N.Y. Governor Cuomo Vetoes Bioheat Bill On Financial Concerns

Having every bioheat oil user claim the fuel credit would cut into state tax revenues.

Published on: Jan 14, 2014

On Friday, New York State Governor Andrew Cuomo vetoed a bill requiring all heating oil sold for use in any building in New York State to contain at least 2% biodiesel because of concerns about the financial impact on the state budget. The requirement would have taken effect in New York City and Nassau, Rockland, Suffolk and Westchester counties on Oct. 1, 2014, and in the remainder of the state on July 1, 2015.

John Maniscalco, CEO of the New York Oil Heating Association, is disappointed with the veto and the reasons given for the bill rejection. "I'm somewhat confused at the Governor's reason for the veto of the expanded, statewide use of biodiesel as stipulated in Assembly bill 7906," he said.

N.Y. Governor Cuomo Vetoes Bioheat Bill On Financial Concerns
N.Y. Governor Cuomo Vetoes Bioheat Bill On Financial Concerns

"The Governor states that he supports the sponsors' goal of promoting a locally produced renewable fuel which would result in less air pollution and create new markets for agricultural products ... less air pollution and create new markets. Yet his veto message took exception to the fact that the bill did not take into consideration the fiscal impact on the state's treasury in regard to the 2% Clean Heating Fuel Tax Credit,"

Despite the veto, the bill could still be considered later in the state budget discussions for 2014-2015. Oil Price Information Service Analyst Edgar Ang notes that New York City began requiring all grades of heating oil to contain at least 2% biodiesel from October 2012. That mandate made New York City a leader in mandated biofuel use for heating.

Cuomo's stated reason for the veto
"I support the sponsors' goal of promoting a locally produced renewable fuel which would result in less air pollution and create new markets for agricultural products," explained Cuomo. "There's an existing Clean Heating Fuel Credit which proves a credit of $0.01 for every percent of biodiesel per gallon of heating oil purchased by taxpayers, not to exceed twenty cents per gallon."

This bill didn't take into account how the existing tax credit would be impacted by a new mandate requiring all consumers purchase at least 2% biodiesel, he adds. It could have a significant state fiscal impact because all consumers of heating oil would be able to claim a $0.02 credit for each gallon of heating oil purchased.

"This bill should be considered not in isolation, but in the broader context and framework of the upcoming 2014-2015 SFY budget discussions.

Information courtesy of Oil Price Information Service