On June 13, 2008 the New York Assembly introduced a bill, A11590, to impose a windfall recapture tax on oil companies, the proceeds of which would generate up to $550 million to supplement the Home Energy Assistance Program (HEAP) and up to $550 million to create a new state Energy Reinvestment Account, proceeds of which would be used to improve energy efficiency in the state.
The recapture tax is premised on a finding that “capping the motor fuel sales tax has failed to provide the people of the state the savings that should have materialized due to unnecessary price inflation.” Oil companies would be prohibited from passing through the windfall recapture taxes to consumers.
The first $550 million generated by the windfall recapture tax would be used to supplement HEAP, half to increase benefits in the existing program, and half to create a new eligibility tier for households with incomes slightly above the current HEAP program guidelines.
After supplementing the HEAP program, up to $550 million would be appropriated by the legislature from the new Energy Reinvestment Fund to augment home weatherization and other energy efficiency programs.
The Assembly bill addresses the reality that rising costs of gasoline, heating oil, natural gas, and electricity are placing heavy energy burdens on low and moderate income New York households. See Wages of 30% of New Yorkers Do Not Cover Minimum Needs. Those burdens may increase further by next winter. See Home Heating Oil Prices Remain High and High Natural Gas Prices Signal Trouble Next Winter for Low Income Customers. It also addresses the need for a major initiative to increase the energy efficiency of New York’s housing stock with cost effective investment in energy efficiency measures, and stands in contrast to the lack of action at the federal level to address home energy affordability and efficiency. See Bush Proposes LIHEAP Cuts in 2009 Budget, and Bush Proposes Elimination of Low Income Home Weatherization Program.
The Assembly announced in a June 17 press release and at a press conference that the bill is part of a larger package of energy bills the Assembly expects to act upon soon.
The Assembly Speaker indicated that the Assembly initiatives could be enacted in a subsequent special session if they are not enacted now, as the regular session of the Legislature nears an end. The state Senate previously announced a proposal to provide energy tax credits to homeowners; the Governor has not addressed the issue of rising home energy costs and energy burdens.