TANK REPLACEMENT TAX CREDITS AND BURNER REBATE PROGRAMS
As noted earlier, NYSEC was able to intercede to stop any tank removal legislation from proceeding last session and is working with Senator O'Mara and others to institute either a consumer tax credit or rebate to help cover the costs of the tank replacement. From 2000 through 2004, a heating oil tank replacement $500 tax credit (valued at $15 million) existed, which resulted in approximately 30,000 tanks being replaced.
As part of the effort on heating oil tanks, NYSEC will also pursue the reinstatement of the NYS Oil Burner Rebate Program in 2018 as well. New York State used to provide a personal homeowner rebate for the installation of new, high efficiency heating systems. The previous program, which operated from 1987 through 1993, provided some $3.36 million in rebates ranging from $140 - $180, resulting in over 22,000 oil heating system upgrades. In lieu of a rebate, we will additionally pursue a $500 personal income tax credit for every heating system upgrade to a more efficient and cleaner system...which has the additional benefit of further reducing the oil heating industry's carbon footprint.
NYSEC has asked Shenker Russo & Clark (SRC) to monitor the Carbon Tax initiative currently being discussed by the New York Independent System Operator (NYISO) and the NYS Public Service Commission (PSC) to tax carbon used for electric power generation. No state in the country has yet to adopt a carbon tax, although many proposals have been advanced. A ballot referendum in the State of Washington failed to win public support last year, and the New England states of Vermont, Connecticut, and Rhode Island all have current legislation under consideration.
While the NYISO and PSC are developing a work plan for the implementation of a carbon tax on electric power generation as a component of the state's effort to reduce carbon emissions, NYSEC is wary of the proposal expanding to all fossil fuel uses, especially since there is pending legislation for a full-scale carbon tax. As previously reported, the current discussion involves a tax of approximately $40 per ton on fuel used for power generation; however, if that tax were to find its way to the home heating sector, it is estimated that it would increase heating oil prices by some 40 cents per gallon. NYSEC and Shenker Russo and Clark have already engaged energy officials in the Governor's office and Executive Agencies to carefully monitor this proposal and its potential impact on our industry and our customers throughout the state.
ELIMINATION OF THE NYS PETROLEUM BUSINESS TAX
Over 75,000 small businesses in New York State rely on heating oil for space heating and are subject to the petroleum business tax (PBT). The PBT rate is currently 5.2 cents-per-gallon plus applicable state and local sales taxes. It should be noted, however, that natural gas used for space heating is not subject to the PBT. This discriminatory tax on commercial heating oil needs to be eliminated. By eliminating the PBT on non-residential space heating, the state will help lower operating costs for thousands of small businesses.
LIEN LAW LEGISLATION
The Lien Law is intended to protect the value of services rendered to real property. Heating oil dealers provide a crucial service to commercial buildings and apartment buildings that use heating oil or kerosene as a source of heat, hot water, or for forms of energy or power. However, heating oil dealers are not permitted by law to file a lien against real property owners for non-payment of fuel deliveries. On the other hand, natural gas utilities do have the right to file liens and are paid owed bills. Thus, heating oil dealers are frequently unable to collect monies owed to them by commercial building owners for delivered heating oil, either as a result of the transfer of ownership of a building or because the legal costs of recovering amounts owed through court proceedings oftentimes outweigh the value of the monies owed.
As a result, heating oil dealers are often denied remuneration for the fuel that they have provided to nonpaying buildings. The shortfalls experienced by heating oil dealers, as a result of nonpayment, can lead to higher heating costs for all customers that do pay for their fuel oil bills. NYSEC will propose legislation that would permit heating oil dealers to seek recovery of monies owed to them for the delivery of heating fuel or kerosene to commercial properties or large apartment buildings through the filing of a lien to collect for previously delivered fuel oil. Allowing heating oil dealers to file a lien for oil delivered would correct the current inequity created by the nonpayment by commercial building owners. Further, it will give oil dealers the ability to collect old past due oil bills, particularly when the building is sold to a new owner.
NEW YORK NORA
The National Oilheat Research Alliance (NORA) is a national check-off program established in 2000. It provides funding equal to two-tenths of one cent per gallon of home heating oil sold nationally to help advance home heating fuel research & development (R&D), energy efficiency, technician and industry training, and consumer education. New York State is the largest consumer of home heating oil in the country. Advances in R&D and heating system energy efficiency have allowed a very large number of consumers to lower their home heating use by more than 40% over the past decade. Yes, NORA programs have helped the average homeowner/consumer go from using 1,200 gallons to approximately 700 gallons, on-average per year!! Establishing a NYS NORA program at one-tenth of a cent per gallon would allow the home heating oil industry in New York to complement the efforts afforded the industry from the federal program. Similar to the federal program, the NYS NORA proposal would provide for additional R&D, energy efficiency programs, industry training and consumer education.