Tuesday, September 20, 2005

1 NEW YORK STATE SENATE 2 3 4 THE STENOGRAPHIC RECORD 5 6 7 8 9 ALBANY, NEW YORK 10 September 20, 2005 11 4:00 p.m. 12 13 14 REGULAR SESSION 15 16 17 18 LT. GOVERNOR MARY O. DONOHUE, President 19 STEVEN M. BOGGESS, Secretary 20 21 22 23 24 25

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(518) 371-8910 1 P R O C E E D I N G S 2 THE PRESIDENT: The Senate will 3 please come to order. 4 I ask everyone present to please 5 rise and repeat with me the Pledge of 6 Allegiance. 7 (Whereupon, the assemblage recited 8 the Pledge of Allegiance to the Flag.) 9 THE PRESIDENT: In the absence of 10 clergy, may we bow our heads in a moment of 11 silence, please. 12 (Whereupon, the assemblage 13 respected a moment of silence.) 14 THE PRESIDENT: Reading of the 15 Journal. 16 THE SECRETARY: In Senate, 17 Monday, September 19, the Senate met pursuant 18 to adjournment. The Journal of Sunday, 19 September 18, was read and approved. On 20 motion, Senate adjourned. 21 THE PRESIDENT: Without 22 objection, the Journal stands approved as 23 read. 24 Presentation of petitions. 25 Messages from the Assembly.

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(518) 371-8910 1 Messages from the Governor. 2 Reports of standing committees. 3 Reports of select committees. 4 Communications and reports from 5 state officers. 6 Motions and resolutions. 7 Senator Fuschillo. 8 SENATOR FUSCHILLO: Madam 9 President, may we please adopt the Resolution 10 Calendar, with the exception of Resolution 11 2764. 12 THE PRESIDENT: All in favor of 13 so adopting the Resolution Calendar please 14 signify by saying aye. 15 (Response of "Aye.") 16 THE PRESIDENT: Opposed, nay. 17 (No response.) 18 THE PRESIDENT: The Resolution 19 Calendar is so adopted. 20 Senator Fuschillo. 21 SENATOR FUSCHILLO: Thank you, 22 Madam President. There's a Resolution 2764 at 23 the desk, by Senator Hannon. May we please 24 have it read in its entirety and move for its 25 immediate adoption.

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(518) 371-8910 1 THE PRESIDENT: The Secretary 2 will read. 3 THE SECRETARY: By Senator 4 Hannon, Legislative Resolution memorializing 5 Governor George E. Pataki to proclaim 6 November 2005 as Lung Cancer Awareness Month. 7 "WHEREAS, Medical research is vital 8 to the current health care needs of all 9 citizens, and contributes to the advancement 10 of future medical breakthroughs; and 11 "WHEREAS, In its early stages, lung 12 cancer usually does not cause symptoms. When 13 symptoms occur, the cancer is often advanced; 14 and 15 "WHEREAS, Symptoms of lung cancer 16 include chronic cough, hoarseness, coughing up 17 blood, weight loss and loss of appetite, 18 shortness of breath, fever without a known 19 reason, wheezing, repeated bouts of bronchitis 20 or pneumonia and chest pains; and 21 "WHEREAS, Smoking is one of the 22 main contributors to lung cancer, with more 23 than 87 percent of all lung cancer attributed 24 to smoking tobacco. The more time and 25 quantity you smoke, the greater your risk of

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(518) 371-8910 1 lung cancer. But if you stop smoking, the 2 risk of lung cancer decreases each year as 3 normal replace abnormal cells; and 4 "WHEREAS, After ten years, the risk 5 drops to a level that is one-third to one-half 6 of the risk for people who continue to smoke. 7 In addition, quitting smoking greatly reduces 8 the risk of developing other smoking-related 9 diseases, such as heart disease, stroke, 10 emphysema and chronic bronchitis; and 11 "WHEREAS, Radon is considered to be 12 the second leading cause of lung cancer in the 13 United States today. Radon gas can come up 14 through the soil under a home or building and 15 enter through gaps and cracks in the 16 foundation or insulation, as well as through 17 pipes, drains, walls or other openings; and 18 "WHEREAS, Radon causes between 19 15,000 and 22,000 lung cancer deaths each year 20 in the United States -- 12 percent of all lung 21 cancer deaths are linked to radon; and 22 "WHEREAS, Another leading cause of 23 lung cancer is on-the-job exposure to 24 cancer-causing substances or carcinogens. 25 Asbestos is a well-known, work-related

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(518) 371-8910 1 substance that can cause lung cancer, but 2 there are many others, including uranium, 3 arsenic, and certain petroleum products; and 4 "WHEREAS, Peter Jennings, a 5 New York City resident and veteran newsman of 6 ABC 'World News Tonight,' died on Sunday, 7 August 7, 2005, some four months after he 8 announced on the air that he had been 9 diagnosed with lung cancer; and 10 "WHEREAS, Each year, nearly 11 1.4 million people are diagnosed with cancer, 12 and approximately 600,000 will perish from it. 13 Though there are many types of cancer, none 14 causes as much devastation as cancer of the 15 lung. In 2005, the American Cancer Society 16 estimates that 172,570 people will be 17 diagnosed with lung cancer in the United 18 States: 93,010 men and 79,560 women; and 19 "WHEREAS, Despite these staggering 20 numbers, lung cancer receives insufficient 21 awareness and attention from the research 22 community. It is imperative for our society 23 to concentrate on this particular matter; and 24 "WHEREAS, about 85 percent of lung 25 cancer cases are diagnosed in later stages of

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(518) 371-8910 1 the disease. If detected early, research 2 shows that the five-year survival rates could 3 reach 80 percent; and 4 "WHEREAS, This Legislative Body 5 urges all residents of New York State to make 6 themselves more aware of the risk of lung 7 cancer and to take measures to minimize those 8 risks in an effort to promote better health 9 and reduce the incidence of lung cancer; now, 10 therefore, be it 11 "RESOLVED, That this Legislative 12 Body pause in its deliberations to memorialize 13 Governor George E. Pataki to proclaim 14 November 2005 as Lung Cancer Awareness Month 15 in the State of New York; and be it further 16 "RESOLVED, That a copy of this 17 resolution, suitably engrossed, be transmitted 18 to The Honorable George E. Pataki, Governor of 19 the State of New York." 20 THE PRESIDENT: Senator Hannon. 21 SENATOR HANNON: Madam President, 22 I just wanted to say that this resolution 23 about memorializing the Governor to proclaim 24 November as Lung Cancer Awareness Month is 25 very important and we'd like to open this up

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(518) 371-8910 1 to cosponsorship by any of the other Senators. 2 THE PRESIDENT: Any Senator who 3 does not wish to cosponsor this resolution, 4 please notify the desk. 5 All in favor of the resolution 6 please signify by saying aye. 7 (Response of "Aye.") 8 THE PRESIDENT: Opposed, nay. 9 (No response.) 10 THE PRESIDENT: The resolution is 11 adopted. 12 Senator Fuschillo. 13 SENATOR FUSCHILLO: Madam 14 President, there is another resolution at the 15 desk, 2920, by Senator Paterson. May we 16 please have it read in its entirety and move 17 for its immediate adoption. 18 THE PRESIDENT: The Secretary 19 will read. 20 THE SECRETARY: By Senator 21 Paterson, Legislative Resolution Number 2920, 22 mourning the death of Sandra Feldman, former 23 president of the American Federation of 24 Teachers and nationally renowned union leader. 25 "WHEREAS, Sandra Feldman, president

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(518) 371-8910 1 of the American Federation of Teachers from 2 1997 to 2004, was recognized nationally as an 3 ardent and passionate leader of a national 4 union; and 5 "WHEREAS, Sandra Feldman's election 6 as AFT president followed a distinguished 7 30-year career with the United Federation of 8 Teachers as the 11-year president of this 9 New York City 110,000-member local; and 10 "WHEREAS, Sandra Feldman was a 11 tireless advocate for children, public 12 education and the labor movement, and a 13 powerful voice for the 1.3 million educators, 14 healthcare professionals, public employees and 15 retirees represented by the AFT, the nation's 16 second largest union; and 17 "WHEREAS, Sandra Feldman was a 18 nationally recognized champion of high 19 academic standards, rigorous teacher training, 20 universal preschool for young children and 21 extended kindergarten for disadvantaged 22 youngsters, redesigning schools for academic 23 improvement and research-backed programs to 24 raise student achievement; and 25 "WHEREAS, Sandra Feldman worked

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(518) 371-8910 1 with members of Congress and federal education 2 officials to write the education law known as 3 'No Child Left Behind,' which imposed stricter 4 performance standards on all schools receiving 5 federal aid; and 6 "WHEREAS, Sandra Feldman worked to 7 increase federal and state spending for 8 programs for young children in a program 9 called 'Kindergarten Plus'; and 10 "WHEREAS, Sandra Feldman, popularly 11 known as 'Sandy,' was an effective advocate 12 for the rights and concerns of nurses and 13 healthcare professionals, working to bring 14 public attention to the national nursing 15 shortage, patient rights and adequate staffing 16 levels in healthcare facilities; and 17 "WHEREAS, Sandra Feldman has been 18 in the forefront of efforts in Congress and in 19 state legislatures to support pro-education, 20 pro-worker measures, and adequate funding and 21 resources for pre-K through 12 and higher 22 education and public services; and 23 "WHEREAS, Continuing her history of 24 advocacy for civil rights and social justice 25 that began in the 1960s as an activist in the

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(518) 371-8910 1 Freedom Rides and in the 1963 March on 2 Washington for Jobs and Freedom, Sandra 3 Feldman spoke out against all forms of 4 discrimination; and 5 "WHEREAS, Sandra Feldman, aptly 6 described as a 'visionary,' was born of humble 7 means and grew up in a poor working-class 8 neighborhood in Brooklyn, New York. She was 9 the daughter of a milkman and a sickly woman 10 who worked part-time in a bakery. She 11 attended James Madison High School and studied 12 English at Brooklyn College, where she 13 immersed herself in socialist politics and 14 civil rights activities; and 15 "WHEREAS, Sandra Feldman was a 16 leading voice in the national and 17 international labor movement as a member of 18 the AFL-CIO Executive Council and a vice 19 president of Education International, 20 highlighting the needs of working 21 professionals and promoting universal 22 education for all children throughout the 23 world; and 24 "WHEREAS, It is the sense of this 25 Legislative Body to pay tribute to the lives

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(518) 371-8910 1 of those esteemed individuals of national 2 renown who distinguished themselves through 3 their life's work; now, therefore, be it 4 "RESOLVED, That this Legislative 5 Body pause in its deliberations to mourn the 6 September 18, 2005, death of our friend and 7 ally, labor leader Sandra Feldman, and be it 8 further 9 "RESOLVED, That a copy of this 10 resolution, suitably engrossed, be transmitted 11 to the family of Sandra Feldman." 12 THE PRESIDENT: Senator Paterson. 13 SENATOR PATERSON: Thank you, 14 Madam President. 15 Sadly, I stand before you, Madam 16 President, to mourn the death of Sandra 17 Feldman, born in 1939, who died yesterday 18 morning at 5:30, succumbing to cancer. After 19 two or three successful fights, she was unable 20 to stave off the last wave of cancer that 21 claimed her body. 22 Sandra Feldman's distinct career 23 started with her political participation when 24 she was a student at James Madison High 25 School. In her early twenties, she marched in

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(518) 371-8910 1 the famous Freedom Rides in the South, was 2 arrested twice in civil disobedience, fighting 3 for the rights of people who lived a long way 4 from where she lived, although she was raised 5 in a poor family in Brooklyn, New York. 6 Sandra went on to become the head 7 of the United Federation of Teachers for 8 11 years, and then for 25 years head of the 9 American Federation of Teachers, succeeding 10 the late and very great Albert Shanker. 11 She was someone, to those of us who 12 knew her very well -- and I knew her extremely 13 well -- always thinking, always participating, 14 always trying to find a way to make the world 15 a better place. 16 There are a lot of very effective 17 union leaders, but very few great ones. And 18 as is in the case of greatness, it always 19 involves some sort of acceleration to the 20 needs of others, away from the personal 21 interests of oneself or of the collective 22 interests of those they serve. 23 In 1988, Sandra Feldman, at the 24 time head of the United Federation of 25 Teachers, agreed without any resistance to

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(518) 371-8910 1 setting up the Schools Under Registration 2 Review, the SURR schools, even though it 3 required the transfer of many teachers in the 4 New York City public school system. Didn't 5 always make her popular in the beginning for 6 taking a stand like this, but the entire union 7 came around this process and helped improve 8 the education conditions for the 1.1 million 9 schoolchildren of New York City. 10 It was activities such as that, 11 time and time again, that made Sandra 12 distinguished and made her the very great 13 person who we memorialize and celebrate today. 14 It's sad that we would not be able 15 to get the benefit of her wisdom, her 16 thinking. But there was no one more dynamic, 17 more articulate, more persuasive, more 18 courageous, and more outspoken when an issue 19 needed to be addressed. 20 And so I'd like to open the 21 resolution to all of my colleagues on both 22 sides of the aisle, where she was respected on 23 both sides of the aisle and in every 24 neighborhood she ever visited and in every 25 place they ever heard about her. It is in

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(518) 371-8910 1 that spirit that I thank you for the time to 2 reflect on one of my dear friends, and who 3 would have been one of yours had you known her 4 better. 5 Thank you, Madam President. 6 THE PRESIDENT: Any member who 7 does not wish to cosponsor the pending 8 resolution, please notify the desk. 9 Senator Stavisky. 10 SENATOR STAVISKY: Madam 11 President, I thank Senator Paterson for 12 sponsoring this resolution. And I too knew 13 Sandy Feldman, as well as her predecessor, Al 14 Shanker. And they exemplified everything 15 that's good in the trade union movement, but 16 also everything that is good in education. 17 Sandy Feldman grew up in poverty, 18 and she rose to become the national president 19 of a major labor organization. But she wanted 20 today's children to have the same 21 opportunities that she had growing up, that 22 education was the passport out of poverty. 23 And I too mourn the passing of Sandy Feldman. 24 Thank you. 25 THE PRESIDENT: All in favor of

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(518) 371-8910 1 the resolution please signify by saying aye. 2 (Response of "Aye.") 3 THE PRESIDENT: Opposed, nay. 4 (No response.) 5 THE PRESIDENT: The resolution is 6 adopted. 7 Senator Fuschillo. 8 SENATOR FUSCHILLO: Madam 9 President, there's a resolution at the desk, 10 2918, by Senator Golden and by Senator Trunzo. 11 May we please have it read in its entirety and 12 move for its immediate adoption. 13 THE PRESIDENT: The Secretary 14 will now read Resolution 2918. 15 THE SECRETARY: By Senators 16 Golden and Trunzo, Legislative Resolution 17 Number 2918, urging the New York State 18 Congressional Delegation to focus its efforts 19 to increase the amount of contingency funding 20 available for LIHEAP. 21 "WHEREAS, The federally funded 22 Low-Income Home Energy Assistance Program 23 (LIHEAP) allows New York State to help our 24 most vulnerable population, eligible 25 low-income and elderly residents, with their

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(518) 371-8910 1 home energy bills; and 2 "WHEREAS, As a result of the 3 increasing home heating fuel costs, New York 4 State residents are again expected to be 5 confronted with significant increases in 6 energy costs this heating season, thereby 7 putting a drain on family budgets; and 8 "WHEREAS, Current estimates project 9 substantial increases in fuel costs from last 10 winter, which was one of the most costly 11 heating seasons on record; and 12 "WHEREAS, According to the New York 13 State Energy Research and Development 14 Authority, the statewide weekly average price 15 of home heating oil rose from $1.76 per gallon 16 one year ago to $2.72 per gallon last week, an 17 increase of 54 percent; and 18 "WHEREAS, Natural gas costs are 19 also expected to show similar increases; and 20 "WHEREAS, Last year, New York State 21 received $236 million in LIHEAP and 22 $42.3 million from contingency funds, for a 23 2004-2005 total of $278.3 million, thus 24 allowing New York to provide 969,662 benefits; 25 and

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(518) 371-8910 1 "WHEREAS, Based on projections, if 2 the national formula remains at $1.8 billion, 3 New York's share would be $224 million, then 4 New York would need $54 million to stay at 5 2004-2005 levels; and 6 "WHEREAS, Without an immediate 7 increase in the contingency funding for 8 LIHEAP, our ability to provide adequate 9 support to the many eligible seniors and 10 low-income families that need government 11 assistance for something as basic as staying 12 warm will be jeopardized; now, therefore, be 13 it 14 "RESOLVED, That this Legislative 15 Body pause in its deliberations to urge the 16 New York State Congressional Delegation to 17 focus its efforts to increase the amount of 18 contingency funding available for LIHEAP; and 19 be it further 20 "RESOLVED, That copies of this 21 resolution, suitably engrossed, be transmitted 22 to each member of the New York State 23 Congressional Delegation." 24 THE PRESIDENT: Senator Golden. 25 SENATOR GOLDEN: Thank you, Madam

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(518) 371-8910 1 President. 2 I rise on this resolution to speak 3 and ask that those who would like to go on 4 this resolution, that it's opened up to all, 5 and that the resolution be presented to the 6 federal government, to our Congressional 7 delegation, and that we be allowed, for the 8 $1.8 billion that is allocated for HEAP that 9 has been steady for the past two years, that 10 that be increased. 11 We've put packages forward today 12 for those that drive their cars, for gasoline, 13 and the prices are off the chart. We're doing 14 the same for home heating oil for our seniors 15 in the State of New York. We need to do more 16 for the population of the eligible low-income 17 family and that senior that needs those 18 dollars to be able to get through this winter. 19 We've seen the prices of heating 20 oil from last year, from $1.76 to $2.72 per 21 gallon. We see oil going up 35 percent this 22 year and natural gas up 71 percent this year. 23 We would ask that this resolution be moved 24 forward, that our delegation proposes that the 25 HEAP allocation be increased.

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(518) 371-8910 1 And if we were just to do the 2 2004-2005 to maintain status dollars for those 3 programs, it would be 54 additional million 4 dollars that we would need. 5 So I would hope that the federal 6 government, our president and Congressional 7 delegation will in fact pass this resolution 8 and give due relief to the residents here, 9 low-income residents here in the state of 10 New York. 11 Thank you, Madam President. 12 THE PRESIDENT: On the 13 resolution, all in favor of the resolution 14 please signify by saying aye. 15 (Response of "Aye.") 16 THE PRESIDENT: Opposed, nay. 17 (No response.) 18 THE PRESIDENT: The resolution is 19 adopted. 20 Senator Fuschillo. 21 SENATOR FUSCHILLO: Madam 22 President, will you please recognize Senator 23 Krueger. 24 THE PRESIDENT: Yes. Senator 25 Krueger.

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(518) 371-8910 1 SENATOR FUSCHILLO: Thank you. 2 SENATOR LIZ KRUEGER: Thank you, 3 Madam President. 4 I rise to speak on a resolution we 5 passed as part of the calendar a few minutes 6 earlier. It was a resolution also urging the 7 Congressional delegation of our state to 8 institute policies which will reduce the 9 country's dependence on oil. 10 The fact is that we are here to 11 deal with energy and the costs of energy 12 today. And like Senator Golden, I recognize 13 that much of what needs to be done needs to be 14 done at the federal level. 15 And so in addition to the proposals 16 to urge our federal government to expand the 17 funding for the LIHEAP program, which is 18 desperately needed, in the resolution that we 19 just passed a few minutes earlier as part of 20 our calendar we also address in this 21 resolution, quite a few of my Senate 22 Democratic colleagues -- and I'm happy to open 23 this up to all of the house for 24 cosponsorship -- we're also urging the federal 25 government to address the fundamental issue of

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(518) 371-8910 1 our dependence on foreign oil, which is a 2 danger to the security of our state and 3 nation, by finally doing a laundry list of 4 work that needs to be done to protect all of 5 us, in all fifty states, at the federal level. 6 The fact is that our oil and gas 7 industry is so uncompetitive and highly 8 concentrated that in the United States more 9 than half of all oil-refining capacity and 10 62 percent of the retail gas market is 11 controlled by five companies. And these costs 12 have been skyrocketing long before Hurricane 13 Katrina sent our prices even higher. And in 14 fact, we estimate that the cost of heating oil 15 this winter could be as high as 31 percent 16 higher than last year. 17 We need our federal government to 18 reverse itself on several of the actions it 19 took in its new federal energy bill, which 20 provided tens of billions of dollars in 21 additional subsidies and tax breaks to oil, 22 gas, coal, nuclear industry, rather than 23 expanding our efforts to support investment in 24 research and development for alternative 25 sources of energy, including wind, solar,

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(518) 371-8910 1 geothermal, biomass. 2 We need our federal government, 3 instead of continuing to subsidize the oil and 4 gas industry, to create federal renewable 5 portfolio standards that require electricity 6 providers to include a minimum level of 7 clean-energy resources in the electricity mix 8 that they deliver to consumers. We need our 9 federal government to expand our renewable 10 energy production credit to make renewable 11 energy cost-competitive for consumers. 12 We need to introduce greater 13 energy-efficiency standards for appliances at 14 the national level. We need to end tax breaks 15 and subsidies for nonrenewable energy sources. 16 We need to have a federal government that will 17 require an increased mile-per-gallon standard 18 for all vehicles. 19 We need to ensure that American 20 consumers do not continue to be dependent on 21 foreign oil or be fearful that our 22 international policies or our national 23 security is in the hands of the same companies 24 that determine the prices we pay for both our 25 gas and our home heating oil. We need to

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(518) 371-8910 1 ensure that the federal government 2 substantially increases funding for public 3 transportation and encourages smart growth. 4 And again, my resolution also calls 5 for the federal government to expand the 6 funding for the Low-Income Home Energy 7 Assistance Program, which has been the most 8 effective program at the federal level to help 9 supplement the high cost of energy for 10 low-income people throughout this country. 11 But last year we ran out of money by May 27th 12 and had to start turning people away. 13 So I want to thank my colleagues 14 for their support in this resolution for 15 continuing not only our work here in Albany 16 today, but ensuring that the federal 17 government and our delegation to Congress 18 recognizes that a great deal of the work that 19 needs to be done to ensure we truly address 20 long-term and substantive energy problems for 21 the people of the State of New York is 22 dependent on whether our colleagues in 23 Washington follow through on a list of issues 24 that they so far have not seen fit to take 25 seriously.

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(518) 371-8910 1 Thank you, Madam President. 2 THE PRESIDENT: Senator 3 Fuschillo. 4 SENATOR FUSCHILLO: Madam 5 President, there will be an immediate meeting 6 of the Rules Committee in the Majority 7 Conference Room. And the Senate will stand at 8 ease. 9 THE PRESIDENT: There will be an 10 immediate meeting of the Rules Committee in 11 the Majority Conference Room. 12 The Senate stands at ease. 13 (Whereupon, the Senate stood at 14 ease at 4:27 p.m.) 15 (Whereupon, the Senate reconvened 16 at 4:42 p.m.) 17 ACTING PRESIDENT MEIER: Senator 18 Fuschillo. 19 SENATOR FUSCHILLO: Mr. 20 President, may we please return to reports of 21 standing committees. I believe there's a 22 report of the Rules Committee at the desk. 23 ACTING PRESIDENT MEIER: Reports 24 of standing committees. 25 The Secretary will read.

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(518) 371-8910 1 THE SECRETARY: Senator Bruno, 2 from the Committee on Rules, reports the 3 following bills: 4 Assembly Print 8834, by the 5 Assembly Committee on Rules, an act to amend 6 the Tax Law; 7 Assembly Print 7059, by Member of 8 the Assembly Abbate, an act to amend the 9 Retirement and Social Security Law; 10 Assembly Print 3163, by Member of 11 the Assembly John, an act to amend the 12 Workers' Compensation Law; 13 Senate Print 5846A, by Senator 14 Wright, an act to amend the Tax Law; 15 2829A, by Senator Flanagan, an act 16 to amend the Economic Development Law; 17 5155, by Senator Breslin, an act to 18 amend Chapter 672 of the Laws of 1993, 19 amending the Public Authorities Law; 20 5452, by Senator Bruno, an act to 21 amend the Vehicle and Traffic Law; 22 5763A, by Senator Marcellino, an 23 act to amend the Tax Law; 24 5965, by Senator Spano, an act to 25 amend the Tax Law;

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(518) 371-8910 1 5966, by Senator Flanagan, an act 2 to amend the Real Property Tax Law; 3 5967, by Senator Winner, an act to 4 amend the Tax Law; 5 5968, by Senator Robach, an act to 6 amend the Tax Law; 7 5969, by Senator Marcellino, an act 8 to amend the Agriculture and Markets Law; 9 And Senate Print 5970, by Senator 10 Hannon, an act to amend the Tax Law. 11 All bills ordered direct to third 12 reading. 13 ACTING PRESIDENT MEIER: Senator 14 Fuschillo. 15 SENATOR FUSCHILLO: Move to 16 accept the report of the committee. 17 ACTING PRESIDENT MEIER: All in 18 favor of accepting the report of the Rules 19 Committee signify by saying aye. 20 (Response of "Aye.") 21 ACTING PRESIDENT MEIER: Those 22 opposed, nay. 23 (No response.) 24 ACTING PRESIDENT MEIER: The 25 report of the Rules Committee is accepted.

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(518) 371-8910 1 Senator Fuschillo. 2 SENATOR FUSCHILLO: Can we please 3 have the reading of the noncontroversial 4 calendar. 5 ACTING PRESIDENT MEIER: The 6 Secretary will conduct the noncontroversial 7 reading of the calendar. 8 THE SECRETARY: Calendar Number 9 515, by the Assembly Committee on Rules, 10 Assembly Print Number 8834, an act to amend 11 the Tax Law and the State Finance Law. 12 ACTING PRESIDENT MEIER: Read the 13 last section. 14 THE SECRETARY: Section 4. This 15 act shall take effect immediately. 16 ACTING PRESIDENT MEIER: Call the 17 roll. 18 (The Secretary called the roll.) 19 THE SECRETARY: Ayes, 50. 20 ACTING PRESIDENT MEIER: The bill 21 is passed. 22 THE SECRETARY: In relation to 23 Calendar Number 515, the vote is ayes, 60. 24 ACTING PRESIDENT MEIER: The bill 25 is passed.

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(518) 371-8910 1 THE SECRETARY: Calendar Number 2 1143, by Member of the Assembly John, Assembly 3 Print Number 3163, an act to amend the 4 Workers' Compensation Law. 5 ACTING PRESIDENT MEIER: Read the 6 last section. 7 THE SECRETARY: Section 5. This 8 act shall take effect immediately. 9 ACTING PRESIDENT MEIER: Call the 10 roll. 11 (The Secretary called the roll.) 12 THE SECRETARY: Ayes, 60. 13 ACTING PRESIDENT MEIER: The bill 14 is passed. 15 THE SECRETARY: Calendar Number 16 1845, by Senator Wright, Senate Print -- 17 SENATOR PATERSON: Lay it aside. 18 ACTING PRESIDENT MEIER: Lay the 19 bill aside. 20 THE SECRETARY: In relation to 21 Calendar Number 1991, Senator Flanagan moves 22 to discharge, from the Committee on Rules, 23 Assembly Bill Number 8506 and substitute it 24 for the identical Senate Bill Number 2829A, 25 Third Reading Calendar 1991.

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(518) 371-8910 1 ACTING PRESIDENT MEIER: 2 Substitution ordered. 3 The Secretary will read. 4 THE SECRETARY: Calendar Number 5 1991, by Member of the Assembly Weprin, 6 Assembly Print Number 8506, an act to amend 7 the Economic Development Law. 8 ACTING PRESIDENT MEIER: Read the 9 last section. 10 THE SECRETARY: Section 5. This 11 act shall take effect immediately. 12 ACTING PRESIDENT MEIER: Call the 13 roll. 14 (The Secretary called the roll.) 15 THE SECRETARY: Ayes, 60. 16 ACTING PRESIDENT MEIER: The bill 17 is passed. 18 THE SECRETARY: In relation to 19 Calendar Number 1992, Senator Breslin moves to 20 discharge, from the Committee on Rules, 21 Assembly Bill Number 7465 and substitute it 22 for the identical Senate Bill Number 5155, 23 Third Reading Calendar 1992. 24 ACTING PRESIDENT MEIER: 25 Substitution ordered.

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(518) 371-8910 1 The Secretary will read. 2 THE SECRETARY: Calendar Number 3 1992, by Member of the Assembly McEneny, 4 Assembly Print Number 7465, an act to amend 5 Chapter 672 of the Laws of 1993, amending the 6 Public Authorities Law. 7 ACTING PRESIDENT MEIER: Read the 8 last section. 9 THE SECRETARY: Section 2. This 10 act shall take effect immediately. 11 ACTING PRESIDENT MEIER: Call the 12 roll. 13 (The Secretary called the roll.) 14 THE SECRETARY: Ayes, 60. 15 ACTING PRESIDENT MEIER: The bill 16 is passed. 17 THE SECRETARY: In relation to 18 Calendar Number 1993, Senator Bruno moves to 19 discharge, from the Committee on Rules, 20 Assembly Bill Number 5437 and substitute it 21 for the identical Senate Bill Number 5452, 22 Third Reading Calendar 1993. 23 ACTING PRESIDENT MEIER: 24 Substitution ordered. 25 The Secretary will read.

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(518) 371-8910 1 THE SECRETARY: Calendar Number 2 1993, by Member of the Assembly Canestrari, 3 Assembly Print Number 5437, an act to amend 4 the Vehicle and Traffic Law. 5 ACTING PRESIDENT MEIER: There is 6 a home-rule message at the desk. 7 Read the last section. 8 THE SECRETARY: Section 2. This 9 act shall take effect immediately. 10 ACTING PRESIDENT MEIER: Call the 11 roll. 12 (The Secretary called the roll.) 13 ACTING PRESIDENT MEIER: Senator 14 Breslin. 15 SENATOR BRESLIN: Thank you, Mr. 16 President. 17 I intend to vote for this 18 legislation, as the City of Rensselaer 19 deserves a parking permit in and around the 20 railroad station. They have a home-rule 21 message. Just as we've approved parking 22 permits in Rochester, Rye, Pelham, Auburn, 23 Tarrytown, and a host of other locations. 24 I've also had legislation in since 25 1998, 1999, and up to the present, looking for

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(518) 371-8910 1 parking permits so the homeowners in and 2 around the Capitol and the Legislative Office 3 Building can enjoy a quality of life. So I 4 look forward to the time when the citizens of 5 Albany can enjoy those same kinds of 6 restrictions as this bill will provide to the 7 City of Rensselaer. 8 I vote in the affirmative. 9 ACTING PRESIDENT MEIER: Senator 10 Breslin will be recorded in the affirmative. 11 Announce the results. 12 THE SECRETARY: Ayes, 60. 13 ACTING PRESIDENT MEIER: The bill 14 is passed. 15 THE SECRETARY: Calendar Number 16 1081, by Member of the Assembly Abbate, 17 Assembly Print Number 7059, an act to amend 18 the Retirement and Social Security Law. 19 ACTING PRESIDENT MEIER: Read the 20 last section. 21 THE SECRETARY: Section 6. This 22 act shall take effect immediately. 23 ACTING PRESIDENT MEIER: Call the 24 roll. 25 (The Secretary called the roll.)

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(518) 371-8910 1 THE SECRETARY: Ayes, 60. 2 ACTING PRESIDENT MEIER: The bill 3 is passed. 4 THE SECRETARY: Calendar Number 5 1994, by Senator Marcellino, Senate Print -- 6 SENATOR PATERSON: Lay it aside. 7 ACTING PRESIDENT MEIER: Lay the 8 bill aside. 9 THE SECRETARY: Calendar Number 10 1995, by Senator Spano -- 11 SENATOR PATERSON: Lay that 12 aside. 13 ACTING PRESIDENT MEIER: Lay the 14 bill aside. 15 THE SECRETARY: Calendar Number 16 1996, by Senator Flanagan, Senate Print Number 17 5966, an act to amend the Real Property Tax 18 Law. 19 ACTING PRESIDENT MEIER: Read the 20 last section. 21 THE SECRETARY: Section 2. This 22 act shall take effect immediately. 23 ACTING PRESIDENT MEIER: Call the 24 roll. 25 (The Secretary called the roll.)

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(518) 371-8910 1 THE SECRETARY: Ayes, 60. 2 ACTING PRESIDENT MEIER: The bill 3 is passed. 4 THE SECRETARY: Calendar Number 5 1997, by Senator Winner, Senate Print 5967, an 6 act to amend the Tax Law. 7 ACTING PRESIDENT MEIER: Read the 8 last section. 9 SENATOR PATERSON: Lay it aside. 10 ACTING PRESIDENT MEIER: Lay the 11 bill aside. 12 THE SECRETARY: Calendar Number 13 1998, by Senator Robach, Senate Print Number 14 5968, an act to amend the Tax Law. 15 ACTING PRESIDENT MEIER: Read the 16 last section. 17 THE SECRETARY: Section 3. This 18 act -- 19 SENATOR PATERSON: Lay it aside. 20 ACTING PRESIDENT MEIER: Lay the 21 bill aside. 22 THE SECRETARY: Calendar Number 23 1999, by Senator Marcellino, Senate Print 24 5969, an act to amend -- 25 SENATOR PATERSON: Lay it aside.

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(518) 371-8910 1 ACTING PRESIDENT MEIER: Lay the 2 bill aside. 3 THE SECRETARY: Calendar Number 4 2000, by Senator Hannon, Senate Print Number 5 5970, an act to amend the Tax Law. 6 ACTING PRESIDENT MEIER: There is 7 a local fiscal impact note at the desk. 8 Read the last section. 9 THE SECRETARY: Section 12. This 10 act shall take effect immediately. 11 ACTING PRESIDENT MEIER: Call the 12 roll. 13 (The Secretary called the roll.) 14 THE SECRETARY: Ayes, 60. 15 ACTING PRESIDENT MEIER: The bill 16 is passed. 17 Senator Bruno, that completes the 18 noncontroversial reading of the calendar. 19 SENATOR BRUNO: Mr. President, 20 can we at this time return to motions and 21 resolutions. 22 I believe I have a resolution at 23 the desk, Number 2904. I would ask that at 24 this time it be read in its entirety and move 25 for its immediate adoption.

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(518) 371-8910 1 ACTING PRESIDENT MEIER: Motions 2 and resolutions. 3 The Secretary will read. 4 THE SECRETARY: By Senator Bruno, 5 Legislative Resolution Number 2904, sending 6 deepest condolences to the victims of 7 Hurricane Katrina and expressing solidarity 8 with all individuals and organizations 9 involved in the ongoing rescue and recovery 10 efforts in the Southeastern United States. 11 "WHEREAS, The human toll resulting 12 from the devastating, cataclysmic events of 13 Hurricane Katrina and its aftermath will alter 14 the course of the lives of countless families 15 and require the efforts and support of 16 Americans from across the United States to 17 ensure the restoration of stability to all of 18 the regions affected by the storm; and 19 "WHEREAS, This Legislative Body is 20 deeply moved to send the deepest heartfelt 21 condolences of the people of the State of 22 New York to the victims of Hurricane Katrina 23 and to express solidarity with all of the 24 individuals and organizations involved in the 25 ongoing rescue and recovery efforts in the

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(518) 371-8910 1 Southeastern United States; and 2 "WHEREAS, The coordinated efforts 3 of state and federal governments in 4 transporting hundreds of thousands of 5 individuals to dry land has made evident the 6 enormous challenge of ensuring that the 7 displaced victims of Hurricane Katrina are 8 provided the basic necessities of life in 9 order to start their lives over again; and 10 "WHEREAS, The members of the 11 New York State Senate collectively recognize 12 the compassion of the individuals and 13 organizations from the State of New York who 14 have volunteered their efforts to help the 15 victims of Hurricane Katrina; and 16 "WHEREAS, This Legislative Body 17 commends the efforts of all those involved in 18 the rescue and recovery, including the efforts 19 of the SEMO (State Emergency Management 20 Office), and the members of the National Guard 21 from the State of New York, who have been and 22 continue to be integral in restoring power and 23 water to the affected areas, and in helping 24 out in any aspect, bringing normalcy back to 25 the lives of the victims; and

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(518) 371-8910 1 "WHEREAS, Furthermore, this 2 Legislative Body recognizes the generosity and 3 humanitarianism of the many New York families 4 who have opened their doors to people 5 displaced in the aftermath of the storm, as 6 well as the universities and colleges that 7 have opened their academic doors to students 8 from the affected states; and 9 "WHEREAS, In addition to the human 10 toll, Hurricane Katrina has resulted in 11 extensive economic damage across the affected 12 regions, the complete destruction of whole 13 cities, towns and neighborhoods, private and 14 public property, and countless businesses; and 15 "WHEREAS, This natural disaster is 16 one of the worst in our nation's history, 17 requiring a widespread need for food, 18 supplies, tools, equipment, medicine, health 19 care, law enforcement personnel, security 20 services, public utility services, sanitation 21 and waste disposal, cleanup of debris, 22 property restoration and reconstruction; and 23 "WHEREAS, The destruction of 24 historic neighborhoods and towns, where so 25 much of the very story of America has been

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(518) 371-8910 1 written through the fusion of various cultures 2 and traditions as people made their lives in 3 those areas for generations, is a wound that 4 all Americans will suffer for years as a 5 result of this catastrophe; and 6 "WHEREAS, This Legislative Body 7 recognizes the magnitude of this ongoing 8 national tragedy, and with these words sends 9 the message to all victims of Hurricane 10 Katrina that the people of this great Empire 11 State relate to the suffering that others 12 endure in times of such devastation and 13 recovery, and will remain steadfast in unity 14 with them for as long as it takes to reunite 15 their families, restore hope to their lives, 16 and secure their future; now, therefore, be it 17 "RESOLVED, That this Legislative 18 Body pause in its deliberations to send the 19 deepest heartfelt condolences of the people of 20 the State of New York to the victims of 21 Hurricane Katrina, and to express solidarity 22 with all of the individuals and organizations 23 involved in the ongoing rescue and recovery 24 efforts in the Southeastern United States." 25 ACTING PRESIDENT MEIER: Senator

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(518) 371-8910 1 Bruno. 2 SENATOR BRUNO: Mr. President, 3 can we follow the normal custom of the house 4 and open this resolution up to all members in 5 the chamber. 6 And anyone that would prefer not to 7 be on it, would you please just let the desk 8 know. 9 Thank you, Mr. President. 10 ACTING PRESIDENT MEIER: Those 11 members wishing not to be the resolution 12 inform the desk. 13 All those in favor of the 14 resolution signify by saying aye. 15 (Response of "Aye.") 16 ACTING PRESIDENT MEIER: Those 17 opposed, nay. 18 (No response.) 19 ACTING PRESIDENT MEIER: The 20 resolution is adopted. 21 Senator Bruno. 22 SENATOR BRUNO: And, Mr. 23 President, I believe I have another resolution 24 at the desk, 2921. I would ask that it also 25 be read in its entirety and move for its

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(518) 371-8910 1 immediate adoption. 2 ACTING PRESIDENT MEIER: The 3 Secretary will read. 4 THE SECRETARY: By Senator Bruno, 5 Legislative Resolution Number 2921, paying 6 tribute to the life and accomplishments of 7 Simon Wiesenthal, internationally renowned 8 Holocaust survivor. 9 "WHEREAS, This Legislative Body is 10 moved to recognize and pay tribute to the life 11 and accomplishments of Simon Wiesenthal for 12 the courage and fortitude he displayed 13 throughout his life; and 14 "WHEREAS, With his tremendous pride 15 for his heritage, and his ceaseless work 16 against hate and prejudice, Simon Wiesenthal 17 benefited the world in immeasurable ways; and 18 "WHEREAS, A survivor of five Nazi 19 death camps, Simon Wiesenthal died on Tuesday, 20 September 20, 2005, at the remarkable age of 21 96, in Vienna, Austria; and 22 "WHEREAS, After being liberated 23 from the Mauthausen death camp in May 1945, 24 Simon Wiesenthal dedicated his life to 25 tracking down Nazi war criminals and to being

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(518) 371-8910 1 a voice for the 6 million Jews who died during 2 the onslaught. Between Simon and his wife, 3 Cyla, they lost 89 relatives in the Holocaust; 4 and 5 "WHEREAS, Through his work, Simon 6 Wiesenthal brought to justice some 1,100 Nazi 7 war criminals, including one-time SS leader 8 Adolf Eichmann and the policeman who arrested 9 Anne Frank; and 10 "WHEREAS, In addition, Simon 11 Wiesenthal spent more than 50 years speaking 12 out against neo-Nazism and racism, and 13 remembering the Jewish experience as a lesson 14 for humanity; and 15 "WHEREAS, Simon Wiesenthal was the 16 recipient of numerous awards, including 17 Austria's Golden Decoration of Merit, which 18 was presented by President Heinz Fischer in 19 June of 2005; and 20 "WHEREAS, This Legislative Body is 21 proud to inscribe upon its records this 22 memoriam for Simon Wiesenthal, whose legacy as 23 the conscience of the Holocaust will long 24 endure the passage of time; now, therefore, be 25 it

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(518) 371-8910 1 "RESOLVED, That this Legislative 2 Body pause in its deliberations to pay tribute 3 to the life and accomplishments of Simon 4 Wiesenthal, internationally renowned Holocaust 5 survivor of Vienna, Austria; and be it further 6 "RESOLVED, That a copy of this 7 resolution, suitably engrossed, be transmitted 8 to The Simon Wiesenthal Centre in Israel." 9 ACTING PRESIDENT FLANAGAN: The 10 question is on the resolution. All in favor 11 signify by saying aye. 12 (Response of "Aye.") 13 ACTING PRESIDENT FLANAGAN: 14 Opposed, nay. 15 (No response.) 16 ACTING PRESIDENT FLANAGAN: The 17 resolution is adopted. 18 Senator Paterson. 19 Senator Bruno. 20 SENATOR BRUNO: May I just offer, 21 again, opening this resolution to the house. 22 And anyone that would like to do otherwise 23 than be on the resolution, please just let the 24 desk know. 25 Thank you, Mr. President.

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(518) 371-8910 1 Senator Paterson. 2 SENATOR PATERSON: Oh, thank you, 3 Senator Bruno. Not just for the floor, but 4 for your interest and forbearance in honoring 5 Simon Wiesenthal, who today died at the age of 6 96, just in the last 24 hours, an 7 internationally acclaimed Holocaust survivor 8 and a person that chased down and pursued 9 those who violated the lives, the families, 10 and the dignity of others. 11 Living to such an old age, many of 12 the people who he helped so much may not have 13 survived to really understand how great Simon 14 Wiesenthal was. As the resolution points out, 15 he was honored by President Heinz Fischer in 16 this year. And even in his waning years, he 17 continued to speak out against injustice and 18 to fight against all forms of hate and 19 prejudice and particularly violence against 20 others. 21 It's a part of world history that 22 we can never forget. It's a part of world 23 history that goes on even today in other parts 24 of the world, and unfortunately struck this 25 country in an attack, meaninglessly, on our

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(518) 371-8910 1 country that we just commemorated on the 2 fourth anniversary of the attack on the World 3 Trade Center and the Pentagon on 4 September 11th. 5 So again, this is just a moment we 6 should remember and a period in which we 7 should fight, all of us together, to try to 8 avoid it occurring any time in the future. 9 So I just wanted to thank Senator 10 Bruno for offering this resolution. There's 11 no finer person or person recognized all over 12 the world for his humanity and his 13 condemnation and fight against those who 14 didn't practice the same. 15 ACTING PRESIDENT FLANAGAN: 16 Senator Bruno. 17 SENATOR BRUNO: Mr. President, 18 can we at this time return to the 19 controversial calendar. 20 ACTING PRESIDENT FLANAGAN: The 21 Secretary will read. 22 THE SECRETARY: Calendar Number 23 1845, by Senator Wright, Senate Print 5846A, 24 an act to amend the Tax Law. 25 SENATOR SCHNEIDERMAN:

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(518) 371-8910 1 Explanation. 2 ACTING PRESIDENT FLANAGAN: An 3 explanation has been asked for, Senator 4 Wright. 5 SENATOR WRIGHT: Thank you, Mr. 6 President. 7 The bill before us provides a 8 biofuel tax credit for the production of 9 biofuels in the state of New York. It's part 10 of the Senate's energy package that's being 11 advanced today to encourage the use of 12 alternative fuels. 13 As I'm sure most everyone in this 14 chamber is aware, we've advanced the idea of a 15 biofuel tax credit in various budget 16 discussions as well as in this past 17 legislative session. Today we're advancing 18 another alternative, and the purpose is really 19 twofold: Number one, to provide for 20 alternative fuel sources here in the state, to 21 address our energy needs and review our 22 dependence upon petroleum and foreign oil; 23 but, secondly, to also stimulate the economy 24 of the state. 25 Because as I know, most members

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(518) 371-8910 1 here in the chamber recognize that New York 2 State banned MTBE and that ethanol is the 3 appropriate substitute as an oxygenate. So we 4 in fact have ethanol in our gasoline products 5 now, produced elsewhere in the nation, not in 6 the state of New York, thereby losing the jobs 7 and the opportunities that New York could 8 have. 9 So we have an opportunity to 10 address our energy independence as well as 11 provide economic advancement in the state. 12 ACTING PRESIDENT FLANAGAN: 13 Senator Krueger. 14 SENATOR LIZ KRUEGER: Thank you. 15 Could the sponsor please yield for a question. 16 SENATOR WRIGHT: I will. 17 SENATOR LIZ KRUEGER: Thank you. 18 Senator, in the spring when we were 19 leaving session, you had a variation on this 20 bill -- I'm sorry, I don't remember the 21 number. Now, how does this bill differ from 22 the bill that moved in this chamber either the 23 last day of session or the day before, as I 24 recall? 25 SENATOR WRIGHT: This bill would

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(518) 371-8910 1 provide the credit that is authorized, the 2 fuel tax credit, which is 15 cents a gallon 3 after production of 40,000 gallons, with a 4 maximum tax credit of $2.5 million per 5 taxpayer per year. That is one difference. 6 The second difference is the credit 7 is available for a maximum of four years, but 8 the credit may not lower the taxes below the 9 minimum tax fixed by law. If in fact it does, 10 it would be treated as a refundable 11 overpayment of tax. 12 SENATOR LIZ KRUEGER: If, through 13 you, the sponsor would continue to yield. 14 ACTING PRESIDENT FLANAGAN: 15 Senator Wright? 16 SENATOR WRIGHT: Yes, I will, Mr. 17 President. 18 SENATOR LIZ KRUEGER: Thank you. 19 And, Senator, one of my concerns on 20 the last bill that we debated that you just 21 referenced was my concern that not all 22 alternative fuels are equal in the eyes of 23 science. Do you share any of my concerns that 24 ethanol has not proved to be as effective from 25 a cost perspective or an environmentally

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(518) 371-8910 1 cleaner perspective than petroleum at this 2 point in time and that, rather, we should be 3 exploring biofuels and biodiesel options that 4 don't include ethanol? 5 SENATOR WRIGHT: I'm aware of the 6 science as it relates to ethanol. I'm also 7 aware -- much of which is dated. I'm also 8 aware of the new science, much of which is 9 more recent, that addresses new technologies, 10 and believe that biofuel alternatives, and 11 there are a number of them, can in fact be 12 companions in part of this, which is what our 13 intent is, to reflect both ethanol and 14 biofuels. 15 The reality is that ethanol is the 16 predominant alternative and oxygenate 17 currently being used, and New York should be 18 benefitting from that use. 19 SENATOR LIZ KRUEGER: And I 20 wanted to -- excuse me, Mr. President. If, 21 through you, the sponsor would yield for an 22 additional question. 23 ACTING PRESIDENT FLANAGAN: 24 Senator Wright? 25 SENATOR WRIGHT: I will, Mr.

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(518) 371-8910 1 President. 2 SENATOR LIZ KRUEGER: Thank you. 3 This bill would provide this 4 incentive per gallon regardless of the use of 5 the fuel? This could be for vehicles or home 6 heating, or is this specifically for vehicle 7 fuel? 8 SENATOR WRIGHT: No, it can be 9 used for both. 10 SENATOR LIZ KRUEGER: Thank you. 11 Mr. President, on the bill. 12 ACTING PRESIDENT FLANAGAN: 13 Senator Krueger, on the bill. 14 SENATOR LIZ KRUEGER: Thank you. 15 I have to say I'm torn about this 16 legislation because, on the one hand, I do 17 think that there are many opportunities for 18 expansion of biofuels that would be a win for 19 the state of New York and the citizens of the 20 state of New York, both from the perspective 21 of decreasing our dependence on oil and on 22 coming up with hopefully cleaner forms of fuel 23 for our environment. And of course, in the 24 long term, at least, hopefully being able to 25 address some of the cost factors for the fuel

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(518) 371-8910 1 that we use in our homes and our vehicles. 2 And yet at the same time I'm torn, 3 because the research for decades now of 4 federal subsidies, particularly for ethanol, 5 have resulted in large amounts of federal 6 money and, in some states outside of New York, 7 state money being used in this model as tax 8 credits and as subsidies to producers, where 9 we're not finding any decrease to 10 environmental pollution from the product, 11 we're not seeing decrease in costs for 12 consumers. 13 And in some cases of research done, 14 most recently by the General Accounting Office 15 of the federal government, we're finding that 16 the cost of an actual gallon of ethanol can be 17 as high as $4 a gallon and be using a gallon 18 of petroleum to produce a gallon of ethanol. 19 Clearly not a win for the environment. 20 So I'm torn because I do think we 21 need to be broadening our universe of 22 alternative fuel. I do want us in the state 23 of New York to be investing in successful or 24 potentially successful models. And yet I 25 don't want us to repeat the same mistakes of

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(518) 371-8910 1 the federal government, who has now used up 2 billions of dollars of taxpayers' money 3 underwriting an industry that has not been a 4 win for the country or the environment; that 5 is, the ethanol industry. 6 And so I've asked some questions. 7 I appreciate the sponsor's responses and his 8 continuing efforts to move us down the road of 9 exploring these options. But for now, I'm 10 afraid I will still continue to vote no 11 because I am so concerned that we don't just 12 simply run down the road of new subsidies for 13 industries that won't actually be wins for our 14 state. 15 Thank you, Mr. President. 16 ACTING PRESIDENT FLANAGAN: 17 Senator Valesky. 18 SENATOR VALESKY: Mr. President, 19 quickly on the bill. 20 I think this is a good piece of 21 legislation that's before us today. I note in 22 the sponsor's memo that he points out that 23 there are 22 other states in the nation that 24 are producing ethanol and other biofuels. And 25 they have all, to a state, adopted a tax

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(518) 371-8910 1 credit or other incentive program to encourage 2 biofuels production. 3 I have seen firsthand the State 4 University of New York Environmental Science 5 and Forestry program in Central New York. 6 They are on the leading edge of production of 7 biofuels. And I think we ought to be doing 8 what we can here to encourage this industry. 9 I would also add, however, that I 10 would hope that we have an opportunity to 11 consider encouraging use of biofuels at the 12 consumer end; perhaps a tax credit for those 13 who would heat their homes partially with 14 biofuels. 15 So I rise in support of this bill 16 and encourage all of my colleagues to support 17 this measure. 18 ACTING PRESIDENT FLANAGAN: Any 19 other Senator wishing to be heard? 20 The debate is closed. 21 The Secretary will ring the bell. 22 Read the last section. 23 THE SECRETARY: Section 6. This 24 act shall take effect immediately. 25 ACTING PRESIDENT FLANAGAN: Call

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(518) 371-8910 1 the roll. 2 (The Secretary called the roll.) 3 THE SECRETARY: Those recorded in 4 the negative on Calendar Number 1845 are 5 Senators Duane, Hassell-Thompson and 6 L. Krueger. 7 Ayes, 58. Nays, 3. 8 ACTING PRESIDENT FLANAGAN: The 9 bill is passed. 10 THE SECRETARY: Calendar Number 11 1994, by Senator Marcellino, Senate Print 12 5763A, an act to amend the Tax Law. 13 SENATOR LIZ KRUEGER: 14 Explanation. 15 ACTING PRESIDENT FLANAGAN: 16 Senator Marcellino, an explanation has been 17 asked for by Senator Krueger. 18 SENATOR MARCELLINO: Thank you. 19 Mr. President, the previous tax 20 credit, the income tax credit for alternative 21 fuel vehicles, expired at the end of the tax 22 year 2004. There's likely to be a significant 23 cost differential between traditional gasoline 24 internal combustion engines and alternatively 25 fueled vehicles. As a result, it will be

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(518) 371-8910 1 necessary to provide consumer incentives to 2 promote their purchase. 3 Incentives should be available for 4 the purchase of any property needed to refuel 5 these environmentally friendly vehicles. 6 These tax credits proved very successful, 7 encouraging New Yorkers to purchase hybrid 8 vehicles. Since the original credit was 9 offered, there are more hybrid models 10 available to consumers, and their price is so 11 comparative to standard cars that there are 12 now long waiting lists -- several months, in 13 fact -- to purchase hybrid vehicles. 14 We hope this will provide another 15 successful program along the lines of the 16 hybrid vehicle program. 17 ACTING PRESIDENT FLANAGAN: 18 Senator Krueger, why do you rise? 19 SENATOR LIZ KRUEGER: Thank you, 20 Mr. President. If, through you, the sponsor 21 would yield. 22 ACTING PRESIDENT FLANAGAN: 23 Senator Marcellino, do you yield? 24 SENATOR MARCELLINO: Yes, I do. 25 SENATOR LIZ KRUEGER: Thank you.

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(518) 371-8910 1 I have to say overall I like the 2 concept of this bill, but I do have a couple 3 of questions. 4 What we're learning from hybrid 5 vehicles is that while they cost to $7,000 to 6 $10,000 more -- 7 SENATOR MARCELLINO: Mr. 8 President, I'm sorry, I'm having trouble to 9 hearing the good Senator. 10 SENATOR LIZ KRUEGER: Certainly, 11 I'll repeat. I think now my light's on. 12 Hopefully that's better. 13 Hybrid vehicles are costing between 14 $7,000 and $10,000 more than the nonhybrid 15 version. But some of the research coming out 16 shows that they're not necessarily saving 17 significantly on fuel mileage. 18 And I was wondering whether there's 19 anything in this bill that I didn't quite see 20 when I read it that would actually mandate 21 that the types of vehicles that we would 22 define as "clean" for tax credit purposes 23 would also have to meet some mile-per-gallon 24 standard in order to receive a tax credit. 25 SENATOR MARCELLINO: Senator,

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(518) 371-8910 1 that's not part of this bill, but it is part 2 of another bill that I have which would 3 provide an incentive. The better the mileage, 4 the better the performance, the better the 5 incentive. 6 So we'll be looking for your 7 support of our other bill as well as this very 8 important bill. 9 SENATOR LIZ KRUEGER: Thank you. 10 Mr. President, if the sponsor would continue 11 to yield. 12 ACTING PRESIDENT FLANAGAN: 13 Senator Marcellino, do you continue to yield? 14 SENATOR MARCELLINO: Yes. 15 SENATOR LIZ KRUEGER: Thank you. 16 I was also wondering whether this 17 bill applies in any way differently for 18 vehicles that are either made in the United 19 States versus foreign vehicles or vehicles 20 that at least are built under some collective 21 bargaining agreement arrangement. Because of 22 course there are also concerns about 23 supporting the American car industry. 24 And perhaps with the tax credit 25 that's targeted towards cleaner vehicles and,

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(518) 371-8910 1 as you said, hopefully vehicles with better 2 miles per gallon, might there not also be an 3 option to ensure that these types of tax 4 credits are used to encourage the building of 5 vehicles where American workers get jobs? 6 SENATOR MARCELLINO: It's a 7 laudable ideal. But we're here to incentivize 8 clean air, and that's what this energy bill 9 does. Clean air and avoidance of reliance 10 upon fossil fuels. Foreign fossil fuels. 11 SENATOR LIZ KRUEGER: Mr. 12 President, on the bill. 13 ACTING PRESIDENT FLANAGAN: 14 Senator Krueger, on the bill. 15 SENATOR LIZ KRUEGER: Thank you. 16 I appreciate the Senator's comments. 17 And I will support this bill, 18 although I would hope that my recommendations 19 might be viewed as friendly amendments as we 20 move forward with this legislation. That I 21 think that any tax credits that we're offering 22 for cleaner vehicles, whether they be what we 23 now call traditional hybrids or other types of 24 new clean fuels, will mandate a 25 miles-per-gallon standard in exchange for the

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(518) 371-8910 1 tax credit. 2 And I would also urge the Senator 3 to amend the bill to recognize the value of 4 tax credits for vehicles that are built by 5 American labor, at least partially. 6 So I'll support the bill, but I 7 hope he'll consider amendments to it. 8 Thank you, Mr. President. 9 ACTING PRESIDENT FLANAGAN: 10 Senator Montgomery. 11 SENATOR MONTGOMERY: Yes, Mr. 12 President, just briefly on the bill. 13 ACTING PRESIDENT FLANAGAN: 14 Senator Montgomery, on the bill. 15 SENATOR MONTGOMERY: I want to 16 join my colleague Senator Krueger in 17 complimenting Senator Marcellino on this 18 legislation. Although there are some areas 19 that we would like to see some amendments, and 20 I agree with that. 21 But generally I would like to say 22 that this legislation, I think, sends a 23 message that is very important from this 24 Legislature, and that is that we want to see 25 the corporate as well as the

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(518) 371-8910 1 individual-taxpayer community begin to utilize 2 much more the kind of energy that is suggested 3 in this legislation. And that if they do 4 that, we are willing to give them some 5 incentive and some tax break as a reward for 6 doing that. 7 We believe, I think, this 8 legislation indicates that we want to see 9 energy efficient vehicles and those vehicles 10 that use renewable energy sources as well, so 11 that we can begin to clean up the environment 12 in our state and especially in our city. 13 And let me just say, Mr. President, 14 I represent a district where all of the buses 15 in the borough of Brooklyn converge in my 16 district. There are three areas in downtown 17 Brooklyn where I represent that are three of 18 the worst hot spots in the United States as it 19 relates to traffic congestion and 20 environmental pollution. So this is extremely 21 important to me. 22 There are proposals -- in addition 23 to the fact that I already have these hot 24 spots, there are proposals that will increase 25 that exponentially, because there will be

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(518) 371-8910 1 several thousand new units of housing, a 2 20,000-seat arena that is proposed for 3 downtown Brooklyn. There are several million 4 new square feet of commercial space and office 5 space, and et cetera, within a 10-square-block 6 area or smaller. 7 So besides the incredibly large 8 overdevelopment that is going on, we're going 9 to see traffic congestion that you could never 10 imagine. It would never happen in your 11 district. I know that, Mr. President. So 12 obviously this is very important to me. 13 So I thank Senator Marcellino, 14 because you're talking to people that I 15 represent, as well as all of the constituents 16 in the state of New York, that we in this 17 Legislature want and intend to do something to 18 make a clear statement about the fact that we 19 want to clean up our environment, we want to 20 be on the right side of global warming. We, 21 the Legislature, the State Senate of New York 22 State, wants clean air, clean-fuel vehicles to 23 be utilized by all of the citizens of this 24 state as well as our public authorities, as 25 the MTA is already doing.

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(518) 371-8910 1 So I want to thank Senator 2 Marcellino, thank you for listening. This is 3 a very important bill, and I'm supporting it. 4 ACTING PRESIDENT FLANAGAN: Any 5 other Senator wishing to be heard? 6 The debate is closed. 7 The Secretary will ring the bell. 8 Read the last section. 9 THE SECRETARY: Section 5. This 10 act shall take effect immediately. 11 ACTING PRESIDENT FLANAGAN: Call 12 the roll. 13 (The Secretary called the roll.) 14 THE SECRETARY: Ayes, 61. 15 ACTING PRESIDENT FLANAGAN: The 16 bill is passed. 17 THE SECRETARY: Calendar Number 18 1995, by Senator Spano, Senate Print 5965, an 19 act to amend the Tax Law. 20 SENATOR SCHNEIDERMAN: 21 Explanation. 22 ACTING PRESIDENT FLANAGAN: 23 Senator Spano, an explanation has been asked 24 for. 25 SENATOR SPANO: Thank you, Mr.

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(518) 371-8910 1 President. 2 This bill will assist our senior 3 citizens with their heating bills this winter 4 by providing a $100 personal income tax credit 5 for renters who pay their own heat and with a 6 $200 rebate check for those senior homeowners 7 who are eligible for the advanced STAR 8 benefit. 9 ACTING PRESIDENT FLANAGAN: 10 Senator Schneiderman. 11 SENATOR SCHNEIDERMAN: Thank you. 12 If the sponsor would yield for a few 13 questions. 14 SENATOR SPANO: Yes. 15 SENATOR SCHNEIDERMAN: This bill 16 actually appears to be divided into two 17 sections. 18 The first, if I read it correctly, 19 creates a tax credit of $100 for renters who 20 pay the cost of heating their residence if 21 they meet the age and income requirements. Is 22 that correct? 23 SENATOR SPANO: Yes. 24 SENATOR SCHNEIDERMAN: And the 25 second part of the bill provides an additional

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(518) 371-8910 1 $200 for senior citizens who qualify for the 2 STAR energy rebate program. Is that correct? 3 SENATOR SPANO: Yes. 4 SENATOR SCHNEIDERMAN: And 5 through you, Mr. President, the senior 6 citizens who are eligible for the STAR program 7 have to be homeowners who demonstrate they pay 8 their heating bills; is that not correct? 9 SENATOR SPANO: The senior 10 citizens who are tenants, yes, that's correct, 11 they have to demonstrate they pay their 12 heating bills. 13 SENATOR SCHNEIDERMAN: But I'm in 14 the second section now, which relates to the 15 $200 credit for people eligible for the STAR 16 program. 17 SENATOR SPANO: Well, they're 18 homeowners. Presumably they have to pay their 19 heating costs. That's how it works in 20 Westchester, anyway. 21 (Laughter.) 22 SENATOR SCHNEIDERMAN: I 23 understand some people are getting their 24 heating bills paid by their local 25 representative.

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(518) 371-8910 1 (Laughter.) 2 SENATOR SCHNEIDERMAN: But 3 through you, Mr. President, in all 4 seriousness. 5 So this bill provides for an 6 additional $200 a year for homeowners and an 7 additional $100 a year for renters who pay 8 their heating bills; is that correct? 9 SENATOR SPANO: Correct. 10 SENATOR SCHNEIDERMAN: Thank you, 11 Mr. President. Thank the sponsor. On the 12 bill. 13 ACTING PRESIDENT FLANAGAN: 14 Senator Schneiderman, on the bill. 15 SENATOR SCHNEIDERMAN: Something 16 that is of concern to me, representing a very 17 densely populated district where most of my 18 constituents are renters, is what I believe to 19 be a pattern, not just in this house but in 20 the laws of the State of New York, that 21 essentially amounts to discrimination against 22 residents of the city and, in particular, 23 discrimination against tenants. 24 And I'm disappointed that this bill 25 that has the laudable purpose of providing a

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(518) 371-8910 1 assistance to people who are really hurt by 2 the increases in oil prices continues that 3 discrimination by saying if you're someone 4 who's a homeowner and you pay your heating 5 bill, you get $200; and if you are a renter 6 and you pay your heating bill, you get $100. 7 So I really don't understand the 8 basis for this discrimination. It doesn't 9 have any provisions that ensure that the 10 homeowners are paying more than the renters or 11 any requirements of any kind that would appear 12 to clarify what looks to me like straight-out 13 discrimination against renters. 14 So I will be voting against this 15 bill. And I want to make it clear that I 16 support the purpose of providing additional 17 assistance to seniors, but representing all of 18 the tenants that I do, I cannot accept 19 legislation that provides $200 if you're a 20 homeowner and a poor senior who proves you're 21 paying your heating bills and only $100 if 22 you're even poorer and you can't afford to buy 23 your own house. 24 So for that reason, Mr. President, 25 I will be voting no.

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(518) 371-8910 1 ACTING PRESIDENT FLANAGAN: 2 Senator Krueger. 3 SENATOR LIZ KRUEGER: On the 4 bill, Mr. President. 5 ACTING PRESIDENT FLANAGAN: 6 Senator Krueger, on the bill. 7 SENATOR LIZ KRUEGER: Thank you. 8 I share my colleague Senator 9 Schneiderman's concern, but I must raise an 10 additional issue of discrimination. 11 If you are a renter who doesn't pay 12 your own heat because it is included in the 13 cost of your rent, you get nothing in this 14 bill. And I can guarantee you landlords will 15 transfer their increased costs of heating fuel 16 to their renters, because that's a legal and 17 even rational business model. If my costs go 18 up, I transfer those costs. 19 So tenants who don't pay their own 20 heating bills but of course get heat in their 21 apartments -- and that is the 22 disproportionately largest population of 23 renters in New York City. Most renters, at 24 least in New York City -- I can't speak for 25 the rest of the state -- heat is included in

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(518) 371-8910 1 the rent, but their rent will go up as their 2 landlords' heating costs go up. This bill 3 further discriminates against them, because 4 they get nothing. 5 So I will also be voting against 6 this bill because it is indeed a 7 discriminatory bill in multiple ways. 8 Thank you, Mr. President. 9 ACTING PRESIDENT FLANAGAN: 10 Senator Stavisky. 11 SENATOR STAVISKY: I will also be 12 voting against this bill, because not only is 13 it discriminatory against renters, it's also 14 discriminatory against shareholders in a coop, 15 condominium-unit owners. And they are 16 unfortunately treated disgracefully, really, 17 under the Real Property Tax Law, the 18 classification system. And this is just 19 another nail in the coffin of the 20 cooperatives. 21 ACTING PRESIDENT FLANAGAN: 22 Senator Valesky. 23 SENATOR VALESKY: Mr. President, 24 I believe there's an amendment at the desk. I 25 ask that the reading of the amendment be

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(518) 371-8910 1 waived and ask to be heard on the amendment. 2 ACTING PRESIDENT FLANAGAN: The 3 reading is waived, and you may be heard on the 4 amendment. 5 SENATOR VALESKY: Thank you, Mr. 6 President. 7 I think we should be addressing the 8 issue of heating costs for seniors or 9 anticipated increases in heating costs for 10 seniors this winter, but I am concerned that 11 we are not addressing an issue that is equally 12 important, one that directly impacts children 13 and particularly schoolchildren. 14 I met yesterday with a 15 superintendent in one of the school districts 16 that I represent, and she was indicating to me 17 that because of the anticipated increases in 18 heating costs that they would be lowering the 19 temperature in those classrooms in those 20 school buildings by at least 2 degrees in the 21 upcoming heating season. 22 So this amendment would create a 23 New York State School District Energy Cost 24 Stabilization Fund that would appropriate 25 monies and direct the Commissioner of

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(518) 371-8910 1 Education to establish a grant program that 2 would allow school districts to apply for 3 funding to deal with increases in both 4 transportation costs this year and in heating 5 costs in school buildings. 6 I ask that the amendment be 7 approved. 8 ACTING PRESIDENT FLANAGAN: On 9 the amendment, those Senators in agreement 10 please signify by raising your hands. 11 THE SECRETARY: Those recorded in 12 agreement are Senators Andrews, Breslin, 13 Brown, Diaz, Dilan, Duane, Gonzalez, 14 Hassell-Thompson, Klein, L. Krueger, 15 C. Kruger, Montgomery, Onorato, Oppenheimer, 16 Parker, Paterson, Sabini, Sampson, Savino, 17 Schneiderman, Serrano, A. Smith, M. Smith, 18 Stachowski, Stavisky and Valesky. 19 ACTING PRESIDENT FLANAGAN: The 20 amendment is not agreed to. 21 Any other Senator wishing to be 22 heard? 23 Senator Diaz. 24 SENATOR DIAZ: Thank you, Mr. 25 President. On the bill.

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(518) 371-8910 1 ACTING PRESIDENT FLANAGAN: On 2 the bill, Senator Diaz. 3 SENATOR DIAZ: Most of my life, I 4 have been working and dealing with senior 5 citizens. I have seen senior citizens being 6 discriminated. I have seen terrible things 7 done to senior citizens. Right now, in the 8 city of New York, Mayor Bloomberg changed a 9 hot daily meal for a frozen meal. 10 And I see senior citizens 11 struggling to pay their bills, their medicine, 12 their rent. And when I hear my colleagues 13 here talking about a discrimination that is 14 done against other people, of course, of 15 course I agree. Of course some people have 16 been discriminated. 17 However, I cannot, honestly and 18 humanly speaking, I cannot go and use the 19 approach of if everybody doesn't get the whole 20 thing, nobody gets anything. And anything 21 that the senior citizens could get -- even 22 though the bill is not perfect, and even 23 though I agree with my colleagues that the 24 bill discriminates against other people. But 25 ladies and gentlemen, dealing and working with

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(518) 371-8910 1 senior citizens, I have to here honestly say 2 that anything that I could get for senior 3 citizens, anything that -- anything for senior 4 citizens, especially in my district, I will 5 vote for it. 6 So even though the bill is not 7 perfect, I am voting for this bill, because it 8 takes care of at least some senior citizens. 9 ACTING PRESIDENT FLANAGAN: Any 10 other Senator wishing to be heard? 11 The debate is closed. 12 The Secretary will ring the bell. 13 Read the last section. 14 THE SECRETARY: Section 2. This 15 act shall take effect immediately. 16 ACTING PRESIDENT FLANAGAN: Call 17 the roll. 18 (The Secretary called the roll.) 19 ACTING PRESIDENT FLANAGAN: 20 Senator Wright, to explain his vote. 21 SENATOR WRIGHT: Thank you, Mr. 22 President. To explain my vote. 23 I commend Senator Spano for his 24 leadership on this legislation. Like some of 25 my colleagues have suggested, I too would like

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(518) 371-8910 1 to be everything to everybody. Not only are 2 schools going to face difficulty in terms of 3 heating, hospitals are going to face 4 difficulty in terms of heating, colleges are 5 going to face difficulty in terms of heating. 6 Most any institutional setting you can 7 anticipate, as well as individuals with 8 families, are going to face those problems 9 this year. 10 We don't have enough money to deal 11 with the problem. What we're trying to do is 12 to take the windfall that's being derived from 13 taxes, target it to our most vulnerable 14 population to address a critical need in this 15 state. It doesn't minimize the need of 16 others, but it recognizes a critical need. 17 Relative to the school districts, 18 one should recall that a school expense is a 19 reimbursable expense. Many of them contract 20 in advance and have prices already built in. 21 The concern for school districts actually 22 should be reflected next year, when we are 23 reimbursing them for those expenses that they 24 will be incurred as part of the state aid 25 formula.

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(518) 371-8910 1 So I believe we've targeted what is 2 facing the most critical need as we enter the 3 heating season, our elderly population. I 4 commend Senator Spano for his leadership and 5 encourage support on this vote. 6 I'm voting aye. 7 ACTING PRESIDENT FLANAGAN: 8 Senator Saland. 9 SENATOR SALAND: Thank you, Mr. 10 President. 11 I too would like to join with 12 Senator Wright in commending Senator Spano. I 13 don't profess to be a construction engineer, 14 but I do know the amount of heat that you 15 require will, among other things, depend upon 16 the size of your residence or dwelling, the 17 heating efficiency of whatever that particular 18 dwelling may be. And when I last checked, 19 most homes were considerably larger than 20 apartments. 21 And if I can use the experience of 22 two of my children, both of whom reside in 23 New York City, both of whom have their heat 24 included in their rent, the size of their home 25 or residence would be most modest in

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(518) 371-8910 1 comparison even to a 1500-, 1800-, or 2 2000-square-foot house that many of us find 3 our seniors living in in our districts. 4 So there's absolutely nothing 5 inequitable about the formula. The means by 6 which there is a distinction made between 7 those who reside in a residence that's been 8 constructed in, probably, minimally 1500 to 9 1800 square feet -- few apartments, I think, 10 would run in that range. And those that do, I 11 don't necessarily think that their owners 12 would be as concerned as a senior who might be 13 on a fixed income who is making choices that 14 many of us talk about time and again, whether 15 to buy prescription drugs, whether to get fuel 16 to heat their house, whether to lower the 17 thermostat to some level that many of us might 18 consider to be unsafe or unhealthy. 19 So I thank you, Senator Spano, and 20 commend you for bringing this before us. And 21 I vote aye. 22 ACTING PRESIDENT FLANAGAN: 23 Senator Saland and Senator Wright will be 24 recorded in the affirmative. 25 Announce the results.

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(518) 371-8910 1 THE SECRETARY: Those recorded in 2 the negative on Calendar Number 1995 are 3 Senators Duane, Gonzalez, L. Krueger, 4 Montgomery, Parker, Paterson, Schneiderman, 5 Serrano, A. Smith and Stavisky. 6 Ayes, 51. Nays, 10. 7 ACTING PRESIDENT FLANAGAN: The 8 bill is passed. 9 THE SECRETARY: Calendar Number 10 1997, by Senator Winner, Senate Print Number 11 5967, an act to amend the Tax Law. 12 SENATOR SCHNEIDERMAN: 13 Explanation. 14 ACTING PRESIDENT FLANAGAN: 15 Senator Winner, an explanation has been 16 requested by Senator Schneiderman. 17 SENATOR WINNER: Thank you, Mr. 18 President. 19 This legislation is a chapter 20 amendment to a previous bill that we passed 21 earlier this year to provide for tax credits 22 for fuel cells. This changes the effective 23 date of when that tax credit would be 24 available, from July 1 of 2005 to January 1 of 25 2003, ostensibly for the purposes of not

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(518) 371-8910 1 penalizing those who have previously purchased 2 this technology from the availability of that 3 tax credit. 4 This has already been passed, I 5 believe unanimously, in this house, the 6 original bill. And this chapter amendment is 7 at the request of the Tax Department and the 8 Governor's office. And therefore I would urge 9 your support. 10 ACTING PRESIDENT FLANAGAN: 11 Senator Krueger. 12 SENATOR LIZ KRUEGER: Thank you. 13 If the sponsor would please yield to a 14 question. 15 ACTING PRESIDENT FLANAGAN: 16 Senator Winner, will you yield? 17 SENATOR WINNER: Certainly. 18 SENATOR LIZ KRUEGER: Senator, 19 the purpose of a tax incentive is to do what? 20 SENATOR WINNER: Well, Senator, I 21 know that you and I have very differing 22 viewpoints about taxation policy in New York. 23 Many people believe that the 24 purpose of providing a tax incentive is to 25 bring down the cost of a particular item so

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(518) 371-8910 1 that it would be more usable and therefore, in 2 this instance, provide for the affordability 3 of the equipment which in fact is designed to 4 try to save energy in this state. 5 So I believe that could be one 6 interpretation of what a tax incentive is for 7 the purpose of. 8 SENATOR LIZ KRUEGER: Mr. 9 President, on the bill. 10 ACTING PRESIDENT FLANAGAN: 11 Senator Krueger, on the bill. 12 SENATOR LIZ KRUEGER: I pretty 13 much agree with the sponsor, the purpose of a 14 business tax incentive is to encourage a 15 certain activity; in this case, to encourage 16 the purchase of a fuel cell technology that 17 will be efficient. 18 My problem with this legislation is 19 I don't grasp the concept of a retroactive 20 business tax incentive. These people already 21 bought the equipment. They didn't apparently 22 need the incentive of a tax reduction to 23 encourage them to take a risk on new 24 technology that we hope is more efficient from 25 an energy and environmental perspective.

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(518) 371-8910 1 So while, if I was a businessperson 2 and I bought something and then I learned that 3 there was a sale on, I might wish I had waited 4 for the sale, or if I was a businessperson and 5 I had purchased something or just a consumer 6 and then I discovered if I had waited I could 7 get a tax incentive, I don't actually think 8 the State of New York wants to go into the 9 retroactive tax incentive business. 10 Because with all due respect to the 11 people who bought these items before 12 January 2005, I would assume the next group 13 you would hear from is any other business or 14 consumer who had purchased something before we 15 passed a law, saying: Hello, me too, I want a 16 retroactive tax incentive. And I don't know 17 what my argument would be to vote no to them 18 and yes to this group of businesspeople who 19 bought their equipment before we changed the 20 law. 21 So I think it's a very dangerous 22 precedent for any of us. And with all due 23 respect to this particular group of people who 24 bought these fuel cells, they didn't need the 25 incentive to convince them. They already

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(518) 371-8910 1 bought the items. 2 I have to vote no. And I have to 3 urge my colleagues to think through the 4 precedent being set if we say, If we pass any 5 law and you like it and wish you'd gotten in 6 on it and you want to retroactively, we could 7 spend a lot of time and a lot of taxpayer 8 money trying to reevaluate each decision we 9 made and go backwards. 10 So I urge my colleagues, don't vote 11 for this bill. And I'll be voting no. 12 Thank you very much. Thank you. 13 ACTING PRESIDENT FLANAGAN: Any 14 other Senator wishing to be heard? 15 The debate is closed. 16 The Secretary will ring the bell. 17 Read the last section. 18 THE SECRETARY: Section 2. This 19 act shall take effect on the same date as a 20 chapter of the Laws of 2005. 21 ACTING PRESIDENT FLANAGAN: Call 22 the roll. 23 (The Secretary called the roll.) 24 THE SECRETARY: Those recorded in 25 the negative on Calendar Number 1997 are

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(518) 371-8910 1 Senators Andrews, Diaz, Dilan, Duane, 2 Gonzalez, Hassell-Thompson, L. Krueger, 3 Montgomery, Parker, Paterson, Sabini, Sampson, 4 Schneiderman, Serrano, A. Smith and Stavisky. 5 Ayes, 45. Nays, 16. 6 ACTING PRESIDENT FLANAGAN: The 7 bill is passed. 8 THE SECRETARY: Calendar Number 9 1998, by Senator Robach, Senate Print 5968, an 10 act to amend the Tax Law. 11 SENATOR SCHNEIDERMAN: 12 Explanation. 13 ACTING PRESIDENT FLANAGAN: 14 Senator Robach, an explanation has been asked 15 for by Senator Schneiderman. 16 SENATOR ROBACH: Yes, Mr. 17 President. This -- 18 ACTING PRESIDENT FLANAGAN: 19 Senator Robach, can I interrupt for a second. 20 We just need a little bit of quiet. 21 Senator Robach. 22 SENATOR ROBACH: In response to 23 the large spike in gasoline costs that we've 24 all experienced across the state, this bill 25 would be an immediate response to that, and a

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(518) 371-8910 1 direct one to consumers, which would cap state 2 and local taxable receipts of motor fuel and 3 diesel motor fuel at $2 a gallon, eliminating 4 the windfall to some governments who estimated 5 their receipts at $2. 6 This keeps that money with the 7 people who I believe deserve it, all of our 8 constituents, but at the same time does not 9 interrupt any government programming. It's 10 estimated it would be about 8 to 10 cents a 11 gallon, $400 million in aggregate, and roughly 12 between $150 to $225, almost in a rebate form, 13 if you would, per annum for the average 14 two-car household in New York State. 15 ACTING PRESIDENT FLANAGAN: 16 Senator Schneiderman. 17 SENATOR SCHNEIDERMAN: Thank you, 18 Mr. President. If the sponsor would yield for 19 a few questions. 20 ACTING PRESIDENT FLANAGAN: 21 Senator Robach, will you yield? 22 SENATOR ROBACH: I will. 23 SENATOR SCHNEIDERMAN: How is 24 sales tax on motor fuel and diesel motor fuel 25 collected in the State of New York?

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(518) 371-8910 1 SENATOR ROBACH: Similar to other 2 products. It's the only portion of gas that 3 is taxed on the cost, not on the gallon 4 itself. I.e., because I think this is the 5 question you want, if you estimated the 6 average cost of gas would be $2 in New York, 7 you would roughly collect 16 cents in some 8 counties -- 20 cents in others, if there's a 9 local portion -- on that $2 purchase. 10 Now, with gas going $3 and above, 11 that would become 10, 12 cents higher 12 unanticipated revenue for states and 13 localities. I guess -- I hope that answers 14 your question. That's how it's taxed, on 15 volume. 16 SENATOR SCHNEIDERMAN: Actually, 17 I appreciate it, but my question is a little 18 different. 19 My concern with this legislation is 20 that I don't see any mechanism in this bill 21 that requires any of the savings to be passed 22 on to consumers. 23 So my question is, is it not the 24 case that sales tax on motor fuel and diesel 25 motor fuel is collected from wholesalers when

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(518) 371-8910 1 they accept delivery of a shipment of fuel? 2 SENATOR ROBACH: I think that 3 won't change, that's correct, how it will be 4 collected. But now it will only be capped at 5 $2 rather than at the higher amount. 6 SENATOR SCHNEIDERMAN: And 7 through you, Mr. President, what requirement 8 is there in this bill that the wholesaler will 9 charge any less for the fuel as they pass it 10 along to the retailer? If it's here, please 11 point it out to me. 12 SENATOR ROBACH: I am very 13 hopeful that, like other bills we've done to 14 protect consumers, as they become aware of 15 that, the demand will be high. 16 And I also think that while they 17 don't absolutely have to, just like other 18 taxes that are imposed on gasoline, the public 19 would be aware of it. Obviously, in the 20 bottom-line price, there's no 100 percent 21 guarantee. But I think most people would 22 absolutely adhere to that. 23 And my guess would be as long as 24 some retailers were doing that, to remain 25 competitive, the rest would follow suit. That

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(518) 371-8910 1 would be my hope. 2 SENATOR SCHNEIDERMAN: And 3 through you, Mr. President, I asked about 4 whether there is anything to require 5 wholesalers to pass along the savings that 6 they benefit from by not having to pay the 7 sales tax to retailers. 8 Is there any requirement here that 9 the retailers, to the extent it is passed 10 through to them, pass that savings through to 11 the consumers? 12 SENATOR ROBACH: I don't think 13 that there's -- whenever you're in a free 14 marketplace, there's no guarantee. But I 15 think, given our history, what's gone on in 16 the large public scrutiny of those gas prices, 17 I believe it will. 18 And also I think, as part of all of 19 our jobs, I think we should also educate the 20 public on what we're trying to do. 21 And I believe, from talking to 22 retailers at the local level, they're not only 23 in support of this bill but plan on passing 24 along that saving. Because just like I, from 25 my constituents, who have heard complaints,

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(518) 371-8910 1 issues, concerns, with the cost to working 2 men, women, families and businesses, they've 3 heard that at their retail establishments as 4 well. 5 So while I cannot assure you 6 100 percent, as can't be done in any retail 7 situation, I do think the likelihood is 8 tremendously high. And I for one will be 9 doing all I can to make sure the public, the 10 media, and consumers are aware of it and it 11 gets passed on at the pump. 12 I would just add to this, without 13 this I absolutely know where the money will 14 go -- to the State of New York, not to our 15 constituents, not to our taxpayers, with zero 16 percentage. And I, at least for one, am very 17 much opposed to that idea. I don't think it's 18 necessary for us to take more money than we 19 anticipated from those people and their 20 families. 21 SENATOR SCHNEIDERMAN: Through 22 you, Mr. President, if the sponsor would yield 23 for one more question. 24 ACTING PRESIDENT FLANAGAN: 25 Senator Robach, do you continue to yield?

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(518) 371-8910 1 SENATOR ROBACH: Of course. 2 SENATOR SCHNEIDERMAN: Is there 3 any mechanism provided, in this bill or 4 anywhere else in the law, for any agency, 5 state or local, to monitor whether or not this 6 benefit to -- that clearly provides a benefit 7 to the wholesalers, whether or not any of this 8 benefit or what portion of this benefit is 9 provided to the retailers and whether they, in 10 turn, pass it on to consumers? 11 SENATOR ROBACH: Several overlap 12 places. As exists now, from Weights and 13 Measures to make sure that portion's right, to 14 the Attorney General, who has some regulatory 15 powers over that, as well as the Department of 16 Taxation, to make sure everything from posting 17 to collection is done properly. 18 SENATOR SCHNEIDERMAN: Thank you, 19 Mr. President. Thank the sponsor. On the 20 bill. 21 ACTING PRESIDENT FLANAGAN: 22 Senator Schneiderman, on the bill. 23 SENATOR SCHNEIDERMAN: There's a 24 related bill that's, I guess, the next bill 25 we're going to be addressing that I'm going to

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(518) 371-8910 1 attempt to offer a helpful suggestion in the 2 form of an amendment on. 3 I think the problem with this 4 legislation, which to me is a fundamental 5 flaw, is what the sponsor has just 6 acknowledged. Sales tax on motor fuel is paid 7 by wholesalers when they take delivery of the 8 fuel. That's it. There is no mechanism in 9 the State of New York for monitoring whether 10 they pass along any savings in sales tax to a 11 retailer. It doesn't exist in the Attorney 12 General's office. The price-gouging statute, 13 which I will talk about later, doesn't apply 14 to this situation. 15 Quite simply put, we are at the 16 mercy of the oil industry. And I note that 17 even Senator Bruno, on August 24th, when we 18 were talking about the possibility of price 19 gouging, said that -- stated that he was very 20 concerned about oil businesses that are making 21 up -- quote, making up to 58 percent more 22 profits than they made last year. 23 We are in a situation where people 24 are saying that, oh, because of the hurricane, 25 oil prices have gone up. And yet if you

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(518) 371-8910 1 actually look into the evidence of this small 2 portion of the oil supply that was disrupted 3 by the hurricane, it looks very different. 4 And our great U.S. Senator Schumer today 5 actually addressed this issue and raised it 6 and talked about it at the federal level. 7 If we are going to address the 8 issue of increased prices, I think we have to 9 ask a fundamental question. Is the oil 10 industry playing straight with us, or are they 11 taking advantage of a situation just to rack 12 up profits unnecessarily because the supply 13 has not been seriously diminished? 14 Now, I am going to offer a 15 suggestion in the form of an amendment to 16 Senator Marcellino's bill. What we really 17 need to do is amend our price-gouging statute 18 to give the Attorney General and local 19 authorities jurisdiction to do this. In the 20 absence of that -- and the sponsor can correct 21 me if I'm wrong -- there is no provision of 22 state law that provides for any punishment of 23 any kind for wholesalers and retailers that 24 just simply take the benefit of a sales tax 25 reduction and don't pass it along to the

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(518) 371-8910 1 consumers. There is no downside. 2 And if you're relying on the oil 3 industry to be free of collusion in the area 4 of oil prices, I would urge you that this is 5 probably the worst industry in the United 6 States to pin those noble hopes on. 7 So I would suggest that absent a 8 mechanism to monitor whether the tax is being 9 passed through, absent a mechanism to deter 10 the wholesalers and retailers from just 11 keeping the money, what we're doing really is 12 putting a lot of money -- and we know this is 13 the case -- in the pockets of people in the 14 oil business. Maybe the consumers would get 15 some benefit from this; I don't know how much 16 it would be. The sponsor has acknowledged he 17 doesn't know how much there would be a 18 problem. 19 We can do better than this. We 20 should be looking at a way to ensure that 21 price gouging is not taking place in our 22 state. There are legal steps we can take. 23 I'm going to talk about one later. But 24 without that, I think this is a flawed 25 approach to solving this very, very serious

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(518) 371-8910 1 problem. 2 Thank you, Mr. President. 3 ACTING PRESIDENT FLANAGAN: 4 Senator Balboni. 5 SENATOR BALBONI: Mr. President, 6 I think that as I've listened to my 7 colleagues' discussion of this issue it's very 8 difficult to be sitting here in the chamber 9 and listen to the arguments against an effort 10 to try to reduce the ultimate amount of gas 11 taxes that people pay. 12 Because what we're missing is what 13 all of us experienced when Katrina hit, as you 14 drove around our neighborhoods and you had 15 90-cent-to-a-dollar increases overnight for 16 the gas stations. And I don't know about you 17 guys, but I sat around saying, Where's the AG? 18 Where are the people who are going to look at 19 price gouging? Where are all these different 20 people who are going to take a look at how to 21 protect the consumer? And you know what? 22 Nobody was around. 23 Now we have a nice piece of 24 legislation that at least talks about 25 governmental intervention in an area that

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(518) 371-8910 1 obviously has demonstrated the fluctuations 2 and the volatility that is going to continue 3 to plague us. 4 And, Senator Robach, this is an 5 excellent idea. It's the time for the idea. 6 Because unfortunately, even though we've seen 7 a reduction in costs recently, what we're also 8 seeing is that there's huge volatility. 9 And the last thing -- you know, 10 what we also don't ever do in this chamber, 11 because it's against our interests, we don't 12 look to the laws that are currently on the 13 books. It is my belief that many of the laws 14 that are currently on the books are not being 15 used effectively to try to curb some of the 16 abuses. 17 For example, nobody is talking 18 about antitrust. Antitrust applies to 19 gasoline stations and wholesalers. I mean, 20 nobody talks about that. And yet it's just a 21 coincidence that four stations on every corner 22 seem to have the exact same gas price? You 23 know, we don't talk about these things. But 24 in the bigger context, we ought to be. 25 And of course, at the end of the

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(518) 371-8910 1 day, we should remember the angst that hit all 2 of us when we just said it's just darn unfair 3 that people are capitalizing on somebody 4 else's misery. 5 I plan on voting in favor of 6 Senator Robach's well-thought-out bill. 7 Thank you very much. 8 ACTING PRESIDENT FLANAGAN: 9 Senator Paterson, why do you rise? 10 SENATOR PATERSON: Mr. President, 11 if Senator Balboni would yield for a question. 12 ACTING PRESIDENT FLANAGAN: 13 Senator Balboni, will you yield? 14 SENATOR BALBONI: Yes, I will. 15 SENATOR PATERSON: Senator 16 Balboni, you said you're going to vote for the 17 legislation, and then you gave all the 18 arguments to vote against it. 19 Now, let me elaborate on that. You 20 just talked about all the prices that went up 21 simultaneously, the antitrust action, the 22 issue of what would be apparent price gouging. 23 You bypassed the Governor's office, which 24 could have declared a state of emergency and 25 blamed it on the Attorney General's office --

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(518) 371-8910 1 but we're going to let that go, because we 2 understand. 3 SENATOR BALBONI: But actually, 4 if I might, I just disagree with your premise. 5 I don't think there would have been a basic 6 declaration of an emergency. 7 SENATOR PATERSON: Well, then, in 8 that case the Attorney General's office 9 couldn't act. 10 SENATOR BALBONI: Mr. Speaker -- 11 Mr. Speaker? Sorry. 12 (Laughter.) 13 SENATOR BALBONI: Mr. President, 14 through you. 15 Going back to my days in the 16 Assembly. It's because I'm sitting next to 17 Winner. It's Winner's fault. 18 ACTING PRESIDENT FLANAGAN: 19 Senator Balboni. 20 SENATOR BALBONI: Mr. President, 21 perhaps the gentleman was involved in 22 conversation, but I had actually said that 23 this is the basis for the prosecution. 24 Because if you go back to the business law and 25 you take a look at what constitutes price

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(518) 371-8910 1 gouging and how you set up your investigation 2 to prove that, this -- all of the things we've 3 talked about in fact empower the Attorney 4 General to do this very kind of action. 5 SENATOR PATERSON: All right, 6 Senator. Then if the Senator would yield for 7 a question. 8 ACTING PRESIDENT FLANAGAN: 9 Senator Balboni, do you continue to yield? 10 SENATOR BALBONI: Yes, I do. 11 SENATOR PATERSON: Senator, 12 what's your explanation for why, between 13 August 29th and September 2nd right here in 14 New York State, right in this area, the prices 15 of oil went up from $2 to $3.48, and in 16 New York City the prices went at high as 17 $3.80? 18 SENATOR BALBONI: What is my 19 explanation for that? 20 SENATOR PATERSON: What was the 21 intervening cause, which is the effect that 22 the prices went up? 23 SENATOR BALBONI: Senator 24 Paterson, and I mean this with all due 25 respect, but perhaps you and I can engage in a

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(518) 371-8910 1 discussion as to the effect of the mercantile 2 exchange on the establishment of the prices on 3 a market-based economy for gasoline. At which 4 time, though, we would probably talk about 5 things that happen six months down the line. 6 The question here is how can any 7 retailer or wholesaler justify the increase of 8 90 cents on product that's already in the 9 tank. 10 SENATOR PATERSON: Exactly. 11 SENATOR BALBONI: You know, and 12 so part of that is also, though, long range. 13 As you go forward, how do you protect the 14 consumer? The cap is the way to do that right 15 now, because it provides a break on the price 16 costs. 17 SENATOR PATERSON: Senator 18 Balboni. 19 SENATOR BALBONI: Yes. 20 SENATOR PATERSON: You've just 21 asked me my own question back. 22 (Laughter.) 23 SENATOR PATERSON: So I'm going 24 to answer it for you. 25 SENATOR BALBONI: I don't think I

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(518) 371-8910 1 asked the question. And if I did, I withdraw 2 the question. 3 (Laughter.) 4 SENATOR PATERSON: Serving with 5 you for eight years now, that is the best 6 decision you've ever made. 7 (Laughter.) 8 SENATOR PATERSON: Mr. President, 9 on the bill. 10 ACTING PRESIDENT FLANAGAN: 11 Senator Paterson, on the bill. 12 SENATOR PATERSON: Senator 13 Schneiderman laid out, I think, quite 14 constructively the way in which taxes are paid 15 and the fact that there's really no 16 enforcement of this type of sales tax. So in 17 other words, in concept, Senator Robach's 18 concept is very good. But we don't have the 19 enforcement capability to ensure that it 20 actually happens. 21 The reality is that the same 22 individuals who raised the price of oil are 23 the same ones who faith has shown that they 24 will now not just pocket the tax increase to 25 go along with the skyrocketing rates that they

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(518) 371-8910 1 collected in the last three weeks. 2 So the first time it happens, we 3 feel shame. But the second time, it's shame 4 on us if we're going to give the same entities 5 the decision-making capacity to determine 6 whether or not they want to pass what would be 7 these savings along to the consumer when, in 8 fact, if they were concerned about consumers 9 or anybody at a very difficult time and in a 10 crisis in this country, they went right ahead 11 and raised the prices. 12 As Senator Balboni pointed out, 13 they sold you the same gas that was in their 14 tank at $2 the week before for nearly $4 the 15 week after. The same people did it. Now 16 we're going to give them an extra opportunity 17 by affecting the sales tax, which gives them a 18 greater pool of resources to deal with. 19 Now, first of all, the estimate is 20 $200,000 savings to the state if the -- 21 $200 million, I'm sorry, and the local 22 government another $400 million if they opt 23 in. There are 9 million cars in New York 24 State. So that would be, by my calculations, 25 $44 per car. So a two-car household wouldn't

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(518) 371-8910 1 get a $150 to $200 savings, as Senator Robach 2 is suggesting. It would be $88. So, first of 3 all, it's only half as effective as the 4 sponsor is claiming that it would be. 5 But, secondly, I don't think it's 6 going to be effective at all. Because the 7 issue as -- in terms of the savings, why we 8 would want the money to go to the state rather 9 than, I presume, to the companies, is because 10 the same legislation that we're passing today 11 that would inure to the benefit of consumers 12 would raise costs to the state at the exact 13 same amount that we'd be saving with a sales 14 tax. I get that from the Syracuse 15 Post-Standard of September 2nd. 16 So now when we look at what 17 certainly appeared to be price gouging -- 18 because if it wasn't, I'd sure like to know an 19 example of what is -- we recognize that the 20 hurricane, as both Senator Schneiderman and I 21 believe Senator Balboni also really pointed 22 out, had nothing to do with it. The rigs in 23 the New Orleans area probably lost somewhere 24 between 150,000 and 200,000 barrels of oil 25 during that period, something approaching

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(518) 371-8910 1 nearly about 2 percent of the oil that is 2 distributed around this country every day. 3 When oil comes out of the ground to the time 4 it gets in the gas tank, that's approximately 5 a 4-month period of time. So there was 6 nothing that should have promulgated that kind 7 of effect. 8 Even the large rigs like the Shell 9 rig, which controlled about 250,000 barrels of 10 oil a day, wasn't even affected by the 11 hurricane. You would have needed something 12 with five times the effect on production to 13 even get to 5 percent of the nation's 14 production of oil daily. Our country produces 15 about 20 million gallons of oil a day -- 16 barrels of oil a day. 17 And so when we come after the fact 18 and create this sales-tax incentive, we are 19 really not addressing the major issues. If we 20 were going to come back here and send a 21 message to the federal government today, the 22 message that we've got to send the federal 23 government is that there may be a limited time 24 that we can act on these fuels and oil 25 reserves before they start to run out.

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(518) 371-8910 1 We have used, as a globe, about 2 1 trillion barrels of oil since it started 3 being produced in the mid-19th century. Oil 4 first started to be produced in 1859. The 5 United States' oil production increased 6 gradually until it hit about 10 billion 7 barrels of oil a day midway through the year 8 1970. That number has come down ever since. 9 Now it has dipped slightly below 5 billion 10 barrels of oil a day. 11 And so with that decrease in 12 production, the amount of use in this country 13 is now 30 billion barrels per year. So when 14 you look at the comparison, we are getting 15 less and spending more. 16 By those calculations, we've got to 17 determine how much fossil fuel and oil is left 18 in our earth. If it is 2 trillion barrels, as 19 many have suggested, then we've already used 20 up half the supply. As you get to the bottom 21 of the supply, it becomes more and more 22 expensive to produce the oil. So this is a 23 crisis that some people feel is so paramount 24 that we would actually run out of the fossil 25 fuel in the year 2029.

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(518) 371-8910 1 Our own government's energy experts 2 say that I'm wrong, there's actually 3 3 trillion barrels of oil, of which we've used 4 one, beneath the earth's surface. If that's 5 the case, it would only add about 18 years to 6 the expectancy before the oil actually runs 7 out. 8 So what we're going to have to do 9 is to find alternative fuels that extend this 10 time until we can find the alternative fuel 11 that would actually solve this crisis and make 12 the conversion. But the conversion itself 13 would take a number of years. 14 And that's what we need our 15 colleagues in Washington to focus, that the 16 issue is one that is time-sensitive. The 17 ideas of wind, of solar power, of hydrothermal 18 fuels are good, but they can't, as oil can, 19 just go straight for production. Their 20 effectiveness is measured by their ability to 21 extract hydrogen from water. 22 Hydrogen is the lightest element 23 in -- at least one of the lightest elements 24 that we have. No matter how well you try to 25 contain it, 3.4 percent of it escapes. That's

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(518) 371-8910 1 the best we've ever done. So therefore, any 2 kind of use of hydrogen fuel at this point is 3 really not going to be cost-effective. It 4 would cost, and this is probably the first 5 time I've ever used this term here on the 6 floor, trillions of dollars to build the types 7 of pipelines that we now pump oil to pump 8 hydrogen. 9 So as you can see, it is probably 10 not as effective as we think in terms of a 11 conversion. What we're going to have to do is 12 a conservation, a little at a time, to 13 actually preserve and prolong our oil supply. 14 But the tax, the sales tax that 15 we're proposing here today is not going to 16 benefit us unless we can guarantee that the 17 money gets in the hands of the consumer. I 18 think that Senator Schneiderman illustrated 19 that when you look at that system, there's 20 nothing to guarantee that it's actually going 21 to work. 22 So it's really my feeling, standing 23 here today, that it was a good idea for us to 24 come back. I commend Senator Bruno for 25 bringing us back to discuss this. Together we

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(518) 371-8910 1 can implore the federal government that this 2 is probably the most serious issue we can be 3 facing now, when most of the other available 4 oil around the globe is in the hands of many 5 of our enemies. 6 And so I don't think that a sales 7 tax would be in any way beneficial when the 8 decision-making capacity of what the price of 9 oil is is still something that we have no real 10 ability to influence. And we just saw an 11 example of that during the crisis last month. 12 ACTING PRESIDENT FLANAGAN: 13 Senator Morahan. 14 SENATOR MORAHAN: Thank you, Mr. 15 President. Would the sponsor yield for a 16 question? 17 SENATOR ROBACH: Yes, I will. 18 SENATOR MORAHAN: Senator Robach, 19 every year we vote to give a sales-tax holiday 20 just before we open up the schools so that our 21 consumers and our people can deal with the 22 sudden need to buy a large amount of clothing. 23 So we take it into our agenda to give a tax 24 holiday for several weeks, or two weeks. 25 How is that any different on the

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(518) 371-8910 1 enforcement issue? How do we guarantee in 2 that situation, which we unanimously vote for, 3 that that tax gets back to the consumer? 4 SENATOR ROBACH: Correct, it's 5 absolutely the same. That bill that we do to 6 try and hold down the cost of clothing to 7 folks would be exactly the perfect analogy. 8 We have no control over what the 9 cost of the product is, but we can control 10 what the cost of the tax is. In an attempt, 11 again, to make that more additional beneficial 12 to the consumers and our constituents. 13 SENATOR MORAHAN: So a 14 retailer -- may I continue, Mr. President? 15 Will the sponsor continue to yield? 16 ACTING PRESIDENT FLANAGAN: 17 Senator Robach? 18 SENATOR ROBACH: I will. 19 SENATOR MORAHAN: So in other 20 words, a retailer selling shoes or any other 21 garment or footwear under $110, knowing that 22 we're going to come out with this tax 23 abatement, if you will, for the sales tax, 24 could up their price, couldn't they? 25 SENATOR ROBACH: They could,

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(518) 371-8910 1 hypothetically. Absolutely. 2 SENATOR MORAHAN: Okay. Mr. 3 President, will the sponsor continue to yield? 4 ACTING PRESIDENT FLANAGAN: 5 Senator Robach, do you continue to yield? 6 SENATOR ROBACH: I will. 7 SENATOR MORAHAN: So in other 8 words, it would be the marketplace now, the 9 competition, that probably would hold a 10 retailer down from trying to raise his price a 11 little bit to, you know, capitalize -- 12 SENATOR ROBACH: Absolutely. 13 There is no question. Comments on what 14 absolute guarantee rigidity is not there. But 15 we would hope that the consumer would be 16 somewhat aware of that and would put that 17 pressure on. 18 In the case of gas, there is no 19 question, Senator Morahan, that there are 20 websites now that are posting gas. When gas 21 was $2 a gallon, even I myself was not that 22 particular at which corner I bought gas at. 23 At the higher price, you can bet your life I 24 now shop around for the lowest cost. 25 And I believe if we implemented

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(518) 371-8910 1 this, just like clothing or anything else, 2 people would shop around for the lowest cost 3 and would force the marketplace to adhere and 4 past that savings on to the consumer. 5 SENATOR MORAHAN: Thank you, 6 Senator. 7 SENATOR ROBACH: You're welcome. 8 ACTING PRESIDENT FLANAGAN: 9 Senator Padavan. 10 SENATOR PADAVAN: Part of my 11 reason for asking to speak was to make the 12 very point that the Senator Morahan did. 13 Last year, at the request of the 14 City of New York, we eliminated the sales tax 15 on clothing and shoes of $110 or less. We did 16 it unanimously, as I recall. And yet no one 17 raised the question on the floor as to how we 18 were going to stop Nike, as an example, of 19 increasing their price to the retailer an 20 amount equivalent to the reduction in the 21 sales tax that we were providing. 22 No one raised that issue. The 23 reason you didn't, and the reason it's not an 24 issue today, is a competitive market. 25 Now, Senator Paterson, I know you

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(518) 371-8910 1 understand the commodities market a lot more 2 than you indicated in your remarks. 3 Commodities are sold not on the price of 4 today, but the price of tomorrow, which could 5 be months or years, in some cases. But 6 generally it's months. Which is why most 7 building owners, apartment owners, lock in a 8 price, they lock in a price that they're going 9 to pay for the coming heating season. 10 Now, if the wholesale price in the 11 marketplace has gone crazy because of a 12 hurricane or whatever the factors may be, then 13 that wholesaler gets stuck holding the bag. 14 And the owner of the building, the apartment 15 building, as an example, pays that price. 16 However, I do agree with you that 17 people can take advantage of the situation and 18 disagree with you in terms of what exists out 19 there to deal with those problems. 20 The Attorney General has found it 21 possible -- and we applaud him -- to crack 22 down on the securities industry, the insurance 23 industry, and a whole bunch of others who were 24 doing things at the expense of the consumer, 25 adversely. People are going to jail. People

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(518) 371-8910 1 are paying huge fines. 2 And there is no doubt in my mind 3 that he could crack down on the commodities 4 industry, I don't care if it's oil or wheat or 5 soybeans or hog jowls, crack down on that 6 industry if they were taking advantage of the 7 marketplace. 8 As a matter of fact, I think 9 Senator Fuschillo has a bill in to increase 10 the magnitude of those penalties that 11 currently exist under law in terms of civil 12 action. 13 The marketplace -- this was 14 mentioned earlier today by Senator Bruno -- 15 the marketplace will also provide a vehicle to 16 ensure that this reduction, in terms of the 17 retail price vis-a-vis the sales tax, is 18 passed along to the consumer. 19 Last week I filled up a tank of 20 gas, I think I paid $3.49. Today I filled up 21 a task of gas before I left for Albany, and it 22 was $3.07. What happened? What happened? 23 Well, the futures contracts went down, number 24 one, if I heard correctly on the radio and 25 elsewhere. Well, they may go back up again.

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(518) 371-8910 1 But nevertheless, they went down between that 2 week-and-a-half time frame. 3 One gas station on that corner 4 competes with another gas station on that 5 corner. Sunoco over there, Mobil over there. 6 And 10 cents is a fair amount on a gallon. 7 And if you're driving down the avenue and you 8 see that one's 10 cents less than this one, 9 where are you going to go? You're going to 10 save the 10 cents, obviously. And so that 11 will be another way of dealing with the issue. 12 Is it a hundred percent foolproof 13 in every respect? No. No more than it was 14 when we eliminated the sales tax on clothing 15 and shoes. But there are enough vehicles out 16 there -- the Attorney General, the State Tax 17 Department, Department of Consumer Affairs, 18 both state and city, all of those folks 19 certainly have the authority to jump into the 20 issue if people are taking advantage of it. 21 ACTING PRESIDENT FLANAGAN: 22 Senator Volker. 23 SENATOR VOLKER: Mr. President, I 24 just -- and I realize it's very tempting to 25 talk about price gouging and all that sort of

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(518) 371-8910 1 thing. I used to be chairman of Energy some 2 years ago. I spent some time with the Federal 3 Energy Regulatory Commission. And I spent, of 4 course, a lot of time -- I've been in the 5 Legislature here for almost 34 years. You 6 know, what you said, David, was very 7 fascinating. You gave a lot of very good 8 information. 9 But let me tell you what really 10 caused -- and when somebody says that the 11 hurricane, the worst natural disaster in the 12 history -- some could argue in the history of 13 the world -- by the way, if that Category 5 14 storm ever hit the levees in Holland, they 15 would break. I just have to tell you that 16 there doesn't seem to be an understanding, 17 there were about 30 refineries that went down. 18 The problem in this country is 19 thanks to the Clean Air Act, the federal 20 government has total control of this issue. 21 We don't have control of it. The Clean Air 22 Act said everybody in this country now, 23 whether you need it or not, has to have some 24 additive in their gas. That means that all 25 sorts of different refineries have to refine

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(518) 371-8910 1 different kinds of gas. That's a killer. 2 That's the real reason we have this problem. 3 We don't need ethanol in our -- we have some 4 cleanest air in Western New York in the world 5 right now. It's silly, but then on the other 6 hand the Clean Air Act says you got to have 7 something in there. 8 But the bigger problem is we 9 haven't built a new refinery in 15 years. 10 When you say why haven't the prices gone down, 11 because about 12 or 15 refineries went back 12 online -- but I'm just reading the refineries 13 right here. ConocoPhillips, Bell Chase, 14 Louisiana; 247,000, no power, major damage. 15 ExxonMobil, 187,200, no power, water damage. 16 They haven't even gotten to a couple of these 17 refineries yet. They can't get to them. The 18 media that sat in New Orleans and moaned about 19 the hurricane didn't realize there were four 20 states involved. It's such a terrible 21 disaster that the energy industry is in chaos. 22 And one more thing I hesitate to 23 tell everybody. The issue of what the price 24 is going to do is going to be determined in 25 the next three days, two days. If this

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(518) 371-8910 1 hurricane that's now a Hurricane 4, 2 unfortunately -- it's up to 4; it could be a 3 5, Rita -- which is going by, apparently, 4 Florida but headed straight for Houston, if it 5 misses Houston, the price of gas, I will tell 6 you, will be at $2.30 by next week. But if it 7 hits Houston, it will be back up to 8 three-something, whatever. Because the 9 problem is a supply problem. 10 We don't have -- we have plenty of 11 oil. We can't refine it fast enough. And if 12 we don't deal with that -- the 13 environmentalists have turned this whole thing 14 into a mess of epic proportions. We have not 15 built a refinery in 15 years. And the other 16 house has refused to let us pass siting 17 legislation because it's too sensitive. 18 The real reason for all these 19 numbers doesn't have to do -- and I disagree 20 with you, Senator Paterson. There's enough 21 oil, I'm told, for the next century. On the 22 other hand, what we're doing is by this stupid 23 oil stuff we're now tapping into the natural 24 gas problem. 25 One thing I will say, for the

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(518) 371-8910 1 economy of upstate New York this has been 2 great. Coal is moving at a pace we have never 3 seen before. And you can't believe how many 4 industries have switched over to coal. And of 5 course there's this myth that coal is dirty. 6 It's not dirty in any plants in this state. 7 You can't build a dirty plant anymore. It's 8 impossible. 9 But I think the real point is to 10 blame the oil people for this, when their 11 refineries are down all over the place and 12 when they can't get the flow of gasoline into 13 places, is very nice, it looks good, but it 14 doesn't make sense. The truth is, the market 15 reflects the real reliability of oil. And the 16 real reliability of oil right now, with the 17 refineries down, is in deep, deep trouble. 18 Iraq doesn't matter. Iraq's not a 19 big supplier of us anyways. That's the myth 20 about Iraq. It hasn't been for a long time. 21 We don't get much -- we use Canadian, we use 22 all kinds of oil. But the problem is you can 23 have all the oil you want, but if you can't 24 refine it, what the hell good is it? 25 ACTING PRESIDENT FLANAGAN:

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(518) 371-8910 1 Senator Paterson, why do you rise? 2 SENATOR PATERSON: Mr. President, 3 if Senator Volker does not agree with me after 4 this, I'm just going to kill myself. 5 SENATOR SCHNEIDERMAN: Big 6 supporter of the death penalty. 7 ACTING PRESIDENT FLANAGAN: 8 Senator Paterson, are you asking Senator 9 Volker to yield or are you on the bill? 10 SENATOR PATERSON: Say again? 11 ACTING PRESIDENT FLANAGAN: Are 12 you asking Senator Volker to yield -- 13 SENATOR PATERSON: Yes. 14 ACTING PRESIDENT FLANAGAN: -- or 15 are you on the bill? 16 SENATOR VOLKER: I know you won't 17 do what you just said. Go right ahead. 18 SENATOR PATERSON: See, Senator 19 Volker, I think the -- when you explain the 20 refineries that you're talking about, that's 21 their annual production. And you explained it 22 well. 23 But what I'm trying to explain to 24 you is that if you divide that over a year, 25 because it's a few weeks that they've been out

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(518) 371-8910 1 of service, and you take the end product and 2 you add all those end products up, it only 3 comes out to, at the most, about 300,000 4 barrels. 5 And I'm going to tell you who I'm 6 citing as my reference on this. It's 7 President Bush. Because when they went to 8 President Bush and they asked him to use the 9 National Strategic Petroleum fund, which has 10 320 million barrels of gas, he was very 11 reluctant to use it because he knew that the 12 stream of oil during that time was relatively 13 uninterrupted. I'm not going to be shrill and 14 say that it wasn't a problem, but it wasn't a 15 problem that should have ignited that kind of 16 reaction. 17 Do you see what I'm saying? 18 SENATOR VOLKER: I see what 19 you're saying. 20 But I'm looking at the numbers 21 here, and the plants that are down go to a 22 million barrels a day. Just what I'm looking 23 at here. I don't know where that information 24 you had came from. 25 By the way, one of the reasons why

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(518) 371-8910 1 the gas prices have been going down is that 2 the president waived the regulations on the 3 EPA so that they don't have to refine 4 separately. We're getting some gasoline now 5 that is not -- probably doesn't have any 6 ethanol in it. Because the president wisely 7 realized that if he didn't do that, the price 8 would go up even higher. The media, because 9 they don't understand any of this stuff, 10 didn't understand it. 11 But I think, David, the problem is 12 the distribution in this country is so tight 13 that if you knock down 12 refineries, that's 14 half the country, almost. I mean, there's no 15 way that you can avoid that. 16 And the reason, by the way, that 17 other countries haven't -- the price hasn't 18 been as high is because our country is the one 19 affected by these refineries. The other 20 countries aren't seeing the enormous 21 escalation in prices we're seeing, and that's 22 because this is a local problem. 23 You can't have the worst disaster 24 in the history of this country -- which is 25 exactly what just happened. It makes the

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(518) 371-8910 1 tsunami and all that stuff look like a small 2 storm, comparatively. This is four states. 3 It is a horrendous disaster that is going to 4 take years to fix up. And part of the thing 5 we've got to fix up is our whole energy 6 industry. 7 ACTING PRESIDENT FLANAGAN: 8 Senator Parker. 9 SENATOR PARKER: Mr. President, I 10 believe there's an amendment at the desk. 11 ACTING PRESIDENT FLANAGAN: 12 That's correct, Senator Parker. 13 SENATOR PARKER: I ask that the 14 reading of the amendment be waived, and I ask 15 to be heard on the amendment. 16 ACTING PRESIDENT FLANAGAN: The 17 reading is waived, and you may be heard on the 18 amendment. 19 SENATOR PARKER: Thank you very 20 much, Mr. President. 21 I want to begin by thanking Senator 22 Robach for a good attempt to address this 23 crisis. I think that this disaster that 24 Hurricane Katrina brought on us affected 25 people in many different ways. I think that

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(518) 371-8910 1 this is one of the things that people did not, 2 in fact, factor in. 3 And, quickly, it led to a great 4 deal of not just panic emotionally but also a 5 significant stress as it relates to people's 6 pocketbooks. We are looking at significant 7 increases to consumers, not just in fuel costs 8 but home heating this winter. It's going to 9 have a significant impact on things like 10 school districts, who are going to have a high 11 cost of fuel in terms of school buses. You 12 know, we're looking at the cost of this, you 13 know, rising into several billions as we look 14 at it nationally. 15 And I think that, you know, this 16 was a good attempt to -- this bill was a good 17 attempt to give some relief to consumers 18 quickly such that they won't have sticker 19 shock, as I got when I drove through my 20 district and saw prices jump quickly from 21 around $2.50 to $3.80. 22 However, I think that it doesn't go 23 quite far enough. And what my amendment does, 24 it explicitly authorizes and empowers all 25 localities in New York State, if they choose,

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(518) 371-8910 1 the option of providing the same type of 2 exemption from the local sales tax for any 3 fuel price exceeding $2 per gallon. So in the 4 same -- just like we're saying do it for the 5 state, we're also now providing an opportunity 6 for localities who also provide taxes onto 7 fuel to also provide those same kind of relief 8 for consumers. 9 And so I ask my colleagues who are 10 so interested in providing relief to consumers 11 to vote for this amendment and allow not just 12 the state tax to be relieved but also the 13 taxes that localities add also to be relieved 14 with this amendment. 15 ACTING PRESIDENT FLANAGAN: On 16 the amendment, these Senators in agreement 17 please signify by raising your hands. 18 THE SECRETARY: Those recorded in 19 agreement are Senators Andrews, Breslin, 20 Brown, Diaz, Dilan, Duane, Gonzalez, 21 Hassell-Thompson, Klein, L. Krueger, 22 C. Kruger, Montgomery, Oppenheimer, Parker, 23 Paterson, Sabini, Sampson, Savino, 24 Schneiderman, Serrano, A. Smith, M. Smith, 25 Stachowski, Stavisky and Valesky.

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(518) 371-8910 1 ACTING PRESIDENT FLANAGAN: The 2 amendment is not agreed to. 3 Any other Senator wishing to be 4 heard on the bill? 5 Senator Krueger. 6 SENATOR LIZ KRUEGER: Thank you, 7 Mr. President. On the bill. 8 Although our conversation has been 9 all over the place and not exactly on the 10 bill, but I do have to revisit a couple of the 11 points that were made on the floor during the 12 fascinating debate. 13 For the record, I think it was 14 Senator Morahan who made the argument that 15 this kind of sales tax relief is not unlike 16 sales tax relief that we give for clothing 17 before school. Well, one of the differences, 18 in fact, is -- 19 ACTING PRESIDENT FLANAGAN: 20 Senator Krueger, would you suffer an 21 interruption? 22 SENATOR LIZ KRUEGER: Certainly. 23 ACTING PRESIDENT FLANAGAN: Just 24 trying to get some quiet. 25 Senator Krueger.

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(518) 371-8910 1 SENATOR LIZ KRUEGER: Thank you, 2 Mr. President. 3 One, sales tax on clothing is 4 actually something we encourage people to buy. 5 And technically, petroleum products are 6 something we're supposed to be discouraging 7 people from using. So the argument about the 8 tax incentives again are not the same. 9 Second, the way we collect our tax 10 on gas is very different than the way we 11 collect our sales tax on clothing. And going 12 back to Senator Schneiderman's earlier point 13 about how would we ever document or prove 14 whether consumers received the tax reduction, 15 it's different because, on gas, the wholesaler 16 pays the tax up front, based on the -- 17 ACTING PRESIDENT FLANAGAN: 18 Senator Krueger. 19 Thank you. 20 SENATOR LIZ KRUEGER: Thank you. 21 The reason there's a difference in 22 the analogy of sales tax on clothing and shoes 23 and sales tax collection on gas is the gas 24 market is different and the wholesaler, not 25 the retailer, pays the tax up front, based on

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(518) 371-8910 1 the market price of gasoline at the time they 2 receive the delivery. Then the retailer pays 3 the difference in prepaid sales tax by the 4 wholesaler and the actual sales price when the 5 price is above the projected price. 6 It is not an X percent over 7 whatever the label says on the clothing store 8 or the shoe store for buying a product. So in 9 fact, you couldn't track it the same way. 10 It's not a parallel analogy. 11 And again, are we talking about 12 wanting to create a giant infrastructure 13 involving AGs and DAs and tracking down who 14 did what price at 6500 different gas stations 15 in New York State, 90 percent of which are 16 independently owned? 17 We also know that the price issue 18 in gas actually doesn't have much to do with 19 the retailer at any of these 6500 different 20 gas stations and has everything to do with the 21 commodities market, as Senator Padavan 22 attempted to bring up in his discussion, and 23 the mercantile exchange market, and the spot 24 market for gas prices versus contracts. 25 And what we really need to be

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(518) 371-8910 1 addressing -- and unfortunately we're not, 2 with this bill -- is the fundamental question 3 of who is controlling these gas prices, why 4 are they skyrocketing out of control, doesn't 5 really have anything to do with Hurricane 6 Katrina. Senator Volker made very eloquent 7 arguments about that. 8 But in fact we know from our own 9 research and from our own energy experts in 10 New York State that New York State's gasoline 11 supply was already in the tank, so to speak, 12 at least a four weeks' supply, when Katrina 13 hit. The prices didn't go up the next day, 14 the day after, the day after that because of 15 Katrina. 16 And it didn't go up starting with 17 Hurricane Katrina. Oil prices more than 18 tripled since late 2001, before Hurricane 19 Katrina. Between '99 and 2003, average 20 household expenditures on gasoline, heating 21 oil and natural gas increased more than 22 35 percent, and yet industry costs did not 23 increase during this period, leading to record 24 profits. 25 If the gas price in New York State

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(518) 371-8910 1 remains at the current average of $3.25 a 2 gallon, New York drivers will be paying 3 $7.2 billion more than they did last year for 4 gasoline, a $7.2 billion increase to New York 5 drivers. 6 So even if I supported this bill -- 7 and, Senator Robach, I'm sorry, I cannot -- a 8 $100 million savings on a new cost of 9 $7.2 billion is not addressing the problems of 10 the cost of gas in this state and for our 11 citizens. 12 And if the costs of oil and gas 13 remain at historically high levels, the cost 14 of almost all other consumer products in all 15 the sectors of our economy are going to be 16 affected. So I ask at the close, I suppose, 17 of this special session, what are we really 18 doing to address this problem for our state? 19 Again, five major oil companies 20 control 62 percent of the retail gasoline 21 market, and 10 companies control close to 22 80 percent of our oil refinery capacity. 23 Between 1997 and 2002, 34 major oil and gas 24 companies merged into 13, 15 refining 25 companies merged into seven. And the federal

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(518) 371-8910 1 government's U.S. Government Accounting Office 2 found in 2004 that these mergers, increased 3 market concentrations, resulted in higher 4 gasoline prices. 5 A small number of firms dominate 6 and control our market. It is inelastic. And 7 they control what goes into the market and 8 what we pay. The extremely high barrier to 9 entry into the market makes it impossible for 10 competitors to compete or offer lower prices. 11 And the companies in control are making a 12 killing at our expense. 13 The U.S. Federal Trade Commission 14 concluded in 2001 that oil companies 15 intentionally withheld supplies of gasoline 16 from the market as a tactic to drive up prices 17 as a profit-maximizing strategy. It can't 18 come as a shock to us here in 2005 that 19 they're doing the exact same thing because of 20 Katrina. They're holding back supply to 21 increase the cost. Have we not remembered 22 Enron and the electricity story of California? 23 It's exactly the same story. 24 And it's not hard to prove. The 25 profit margins of our top five oil companies

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(518) 371-8910 1 have increased in the second quarter of 2005 2 by double digits. ExxonMobil went up 3 32 percent the second quarter of 2005. 4 British Petroleum, up 37 percent. Shell, up 5 35 percent. Chevron, up 12.8 percent. And 6 ConocoPhillips, up 55 percent. We're going to 7 pay $7.2 billion more for gas in this state 8 this year than last year because these 9 companies have figured out how to control the 10 market and the prices. And, frankly, having a 11 debate with about whether somebody would keep 12 4 cents more in their pocket if we pass this 13 law does nothing to address this. 14 The federal government has allowed 15 this to take place. They have allowed the oil 16 industry to take control in a monopoly model 17 of our gas and petroleum industry. There is 18 not necessarily that much we can do at the 19 state level, to go back to my earlier 20 statements this morning -- excuse me, earlier 21 this afternoon. The federal government has to 22 act, and they have to act in the right 23 direction. 24 And yet there are just a few things 25 we can do here today. We can follow up with

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(518) 371-8910 1 price gouging. And we can work together to 2 demand that federal laws change and we take 3 back the power of the people over the costs of 4 their energy. 5 And it is outrageous -- and I 6 repeat, outrageous -- that this is all 7 documented by federal reports that the profit 8 margins are skyrocketing, and we're arguing 9 over 4 cents a gallon and who might actually 10 collect it if we pass this law. 11 So I'm sorry, Senator, I know you 12 have a good goal here. But this bill will not 13 address the problem of the state and, in fact, 14 will probably create a new set of regulations 15 we won't be able to implement, negatively 16 impacting small businesses. And we've talked 17 about the problems of small gas station owners 18 here before. Most of them are independents. 19 They're not the guilty parties and they're 20 really not the culprits, as angry as we all 21 might be at having to fill up our cars at 22 these ridiculous prices. 23 We have to look at the big picture, 24 and the big picture is a federal picture and 25 questioning why we allow so few to control the

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(518) 371-8910 1 prices and the destiny for so many. 2 I'll vote no on this bill, but I 3 hope we will return to this chamber to really 4 focus on the long-term issues of energy 5 pricing in this state. 6 Thank you, Mr. President. 7 ACTING PRESIDENT FLANAGAN: 8 Senator Valesky. 9 SENATOR VALESKY: Mr. President, 10 briefly on the bill. 11 ACTING PRESIDENT FLANAGAN: 12 Senator Valesky, on the bill. 13 SENATOR VALESKY: Thank you, Mr. 14 President. 15 I have listened intently to 16 arguments on both sides of this issue. After 17 all, this is probably the single reason why we 18 are here today on this twentieth day of 19 September. 20 I'm sure many of you have heard 21 from your constituents about this issue, 22 probably more than any other issue over the 23 last month and even before. Even before the 24 hurricane, high gas prices throughout the 25 summer and going back into the spring.

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(518) 371-8910 1 This is a bill that I think we 2 ought to be supporting because our 3 constituents are demanding that we take 4 action. Of course the federal government 5 needs to take a more aggressive role. But the 6 people that I hear from don't want to hear the 7 blame game. They want to know that their 8 elected officials at the federal level, at the 9 state level are doing all that they can to do 10 something about high gas prices. 11 I have, in my role as ranking 12 member of the Senate Agriculture Committee, 13 spent a great deal of time this summer 14 visiting family farms, talking with members of 15 the agricultural industry, the number-one 16 industry in the state of New York. And to a 17 person, they have told me the kind of impact 18 that these high fuel costs are having on their 19 ability to do business. 20 Senator Robach indicated to us 21 earlier in this debate the average cost for 22 all of us. But for a family farmer who is 23 struggling to make ends meet, you can imagine, 24 as they harvest their crops this fall, the 25 kind of impact that these high fuel prices

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(518) 371-8910 1 have. 2 This bill, is it the perfect bill? 3 I don't know if it's the perfect solution. 4 But it is something that we ought to be doing 5 here in the State of New York. I certainly 6 encourage all of my colleagues on both sides 7 of the aisle to support this measure today. 8 Thank you, Mr. President. 9 ACTING PRESIDENT FLANAGAN: 10 Senator Wright. 11 SENATOR WRIGHT: Thank you, Mr. 12 President. 13 As the chair of the Energy 14 Committee, I found this debate for the last 15 half hour extremely enlightening. But as 16 someone a lot smarter than me once said: It's 17 the taxes, stupid. That's what we're talking 18 about, our taxes. 19 The State of New York does not 20 control global consumption. The State of 21 New York does not control global prosperity. 22 The State of New York doesn't control the 23 refinery capacities. So everything that makes 24 up the cost of the product is essentially 25 beyond the control of New York State -- and

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(518) 371-8910 1 not just the State of New York, but the other 2 49 states as well. It has to be addressed, as 3 has been pointed out, at the federal level. 4 What Senator Robach has rightfully 5 attacked is what we can control here in the 6 State Legislature, the taxation. That's what 7 this is about. Do you or do you not want to 8 cut the taxes to the people of this state when 9 it comes to their gasoline? I do. That's 10 what my constituents want. They are tired of 11 an escalating tax that increases every time 12 the volatility of the gasoline price changes. 13 What Senator Robach appropriately 14 suggests is a flat tax, a flat tax that is 15 fixed, a flat tax that is capped, a flat tax 16 that does not grow and therefore, as 17 consumers, we will not pay that tax. And I 18 for one understand if a tax is high and a tax 19 is low, I'm paying less tax. 20 I'm willing to rely on the 21 competitive market to make sure I get treated 22 fairly, as well as all of the agencies that 23 already exist. We don't need another federal 24 program or another state program to cut 25 New York State taxes. We can do that right

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(518) 371-8910 1 here. It's simple. Cut them. And by doing 2 so, we will reduce the price of gasoline some 3 10 cents. 4 I don't know about you, but in my 5 neck of the woods it was $3.65 not a couple of 6 weeks ago. And I spent an awful lot of time, 7 as did most of my constituents, trying to find 8 how I could save a nickel, let alone a dime. 9 And a dime on every gallon adds up when you're 10 driving 40 miles a day back and forth to work, 11 when you're doing it every day. When you 12 drive to car to get to church, when you drive 13 a car to go to your high school basketball 14 game. 15 Everything we do in rural New York 16 involves a car. And every time you use that 17 vehicle, you're consuming gasoline. And at 18 10 cents a gallon, we're saving our taxpayers 19 money. 20 I frankly don't understand why it 21 took us so long. It's a relatively simple 22 issue this afternoon. We eliminated sales tax 23 on energy-efficient appliances earlier this 24 afternoon by a 61 to zero vote, because we're 25 all in favor of energy efficiency. And we

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(518) 371-8910 1 eliminated that tax without a problem. Now, 2 when it comes to taking care of somebody's 3 principal costs in terms of gasoline in rural 4 areas of this state, we debate whether or not 5 we're going to receive it. 6 I believe we're going to receive 7 it. I believe if we have the opportunity to 8 cut the tax, take the opportunity now. And in 9 doing so, that will further enable us to look 10 out for the seniors. Because let's not 11 forget, we've already approved that program. 12 Earlier this afternoon we agreed that the 13 windfall would pay for the heat program to our 14 seniors. But we don't get it if we don't cut 15 the tax. 16 So let's get about the business. I 17 encourage all my colleagues, look at what 18 we're dealing with. We're talking about 19 cutting taxes. All the other global 20 competitive issues will get sorted out, but 21 not by the New York State Legislature and not 22 this afternoon. What we can do is what we are 23 capable of doing, and that is reducing this 24 tax. I'm fully prepared to vote yes anytime 25 anybody else is.

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(518) 371-8910 1 Thank you, Mr. President. 2 ACTING PRESIDENT FLANAGAN: 3 Senator Parker. 4 SENATOR PARKER: Thank you, Mr. 5 President. On the bill. 6 ACTING PRESIDENT FLANAGAN: 7 Senator Parker, on the bill. 8 SENATOR PARKER: Thank you. 9 Again, I want to take the 10 opportunity to thank the sponsor of this bill 11 for really having some vision about how we 12 relieve, give some financial relief to 13 taxpayers and to consumers. Because, you 14 know, as we all agree, that's one of the 15 things we love to do. 16 And I certainly respect the 17 chairman's perspective on this. As the ranker 18 on Energy and Telecommunication, we've had a 19 great opportunity to talk about these issues 20 and I'm glad to say that we more often agree 21 than not. I think this is one of those rare 22 times that we're going to disagree. 23 And I'm moved by the fact that we 24 have not paid attention to what's really 25 happening. We're looking at the doughnut

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(518) 371-8910 1 hole. You know, everybody's concentrating on 2 the doughnut hole; nobody's looking at the 3 doughnut. And the real doughnut here is that 4 Hurricane Katrina did not cause prices to 5 jump. 6 And in fact, what we ought to be 7 doing and what we have not done here, ladies 8 and gentlemen, is that we have not gone after, 9 you know, price gougers. We have not put 10 forth a bill, we have not had any significant 11 debate on what do we do about price gouging, 12 which is what caused a jump in 24 hours of 70 13 to 80 cents statewide. And until, in fact, we 14 do that, we're not really dealing with what we 15 have to deal with. 16 I also want to challenge two of the 17 comments made by my colleagues across the 18 aisle, one of which is this idea that we have 19 a competitive market in the fuel industry. 20 There is not a competitive market. And you 21 have to really, you know, pull out the Fortune 22 500 and figure out that half these companies, 23 including Sunoco, Mobil and Exxon, are owned 24 by the same company. There is no competitive 25 market.

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(518) 371-8910 1 And so when you talk about the 2 difference between what we're doing when we 3 are giving people taxes back on clothes 4 underneath $110 and what we're doing here, it 5 is apples and oranges. Because we're talking 6 about a very competitive retail market as 7 relates to retail clothing items and a 8 noncompetitive market when you're talking 9 about fuel companies. 10 The second thing is that I would 11 disagree with Senator Wright as it relates to 12 this idea that in fact cutting a tax in this 13 particular case is going to give us a 14 windfall. In fact, I don't understand how you 15 cut taxes and get a windfall. This is the 16 same kind of problem as led us into a 17 multi-trillion-dollar deficit on the national 18 level. 19 And in fact I argue that if we're 20 going to talk about, you know, doing the 21 enhanced STAR or giving money to LIHEAP, we in 22 fact ought not to -- which is what the 23 Manhattan Institute has said, what every other 24 major energy analyst around the country has 25 said. In fact, cutting the local taxes in

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(518) 371-8910 1 fact would be the wrong way to go. 2 And so by cutting the local taxes, 3 how do you create a windfall when you're not 4 collecting money? At most, what you're going 5 to do is raise people back up to the level at 6 which they're consuming that's now dropped 7 because people can't afford to drive their 8 cars. 9 But to address that all of a sudden 10 we're going to have people running to the 11 pumps just because we've cut, you know, maybe 12 4 cents that they may not even get -- because 13 I, frankly, don't the same trust that Senator 14 Robach and Senator Wright have in the fuel 15 industry that they're going to be passing 16 these taxes on to the consumers right as soon 17 as we pass this bill. 18 And so for those reasons, I'm going 19 to be voting no on this bill. 20 ACTING PRESIDENT FLANAGAN: Any 21 other Senator wish to be heard? 22 Debate is closed. 23 The Secretary will ring the bell. 24 Read the last section. 25 THE SECRETARY: Section 3. This

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(518) 371-8910 1 act shall take effect on the 30th day. 2 ACTING PRESIDENT FLANAGAN: Call 3 the roll. 4 (The Secretary called the roll.) 5 ACTING PRESIDENT FLANAGAN: 6 Senator Sabini, to explain his vote. 7 SENATOR SABINI: Thank you, Mr. 8 President. 9 I listened to the debate on this 10 issue, and I was torn because I do feel that 11 while essentially there is a difference 12 between this and suspending the sales tax, 13 because it's paid -- the sales tax is paid by 14 the purchaser, not by the provider, as it is 15 in gasoline. 16 But in listening to some of the 17 debate, including the debate that -- or the 18 reasons that my colleague Senator Valesky 19 raised, and understanding that many of our 20 residents in New York State do depend on the 21 auto for the necessities of life -- going to 22 the store, going to school, picking up any 23 essential items to conduct their lives -- that 24 essentially he's right, this makes life a 25 little better for those people. And that's

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(518) 371-8910 1 why we're supposed to be in government, to 2 make things a little better for people. 3 So while I don't think this is the 4 ultimate silver-bullet solution, I think it is 5 better than not doing it, and I share his 6 assertion that this will make things a little 7 better for New Yorkers no matter where they 8 are. 9 I'd also like to remind my 10 colleagues, as the ranker on the 11 Transportation Committee, that we have a bond 12 issue coming up. And one of the ways to 13 conserve fuel, the bond issue will do twofold: 14 Increase mass transit and make the current 15 roads we have more fuel-efficient. 16 And we should be urging New Yorkers 17 and urging editorial boards and urging 18 interest groups to support that bond issue, 19 since we're the ones who helped put it up 20 before the voters. That will go a long way to 21 saving energy as well. 22 So I'll be voting aye. Thank you. 23 ACTING PRESIDENT FLANAGAN: 24 Announce the results. 25 THE SECRETARY: Those recorded in

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(518) 371-8910 1 the negative on Calendar Number 1998 are 2 Senators Andrews, Breslin, Diaz, Dilan, Duane, 3 Gonzalez, Hassell-Thompson, L. Krueger, 4 Parker, Paterson, Schneiderman, A. Smith and 5 Stavisky. 6 Those Senators absent from voting 7 on Calendar Number 1998: Senator Onorato. 8 Ayes, 47. Nays, 13. 9 ACTING PRESIDENT FLANAGAN: The 10 bill is passed. 11 THE SECRETARY: Calendar Number 12 1999, by Senator Marcellino, Senate Print 13 5969, an act to amend the Agriculture and 14 Markets Law. 15 ACTING PRESIDENT FLANAGAN: 16 Senator Smith. 17 SENATOR ADA SMITH: Thank you, 18 Mr. President. Will the sponsor yield for a 19 couple of questions? 20 ACTING PRESIDENT FLANAGAN: 21 Senator Marcellino, will you yield? 22 SENATOR MARCELLINO: Yes. 23 SENATOR ADA SMITH: Thank you. 24 Senator Marcellino, are you 25 familiar with high-volume service stations?

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(518) 371-8910 1 SENATOR MARCELLINO: I believe 2 there are several in my district. 3 SENATOR ADA SMITH: Are you aware 4 that many of these stations receive four and 5 five loads of gas per day? 6 SENATOR MARCELLINO: I do not 7 know of any station that receives four and 8 five deliveries on a daily basis. 9 SENATOR ADA SMITH: Well, there 10 are many in the City of New York. 11 Will the sponsor yield for another 12 question? 13 ACTING PRESIDENT FLANAGAN: 14 Senator Marcellino, do you continue to yield? 15 SENATOR MARCELLINO: Yes, I do. 16 ACTING PRESIDENT FLANAGAN: 17 Senator Smith. 18 SENATOR ADA SMITH: Are you aware 19 that in penalizing the service stations for 20 their volume that these prices would 21 inevitably be passed on the next day rather 22 than that same day, since you're only limiting 23 it to one price hike per day? 24 SENATOR MARCELLINO: Senator, the 25 State of New Jersey, the State of

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(518) 371-8910 1 Pennsylvania, the State of Connecticut all 2 have this legislation now in law -- including 3 the State of Wisconsin, all have the 4 legislation in law. 5 The gasoline in New Jersey, 6 Connecticut, and Pennsylvania -- I don't know 7 about Wisconsin -- all lower than New York 8 State. All less expensive. They've incurred 9 no closings, they've incurred no problems in 10 keeping the stations moving. They have 11 high-volume stations there too. There seems 12 to be no difficulty in those other states. So 13 I don't see any difficulty here. 14 The trick is to put some stability 15 for the consumer, so if he has to in some 16 cases fill up twice a day, as some people do, 17 because they travel extensively as part of 18 their jobs -- if they have to fill up twice a 19 day, they should see the same price of gas 20 from the morning to the night. 21 SENATOR ADA SMITH: Would the 22 sponsor yield for one more question? 23 ACTING PRESIDENT FLANAGAN: 24 Senator Marcellino, do you continue to yield? 25 SENATOR MARCELLINO: Yes, I do.

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(518) 371-8910 1 ACTING PRESIDENT FLANAGAN: 2 Senator Smith. 3 SENATOR ADA SMITH: Senator 4 Marcellino, are you also aware that on each 5 delivery there is a difference in pricing? 6 SENATOR MARCELLINO: Yes, I am. 7 SENATOR ADA SMITH: Would the 8 sponsor continue to yield? 9 SENATOR MARCELLINO: Yes. 10 SENATOR ADA SMITH: Well, who 11 should bear it, the small service station 12 owner, who is our constituent as well -- 13 SENATOR MARCELLINO: Yes. Yes, 14 that person is. And they're a victim too of 15 the greed of the oil companies. I won't 16 contest that. That's a fact. They're victims 17 as well. 18 But the consuming public who has to 19 depend on gasoline to deliver milk, to deliver 20 bread, to support their school districts, the 21 municipalities, all have to pay for that. The 22 price of food is going up. And there was an 23 article in the paper recently about a fear of 24 inflation due to rapidly increasing gasoline 25 prices impacting the price of a gallon of

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(518) 371-8910 1 milk. 2 I think we need some stability to 3 this system. 4 SENATOR ADA SMITH: Will the 5 sponsor yield for one last question. 6 ACTING PRESIDENT FLANAGAN: 7 Senator Marcellino? 8 SENATOR MARCELLINO: Sure. 9 Absolutely. 10 SENATOR ADA SMITH: And I want to 11 say that I agree that the consumer should not 12 be punished. 13 Therefore, wouldn't you agree that 14 we should be putting this penalty on the 15 distributor or the trucker rather than the 16 small businessperson? 17 SENATOR MARCELLINO: If I could 18 take care of BP and Sunoco and Conoco and all 19 the other guys in the New York State 20 Legislature, I certainly would love to do 21 that. But I don't think it's within our 22 purview to deal with them. 23 We can control prices at the pump 24 and prevent gouging at the pump. I had it in 25 my district, prices going up three and four

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(518) 371-8910 1 times a day. Not because of three and four 2 deliveries a day. The New Jersey Turnpike, 3 same thing. They're high-volume dealers. And 4 so is the New York State Thruway, they're 5 high-volume. They're not jacking the price 6 up, and in many cases they'll pump the gas for 7 you. 8 SENATOR ADA SMITH: On the bill. 9 ACTING PRESIDENT FLANAGAN: 10 Senator Smith, on the bill. 11 SENATOR ADA SMITH: Thank you, 12 Mr. President. 13 We're going to have disreputable 14 people no matter where, and in all lines of 15 business. But I believe that as legislators 16 we have a responsibility to punish those that 17 are responsible. And in this instance it is 18 not the small businessperson who may have a 19 gas station, but it is the distributor or the 20 trucker that should bear the burden of this 21 fine. And it certainly should not be our 22 consumers. 23 Thank you. 24 ACTING PRESIDENT FLANAGAN: Does 25 any other Senator wish to be heard?

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(518) 371-8910 1 Senator Schneiderman. 2 SENATOR SCHNEIDERMAN: Thank you, 3 Mr. President. I believe there's an amendment 4 at the desk. I ask that the reading of the 5 amendment be waived and that I be heard on the 6 amendment. 7 ACTING PRESIDENT FLANAGAN: The 8 reading is waived, and you may be heard on the 9 amendment. 10 SENATOR SCHNEIDERMAN: Thank you. 11 I have to say that, as Senator 12 Paterson and several others have noted, for 13 better or worse, this session has raised the 14 level of debate and awareness and 15 consciousness of the state's substantial 16 energy problems. 17 I do not believe that some of the 18 bills that have come before us will accomplish 19 their intended result, but I don't think 20 there's any question that on both sides of the 21 aisle we are attempting to take actions to 22 actually reduce energy prices, to encourage 23 alternative sources of energy. 24 However, my amendment that I'm 25 offering today, which really relates to

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(518) 371-8910 1 Senator Marcellino's bill and also to Senator 2 Robach's bill that we discussed earlier, 3 provides a change in law that we can make that 4 would have a substantial effect, I believe, on 5 the real problem. 6 This amendment would amend the 7 price-gouging statute of the State of New York 8 so that the Attorney General and district 9 attorneys in this state can actually enforce 10 the law and prevent price gouging. 11 Now, the problem with the 12 price-gouging statute as it's currently 13 drafted is that it requires, first of all, the 14 Governor to declare a state of emergency and 15 that it has no criminal provision in it of any 16 kind limiting its use to the Attorney 17 General's office. 18 This amendment would change the law 19 in two ways. And Senator Robach has expressed 20 hope that distributors would pass reductions 21 in the sales tax along to consumers. We've 22 heard from everyone out in the wake of this 23 monumental price increase that there appears 24 to be some portion of it that is not due to 25 the hurricane, that is due to profiteering in

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(518) 371-8910 1 the wake of the hurricane. 2 So I would suggest to you -- and 3 this is in all sincerity -- on the other side 4 of the aisle, we should in our house amend the 5 price-gouging statute to make it easier for 6 the Attorney General to take action and to 7 provide a criminal penalty for price gouging. 8 I'm just suggesting a violation, but that 9 gives jurisdiction to the state's district 10 attorneys. These are the people who will be 11 able to monitor whether or not distributors 12 are profiteering or they're passing the 13 savings along. 14 Absent this, Senator Marcellino's 15 bill and Senator Robach's bill are toothless 16 tigers. There is no enforcement mechanism, 17 there is no monitoring mechanism. 18 And I would suggest to Senator 19 Balboni, who has expressed an interest in the 20 powers of the Attorney General's office, that 21 in fact the price-gouging statute is not 22 something that can currently be used by our 23 sitting Attorney General or by future 24 attorneys general unless we amend it. 25 So this is an honest proposal,

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(518) 371-8910 1 ladies and gentlemen. Maybe we're not going 2 to do it today, because I get the feeling that 3 our amendments seldom prevail. But I would 4 suggest that someone over there take it and 5 submit it and take a look at it. This is 6 something we can do to prevent price gouging. 7 And there is no question, I 8 believe, in the mind of anyone here that even 9 if there were some other causes of the price 10 increases, there were people increasing prices 11 far more than they needed to because of their 12 own increased costs. That's something we can 13 stop. That's something we can do something 14 about. 15 I hope that everyone will support 16 this amendment. Let's change the 17 price-gouging statute and provide some teeth 18 to the laws that we're attempting to change 19 today. 20 Thank you. 21 ACTING PRESIDENT FLANAGAN: On 22 the amendment, those Senators in agreement 23 please signify by raising your hands. 24 THE SECRETARY: Those recorded in 25 agreement are Senators Andrews, Breslin,

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(518) 371-8910 1 Brown, Diaz, Dilan, Duane, Gonzalez, 2 Hassell-Thompson, Klein, L. Krueger, 3 Montgomery, Oppenheimer, Parker, Paterson, 4 Sabini, Sampson, Savino, Schneiderman, 5 Serrano, A. Smith, M. Smith, Stachowski, 6 Stavisky, and Valesky. 7 ACTING PRESIDENT FLANAGAN: The 8 amendment is not agreed to. 9 Any other Senator wish to be heard 10 on the bill? 11 Debate is closed. 12 The Secretary will ring the bell. 13 Read the last section. 14 THE SECRETARY: Section 2. This 15 act shall take effect one week after it shall 16 have become a law. 17 ACTING PRESIDENT FLANAGAN: Call 18 the roll. 19 (The Secretary called the roll.) 20 THE SECRETARY: Ayes, 59. 21 Those Senators absent from voting 22 on Calendar Number 1999: Senators C. Kruger 23 and Onorato. 24 ACTING PRESIDENT FLANAGAN: 25 Senator Paterson, why do you rise?

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(518) 371-8910 1 SENATOR PATERSON: If we could 2 reopen the roll call, there might be a couple 3 of members who want to vote no. 4 ACTING PRESIDENT FLANAGAN: The 5 Secretary will read the roll call. 6 THE SECRETARY: In relation to 7 Calendar Number 1999, those recorded in the 8 negative are Senators Paterson, Schneiderman 9 and A. Smith. 10 Absent from voting: Senators C. 11 Kruger and Onorato. 12 Ayes, 56. Nays, 3. 13 ACTING PRESIDENT FLANAGAN: The 14 bill is passed. 15 Senator Bruno, that completes the 16 controversial reading of the calendar. 17 SENATOR BRUNO: Mr. President, is 18 there any other business that should come 19 before us at the desk? 20 ACTING PRESIDENT FLANAGAN: No, 21 Senator Bruno. 22 SENATOR BRUNO: There is none? 23 ACTING PRESIDENT FLANAGAN: There 24 is none. 25 SENATOR BRUNO: There being no

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(518) 371-8910 1 further business to come before the Senate, I 2 would move that we stand adjourned, subject to 3 the call of the leader, intervening days to be 4 legislative days. 5 And have a safe passage, all of 6 you. 7 Thank you, Mr. President. Move we 8 adjourn. 9 ACTING PRESIDENT FLANAGAN: The 10 Senate stands adjourned at the call of the 11 Majority Leader, intervening days to be 12 legislative days. 13 (Whereupon, at 7:19 p.m., the 14 Senate adjourned.) 15 16 17 18 19 20 21 22 23 24 25

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