The dramatic escalation in fuel prices over the past few months has affected everything from summer vacation plans to family budgets. Earlier this year I supported legislation that essentially caps the New York State sales tax on gasoline if prices exceed $2.00 per gallon. That law has provided short-term relief and received much media attention. But we need a plan for the future. That future lies in more affordable and cleaner-burning alternative fuel sources.
On July 31, Governor Pataki signed new legislation into law that will make it easier for New York drivers to obtain alternative fuels like biodiesel and ethanol. Because most gas stations are locked into distribution agreements with major fuel distributors, they have not been able to offer renewable fuels to consumers. The new law exempts such fuels from any contractual agreements, meaning gas stations can buy E85 – made up of 85 percent ethanol and 15 percent gasoline – as well as biodiesel, hydrogen and compressed natural gas from outlets other than their main distributors.
Once fully implemented, this law will serve a dual purpose. It will both increase the availability and demand for viable alternatives to high-priced gasoline and make it more feasible for New Yorkers to buy cars that run on domestically produced alternative fuels. This is clearly a win-win situation, as it will reduce fuel costs and help to protect the environment.
There are currently about 200,000 alternative fuel vehicles registered in New York, and most automakers at least have plans to offer more “flex fuel” models in the near future. This legislation will make it considerably easier for motorists to purchase alternative fuels, as well as encourage them to purchase environmentally-friendly vehicles.
During the past legislative session, we also passed several initiatives to provide energy tax relief. These will exempt alternative fuels from the Motor Fuel, Petroleum Business, Fuel Use and Sales and Use taxes. Also, most alternative fuels will be exempt from pre-paid sales taxes. Other measures will allow clean energy facilities to be granted Empire Zone status regardless of whether they are located in designated Zones and provide a Personal Income Tax credit for home owners who replace their home heating systems with certified Energy Star equipment.
Capping the gas tax has provided short-term relief, but this innovative legislation has New York on target as a leader in the production and use of alternative fuel sources. Both fiscally and environmentally, this is definitely a step in the right direction.