(ALBANY, NY) Senator Dale M. Volker announced that the New York State Senate today introduced a comprehensive energy plan that would provide $350 million in relief from high energy costs to small businesses to help them create and retain jobs. Like millions of New York homeowners, small businesses have cited high energy costs as a significant problem that is hurting their bottom lines.
In addition to announcing a plan helping small businesses, the Senate today passed an energy plan that would build on the recent $100 million increase in the Home Energy Assistance Program by providing heating assistance to more senior citizens, capping the State taxes on gasoline and encouraging energy conservation and development of alternative energy sources to lessen our dependency on foreign oil.
"We all are experiencing the financial toll that our families are enduring in dealing with the high costs of gasoline to run our cars, and natural gas and oil to heat our homes," said Senator Dale M. Volker. "Our energy plan lays out a realistic approach to helping the driving public at-large with reducing the cost of gasoline and provides needed financial relief to homeowners and renters in dealing with the ever-rising costs of heating their homes. I cannot emphasize enough the utmost importance in dealing with this financial crisis that is not only hurting our personal finances, but is damaging our state’s economy."
ENERGY COST RELIEF FOR SMALL BUSINESSES
Most of the new jobs in New York State are being created by small businesses. Small business owners have cited increasing energy costs as one of the biggest problems they face in staying competitive.
The centerpiece of the Senate energy plan would address that concern by providing a $350 million refundable tax credit that would help 386,000 eligible small businesses across New York State afford the rising cost of energy. Businesses with fewer than 20 employees would be eligible for the assistance. Businesses of this size employ about 1.4 million New Yorkers.
Under the plan, a credit of two cents per Kilowatt Hour (KwH) would be applied directly to eligible businesses’ tax liability, while businesses that do not owe taxes would receive a rebate check. The benefit level of two-cents per kilowatt hour approximates the rate benefit provided under the Power for Jobs program, which has proven to be one of the state’s most important economic development programs.
The Senate plan excludes businesses that already receive similar benefits through the Empire Zone and Power for Jobs programs. It also excludes sole proprietorships working out their residence.
The Senate plan will also eliminate the Petroleum Business Tax on non-residential heating fuel, further reducing energy expenses for small businesses by up to $7 million a year.
HELPING WITH HOME HEATING
The Senate today passed "Senior Heat" program legislation, which would provide $200 rebate checks to eligible senior citizen homeowners to help offset the cost of home heating. Seniors approved for the enhanced STAR school property tax rebate program (at least 65 years old with an annual income of less than $64,650) would be eligible for the Senior Heat program. The plan would also provide a $100 refundable State tax credit to eligible senior citizens who rent and pay for their heat. The program would provide an estimated $140 million in assistance to more than 640,000 senior homeowners and renters.
The Senate also acted on a resolution, sponsored by Senator Martin Golden (R-C-I, Brooklyn) asking the federal government to increase the contingency funding for the low income Home Energy Assistance Program (HEAP). New York State has received $15 million in 2005-06 contingency HEAP funding, compared to $42.4 million in contingency funding in 2004-05.
Last week, the Legislature passed a bill, now law, that will provide an additional $100 million in emergency funds for the Home Energy Assistance Program to ensure that seniors and low-income New Yorkers are able to afford to heat their homes this winter.
CAP GAS TAXES
The Senate will act today on a bill to place a cap on the State and local sales taxes on gasoline that would save consumers about $240 million annually as gas prices currently average nearly $2.60 per gallon, and all localities participate. The New York City council, and many other local government officials, have also asked the Senate to adopt a cap on gas sales taxes.
The Senate energy plan would cap the State and local sales tax on gasoline at a taxable value of $2 per gallon. The cap would save motorists an estimated $120 million annually in State sales taxes, if gas prices stay at about $2.60 per gallon. The cap covers the local sales tax on gas unless a local government votes to opt out of the cap. If all localities participate, the plan would generate another $120 million in savings.
SUSPEND NEW YORK CITY RESIDENTIAL FUEL TAX
The Senate also passed a bill (S.5984A), that would give New York City the option of suspending its local sales tax on residential home heating fuel for the months February, March and April of this year. It is estimated that suspending the city tax on heating fuel would save residents about $20 million.
In addition, the Senate will act next month on legislation (S.5979A), that would give New York City the option to completely eliminate the local sales tax on residential home heating fuel.
ENCOURAGING BIO FUEL PRODUCTION
The Senate will also passed today legislation (S.5846A), that would provide manufacturers of qualified bio-fuel products, primarily ethanol and bio-diesel, with a refundable tax credit. The credit would be 15 cents a gallon, capped at $2.5 million per plant, per year, for up to four years.
The Federal Government and industry experts estimate that drivers in New York State would see a minimum savings of eight cents a gallon at the pump if New York State could provide a substantial amount of the ethanol that will be required to be used by the new Federal Energy Act of 2005. It is estimated that the credit will save New York State taxpayers $600,000 in SFY 2006-07 and $10 million a year by SFY 2010-11. As more New York State produced bio-fuels are added to the mix of gasoline at the pump, consumers will see a further easing of gas prices.
ALTERNATIVE FUEL VEHICLES
The Senate will also passed legislation (S.5763B), that would extend through the end of 2006, the recently expired alternative fueled vehicle tax credit. The credit would apply to actual alternative fuels such as methanol, ethanol and fully electric vehicles. The bill also reestablishes a State sales tax exemption for the purchase of refueling property equipment. The bill is estimated to provide $3 million a year in credits through SFY 2007-08.
ALTERNATIVE ENERGY PROPERTY TAX EXEMPTION
The Senate also acted today on legislation to extend for four years, a law that allows localities and school districts to provide a full or partial exemption for real property taxes on land that contains alternative energy generation systems such as wind and solar power and farm waste to energy systems. Due to the fact that the Assembly has not passed similar legislation, this exemption expired on January 1, 2006.
ENERGY STAR EXEMPTION
The Senate also passed today on a measure to eliminate the State sales tax on insulating materials such as high efficiency windows, doors, weather-stripping, pipe sheathing and alternative energy systems in or attached to a building such as wind power or fuel cells. In addition, the bill would provide four sales tax free weeks (one per season) on a variety of energy star products, such as washers, dryers, refrigerators, dishwashers, furnaces and hot water heaters. These measures are estimated to save New York State taxpayers $40 million a year. (S.5970A)
ALTERNATIVE ENERGY EQUIPMENT
The Senate passed legislation (S.785A), that would provide a tax credit for businesses that install alternative energy equipment such as wind, solar or fuel cells. This bill would save New York State businesses $15 million a year beginning in SFY 2006-07.
The Senate passed legislation (S.5755B), that provides enhanced exemptions for Petroleum Business Taxes on qualifying aircraft flights. The aviation industry would save an estimated $7 million under the bill.