S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   3675
 
                        2025-2026 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             January 29, 2025
                                ___________
 
 Introduced  by  M.  of  A.  SIMON,  KELLES, LEVENBERG, SEAWRIGHT, STERN,
   GONZALEZ-ROJAS,  SHIMSKY,  GALLAGHER,  BARRETT,  ROSENTHAL,   EPSTEIN,
   SIMONE,  JACKSON,  STIRPE,  HEVESI, GLICK, FORREST, REYES, KIM, STECK,
   SHRESTHA, DINOWITZ, BICHOTTE HERMELYN, COLTON, BURDICK, TAPIA, RAGA --
   Multi-Sponsored by -- M. of A. DAVILA -- read once and referred to the
   Committee on Economic Development
 
 AN ACT to amend the tax law, in relation to  eliminating  property  that
   directly produces, transmits, distributes, transports or stores fossil
   fuels from qualifying tangible property for purposes of the investment
   tax  credit  and the Brownfield redevelopment tax credit; to amend the
   tax law, in relation to tax on  sales  of  motor  fuel  and  petroleum
   products  and  to  make  conforming  changes; to amend the tax law, in
   relation to taxes not authorized and the disposition  of  revenue;  to
   repeal  paragraph  3 of subdivision (f) and paragraph 4 of subdivision
   (g) of section 301-a of the tax law relating to  manufacturing  gallo-
   nage for purposes of the imposition of certain taxes; to repeal subdi-
   visions  (i), (j), and (l) of section 301-c of the tax law relating to
   reimbursement; to repeal section 301-d of the tax law  relating  to  a
   utility  credit or reimbursement; to repeal subdivision (f) of section
   301-e of the tax law relating  to  an  aviation  fuel  business  which
   services four or more cities; to repeal subparagraph (xi) of paragraph
   3  of  subdivision  (c)  of  section  1105  of the tax law relating to
   services rendered with respect to  certain  property;  and  to  repeal
   paragraph 9 of subdivision (a) of section 1115 of the tax law relating
   to fuel sold to an airline for use in its airplanes
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Short title. This act shall be known and may  be  cited  as
 the "Stop Climate Polluter Handouts Act".

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD06545-02-5
 A. 3675                             2
 
              

   §  2.  Subdivision  (m)  of  section 301-a of the tax law, as added by
 section 20 of part K of chapter 61 of the laws of 2011,  is  amended  to
 read as follows:
   (m)  Special  rate adjustment for certain 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] THREE 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,  however,
 that  the  commissioner  shall require such documentary proof to qualify
 for any credit or reimbursement provided hereunder as  the  commissioner
 deems appropriate.
   § 3. Paragraph 3 of subdivision (f) and paragraph 4 of subdivision (g)
 of section 301-a of the tax law are REPEALED.
   §  4. Subdivisions (a) and (d) of section 301-b of the tax law, subdi-
 vision (a) as added by chapter 190 of the laws of 1990, paragraph  5  of
 subdivision  (a)  as amended by section 3 of part E of chapter 59 of the
 laws of 2012, paragraphs 6, 7 and 8  of  subdivision  (a)  as  added  by
 section  4  of part W-1 of chapter 109 of the laws of 2006, and subdivi-
 sion (d) as amended by section 21 of part K of chapter 61 of the laws of
 2011, are amended to read as follows:
   (a) Products. (1) [Kerosene sold or used by a petroleum business which
 is registered under article twelve-A of this chapter as a distributor of
 diesel motor fuel so long as (i) such product has not  been  blended  or
 mixed  with  any  other  product constituting diesel motor fuel or motor
 fuel or a residual petroleum product and (ii) such product is  not  used
 by  the petroleum business as fuel to operate a motor vehicle or sold by
 such petroleum business to a consumer for use as fuel to operate a motor
 vehicle.
   (2) Kero-jet fuel (i) sold by a petroleum business which is registered
 under article twelve-A of this chapter as a distributor of diesel  motor
 fuel  to  a  consumer  for  use exclusively as jet aircraft fuel or to a
 petroleum business registered under such article twelve-A as a "distrib-
 utor 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, (ii) used by a petroleum business, registered
 under article twelve-A of this chapter as a distributor of diesel  motor
 fuel,  exclusively  as jet aircraft fuel, or (iii) sold at retail not in
 bulk by a petroleum business registered under article twelve-A  of  this
 chapter  as  a  "distributor  of  kero-jet fuel only" where such fuel is
 delivered directly into the fuel tank of a jet airplane for use  in  the
 operation of such airplane.
   (3)] Aviation gasoline, meeting the specifications set forth in Ameri-
 can  Standard Testing Material Specification D910 or Military Specifica-
 tion MIL-G-5572, which is imported or caused to be  imported  into  this
 state by a petroleum business which is registered under article twelve-A
 of  this  chapter  as  a distributor of motor fuel or produced, refined,
 manufactured or compounded in this state by such a petroleum business.
   [(4) Residual petroleum product sold by a  petroleum  business  regis-
 tered  under  this  article  as a residual petroleum product business if
 such product is sold by such petroleum business to a  consumer  for  use
 A. 3675                             3

 exclusively  as  bunker  fuel  for vessels or if such product is used by
 such petroleum business exclusively as bunker fuel in its own vessels.
   (5)] (2) Liquefied petroleum gases, such as butane, ethane or propane,
 USED  FOR  PURPOSES OTHER THAN AS MOTOR FUEL IN THE OPERATION OF A MOTOR
 VEHICLE OR FOR USE IN THE OPERATION OF A PLEASURE OR RECREATIONAL  MOTOR
 BOAT OR USING OR CONSUMING LIQUEFIED PETROLEUM GAS FOR SUCH PURPOSE.
   [(6)]  (3)  E85  imported  or caused to be imported into this state or
 produced, refined, manufactured or compounded in this state by a  petro-
 leum  business  registered  under article twelve-A of this chapter, as a
 distributor of motor fuel, and then sold by such petroleum business  and
 delivered  to  a  filling  station  and placed in a storage tank of such
 filling station for such E85 to be dispensed directly into a motor vehi-
 cle for use in the operation of such vehicle.
   [(7)] (4) (i) Partial B20 exemption. B20  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, and
 then sold by such petroleum business.
   (ii)  Calculation  of  partial  exemption.  The  amount of the partial
 exemption under this paragraph shall be determined  by  multiplying  the
 quantity  of  B20 times twenty percent of the applicable taxes otherwise
 imposed by this article on such fuel.
   [(8)] (5) CNG or hydrogen.
   (d) Sales to consumers for heating purposes. [(1)]  Total  residential
 heating  exemption.  Non-highway  diesel  motor fuel sold by a petroleum
 business registered under article twelve-A of this chapter as a distrib-
 utor of diesel motor fuel or residual petroleum product sold by a petro-
 leum business registered under this  article  as  a  residual  petroleum
 product  business  to  the  consumer exclusively for residential heating
 purposes only if 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 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.
   [(2) Partial non-residential heating exemption. (A) 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  resi-
 dual  petroleum  product  sold  by a petroleum business registered under
 this article as a residual petroleum product business  to  the  consumer
 exclusively for heating, other than residential heating purposes only if
 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  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  (B)  Calculation
 of  partial  exemption. The partial exemption under this paragraph shall
 be determined by multiplying 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.]
   §  5.  The  subdivision  heading and paragraph 1 of subdivision (c) of
 section 301-b of the tax law, as added by chapter 190  of  the  laws  of
 1990, are amended to read as follows:
   Sales  to  [New York state and] the federal government. (1) Motor fuel
 imported or caused to be imported into this state or produced,  refined,
 A. 3675                             4
 
 manufactured  or compounded in this state by a petroleum business regis-
 tered under article twelve-A of this chapter, as a distributor of  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 motor fuel is used by such
 organization for its own use or consumption.
   § 6. The opening paragraph and subdivisions (a)  and  (b)  of  section
 301-c  of  the tax law, the opening paragraph as amended by section 2 of
 part T of chapter 59 of the laws of 2022, subdivision (a) as amended  by
 section  23 of part K of chapter 61 of the laws of 2011, and subdivision
 (b) as amended by chapter 330 of the laws of 1991, are amended  to  read
 as follows:
   A subsequent purchaser shall be eligible for reimbursement of tax with
 respect  to the following gallonage, subsequently sold by such purchaser
 in accordance with subdivision (a), (b), (e), (h),  [(j),  (k),  (n)  or
 (o)]  (I),  (K)  OR  (L)  of  this  section or used by such purchaser in
 accordance with subdivision (c), (d), (f), (g), [(i), (l), (m)]  (J)  or
 [(q)]  (N)  of  this  section,  which gallonage has been included in the
 measure of the tax imposed by this article on a petroleum business:
   (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.
   [(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
 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.
   (B) Calculation of partial reimbursement.  Notwithstanding  any  other
 provision  of  this  article, the amount of the reimbursement under this
 paragraph shall be determined by multiplying the quantity of non-highway
 A. 3675                             5

 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 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 non-highway diesel motor fuel rate, as the case  may
 be.]
   (b)  Sales  to [New York state and] the federal government. Motor fuel
 and diesel motor fuel purchased in this state and sold by such purchaser
 in this state to an organization described in paragraph [one or] two  of
 subdivision  (a) of section eleven hundred sixteen of this chapter where
 (i) such motor fuel or diesel motor fuel is for such organization's  own
 use  or  consumption,  (ii) the tax imposed pursuant to this article has
 been paid with respect to such motor fuel or 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 of taxation and finance evidencing the absorption by  it  of  the
 entire  amount  of  the  tax imposed pursuant to this article. Provided,
 however, that the commissioner [of taxation and finance]  shall  require
 such  documentary proof to qualify for any reimbursement of tax provided
 by this section as the commissioner  deems  appropriate,  including  the
 expansion  of any certification required pursuant to section two hundred
 eighty-five-a or two hundred eighty-five-b of this chapter to cover  the
 taxes imposed pursuant to this article.
   §  6-a.  The  opening  paragraph  of  section 301-c of the tax law, as
 amended by section 3 of part T of chapter 59 of the  laws  of  2022,  is
 amended to read as follows:
   A subsequent purchaser shall be eligible for reimbursement of tax with
 respect  to the following gallonage, subsequently sold by such purchaser
 in accordance with subdivision (a), (b), (e), (h), [(j)] or [(k)] (I) of
 this section or used by such purchaser in  accordance  with  subdivision
 (c),  (d),  (f),  (g), [(i), (l), (m)] (J) or [(q)] (N) of this section,
 which gallonage has been included in the measure of the tax  imposed  by
 this article on a petroleum business:
   § 7. Subdivisions (i), (j) and (l) of section 301-c of the tax law are
 REPEALED.
   §  8. Subdivisions (k), (m), (n), (o), (p) and (q) of section 301-c of
 the tax law are relettered subdivisions (i), (j), (k), (l), (m) and (n).
   § 9. Section 301-d of the tax law is REPEALED.
   § 10. Subdivision (f) of section 301-e of the tax law is REPEALED.
   § 11. Subdivision (a) of section 301-j of the tax law, as  amended  by
 chapter  309 of the laws of 1996, paragraphs 1, 2, 3 and 4 as amended by
 section 29 of part K of chapter 61 of the laws of 2011,  is  amended  to
 read as follows:
   (a)  Imposition  of  tax.  (1)  In  addition  to  the taxes imposed by
 sections three hundred one-a and three hundred one-e  of  this  article,
 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 supple-
 mental  monthly tax for each or any part of a taxable month at a rate of
 six and eight-tenths cents per  gallon  with  respect  to  the  products
 included  in  each  component of the taxes imposed by such section three
 hundred one-a and the aviation gasoline component of the tax imposed  by
 such section three hundred one-e of this article.
 A. 3675                             6
 
   (2)  [Provided,  however,  "commercial  gallonage,"  as  such  term is
 defined in subdivision (k) of section three  hundred  of  this  article,
 shall be exempt from the measure of the tax imposed under this section.
   (3)]  Provided, further, "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)]  (3)  Provided,  further, a separate per gallon rate shall apply
 with respect to highway diesel motor fuel. Such 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 paragraph [five]
 FOUR of this subdivision and subtracting therefrom one  and  three-quar-
 ters  cents.    Commencing  January first, two thousand twelve, and each
 January thereafter, the per gallon rate  applicable  to  highway  diesel
 motor fuel shall be the adjusted rate under paragraph one of this subdi-
 vision  as  adjusted  in  accordance  with paragraph [five] FOUR of this
 subdivision which commences on such date minus  one  and  three-quarters
 cents.  The  resulting  rate  under this paragraph shall be expressed in
 hundredths of a cent.
   [(5)] (4) Except as  herein  provided,  the  tax  imposed  under  this
 section  shall  be calculated in the same respective manner as the taxes
 imposed by section three hundred one-a and section three  hundred  one-e
 of  this article. Except [for section three hundred one-d and except] as
 otherwise provided in this section, all the provisions of  this  article
 applicable  to  the  taxes  imposed  by sections three hundred one-a and
 three hundred one-e of this article, shall apply  with  respect  to  the
 supplemental  tax  imposed  by  this section to the same extent as if it
 were respectively imposed by such sections.
   § 12. Subparagraphs (ix) and (x) of paragraph 3  and  paragraph  5  of
 subdivision  (c)  of  section  1105 of the tax law, subparagraph (ix) of
 paragraph 3 as added by chapter 395 of the laws  of  1998,  subparagraph
 (x)  of  paragraph  3 as added by section 1 of part FF of chapter 407 of
 the laws of 1999, and paragraph 5 as amended by chapter 321 of the  laws
 of 2005, are amended to read as follows:
   (ix) [such services rendered with respect to tangible property used or
 consumed directly and predominantly in the production for sale of gas or
 oil  by  manufacturing,  processing,  generating,  assembling, refining,
 mining, or extracting.
   (x)] such services rendered with  respect  to  property  described  in
 paragraph  twelve-a of subdivision (a) of section eleven hundred fifteen
 of this article.
   (5) Maintaining, servicing or repairing  real  property,  property  or
 land,  as  such  terms are defined in the real property tax law, whether
 the services are performed in or outside of a building, as distinguished
 from adding to or improving such real property, property or land,  by  a
 capital improvement as such term capital improvement is defined in para-
 graph  nine  of  subdivision  (b)  of section eleven hundred one of this
 article, but excluding (i) services rendered by an individual who is not
 in a regular trade or business offering [his] SUCH INDIVIDUAL'S services
 to the public, (ii) [services rendered directly  with  respect  to  real
 property,  property  or land used or consumed directly and predominantly
 in the production for sale of gas or oil by  manufacturing,  processing,
 generating, assembling, refining, mining, or extracting, (iii)] services
 rendered  with  respect  to  real  property,  property  or  land used or
 consumed predominantly either in the  production  of  tangible  personal
 property,  for sale, by farming or in a commercial horse boarding opera-
 tion, or in both and [(iv)] (III) services of removal of waste  material
 A. 3675                             7
 
 from  a  facility  regulated  as  a transfer station or construction and
 demolition debris processing facility by the department of environmental
 conservation, provided that the waste material to  be  removed  was  not
 generated by the facility.
   §  13.  Subparagraph (xi) of paragraph 3 of subdivision (c) of section
 1105 of the tax law is REPEALED.
   § 14. Paragraph 9 of subdivision (a) of section 1115 of the tax law is
 REPEALED.
   § 15. Paragraphs 3 and 4 of subdivision (a) of section 1221 of the tax
 law, paragraph 3 as amended by chapter 2 of the laws of 1995  and  para-
 graph  4  as  added by chapter 93 of the laws of 1965, are amended and a
 new paragraph 5 is added to read as follows:
   (3) except in accordance with the provisions of  section  twenty-b  of
 the  general city law, a tax upon gross incomes, gross operating incomes
 or gross receipts of persons subject to taxation under the provisions of
 section one hundred eighty-six-a or one  hundred  eighty-six-e  of  this
 chapter,  but  this  clause shall not be deemed to restrict the power to
 tax persons not subject to taxation under such section of  this  chapter
 who  are  otherwise subject to taxation under subdivision (a) of section
 twelve hundred one OF THIS ARTICLE, nor the power to provide for credits
 against any tax imposed pursuant to such subdivision, nor to  limit  the
 rates of taxes authorized to be imposed by such subdivision [(a) of such
 section twelve hundred one], [or]
   (4)  a tax upon interest or dividends received from a corporation by a
 person referred to in this section[.], OR
   (5) A TAX ON FUEL SOLD TO AN AIRLINE FOR USE IN ITS AIRPLANES.
   § 16. Section 1148 of the tax law is amended by adding a new  subdivi-
 sion (d) to read as follows:
   (D)  PROVIDED,  HOWEVER, BEFORE SUCH FUNDS ARE DISTRIBUTED PURSUANT TO
 SUBDIVISION (A) OF THIS SECTION, ANY REVENUE  COLLECTED  BY  THE  STATE,
 FROM FUEL SOLD TO AN AIRLINE FOR USE IN ITS AIRPLANES, UNDER THE AUTHOR-
 ITY  GRANTED  TO  THE  STATE  BY  THIS ARTICLE SHALL BE DEDICATED TO THE
 AVIATION PURPOSE ACCOUNT OF THE DEDICATED HIGHWAY AND BRIDGE TRUST FUND,
 PROVIDED THAT THE PORTION FOR THE  AIRPORT  OR  AVIATION  STATE  PROGRAM
 SHALL BE NO LESS THAN FORTY MILLION DOLLARS ANNUALLY, WITH THE REMAINING
 REVENUE  COLLECTED  FROM  SUCH  TAXES  BEING  DEDICATED  TO  THE CAPITAL
 PROJECTS FUND FOR AVIATION PURPOSES REQUIRED IN CONNECTION THEREWITH  OF
 AIRPORTS AND AVIATION FACILITIES, EQUIPMENT AND RELATED PROJECTS.
   §  17.  Paragraph  (ii)  of subdivision (b) of section 1115 of the tax
 law, as amended by section 30 of part Y of chapter 63  of  the  laws  of
 2000, is amended to read as follows:
   (ii)  [Gas,  electricity]  ELECTRICITY,  refrigeration  and steam, and
 [gas,] electric, refrigeration and steam service of whatever nature  for
 use  or consumption directly and exclusively in research and development
 in the experimental or laboratory sense shall be  exempt  from  the  tax
 imposed  under  subdivision  (b)  of section eleven hundred five and the
 compensating use tax imposed under section eleven hundred  ten  of  this
 article.  Such  research  and development shall not be deemed to include
 the ordinary testing or inspection of materials or products for  quality
 control,  efficiency  surveys,  management  studies,  consumer  surveys,
 advertising, promotions or research in connection with literary, histor-
 ical or similar projects.
   § 18. Paragraph 1 of subdivision (c) of section 1115 of the  tax  law,
 as  amended by section 7 of part B of chapter 63 of the laws of 2000, is
 amended to read as follows:
 A. 3675                             8
 
   (1) [Fuel, gas, electricity] ELECTRICITY, refrigeration and steam, and
 [gas,] electric, refrigeration and steam service of whatever nature  for
 use  or consumption directly and exclusively in the production of tangi-
 ble personal property, [gas,] electricity, refrigeration or  steam,  for
 sale,  by  manufacturing,  processing, assembling, generating, refining,
 mining or extracting shall be exempt from the taxes imposed under subdi-
 visions (a) and (b) of section eleven hundred five and the  compensating
 use tax imposed under section eleven hundred ten of this article.
   §  19.  Subdivision  (j) of section 1115 of the tax law, as amended by
 section 41 of part K of chapter 61 of the laws of 2011,  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] PARAGRAPH forty-
 two 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,] 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 but only if all of  such
 fuel  is  consumed  other than on the public highways of this state. The
 exemption provided in subdivision (c) of this  section  shall  apply  to
 sales  and  uses of non-highway diesel motor fuel for use or consumption
 either in the production for sale of tangible personal property by farm-
 ing 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 farm-
 lands or adjacent lands used in a commercial horse  boarding  operation,
 or both).
   §  19-a. Subdivision (j) of section 1115 of the tax law, as amended by
 section 41-a of part K of chapter 61 of the laws of 2011, 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 but only if all of such
 fuel is consumed other than on the public highways of  this  state.  The
 exemption  provided  in  subdivision  (c) of this section shall apply to
 sales and uses of non-highway diesel motor fuel for use  or  consumption
 either in the production for sale of tangible personal property by farm-
 ing  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
 A. 3675                             9
 
 state (except for the use of the public highways to reach adjacent farm-
 lands  or  adjacent lands used in a commercial horse boarding operation,
 or both).
   §  20.  Subdivision  (s)  of  section 1115 of the tax law, as added by
 chapter 201 of the laws of 1995, is relettered subdivision (p).
   § 21. Subdivision (w) of section 1115 of the  tax  law,  as  added  by
 section  32  of  part Y of chapter 63 of the laws of 2000, is amended to
 read as follows:
   (w) Receipts from the sale of [gas or] electricity or [gas  or]  elec-
 tric service of whatever nature and consideration given or contracted to
 be  given for, or for the use of, [gas or] electricity or [gas or] elec-
 tric service of whatever nature purchased for use or consumption direct-
 ly and exclusively to provide [gas  or]  electric  service  of  whatever
 nature  consisting of operating [a gas pipeline or gas distribution line
 or] an electric transmission or  distribution  line  [and  ensuring  the
 necessary working pressure in an underground gas storage facility] shall
 be exempt from sales and compensating use taxes imposed by this article.
 Such exempt [gas or] electricity or [gas or] electric service of whatev-
 er  nature  shall  include,  but  shall not be limited to, such [gas or]
 electricity or [gas or] electric service  of  whatever  nature  used  or
 consumed directly and exclusively to (1) [ensure necessary working pres-
 sure  in  a  gas pipeline used to transport, transmit or distribute gas,
 (2) operate compressors used to transport, transmit  or  distribute  gas
 through  such  a  gas  pipeline  or  distribution line or used to ensure
 necessary working pressure in such a storage facility, (3) operate heat-
 ers to prevent gas in such a pipeline or distribution line  from  freez-
 ing,  (4)  operate  equipment which removes impurities and moisture from
 gas in such a pipeline or distribution line,  (5)]  operate  substations
 and  equipment  related  to electric transmission and distribution lines
 such  as  transformers,  capacitors,  meters,  switches,   communication
 devices  and  heating  and  cooling  equipment, and [(6)] (2) ensure the
 reliability of electricity or electric service transmitted  or  distrib-
 uted  through  such  lines,  for  example, by operating reserve capacity
 machinery and equipment.
   § 22. Subdivision (k) of section 300 of the tax  law,  as  amended  by
 section  17  of  part K of chapter 61 of the laws of 2011, is amended to
 read as follows:
   (k) "Commercial gallonage" means gallonage (1)  which  is  non-highway
 diesel  motor fuel or residual petroleum product, (2) [which is included
 in the full measure of the 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, (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 "manufactur-
 ing gallonage", as such term is  defined  in  subdivision  (m)  of  this
 section,  [(C)]  OR  (B)  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 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,]  and  [(4)]  (3)  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) "manufacturing exemption" under paragraph three of subdivision  (f)
 A. 3675                            10

 of  section  three  hundred one-a of this article, (iii)] not-for-profit
 organization exemption under subdivision (h) of  section  three  hundred
 one-b  of this article[, or (iv) heating exemption provided for in para-
 graph  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 documentary proof  to  substantiate  the
 classification  of product as "commercial gallonage" as the commissioner
 deems appropriate.
   § 23. Paragraph 1 of subdivision (f) of section 301-b of the tax  law,
 as amended by section 21 of part K of chapter 61 of the laws of 2011, is
 amended to read as follows:
   (1)  Residual petroleum product and non-highway diesel motor fuel sold
 to an electric corporation, [as described in subdivision (a) of  section
 three hundred one-d of this article,] AS DEFINED IN SUBDIVISION THIRTEEN
 OF  SECTION TWO OF THE PUBLIC SERVICE LAW, SUBJECT TO THE SUPERVISION OF
 THE DEPARTMENT OF PUBLIC SERVICE, which is registered with  the  depart-
 ment  as a petroleum business tax direct pay permittee, and used by such
 electric corporation to fuel generators for the purpose of manufacturing
 or producing electricity where such electric corporation provides a copy
 of a direct pay permit authorized and issued by the commissioner, 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 arti-
 cle, after the application 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 respon-
 sibilities and liabilities of taxpayers under this article with  respect
 to such residual petroleum product and non-highway diesel motor fuel.
   §  24. This act shall take effect immediately and shall apply to taxa-
 ble years commencing on or after the first of  January  next  succeeding
 the date on which it shall have become a law; provided, however, that:
   (a)  the  amendments  to  paragraphs  6, 7 and 8 of subdivision (a) of
 section 301-b of the tax law made by section four of this act shall  not
 affect the repeal of such paragraphs and shall be deemed repealed there-
 with;
   (b)  the  amendments  to the opening paragraph of section 301-c of the
 tax law made by section six of this act shall be subject to the  expira-
 tion  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 six-a of this act shall take effect;
   (c) the amendments to subdivisions (k) and (l) of section 301-c of the
 tax law made by section eight of this act shall not affect the repeal of
 such subdivisions and shall be deemed repealed therewith; and
   (d)  the  amendments to subdivision (j) of section 1115 of the tax law
 made by section nineteen 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 nineteen-a of this act shall take effect.