Sec. 1. 36 MRSA §1752, sub-§9-B, as amended by PL 1997, c. 557, Pt. D, §1 and affected by §4 and Pt. G, §1, is further amended to read:

9-B. Production. "Production" means an operation or integrated series of operations engaged in as a business or segment of a business that transforms or converts personal property by physical, chemical or other means into a different form, composition or character from that in which it originally existed.

"Production" includes manufacturing, processing, assembling and fabricating operations that meet the definitional requisites, including biological processes that are part of an integrated process of manufacturing organisms or microorganic materials through the application of biotechnology. "Production" also includes the production of prepared foods, as defined in subsection 8-A.

"Production" does not include biological processes except as otherwise provided by this subsection, wood harvesting operations, or the severance of sand, gravel, oil, gas or other natural resources produced or severed from the soil or water, or activities such as cooking or preparing drinks, meals, food or food products by a retailer for retail sale. The foregoing are examples of activities that are not included within the term "production."

Sec. 2. 36 MRSA §1760, sub-§31, ķA, as amended by PL 2001, c. 714, Pt. Z, §1, is further amended to read:

A. For use by the purchaser directly and primarily in the production of tangible personal property intended to be sold or leased ultimately for final use or consumption or in the production of tangible personal property pursuant to a contract with the United States Government or any agency thereof, of the United States Government; for use by the purchaser in the operation of a hotel or rooming house; or, in the case of sales occurring after June 30, 2003, for use in the generation of radio and television broadcast signals by broadcast stations regulated under 47 Code of Federal Regulations, Part 73. This exemption applies even if the purchaser sells the machinery or equipment and leases it back in a sale and leaseback transaction. This exemption also applies whether the purchaser agrees before or after the purchase of the machinery or equipment to enter into the sale and leaseback transaction and whether the purchaser's use of the machinery