State Senator Michael Balboni announced a legislative agreement to

provide New York motorists relief from high gas prices by capping and

reducing the sales taxes on gasoline. The plan, which will lower the cost

of gasoline by up to 8 cents per gallon and save New York drivers as

much as $450 million annually, goes into effect on June 1.

Under the agreement, Nassau and Suffolk counties would also have the

option of passing laws to cap the local sales tax on gas at a fixed rate,

which would provide further relief for Long Island motorists.

Senator Balboni (R-East Williston) said, "The state should not reap a

windfall when the price of gasoline soars, nor should big oil companies get

richer. The plan agreed upon by the legislature will freeze the tax when

gas prices soars over $2 per gallon, offering immediate and much-needed

relief for struggling New York motorists."

Currently, New York State collects 4 percent of every gallon of fuel in sales

tax, an average of 12 cents per gallon at current prices. As the price of

gas goes up, the state collects more and more tax revenue.

The legislation also requires that service station owners pass along

the savings to consumers in the form of lower gas prices. The State

Commissioner of Taxation and Finance, in conjunction with the chair of the

State Consumer Protection Board, would be charged with enforcing the cap.

There would be a fine of up to $5,000 per incident, per day, for stations

that do not pass along the savings to motorists.

Senator Balboni has long urged a roll back of the state gas sales tax.

Recently, he established an online petition drive to solicit public

support for this new tax saving measure and to urge the assembly to agree

to the proposal. Prior to this week's agreement, the senate had twice

passed legislation instituting a cap on the gas sales tax at $2 per gallon,

but the assembly had not acted on any gas tax relief measure.

Should gas prices fall below $2 per gallon, the 8 cent cap would be

reduced proportionately. Both the senate and the assembly are expected to

approve the legislation next week.

Both houses of the legislature will continue to discuss proposals to

encourage the development and use of alternative sources of energy and

encourage energy conservation and the purchase of energy-saving products and materials.