WILLIAM DONALD SCHAEFER, Governor Ch. 696

(ii) is not used in administration, management,
sales, or any other nonoperational activity;

(iii) at any stage of operation from the
handling of raw material or components on the production activity
site to the time the product is ready for delivery or storage, is
used:

1.  in a production activity; or

2.  for research and development, as
defined in § [11-216] 11-217 of this subtitle; and

(iv) except for a foundation to support other
machinery or equipment or for an item required to conform to an
air or water pollution law and normally considered part of real
property, is not installed so that it becomes real property; or

(2) a melting, smelting, heating, or annealing coke
oven, aluminum furnace, anode bake oven, electrolytic pot,
cathode, refractory, or other material used in relining and
rebuilding a furnace or oven.

11-217.

(a)  (1) In this section, "research and development" means:

(i) basic and applied research in the sciences
and engineering; and

(ii) the design [and], development, AND
GOVERNMENTALLY-REQUIRED PRE-MARKET TESTING of prototypes,
PRODUCTS, and processes.

(2) "Research and development" does not include:

(i) market research;

(ii) research in the social sciences or
psychology and other nontechnical activities;

(iii) routine product testing;

(iv) sales services; or

(v) technical and nontechnical services.

(b)  The sales and use tax does not apply to a sale of
material that is to:

(1) be consumed, mutilated, or tested to destruction
in research and development; or

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