$10 million in competitive grants to companies to develop flex-fuel hybrid and plug-in hybrid technologies. plus, as noted below, $20M for cellulosic ethanol and $10M for lightweighting vehicles. (Albany Business Review and AP stories, each has different details)

The Business Review (Albany) - 4:54 PM EST Monday Pataki to propose funding for Malta fuel research lab Eric Durr

Funding for a $24 million alternative fuel research laboratory in Malta, N.Y., as well as a tax credit to companies that make renewable fuel, and a 10 percent state Thruway toll discount to operators of hybrid fuel vehicles will be included in the state budget package New York Gov. George Pataki is releasing on Jan. 17.

Another idea calls for encouraging the purchase of energy-efficient appliances by suspending the sale tax on "Energy Star" certified products for a pair of two-week periods. Similar sales-tax free periods have been used in the past to encourage targeted consumer spending.

These initiatives and others are part of a plan to reduce New York's dependence on imported energy and position the state as a center of renewable energy research, according to the governor's office.

"New York State must continue our efforts to increase energy efficiency and the use of clean and renewable fuels so that we can reduce our dependence on imported energy," Pataki said in a written statement.

Highlights of the plan include:

• The creation of the Alternative Fuel Vehicle Research Lab by the New York State Energy Research and Development Authority and the Department of Environmental Conservation (DEC) at the Saratoga Technology and Energy Park in Malta. The $24 million state-of-the-art laboratory will conduct research and testing of new and improved fuels, batteries and pollution-control devices, including plug-in hybrids, hydrogen vehicles, renewable fuels, emerging distributed generation, and thermally-activated technologies;
• Eliminating all state taxes on renewable automotive fuels. These include the E85 ethanol/gasoline mix and B2 biodiesel mixes. These taxes currently cost consumers about 40 cents per gallon.
• Provide grants of up to $50,000 to encourage gas stations to dispense E85 and B20 fuels.
• Direct the New York State Thruway Authority stations to add 27 pumps for E85 and B20 fuels.
• Create a $20 million program, administered by the Department of Agriculture and Markets, to develop a pilot cellulose ethanol plant in New York. Fuel would be made from grass, agricultural residues and pulp and paper mill wastes.
• Direct the New York Power Authority to provide $50 million to private sector power generators who host research and development of clean coal technologies to reduce CO2 emissions.
• Provide a $2,000 personal income tax credit to people who purchase new hybrid or alternative fuel vehicles. This would take $5 million out of the state's revenue pool in 2006 through 2007.
• Create new High Occupancy Vehicle lanes for alternative fuel vehicles.
• Provide $10 million in grants, administered by NYSERDA, to developers of flex-fuel and plug-in hybrid vehicles, which would allow charging from the power grid at night.
• Provide competitive grants totaling $10 million to promote research and manufacturing of lightweight car parts, which will reduce vehicle weight and improve mileage.
• Create a $5 million grant program, run through NYSERDA, to promote the development of hydrogen-powered vehicles.
• Allow clean energy companies to qualify for Empire Zone benefits, even if they are not in a zone.
• Give consumers who purchase and install high-efficiency heating equipment an income tax credit of up to $500.

http://www.newsday.com/­news/­local/­wire/­newyork/­ny-bc-ny--statebudget-energ0116jan16,0,7948397.story?coll=ny-region-apnewyork

Pataki: Hybrid car owners to get tax break, perks

By MICHAEL GORMLEY Associated Press Writer

January 16, 2006, 4:05 PM EST

ALBANY, N.Y. -- The rising number of buyers of hybrid and alternative fuel automobiles would get a tax break, a map of alternative fuel filling stations and access to some priority traffic lanes under Gov. George Pataki's proposed state budget.

The wide ranging energy proposals, including tax breaks for heating costs, will be part of Pataki 2006-07 budget proposal on Tuesday. They address his goals of cleaning New York's air while reducing dependence on "terror-promoting foreign oil."

The governor's budget proposal to the Legislature is scheduled to be delivered Tuesday, starting the usually contentious budget negotiations with legislative leaders.

The energy proposal he released Monday seeks to provide incentives for consumers to use cleaner fuels, as well as funding for research to make cleaner, lighter automobiles. It is Pataki's last budget to try to burnish environmental and fiscal conservative credentials nationwide as he considers a run for president in 2008. Several proposals encourage the use of ethanol, an agriculture-based fuel for automobiles that would appeal to farmers in New York and the key presidential primary state of Iowa.

The package of energy-related bills would also provide home heating tax credits and encourage development of so-called clean coal-burning plants.

"My plan will encourage the development of more new and more energy-efficient technologies, bolster the production and use of renewable fuels, and help to reduce the high energy cost burdens that hurt our families and our economy," Pataki said.

Jason Babbie, environmental policy analyst for the New York Public Interest Research Group, said the package has something for everyone to support, and oppose.

"It's hard see how much impact some of these proposals will have, but there's a lot of encouraging aspects to it," Babbie said. "But there's one particularly troubling one: The coal proposal."

Babbie and many environmentalists question whether technology has improved enough to cleanly burn America's 250-year supply of coal. "It keeps us potentially rooted in the past."

Another concern for Babbie is the tax credit for buying increasingly popular hybrid vehicles, without standards for miles per gallon or pollution controls.

"If you buying a Lexus SUV, I don't know if you need a tax credit," he said. Still, he called Pataki's proposal encouraging and one that would have to be embraced for years to come, after Pataki completes his third term in December.

Pataki's proposal include:

_Renew the $2,000 personal income tax credit for buying a hybrid vehicle, which carries a higher costs than traditional models. It would cost the state about $5 million in lost revenue.

_10 percent discount in the E-Z Pass toll program for drivers of hybrid and other cars that get at least 45 miles per gallon and meet air quality standards.

_Allow vehicles that average at least 45 mpg and meet air quality standards to use often less congested car pool-only lanes in New York City and on the Long Island Expressway, even when not car pooling.

_Home heating tax credit for New Yorkers 65 years old and older with incomes up to $75,000. The tax credit could be up to $500.

_$50 million to help low-income families pay energy bills.

_A $500 tax credit for replacement or renovation of old home heating systems.

_Two sales tax-free weeks for the purchase of appliances and air conditions that carry the Energy Star tag showing they are energy efficient.

_Ending state taxes on renewable fuels while creating more filling stations for ethanol, biodiesel and other biofuels. This could make alternative fuels cheaper at the pump than gasoline. Renewable fuels would be offered at all 27 state Thruway travel plazas and the state would send maps of alternative fuel stations to owners of those vehicles.

_$20 million would be used to promote "cellulosic" ethanol made from paper mill waste, grasses and shrubs to lead to the construction of an ethanol manufacturing plant.

_Construction of an alternative fuel research lab in Saratoga County's town of Malta technology and energy park. It would do research on fuels, batteries and pollution control technologies. Another $10 million program would support research to make lighter vehicles and a $5 million program would research hydrogen-fueled vehicles.

_$10 million in competitive grants to companies to develop flex-fuel hybrid and plug-in hybrid technologies.

_Companies that use clean energy will get tax breaks similar to those offered in geographic Empire Zones, regardless of where the clean company is located.