuel" means gasoline, benzol, E85, FUEL GRADE ETHANOL THAT
MEETS THE ASTM INTERNATIONAL ACTIVE STANDARDS  SPECIFICATIONS  D4806  OR
D4814  or other product[, except kerosene and crude oil,] which is suit-
able for use in operation of a motor vehicle engine[, but if kerosene or
crude oil is compounded or mixed with any other product or products, and
the resulting compound or mixture is suitable for use in  the  operation
of  any such motor vehicle engine, such resulting compound or mixture in
its entirety shall be a "motor fuel."].
  6. "Filling station" shall include  any  place,  location  or  station
where motor fuel [or], HIGHWAY Diesel motor fuel OR WATER-WHITE KEROSENE
(EXCLUSIVELY  FOR  HEATING PURPOSES IN CONTAINERS OF NO MORE THAN TWENTY
GALLONS), is offered for sale at retail.
  14. "Diesel motor fuel" shall mean NO. 1 DIESEL  FUEL,  NO.  2  DIESEL
FUEL,  BIODIESEL,  kerosene, crude oil, fuel oil or other middle distil-
late and also motor fuel suitable for use in the operation of an  engine
of  the diesel type, excluding, however, any product specifically desig-
nated "No. 4 Diesel fuel" and not suitable as a fuel used in the  opera-
tion of a motor vehicle engine.
  22.  "E85"  means  a  [mixture  consisting  by  volume  of eighty-five
percent] FUEL BLEND CONSISTING OF ethanol and [the  remainder  of  which
is] motor fuel, WHICH MEETS THE ASTM INTERNATIONAL ACTIVE STANDARD D5798
FOR FUEL ETHANOL.
  23. "B20" means a mixture consisting by volume of twenty percent biod-
iesel  and the remainder of which is diesel motor fuel. [For purposes of
this subdivision "biodiesel"] "BIODIESEL" shall mean  EITHER  "QUALIFIED
BIODIESEL"  OR  "UNQUALIFIED  BIODIESEL."  "QUALIFIED BIODIESEL" MEANS a
diesel  motor  fuel  substitute  produced  from  nonpetroleum  renewable
resources  that  meets  the registration requirements for fuels and fuel
additives established  by  the  Environmental  Protection  Agency  under

S. 2811                            41                            A. 4011

section  211  of  the  Clean Air Act (42 U.S.C. 7545) and that meets the
[American Society for Testing and Materials D6751-02a Standard  Specifi-
cation  for Biodiesel Fuel (B100) Blend Stock for Distillate Fuels] ASTM
INTERNATIONAL  ACTIVE  STANDARD  D6751 FOR BIODIESEL FUEL.  "UNQUALIFIED
BIODIESEL" MEANS A DIESEL MOTOR FUEL SUBSTITUTE PRODUCED FROM  NONPETRO-
LEUM  RENEWABLE  RESOURCES  THAT  DOES  NOT  MEET THE ASTM INTERNATIONAL
ACTIVE STANDARD D6751 FOR BIODIESEL FUEL.
  S 1-a. Subdivision 15 of section 282 of the tax law is REPEALED.
  S 2. Subdivision 16 of section 282 of the tax law is REPEALED and  two
new subdivisions 16 and 16-a are added to read as follows:
  16.  "NON-HIGHWAY  DIESEL MOTOR FUEL" MEANS ANY DIESEL MOTOR FUEL THAT
IS DESIGNATED FOR USE OTHER THAN ON A PUBLIC HIGHWAY, AND IS DYED DIESEL
MOTOR FUEL AS DEFINED IN SUBDIVISION EIGHTEEN-A OF THIS SECTION.
  16-A. "HIGHWAY DIESEL MOTOR FUEL" MEANS ANY DIESEL MOTOR FUEL WHICH IS
NOT NON-HIGHWAY DIESEL MOTOR FUEL.
  S 3. Subdivision 18 of section 282 of the tax law, as added by chapter
302 of the laws of 2006, is renumbered subdivision 18-a and  is  amended
to read as follows:
  18-a.  "Dyed  Diesel  motor  fuel"  means  Diesel motor fuel which [is
enhanced Diesel motor fuel and which] has been dyed in  accordance  with
and  for the purpose of complying with the provisions of 26 USC S4082(a)
and the regulations thereunder, as may be amended from time to time.
  S 4. Section 282 of the tax law is amended by adding a new subdivision
26 to read as follows:
  26. "PUBLIC HIGHWAY" MEANS PUBLIC HIGHWAY AS  DEFINED  IN  SUBDIVISION
SIX OF SECTION FIVE HUNDRED ONE OF THIS CHAPTER.
  S  5.  Subdivisions    2,  3, 4 and 5 of section 282-a of the tax law,
subdivision 2 and paragraph (b) of subdivision 3 as amended  by  chapter
245 of the laws of 1989, subdivisions 3, 4 and 5 as added by chapter 261
of the laws of 1988 and paragraph (c) of subdivision 3 as added by chap-
ter 302 of the laws of 2006, are amended to read as follows:
  2.  No person shall [engage] SELL OR USE DIESEL MOTOR FUEL within this
state [in the enhancement of Diesel motor fuel, make a sale  or  use  of
Diesel  motor fuel] (other than a retail sale not in bulk or self-use of
Diesel motor fuel which has been the subject of a retail  sale),  import
or cause the importation of Diesel motor fuel into the state or produce,
refine,  manufacture  or  compound  Diesel  motor  fuel within the state
unless such person shall be registered by the  department  [of  taxation
and  finance]  as  a  distributor  of  Diesel  motor fuel. Provided, the
commissioner [of taxation and finance] shall not register as a distribu-
tor of Diesel motor fuel any person who is engaged solely in one or both
of the following: (i) any person who makes or offers to  make  a  retail
sale  not  in  bulk of such fuel or (ii) any person who purchases Diesel
motor fuel in bulk in this state for the sole purpose of  self-use.  The
commissioner  may,  however,  register as a distributor of kero-jet fuel
only a fixed base operator who makes no sales  of  kero-jet  fuel  other
than  retail  sales not in bulk delivered directly into the fuel tank of
an airplane for use in the operation of such airplane and who  makes  no
other  sales of diesel motor fuel. Such registration shall apply only to
the wholesale purchase of kero-jet fuel and the retail sale of such fuel
not in bulk for delivery directly into the fuel tank of an airplane  for
use in the operation thereof. Provided, further, that if the commission-
er  is  satisfied  that  full  registration is not necessary in order to
protect tax revenues, the commissioner may limit or modify the  require-
ment  of registration as a distributor with respect to any person other-
wise required to register solely because such person engages in the sale

S. 2811                            42                            A. 4011

of NON-HIGHWAY Diesel motor  fuel  where  such  person  makes  sales  of
NON-HIGHWAY  Diesel  motor fuel to the consumer solely for [the purposes
described in subparagraph (i) of paragraph (b) of subdivision  three  of
this  section]  USE OTHER THAN ON A PUBLIC HIGHWAY, provided that if the
commissioner so limits or modifies such  registration  requirement  with
respect  to  such person, then such registration shall apply only to the
importation, sale and distribution of SUCH NON-HIGHWAY Diesel motor fuel
[for the purposes described in such subparagraph (i)]. The  commissioner
[of  taxation  and finance] may also waive any other requirement imposed
by this article on such a distributor. All the provisions of section two
hundred eighty-three of this  article  shall  apply  to  applicants  for
registration  and registrants with respect to Diesel motor fuel, and, in
addition, distributors with  respect  to  Diesel  motor  fuel  shall  be
subject to all other provisions of this article relating to distributors
of motor fuel, including but not limited to, the keeping of records, the
fixing,  determination  and  payment  of  tax  and  filing  of  returns.
PROVIDED, FURTHER, THE COMMISSIONER MAY LIMIT OR MODIFY THE  REQUIREMENT
OF REGISTRATION AS A DISTRIBUTOR WITH RESPECT TO ANY PERSON WHO PRODUCES
FOR SELF USE "UNQUALIFIED BIODIESEL."
  3.  (a) The tax imposed by this section shall not apply to the sale of
untaxed Diesel motor fuel to or the use of such fuel by an  organization
described  in  paragraph one or two of subdivision (a) of section eleven
hundred sixteen of this chapter where such Diesel motor fuel is used  by
such organization for its own use or consumption.
  (b)  The  tax  on  the  [incident] INCIDENCE of sale or use imposed by
subdivision one of this section shall not apply to: (i) the sale [to] or
use [by the consumer of previously untaxed Diesel motor  fuel  which  is
not enhanced Diesel motor fuel and which is used exclusively for heating
purposes  or  for  the purpose of use or consumption directly and exclu-
sively in the production of tangible personal property,  gas,  electric-
ity,  refrigeration  or  steam,  for  sale,] OF NON-HIGHWAY DIESEL MOTOR
FUEL, but only if all of such fuel is consumed other than on the  PUBLIC
highways  of  this  state  (EXCEPT  FOR THE USE OF THE PUBLIC HIGHWAY BY
FARMERS TO REACH ADJACENT FARMLANDS); provided, however, this  exemption
shall in no event apply to a sale of NON-HIGHWAY Diesel motor fuel which
involves  a  delivery at a filling station or into a repository which is
equipped with a hose or other  apparatus  by  which  such  fuel  can  be
dispensed  into  the  fuel tank of a motor vehicle; or (ii) [the sale of
previously untaxed Diesel motor fuel which is not enhanced Diesel  motor
fuel  to  a  person  registered  under  this article as a distributor of
Diesel motor fuel other than (A) a retail sale to such person or  (B)  a
sale  to  such  person which involves a delivery at a filling station or
into a repository which is equipped with a hose or  other  apparatus  by
which  such fuel can be dispensed into the fuel tank of a motor vehicle;
or (iii) a sale or use of enhanced Diesel motor fuel to or by a consumer
exclusively for the purposes of heating specified in subparagraph (i) of
this paragraph but only if such enhanced Diesel motor fuel is  delivered
into a storage tank which is not equipped with a hose or other apparatus
by  which such fuel can be dispensed into the fuel tank of a motor vehi-
cle and such storage tank is attached to the heating unit  burning  such
fuel,  provided  that  each  delivery of such fuel of over four thousand
five hundred gallons shall be evidenced by a certificate signed  by  the
purchaser  stating that the product will be used exclusively for heating
purposes; or (iv) a sale or use consisting of no more than four thousand
five hundred gallons of Diesel motor fuel in a thirty-day period  to  or
by  a  consumer  who  purchases or uses such fuel for use or consumption

S. 2811                            43                            A. 4011

directly and exclusively in the production for sale of tangible personal
property by farming but only if all of such fuel  is  delivered  on  the
farm  site  and  is  consumed  other  than on the highways of this state
(except  for  the  use  of  the  highway  to  reach  adjacent farmlands)
provided, however, a farmer may purchase more than  four  thousand  five
hundred gallons of Diesel motor fuel in a thirty-day period for such use
or  consumption  exempt  from the tax in accordance with prior clearance
given by the commissioner of taxation and finance; or (v)] a sale to the
consumer consisting of not more than twenty gallons of water-white kero-
sene to be used and consumed exclusively for heating purposes; or [(vi)]
(III) the sale to or delivery at  a  filling  station  or  other  retail
vendor  of  water-white  kerosene provided such filling station or other
retail vendor only sells such water-white kerosene exclusively for heat-
ing purposes in containers of no more than twenty  gallons;  or  [(vii)]
(IV) a sale of kero-jet fuel to an airline for use in its airplanes or a
use  of  kero-jet fuel by an airline in its airplanes; or [(viii)] (V) a
sale of kero-jet fuel by a registered distributor of Diesel  motor  fuel
to  a fixed base operator registered under this article as a distributor
of kero-jet fuel only where such fixed base operator is  engaged  solely
in  making or offering to make retail sales not in bulk of kero-jet fuel
directly into the fuel tank of an airplane for the purpose of  operating
such airplane; or [(ix)] (VI) a retail sale not in bulk of kero-jet fuel
by  a fixed base operator registered under this article as a distributor
of kero-jet fuel only where such fuel is  delivered  directly  into  the
fuel tank of an airplane for use in the operation of such airplane.
  (c)  [Limited  exemptions  for  dyed  Diesel  motor  fuel. (i) The tax
imposed by this section shall not apply to: (A) the sale of dyed  Diesel
motor  fuel  by  the importer to a purchaser under the circumstances and
subject to the terms and conditions as follows:  (1)  the  importer  and
purchaser  are each registered under this article as a full Diesel motor
fuel distributor; (2) such importer has  imported  the  enhanced  Diesel
motor  fuel,  which  is  the subject of the sale, into the state and has
dyed such fuel to comply with the provisions of 26 USC S 4082(a) and the
regulations thereunder, as may be amended from time  to  time;  (3)  the
purchaser  is a holder of a currently valid direct payment permit issued
pursuant to section two hundred eighty-three-d of this article; and  (4)
such  purchaser  is primarily engaged in the retail heating oil business
and such dyed Diesel motor fuel will be sold  by  such  purchaser  in  a
retail  sale  to  a consumer for use solely as residential or commercial
heating oil; (B) a first sale of the dyed Diesel motor  fuel,  which  as
the  subject  of an exempt sale described in clause (A) of this subpara-
graph, by the purchaser described therein to a purchaser likewise  hold-
ing  a  currently  valid  direct  pay permit under the circumstances and
subject to the terms and conditions as follows: (1)  the  sale  of  such
second  purchaser  by such first purchaser is the first and only sale of
such dyed Diesel motor fuel by such first  purchaser;  (2)  such  second
purchaser  is  primarily  engaged in the retail heating oil business and
such dyed Diesel motor fuel will be sold by such second purchaser  in  a
retail  sale  to  a consumer for use solely as residential or commercial
heating oil; (3) on  the  sale  to  the  second  purchaser,  such  first
purchaser described in such clause (A) attaches to the invoice a copy of
the  invoice  given by the importer on the exempt sale described in such
clause (A), so as to identify the origin of the dyed Diesel  fuel  which
is the subject of the sale to such second purchaser; and (4) such second
purchaser certifies that such dyed Diesel motor fuel is to be sold by it
only  to  a consumer for use solely as residential or commercial heating

S. 2811                            44                            A. 4011

oil. (ii) Prior to, or at the time of, such sale  of  such  dyed  Diesel
motor  fuel  described  in clause (A) or (B) of subparagraph (i) of this
paragraph, the purchaser shall give a certificate to the seller  setting
forth  the intended use of the dyed Diesel motor fuel which is sought to
be qualified for exemption under this paragraph, that the purchaser  has
been  issued a direct payment permit which is currently valid, that such
permit has not been suspended or revoked and that the  purchaser  other-
wise  meets  the  qualifications  of  this  paragraph. (iii) The limited
exemptions allowed under this paragraph shall in no event apply  to  any
dyed  Diesel  motor  fuel  which is delivered into a repository equipped
with hose or other apparatus capable of being used to dispense fuel into
the fuel tank of a  motor  vehicle,  or  where  the  purchaser's  direct
payment  permit  has  been suspended or revoked and the commissioner has
made generally available the identity  of  those  persons  whose  direct
payment permits have been suspended or revoked.] NOTHING IN THIS ARTICLE
SHALL  EXEMPT  NON-HIGHWAY  DIESEL MOTOR FUEL FROM THE IMPOSITION OF THE
TAX UNDER THIS  SECTION,  IF  SUCH  NON-HIGHWAY  DIESEL  MOTOR  FUEL  IS
INTENDED  FOR  USE  ON  THE  WATERWAYS  OF THE STATE INCLUDING ANY OTHER
WATERWAYS BORDERING ON THE STATE, FOR OPERATING PLEASURE OR RECREATIONAL
MOTOR BOATS THEREON.
  4. The tax imposed by this section  on  Diesel  motor  fuel  shall  be
passed  through  by the seller and included as part of the selling price
to each purchaser of such fuel. Provided, however, the amount of the tax
imposed by this section may be excluded from the selling price of Diesel
motor fuel where (i) a sale of Diesel motor fuel is made to an organiza-
tion described in paragraph (a) of subdivision  three  of  this  section
solely  for  the  purpose  stated  therein;  (ii)  a  sale of [enhanced]
NON-HIGHWAY Diesel motor fuel is made to a consumer [exclusively for the
purposes of heating specified in subparagraph (i) of  paragraph  (b)  of
subdivision three of this section] but only if such [enhanced] NON-HIGH-
WAY  Diesel motor fuel is NOT DELIVERED TO A FILLING STATION, NOR deliv-
ered into a storage tank which is [not] equipped with a  hose  or  other
apparatus  by  which  such fuel can be dispensed into the fuel tank of a
motor vehicle [and such storage tank is attached  to  the  heating  unit
burning such fuel, provided that each delivery of such fuel of over four
thousand five hundred gallons shall be evidenced by a certificate signed
by  the  purchaser stating that the product will be used exclusively for
heating purposes; (iii) a sale is made consisting of no more  than  four
thousand  five hundred gallons (or a greater amount which has been given
prior clearance by the commissioner of taxation and finance)  of  Diesel
motor  fuel in a thirty-day period to a consumer who purchases such fuel
for use or consumption directly and exclusively in  the  production  for
sale  of  tangible  personal property by farming but only if all of such
fuel is consumed other than on the highways or waterways of this state];
or [(iv)] (III) the sale to or delivery at a filling  station  or  other
retail  vendor  of water-white kerosene provided such filling station or
other retail vendor only sells such water-white kerosene exclusively for
heating purposes in containers of no more than twenty gallons; or  [(v)]
(IV)  a  sale  of  kero-jet  fuel  is  made to an airline for use in its
airplanes.
  5. All the provisions of this article relating to  the  administration
and  collection  of the taxes on motor fuel, except sections two hundred
eighty-three-a and two hundred eighty-three-b of this article, shall  be
applicable  to  the  tax imposed by this section with such limitation as
specifically provided for in this article with respect to  Diesel  motor
fuel  and  with  such  modification  as  may  be  necessary to adapt the

S. 2811                            45                            A. 4011

language of such provisions to the tax imposed  by  this  section.  With
respect  to  the bond or other security required by subdivision three of
section two hundred eighty-three of this article, the  commissioner  [of
taxation  and finance], in determining the amount of bond or other secu-
rity required for the purpose of securing tax payments, shall take  into
account  the  volume of [heating fuel] NON-HIGHWAY DIESEL MOTOR FUEL and
other Diesel motor fuel sold for exempt purposes  by  a  distributor  of
Diesel  motor  fuel  during prior periods as a factor reducing potential
tax liability along with any other relevant factors in  determining  the
amount  of  security required.   With respect to the bond required to be
filed prior to registration as a Diesel motor fuel distributor, no  bond
shall  be  required  of  an  applicant upon a finding of the applicant's
fiscal responsibility, as  reflected  by  such  factors  as  net  worth,
current  assets  and liabilities, and tax reporting and payment history,
and the department shall not provide for a minimum bond of every  appli-
cant.
  S  6. Subdivision 7 of section 283 of the tax law, as amended by chap-
ter 261 of the laws of 1988, is amended to read as follows:
  7. Temporary restraining order and  permanent  [injuction]  INJUNCTION
against  unlawful  importation  and forfeiture of unlawfully imported or
produced [automotive] MOTOR FUEL OR  DIESEL  MOTOR  fuel.  (a)  Whenever
evidence  is  furnished by the commissioner [of taxation and finance] to
any justice of the supreme court, in court or at chambers, showing  that
any  person  not registered as a distributor as required by this article
has imported [automotive fuel] MOTOR FUEL OR DIESEL MOTOR FUEL into this
state or caused [automotive] MOTOR FUEL  OR  DIESEL  MOTOR  fuel  to  be
imported  into  this  state  or  has  produced, refined, manufactured or
compounded [automotive fuel or has subjected diesel motor  fuel  to  the
process  of  enhancement  within  this state] MOTOR FUEL OR DIESEL MOTOR
FUEL, such justice may make a temporary order without notice prohibiting
such person and his  agents  from  selling,  transferring  or  otherwise
disposing  of  any  such fuel or any fuel and also prohibiting all other
persons in possession of or having control over the same  from  selling,
releasing,  transferring or otherwise disposing of any [automotive fuel]
MOTOR FUEL OR DIESEL MOTOR FUEL imported,  produced,  refined,  manufac-
tured, compounded, [enhanced,] sold or transferred by such person not so
registered pending a hearing for a preliminary injunction.
  (b)  Upon  granting  a  temporary order, the court shall direct that a
hearing be held at the earliest  possible  time  upon  such  notice  and
service  as  the court shall direct and at the same time, if such action
has not yet been commenced, the commissioner [of taxation  and  finance]
shall commence an action in supreme court for a permanent injunction and
forfeiture of [automotive fuel] MOTOR FUEL OR DIESEL MOTOR FUEL pursuant
to  paragraph (c) of this subdivision. Where, after such opportunity for
a hearing, the court determines that there is a substantial  probability
that the commissioner will prevail in such action, the court shall grant
a  preliminary  injunction  restraining  the  sale, release, transfer or
other disposition of fuel subject to the temporary order.
  (c) (1) If it is established by clear  and  convincing  evidence  that
[automotive  fuel]  MOTOR FUEL OR DIESEL MOTOR FUEL was imported, caused
to be imported, produced, refined, manufactured or compounded [or diesel
motor fuel was subjected to the process of enhancement]  by  any  person
not  registered  as a distributor as required by this article, the court
shall grant a judgment (i) permanently enjoining  such  person  and  his
agents  from  selling,  transferring  or otherwise disposing of any such
fuel or any fuel within this state and (ii) declaring the forfeiture  of

S. 2811                            46                            A. 4011

any fuel that was so imported, caused to be imported, produced, refined,
manufactured, OR compounded [or enhanced] by such person.
  (2)  With respect to [automotive fuel] MOTOR FUEL OR DIESEL MOTOR FUEL
that was imported, caused to be imported,  produced,  refined,  manufac-
tured  or  compounded,  [or  diesel motor fuel that was subjected to the
process of enhancement] by a person not registered as a  distributor  as
required  by  this article or that was unlawfully sold or transferred by
such person, if it is established by clear and convincing evidence  that
any  other  person in possession of or having control over such fuel was
not a purchaser or transferee in good faith of such fuel with respect to
the fact that  such  fuel  was  so  imported,  caused  to  be  imported,
produced, refined, manufactured, OR compounded [or enhanced] by a person
not registered as a distributor as required by this article or that such
fuel  was  so  unlawfully  sold or transferred by such person, the court
shall grant a judgment (i) permanently enjoining such other  person  and
his  OR  HER  agents  from selling, releasing, transferring or otherwise
disposing of any such fuel and (ii) declaring  the  forfeiture  of  such
fuel in the possession or under the control of such other person.
  (d)  The  commissioner  may, at any time subsequent to the granting of
the temporary order pursuant to paragraph (a) of  this  subdivision,  in
his  OR HER sole discretion consent to a sale of [automotive fuel] MOTOR
FUEL OR DIESEL MOTOR FUEL subject to such temporary order  which  is  in
the possession or under the control of a person other than the person or
the  agent  of the person who imported, caused to be imported, produced,
refined, manufactured, compounded [or enhanced] or  unlawfully  sold  or
transferred  such  fuel. As a condition of granting permission to a sale
of [automotive fuel] MOTOR FUEL OR DIESEL MOTOR FUEL  pursuant  to  this
subdivision,  the  commissioner  shall require the payment of all taxes,
penalties and interest imposed by and pursuant to the authority of  this
chapter with respect to such fuel.
  (e)  (1)  At  any  time  during  the  pendency of an action under this
section, the [automotive fuel] MOTOR FUEL OR DIESEL MOTOR  FUEL  subject
to a temporary, preliminary or permanent order hereunder may be released
from  the  scope  of  such order if there is given an undertaking, in an
amount equal to the market value of such  fuel  plus  state  excise  and
sales  taxes  and federal excise taxes, to the effect that there will be
paid to the commissioner the amount of the market value of such fuel and
such taxes in the event that such fuel is adjudged forfeited.
  (2) Any person enjoined by a temporary order or a preliminary  injunc-
tion  issued  pursuant  to  this  subdivision  may  move at any time, on
notice, to vacate or modify it.
  (f) The procedures of the civil practice law and rules  applicable  to
temporary  restraining  orders,  preliminary  injunctions  and permanent
injunctions not inconsistent with this subdivision shall apply to tempo-
rary orders, preliminary injunctions and  permanent  injunctions  issued
under  this  subdivision  and any provision of this subdivision which is
not in accord with the constitutional mandate of such procedures of  the
civil practice law and rules shall be deemed to be modified as necessary
to  accord  with  such a mandate. The procedural provisions set forth in
paragraph three of subdivision (d) and in  subdivision  (j)  of  section
eighteen  hundred forty-eight of this chapter shall apply to the forfei-
ture proceedings under this subdivision and, in respect to a declaration
of forfeiture under this subdivision, the court shall direct the commis-
sioner to sell or otherwise dispose of such forfeited [automotive  fuel]
MOTOR  FUEL  OR  DIESEL  MOTOR  FUEL on such conditions the commissioner
deems most advantageous and just under the  circumstances.  The  commis-

S. 2811                            47                            A. 4011

sioner  shall not be required to file any undertaking in connection with
an action pursuant to this subdivision.
  S 7. Sections 283-d and 284-b of the tax law are REPEALED.
  S  8.  Subdivision  3  of  section 285-b of the tax law, as amended by
chapter 245 of the laws of 1989, is amended to read as follows:
  3. (a) The claim for or exemption from tax provided  for  in  subpara-
graphs  (i),  (II),  (iii),  (iv),  [(v),] AND (vi)[, (vii) and (ix)] of
paragraph (b) of subdivision three of section two  hundred  eighty-two-a
of  this  article shall be established by means of an exempt transaction
certificate. If any such exemption is applicable, such certificate shall
be provided by the purchaser to the seller at the time of  or  prior  to
delivery  of  the Diesel motor fuel. Such exempt transaction certificate
shall set forth the name and address of the purchaser and the  basis  of
the  exemption  and shall be signed by such purchaser and by the seller.
Such certificate shall be in such form and contain such  other  informa-
tion  as the commissioner [of taxation and finance] shall require. Where
a proper and complete exempt transaction certificate has been  furnished
and  accepted  by  the seller in good faith, such certificate under such
circumstance shall relieve the seller of the burden of proving that  the
Diesel  motor  fuel  covered  by  such certificate is exempt from tax by
reason of subparagraph (i), (II), (iii), (iv), [(v),] OR (vi)[, (vii) or
(ix)] of paragraph (b) of subdivision three of such section two  hundred
eighty-two-a. Any purchaser who furnishes to his seller a false or frau-
dulent exempt transaction certificate for the purpose of establishing an
exemption  from  the  tax imposed by section two hundred eighty-two-a of
this article shall be jointly and severally liable for the  tax  imposed
by  such  section.  In  lieu  of  an exempt transaction certificate, the
commissioner [of taxation and finance] may provide for the establishment
of such exemption by means of a procedure or other document which he  OR
SHE  deems  appropriate so as to secure the revenues from the excise tax
on Diesel motor fuel.  Provided, further, in the case of  the  exemption
provided  by  subparagraph  (i) of paragraph (b) of subdivision three of
section two hundred eighty-two-a of this article, the commissioner shall
provide for an alternative procedure or other document  signed  only  by
the  seller, such as a metered delivery ticket, for the establishment of
such exemption in those cases where such commissioner is satisfied  that
the  use  of such alternative procedure or other document will not jeop-
ardize the revenues from the excise tax on Diesel motor fuel.
  (b) A claim for the exemption from tax provided  for  in  subparagraph
[(ii)  or  (viii)]  (V) of paragraph (b) of subdivision three of section
two hundred eighty-two-a of this article shall be established  by  means
of  an  interdistributor sale certificate. If such exemption is applica-
ble, such certificate shall be provided by the purchaser to  the  seller
at  the  time  of  or  prior  to delivery of the Diesel motor fuel. Such
certificate shall set forth the name and address of the  purchaser,  the
purchaser's  registration  number, an affirmation by such purchaser that
the purchaser is registered as a distributor and that such  registration
has not been suspended or cancelled and shall be signed by such purchas-
er and by the seller. Such certificate shall be in such form and contain
such  other  information  as  the commissioner [of taxation and finance]
shall require. Where a proper and complete interdistributor sale certif-
icate has been furnished and accepted by the seller in good faith,  such
certificate  under  such  circumstance  shall  relieve the seller of the
burden of proving that the Diesel motor fuel covered by such certificate
is exempt from tax by reason of subparagraph [(ii)  or  (viii)]  (V)  of
paragraph  (b)  of subdivision three of such section two hundred eighty-

S. 2811                            48                            A. 4011

two-a. For purposes of this paragraph, a seller shall not have  accepted
such certificate in good faith if the purchaser's registration is inval-
id  because  it  has been suspended or cancelled, or if the purchaser is
not  registered,  and  the  commissioner  [of  taxation and finance] has
furnished registered distributors with information identifying all those
persons then validly registered as distributors of Diesel motor fuel and
those persons whose registrations have been suspended or cancelled.  Any
purchaser  who  furnishes  to his seller a false or fraudulent interdis-
tributor sale certificate for the purpose of establishing  an  exemption
from the tax imposed by section two hundred eighty-two-a of this article
shall  be  jointly  and  severally  liable  for  the tax imposed by such
section.
  S 9. Subdivision 1 of section 286 of the tax law, as amended by  chap-
ter 302 of the laws of 2006, is amended to read as follows:
  1.  Every person who imports or causes to be imported into this state,
or who produces, refines, manufactures or compounds within  this  state,
or  who purchases or sells in this state motor fuel or diesel motor fuel
or ingredients which may be manufactured or compounded into  motor  fuel
or  diesel  motor  fuel,  [or engages in the enhancement of diesel motor
fuel,] shall keep a complete and accurate record of  all  purchases  and
sales,  uses  or  other dispositions thereof and a complete and accurate
record of the number of gallons of motor fuel or diesel  motor  fuel  or
such  ingredients  so  imported,  produced,  refined, manufactured[,] OR
compounded [or enhanced]. Every person who stores motor fuel  or  diesel
motor  fuel shall keep a complete and accurate record of the identity of
the person for whom such fuel is stored, the quantity and type  of  fuel
so stored, the identity of the person to whom such fuel is released from
storage  and  the  quantity  and  type of fuel so released. Such records
shall be in such form and contain such other information as the  commis-
sioner  shall  prescribe. Said commissioner, by rule or regulation, also
may require the delivery of statements to purchasers  with  consignments
of  motor  fuel  or diesel motor fuel or such ingredients, and prescribe
the matters to be contained therein. Such records and statements, unless
required by the commissioner to be preserved for a longer period,  shall
be  preserved  for  a  period  of  three  years and shall be offered for
inspection at any time upon oral or written demand by such  commissioner
or the commissioner's duly authorized agents. The commissioner is hereby
further  authorized to examine the equipment of any such person pertain-
ing to the storage, sale or delivery of such fuels, as well as the stock
of such fuels in the possession or control of such person. To verify the
amount of tax due  under  this  article,  each  such  person  is  hereby
directed  and required to give to the commissioner or the commissioner's
duly authorized representatives, the means, facilities  and  opportunity
for  such examinations as are herein provided for and required.  Nothing
CONTAINED in this section [contained] shall be construed to require  the
keeping  for  purposes of this article of a record of purchases or sales
of motor fuel or diesel motor fuel or  such  ingredients  at  retail  in
small  quantities  (less than thirty gallons) or of motor fuel or diesel
motor fuel imported into this state in the tank of a motor vehicle which
supplies the fuel for its operation.
  S 10. Section 286-a of the tax law, as amended by chapter 261  of  the
laws of 1988, is amended to read as follows:
  S  286-a.  Records and reports of transportation of [automotive] MOTOR
FUEL AND DIESEL MOTOR fuel. Every person transporting [automotive] MOTOR
FUEL OR DIESEL MOTOR fuel within this state, whether such transportation
originates within or without this  state,  when  required  by  the  [tax

S. 2811                            49                            A. 4011

commission]  COMMISSIONER,  shall keep a true and accurate record of all
[automotive] MOTOR FUEL AND DIESEL MOTOR fuel so transported,  including
ingredients  which  may  be manufactured or compounded into [automotive]
MOTOR  FUEL  OR  DIESEL  MOTOR fuel, showing such facts with relation to
such [automotive] fuel and ingredients and their transportation  as  the
[tax  commission] COMMISSIONER may require. Such record shall be open to
inspection by the representatives of the  department  [of  taxation  and
finance]  at  any time and the [tax commission] COMMISSIONER may require
from any such person sworn returns of all or any part of the information
shown by such records.
  S 11. Section 286-b of the tax law, as amended by chapter 261  of  the
laws of 1988, is amended to read as follows:
  S  286-b.  Transportation  of  [automotive] MOTOR FUEL OR DIESEL MOTOR
fuel; manifest required. 1. The master or other person in charge of  any
barge, tanker or other vessel in which [automotive] MOTOR FUEL OR DIESEL
MOTOR fuel is being transported over any of the navigable waters of this
state,  the operator of a motor vehicle in which [automotive] MOTOR FUEL
OR DIESEL MOTOR fuel is being transported in this state, or the operator
of a pipeline through which [automotive] MOTOR FUEL OR DIESEL MOTOR fuel
is being transported in this state, other than [automotive]  MOTOR  FUEL
OR  DIESEL  MOTOR fuel being transported for use in operating the engine
which propels such vessel or motor vehicle, as the  case  may  be,  must
have  in  his  OR  HER  possession  a  manifest which shows the name and
address of the person from whom such [automotive] fuel was  received  by
him  OR  HER  and  the  place  of  receipt of such fuel and the name and
address of every person to whom he OR SHE is to  make  delivery  of  the
same  and  the place of delivery, together with the number of gallons to
be delivered to each such person, and,  if  such  [automotive]  fuel  is
being  imported into the state in such vessel, motor vehicle or pipeline
for use, storage, distribution or sale in the state,  the  name  of  the
distributor importing or causing such fuel to be imported into the state
and  such  other  information  as  the [tax commission] COMMISSIONER may
require pursuant to rule or regulation, and shall at the  request  of  a
peace  officer,  acting  pursuant to his OR HER special duties, a police
officer, any representative of the department [of taxation and  finance]
or any other person authorized by law to inquire into or investigate the
transportation  of  such  [automotive]  fuel,  produce such manifest for
inspection. The person causing the operation of such vessel, motor vehi-
cle or pipeline shall be responsible  to  cause  the  operator  of  such
vessel,  motor  vehicle  or pipeline to keep in his OR HER possession on
such vessel, in such motor vehicle or in the main  control  building  of
such  pipeline  in this state the manifest required by this section. The
absence of the manifest required by this section shall give  rise  to  a
presumption  that the [automotive] MOTOR FUEL OR DIESEL MOTOR fuel being
transported is intended for sale, use, distribution or storage  in  this
state  and  is  being  imported or caused to be imported by other than a
registered distributor. Moreover, the absence of (1) the place of deliv-
ery of motor fuel OR DIESEL MOTOR FUEL on the manifest with  respect  to
[automotive]  MOTOR  FUEL  OR  DIESEL MOTOR fuel being imported into the
state shall give rise to a presumption that such fuel is being  imported
into  the  state for use, distribution, storage or sale in the state and
(2) the name of a registered distributor on the manifest with respect to
[automotive] MOTOR FUEL OR DIESEL MOTOR fuel  being  imported  into  the
state  for  use,  distribution,  storage or sale in the state shall give
rise to a presumption that such fuel is being so imported or  caused  to
be  imported by other than a registered distributor. Every barge, tanker

S. 2811                            50                            A. 4011

or other vessel so used for the transportation of  motor  fuel  must  be
plainly  and  visibly  marked  on both sides thereof and above the water
line with the word "Gasoline," or other name of  the  motor  fuel  being
transported,  in letters at least eight inches high and of corresponding
appropriate width, or must be  identified  as  prescribed  by  the  [tax
commission]  COMMISSIONER  pursuant to rule or regulation. The master or
person in charge of such barge, tanker or other vessel, as well  as  the
owners  thereof,  shall be guilty of a violation of this section if such
barge, tanker or other vessel is not so marked.
  2. The commissioner may,  by  regulation  provide  for  the  form  and
content of the manifest required for [automotive] MOTOR AND DIESEL MOTOR
fuel  and  for the filing of monthly information returns by every person
required to maintain records,  described  in  subdivision  one  of  this
section,  which  shall  in all material respects reflect the information
required to be contained in such records. Such returns shall be in  such
form  and  contain  such  other  information  as  the commissioner shall
require.
  S 12. Subdivision 1 of section 287 of the tax law, as amended by chap-
ter 261 of the laws of 1988, is amended to read as follows:
  1. Every distributor shall, on or before the  twentieth  day  of  each
month,   file with the department [of taxation and finance] a return, on
forms to be prescribed by the commissioner and furnished by such depart-
ment, stating the number of gallons of motor fuel imported, manufactured
or sold by such distributor in the state during the  preceding  calendar
month  and  in  the  case of Diesel motor fuel, the number of gallons of
[enhanced] Diesel motor fuel imported[, the number of gallons  enhanced]
and the number of gallons which have been sold or used. Provided, howev-
er,  the  commissioner  may, if he OR SHE deems it necessary in order to
[insure] ENSURE the payment  of  the  taxes  imposed  by  this  article,
require returns to be made at such times and covering such periods as he
OR  SHE may deem necessary, and, by regulation, may permit the filing of
returns by distributors of Diesel motor fuel on a quarterly, semi-annual
or annual basis, or may waive the filing of returns by a distributor  of
Diesel  motor  fuel  for  such time and upon such terms as he OR SHE may
deem proper if satisfied that  no  tax  imposed  by  this  article  with
respect  to Diesel motor fuel is or will be payable by him OR HER during
the time for which returns are waived. Such returns shall  contain  such
further  information as the commissioner shall require.  The fact that a
distributor's name is signed to a filed  return  shall  be  prima  facie
evidence  for  all  purposes that the return was actually signed by such
distributor.  Each such distributor shall, with respect to  motor  fuel,
pay  to the department with the filing of such return, the taxes imposed
by this article on each gallon of motor fuel imported,  manufactured  or
sold by such distributor in the state, and so reported, during the peri-
od  covered  by  such  return.  Each  distributor shall, with respect to
Diesel motor fuel, pay to the department with the filing of  the  return
the  taxes  imposed  by  this article on the number of gallons of Diesel
motor fuel sold or used or delivered to a filling station  or  delivered
into  the fuel tank of a motor vehicle  during the period covered by the
return. Provided, however, that where a distributor has purchased [auto-
motive] MOTOR FUEL OR DIESEL MOTOR fuel upon which the taxes imposed  by
this article have been paid or paid over and in each instance the tax is
included  in the price, a credit shall be allowed for the amount of such
taxes upon the subsequent sale of such fuel  to  the  extent  that  such
taxes are so paid and included in the price.

S. 2811                            51                            A. 4011

  S  13. Paragraphs (a) and (c) of subdivision 3 of section 289-c of the
tax law, paragraph (a) as amended by chapter 558 of the laws of 1965 and
paragraph (c) as amended by chapter 302 of the laws of 2006, are amended
to read as follows:
  (a) Except as otherwise provided in paragraph (b) of this section, any
person  who  shall buy any motor fuel or diesel motor fuel, on which the
tax imposed by this article shall have been paid, and shall consume  the
same  in  any  manner except in the operation of a motor vehicle upon or
over the PUBLIC highways of this state, or in the operation of a  pleas-
ure  or  recreational motor boat upon or over the waterways of the state
including waterways bordering on the  state,  shall  be  reimbursed  the
amount  of  such  tax in the manner and subject to the conditions herein
provided except that there shall be no  reimbursement  of  tax  paid  on
motor  fuel  or diesel motor fuel taken out of this state in a fuel tank
connected with the engine of a motor vehicle  and  consumed  outside  of
this state.
  (c)  All  claims  for  reimbursement shall be in such form and contain
such information as the commissioner shall prescribe and shall be  filed
within three years from (i) the date of the purchase, in the case of the
purchaser;  or  (ii) the date of the sale, in the case of the seller, of
the motor fuel so subject  to  reimbursement.  Every  such  claim  shall
include  a  certificate by or on behalf of the party presenting the same
to the effect that it is just, true and correct, that  no  part  thereof
has  been  paid,  except as stated therein, and that the balance therein
stated is actually due and owing. The claimant shall satisfy the depart-
ment that the claimant has borne the tax and that  the  motor  fuel  has
been  consumed by the claimant in a manner other than the operation of a
motor vehicle upon or over the PUBLIC highways of this state, the opera-
tion of a pleasure or recreational motorboat upon or over the  waterways
of  the state including waterways bordering on the state or, in the case
of an omnibus carrier, taxicab licensee, nonpublic  school  operator  or
volunteer  ambulance  service,  that  the claimant has borne the tax and
that the amount claimed is the amount of  such  tax  reimbursable  under
paragraph  (b),  (d),  (e)  or  (f)  of  THIS subdivision [three of this
section]. The department may require such further information  or  proof
as  it shall deem necessary for the administration of such claim. Claims
for reimbursement approved by the department shall be paid from revenues
collected under this article and deposited to the credit  of  the  comp-
troller as hereinafter provided; but no such claims shall be paid unless
the  department  is  satisfied  that the amount of the tax for which the
reimbursement is claimed has actually been collected by the state.   The
amount  of  any  erroneous  or  excessive  payment  to  a  claimant  for
reimbursement may be determined by the department and may  be  recovered
from  such claimant in the same manner as a tax imposed by this article,
provided, however, that any such  determination  shall  be  made  within
three years after the date of such erroneous or excessive payment.
  S 14. Subdivision 4 of sections 289-c of the tax law is REPEALED.
  S  15.  Subdivision  1  of section 289-e of the tax law, as amended by
section 5 of part EE of chapter 63 of the laws of 2000,  is  amended  to
read as follows:
  1.  All  taxes,  interest, penalties and fees collected or received by
the commissioner under the taxes imposed  by  this  article,  except  as
provided  otherwise  in  subdivision  two  and subdivision three of this
section and sections two hundred eighty-two-b, two hundred eighty-two-c,
two hundred eighty-four-a and  two  hundred  eighty-four-c,  other  than
[those imposed by section two hundred eighty-four-b and] the fee imposed

S. 2811                            52                            A. 4011

by  section two hundred eighty-four-d and penalties and interest on such
fee, shall be deposited and disposed of pursuant to  the  provisions  of
section  one  hundred  seventy-one-a  of  this chapter; provided that an
amount  equal  to  thirty-seven  and  one-half  per centum of the moneys
collected under section two hundred eighty-four of this chapter shall be
appropriated and used for the acquisition of property necessary for  the
construction  and  reconstruction of highways and bridges or culverts on
the state highway system, and  for  the  construction,  maintenance  and
repair of such highways and bridges or culverts, all under the direction
of the commissioner of transportation.
  S 16. Section 289-f of the tax law, as added by chapter 44 of the laws
of 1985, is amended to read as follows:
  S  289-f.  Joint  administration  of  taxes. In addition to the powers
granted to the  [tax  commission]  COMMISSIONER  in  this  chapter,  the
[commission] COMMISSIONER is hereby authorized to make provisions pursu-
ant  to  rules and regulations for the joint administration, in whole or
in part, of the state and local taxes imposed  by  article  twenty-eight
and authorized to be imposed by article twenty-nine of this chapter upon
the  sale  of [automotive] MOTOR FUEL OR DIESEL MOTOR fuel and the taxes
imposed and authorized to be imposed  by  this  article,  including  the
joint  reporting,  assessment,  collection,  determination and refund of
such taxes, and for that purpose to prescribe that any of  the  [commis-
sion's]  COMMISSIONER'S  functions under such articles, and any returns,
forms, statements, documents or  information  to  be  submitted  to  the
[commission]  COMMISSIONER under such articles, any books and records to
be kept for purposes of the taxes imposed or authorized to be imposed by
such articles, any schedules of amounts to be collected under such arti-
cles, any registration required under such articles, and the payment  of
taxes  under such articles shall be on a joint basis with respect to the
taxes imposed by such articles.
  S 17. Paragraph 2 of subdivision (b) and subdivisions  (c),  (k),  (l)
and (m) of section 300 of the tax law, paragraph 2 of subdivision (b) as
amended  by chapter 170 of the laws of 1994, subdivision (c) as added by
chapter 190 of the laws of 1990, subdivision (k) as amended by section 1
of part H of chapter 407 of the laws of 1999 and  subdivisions  (l)  and
(m)  as added by chapter 309 of the laws of 1996, are amended to read as
follows:
  (2) With respect to diesel motor fuel, every corporation and  unincor-
porated business (i) importing diesel motor fuel or causing diesel motor
fuel  to  be  imported  into the state for use, distribution, storage or
sale in the state, (ii) producing, refining, manufacturing or  compound-
ing  diesel motor fuel within the state, (iii) [engaging in the enhance-
ment of diesel motor fuel within the state, (iv)] making a sale  or  use
of  diesel motor fuel in the state, other than a retail sale not in bulk
or self-use of diesel motor fuel which has been the subject of a  retail
sale  to  such  corporation  or  unincorporated  business, or [(v)] (IV)
registered by the department [of taxation and finance] as a "distributor
of kero-jet fuel only" pursuant to the provisions of subdivision two  of
section  two  hundred  eighty-two-a  of  this chapter. Diesel motor fuel
brought into this state in the ordinary fuel tank  connecting  with  the
engine  of  a  motor  vehicle,  airplane  or other conveyance, but not a
vessel (other than a recreational motor boat  or  a  commercial  fishing
vessel as defined in subdivision (j) of this section if the diesel motor
fuel  imported  into  and consumed in this state is used to operate such
vessel while it  is  engaged  in  the  harvesting  of  fish  for  sale),
propelled  by  the  use of such diesel motor fuel and to be used only in

S. 2811                            53                            A. 4011

the operation thereof, shall not be deemed imported within  the  meaning
of  this  article,  if  not removed from such tank except as used in the
propulsion of such engine.
  (c) [(1)] The [term (A)] TERMS (1) "diesel motor fuel" means such term
as  defined in subdivision fourteen of section two hundred eighty-two of
this chapter  [and  regulations  thereunder  including  any  regulations
relating  to product specifically designated "No. 4 diesel fuel" and not
suitable as a fuel used in the operation of a motor vehicle engine], and
  [(B) "enhanced] (2) "HIGHWAY diesel motor fuel"  means  such  term  as
defined in subdivision [sixteen] SIXTEEN-A of section two hundred eight-
y-two of this chapter, and
  [(C)(i)  "nonautomotive type diesel motor fuel" as used in relation to
the rates of the tax imposed by section  three  hundred  one-a  of  this
article means any diesel motor fuel, as described in subparagraph (A) of
this  paragraph,  which  would  be  excluded  from the diesel motor fuel
excise tax imposed by section two hundred eighty-two-a of  this  chapter
solely  by  reason of the enumerated exclusions based on ultimate use of
the product set forth in paragraph (b)  of  subdivision  three  of  such
section,  and  (ii)  "automotive-type  diesel  motor  fuel"  as  used in
relation to the rates of tax imposed by such section three hundred one-a
means diesel motor fuel which is  not  nonautomotive-type  diesel  motor
fuel.]
  (3)  "NON-HIGHWAY  DIESEL  MOTOR  FUEL"  MEANS SUCH TERM AS DEFINED IN
SUBDIVISION SIXTEEN OF SECTION TWO HUNDRED EIGHTY-TWO OF THIS CHAPTER.
  [(2)] (4) As used in this article, references to persons or  petroleum
businesses registered under article twelve-A of this chapter as distrib-
utors  of  diesel motor fuel shall include all such persons or petroleum
businesses registered under such article as distributors of diesel motor
fuel and persons or petroleum businesses operating under  valid  limited
registrations  relating to persons or petroleum businesses making retail
sales of  diesel  motor  fuel  to  consumers  solely  for  the  purposes
described  in  subparagraph (i) of paragraph (b) of subdivision three of
section two hundred eighty-two-a of this chapter,  but  such  references
shall  not  include  persons  and  petroleum  businesses  registered  as
"distributors of kero-jet fuel  only"  pursuant  to  the  provisions  of
subdivision two of section two hundred eighty-two-a of this chapter.
  (k)  "Commercial  gallonage"  means gallonage (1) which is [nonautomo-
tive-type] NON-HIGHWAY diesel motor fuel [(which is not enhanced  diesel
motor fuel)] or residual petroleum product, (2) which is included in the
full  measure  of the [nonautomotive-type] NON-HIGHWAY diesel motor fuel
component or the residual petroleum product component of the tax imposed
under section three hundred one-a of this article, [and] (3) which  does
not  (and  will not) qualify (A) for the utility credit or reimbursement
provided for in section three hundred one-d  of  this  article,  (B)  as
"manufacturing gallonage", as such term is defined in subdivision (m) of
this section, (C) for the not-for-profit organization exemption provided
for  in  subdivision (h) of section three hundred one-b of this article,
or (D) for the heating exemption provided for in paragraph two of subdi-
vision (d) of section three hundred one-b of this article or the heating
reimbursement provided for  in  paragraph  two  of  subdivision  (a)  of
section  three  hundred one-c of this article, AND (4) WHICH WILL NOT BE
USED NOR HAS BEEN USED IN THE FUEL TANK CONNECTING WITH THE ENGINE OF  A
VESSEL.  No gallonage shall qualify as "commercial gallonage" where such
gallonage  is eligible for the (i) utility credit or reimbursement under
such section three hundred one-d of this article, (ii) [if before  Janu-
ary first, nineteen hundred ninety-eight, the manufacturing exemption or

S. 2811                            54                            A. 4011

reimbursement  under  paragraph  one of subdivision (b) of section three
hundred one-j of this article and, if on or after January  first,  nine-
teen  hundred  ninety-eight,  the] "manufacturing exemption" under para-
graph  [four] THREE of subdivision (f) of section three hundred one-a of
this article, (iii) [the] not-for-profit  organization  exemption  under
subdivision  (h) of section three hundred one-b of this article, or (iv)
heating exemption provided for in paragraph two of  subdivision  (d)  of
section three hundred one-b of this article or the heating reimbursement
provided  for  in  paragraph  two  of  subdivision  (a) of section three
hundred one-c of this article. The commissioner shall require such docu-
mentary proof to substantiate the classification of product as  "commer-
cial gallonage" as the commissioner deems appropriate.
  (l)  "Railroad diesel" means NON-HIGHWAY diesel motor fuel for use and
consumption directly and exclusively in the operation of a locomotive or
a self-propelled vehicle run only on rails or tracks, but only if either
(1) all such fuel is delivered into a  storage  facility  which  is  not
equipped  with  a  hose  or  other  apparatus  by which such fuel can be
dispensed into the fuel tank of a motor vehicle  and  such  facility  is
used  only  to fuel such locomotives or such self-propelled vehicles, or
(2) in accordance with the terms of sale, all  such  fuel  is  delivered
directly  into  the  tank  of  a  locomotive  or self-propelled vehicle.
Provided, however, that  a  sale  to  a  purchaser  who  will  use  such
NON-HIGHWAY diesel motor fuel as "railroad diesel" shall be evidenced by
a  certificate  signed  by  the purchaser stating that such diesel motor
fuel will be used and consumed as prescribed in this subdivision and the
commissioner may require such  other  information  as  the  commissioner
deems appropriate.
  (m)  "Manufacturing  gallonage"  means  residual  petroleum product or
NON-HIGHWAY diesel motor fuel  [(which  is  not  enhanced  diesel  motor
fuel)]  used  and consumed directly and exclusively in the production of
tangible personal property for  sale  by  manufacturing,  processing  or
assembly,  but  only  if (I) all of such fuel or product is delivered on
the manufacturing site [and is consumed other than on  the  highways  of
this  state],  OR  (II)  THE PURCHASER CAUSES SUCH FUEL OR PRODUCT TO BE
DELIVERED TO ITS MANUFACTURING SITE.  "Manufacturing gallonage" shall in
no event [include diesel motor fuel] BE CONSUMED ON THE PUBLIC  HIGHWAYS
OF  THIS  STATE  OR  delivered at a filling station or into a repository
which is equipped with a hose or other apparatus by which such fuel  can
be  dispensed  into  the  fuel tank of a motor vehicle. The commissioner
shall require such documentary proof to substantiate the  classification
of product as "manufacturing gallonage" as the commissioner deems appro-
priate.
  S 18. Section 301  of the tax law is REPEALED.
  S 19. Subdivision (a), paragraph 1 of subdivision (b) and subdivisions
(c),  (e),  (f) and (h) of section 301-a of the tax law, subdivision (a)
as amended by section 1 of part U of chapter 63 of  the  laws  of  2000,
paragraph  1  of  subdivision  (b) and paragraph 1 of subdivision (c) as
amended by section 154 of part A of chapter 389 of  the  laws  of  1997,
subdivisions  (c),  (e), (f) and (h) as added by chapter 190 of the laws
of 1990, paragraph 3 of subdivision (e) and paragraph 3  of  subdivision
(f)  as  amended  by  chapter 170 of the laws of 1994 and paragraph 4 of
subdivision (e) and  paragraph 4 of subdivision (f) as added by  chapter
309 of the laws of 1996, are amended to read as follows:
  (a)  General.  Notwithstanding any other provision of this chapter, or
of any other law, [for taxable months commencing on or after  the  first
day of September, nineteen hundred ninety,] there is hereby imposed upon

S. 2811                            55                            A. 4011

every  petroleum  business  for  the  privilege of engaging in business,
doing business, employing capital, owning or leasing property, or  main-
taining an office in this state, a monthly tax for each or any part of a
taxable  month  equal  to the sum of the motor fuel component determined
pursuant to subdivision (b) of this section, the [automotive-type] HIGH-
WAY diesel motor fuel component determined pursuant to paragraph one  of
subdivision  (c)  of  this section, the [nonautomotive-type] NON-HIGHWAY
diesel motor fuel component determined  pursuant  to  paragraph  two  of
subdivision  (c)  of  this  section  and  the residual petroleum product
component determined pursuant to subdivision (d) of this section.
  (1) The motor fuel component shall be determined  by  multiplying  the
motor  fuel  and  [automotive-type] HIGHWAY diesel motor fuel rate times
the number of gallons of  (1)  motor  fuel  imported  or  caused  to  be
imported  into  this  state  by the petroleum business for use, distrib-
ution, storage or sale in the state or (2) produced,  refined,  manufac-
tured  or  compounded  in the state by the petroleum business during the
month covered by the return under this article.  Provided, however, that
no motor fuel shall be included in the measure  of  the  tax  unless  it
shall  have  previously come to rest within the meaning of federal deci-
sional law interpreting the United States constitution,  nor  shall  any
motor fuel be included in the measure of the tax imposed by this article
more than once.
  (c) (1) [Automotive-type] HIGHWAY Diesel motor fuel component. (A) The
[automotive-type]  HIGHWAY  diesel  motor fuel component shall be deter-
mined by multiplying the motor fuel and [automotive-type] HIGHWAY diesel
motor fuel rate times (1) the number  of  gallons  of  [automotive-type]
HIGHWAY  diesel  motor fuel sold or used by a petroleum business in this
state during the month covered by the return under this article and  (2)
with  respect to any gallonage which prior thereto has not been included
in the measure of the tax imposed by this article, times the  number  of
gallons  of HIGHWAY diesel motor fuel delivered (i) to a filling station
or (ii) into the fuel tank connecting with the engine of a motor vehicle
for use in the operation thereof, whichever of  the  latter  two  events
shall  be the first to occur.  Provided, however, that no HIGHWAY diesel
motor fuel shall be included in the measure of the tax unless  it  shall
have  previously  come  to rest within the meaning of federal decisional
law interpreting the United States constitution, nor decisional law, nor
shall any HIGHWAY diesel motor fuel be included in the  measure  of  the
tax imposed by this article more than once.
  (B)  [Diesel] HIGHWAY DIESEL motor fuel brought into this state in the
fuel tank connecting with the engine of a vessel propelled by the use of
such diesel motor fuel shall be deemed to constitute a  taxable  use  of
diesel motor fuel for the purpose of this paragraph to the extent of the
fuel  that  is  consumed  in  the operation of the vessel in this state.
Provided, however, this paragraph shall not apply to (i) a  recreational
motor  boat or (ii) [subsequent to August thirty-first, nineteen hundred
ninety-four,] a commercial fishing vessel (as defined in subdivision (j)
of section three hundred of this  article)  if  the  diesel  motor  fuel
imported into and consumed in this state is used to operate such commer-
cial  fishing  vessel  while it is engaged in the harvesting of fish for
sale. Provided, further, that tax liability for gallonage that a  vessel
consumes  in  this  state shall be the tax liability with respect to the
positive difference between the gallonage consumed in this state  during
the  reporting  period  and  the gallonage purchased in this state (upon
which the tax imposed by this section has been paid) during such period.
A credit or refund shall be available for any excess  of  tax  liability

S. 2811                            56                            A. 4011

for gallonage purchased in this state during the period over tax liabil-
ity  on  gallonage  so  consumed in this state during such period, which
excess shall be presumed to have been used outside this state.
  (2)  [Nonautomotive-type] NON-HIGHWAY diesel motor fuel component. The
[nonautomotive-type] NON-HIGHWAY diesel fuel component shall  be  deter-
mined  by  multiplying the [nonautomotive-type] NON-HIGHWAY diesel motor
fuel rate times the number of gallons of [nonautomotive-type]  NON-HIGH-
WAY diesel motor fuel sold or used by a petroleum business in this state
during  the  month  covered  by the return under this section. Provided,
however, that no NON-HIGHWAY diesel motor fuel shall be included in  the
measure  of  the tax unless it shall have previously come to rest within
the meaning of federal decisional law  interpreting  the  United  States
constitution,  nor  shall  any  [nonautomotive-type]  NON-HIGHWAY diesel
motor fuel be included in the measure of the tax imposed by this article
more than once.
  (e) Motor fuel and [automotive-type] HIGHWAY diesel motor  fuel  rate.
(1) The basic motor fuel and HIGHWAY diesel [automotive-type] motor fuel
rate shall be [five and one-half] TEN AND TWO-TENTHS cents per gallon.
  (2)  [Commencing  April  first, nineteen hundred ninety-one, the motor
fuel and automotive-type diesel motor fuel rate shall be the product  of
the basic rate set forth in paragraph one of this subdivision multiplied
by a fraction, the numerator of which is the sum of the monthly producer
price  index (unadjusted) published by the bureau of labor statistics of
the United States department of labor for the  category  of  commodities
designated  "refined  petroleum  products"  for  the  twelve consecutive
months ending with the month of November, nineteen hundred  ninety,  and
the  denominator of which is the sum of the monthly producer price index
(unadjusted) published by the bureau of labor statistics of  the  United
States  department  of  labor for the category of commodities designated
"refined petroleum products" for the twelve  consecutive  months  ending
with the month of November, nineteen hundred eighty-nine.
  (3)  Commencing  on the first day of January, nineteen hundred ninety-
two, the motor fuel and automotive-type diesel motor fuel rate  then  in
effect  on  the  immediately  preceding  December  thirty-first shall be
adjusted as follows: such rate shall be multiplied  by  a  fraction  the
numerator of which is the sum of the monthly producer price index (unad-
justed) published by the bureau of labor statistics of the United States
department  of labor for the category of commodities designated "refined
petroleum products" for the twelve consecutive months  ending  with  the
month  of  August,  nineteen  hundred  ninety-one and the denominator of
which is the sum  of  the  monthly  producer  price  index  (unadjusted)
published by the bureau of labor statistics of the United States depart-
ment of labor for the category of commodities designated "refined petro-
leum  products"  for the twelve consecutive months ending with the month
of August, nineteen hundred ninety. Commencing on the first day of Janu-
ary of nineteen hundred ninety-six and every] EVERY year [thereafter] AS
OF JANUARY FIRST, the motor fuel and  [automotive-type]  HIGHWAY  diesel
motor  fuel  rate  then  in effect on the immediately preceding December
thirty-first shall be adjusted as follows: such rate shall be multiplied
by a fraction the numerator of which is the sum of the monthly  producer
price  index (unadjusted) published by the bureau of labor statistics of
the United States department of labor for the  category  of  commodities
designated  "refined  petroleum  products"  for  the  twelve consecutive
months ending with the month of August of the immediately preceding year
and the denominator of which is the sum of the  monthly  producer  price
index  (unadjusted)  published  by the bureau of labor statistics of the

S. 2811                            57                            A. 4011

United States department of labor for the category of commodities desig-
nated "refined petroleum products" for  the  twelve  consecutive  months
ending  with  the  month of August in the year prior to such immediately
preceding  year,  provided,  however,  that  the  adjusted rate [to take
effect on January first, nineteen hundred ninety-six  and  each  January
first thereafter] shall not increase above or decrease below the rate in
effect  on  the immediately preceding December thirty-first by more than
five percent.
  [(4)]  (3)  Notwithstanding  any  other  provision  of  this  article,
[commencing  January  first,  nineteen  hundred  ninety-seven,]  the per
gallon rate with respect to "railroad  diesel"  shall  be  the  adjusted
motor  fuel  and  [automotive-type] HIGHWAY diesel motor fuel rate under
paragraphs one [through three] AND TWO  of  this  subdivision  [for  the
period  commencing  such  January first, nineteen hundred ninety-seven,]
minus one and three tenths cents per gallon. [Commencing  on  the  first
day of January each year thereafter, the per gallon rate with respect to
"railroad  diesel" shall be determined by taking the then motor fuel and
automotive-type diesel motor fuel  rate  under  paragraphs  one  through
three  of  this subdivision which commences on such first day of January
and subtracting one and three tenths cents per gallon.]
  (f) [Nonautomotive-type] NON-HIGHWAY diesel motor fuel rate.
  (1) The basic [nonautomotive-type] NON-HIGHWAY diesel motor fuel  rate
shall be [five] NINE AND THREE-TENTHS cents per gallon.
  (2) [Commencing April first, nineteen hundred ninety-one, the nonauto-
motive-type  diesel  motor  fuel  rate shall be the product of the basic
rate set forth in paragraph one of  this  subdivision  multiplied  by  a
fraction the numerator of which is the sum of the monthly producer price
index  (unadjusted)  published  by the bureau of labor statistics of the
United States department of labor for the category of commodities desig-
nated "refined petroleum products" for  the  twelve  consecutive  months
ending  with  the  month  of  November, nineteen hundred ninety, and the
denominator of which is the sum of  the  monthly  producer  price  index
(unadjusted)  published  by  the  bureau  of the labor statistics of the
United States department of labor for the category of commodities desig-
nated "refined petroleum products" for  the  twelve  consecutive  months
ending with the month of November, nineteen hundred eighty-nine.
  (3)  Commencing  on the first day of January, nineteen hundred ninety-
two, the nonautomotive-type diesel motor fuel rate then in effect on the
immediately  preceding  December  thirty-first  shall  be  adjusted   as
follows:  Such  rate  shall be multiplied by a fraction the numerator of
which is the sum  of  the  monthly  producer  price  index  (unadjusted)
published by the bureau of labor statistics of the United States depart-
ment of labor for the category of commodities designated "refined petro-
leum  products"  for the twelve consecutive months ending with the month
of August, nineteen hundred ninety-one and the denominator of  which  is
the  sum  of  the monthly producer price index (unadjusted) published by
the bureau of labor statistics of the United States department of  labor
for  the category of commodities designated "refined petroleum products"
for the twelve consecutive months ending with the month of August, nine-
teen hundred ninety. Commencing on the first day of January of  nineteen
hundred  ninety-six  and  every]  EVERY year [thereafter,] AS OF JANUARY
FIRST the [nonautomotive-type] NON-HIGHWAY diesel motor fuel  rate  then
in  effect  on  the immediately preceding December thirty-first shall be
adjusted as follows: Such rate shall be multiplied  by  a  fraction  the
numerator of which is the sum of the monthly producer price index (unad-
justed) published by the bureau of labor statistics of the United States

S. 2811                            58                            A. 4011

department  of labor for the category of commodities designated "refined
petroleum products" for the twelve consecutive months  ending  with  the
month of August of the immediately preceding year and the denominator of
which  is  the  sum  of  the  monthly  producer price index (unadjusted)
published by the bureau of labor statistics of the United States depart-
ment of labor for the category of commodities designated "refined petro-
leum products" for the twelve consecutive months ending with  the  month
of  August  in  the  year  prior  to  such  immediately  preceding year,
provided, however, that the adjusted rate [to  take  effect  on  January
first,  nineteen  hundred  ninety-six and each January first thereafter]
shall not increase above or decrease below the rate  in  effect  on  the
immediately preceding December thirty-first by more than five percent.
  [(4)]  (3)  Notwithstanding  any  other  provision  of  this  article,
[commencing January first,  nineteen  hundred  ninety-eight,  nonautomo-
tive-type]  NON-HIGHWAY diesel motor fuel which is "manufacturing gallo-
nage," as such term is defined  in  subdivision  (m)  of  section  three
hundred of this article, shall be exempt from the measure of the [nonau-
tomotive-type]  NON-HIGHWAY  diesel  motor  fuel  component  of  the tax
imposed under this section.
  (h) Publication and rounding of rate. (1) The commissioner  [of  taxa-
tion and finance] shall cause to be published in the section for miscel-
laneous notices in the state register, and give other appropriate gener-
al  notice  of,  the rate adjustment calculation and the resulting motor
fuel and [automotive-type] HIGHWAY diesel motor fuel  rate,  [nonautomo-
tive-type]  NON-HIGHWAY  diesel  motor  fuel rate and residual petroleum
product rate fixed by this section for the period commencing  on  [April
first,  nineteen  hundred  ninety-one,  no  later  than  the immediately
preceding first day of March] JANUARY FIRST, TWO  THOUSAND  TWELVE,  and
for each calendar year thereafter, no later than the immediately preced-
ing  first day of December. The calculation and publication of the rates
of tax so fixed by provisions of this  section  shall  not  be  included
within  paragraph  (a)  of subdivision two of section one hundred two of
the state administrative procedure act relating to the definition  of  a
rule.
  (2)  The rates determined pursuant to this section shall be rounded to
the nearest one-tenth of one cent.
  S 19-a. Subdivision (k) of section 301-a of the tax law is REPEALED.
  S 20. Section 301-a of the tax law is amended by adding a new subdivi-
sion (m) to read as follows:
  (M)  SPECIAL  PROVISION  RELATING  TO  VESSELS.  NOTWITHSTANDING   ANY
PROVISION OF THIS SECTION TO THE CONTRARY, THE USE OF NON-HIGHWAY DIESEL
MOTOR  FUEL  IN  THE  ENGINE  OF A VESSEL TO PROPEL SUCH VESSEL SHALL BE
SUBJECT TO TAX AT THE MOTOR FUEL AND  HIGHWAY  DIESEL  MOTOR  FUEL  RATE
PROVIDED  FOR IN THIS SECTION, AND SHALL BE SUBJECT TO THE PROVISIONS OF
SECTION THREE HUNDRED ONE-J OF THIS ARTICLE,  INCLUDING  THE  ADJUSTMENT
SET  FORTH  IN  PARAGRAPH  FOUR OF SUBDIVISION (A) OF SUCH SECTION THREE
HUNDRED ONE-J. A CREDIT OR REFUND SHALL BE AVAILABLE TO THE  EXTENT  TAX
PAID  ON  GALLONAGE USED TO PROPEL ANY SUCH VESSEL EXCEEDS THE AMOUNT OF
TAX DUE BASED ON THE TAX RATE SET FORTH HEREIN. PROVIDED, THIS  SUBDIVI-
SION  SHALL NOT APPLY TO (A) A RECREATIONAL MOTOR BOAT, OR (B) A COMMER-
CIAL FISHING VESSEL (AS DEFINED IN  SUBDIVISION  (J)  OF  SECTION  THREE
HUNDRED OF THIS ARTICLE) IF THE NON-HIGHWAY DIESEL MOTOR FUEL IS USED TO
OPERATE  SUCH  COMMERCIAL  FISHING  VESSEL  WHILE  IT  IS ENGAGED IN THE
HARVESTING OF FISH FOR SALE. PROVIDED, HOWEVER,  THAT  THE  COMMISSIONER
SHALL  REQUIRE  SUCH  DOCUMENTARY  PROOF  TO  QUALIFY  FOR ANY CREDIT OR
REIMBURSEMENT PROVIDED HEREUNDER AS THE COMMISSIONER DEEMS APPROPRIATE.

S. 2811                            59                            A. 4011

  S 21. Paragraph 2 of subdivision (b), paragraphs 2 and 3  of  subdivi-
sion  (c),  subdivisions (d) and (e), paragraph 1 of subdivision (f) and
subdivisions (g), (h) and (i) of section 301-b of the tax law, paragraph
2 of subdivision (b) and paragraphs 2  and  3  of  subdivision  (c)  and
subdivision (e) as added by chapter 190 of the laws of 1990, the opening
paragraph of paragraph 2 of subdivision (b) as amended by section 155 of
part A of chapter 389 of the laws of 1997, subdivision (d) as amended by
section  2 of part H of chapter 407 of the laws of 1999 and subparagraph
(C) of paragraph 2 of subdivision (d) as amended by section 1 of part  X
of  chapter  63  of  the laws of 2000, paragraph 1 of subdivision (f) as
added by chapter 166 of the laws of 1991, subdivision (g)  as  added  by
chapter  170  of the laws of 1994, subdivision (h) as amended by chapter
302 of the laws of 2006 and subdivision (i) as added by chapter  468  of
the laws of 2000, are amended to read as follows:
  (2)  [Enhanced]  HIGHWAY  diesel  motor  fuel imported or caused to be
imported  into  this  state  or  produced,  refined,   manufactured   or
compounded  in this state by a petroleum business registered under arti-
cle twelve-A of this chapter, as a distributor  of  diesel  motor  fuel,
which is sold by such petroleum business to a purchaser who then exports
such  HIGHWAY  diesel motor fuel from this state for sale or use outside
the state where
  (A) such purchaser exporting such fuel  is  duly  registered  with  or
licensed  by  the  taxing authorities of the state to which such fuel is
exported as a distributor or a dealer in the product being so exported,
  (B) in connection with the  exportation,  such  fuel  was  immediately
shipped  to  an  identified  facility in the state to which such fuel is
exported, and
  (C) the rules and regulations of the  commissioner  [of  taxation  and
finance] relating to evidentiary requirements are complied with.
  (2)  [Enhanced]  HIGHWAY  diesel  motor  fuel imported or caused to be
imported  into  this  state  or  produced,  refined,   manufactured   or
compounded  by a petroleum business registered under article twelve-A of
this chapter, as a distributor of diesel motor fuel, and  then  sold  by
such petroleum business to an organization described in paragraph one or
two of subdivision (a) of section eleven hundred sixteen of this chapter
where  such  HIGHWAY  DIESEL motor fuel is used by such organization for
its own use or consumption.
  (3) NON-HIGHWAY Diesel motor fuel[, which is not enhanced diesel motor
fuel,] sold by a petroleum business registered under article twelve-A of
this chapter as a distributor of diesel motor fuel  to  an  organization
described  in  paragraph one or two of subdivision (a) of section eleven
hundred sixteen of this chapter where such NON-HIGHWAY diesel motor fuel
is used by such organization for its own use or consumption.
  (d) Sales to consumers for heating  purposes.  (1)  Total  residential
heating  exemption.  [(A) Unenhanced] NON-HIGHWAY diesel motor fuel sold
by a petroleum business registered under article twelve-A of this  chap-
ter  as a distributor of diesel motor fuel or residual petroleum product
sold by a petroleum business registered under this article as a residual
petroleum product business to the consumer exclusively  for  residential
heating purposes[.
  (B) Enhanced diesel motor fuel sold by a petroleum business registered
under  article twelve-A of this chapter as a distributor of diesel motor
fuel to the consumer exclusively for residential heating  purposes  but]
only  if such [enhanced] NON-HIGHWAY diesel motor fuel is delivered into
a storage tank which is not equipped with a hose or other  apparatus  by
which  such  fuel can be dispensed into the fuel tank of a motor vehicle

S. 2811                            60                            A. 4011

and such storage tank is attached  to  the  heating  unit  burning  such
fuel[,  provided,  that  with respect to each delivery of such fuel over
four thousand five hundred gallons, to obtain this exemption there shall
be required a certificate signed by the purchaser stating that the prod-
uct will be used exclusively for residential heating purposes].
  (2)   Partial  non-residential  heating  exemption.  (A)  [Unenhanced]
NON-HIGHWAY diesel motor fuel sold by a  petroleum  business  registered
under  article twelve-A of this chapter as a distributor of diesel motor
fuel or residual petroleum product sold by a petroleum  business  regis-
tered under this article as a residual petroleum product business to the
consumer   exclusively  for  heating,  other  than  residential  heating
purposes.
  (B) [Enhanced diesel motor fuel sold by a  petroleum  business  regis-
tered  under article twelve-A of this chapter as a distributor of diesel
motor fuel to the consumer exclusively for heating, other than  residen-
tial  heating  purposes, but] only if such [enhanced] NON-HIGHWAY diesel
motor fuel is delivered into a storage tank which is not equipped with a
hose or other apparatus by which such fuel can  be  dispensed  into  the
fuel  tank  of  a motor vehicle and such storage tank is attached to the
heating unit burning such fuel[, provided, that  with  respect  to  each
delivery of such fuel over four thousand five hundred gallons, to obtain
this  exemption  there  shall  be  required  a certificate signed by the
purchaser stating that the product will be used exclusively for heating,
other than residential heating purposes.
  (C)] Calculation of  partial  exemption.  [Notwithstanding  any  other
provision  of this article, commencing April first, two thousand one and
ending August thirty-first, two thousand two, the amount of the  partial
exemption  under  this  paragraph shall be determined by multiplying the
quantity of diesel motor fuel and residual  petroleum  product  eligible
for  the exemption times the sum of the then current rate of the supple-
mental tax imposed by section three hundred one-j of  this  article  and
twenty  percent  of  the then current rate of the tax imposed by section
three hundred one-a of this article, with respect to the specific diesel
motor fuel or residual petroleum product rate, as the case may  be,  and
commencing  September  first,  two  thousand two, the amount of the] THE
partial exemption under this paragraph shall be determined by  multiply-
ing the quantity of NON-HIGHWAY diesel motor fuel and residual petroleum
product  eligible  for  the  exemption times the sum of the then current
rate of the supplemental tax imposed by section three hundred  one-j  of
this  article  and forty-six percent of the then current rate of the tax
imposed by section three hundred one-a of this article, with respect  to
the specific NON-HIGHWAY diesel motor fuel or residual petroleum product
rate, as the case may be.
  (e)  Sales  of  NON-HIGHWAY  diesel  motor fuel and residual petroleum
product to registered distributors of diesel motor fuel  and  registered
residual petroleum product businesses.
  (1) NON-HIGHWAY Diesel motor fuel[, which is not enhanced diesel motor
fuel,]  sold by a person registered under article twelve-A of this chap-
ter as a distributor of diesel motor fuel to a person  registered  under
such  article  twelve-A as a distributor of diesel motor fuel where such
sale is not a retail sale or a sale that involves a delivery at a  fill-
ing station or into a repository equipped with a hose or other apparatus
by  which  such  NON-HIGHWAY DIESEL MOTOR fuel can be dispensed into the
fuel tank of a motor vehicle.
  (2) Residual petroleum product sold by a person registered under  this
article  as a residual petroleum product business to a person registered

S. 2811                            61                            A. 4011

under this article as a residual petroleum product business  where  such
sale  is not a retail sale. Provided, however, that the commissioner [of
taxation and finance] may require such documentary proof to qualify  for
any  exemption provided in this section as the commissioner deems appro-
priate, including the expansion of any certifications required  pursuant
to  section  two  hundred  eighty-five-a or two hundred eighty-five-b of
this chapter to cover the taxes imposed by this article.
  (1) Residual petroleum  product  and  NON-HIGHWAY  diesel  motor  fuel
[(which  is  not enhanced diesel motor fuel)] sold to an electric corpo-
ration, as described in subdivision (a) of section three  hundred  one-d
of  this  article,  which is registered with the department [of taxation
and finance] as a petroleum business tax direct pay permittee, and  used
by such electric corporation to fuel generators for the purpose of manu-
facturing  or  producing  electricity  where  such  electric corporation
provides a copy of a direct pay permit  authorized  and  issued  by  the
commissioner [of taxation and finance], to the petroleum business making
such  sale. If so registered, such corporation shall be a taxpayer under
this article and (i) such  electric  corporation  shall  file  a  return
monthly  and pay the applicable tax under this article, after the appli-
cation of allowable credits, on  all  such  purchases  directly  to  the
commissioner,  (ii) such electric corporation shall be subject to all of
the provisions of this article  relating  to  the  responsibilities  and
liabilities  of  taxpayers under this article with respect to such resi-
dual petroleum product and NON-HIGHWAY diesel motor fuel.
  (g) Sales or uses of NON-HIGHWAY diesel motor fuel and residual petro-
leum product for farm production. NON-HIGHWAY Diesel motor fuel or resi-
dual petroleum product sold to or used by a consumer  who  purchases  or
uses  such  NON-HIGHWAY DIESEL MOTOR fuel or product for use or consump-
tion directly and exclusively in the production  for  sale  of  tangible
personal  property  by  farming, but only if all such NON-HIGHWAY DIESEL
MOTOR fuel or product is delivered on the  farm  site  and  is  consumed
other  than  on the PUBLIC highways of this state (except for the use of
the PUBLIC highway to reach  adjacent  farmlands)[;  provided,  however,
that  a  farmer  may  purchase  no  more than four thousand five hundred
gallons of diesel motor fuel in a thirty-day  period  for  such  use  or
consumption  exempt from the measure of the tax imposed by section three
hundred one-a of this article, except in accordance with prior clearance
given by the commissioner].
  (h) Exemption for certain not-for-profit organizations. There shall be
exempt from the measure of the petroleum business tax imposed by section
three hundred one-a of this article a sale or use of residual  petroleum
product, OR NON-HIGHWAY diesel motor fuel [(which is not enhanced diesel
motor  fuel)  or dyed diesel motor fuel,] to or by an organization which
has qualified under paragraph four or five of subdivision (a) of section
eleven hundred sixteen of this chapter  where  such  NON-HIGHWAY  diesel
motor  fuel  or  residual  petroleum  product is exclusively for use and
consumption by such organization, but only if all  of  such  NON-HIGHWAY
diesel  motor fuel or product is consumed other than on the PUBLIC high-
ways of this state. Provided, however, this exemption shall in no  event
apply to a sale of NON-HIGHWAY diesel motor fuel which involves a deliv-
ery  at  a filling station or into a repository which is equipped with a
hose or other apparatus by which such NON-HIGHWAY DIESEL MOTOR fuel  can
be  dispensed  into  the fuel tank of a motor vehicle and all deliveries
hereunder shall be made to  the  premises  occupied  by  the  qualifying
organization  and used by such organization in furtherance of the exempt
purposes of such organization. Provided, however, that the  commissioner

S. 2811                            62                            A. 4011

shall  require  such  documentary  proof  to  qualify  for any exemption
provided  herein  as  the  commissioner  deems  appropriate.   Provided,
further,  the distributor selling such NON-HIGHWAY DIESEL MOTOR fuel and
product  shall separately report on its return the gallonage sold during
the reporting period exempt from tax under the provisions of this subdi-
vision and provide such other information with respect to such sales  as
the  commissioner  deems appropriate to prevent evasion. [The term "dyed
diesel motor fuel" as used in this subdivision shall have the same mean-
ing it has in subdivision eighteen of section two hundred eighty-two  of
this chapter.]
  (i)  Exemption  for  passenger  commuter ferries. A use by a passenger
commuter ferry of NON-HIGHWAY diesel motor fuel  or  residual  petroleum
product  where  such NON-HIGHWAY diesel motor fuel or residual petroleum
product was used and consumed by a passenger commuter ferry  exclusively
in providing mass transportation service. Provided, that the commission-
er  shall  require  such  documentary proof to qualify for any exemption
provided hereunder as the commissioner deems appropriate.
  S 22. Subdivision (j) of section 301-b of the tax law is REPEALED.
  S 23. Subdivisions (a), (e), (f), (h), (i), (j), (k), (l) and  (m)  of
section  301-c  of  the tax law, subdivision (a) as amended by section 4
and subdivision (l) as added by section 5 of part H of  chapter  407  of
the  laws of 1999, subparagraph (B) of paragraph 2 of subdivision (a) as
amended by section 2 of part X of chapter 63 of the laws of 2000, subdi-
visions (e) and (f) as added by chapter 170 of the laws of 1994,  subdi-
vision  (h)  as amended by chapter 302 of the laws of 2006, subdivisions
(i), (j) and (k) as added by chapter 309 of the laws of 1996, and subdi-
vision (m) as added by chapter 468 of the laws of 2000, are  amended  to
read as follows:
  (a) NON-HIGHWAY Diesel motor fuel used for heating purposes. (1) Total
residential   heating   reimbursement.  NON-HIGHWAY  Diesel  motor  fuel
purchased in this state and sold by such purchaser to a consumer for use
exclusively for residential heating purposes but  only  where  (i)  such
NON-HIGHWAY  diesel motor fuel is delivered into a storage tank which is
not equipped with a hose or other apparatus by  which  such  NON-HIGHWAY
DIESEL MOTOR fuel can be dispensed into the fuel tank of a motor vehicle
and  such storage tank is attached to the heating unit burning such NON-
HIGHWAY DIESEL MOTOR fuel, (ii) the tax imposed pursuant to this article
has been paid with respect to such NON-HIGHWAY diesel motor fuel and the
entire amount of such tax has been absorbed by such purchaser, and (iii)
such purchaser possesses documentary proof satisfactory to  the  commis-
sioner  evidencing  the absorption by it of the entire amount of the tax
imposed pursuant to this article. Provided, however,  that  the  commis-
sioner is authorized, in the event that the commissioner determines that
it  would  not threaten the integrity of the administration and enforce-
ment of the tax imposed by this article, to provide a reimbursement with
respect to a retail sale to a consumer for residential heating  purposes
of  less than ten gallons of NON-HIGHWAY diesel motor fuel provided such
fuel is not dispensed into the  tank  of  a  motor  vehicle.  [Provided,
further,  that  with  respect  to each delivery of enhanced diesel motor
fuel of  over  four  thousand  five  hundred  gallons,  to  obtain  this
reimbursement  there  shall  be  required  a  certificate  signed by the
consumer stating that the product will be used exclusively for  residen-
tial heating purposes.]
  (2)  Partial  non-residential  heating  reimbursement. (A) NON-HIGHWAY
Diesel motor fuel purchased in this state and sold by such purchaser  to
a  consumer  for use exclusively for heating, other than for residential

S. 2811                            63                            A. 4011

heating purposes, but only where (i) such NON-HIGHWAY diesel motor  fuel
is  delivered  into  a storage tank which is not equipped with a hose or
other apparatus by which such  NON-HIGHWAY  DIESEL  MOTOR  fuel  can  be
dispensed into the fuel tank of a motor vehicle and such storage tank is
attached to the heating unit burning such NON-HIGHWAY DIESEL MOTOR fuel,
(ii) the tax imposed pursuant to this article has been paid with respect
to  such NON-HIGHWAY diesel motor fuel and the entire amount of such tax
has been absorbed by such purchaser, and (iii) such purchaser  possesses
documentary  proof  satisfactory  to  the  commissioner  evidencing  the
absorption by it of the entire amount of the  tax  imposed  pursuant  to
this  article. [Provided, however, that with respect to each delivery of
enhanced diesel motor fuel of over four thousand five  hundred  gallons,
to  obtain  this  reimbursement  there  shall  be required a certificate
signed by the consumer stating that the product will be used exclusively
for heating, other than for residential heating purposes.]
  (B) Calculation of partial reimbursement.  Notwithstanding  any  other
provision of this article, [commencing April first, two thousand one and
ending  August  thirty-first,  two  thousand  two,  the  amount  of  the
reimbursement under this paragraph shall be  determined  by  multiplying
the  quantity  of diesel motor fuel eligible for the reimbursement times
the sum of the then current rate of  the  supplemental  tax  imposed  by
section  three  hundred  one-j of this article and twenty percent of the
then current rate of the tax imposed by section three hundred  one-a  of
this  article,  with  respect to the specific diesel motor fuel rate, as
the case may be, and commencing September first, two thousand two,]  the
amount  of the reimbursement under this paragraph shall be determined by
multiplying the quantity of NON-HIGHWAY diesel motor fuel  eligible  for
the  reimbursement times the sum of the then current rate of the supple-
mental tax imposed by section three hundred one-j of  this  article  and
forty-six percent of the then current rate of the tax imposed by section
three  hundred  one-a  of  this  article, with respect to the [specific]
NON-HIGHWAY diesel motor fuel rate, as the case may be.
  (e) NON-HIGHWAY Diesel motor fuel and residual petroleum product  used
for farm production. NON-HIGHWAY Diesel motor fuel or residual petroleum
product purchased in this state and sold by such purchaser to a consumer
for  use  or  consumption directly and exclusively in the production for
sale of tangible personal property by farming, but only if all  of  such
NON-HIGHWAY  DIESEL  MOTOR fuel or product is delivered on the farm site
and is consumed other than on the PUBLIC highways of this state  (except
for  the  use  of  the  PUBLIC  highway  to  reach adjacent farmlands)[;
provided, however, that a subsequent purchaser  shall  be  eligible  for
this  reimbursement  with  respect  to  no  more than four thousand five
hundred gallons of diesel motor fuel sold to a consumer in a  thirty-day
period  for  such  use  or  consumption, except in accordance with prior
clearance given by the commissioner]. This reimbursement may be  claimed
only  where  (i)  the tax imposed pursuant to this article has been paid
with respect to such NON-HIGHWAY diesel motor fuel or residual petroleum
product and the entire amount of such tax  has  been  absorbed  by  such
purchaser, and (ii) such purchaser possesses documentary proof satisfac-
tory  to  the commissioner evidencing the absorption by it of the entire
amount of the tax imposed pursuant to this article.  Provided,  however,
that  the  commissioner  shall require such documentary proof to qualify
for any reimbursement of tax provided by this section as the commission-
er deems appropriate[, including any certification required pursuant  to
section  two  hundred  eighty-five-b  of this chapter and any such prior
clearance described in the first sentence of this subdivision].

S. 2811                            64                            A. 4011

  (f) Motor fuel used for farm production. No  more  than  one  thousand
five  hundred gallons of motor fuel purchased in this state in a thirty-
day period or a greater amount which has been given prior  clearance  by
the  commissioner,  by  a  consumer  for use or consumption directly and
exclusively  in the production for sale of tangible personal property by
farming, but only if all of such fuel is delivered on the farm site  and
is  consumed other than on the PUBLIC highways of this state (except for
the use of the highway to reach adjacent farmlands). This  reimbursement
to  such  purchaser  who used such motor fuel in the manner specified in
this subdivision may be claimed only where, (i) the tax imposed pursuant
to this article has been paid with respect to such motor  fuel  and  the
entire  amount of such tax has been absorbed by such purchaser, and (ii)
such purchaser possesses documentary proof satisfactory to  the  commis-
sioner  evidencing  the absorption by it of the entire amount of the tax
imposed pursuant to this article. Provided, however,  that  the  commis-
sioner   shall  require  such  documentary  proof  to  qualify  for  any
reimbursement of tax provided by this subdivision  as  the  commissioner
deems  appropriate.  The  commissioner  is hereby empowered to make such
provisions as deemed necessary to define  the  procedures  for  granting
prior  clearance  for  purchases  of more than one thousand five hundred
gallons in a thirty-day period.
  (h) A subsequent purchaser which is registered  as  a  distributor  of
diesel motor fuel shall be eligible for reimbursement of the tax imposed
by section three hundred one-a of this article with respect to gallonage
of  residual  petroleum  product[,]  AND  NON-HIGHWAY  diesel motor fuel
[(which is not enhanced diesel motor fuel) and dyed diesel motor  fuel,]
subsequently  sold by such purchaser to an organization which has quali-
fied under paragraph four or five of subdivision (a) of  section  eleven
hundred sixteen of this chapter for the exclusive use and consumption by
such  organization.  Provided, however, this exemption shall in no event
apply to a sale of NON-HIGHWAY diesel motor fuel which involves a deliv-
ery at a filling station or into a repository which is equipped  with  a
hose  or other apparatus by which such NON-HIGHWAY DIESEL MOTOR fuel can
be dispensed into the fuel tank of a motor vehicle  and  all  deliveries
hereunder  shall  be  made  to  the  premises occupied by the qualifying
organization and used by such organization in furtherance of the  exempt
purposes  of  such  organization. This reimbursement may be claimed only
where (i) the tax imposed pursuant to this article has  been  paid  with
respect  to  such  NON-HIGHWAY  diesel  motor fuel or residual petroleum
product and the entire amount of such tax  has  been  absorbed  by  such
purchaser, and (ii) such purchaser possesses documentary proof satisfac-
tory  to  the commissioner evidencing the absorption by it of the entire
amount of the tax imposed pursuant to this article.  Provided,  further,
that  the  commissioner  shall  require  such other documentary proof to
qualify for any reimbursement of tax provided by  this  section  as  the
commissioner  deems  appropriate.  [The term "dyed diesel motor fuel" as
used in this subdivision shall have the same meaning it has in  subdivi-
sion eighteen of section two hundred eighty-two of this chapter.]
  (i)  Reimbursement  for  commercial  gallonage.  (1) [Commencing March
first, nineteen  hundred  ninety-seven,  a]  A  reimbursement  shall  be
allowed  to a consumer with respect to gallonage of [nonautomotive-type]
NON-HIGHWAY diesel motor fuel  [(which  is  not  enhanced  diesel  motor
fuel)]  or  residual  petroleum  product (i) which was purchased by such
consumer and where the supplemental tax imposed by section three hundred
one-j of this article with respect to  such  gallonage  was  paid  by  a
petroleum  business  and  passed  through  to  such  consumer, (ii) such

S. 2811                            65                            A. 4011

consumer absorbed the entirety of such tax in the purchase price of such
gallonage, and (iii) such  gallonage  was  used  and  consumed  by  such
consumer  exclusively as "commercial gallonage". Provided, however, that
the commissioner shall require such documentary proof to qualify for any
reimbursement  of  tax  provided by this subdivision as the commissioner
deems appropriate, including a certification by the  consumer  that  the
product  was  used and consumed exclusively as "commercial gallonage" by
such consumer.
  (2) Calculation. The amount of the reimbursement shall  be  determined
by  multiplying  the  quantity  of  "commercial  gallonage" eligible for
reimbursement times the  then  current  rate  of  the  supplemental  tax
imposed  by  section three hundred one-j of this article with respect to
[nonautomotive-type] NON-HIGHWAY diesel motor fuel or residual petroleum
product, as the case may be. Any reimbursement of tax may be applied for
not more often than monthly.
  (j) Reimbursement for  manufacturing  gallonage.  [Commencing  January
first, nineteen hundred ninety-eight, a] A subsequent purchaser shall be
eligible  for reimbursement of any taxes imposed under this article with
respect to gallonage  of  residual  petroleum  product  and  NON-HIGHWAY
diesel  motor  fuel  [(which is not enhanced diesel motor fuel),] subse-
quently sold by such purchaser to a consumer  as  "manufacturing  gallo-
nage."  This reimbursement may be claimed only where (1) any tax imposed
pursuant to this article has been paid with respect  to  such  gallonage
and  the  entire amount of such tax has been absorbed by such purchaser,
and (2) such purchaser possesses documentary proof satisfactory  to  the
commissioner  evidencing  the  absorption  by it of the entire amount of
such tax. Provided, however, that the commissioner  shall  require  such
documentary  proof  to  qualify for any reimbursement of tax provided by
this subdivision as  the  commissioner  deems  appropriate  including  a
certificate by the consumer that such product is to be used and consumed
exclusively as "manufacturing gallonage".
  (k)  Reimbursement  for  railroad  gallonage.  (1) [Commencing January
first, nineteen hundred ninety-seven,] a subsequent purchaser, which  is
registered  as a distributor of diesel motor fuel, shall be eligible for
a reimbursement in accordance with  this  subdivision  with  respect  to
NON-HIGHWAY  diesel  motor fuel subsequently sold by such purchaser to a
consumer as "railroad diesel".
  (2) The amount of the reimbursement with respect to such product shall
be equal to the difference between (i) the tax actually paid under  this
article  by a petroleum business with respect to such product and subse-
quently passed through to and absorbed by such purchaser, and  (ii)  the
tax  under  this  article that would have been paid with respect to such
product had an importing distributor sold such  product  directly  to  a
purchaser  as  "railroad  diesel".  Provided that the commissioner shall
require such documentary proof as the commissioner  deems  necessary  to
substantiate   a   reimbursement   claim  under  this  subdivision.  Any
reimbursement of tax may be applied for not more often than monthly.
  (l) Reimbursement for mining and  extraction.  A  purchaser  shall  be
eligible  for  reimbursement of the tax imposed by section three hundred
one-a of this article with respect to gallonage  of  residual  petroleum
product  and  NON-HIGHWAY  diesel  motor  fuel,  purchased  for  use and
consumption directly and  exclusively  in  the  production  of  tangible
personal  property  for sale by mining or extracting, but only if all of
such fuel or product is delivered at the mining or extracting  site  and
is  consumed  other than on the PUBLIC highways of this state; provided,
however, this reimbursement shall  in  no  event  apply  to  a  sale  of

S. 2811                            66                            A. 4011

NON-HIGHWAY  diesel  motor  fuel  which involves a delivery at a filling
station. This reimbursement may  be  claimed  only  where  (i)  the  tax
imposed  pursuant  to  this  article  has been paid with respect to such
NON-HIGHWAY  diesel  motor  fuel  or  residual petroleum product and the
entire amount of such tax has been absorbed by such purchaser, and  (ii)
such  purchaser  possesses documentary proof satisfactory to the commis-
sioner evidencing the absorption by it of the entire amount of  the  tax
imposed  pursuant  to  this article. Provided, however, that the commis-
sioner  shall  require  such  documentary  proof  to  qualify  for   any
reimbursement  of tax provided by this section as the commissioner deems
appropriate.
  (m) Reimbursement for passenger commuter ferries. A use by a passenger
commuter ferry of NON-HIGHWAY diesel motor fuel  or  residual  petroleum
product  where  such NON-HIGHWAY diesel motor fuel or residual petroleum
product was used and consumed by a passenger commuter ferry  exclusively
in  providing  mass  transportation  service.  This reimbursement may be
claimed only where (1) any tax imposed pursuant to this article has been
paid with respect to such gallonage and the entire amount  of  such  tax
has  been absorbed by such purchaser, and (2) such ferry possesses docu-
mentary proof satisfactory to the commissioner evidencing the absorption
by it of the entire amount of such tax. Provided, that the  commissioner
shall  require  such  documentary proof to qualify for any reimbursement
provided hereunder as the commissioner deems appropriate.
  S 24. Paragraphs 1 and 2 of subdivision (a) of section  301-d  of  the
tax  law,  as amended by chapter 410 of the laws of 1991, are amended to
read as follows:
  (1) Credit. Residual petroleum product and  NON-HIGHWAY  diesel  motor
fuel  [(which is not enhanced diesel motor fuel)] (i) imported into this
state by such electric corporation which is a petroleum  business  where
the  tax  liability under section three hundred one-a of this article is
imposed on such electric corporation and where the residual petroleum or
NON-HIGHWAY diesel product so imported is used by such  electric  corpo-
ration  to fuel generators for the purpose of manufacturing or producing
electricity or (ii) purchased in this state by such electric corporation
by the use of a valid direct payment permit whereby such electric corpo-
ration assumed full liability for tax with respect to such product where
such product so purchased is used by such electric corporation  to  fuel
generators for the purpose of manufacturing or producing electricity.
  (2) Reimbursement.  Residual  petroleum product and NON-HIGHWAY diesel
motor fuel [(which is not enhanced diesel motor fuel)] purchased in this
state by such electric corporation where  the  tax  imposed  by  section
three hundred one-a of this article with respect to such residual petro-
leum or diesel product was paid and the utility absorbed such tax in the
purchase price of such fuel and where such product is used by such elec-
tric  corporation to fuel generators for the purpose of manufacturing or
producing electricity.
  S 25. Subdivision (c) of section 301-e of the tax law, as  amended  by
chapter 2 of the laws of 1995, is amended to read as follows:
  (c)  Kero-jet  fuel  component.  The  kero-jet fuel component shall be
determined by multiplying the kero-jet fuel rate  times  the  number  of
gallons of (1) kero-jet fuel imported or caused to be imported into this
state  by  an  aviation fuel business and consumed in this state by such
business in the operation of its aircraft; and (2) kero-jet fuel,  which
has  not  been  previously included in the measure of the tax imposed by
this section, (i) which is sold in this state by an aviation fuel  busi-
ness  to  persons  other  than  those  registered  under this article as

S. 2811                            67                            A. 4011

aviation fuel businesses or (ii) which is consumed in this state  by  an
aviation  fuel  business in the operation of its aircraft. Provided that
importation of kero-jet fuel in the fuel  tanks  of  aircraft  shall  be
importation  for  the  purposes of this section. The basic kero-jet fuel
rate shall be [one and  nine-tenths]  SIX  AND  EIGHT-TENTHS  cents  per
gallon.  The rate shall be adjusted at the same time as the rates of the
components of the  petroleum  business  tax  imposed  by  section  three
hundred  one-a  of this article, and the method of making adjustments to
the kero-jet fuel rate shall be the same as the  method  used  for  such
rates.  [Provided, however, that commencing July first, nineteen hundred
ninety-one, the kero-jet fuel rate shall be equal to the motor fuel  and
automotive-type diesel motor fuel rate set by subdivision (e) of section
three  hundred  one-a  of  this  article as such rate may be adjusted as
provided in such subdivision. Provided, further, that commencing Septem-
ber first, nineteen hundred ninety-five, the kero-jet fuel rate shall be
five and two-tenths cents per gallon. The rate shall be adjusted at  the
same  time  as the rates of the components of the petroleum business tax
imposed by section three hundred one-a of this article, and  the  method
of making adjustments to the kero-jet fuel rate shall be the same as the
method used for such rates.]
  S 26. Sections 301-f and 301-g of the tax law are REPEALED.
  S  27. Paragraph 2 of subdivision (a) of section 301-h of the tax law,
as amended by chapter 170 of the laws of 1994, is  amended  to  read  as
follows:
  (2)  The rate of the tax imposed by this section shall be equal to the
motor fuel and [automotive-type] HIGHWAY diesel motor fuel rate  set  by
subdivision  (e)  of  section  three  hundred one-a plus the rate of the
supplemental tax imposed by section three hundred one-j of this  article
as  such  rates  are  specified  therein  and as they may be adjusted as
provided in such provisions. [In addition, the tax surcharge imposed  by
section  three  hundred-one-g  of  this  article  shall  be imposed with
respect to the tax imposed by this section as if the tax  imposed  here-
under were imposed by section three hundred-one-a of this article.]
  S 28. Section 301-i of the tax law is REPEALED.
  S  29. Paragraphs 1, 2, 3 and 4 of subdivision (a) and subdivision (c)
of section 301-j of the tax law,  paragraph  1  of  subdivision  (a)  as
amended and paragraphs 2, 3 and 4 of subdivision (a) as added by chapter
309 of the laws of 1996 and subdivision (c) as amended by chapter 410 of
the laws of 1991, are amended to read as follows:
  (1)  In  addition to the taxes imposed by sections three hundred one-a
and three hundred one-e of this article, [for taxable months  commencing
on  or  after  July  first, nineteen hundred ninety-one] there is hereby
imposed upon every petroleum  business  subject  to  tax  imposed  under
section  three  hundred  one-a  of  this article and every aviation fuel
business subject to the aviation gasoline component of the  tax  imposed
under section three hundred one-e of this article, a supplemental month-
ly  tax  for  each or any part of a taxable month at a rate of [four and
one-half] SIX AND EIGHT-TENTHS cents per  gallon  with  respect  to  the
products  included  in  each  component  of  the  taxes  imposed by such
[sections] SECTION three hundred one-a and the aviation gasoline  compo-
nent  of  the  tax  imposed  by such section three hundred one-e of this
article.
  (2) Provided, however, [commencing March first, nineteen hundred nine-
ty-seven,] "commercial gallonage," as such term is defined  in  subdivi-
sion  (k) of section three hundred of this article, shall be exempt from
the measure of the tax imposed under this section.

S. 2811                            68                            A. 4011

  (3) Provided, further, [commencing  January  first,  nineteen  hundred
ninety-seven,] "railroad diesel," as such term is defined in subdivision
(l)  of  section three hundred of this article, shall be exempt from the
measure of the tax imposed under this section.
  (4)  Provided,  further,  [commencing  January first, nineteen hundred
ninety-eight,] a separate per gallon rate shall apply  with  respect  to
[automotive-type]  HIGHWAY  diesel motor fuel. Such rate shall be deter-
mined by taking the adjusted rate per gallon of tax imposed under  para-
graph  one  of this subdivision as adjusted in accordance with paragraph
five of this subdivision [which commences on such date] and  subtracting
therefrom  [three-quarters  of  one  cent.  On  January  first, nineteen
hundred ninety-nine, the automotive-type diesel motor fuel rate shall be
determined by taking the adjusted rate per gallon of tax  imposed  under
paragraph  one of this subdivision, as adjusted in accordance with para-
graph five  of  this  subdivision  which  commences  on  such  date  and
subtracting  therefrom three-quarters of one cent. On April first, nine-
teen hundred ninety-nine, there shall be a new rate applicable  to  such
fuel  which  shall  be  such  adjusted rate of tax per gallon under such
paragraph one of this subdivision, as adjusted in accordance with  para-
graph  five  of  this  subdivision then in effect, minus] one and three-
quarters cents. Commencing January first, two thousand TWELVE, and  each
January  thereafter, the per gallon rate applicable to [automotive-type]
HIGHWAY diesel motor fuel shall be the adjusted rate under paragraph one
of this subdivision as adjusted in accordance  with  paragraph  five  of
this  subdivision which commences on such date minus one and three-quar-
ters cents. The resulting rate under this paragraph shall  be  expressed
in hundredths of a cent.
  (c)  Rate adjustment [and surcharge]. [Commencing January first, nine-
teen hundred ninety-two and on the first day of January every year ther-
eafter, the] THE rate of the supplemental tax shall be adjusted  at  the
same  time  as  the  rates  of  the  components  of the taxes imposed by
sections three hundred one-a and three hundred one-e  of  this  article,
and the method of making adjustments to the rate of the supplemental tax
shall be the same as the method used for such rates.
  S  30.  The  opening paragraph and subdivisions (a) and (c) of section
301-1 of the tax law, as added by chapter 170 of the laws of  1994,  are
amended to read as follows:
  There  shall be allowed to a registered petroleum business or aviation
fuel business a refund  under  this  section  for  the  taxes  [and  tax
surcharge] imposed by sections three hundred one-a, three hundred one-e,
[three  hundred  one-g]  and three hundred one-j of this article for the
tax paid under such sections with respect to gallonage which is  repres-
ented by a worthless debt as follows:
  (a)  The refund shall be allowed to a registered petroleum business or
aviation fuel business for gallonage with respect to which tax liability
for the taxes under this article is imposed on such  petroleum  business
or  aviation fuel business where (i) such gallonage has been included in
the reports filed by such petroleum business or aviation  fuel  business
and all the taxes under this article with respect to such gallonage have
been paid by such business, (ii) such gallonage was sold in-bulk by such
petroleum  or aviation fuel business to a purchaser for such purchaser's
own use and consumption and (iii) such sale gave rise to  a  debt  which
became  worthless, as that term is used for federal income tax purposes,
and where such debt is deducted as a worthless debt for  federal  income
tax  purposes  for  the  taxable  year  covering the month in which such
refund claim relating to such debt is filed. Provided, however, for  the

S. 2811                            69                            A. 4011

purposes  of  this  section, a sale of motor fuel and [enhanced] HIGHWAY
diesel motor fuel to a filling station shall be  deemed  to  be  a  sale
in-bulk  for  such  filling  station's  own  use  and  consumption  and,
provided,  further,  in  no  event  shall  a worthless debt qualify with
respect to the refund hereunder where such debt  arises  from  a  retail
sale  at a filling station or sale wherein product is delivered directly
into the fuel tank of a motor vehicle, airplane or other conveyance.
  (c) Upon receipt of a claim for refund in processible  form,  interest
shall be allowed and paid at the overpayment rate set by the commission-
er  pursuant to subdivision twenty-sixth of section one hundred seventy-
one of this chapter from the date of the receipt of the refund claim  to
the  date  immediately  preceding the date of the refund check except no
such interest shall be allowed or paid if the  refund  check  is  mailed
within  ninety  days  of  such  receipt  and except no interest shall be
allowed or paid if the amount thereof would be  less  than  one  dollar.
Provided, further, the refund shall be granted pro rata against sections
three  hundred  one-a,  three  hundred  one-e, [three hundred one-g] and
three hundred one-j of this article, as the case may  be,  to  the  same
extent  as  represented  by  the remittance of the petroleum business or
aviation fuel business with respect to the gallonage represented by  the
worthless debt.
  S 31. Subdivision (b) of section 302 of the tax law, as added by chap-
ter 190 of the laws of 1990, is amended to read as follows:
  (b)  Residual  petroleum product business. The department [of taxation
and finance], upon the application of a  corporation  or  unincorporated
business,  shall register such corporation or unincorporated business as
a residual petroleum product business except that the  commissioner  [of
taxation and finance] may refuse to register an applicant for any of the
grounds  specified  in  subdivision  two  or five of section two hundred
eighty-three of this chapter or in subdivision (d) of this section.  The
application  shall  be  in such form and contain such information as the
commissioner shall prescribe. All of the provisions of subdivisions two,
four, five, six, seven, eight, nine  and  ten  of  section  two  hundred
eighty-three  of  this  chapter relating to registration of distributors
shall be applicable to the registration of  residual  petroleum  product
businesses  under  this section with the same force and effect as if the
language of those subdivisions had been incorporated  in  full  in  this
section  and  had  expressly  referred  to  the registration of residual
petroleum product businesses and the tax imposed by this  article,  with
such  modification as may be necessary in order to adapt the language of
such provisions to the provisions of  this  article,  provided,  specif-
ically, that the term "distributor" shall be read as "residual petroleum
product  business"  and  the  [terms] TERM "motor fuel" [and "automotive
fuel"] shall be read as "residual petroleum product". Provided, however,
that if the commissioner is satisfied  that  the  requirements  of  such
provisions  for  registration  are not necessary in order to protect tax
revenues, the commissioner may limit or modify  such  requirements  with
respect  to corporations or unincorporated businesses not required to be
registered as distributors of motor fuel or diesel motor fuel.
  S 32. Section 312 of the tax law, as amended by  chapter  166  of  the
laws  of  1991 and subdivision (b) as amended by section 8 of part EE of
chapter 63 of the laws of 2000, is amended to read as follows:
  S 312. Deposit and disposition of revenue.--[(a) Except as provided in
sections three hundred one-f and three hundred one-g of this chapter, of
all of the taxes, interest and penalties collected or  received  by  the
commissioner  of taxation and finance under section three hundred one of

S. 2811                            70                            A. 4011

this article with respect to any taxable year  commencing  on  or  after
April  first,  nineteen  hundred  eighty-four and to that portion of any
taxable year commencing prior thereto to the extent of that  portion  of
such  year  which  includes the period which commences with April first,
nineteen hundred eighty-four, seventy-two and seven-tenths percent shall
be deposited and disposed of pursuant to the provisions of  section  one
hundred  seventy-one-a  of this chapter and the balance thereof shall be
deposited in the mass transportation operating assistance  fund  to  the
credit  of  the  metropolitan  mass  transportation operating assistance
account and  the  public  transportation  systems  operating  assistance
account  thereof in the manner provided by subdivision eleven of section
one hundred eighty-two-a of this chapter. Provided,  however,  that  the
actual  amount  of  such  taxes,  interest  and penalties which shall be
deposited in such mass transportation operating assistance fund pursuant
to this section during the twelve-month period from April  first,  nine-
teen  hundred  eighty-four to and including March thirty-first, nineteen
hundred eighty-five shall not be less than an amount which,  when  added
to  the actual amount that is deposited in such fund during such twelve-
month period and that is attributable to the taxes, interest and  penal-
ties  collected  and  received under section one hundred eighty-two-a of
this chapter, yields the sum of seventy-nine million five hundred  thou-
sand  dollars and provided further that of such actual amounts deposited
in such fund pursuant to this section and to section one hundred  eight-
y-two-a of this chapter during the twelve-month period from April first,
nineteen  hundred  eighty-five  to  March thirty-first, nineteen hundred
eighty-six and during the twelve-month period from April first, nineteen
hundred eighty-six to March thirty-first, nineteen hundred eighty-seven,
the amount which shall be deposited to the credit of the  public  trans-
portation  systems operating assistance account thereof during each such
period shall be not  less  than  thirty-six  million  dollars.  Provided
further  that  if  the total amount deposited in the mass transportation
operating assistance fund during  the  twelve  month  period  commencing
April  first,  nineteen hundred eighty-five pursuant to this section and
to section one hundred eighty-two-a of this chapter is less than  eighty
million  dollars,  the  comptroller  shall  deposit to the credit of the
metropolitan mass transportation  operating  assistance  account  on  or
after  April  first,  nineteen  hundred eighty-six and on or before June
thirtieth, nineteen hundred eighty-six from  any  taxes,  interest,  and
penalties  collected  or  received  by  the commissioner of taxation and
finance under this article in addition to amounts which would  otherwise
be  deposited to the credit of the mass transportation operating assist-
ance fund, an amount equal to  the  difference  between  eighty  million
dollars  and  the  amounts actually deposited in the mass transportation
operating assistance fund during such twelve-month  period  pursuant  to
this  section  and  to section one hundred eighty-two-a of this chapter.
Provided further that if the total amount deposited in the  mass  trans-
portation  operating  assistance  fund  during  the  twelve month period
commencing April first, nineteen hundred  eighty-six  pursuant  to  this
section  and to section one hundred eighty-two-a of this chapter, exclu-
sive of the amount deposited in such fund to the credit of the metropol-
itan mass transportation operating assistance account on or after  April
first,  nineteen  hundred  eighty-six  and  on or before June thirtieth,
nineteen hundred eighty-six pursuant to the preceding sentence, is  less
than eighty million dollars, the comptroller shall deposit to the credit
of  the metropolitan mass transportation operating assistance account on
or after April first, nineteen hundred eighty-seven  and  on  or  before

S. 2811                            71                            A. 4011

June  thirtieth, nineteen hundred eighty-seven from any taxes, interest,
and penalties collected or received by the commissioner of taxation  and
finance  under this article in addition to amounts which would otherwise
be  deposited to the credit of the mass transportation operating assist-
ance fund, an amount equal to  the  difference  between  eighty  million
dollars  and  the  amounts actually deposited in the mass transportation
operating assistance fund during such twelve-month  period  pursuant  to
this  section  and  to section one hundred eighty-two-a of this chapter,
exclusive of the amount deposited in such fund  to  the  credit  of  the
metropolitan  mass  transportation  operating  assistance  account on or
after April first, nineteen hundred eighty-six and  on  or  before  June
thirtieth,   nineteen  hundred  eighty-six  pursuant  to  the  preceding
sentence. Provided, further, however, with respect  to  all  taxes,  and
interest  and  penalties  relating thereto, collected or received by the
commissioner of taxation and finance under the tax  imposed  by  section
three  hundred  one  of  this  article  with respect to any taxable year
commencing on and after June first, nineteen hundred ninety and to  that
portion  of  any  taxable year commencing prior thereto to the extent of
that portion of such year which includes the period which commences June
first, nineteen hundred ninety, eighty-nine and one-half percent of such
collections  shall  be  deposited  and  disposed  of  pursuant  to   the
provisions  of section one hundred seventy-one-a of this chapter and the
balance thereof shall be deposited in the mass transportation  operating
assistance  fund  to  the credit of the metropolitan mass transportation
operating assistance account and the public transportation systems oper-
ating assistance account thereof in the manner provided  by  subdivision
eleven of section one hundred eighty-two-a of this chapter.
  (b)  Of  all of the taxes collected or received by the commissioner on
or before March thirty-first,  nineteen  hundred  ninety-one  under  the
taxes imposed by sections three hundred one-a and three hundred one-e of
this  article,  and all interest and penalties relating thereto, eighty-
seven and five-hundredths percent of such collections shall be deposited
and disposed of pursuant to the provisions of section one hundred seven-
ty-one-a of this chapter and the balance thereof shall be  deposited  in
the  mass  transportation operating assistance fund to the credit of the
metropolitan mass transportation operating assistance  account  and  the
public  transportation  systems  operating assistance account thereof in
the manner provided by subdivision eleven of section one hundred  eight-
y-two-a  of this chapter. Of all taxes, interest and penalties collected
or received after March thirty-first, nineteen hundred  ninety-one,  and
before  April  first,  nineteen  hundred  ninety-three,  from  the taxes
imposed by sections three hundred one-a and three hundred one-e of  this
article,  initially  thirty-five percent shall be deposited and disposed
of pursuant to such section one hundred seventy-one-a. The balance ther-
eof shall then be disposed of as follows: seventy-two  and  seven-tenths
percent  shall be deposited and disposed of pursuant to such section one
hundred seventy-one-a and twenty-seven and three-tenths percent shall be
deposited in such  mass  transportation  operating  assistance  fund  as
prescribed  in  the aforestated manner. Except as otherwise provided, of
all taxes, interest and penalties  collected  or  received  after  March
thirty-first,  nineteen  hundred  ninety-three,  and before April first,
nineteen hundred ninety-four, from the taxes imposed by  sections  three
hundred  one-a  and  three  hundred one-e of this article, (i) initially
fifty-four percent shall be deposited, as prescribed by subdivision  (d)
of  section  three  hundred one-j of this chapter, (ii) twenty-eight and
three-tenths percent shall be deposited and disposed of pursuant to such

S. 2811                            72                            A. 4011

section one hundred seventy-one-a of this chapter in  the  general  fund
and  (iii) seventeen and seven-tenths percent shall be deposited in such
mass transportation operating  assistance  fund  as  prescribed  in  the
aforestated manner. Provided, however, that, prior to such deposit, from
the  amounts  so  collected  or received during the period commencing on
January first, nineteen hundred ninety-four and ending on March  thirty-
first,  nineteen  hundred ninety-four, an amount equal to the portion of
the taxes, interest and penalties so  received  or  collected  resulting
from  the  amendments made by sections forty-two, forty-three and forty-
four of chapter fifty-seven of the laws of nineteen hundred ninety-three
shall be deposited and disposed of pursuant to the provisions of  subdi-
vision  one of section one hundred seventy-one-a of this chapter. Except
as otherwise provided, of all taxes, interest and penalties collected or
received on or after April first, nineteen hundred ninety-four, from the
taxes imposed by sections three hundred one-a and three hundred one-e of
this article, (i) initially fifty-four percent shall  be  deposited,  as
prescribed  by  subdivision  (d)  of section three hundred one-j of this
article, (ii) twenty-eight and three-tenths percent shall  be  deposited
and  disposed  of  pursuant to such section one hundred seventy-one-a of
this chapter in the general fund, (iii) seven and  nine  hundred  sixty-
five  thousandths percent shall be deposited in such mass transportation
operating assistance fund as prescribed in the  aforestated  manner  and
(iv)  nine  and  seven  hundred thirty-five thousandths percent shall be
deposited  in  the  revenue  accumulation  fund.  Except  as   otherwise
provided,  of all taxes, interest and penalties collected or received on
or after  September  first,  nineteen  hundred  ninety-four  and  before
September first, nineteen hundred ninety-five, from the taxes imposed by
sections  three  hundred  one-a and three hundred one-e of this article,
(i) initially fifty-nine percent shall be deposited,  as  prescribed  by
subdivision  (d)  of  section  three hundred one-j of this article, (ii)
twenty-two and four-tenths percent shall be deposited  and  disposed  of
pursuant  to  such  section one hundred seventy-one-a of this chapter in
the general fund, (iii) eight  and  three  hundred  seventy  thousandths
percent shall be deposited in such mass transportation operating assist-
ance  fund  as prescribed in the aforestated manner and (iv) ten and two
hundred thirty thousandths percent shall be  deposited  in  the  revenue
accumulation  fund. Except as otherwise provided, of all taxes, interest
and penalties, collected or received on or after September first,  nine-
teen  hundred ninety-five and before April first, nineteen hundred nine-
ty-six from the taxes imposed by sections three hundred one-a and  three
hundred  one-e of this article, (i) initially sixty-two and eight-tenths
percent shall be deposited as prescribed by subdivision (d)  of  section
three  hundred  one-j  of  this  article, (ii) eighteen percent shall be
deposited and disposed of pursuant to section one hundred  seventy-one-a
of  this  chapter in the general fund, (iii) eight and six hundred forty
thousandths percent shall be deposited in such mass transportation oper-
ating assistance fund as prescribed in the aforestated manner  and  (iv)
ten and five hundred sixty thousandths percent shall be deposited in the
revenue  accumulation  fund. Except as otherwise provided, of all taxes,
interest and penalties collected or received on or  after  April  first,
nineteen  hundred ninety-six, and before January first, nineteen hundred
ninety-seven from the taxes imposed by sections three hundred one-a  and
three  hundred  one-e  of  this  article,  (i) initially sixty-three and
three-tenths percent shall be deposited, as  prescribed  by  subdivision
(d)  of  section three hundred one-j of this article, (ii) seventeen and
four-tenths percent shall be deposited and disposed of pursuant to  such

S. 2811                            73                            A. 4011

section  one  hundred  seventy-one-a of this chapter in the general fund
and (iii) nineteen and three-tenths percent shall be deposited  in  such
mass  transportation  operating  assistance  fund  as  prescribed in the
aforestated  manner.  Except as otherwise provided, of all taxes, inter-
est and penalties collected or received on or after January first, nine-
teen hundred ninety-seven and before  January  first,  nineteen  hundred
ninety-eight  from the taxes imposed by sections three hundred one-a and
three hundred one-e of this article, (i) initially  sixty-six  and  two-
tenths  percent  shall be deposited, as prescribed by subdivision (d) of
section three hundred one-j of this article, (ii) fourteen and  one-half
percent  shall be deposited and disposed of pursuant to such section one
hundred seventy-one-a of this chapter in  the  general  fund  and  (iii)
nineteen and three-tenths percent shall be deposited in such mass trans-
portation  operating  assistance  fund  as prescribed in the aforestated
manner.  Except as otherwise provided, of all taxes, interest and penal-
ties collected or received on or after January first,  nineteen  hundred
ninety-eight  and  before April first, nineteen hundred ninety-nine from
the taxes imposed by sections three  hundred  one-a  and  three  hundred
one-e  of  this article, (i) initially sixty-eight and one-tenth percent
shall be deposited, as prescribed by subdivision (d)  of  section  three
hundred one-j of this article, (ii) twelve and four-tenths percent shall
be deposited and disposed of pursuant to such section one hundred seven-
ty-one-a  of  this  chapter  in  the general fund and (iii) nineteen and
one-half percent shall be deposited in such mass transportation  operat-
ing  assistance fund as prescribed in the aforestated manner.  Except as
otherwise provided, of all taxes, interest and  penalties  collected  or
received on or after April first, nineteen hundred ninety-nine, from the
taxes imposed by sections three hundred one-a and three hundred one-e of
this article, (i) initially sixty-nine and eight-tenths percent shall be
deposited,  as  prescribed  by  subdivision (d) of section three hundred
one-j of this article, (ii) ten and seven-tenths percent shall be depos-
ited and disposed of pursuant to such section one hundred  seventy-one-a
of  this  chapter  in  the  general fund and (iii) nineteen and one-half
percent shall be deposited in such mass transportation operating assist-
ance fund as prescribed in the aforestated manner.] Except as  otherwise
provided,  of all taxes, interest and penalties collected or received on
or after April first, two  thousand  one,  from  the  taxes  imposed  by
sections  three  hundred  one-a and three hundred one-e of this article,
(i) initially eighty and three-tenths percent  shall  be  deposited,  as
prescribed  by  subdivision  (d)  of section three hundred one-j of this
article and (ii) nineteen and seven-tenths percent shall be deposited in
such mass transportation operating assistance fund [as prescribed in the
aforestated manner] TO THE CREDIT OF THE METROPOLITAN  MASS  TRANSPORTA-
TION  OPERATING ASSISTANCE ACCOUNT AND THE PUBLIC TRANSPORTATION SYSTEMS
OPERATING ASSISTANCE ACCOUNT THEREOF IN THE MANNER PROVIDED BY  SUBDIVI-
SION  ELEVEN  OF  SECTION  ONE  HUNDRED  EIGHTY-TWO-A  OF  THIS CHAPTER.
[Provided, further, that on or before the twenty-fifth day of each month
commencing with October, nineteen hundred ninety  and  terminating  with
the  month  of March, two thousand one, the comptroller shall deduct the
amount of six hundred twenty-five thousand dollars prior to any  deposit
or  disposition  of  the  taxes,  interest  and  penalties  collected or
received pursuant to such sections three hundred one-a and three hundred
one-e and shall pay such amount to the state treasury to the  credit  of
the  general fund.] Provided, further that on or before the twenty-fifth
day of each month commencing with April, two  thousand  one,  the  comp-
troller  shall  deduct  the  amount  of six hundred twenty-five thousand

S. 2811                            74                            A. 4011

dollars prior to any deposit or disposition of the taxes, interest,  and
penalties  collected or received pursuant to such sections three hundred
one-a and three hundred one-e and shall deposit such amount in the dedi-
cated fund accounts pursuant to subdivision (d) of section three hundred
one-j  of  this  article.  Provided,  further,  that  commencing January
fifteenth, nineteen hundred ninety-one, and on or before the  tenth  day
of  March  and the fifteenth day of June and September of such year, the
commissioner shall, based on information supplied by taxpayers and other
appropriate sources, estimate the amount of the utility  credit  author-
ized  by  section  three  hundred  one-d  of this article which has been
accrued to reduce tax liability under section one  hundred  eighty-six-a
of  this  chapter during the period covered by such estimate and certify
to the state comptroller such estimated amount.  The  comptroller  shall
forthwith,  after  receiving such certificate, deduct the amount of such
credit so certified by the commissioner prior to any deposit or disposi-
tion of the taxes, interest and penalties collected or received pursuant
to such sections three hundred one-a and three hundred one-e  and  shall
pay such amount so certified and deducted into the state treasury to the
credit  of  the general fund. [As soon as practicable after April first,
nineteen hundred ninety-one, nineteen hundred  ninety-two  and  nineteen
hundred  ninety-three,  but before June fifteenth of each such year, the
commissioner shall determine the amount of the utility tax credit  which
has  been  actually  used to reduce tax liability under such section one
hundred eighty-six-a and shall certify the difference between such actu-
al amount and the earlier estimated amount.] Also, subsequently,  during
the  fiscal  year  when  the  commissioner  becomes  aware of changes or
modifications with respect to  actual  credit  usage,  the  commissioner
shall,  as  soon as practicable, issue a certification setting forth the
amount of any required adjustment to the amount of actual  credit  usage
previously certified. After receiving the certificate of the commission-
er  with respect to actual credit usage or modification of the same, the
comptroller shall forthwith adjust general fund receipts and the  reven-
ues  to  be  deposited  or disposed of under this article to reflect the
difference so certified by the commissioner. The commissioner shall  not
be  liable  for  any  overestimate or underestimate of the amount of the
utility credit which has been accrued to reduce tax liability under such
section one hundred eighty-six-a. Nor shall the commissioner  be  liable
for any inaccuracy in any certificate with respect to the amount of such
credit  actually  used or any required adjustment with respect to actual
credit usage, but the commissioner shall as soon  as  practicable  after
discovery  of any error adjust the next certification under this section
to reflect any such error.
  [On or before July thirty-first, nineteen hundred ninety-two and on or
before July thirty-first, nineteen hundred ninety-three, the commission-
er shall conduct  the  following  reconciliation  with  respect  to  the
preceding  fiscal year: he shall multiply the total of all taxes, penal-
ties and interest, after refunds and reimbursements, which  are  derived
from  the  motor  fuel  component, the automotive-type diesel motor fuel
component and the aviation gasoline component  by  twenty  fifty-fifths;
the  total  of  all  taxes,  penalties  and  interest, after refunds and
reimbursements, which are derived  from  the  nonautomotive-type  diesel
motor  fuel component (excluding taxes, penalties and interest which are
derived from product with respect to which the credit  or  reimbursement
provided  by  section three hundred one-d is taken) by twenty-fiftieths;
and all taxes, penalties and interest, after refunds and reimbursements,
which are derived from the residual petroleum product component (exclud-

S. 2811                            75                            A. 4011

ing taxes, penalties and interest which are derived  from  product  with
respect  to  which the credit or reimbursement provided by section three
hundred one-d is taken) by twenty-fortieths. The products of the forego-
ing  multiplications  shall  be  added together and the resulting sum of
such products shall be compared with the total of the amounts  initially
distributed  during  such  fiscal  year  with respect to such components
(excluding receipts derived from product with respect to which the cred-
it or reimbursement provided by section three hundred one-d is taken and
excluding any amount which represents a reconciliation adjustment pursu-
ant to this paragraph) pursuant to section one hundred seventy-one-a  of
this  chapter  which represented thirty-five percent of the total, after
refunds  and  reimbursements,  of  all  taxes,  penalties  and  interest
collected  or  received  during  such  fiscal  year under sections three
hundred one-a and three hundred one-e during the months of  such  fiscal
year with respect to such components. The commissioner shall then certi-
fy  the  amount  of  such  difference to the comptroller. If the amounts
initially distributed in such fiscal year are greater than  the  sum  of
such  products,  the comptroller shall withhold an amount equal to twen-
ty-seven and three-tenths percent of  such  difference  from  the  first
moneys  otherwise  payable to the general fund pursuant to this subdivi-
sion and shall pay such amount  to  the  mass  transportation  operating
assistance  fund  to  the credit of the metropolitan mass transportation
operating assistance account and the public transportation systems oper-
ating assistance account thereof  in  the  aforestated  manner.  If  the
amounts  initially distributed in such fiscal year are less than the sum
of such products, the comptroller shall  withhold  an  amount  equal  to
twenty-seven  and three-tenths percent of such difference from the first
moneys otherwise payable to the mass transportation operating assistance
fund pursuant to this subdivision and  shall  pay  such  amount  to  the
general fund.
  When  the  commissioner becomes aware of changes or modifications with
respect to the distribution of revenue under this article,  the  commis-
sioner  shall,  as  soon  as  practicable, issue a certification setting
forth the amount of any required adjustment. After receiving the certif-
icate of the commissioner with respect to  any  adjustments,  the  comp-
troller shall forthwith adjust general fund receipts and the revenues to
be deposited or disposed of under this article to reflect the difference
so  certified  by the commissioner. The commissioner shall not be liable
for any overestimate or underestimate of the amount of the distribution.
Nor shall the commissioner be liable for any inaccuracy in  any  certif-
icate  with  respect  to  the amount of the distribution or any required
adjustment with respect to the distribution, but the commissioner  shall
as  soon  as  practicable  after  discovery of any error adjust the next
certification under this section to reflect any such  error.]  Prior  to
making  deposits  as  provided  in this [subdivision] SECTION, the comp-
troller shall retain such amount as the commissioner may determine to be
necessary, subject to the approval of the director of  the  budget,  for
reasonable  costs  of the department in administering and collecting the
taxes deposited pursuant to this [subdivision] SECTION and  for  refunds
and  reimbursements  with  respect to such taxes, out of which the comp-
troller shall pay any refunds or reimbursements of such taxes  to  which
taxpayers shall be entitled.
  S  33.  Subdivision  (b)  of section 315 of the tax law, as amended by
section 156 of part A of chapter 389 of the laws of 1997, is amended  to
read as follows:

S. 2811                            76                            A. 4011

  (b)  Joint administration of taxes.  In addition to the powers granted
to the commissioner in this chapter, the commissioner is hereby  author-
ized  to  make  provisions  for the joint administration, in whole or in
part, of the taxes imposed by articles  twelve-A  and  twenty-eight  and
pursuant  to  the  authority of article twenty-nine of this chapter upon
[automotive fuel] MOTOR FUEL AND DIESEL MOTOR FUEL and the taxes imposed
by this article, including the joint reporting, assessment,  collection,
determination  and  refund  of  such  taxes,  and  for  that  purpose to
prescribe that any of the commissioner's functions under such  articles,
and  any  returns,  forms,  statements,  documents  or information to be
submitted to the commissioner under such articles, any books and records
to be kept for purposes of the taxes imposed or authorized to be imposed
by such articles, any schedules of amounts to be  collected  under  such
articles, any registration required under such articles, and the payment
of  taxes under such articles, shall be on a joint basis with respect to
the taxes imposed by or pursuant to such articles.   Provided,  notwith-
standing  any provision of this article to the contrary, in the further-
ance of joint administration,  the  provisions  of  subdivision  one  of
section  two  hundred  eighty-five-a  and subdivision one of section two
hundred eighty-nine-c of this chapter shall apply to the  taxes  imposed
under this article with the same force and effect as if those provisions
specifically  referred  to  the  taxes  imposed  hereunder  and  all the
products with respect to which the taxes are imposed under this article.
Provided, further, a reimbursement (or credit) of  taxes  imposed  under
this  article shall be available to subsequent purchasers of motor fuel,
diesel motor fuel or residual petroleum product under the  circumstances
specified  in  subdivision eight of section two hundred eighty-nine-c of
this chapter with respect to the export of such products.  In  addition,
all  the provisions of subdivision one of section two hundred eighty-six
of this chapter shall be applicable to all of the products  included  in
the  measure  of  the  tax imposed by this article and the powers of the
commissioner in administering the tax  imposed  by  this  article  shall
include  these set forth in such subdivision.  Moreover, the commission-
er, in order to preserve the revenue from the tax imposed by this  arti-
cle,  shall, by regulation, require that the movement of residual petro-
leum product into  or  in  this  state  be  accompanied  by  a  tracking
document.  [Such manifest or other tracking document shall be prescribed
only after consultation with the state  motor  fuels  taxation  advisory
council  (created by section forty-one of chapter forty-four of the laws
of nineteen hundred eighty-five) as to its form and content  and  as  to
whether  an  existing  industry document (or a modified version thereof)
may adequately serve the tracking purpose so that such existing industry
document may be prescribed as the tracking document.] Also, the  commis-
sioner  may  require  (i)  that  any returns, forms, statements or other
document with respect to motor fuel or diesel  motor  fuel  required  of
transporters  or  terminal operators under such article twelve-A of this
chapter apply with the same force and effect to persons transporting  or
storing residual petroleum product, (ii) a certification that particular
gallonage of motor fuel, diesel motor fuel or residual petroleum product
has  been included in the measure of the tax imposed by this article and
such tax has been paid, and (iii) that the certification required pursu-
ant to section two hundred eighty-five-a or two hundred eighty-five-b of
this chapter be expanded to include the tax imposed by this article.
  S 34. Subdivision 10 of section 501 of the  tax  law,  as  amended  by
chapter 407 of the laws of 1990, is amended to read as follows:

S. 2811                            77                            A. 4011

  10. "Automotive fuel" shall mean, SOLELY FOR PURPOSES OF THIS ARTICLE,
diesel  motor  fuel  as  defined  in subdivision fourteen of section two
hundred eighty-two of this chapter and motor fuel as defined in subdivi-
sion two of section two hundred eighty-two of this chapter.
  S 35. Subdivision (b) of section 528 of the tax law, as added by chap-
ter 170 of the laws of 1994, is amended to read as follows:
  (b) Cooperative agreements. Notwithstanding any inconsistent provision
of  law,  the  commissioner  is  authorized  to enter into a cooperative
agreement with other states, the District of Columbia  or  provinces  or
territories  of Canada for the administration of the tax imposed by this
article and similar taxes imposed by other member jurisdictions and  for
the  reporting  and  payment of tax to a single base state and a propor-
tional sharing of revenue of taxes relating to fuel use among the juris-
dictions where a qualified motor vehicle is operated. The agreement  may
provide  for  determining  the base state for carriers, carriers records
requirements, audit procedures, exchange of information, persons  eligi-
ble for tax licensing, defining qualified motor vehicles, determining if
bonding  is  required  and  requiring bonds to secure the tax imposed by
this article and similar taxes imposed by  other  member  jurisdictions,
specifying reporting requirements and periods including defining uniform
penalty  and  interest rates for late reporting, determining methods for
collecting and forwarding of taxes, interest and  penalties  to  another
jurisdiction, notice and timing of hearings and other provisions as will
facilitate  the  administration  of the agreement. The commissioner may,
pursuant to the terms of the agreement, forward to the  proper  officers
of  another  member  jurisdiction  any information in the commissioner's
possession relating to the manufacture, receipt, sale, use,  transporta-
tion or shipment of [automotive fuel] MOTOR FUEL OR DIESEL MOTOR FUEL by
any  person and may share any information relating to the administration
of taxes pursuant to the agreement with such officers. The  commissioner
may  disclose  to the proper officers of another member jurisdiction the
location of offices, motor vehicles and other real and personal property
of carriers. The agreement may provide for each member  jurisdiction  to
audit the records of persons based in the member jurisdiction and deter-
mine  taxes  due  each  member  jurisdiction. The commissioner may adopt
rules and regulations for the  administration  and  enforcement  of  the
agreement.  In  connection with the administration of taxes under such a
cooperative agreement, the commissioner may enter into an agreement with
other member jurisdictions and any banks, banking houses,  trust  compa-
nies  or  other  similar institutions with respect to the payment of any
tax, fees, penalty or interest to  such  banks,  banking  houses,  trust
companies  or similar institutions and the filing of returns and reports
with such banks, banking houses, trust companies or similar institutions
as agent of the commissioner and such other member jurisdictions. Pursu-
ant to a written agreement made with one  or  more  of  the  appropriate
departments,  agencies, officers or instrumentalities of other jurisdic-
tions, the commissioner may let contracts for provision of such services
to the department and to one or more of such entities of other jurisdic-
tions; provided, that provisions shall be made in  all  such  agreements
with  the  participating governmental entities and in all such contracts
let by the commissioner for the assumption by each of the  participating
governmental entities of sole responsibility for its proportionate share
of  the  costs  under  the  terms of such contract. The commissioner may
contract for such services jointly with and pursuant to a  contract  let
by  the  appropriate  department,  agency, officer or instrumentality of
another jurisdiction; provided that (1) the commissioner  shall  approve

S. 2811                            78                            A. 4011

the  proposed  terms  and  conditions  of  all  such  joint governmental
contracts, (2) the letting of such joint governmental contract shall  be
based  on  invitation  of  competitive  bids  or  proposals, and (3) the
participation  by  the  department  in  any such joint contract shall be
preceded by an evaluation and finding in  writing  by  the  commissioner
that a reasonable potential exists for the saving of costs by the state,
by means of such joint governmental contract.
  S  36.  The  opening  paragraph of subparagraph (ii) of paragraph 4 of
subdivision (b) of section 1101 of the tax law, as  amended  by  chapter
261 of the laws of 1988, is amended to read as follows:
  Notwithstanding  the provisions of subparagraph (i) of this paragraph,
no motor fuel or diesel motor fuel shall be sold or used in  this  state
without payment, and inclusion in the sales price of such motor fuel, of
the  tax on motor fuel required to be prepaid pursuant to the provisions
of section eleven hundred two of this article except where  a  provision
of this article relating to motor fuel or diesel motor fuel specifically
provides  otherwise  and  except in the case of a sale or use subject to
tax under section eleven hundred five or eleven hundred ten, respective-
ly, of this article. Provided, however, except for such  requirement  of
prepayment  of  tax required by section eleven hundred two of this arti-
cle, the provisions of this subparagraph shall not otherwise modify  the
meaning of the term "retail sale" as used in this article.  For purposes
of  this  subparagraph  and  sections eleven hundred two, eleven hundred
eleven, eleven hundred twenty, eleven hundred thirty-two, eleven hundred
thirty-four, eleven  hundred  thirty-five,  eleven  hundred  thirty-six,
ELEVEN HUNDRED FORTY-TWO, ELEVEN HUNDRED FORTY-FIVE and eighteen hundred
seventeen  of this chapter, the following terms shall have the following
meanings:
  S 37. Clause (A) of subparagraph (ii) of paragraph  4  of  subdivision
(b)  of  section  1101  of the tax law, as amended by chapter 261 of the
laws of 1988, is amended to read as follows:
  (A) "[Automotive fuel"] PETROLEUM PRODUCTS" means diesel motor fuel as
defined in subdivision fourteen of section  two  hundred  eighty-two  of
this  chapter,  other  than  kerosene  or  propane  used for residential
purposes, or motor fuel as defined in subdivision  two  of  section  two
hundred  eighty-two  of  this  chapter. The phrase "used for residential
purposes" shall have the same meaning as it has for purposes of  section
eleven hundred five-A of this article.
  S  38.  Clause  (F) of subparagraph (ii) of paragraph 4 of subdivision
(b) of section 1101 of the tax law is REPEALED and a new clause  (F)  is
added to read as follows:
  (F)  THE  TERMS  "HIGHWAY  DIESEL  MOTOR FUEL" AND "NON-HIGHWAY DIESEL
MOTOR FUEL" SHALL HAVE THE SAME MEANING AS THEY  HAVE  FOR  PURPOSES  OF
ARTICLE TWELVE-A OF THIS CHAPTER.
  S  39.  Paragraph 2 of subdivision (a) of section 1102 of the tax law,
as separately amended by section 9 of part W-1 of chapter 109 and  chap-
ter 302 of the laws of 2006, is amended to read as follows:
  (2)  Every distributor of diesel motor fuel shall pay, as a prepayment
on account of the taxes imposed by this  article  and  pursuant  to  the
authority of article twenty-nine of this chapter, a tax upon the sale or
use  of diesel motor fuel in this state. The tax shall be computed based
upon the number of gallons of diesel motor fuel sold or used.  Provided,
however,  if  the  tax  has  not been imposed prior thereto, it shall be
imposed on the delivery  of  diesel  motor  fuel  to  a  retail  service
station.  The collection of such tax shall not be made applicable to the
sale or use of diesel motor fuel under circumstances which preclude  the

S. 2811                            79                            A. 4011

collection  of  such tax by reason of the United States constitution and
of laws of the United States enacted pursuant thereto. The  prepaid  tax
on  diesel  motor  fuel  shall  not  apply to (i) the sale of previously
untaxed  [diesel  motor  fuel  which is not enhanced] NON-HIGHWAY Diesel
motor fuel to a person registered as a distributor of Diesel motor  fuel
other  than a sale to such person which involves a delivery at a filling
station or into a repository which is equipped  with  a  hose  or  other
apparatus  by  which  such fuel can be dispensed into the fuel tank of a
motor vehicle, OR (ii) the sale to or delivery at a filling  station  or
other  retail  vendor  of  water-white  kerosene  provided  such filling
station or other retail vendor  only  sells  such  water-white  kerosene
exclusively  for  heating  purposes in containers of no more than twenty
gallons or to the sale of CNG or hydrogen [or (iii)  the  sale  of  dyed
diesel  motor fuel as set forth in clause (A) or (B) of subparagraph (i)
of  paragraph  (c)  of  subdivision  three  of   section   two   hundred
eighty-two-a of this chapter].
  S 39-a. Paragraph 2 of subdivision (a) of section 1102 of the tax law,
as  amended  by  chapter  302 of the laws of 2006, is amended to read as
follows:
  (2) Every distributor of diesel motor fuel shall pay, as a  prepayment
on  account  of  the  taxes  imposed by this article and pursuant to the
authority of article twenty-nine of this chapter, a tax upon the sale or
use of diesel motor fuel in this state. The tax shall be computed  based
upon  the number of gallons of diesel motor fuel sold or used. Provided,
however, if the tax has not been imposed  prior  thereto,  it  shall  be
imposed  on  the  delivery  of  diesel  motor  fuel  to a retail service
station. The collection of such tax shall not be made applicable to  the
sale  or use of diesel motor fuel under circumstances which preclude the
collection of such tax by reason of the United States  constitution  and
of  laws  of the United States enacted pursuant thereto. The prepaid tax
on diesel motor fuel shall not apply  to  (i)  the  sale  of  previously
untaxed  [diesel  motor  fuel  which is not enhanced] NON-HIGHWAY Diesel
motor fuel to a person registered as a distributor of Diesel motor  fuel
other  than a sale to such person which involves a delivery at a filling
station or into a repository which is equipped  with  a  hose  or  other
apparatus  by  which  such fuel can be dispensed into the fuel tank of a
motor vehicle, OR (ii) the sale to or delivery at a filling  station  or
other  retail  vendor  of  water-white  kerosene  provided  such filling
station or other retail vendor  only  sells  such  water-white  kerosene
exclusively  for  heating  purposes in containers of no more than twenty
gallons [or (iii) the sale of dyed diesel motor fuel  as  set  forth  in
clause  (A)  or  (B) of subparagraph (i) of paragraph (c) of subdivision
three of section two hundred eighty-two-a of this chapter].
  S 40. Subsection (a) of section 1105-A of the tax law, as  amended  by
section  1  of  part  B of chapter 35 of the laws of 2006, is amended to
read as follows:
  (a) Notwithstanding any other provisions of this article, but not  for
purposes  of  the  taxes imposed by section eleven hundred eight of this
part or authorized pursuant to the authority of article  twenty-nine  of
this  chapter,  the  taxes  imposed by subdivision (a) or (b) of section
eleven hundred five OF THIS PART on the receipts from the retail sale of
fuel oil and coal used for residential purposes; the receipts  from  the
retail  sale  of  wood  used  for  residential heating purposes; and the
receipts from every sale, other than for resale, of propane (except when
sold in containers of less than one hundred pounds), natural gas,  elec-
tricity, steam and gas, electric and steam services used for residential

S. 2811                            80                            A. 4011

purposes  shall  be  paid  at  the  rate of three percent for the period
commencing January  first,  nineteen  hundred  seventy-nine  and  ending
December thirty-first, nineteen hundred seventy-nine; at the rate of two
and  one-half  percent for the period commencing January first, nineteen
hundred eighty and ending September thirtieth, nineteen hundred  eighty,
and  at  the  rate  of zero percent on and after October first, nineteen
hundred eighty. The provisions of this subsection shall not apply  to  a
sale  of  [(i)] diesel motor fuel which involves a delivery at a filling
station or into a repository which is equipped  with  a  hose  or  other
apparatus  by  which  such fuel can be dispensed into the fuel tank of a
motor vehicle [and (ii) enhanced diesel motor fuel except in the case of
a sale of such enhanced diesel motor fuel used exclusively for  residen-
tial  purposes  which  is  delivered  into  a  storage tank which is not
equipped with a hose or other  apparatus  by  which  such  fuel  can  be
dispensed into the fuel tank of a motor vehicle and such storage tank is
attached  to  the  heating  unit  burning  such fuel, provided that each
delivery of such fuel of over four thousand five hundred  gallons  shall
be  evidenced  by a certificate signed by the purchaser stating that the
product will be used exclusively for residential purposes].
  S 41. Subdivision (j) of section 1115 of the tax law,  as  amended  by
section 12 of part W-1 of chapter 109 of the laws of 2006, is amended to
read as follows:
  (j) The exemptions provided in this section shall not apply to the tax
required  to  be  prepaid  pursuant  to the provisions of section eleven
hundred two of this article nor to the taxes imposed by sections  eleven
hundred  five  and  eleven  hundred  ten of this article with respect to
receipts from sales and uses of motor fuel or diesel motor fuel,  except
that  the exemptions provided in paragraphs nine and forty-two of subdi-
vision (a) of this section shall apply to the tax required to be prepaid
pursuant to the provisions of section eleven hundred two of this article
and to the taxes imposed by sections  eleven  hundred  five  and  eleven
hundred  ten  of this article with respect to sales and uses of kero-jet
fuel, CNG, hydrogen and E85, provided, however,  the  exemption  allowed
for  E85  shall  be  subject  to the additional requirements provided in
section eleven hundred two of this article  with  respect  to  E85.  The
exemption  provided  in  subdivision  (c) of this section shall apply to
sales and uses of NON-HIGHWAY diesel motor fuel [which is  not  enhanced
diesel  motor  fuel] but only if all of such fuel is consumed other than
on the PUBLIC highways of this state, provided, however, this  exemption
shall in no event apply to a sale of NON-HIGHWAY diesel motor fuel which
involves  a  delivery at a filling station or into a repository which is
equipped with a hose or other  apparatus  by  which  such  fuel  can  be
dispensed  into the fuel tank of a motor vehicle. The exemption provided
in subdivision (c) of this section shall apply to sales and uses  of  no
more than four thousand five hundred gallons of NON-HIGHWAY diesel motor
fuel  in  a  thirty-day  period  for  use  or  consumption either in the
production for sale of tangible personal property by  farming  or  in  a
commercial  horse boarding operation, or in both but only if all of such
fuel is consumed other than on the PUBLIC highways of this state (except
for the use of the PUBLIC highways to reach adjacent farmlands or  adja-
cent  lands  used  in  a  commercial horse boarding operation, or both),
provided, however, such exemption shall be applicable to the sale or use
of more than four thousand five hundred gallons  of  NON-HIGHWAY  diesel
motor fuel in a thirty-day period for such use or consumption in accord-
ance with a prior clearance given by the commissioner.

S. 2811                            81                            A. 4011

  S 41-a.  Subdivision (j) of section 1115 of the tax law, as amended by
section  8  of  part  B of chapter 63 of the laws of 2000, is amended to
read as follows:
  (j) The exemptions provided in this section shall not apply to the tax
required  to  be  prepaid  pursuant  to the provisions of section eleven
hundred two of this article nor to the taxes imposed by sections  eleven
hundred  five  and  eleven  hundred  ten of this article with respect to
receipts from sales and uses of motor fuel or diesel motor fuel,  except
that the exemption provided in paragraph nine of subdivision (a) of this
section  shall  apply  to the tax required to be prepaid pursuant to the
provisions of section eleven hundred two of  this  article  and  to  the
taxes  imposed by sections eleven hundred five and eleven hundred ten of
this article with respect to  sales  and  uses  of  kero-jet  fuel.  The
exemption  provided  in  subdivision  (c) of this section shall apply to
sales and uses of NON-HIGHWAY diesel motor fuel [which is  not  enhanced
diesel  motor  fuel] but only if all of such fuel is consumed other than
on the PUBLIC highways of this state, provided, however, this  exemption
shall in no event apply to a sale of NON-HIGHWAY diesel motor fuel which
involves  a  delivery at a filling station or into a repository which is
equipped with a hose or other  apparatus  by  which  such  fuel  can  be
dispensed  into the fuel tank of a motor vehicle. The exemption provided
in subdivision (c) of this section shall apply to sales and uses  of  no
more than four thousand five hundred gallons of NON-HIGHWAY diesel motor
fuel  in  a  thirty-day  period  for  use  or  consumption either in the
production for sale of tangible personal property by  farming  or  in  a
commercial  horse boarding operation, or in both but only if all of such
fuel is consumed other than on the PUBLIC highways of this state (except
for the use of the PUBLIC highways to reach adjacent farmlands or  adja-
cent  lands  used  in  a  commercial horse boarding operation, or both),
provided, however, such exemption shall be applicable to the sale or use
of more than four thousand five hundred gallons  of  NON-HIGHWAY  diesel
motor fuel in a thirty-day period for such use or consumption in accord-
ance with a prior clearance given by the commissioner.
  S  42.  Subdivision  (e) of section 1120 of the tax law, as amended by
chapter 2 of the laws of 1995, is amended to read as follows:
  (e) Immediate export. With respect to (i) motor fuel  imported,  manu-
factured or sold or purchased in this state, and (ii) [enhanced] HIGHWAY
diesel  motor  fuel,  a  refund  or credit shall be allowed a registered
distributor of this state or a purchaser  of  the  tax  required  to  be
prepaid  pursuant  to  section eleven hundred two of this article in the
amount of such tax paid by or included in the price paid by a  distribu-
tor or such purchaser if such fuel was exported from this state for sale
outside  this state, such distributor or such purchaser, as the case may
be, exporting such fuel is duly  registered  with  or  licensed  by  the
taxing  authorities  of  the  state  to which such fuel is exported as a
distributor or a dealer in the fuel being so exported, and in connection
with such exportation such fuel was immediately shipped to an identified
facility in the state to which such fuel is exported, and  provided  the
applicant  complies  with  all requirements and rules and regulations of
the commissioner, including evidentiary requirements, relating thereto.
  S 43. Subparagraph (i) of paragraph 3 of subdivision  (h)  of  section
1132  of  the tax law, as amended by chapter 261 of the laws of 1988, is
amended to read as follows:
  (i) For the purpose of the proper administration of this  article  and
to  prevent evasion of the tax hereby imposed, it shall be presumed that
all retail sales of motor fuel or diesel motor fuel are subject  to  the

S. 2811                            82                            A. 4011

tax  required  to  be  collected  by  subdivision  (a) of section eleven
hundred five of this article or paid by the provisions of section eleven
hundred ten of this article until the contrary is  established,  and  it
shall  be  presumed  that  all motor fuel or diesel motor fuel imported,
manufactured, [subjected to enhancement,] sold, received or possessed by
any person in this state, which such person cannot otherwise account for
as having been sold subject to the  tax  required  to  be  collected  by
subdivision (a) of section eleven hundred five or paid by the provisions
of  section eleven hundred ten of this article, has been sold subject to
the tax required to be collected by subdivision (a)  of  section  eleven
hundred  five  or  paid  by the provisions of section eleven hundred ten
except that no such presumption shall apply with respect to  motor  fuel
or  diesel motor fuel in the fuel tank of a motor vehicle used to propel
such vehicle or to motor fuel in small drums or similar containers.  The
burden  of  proving  that  any  sale is not so subject shall be upon the
person required to collect such tax and the purchaser of such fuel.
  S 44. Subparagraph (iii) of paragraph 1 of subdivision (a) of  section
1134  of the tax law, as amended by section 160 of part A of chapter 389
of the laws of 1997, is amended to read as follows:
  (iii)  every  person  selling  [automotive  fuel]  PETROLEUM  PRODUCTS
including persons who or which are not distributors,
  S  45.  Subdivision  (d) of section 1135 of the tax law, as amended by
chapter 44 of the laws of 1985 and as relettered by chapter  61  of  the
laws of 1989, is amended to read as follows:
  (d) Every person selling or holding large volumes of [automotive fuel]
PETROLEUM PRODUCTS shall keep records for such periods and in the manner
prescribed  by  the  [tax commission] COMMISSIONER pursuant to rules and
regulations. Such records shall show (1) the number of gallons of [auto-
motive fuel] PETROLEUM PRODUCTS purchased, the price paid therefor,  the
amount  of tax paid pursuant to the provisions of section eleven hundred
two of this article and the regional average retail sales price applica-
ble thereto and (2) the number of gallons sold, and the  price  paid  by
the  purchaser to whom such person sells the [automotive fuel] PETROLEUM
PRODUCTS, and the amount of tax included in such price pursuant  to  the
provisions  of  section  eleven  hundred  two  of  this  article and the
[regional average retail sales price or the]  amount  of  tax  collected
pursuant  to the provisions of subdivision (a) of section eleven hundred
five of this article applicable to such sale together  with  such  addi-
tional  information  as the [tax commission] COMMISSIONER shall require.
The [regional average retail sales price, and the] amount of  tax  shall
be  calculated  in the manner set forth in section eleven hundred eleven
of this article.
  S 46. Subdivision (a) of section 1136 of the tax law,  as  amended  by
chapter  89 of the laws of 1976, paragraphs 1, 2, 3 and 5 as amended and
paragraph 6 as added by chapter 2 of the laws of 1995 and  paragraphs  4
and  7  as amended by section 2-e of part M-1 of chapter 106 of the laws
of 2006, is amended to read as follows:
  (a) (1) Every person required to register  with  the  commissioner  as
provided  in section eleven hundred thirty-four OF THIS PART whose taxa-
ble receipts, amusement charges and rents total less than three  hundred
thousand dollars, or in the case of any such person who is a distributor
whose  sales of [automotive fuel] PETROLEUM PRODUCTS total less than one
hundred thousand gallons, in every quarter of the preceding  four  quar-
ters, shall only file a return quarterly with the commissioner.
  (2)  Every  person  required  to  register  with  the  commissioner as
provided in section eleven hundred thirty-four OF THIS PART whose  taxa-

S. 2811                            83                            A. 4011

ble  receipts,  amusement charges and rents total three hundred thousand
dollars or more, or in the case of any such person who is a  distributor
whose  sales  of  [automotive fuel] PETROLEUM PRODUCTS total one hundred
thousand gallons or more, in any quarter of the preceding four quarters,
shall,  in  addition to filing a quarterly return described in paragraph
one of this subdivision, and except as  otherwise  provided  in  section
eleven  hundred two or eleven hundred three of this article, file either
a long-form or short-form part-quarterly return monthly with the commis-
sioner.
  (3) However, a person required to register with  the  commissioner  as
provided in section eleven hundred thirty-four OF THIS PART only because
such  person  is  purchasing  or  selling tangible personal property for
resale, and who is not required to  collect  any  tax  or  pay  any  tax
directly  to the commissioner under this article, shall file an informa-
tion return annually in such form as  the  commissioner  may  prescribe.
Likewise,  a  person,  who  is  required  to register and who is selling
[automotive fuel] PETROLEUM PRODUCTS who is not a distributor  of  motor
fuel, shall file an information return quarterly or, if the commissioner
deems  necessary,  monthly,  in  such  form  as  the  commissioner shall
prescribe.
  (4) The return of a vendor of tangible personal property  or  services
shall  show  such vendor's receipts from sales and the number of gallons
of any motor fuel or diesel motor fuel sold and also the aggregate value
of tangible personal property and services and number of gallons of such
fuels sold by the vendor, the use of which is subject to tax under  this
article,  and  the  amount  of  tax  payable  thereon  pursuant  to  the
provisions of section eleven hundred  thirty-seven  of  this  part.  The
return  of  a recipient of amusement charges shall show all such charges
and the amount of tax thereon, and the return of an operator required to
collect tax on rents shall show all rents received or  charged  and  the
amount of tax thereon.
  (5)  The returns of any seller of [automotive fuel] PETROLEUM PRODUCTS
shall show the number of gallons of [automotive fuel] PETROLEUM PRODUCTS
sold, together with such  additional  information  as  the  commissioner
shall  require  in  order  to certify the amount of taxes, penalties and
interest payable to local taxing jurisdictions imposed on  the  sale  or
use  of  [automotive fuel] PETROLEUM PRODUCTS pursuant to the provisions
of section twelve hundred sixty-one of this chapter.
  (6) The returns of any seller of cigarettes shall show the  amount  of
prepaid  tax  assumed  or paid thereon and passed through, together with
such additional information as the commissioner shall require.
  (7) Taxable receipts as used in this  section  shall  include  taxable
receipts from the sale of [automotive fuel] PETROLEUM PRODUCTS and ciga-
rettes and any receipts from the sale of motor fuel or diesel motor fuel
or  cigarettes in this state whether or not such receipts are subject to
the taxes imposed by section eleven hundred two, eleven  hundred  three,
eleven hundred five or eleven hundred ten of this article and regardless
of  whether  the  provisions  of section eleven hundred twenty or eleven
hundred twenty-one of this article are applicable to the  taxes  imposed
in  respect  of  such  receipts  or  numbers of gallons of motor fuel or
diesel motor fuel sold.
  [(i)] (8) For purposes of this article the term "long-form, part-quar-
terly return" shall mean a return in  a  form  determined  by  the  [tax
commission]  COMMISSIONER  providing  for  the calculation of the actual
sales and compensating use taxes for the preceding month in  the  manner
set  forth in subdivisions (a) and (b) of section eleven hundred thirty-

S. 2811                            84                            A. 4011

seven OF THIS PART. A person filing a long-form,  part-quarterly  return
for  each of the months contained in a quarter shall also be required to
file a quarterly return for such quarter.
  [(ii)]  (9)  For  purposes of this article the term "short-form, part-
quarterly return" shall mean a return which shall be available  for  use
in  filing  as a return for the first two months of any quarter and only
by a person required to file a return monthly who has had at least  four
successive  quarterly  tax  periods  immediately preceding the month for
which the return is to be filed and who elects such use,  and  is  in  a
form  determined  by the [tax commission] COMMISSIONER and providing for
the calculation of one-third of the total  state  and  local  sales  and
compensating  use  taxes  paid  by  the  person  to the [tax commission]
COMMISSIONER in the comparable quarter of the immediately preceding year
under this article and as taxes imposed pursuant  to  the  authority  of
article  twenty-nine with respect to all receipts, amusement charges and
rents.
  S 47. Subdivision 11 of section 1142 of the tax law, as added by chap-
ter 930 of the laws of 1982, is amended to read as follows:
  11. To make such provision pursuant to rules and regulations  for  the
joint  administration, in whole or in part, of the state and local taxes
imposed by this article and authorized by article  twenty-nine  of  this
chapter  upon  the  sale of [automotive fuel] PETROLEUM PRODUCTS and the
taxes imposed by article twelve-A of this chapter and authorized  to  be
imposed  by  such  article,  including  the joint reporting, assessment,
collection, determination and refund of such taxes, and for that purpose
to prescribe that any of  the  [commission's]  COMMISSIONER'S  functions
under  said  articles,  and any returns, forms, statements, documents or
information to be submitted to the [commission] COMMISSIONER under  said
articles,  any  books  and  records to be kept for purposes of the taxes
imposed or authorized by said articles, any schedules of amounts  to  be
collected  under  said  articles,  any  registration required under said
articles, and the payment of taxes under said articles  shall  be  on  a
joint basis with respect to the taxes imposed by said articles.
  S  48.  Subparagraph  (i) of paragraph 3 of subdivision (a) of section
1145 of the tax law, as amended by chapter 2 of the  laws  of  1995,  is
amended to read as follows:
  (i)  Any  person  required  to obtain a certificate of authority under
section eleven hundred thirty-four OF THIS PART who, without  possessing
a  valid  certificate of authority, (A) sells tangible personal property
or services subject to tax, receives amusement  charges  or  operates  a
hotel, (B) purchases or sells tangible personal property for resale, (C)
sells  [automotive  fuel]  PETROLEUM  PRODUCTS,  or (D) sells cigarettes
shall, in addition to any other penalty  imposed  by  this  chapter,  be
subject to a penalty in an amount not exceeding five hundred dollars for
the  first day on which such sales or purchases are made, plus an amount
not exceeding two hundred dollars for each subsequent day on which  such
sales  or  purchases are made, not to exceed ten thousand dollars in the
aggregate.
  S 49. Subparagraph (i) of paragraph 3 of subdivision  (a)  of  section
1210  of the tax law, as amended by section 2 of part B of chapter 35 of
the laws of 2006, is amended to read as follows:
  (i) Notwithstanding any other provision of law to the contrary but not
with respect to cities subject  to  the  provisions  of  section  eleven
hundred  eight  of  this [article] CHAPTER, any city or county, except a
county wholly contained within  a  city,  may  provide  that  the  taxes
imposed,  pursuant  to  this  subdivision, by such city or county on the

S. 2811                            85                            A. 4011

retail sale or use of fuel oil and coal used for  residential  purposes,
the  retail  sale  or use of wood used for residential heating purposes,
the sale, other than  for  resale,  of  propane  (except  when  sold  in
containers  of  less than one hundred pounds), natural gas, electricity,
steam and gas, electric and steam services used for residential purposes
and the use of gas or electricity used for residential purposes  may  be
imposed  at a lower rate than the uniform local rate imposed pursuant to
the opening paragraph of this section, as long as such rate  is  one  of
the  rates  authorized  by  such  paragraph  or  such sale or use may be
exempted from such taxes. Provided, however, such lower rate must  apply
to all such energy sources and services and at the same rate and no such
exemption may be enacted unless such exemption applies to all such ener-
gy  sources  and services. The provisions of this subparagraph shall not
apply to a sale or use of [(i)]  diesel  motor  fuel  which  involves  a
delivery  at  a  filling  station or into a repository which is equipped
with a hose or other apparatus by which such fuel can be dispensed  into
the  fuel  tank  of a motor vehicle [and (ii) enhanced diesel motor fuel
except in the case of a sale or use of such enhanced diesel  motor  fuel
used  exclusively  for  residential  purposes  which is delivered into a
storage tank which is not equipped with a hose  or  other  apparatus  by
which  such  fuel can be dispensed into the fuel tank of a motor vehicle
and such storage tank is attached to the heating unit burning such fuel,
provided that each delivery of such fuel  of  over  four  thousand  five
hundred  gallons  shall  be  evidenced  by  a  certificate signed by the
purchaser stating that the product will be used exclusively for residen-
tial purposes].
  S 50. Subdivision (c) of section 1812 of the tax law,  as  amended  by
section  25  of subpart I of part V-1 of chapter 57 of the laws of 2009,
is amended to read as follows:
  (c) Any owner of a filling station who shall willfully  and  knowingly
have  in  his OR HER custody, possession or under his OR HER control any
motor fuel or Diesel motor fuel  [on  which]  (1)  ON  WHICH  the  taxes
imposed  by  or  pursuant to the authority of such article have not been
assumed or paid by a distributor registered as such under  such  article
[or],  (2) ON WHICH the taxes imposed by or pursuant to the authority of
such article have not been included in the cost to him OR  HER  of  such
fuel  where  such taxes were required to have been passed through to him
OR HER and included in the cost to him OR HER of  such  fuel,    OR  (3)
WHICH  IS DYED DIESEL MOTOR FUEL AS DEFINED BY SUBDIVISION EIGHTEEN-A OF
SECTION TWO HUNDRED EIGHTY-TWO OF THIS CHAPTER (EXCEPT  FOR  WATER-WHITE
KEROSENE),  shall  [in  either case,] be guilty of a class E felony. For
purposes of this subdivision, such owner shall willfully  and  knowingly
have  in  his OR HER custody, possession or under his OR HER control any
motor fuel or Diesel motor fuel  on  which  such  taxes  have  not  been
assumed or paid by a distributor registered as such where such owner has
knowledge  of  the requirement that such taxes be paid and where, to his
OR HER knowledge, such taxes have not been assumed or paid by  a  regis-
tered  distributor  on  such motor fuel or Diesel motor fuel. Such owner
shall willfully and knowingly have in his OR HER custody, possession  or
under  his  OR  HER control any motor fuel or Diesel motor fuel on which
such taxes are required to have been passed through to him  OR  HER  and
have not been included in his OR HER cost where such owner has knowledge
of  the  requirement  that such taxes be passed through and where to his
knowledge such taxes have not been so included. SUCH OWNER  SHALL  WILL-
FULLY  AND KNOWINGLY HAVE IN HIS OR HER CUSTODY, POSSESSION OR UNDER HIS
OR HER CONTROL ANY DYED DIESEL MOTOR FUEL (EXCEPT WATER-WHITE  KEROSENE)

S. 2811                            86                            A. 4011

WHERE SUCH OWNER HAS KNOWLEDGE OF THE REQUIREMENT THAT DYED DIESEL MOTOR
FUEL  (EXCEPT  WATER-WHITE  KEROSENE)  MAY NOT BE IN HIS OR HER CUSTODY,
POSSESSION OR UNDER HIS OR HER CONTROL.
  S  51.  Subdivision (e) of section 1812 of the tax law is REPEALED and
subdivision (f) is relettered subdivision (e).
  S 52. Section 1812-a of the tax law, as added by chapter  261  of  the
laws of 1988, is amended to read as follows:
  S  1812-a.  Person not registered as distributor of Diesel motor fuel.
(a) Any person who, while not registered  as  a  distributor  of  Diesel
motor  fuel pursuant to the provisions of article twelve-A of this chap-
ter, [engages in the enhancement,] makes a sale or use within the  state
of  Diesel motor fuel (other than a retail sale not in bulk or the self-
use of Diesel motor fuel which has been the subject of a  retail  sale),
imports  or  causes  Diesel  motor fuel to be imported into the state or
produces, refines, manufactures or compounds Diesel  motor  fuel  within
the  state  shall  be guilty of a misdemeanor. If, within any ninety day
period, two thousand nine hundred gallons or more of Diesel  motor  fuel
are  subjected to [enhancement or] sale or use (other than a retail sale
not in bulk or the self-use of Diesel motor  fuel  which  has  been  the
subject  of a retail sale) within the state or are imported or caused to
be imported by any person while not so registered as  a  distributor  of
Diesel motor fuel, such person shall be guilty of a class E felony.
  (b) Any person whose registration under article twelve-A of this chap-
ter  applies  only  to  the importation, sale and distribution of Diesel
motor fuel for the purposes described in subparagraph (i)  of  paragraph
(b)  of  subdivision  three  of section two hundred eighty-two-a of this
chapter who delivers NON-HIGHWAY Diesel motor fuel at a filling  station
[other  than  for  the  sole  purpose of heating such station] or into a
repository equipped with a hose or other apparatus by which  NON-HIGHWAY
Diesel  motor  fuel can be dispensed into the fuel tank of a motor vehi-
cle, other than such a repository which is located on  the  premises  of
such  registrant  where  the Diesel motor fuel delivered therein is used
exclusively for the purpose of fueling motor vehicles operated by regis-
trant for the purpose of distributing Diesel motor fuel for the purposes
described in such subparagraph (i), shall be guilty  of  a  misdemeanor.
If,  within  any  ninety  day period, any such person whose registration
under article twelve-A of this chapter applies only to the  importation,
sale  and distribution of NON-HIGHWAY Diesel motor fuel for the purposes
described in subparagraph (i) of paragraph (b) of subdivision  three  of
section  two hundred eighty-two-a of this chapter so unlawfully delivers
a total of one thousand gallons or more of Diesel  motor  fuel  at  such
filling  station or stations or into such repository or repositories (or
a combination of both such filling  stations  and  repositories),  then,
such person shall be guilty of a class E felony.
  (c)  Any  person who has twice been convicted under this section shall
be guilty of a class E felony  for  any  subsequent  violation  of  this
section,  regardless of the amount of Diesel motor fuel involved in such
violation. For purposes  of  this  section,  the  terms  ["enhancement"]
"NON-HIGHWAY DIESEL MOTOR FUEL" and "retail sale not in bulk" shall have
the  same  meaning  they  have  for purposes of article twelve-A of this
chapter.
  S 53. Subdivisions (a) and (b) of section 1817  of  the  tax  law,  as
amended by section 30 of subpart I of part V-1 of chapter 57 of the laws
of 2009, is amended to read as follows:
  (a)  Any  person  required  to obtain a certificate of authority under
section eleven hundred thirty-four of this chapter who, without possess-

S. 2811                            87                            A. 4011

ing a valid certificate  of  authority,  willfully  (1)  sells  tangible
personal property or services subject to tax, receives amusement charges
or  operates  a hotel, (2) purchases or sells tangible personal property
for  resale,  or (3) sells [automotive fuel] PETROLEUM PRODUCTS; and any
person who fails to surrender a certificate of authority as required  by
such article shall be guilty of a misdemeanor.
  (b)  Any  person  required  to obtain a certificate of authority under
section eleven hundred thirty-four of this chapter who within five years
after a determination by the [tax commission] COMMISSIONER, pursuant  to
such  section,  to  suspend,  revoke or refuse to issue a certificate of
authority has become final, and without possession of  a  valid  certif-
icate  of  authority  (1)  sells  tangible personal property or services
subject to tax, receives amusement charges  or  operates  a  hotel,  (2)
purchases  or  sells tangible personal property for resale, or (3) sells
[automotive fuel] PETROLEUM PRODUCTS, shall be guilty of a  misdemeanor.
It  shall  be an affirmative defense that such person performed the acts
described in this subdivision without knowledge of  such  determination.
Any   person   who  violates  a  provision  of  this  subdivision,  upon
conviction, shall be subject to a fine in any amount authorized by  this
article,  but  not  less  than  five hundred dollars, in addition to any
other penalty provided by law.
  S 54. The section heading, subdivisions (a), (b) and (c), paragraph 3,
subparagraph (D) of paragraph 4 and paragraph 6 of subdivision  (d)  and
subdivisions  (e)  and  (g)  of section 1848 of the tax law, as added by
chapter 276 of the laws of 1986 and subparagraph (D) of paragraph 4  and
paragraph  6 of subdivision (d) as amended by chapter 190 of the laws of
1990, are amended to read as follows:
  Forfeiture action with respect to motor fuel and DIESEL MOTOR FUEL AND
vehicle carrying such fuel. (a) Temporary  seizure.  Whenever  a  police
officer  designated  in  section 1.20 of the criminal procedure law or a
peace officer designated in subdivision four of  section  2.10  of  such
law,  acting  pursuant  to  his special duties, shall discover any motor
fuel OR DIESEL MOTOR FUEL which is being imported for use, distribution,
storage or sale in the state where the person importing or causing  such
motor  fuel  OR  DIESEL MOTOR FUEL to be imported is not registered as a
distributor under  section  two  hundred  eighty-three  OR  SECTION  TWO
HUNDRED  EIGHTY-TWO-A,  of this chapter, AS THE CASE MAY BE, such police
officer or  peace  officer  is  hereby  authorized  to  seize  and  take
possession  of  such  motor fuel OR DIESEL MOTOR FUEL, together with the
vehicle or other means of transportation used to  transport  such  motor
fuel.
  (b)  Retention  of  property. The department [of taxation and finance]
shall hold and safely keep such motor fuel, DIESEL MOTOR  FUEL,  vehicle
or  other  means of transportation seized pursuant to subdivision (a) of
this section.  Seized motor fuel OR DIESEL MOTOR FUEL may  be  deposited
to  the credit of the department [of taxation and finance] at a terminal
or other storage facility within the state or may be sold by the depart-
ment on the open market.
  (c) Confirmation of temporary seizure. Within five business days after
the temporary seizure of motor fuel, DIESEL MOTOR FUEL, vehicle or other
means of transportation pursuant to subdivision (a) of this section, the
department [of taxation and finance] shall move in supreme court in  any
county,  on  such  notice as the court shall direct to the owners of the
property, to confirm the temporary seizure. If the department [of  taxa-
tion  and finance] fails to make such motion within the required period,
such seized property shall be restored to the owners thereof as provided

S. 2811                            88                            A. 4011

in subdivision (e) of this section. On a motion for an order  confirming
the  seizure,  the  department  [of taxation and finance] shall show, by
affidavit and such other written evidence  as  may  be  submitted,  that
there  is a cause of action for forfeiture under subdivision (d) of this
section and that there are grounds for confirmation of the seizure.  The
department  shall  include,  in  its  motion papers, an inventory of all
seized property. The court shall  grant  an  application  for  an  order
confirming  the  seizure  when it determines that there is a substantial
probability that the department [of taxation and finance]  will  prevail
on the issue of forfeiture.
  (3)  Forfeiture  of  motor fuel OR DIESEL MOTOR FUEL together with the
vehicle or other means of transportation used to  transport  such  motor
fuel  OR  DIESEL  MOTOR  FUEL shall be adjudged where the department [of
taxation and finance] proves, by clear and convincing evidence, that the
person importing or causing such motor fuel OR DIESEL MOTOR FUEL  to  be
imported  was  not registered as a distributor under section two hundred
eighty-three OR SECTION TWO HUNDRED EIGHTY-TWO-A of this chapter, AS THE
CASE MAY BE. All defendants in a forfeiture action brought  pursuant  to
this article shall have the right to trial by jury on any issue of fact.
  (D) The court may grant the relief provided in subparagraph (A) [here-
of]  OF  THIS PARAGRAPH if it finds that such relief is warranted by the
existence of  some  compelling  factor,  consideration  or  circumstance
demonstrating that forfeiture of the property or any part thereof, would
not  serve the ends of justice. Reporting and payment of the tax imposed
pursuant to article twelve-A or article  twenty-eight  of  this  chapter
with  respect  to such motor fuel OR DIESEL MOTOR FUEL subsequent to the
seizure of such fuel shall not constitute a compelling factor, consider-
ation or circumstance warranting the granting of the relief provided for
in subparagraph (A) [hereof] of this paragraph.  In determining  whether
such  relief  is  warranted  by the existence of some compelling factor,
consideration or circumstances pursuant to  this  paragraph,  the  court
may, however, take into account the fact that such taxes with respect to
the  seized  fuel  have been reported and remitted to the state prior to
the temporary seizure of such fuel if the unregistered importation  into
the  state  was  effected  in  good  faith  and without knowledge of the
requirement of registration and without intent to evade tax.  The  court
must  issue  a  written  decision, stating the basis for an order issued
pursuant to this paragraph.
  (6) The total that may be recovered shall not exceed the value of  the
motor  fuel  OR  DIESEL  MOTOR  FUEL seized and, in addition, either the
value of the vehicle or other means of transportation used to  transport
such  fuel  or three times the amount of the tax and penalty under arti-
cles twelve-A, thirteen-A and twenty-eight and pursuant to the authority
of article twenty-nine of this chapter with respect to the motor fuel OR
DIESEL MOTOR FUEL, whichever is less.
  (e) Return of  property.  If  (1)  the  department  [of  taxation  and
finance]  fails  to  move  for  confirmation  of the seizure pursuant to
subdivision (c) of this section or (2) a court denies an application for
an order confirming the seizure or (3) judgment is entered  against  the
department  in the forfeiture action and that judgment is affirmed after
all appeals are exhausted, then the department shall restore such seized
motor fuel OR DIESEL MOTOR FUEL, or motor fuel OR DIESEL MOTOR FUEL of a
like quantity and type, or such seized vehicle or other means of  trans-
portation  to  the  owners  thereof. Alternatively, if such seized motor
fuel OR DIESEL MOTOR FUEL has been sold as provided in  subdivision  (b)
of  this  section,  the department shall pay to the owners of such motor

S. 2811                            89                            A. 4011

fuel OR DIESEL MOTOR FUEL the proceeds of such sale or, if  greater,  an
amount  of money representing the fair market value of the motor fuel OR
DIESEL MOTOR FUEL at the time of the seizure.
  (g)  Disposal  of  property. The department [of taxation and finance],
after a judicial determination of forfeiture, shall, in its  discretion,
either  retain  such  seized  property for its official use or sell such
forfeited property at public sale. The net proceeds of any such sale, or
of any sale of seized motor fuel OR DIESEL MOTOR  FUEL  as  provided  in
subdivision  (b) of this section, after deduction of the lawful expenses
incurred, shall be deposited and disposed of pursuant to the  provisions
of  section  one  hundred  seventy-one-a of this chapter with respect to
deposit and disposition of revenue.
  S 55. Paragraph (q) of subdivision 34 of section 1.20 of the  criminal
procedure law, as amended by chapter 318 of the laws of 2002, is amended
to read as follows:
  (q) An employee of the department of taxation and finance (i) assigned
to  enforcement  of the taxes imposed under or pursuant to the authority
of article twelve-A of the tax law and administered by the  commissioner
of taxation and finance, taxes imposed under or pursuant to the authori-
ty  of  article  eighteen of the tax law and administered by the commis-
sioner, taxes imposed under article twenty of the tax law, or  sales  or
compensating  use taxes relating to [automotive fuel] PETROLEUM PRODUCTS
or cigarettes imposed under article  twenty-eight  or  pursuant  to  the
authority  of article twenty-nine of the tax law and administered by the
commissioner or (ii) designated  as  a  revenue  crimes  specialist  and
assigned  to  the enforcement of the taxes described in paragraph (c) of
subdivision four of section 2.10 of  this  title,  for  the  purpose  of
applying  for  and  executing  search warrants under article six hundred
ninety of this chapter, for the purpose of acting as  a  claiming  agent
under  article  thirteen-A  of  the  civil  practice  law  and  rules in
connection with the enforcement of the taxes referred to above  and  for
the  purpose  of executing warrants of arrest relating to the respective
crimes specified in subdivision four of section 2.10 of this title.
  S 56. Paragraph (a) of subdivision 4 of section 2.10 of  the  criminal
procedure  law,  as amended by chapter 2 of the laws of 1995, is amended
to read as follows:
  (a) to the enforcement of any of the criminal or seizure  and  forfei-
ture  provisions  of  the tax law relating to (i) taxes imposed under or
pursuant to the authority of article twelve-A of the tax law and  admin-
istered by the commissioner, (ii) taxes imposed under or pursuant to the
authority  of  article  eighteen  of the tax law and administered by the
commissioner, (iii) taxes imposed under article twenty of the  tax  law,
or  (iv)  sales  or compensating use taxes relating to [automotive fuel]
PETROLEUM PRODUCTS or cigarettes imposed under article  twenty-eight  or
pursuant  to  the  authority  of  article twenty-nine of the tax law and
administered by the commissioner or
  S 57. Sections 11-2033, 11-2034, 11-2035, 11-2036, 11-2037 and 11-2038
of the administrative code of the city of New York are REPEALED.
  S 58. This act shall take effect September 1, 2011 and shall apply  to
sales  or  uses  occurring  on or after such date in accordance with the
applicable transitional provisions in sections 1106 and 1217 of the  tax
law; provided, however, that:
  (a) the amendments to subdivisions 22 and 23 of section 282 of the tax
law, made by section one of this act shall not affect the repeal of such
subdivisions and shall be deemed repealed therewith;

S. 2811                            90                            A. 4011

  (b)  the  amendments to paragraph 2 of subdivision (a) of section 1102
of the tax law made by section thirty-nine of this act shall be  subject
to the expiration and reversion of such paragraph pursuant to section 19
of  part  W-1  of chapter 109 of the laws of 2006, as amended, when upon
such date the provisions of section thirty-nine-a of this act shall take
effect; and
  (c)  the  amendments to subdivision (j) of section 1115 of the tax law
made by section forty-one of this act shall be subject to the expiration
and reversion of such subdivision pursuant to section 19 of part W-1  of
chapter  109  of  the  laws of 2006, as amended, when upon such date the
provisions of section forty-one-a of this act shall take effect.

                                 PART L

  Section 1. Subdivision 22 of section 282 of the tax law, as  added  by
section  1 of part W-1 of chapter 109 of the laws of 2006, is amended to
read as follows:
  22. "E85"  means  a  [mixture  consisting  by  volume  of  eighty-five
percent]  FUEL  BLEND  CONSISTING OF ethanol and [the remainder of which
is] motor fuel, WHICH MEETS THE ASTM INTERNATIONAL ACTIVE STANDARD D5798
FOR FUEL ETHANOL.
  S 2. Section 19 of part W-1 of chapter 109 of the laws of 2006, amend-
ing the tax law relating to  providing  exemptions,  reimbursements  and
credits  from various taxes for certain alternative fuels, is amended to
read as follows:
  S 19. This act shall take effect immediately; provided, however,  that
sections one through thirteen of this act shall take effect September 1,
2006  and  shall be deemed repealed on September 1, [2011] 2012 and such
repeal shall  apply  in  accordance  with  the  applicable  transitional
provisions  of sections 1106 and 1217 of the tax law, and shall apply to
sales made, fuel compounded or manufactured, and uses  occurring  on  or
after  such  date,  and with respect to sections seven through eleven of
this act, in  accordance  with  applicable  transitional  provisions  of
sections  1106  and  1217  of  the  tax law; provided, however, that the
commissioner of taxation and finance shall be authorized  on  and  after
the  date  this act shall have become a law to adopt and amend any rules
or regulations  and  to  take  any  steps  necessary  to  implement  the
provisions  of this act; provided further that sections fourteen through
sixteen of this act shall take effect immediately  and  shall  apply  to
taxable years beginning on or after January 1, 2006.
  S  3.  This act shall take effect immediately; provided, however, that
the amendments made to subdivision 22 of section 282 of the tax law made
by section one of this act shall not affect the repeal of such  subdivi-
sion and shall be deemed repealed therewith.

                                 PART M

  Section  1.  Section  11 of part EE of chapter 63 of the laws of 2000,
amending the tax law and other laws relating to modifying  the  distrib-
ution  of  funds  from  the motor vehicle fuel excise tax, as amended by
section 1-b of part A of chapter 63 of the laws of 2005, is  amended  to
read as follows:
  S 11. Notwithstanding any other law, rule or regulation to the contra-
ry,  the  comptroller  is  hereby  authorized and directed to deposit in
equal monthly installments and distribute pursuant to the provisions  of
subdivision  (d) of section 301-j of the tax law amounts listed below to

S. 2811                            91                            A. 4011

the credit of the dedicated highway and bridge trust fund and the  dedi-
cated  mass  transportation  trust  fund from [taxes and fees] ALL MOTOR
VEHICLE RECEIPTS  now  deposited  into  the  general  fund  pursuant  to
provisions  of  the  vehicle and traffic law:  twenty-eight million four
hundred thousand dollars from April 1,  2002  through  March  31,  2003,
sixty-seven  million  nine  hundred  thousand dollars from April 1, 2003
through March 31, 2004, one hundred seventy million one hundred thousand
dollars from April 1, 2004 through  March  31,  2005,  and  one  hundred
percent  of  all  [taxes  and  fees]  MOTOR VEHICLE RECEIPTS pursuant to
provisions of the  vehicle  and  traffic  law  that  are  not  otherwise
directed  to  be  deposited  in  a fund other than the general fund from
April 1, 2005 through March 31, 2006, and  the  same  amount  each  year
thereafter.
  S 2. This act shall take effect April 1, 2011.

                                 PART N

  Section  1.  Paragraph  1  of subdivision a of section 1612 of the tax
law, as amended by chapter 147 of the laws of 2010, is amended  to  read
as follows:
  (1) sixty percent of the total amount for which tickets have been sold
for  a lawful KENO OR SIMILAR STYLE lottery game [introduced on or after
the  effective  date  of  this  paragraph,  subject  to  the   following
provisions:
  (A) such game shall be available only on premises occupied by licensed
lottery sales agents, subject to the following provisions:
  (i)  if  the licensee holds a license issued pursuant to the alcoholic
beverage control law to sell alcoholic beverages for consumption on  the
premises, then not less than twenty-five percent of the gross sales must
result from sales of food;
  (ii)  if  the  licensee does not hold a license issued pursuant to the
alcoholic beverage control law to sell alcoholic beverages for  consump-
tion  on  the  premises,  then  the  premises must have a minimum square
footage greater than two thousand five hundred square feet;
  (iii) notwithstanding the foregoing provisions,  television  equipment
that  automatically  displays  the  results  of  such  drawings  may  be
installed and used without regard to the percentage of food sales or the
square footage if such premises are used as:
  (I) a commercial bowling establishment, or
  (II) a facility authorized under the racing, pari-mutuel wagering  and
breeding law to accept pari-mutuel wagers;
  (B) the rules for the operation of such game shall be as prescribed by
regulations  promulgated  and adopted by the division, provided however,
that such rules shall provide that no person under the age of twenty-one
may participate in such games on the premises of a licensee who holds  a
license  issued  pursuant  to the alcoholic beverage control law to sell
alcoholic beverages for consumption  on  the  premises;  and,  provided,
further,  that such regulations may be revised on an emergency basis not
later than ninety days after the enactment of this paragraph in order to
conform such regulations to the requirements of this paragraph]; or
  S 2. This act shall take effect immediately.

                                 PART O

S. 2811                            92                            A. 4011

  Section 1. Subparagraph (ii)  of  paragraph  1  of  subdivision  b  of
section  1612  of  the  tax law is amended by adding a new clause (I) to
read as follows:
  (I)  NOTWITHSTANDING  ANY  PROVISION OF LAW TO THE CONTRARY, FREE PLAY
ALLOWANCE CREDITS AUTHORIZED BY THE DIVISION PURSUANT TO  SUBDIVISION  F
OF  SECTION  SIXTEEN  HUNDRED  SEVENTEEN-A  OF THIS ARTICLE SHALL NOT BE
INCLUDED IN THE CALCULATION OF THE TOTAL AMOUNT WAGERED ON VIDEO LOTTERY
GAMES, THE TOTAL AMOUNT WAGERED AFTER PAYOUT OF PRIZES, THE VENDOR  FEES
PAYABLE  TO  THE OPERATORS OF VIDEO LOTTERY FACILITIES, VENDOR'S CAPITAL
AWARDS, FEES PAYABLE TO THE DIVISION'S VIDEO  LOTTERY  GAMING  EQUIPMENT
CONTRACTORS, OR RACING SUPPORT PAYMENTS.
  S 2. Section 1617-a of the tax law is amended by adding a new subdivi-
sion f to read as follows:
  F.  (1)  THE  DIVISION MAY ADMINISTER A FREE PLAY ALLOWANCE PROGRAM TO
OFFER PLAYERS OR PROSPECTIVE PLAYERS OF VIDEO LOTTERY  GAMES  FREE  PLAY
CREDITS  FOR  THE  PURPOSE  OF  INCREASING  REVENUES EARNED BY THE VIDEO
LOTTERY PROGRAM FOR THE SUPPORT OF EDUCATION. FOR THE PURPOSES  OF  THIS
SUBDIVISION,  "FREE  PLAY  ALLOWANCE  CREDIT"  MEANS  A SPECIFIED DOLLAR
AMOUNT THAT (I) MAY BE USED BY A PLAYER TO PLAY  A  VIDEO  LOTTERY  GAME
WITHOUT  PAYING  ANY  OTHER  CONSIDERATION,  AND (II) IS NOT USED IN THE
CALCULATION OF TOTAL REVENUE WAGERED AFTER PAYOUT OF PRIZES.
  (2) FOR EACH VIDEO LOTTERY FACILITY, THE DIVISION SHALL AUTHORIZE  THE
USE  OF  FREE  PLAY  ALLOWANCE  CREDITS IF THE OPERATOR OF SUCH FACILITY
SUBMITS A WRITTEN PLAN FOR THE USE OF THE FREE PLAY ALLOWANCE  THAT  THE
DIVISION DETERMINES IS DESIGNED TO INCREASE THE AMOUNT OF REVENUE EARNED
BY VIDEO LOTTERY GAMING AT SUCH FACILITY FOR THE SUPPORT OF EDUCATION.
  (3) FOR EACH VIDEO LOTTERY FACILITY, THE ANNUAL VALUE OF THE FREE PLAY
ALLOWANCE  CREDITS  AUTHORIZED  FOR USE BY THE OPERATOR PURSUANT TO THIS
SUBDIVISION SHALL NOT EXCEED AN AMOUNT EQUAL TO TEN PERCENT OF THE TOTAL
AMOUNT WAGERED ON VIDEO LOTTERY GAMES AFTER PAYOUT OF PRIZES. THE  DIVI-
SION SHALL ESTABLISH PROCEDURES TO ASSURE THAT FREE PLAY ALLOWANCE CRED-
ITS DO NOT EXCEED SUCH AMOUNT.
  (4)  THE DIVISION, IN CONJUNCTION WITH THE DIRECTOR OF THE BUDGET, MAY
SUSPEND THE USE OF FREE PLAY ALLOWANCE CREDITS  AUTHORIZED  PURSUANT  TO
THIS  SUBDIVISION  WHENEVER  THEY JOINTLY DETERMINE THAT THE USE OF FREE
PLAY ALLOWANCE CREDITS ARE NOT EFFECTIVE IN  INCREASING  THE  AMOUNT  OF
REVENUE  EARNED  FOR  THE  SUPPORT OF EDUCATION, AND SUCH USE MAY NOT BE
RESUMED UNLESS THE OPERATOR OF SUCH FACILITY SUBMITS A  NEW  OR  REVISED
WRITTEN  PLAN  FOR  THE USE OF THE FREE PLAY ALLOWANCE THAT THE DIVISION
DETERMINES IS DESIGNED MORE EFFECTIVELY TO PRODUCE AN  INCREASE  IN  THE
AMOUNT  OF  REVENUE  EARNED BY VIDEO LOTTERY GAMING AT SUCH FACILITY FOR
THE SUPPORT OF EDUCATION.
  (5) NOTHING IN THIS SUBDIVISION SHALL BE DEEMED TO PROHIBIT THE OPERA-
TOR OF A VIDEO LOTTERY FACILITY FROM OFFERING FREE PLAY CREDITS TO PLAY-
ERS OR PROSPECTIVE PLAYERS OF VIDEO LOTTERY GAMES WHEN THE VALUE OF SUCH
FREE PLAY CREDITS IS INCLUDED IN THE CALCULATION  OF  THE  TOTAL  AMOUNT
WAGERED ON VIDEO LOTTERY GAMES AND THE TOTAL AMOUNT WAGERED AFTER PAYOUT
OF  PRIZES, AND THE OPERATOR OF SUCH FACILITY PAYS THE DIVISION THE FULL
AMOUNT DUE AS THE RESULT OF SUCH CALCULATIONS.
  (6) THE DIVISION MAY AMEND THE  CONTRACT  WITH  THE  PROVIDER  OF  THE
CENTRAL  COMPUTER  SYSTEM THAT CONTROLS THE VIDEO LOTTERY NETWORK DURING
THE TERM OF SUCH CONTRACT IN EFFECT ON THE EFFECTIVE DATE OF THIS SUBDI-
VISION TO PROVIDE ADDITIONAL CONSIDERATION TO SUCH PROVIDER IN AN AMOUNT
DETERMINED BY THE DIVISION TO BE NECESSARY TO COMPENSATE FOR  (I)  PROC-
ESSING  FREE  PLAY  ALLOWANCE  TRANSACTIONS  AND (II) SYSTEM UPDATES AND
MODIFICATIONS OTHERWISE NEEDED AS OF SUCH EFFECTIVE DATE.

S. 2811                            93                            A. 4011

  S 3. This act shall take effect immediately.

                                 PART P

  Section  1.  Paragraph  2  of subdivision a of section 1612 of the tax
law, as amended by section 1 of part P of chapter  85  of  the  laws  of
2002, is amended to read as follows:
  (2) sixty-five percent of the total amount for which tickets have been
sold  for  the  "Instant Cash" game in which the participant purchases a
preprinted ticket on which dollar amounts or symbols  are  concealed  on
the face or the back of such ticket, provided however up to [three such]
FIVE  NEW  games  may  be  offered  during the fiscal year, seventy-five
percent of the total amount for which tickets have been  sold  for  such
[three] FIVE games in which the participant purchases a preprinted tick-
et  on  which dollar amounts or symbols are concealed on the face or the
back of such ticket; or
  S 2. This act shall take effect immediately.

                                 PART Q

  Section 1. Paragraph 3 of subdivision a of section  1612  of  the  tax
law,  as  amended  by  section 2 of part D of chapter 383 of the laws of
2001, is amended to read as follows:
  (3) fifty percent of the total amount for which tickets have been sold
for games known as: (A) the "Daily Numbers Game" or  "Win  4",  discrete
games  in  which  the  participants select no more than three or four of
their own numbers to match with three or four numbers drawn by the divi-
sion for purposes of determining winners of such games, (B)  "Pick  10",
offered  no  more  than  once daily, in which participants select from a
specified field of numbers a subset of ten numbers to  match  against  a
subset of numbers to be drawn by the division from such field of numbers
for  the  purpose  of  determining  winners  of such game, (C) "Take 5",
offered no more than once daily, in which  participants  select  from  a
specified  field  of numbers a subset of five numbers to match against a
subset of five numbers to be drawn by the division from  such  field  of
numbers  for  purposes  of determining winners of such game, and (D) any
joint, multi-jurisdiction, and out-of-state lottery, EXCEPT SUCH PERCENT
MAY EXCEED FIFTY PERCENT OF THE TOTAL AMOUNT FOR WHICH TICKETS HAVE BEEN
SOLD FOR ANY JOINT, MULTI-JURISDICTION, AND OUT-OF-STATE LOTTERY  IF  AT
LEAST  TWO-THIRDS  OF  THE  LOTTERY  JURISDICTIONS PARTICIPATING IN SUCH
LOTTERY AGREE TO A PERCENTAGE THAT EXCEEDS FIFTY PERCENT AND  EXCEPT  AS
OTHERWISE PROVIDED IN PARAGRAPH ONE OF SUBDIVISION B OF THIS SECTION FOR
ANY JOINT, MULTI-JURISDICTION, OUT-OF-STATE VIDEO LOTTERY GAMING; or
  S 2. This act shall take effect immediately.

                                 PART R

  Section  1.  The  opening paragraph of paragraph 1 of subdivision b of
section 1612 of the tax law, as amended by section  1  of  part  O-1  of
chapter 57 of the laws of 2009, is amended to read as follows:
  Notwithstanding  section  one  hundred twenty-one of the state finance
law, on or before the twentieth day of each month,  the  division  shall
pay  into  the  state  treasury, to the credit of the state lottery fund
created by section ninety-two-c of the state finance law, not less  than
forty-five  percent of the total amount for which tickets have been sold
for games defined in paragraph four of subdivision  a  of  this  section

S. 2811                            94                            A. 4011

during  the  preceding  month,  not less than thirty-five percent of the
total amount for which tickets have been sold for games defined in para-
graph three of subdivision a of this section during the preceding month,
not  less than twenty percent of the total amount for which tickets have
been sold for games defined in paragraph two of subdivision  a  of  this
section during the preceding month, provided however that for games with
a  prize  payout  of  seventy-five percent of the total amount for which
tickets have been sold, the division shall pay not less than ten percent
of sales into the state treasury and not less than  twenty-five  percent
of  the  total amount for which tickets have been sold for games defined
in paragraph one of subdivision a of this section during  the  preceding
month;  and the balance of the total revenue after payout for prizes for
games known as "video lottery gaming," INCLUDING ANY JOINT, MULTI-JURIS-
DICTION, AND OUT-OF-STATE VIDEO LOTTERY GAMING,
  S 2. Paragraph 1 of subdivision c of section 1612 of the tax  law,  as
amended  by  section  2 of part CC of chapter 61 of the laws of 2005, is
amended to read as follows:
  1. The specifications for video lottery gaming, INCLUDING  ANY  JOINT,
MULTI-JURISDICTION,  AND  OUT-OF-STATE  VIDEO  LOTTERY  GAMING, shall be
designed in such a manner as to pay prizes that  average  no  less  than
ninety percent of sales.
  S 3. This act shall take effect immediately.

                                 PART S

  Section  1.    Paragraph  (a)  of subdivision 1 of section 1003 of the
racing, pari-mutuel wagering and breeding law, as amended by  section  1
of  part  C  of  chapter  134 of the laws of 2010, is amended to read as
follows:
  (a) Any  racing  association  or  corporation  or  regional  off-track
betting  corporation,  authorized  to conduct pari-mutuel wagering under
this chapter, desiring to display the simulcast of horse races on  which
pari-mutuel  betting shall be permitted in the manner and subject to the
conditions provided for in this article may apply to  the  board  for  a
license so to do. Applications for licenses shall be in such form as may
be  prescribed  by the board and shall contain such information or other
material or evidence as the board  may  require.  No  license  shall  be
issued  by the board authorizing the simulcast transmission of thorough-
bred races from a track located in Suffolk  county.  The  fee  for  such
licenses  shall  be five hundred dollars per simulcast facility per year
payable by the licensee to the board for deposit into the general  fund.
Except  as  provided herein, the board shall not approve any application
to conduct simulcasting into individual or group  residences,  homes  or
other areas for the purposes of or in connection with pari-mutuel wager-
ing.  The board may approve simulcasting into residences, homes or other
areas to be conducted jointly by one or more regional off-track  betting
corporations and one or more of the following: a franchised corporation,
thoroughbred racing corporation or a harness racing corporation or asso-
ciation;  provided  (i) the simulcasting consists only of those races on
which pari-mutuel betting is authorized by this chapter at one  or  more
simulcast  facilities  for  each  of  the  contracting off-track betting
corporations which shall include wagers made in accordance with  section
one thousand fifteen, one thousand sixteen and one thousand seventeen of
this  article;  provided  further  that the contract provisions or other
simulcast arrangements for such simulcast  facility  shall  be  no  less
favorable than those in effect on January first, two thousand five; (ii)

S. 2811                            95                            A. 4011

that  each  off-track  betting  corporation having within its geographic
boundaries such residences, homes or other areas technically capable  of
receiving  the  simulcast signal shall be a contracting party; (iii) the
distribution  of  revenues  shall be subject to contractual agreement of
the parties except that statutory payments to  non-contracting  parties,
if  any,  may  not be reduced; provided, however, that nothing herein to
the contrary shall prevent a track  from  televising  its  races  on  an
irregular basis primarily for promotional or marketing purposes as found
by  the board. For purposes of this paragraph, the provisions of section
one thousand thirteen of this article shall  not  apply.  Any  agreement
authorizing  an  in-home simulcasting experiment commencing prior to May
fifteenth, nineteen hundred ninety-five, may,  and  all  its  terms,  be
extended  until  June thirtieth, two thousand [eleven] TWELVE; provided,
however, that any party to such agreement may elect  to  terminate  such
agreement  upon  conveying  written  notice to all other parties of such
agreement at least forty-five days prior to the effective  date  of  the
termination,  via  registered  mail. Any party to an agreement receiving
such notice of an intent to terminate, may request the board to  mediate
between  the parties new terms and conditions in a replacement agreement
between the parties as will permit continuation of an in-home experiment
until June thirtieth, two thousand [eleven] TWELVE; and (iv) no  in-home
simulcasting  in  the  thoroughbred special betting district shall occur
without the approval of the regional thoroughbred track.
  S 2. Subparagraph (iii) of paragraph d of  subdivision  3  of  section
1007 of the racing, pari-mutuel wagering and breeding law, as amended by
section  2  of  part C of chapter 134 of the laws of 2010, is amended to
read as follows:
  (iii) Of the sums retained by a receiving track located in Westchester
county on races received from a franchised corporation, for  the  period
commencing January first, two thousand eight and continuing through June
thirtieth, two thousand [eleven] TWELVE, the amount used exclusively for
purses to be awarded at races conducted by such receiving track shall be
computed  as  follows: of the sums so retained, two and one-half percent
of the total pools. Such amount shall be increased or decreased  in  the
amount  of  fifty  percent of the difference in total commissions deter-
mined by comparing the total commissions available  after  July  twenty-
first,  nineteen hundred ninety-five to the total commissions that would
have been available to such track prior to July  twenty-first,  nineteen
hundred ninety-five.
  S  3.  The  opening  paragraph of subdivision 1 of section 1014 of the
racing, pari-mutuel wagering and breeding law, as amended by  section  3
of  part  C  of  chapter  134 of the laws of 2010, is amended to read as
follows:
  The provisions of this section shall govern the simulcasting of  races
conducted  at thoroughbred tracks located in another state or country on
any day during which a franchised corporation is conducting a race meet-
ing in Saratoga county at Saratoga  thoroughbred  racetrack  until  June
thirtieth,  two  thousand  [eleven]  TWELVE and on any day regardless of
whether or not a franchised corporation is conducting a race meeting  in
Saratoga county at Saratoga thoroughbred racetrack after June thirtieth,
two  thousand  [eleven] TWELVE.  On any day on which a franchised corpo-
ration has not scheduled a racing  program  but  a  thoroughbred  racing
corporation  located  within  the state is conducting racing, every off-
track betting corporation branch office and every simulcasting  facility
licensed  in  accordance  with  section  one  thousand  seven (that have
entered into a written agreement  with  such  facility's  representative

S. 2811                            96                            A. 4011

horsemen's  organization, as approved by the board), one thousand eight,
or one thousand nine of this  article  shall  be  authorized  to  accept
wagers  and  display  the live simulcast signal from thoroughbred tracks
located  in  another  state  or foreign country subject to the following
provisions:
  S 4. Subdivision 1 of section 1015 of the racing, pari-mutuel wagering
and breeding law, as amended by section 4 of part C of  chapter  134  of
the laws of 2010, is amended to read as follows:
  1.  The  provisions  of  this section shall govern the simulcasting of
races conducted at harness tracks located in another  state  or  country
during  the period July first, nineteen hundred ninety-four through June
thirtieth, two thousand [eleven] TWELVE.  This section  shall  supersede
all inconsistent provisions of this chapter.
  S  5.  The  opening  paragraph of subdivision 1 of section 1016 of the
racing, pari-mutuel wagering and breeding law, as amended by  section  5
of  part  C  of  chapter  134 of the laws of 2010, is amended to read as
follows:
  The provisions of this section shall govern the simulcasting of  races
conducted  at thoroughbred tracks located in another state or country on
any day during which a franchised corporation is not conducting  a  race
meeting in Saratoga county at Saratoga thoroughbred racetrack until June
thirtieth, two thousand [eleven] TWELVE.  Every off-track betting corpo-
ration branch office and every simulcasting facility licensed in accord-
ance  with  section  one thousand seven that have entered into a written
agreement with such facility's representative horsemen's organization as
approved by the board, one thousand eight or one thousand nine  of  this
article  shall be authorized to accept wagers and display the live full-
card simulcast signal of thoroughbred tracks (which may include  quarter
horse  or  mixed  meetings provided that all such wagering on such races
shall be construed to be thoroughbred races) located in another state or
foreign country, subject to the following provisions; provided, however,
no such written agreement shall be required of a franchised  corporation
licensed in accordance with section one thousand seven of this article:
  S  6. The opening paragraph of section 1018 of the racing, pari-mutuel
wagering and breeding law, as amended by section 6 of part C of  chapter
134 of the laws of 2010, is amended to read as follows:
  Notwithstanding  any  other  provision of this chapter, for the period
July twenty-fifth, two thousand one through September eighth, two  thou-
sand  [ten]  ELEVEN,  when a franchised corporation is conducting a race
meeting within the  state  at  Saratoga  Race  Course,  every  off-track
betting  corporation  branch  office  and  every  simulcasting  facility
licensed in accordance with section one thousand seven (that has entered
into a written agreement with such facility's representative  horsemen's
organization  as approved by the board), one thousand eight or one thou-
sand nine of this article shall  be  authorized  to  accept  wagers  and
display  the  live  simulcast signal from thoroughbred tracks located in
another state, provided that such facility shall accept wagers on  races
run  at  all  in-state  thoroughbred  tracks which are conducting racing
programs subject to the following provisions; provided, however, no such
written agreement shall be required of a franchised corporation licensed
in accordance with section one thousand seven of this article.
  S 7. Section 32 of chapter 281 of  the  laws  of  1994,  amending  the
racing, pari-mutuel wagering and breeding law and other laws relating to
simulcasting,  as  amended  by section 7 of part C of chapter 134 of the
laws of 2010, is amended to read as follows:

S. 2811                            97                            A. 4011

  S 32. This act shall take effect immediately and the  pari-mutuel  tax
reductions  in  section  six  of  this  act  shall  expire and be deemed
repealed on  July  1,  [2011]  2012;  provided,  however,  that  nothing
contained  herein  shall be deemed to affect the application, qualifica-
tion,  expiration,  or  repeal  of  any  provision of law amended by any
section of this act, and such provisions shall be applied  or  qualified
or  shall  expire  or be deemed repealed in the same manner, to the same
extent and on the same date as the case may be as otherwise provided  by
law;  provided  further, however, that sections twenty-three and twenty-
five of this act shall remain in full force and effect only until May 1,
1997 and at such time shall be deemed to be repealed.
  S 8. Section 54 of chapter 346 of  the  laws  of  1990,  amending  the
racing, pari-mutuel wagering and breeding law and other laws relating to
simulcasting  and the imposition of certain taxes, as amended by section
8 of part C of chapter 134 of the laws of 2010, is amended  to  read  as
follows:
  S  54.  This  act  shall  take  effect immediately; provided, however,
sections three through twelve of this act shall take effect  on  January
1, 1991, and section 1013 of the racing, pari-mutuel wagering and breed-
ing  law, as added by section thirty-eight of this act, shall expire and
be deemed repealed on July 1, [2011] 2012; and section eighteen of  this
act  shall take effect on July 1, 2008 and sections fifty-one and fifty-
two of this act shall take effect as of the same date as chapter 772  of
the laws of 1989 took effect.
  S  9.  Paragraph  (a)  of  subdivision 1 of section 238 of the racing,
pari-mutuel wagering and breeding law, as amended by section 10 of  part
C of chapter 134 of the laws of 2010, is amended to read as follows:
  (a)  The  franchised  corporation  authorized  under  this  chapter to
conduct pari-mutuel betting at a race meeting or races run thereat shall
distribute all sums deposited in any pari-mutuel pool to the holders  of
winning  tickets therein, provided such tickets be presented for payment
before April first of the year following the  year  of  their  purchase,
less  an  amount  which  shall be established and retained by such fran-
chised corporation of between twelve to  seventeen  per  centum  of  the
total  deposits in pools resulting from on-track regular bets, and four-
teen to twenty-one per centum of the total deposits in  pools  resulting
from on-track multiple bets and fifteen to twenty-five per centum of the
total  deposits in pools resulting from on-track exotic bets and fifteen
to thirty-six per centum of the total deposits in pools  resulting  from
on-track  super  exotic  bets, plus the breaks. The retention rate to be
established is subject to the prior approval of the racing and  wagering
board.  Such rate may not be changed more than once per calendar quarter
to be effective on the first day of the calendar quarter. "Exotic  bets"
and  "multiple  bets"  shall have the meanings set forth in section five
hundred nineteen of this chapter. "Super exotic  bets"  shall  have  the
meaning  set  forth  in  section  three hundred one of this chapter. For
purposes of this section, a "pick six bet" shall mean a  single  bet  or
wager on the outcomes of six races. The breaks are hereby defined as the
odd  cents over any multiple of five for payoffs greater than one dollar
five cents but less than five dollars, over  any  multiple  of  ten  for
payoffs  greater  than  five  dollars but less than twenty-five dollars,
over any multiple of twenty-five for payoffs  greater  than  twenty-five
dollars but less than two hundred fifty dollars, or over any multiple of
fifty  for  payoffs over two hundred fifty dollars. Out of the amount so
retained there shall be paid  by  such  franchised  corporation  to  the
commissioner  of  taxation and finance, as a reasonable tax by the state

S. 2811                            98                            A. 4011

for the privilege of conducting pari-mutuel betting on the races run  at
the  race  meetings  held  by such franchised corporation, the following
percentages of the total pool for regular and  multiple  bets  five  per
centum  of regular bets and four per centum of multiple bets plus twenty
per centum of the breaks; for  exotic  wagers  seven  and  one-half  per
centum  plus  twenty per centum of the breaks, and for super exotic bets
seven and one-half per centum plus fifty per centum of the  breaks.  For
the  period  June  first, nineteen hundred ninety-five through September
ninth, nineteen hundred ninety-nine, such tax on regular wagers shall be
three per centum and such tax on multiple wagers shall be two  and  one-
half  per  centum,  plus twenty per centum of the breaks. For the period
September tenth, nineteen  hundred  ninety-nine  through  March  thirty-
first,  two  thousand  one, such tax on all wagers shall be two and six-
tenths per centum and for the  period  April  first,  two  thousand  one
through December thirty-first, two thousand [eleven] TWELVE, such tax on
all  wagers  shall  be one and six-tenths per centum, plus, in each such
period, twenty per centum of the breaks. Payment to the New  York  state
thoroughbred  breeding  and  development  fund by such franchised corpo-
ration shall be one-half of one per centum of total daily on-track pari-
mutuel pools resulting from regular, multiple and exotic bets and  three
per  centum  of super exotic bets provided, however, that for the period
September tenth, nineteen  hundred  ninety-nine  through  March  thirty-
first,  two  thousand  one,  such payment shall be six-tenths of one per
centum of regular, multiple and exotic pools and for  the  period  April
first,  two  thousand  one  through  December thirty-first, two thousand
[eleven] TWELVE, such payment shall be seven-tenths of one per centum of
such pools.
  S 10. Subdivision 5 of section 1012 of the racing, pari-mutuel  wager-
ing  and breeding law, as amended by section 11 of part C of chapter 134
of the laws of 2010, is amended to read as follows:
  5. The provisions of this section shall expire and be  of  no  further
force and effect after June thirtieth, two thousand [eleven] TWELVE.
  S 11. This act shall take effect immediately.
  S 2. Severability clause. If any clause, sentence, paragraph, subdivi-
sion,  section  or  part  of  this act shall be adjudged by any court of
competent jurisdiction to be invalid, such judgment  shall  not  affect,
impair,  or  invalidate  the remainder thereof, but shall be confined in
its operation to the clause, sentence, paragraph,  subdivision,  section
or part thereof directly involved in the controversy in which such judg-
ment shall have been rendered. It is hereby declared to be the intent of
the  legislature  that  this  act  would  have been enacted even if such
invalid provisions had not been included herein.
  S 3. This act shall take effect immediately  provided,  however,  that
the  applicable effective date of Parts A through S of this act shall be
as specifically set forth in the last section of such Parts.

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