New York State Assembly Votes on Package of Energy Bills to Help Consumers with Rising Gas Prices

June 20, 2008

The New York State Assembly passed a package of five energy-related bills on June 18, 2008, designated to counteract the steadily rising gas prices and assist consumers with high home fuel costs.

“With today’s economic hardships, everything must be done to help New Yorkers. Fuel prices are out of control and are estimated to keep rising,” said Assemblywoman Sandy Galef, “These bills are vital to help our residents pay for oil and fuel and help alleviate some of the cost burden.”

In 2006, the Assembly and Senate passed a law that capped the states sales tax on gasoline at $2 per gallon saving New York motorists more than $250,000 a year. This cap on state sales tax has done little to lower the cost for consumers today. “Big Oil” has instead continued to produce record-high profits in the past two years while average New Yorkers have watched gas become harder and harder to afford. This legislative package is intended to address this problem with the big oil companies.

The first piece of legislation passed, A.11590, establishes a windfall recapture tax and windfall profits tax for oil companies, and creates the New York energy reinvestment account. This provides for the recapture of lost revenue of over $400 million to the state as a result of motor fuel prices not reflecting the State sales tax cap on motor fuel sales, and to tax the windfall profits of the major oil companies. Gasoline importers would have to pay a surcharge while the bill prohibits the surcharge being passed onto the consumers. The tax revenue caught would be put into the reinvestment account to help New Yorkers by enhancing existing home heating assistance, energy conservation, and weatherization programs. Based on the forecasted price of gasoline by the Energy Information Center, this new windfall-profit tax would be expected to generate $464 million to help the citizens of New York.

Bill A.11588 would stop gasoline stations from potentially cheating their customers through what is know as a “pump jump, when gasoline pumps do not accurately dispense the right amount of fuel being charged to consumers by retailers. In addition, a website would be established that would be updated regularly to inform consumers of the current retail prices for all grades of gasoline and diesel fuel sold at retail outlets throughout the state.

Another bill, A.10262B, would create a database, rating system, and test procedures of replacement tires. This database could then help consumers purchase the most energy-efficient tires for their cars.

Bill A.11589 will provide for fleet maintenance, fueling and driving regulations in order to reduce fuel consumed by New York State Office of General Services vehicles. In addition the light-duty vehicles purchased by state agencies, except for police and emergency vehicles, will be required to be alternative-fuel vehicles. The legislation will also require state agencies to make cost-effective purchases of zero-emission or low-emission medium-duty vehicles.

Finally, bill A.907B would allow gasoline retailers and distributors to purchase and sell unbranded motor fuel, thereby giving consumers the option of purchasing less expensive fuel.

Galef concluded, “This package of bills passed by the Assembly represents an important step to making sure that New Yorkers can better afford the costs of operating their vehicles and providing heat in their homes. It is critical to do everything possible to help protect consumers and these bills are a step in the right direction.”