BILL NUMBER: S8124A

 SPONSOR: SENATOR FUSCHILLO

   This bill amends the general business law, in relation to a motor fuel franchise dealer's right to  obtain alternative fuels from a supplier other than the franchise distributor.  It is intended to ensure the availability to consumers of alternative motor fuels, such as those blended with ethanol, like E85, methyl-ester, commonly referred to as bio-diesel, compressed natural gas and hydrogen.

   The bill amends section 199 - of the General Business Law to render null and void any provision of a motor fuel franchise agreement which prohibits a dealer from purchasing or selling alternative   motor fuel from a supplier other than the current distributor.  It can not limit the quantity of such     alternative fuel to be purchased if current distributor does not supply or offer to supply alternative fuel to the dealer.

  It defines alternative motor fuel:

· a blend of 85 percent ethanol and 15 percent gasoline,

· a blend of at least two percent methyl-ester, commonly referred to as bio-diesel, and diesel motor fuel,

· motor fuel comprised primarily of methane, stored in either gaseous or liquid state, suitable for use and consumption in the engine of a motor vehicle, or hydrogen.

   This bill would also subject a distributor, which violates this new prohibition, to a penalty of $1,OOO. Section two of the bill provides that the bill takes effect immediately and applies to        franchises entered into on or after such effective date.

    Current law renders null and void any franchise provision, which requires a dealer to purchase or sell products of the distributor other than motor fuel.  The bill expands the product that a dealer may sell to alternative fuels.      

  The Association supports this legislation because it is important that we reduce our dependence on

imported energy.  Alternative and renewable motor fuels may be the answer.  Unfortunately we are about twenty-five years late, but we need to start somewhere. 

   Motor fuel dealer franchise agreements include provisions, which allow a dealer to use the logo-identifying distributor. In exchange for that right, the dealer must purchase and sell motor fuel      supplied solely by that distributor. If a distributor does not offer to supply alternative motor fuel,   dealers are prohibited from seeking other fuel from another source. This limits the availability        alternative fuels to motorist.   The bill will render null and void such prohibitive language in future franchises agreements. It allows dealers to seek and purchase alternative fuels from sources other than their distributor when that distributor does not offer to supply alternative motor fuels.

    There are a growing number of flex-fuel vehicles in New York.  Current the population is about 200,000.  This number will need to grow significantly before it will be economically feasible for a   station to install a tank and a pump that can dispense the new fuels. However, as the prices          increase so will the interest in alternative fuels.  Some day it could become popular. This bill, along with the State's efforts to install E85 and bio-diesel pumps at travel plazas along the New York State Thruway, may make alternative fuels available to more drivers. That is not the full extent of its effect.

   The state, under George Pataki is pushing hard to promote alternative fuels.  It could make a small dent in the petroleum vehicle population. The state has issued tax credit and along with the $20     million dedicated to a pilot cellulosic ethanol facility, can help create a market for alternative motor fuels and flex-fuel vehicles in the State. 

   IT WOULD BE NICE, IF THE BILL PERMITTED SERVICE STATIONS TO SELL UNBRANDED PETROLEUM MOTOR FUEL AS WELL.  THIS WOULD DEFINITELY LOWER THE PRICE TO THE CONSUMER.  MAYBE NEXT YEAR WE CAN AMEND THIS BILL.  T