Representing New York's Heating Fuels Industry

State Legislative Update

By Michael Trunzo, Dir. of Government Affairs, Shenker Russo & Clark LLP

While the 2017 New York State Legislative Session officially came to an end on June 21, 2017, the summer months were filled with many meetings and discussions on the biodiesel blending legislation (S.5422-A, A6954-A) that passed both the Senate and Assembly and awaited gubernatorial action. On September 13, 2017, Governor Andrew Cuomo signed the bill into law as Chapter 315 of the Laws of 2017. Thus, as of July 1, 2018, all heating oil sold in Nassau, Suffolk and Westchester counties, as well as the City of New York, will be required to have a 5% blend of biodiesel. NYSEC, along with the National Biodiesel Board, worked tirelessly on this issue for the past several years and look forward to providing home heating oil consumers with the greener and cleaner burning BioHeat.

With Fall upon us, (which you would not know this by the current weather pattern), the focus in the State Capital begins to switch towards the 2018 Legislative Session. NYSEC has already begun to focus on next year's agenda; and while the full agenda is still under development, several items have already come to the forefront and will be on our list of priorities.

Tank Replacement Tax Credits and Heating System Rebate Programs
As previously reported, NYSEC and Shenker Russo & Clark will also be working this Fall with Senator Tom O'Mara, Chair of the Environmental Conservation Committee, regarding his legislation (S.6475) that would have required all heating oil tanks in New York State to be replaced with double wall tanks by 2020. While NYSEC was able to intercede to stop the legislation from proceeding last session, we will be working with Senator O'Mara and his staff to marry a proposal to replace older and, thus, leak prone tanks with either a homeowner personal income 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) was in place and it resulted in approximately 30,000 tanks being replaced. There is currently a proposal by State Senator Ken LaValle and Assemblyman Fred Thiele, (both from Long Island), to reinstate the heating oil tank replacement tax credit and NYSEC will attempt to bring these two proposals together as part of the State Budget process in the 2018 Legislative Session.

As an extension of the effort dealing with heating oil tanks, NYSEC will also pursue reinstatement of the NYS Oil Heat Rebate Program in 2018 as well. New York State used to provide a direct consumer rebate for the installation of new, high efficiency heating systems. The previous program, which operated from 1987 thru 1993, provided some $3.36 million in rebates ranging from $140 - $180, resulting in over 22,000 system upgrades.

Carbon Taxes
NYSEC previously reported on the Carbon Tax Initiative coming from 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 looking at electric power generation as the large target for carbon emission reduction, NYSEC needs to be wary of the proposal expanding to all fossil fuel uses. The current discussion revolves around a $40 per ton carbon tax on fuel used for power generation, but if that tax were to find its way to the home heating sector, it would increase heating oil prices by 40 cents per gallon. Shenker Russo & Clark have already engaged energy officials in the Governor's office and Executive Agencies to monitor this proposal and its potential impact within the state.

Fill Pipe Conversion Legislation
NYSEC and SRC continue to work on fill pipe conversion legislation to address the issue of erroneous fills which cause spills in basements. As you may recall, legislation was introduced to address the proper abandonment of tanks and fill pipes upon conversion from heating oil to another fuel. The bill's sponsor was not aware that New York State Law, NFPA and State Building Code already require proper abandonment of the heating oil tank and the permanent closure of the fill pipe to avoid erroneous deliveries. NYSEC helped draft a new version of this legislation that would require the certification of proper abandonment BEFORE any conversion to another fuel can be put into service. Senator Phil Boyle and Assemblyman Chuck Lavine have introduced this legislation (S.646-A / A.8659) and will work with NYSEC for its passage in the 2018 Legislative Session.

As the heating season begins, NYSEC and SRC will continue to build on the legislative agenda for the coming year and work diligently to represent your interests before New York State government.