Relates to license fees per barrel of petroleum ship through the state for use outside the state

1 Co-sponsor

• Diane J. Savino

Title of bill

An act to amend the navigation law, in relation to license fees per barrel of petroleum

Purpose or general idea of bill

To establish a more competitive level playing field for certain oil storage facilities located near out of state locations.

Summary of specific provisions

Section 1- Amends the navigation law by restoring oil spill fund licensing fees to pre-2015 levels for certain storage facilities.

Section 2 - Amends the navigation law by restoring the credit for barrels of product transferred through a facility in New York and then exported out of state for certain storage facilities.

Justification

For far too long, New York's working families and businesses have suffered from a disproportionate and unfair taxation system wherein competitive interests in New Jersey have an overwhelming advantage. Nowhere is there a more egregious example of this disproportionality than the ever-increasing bridge tolls in and out of New York City, particularly on Staten Island.

As a result of a dramatic increase of oil-by-rail shipments, in 2015 a new state law changed the way in which the state's so-called "Oil Spill Fund" is funded by increasing license fees across the state for facilities that transfer and store petroleum products. The stated intent of the new law is to mitigate risk associated with the volume of crude oil being transported through New York by rail and create a funding stream for first responder training and equipment associated with the shipment of oil by rail.

The vast amount of crude oil storage facilities are located upstate, and none are located within the New York City Metropolitan area. The new fee increase aims to address problems created by upstate crude oil transport, but places downstate non-crude oil storage facilities at a distinct competitive disadvantage, particularly those located near New Jersey ports who pay no oil spill fees.

Having much the same adverse impact of bridge tolls, the increase in the oil spill license fee on non-crude facilities will cause many shippers to leave New York for New Jersey, where there are more than a dozen terminals willing to capitalize on their lower tax rate. Another fee increase will ultimately lead to the closure of New York terminals and the loss of quality jobs as these businesses move to New Jersey, a common occurrence we must not allow to continue.

This bill would simply reset the license fee for certain downstate terminals to pre-2015 levels making them more competitive with similar operators in New Jersey.

Prior legislative history

New bill.

Fiscal implications

Minimal.

Effective date

This act shall take effect immediately.