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SIGMA Weekly Report
December 6, 2019
2020 ELC
Below please find SIGMA's Weekly Report for Friday, December 6, 2019. You may also view a printable version.
 

SIGMA Submits Comments on EPA Supplemental RFS RVO Notice

  • On November 27th, SIGMA submitted comments to EPA on its Supplemental Notice of Proposed Rulemaking on its Renewable Fuel Standard (RFS) Required Volume Obligations (RVOs) for 2020 and 2021 RVOs for biomass-based diesel fuel.
  • The comments reiterated those communicated to EPA in an August 30th letter which suggested that “EPA provide clarity with respect to (1) the standard for obtaining a waiver and the factors used to evaluate an application and (2) transparency with respect to the announcement of a waiver.”
  • EPA issued the Supplemental Notice following its proposal to adjust the 2020 RVOs “to project the volume of gasoline and diesel that will be exempt in 2020 due to small refinery exemptions based on a three-year average of the relief recommended by the Department of Energy (DOE).
  • EPA will now review all of the comments submitted into the docket before publishing a final rule. A final rule, which should contain the RVOs for 2020, is expected by the end of the year.

 

SIGMA Sends Letter to House Transportation and Infrastructure Committee on EVs

  • On December 2nd, SIGMA sent a letter to the House Transportation and Infrastructure Committee expressing a desire to work with the Committee as it develops policies to improve U.S. surface transportation infrastructure. The letter was also signed by NACS and NATSO.
  • In the letter, the associations recognized the role that electric vehicles (EVs) can play “to mitigate carbon emissions from the transportation sector” and noted that “[f]uel retailers in the United States are well positioned to play an important role in this transition.”
  • The associations cautioned, however, that “it is essential that Congress does not allow regulated utilities to misuse their monopolistic status to crowd out private market participation in EV refueling.”

 

House Subcommittee Holds Hearing on FDA E-Cig Flavor Ban Guidance

  • On December 4, the House Oversight and Reform Subcommittee on Economic and Consumer Policy held a hearing entitled, “Broken Promises: Examining the Administration’s Retreat on Banning Vaping Flavors.”
  • Mitch Zeller, Director of the Food and Drug Administration’s (FDA’s) Center for Tobacco Products, testified at the hearing on the status of the FDA’s guidance that would ban flavored e-cigarettes.
  • Of interest to SIGMA members, Mr. Zeller conceded that FDA does not have the legal authority to exempt vape shops from the guidance while banning convenience stores from selling flavored e-cigarettes.

 

SIGMA Submits Comments on DOL Overtime Fluctuating Workweek Proposed Rule

  • On December 5th, SIGMA submitted comments in response to the Department of Labor’s (“DOL’s”) proposal to update the regulations governing how to compute overtime compensation for salaried, nonexempt employees who work hours that vary or fluctuate each week.
  • Today, regulations permit an employer to hire a worker on a “fluctuating workweek” schedule provided the employer, per an agreement with the employee, pays the employee with a fixed salary as straight time compensation, which is separate and apart from overtime premiums, no matter how many hours the employee is asked to work in a particular week.
  • DOL’s proposed rule would permit employers to pay bonuses and other incentive-based compensation to employees under the fluctuating workweek method.

 

Reminder! Overtime Rule is Effective January 1st!

  • The Department of Labor’s (DOL’s) final overtime rule, which replaces the Obama Administration’s more expansive overtime rule that had been halted by a federal court, goes into effect on January 1, 2020.
  • Employers should familiarize themselves with the updated regulations and conduct a thorough review of their employee-compensation structure to ensure their business will be in compliance with the final rule once it goes into effect.  
  • SIGMA counsel has prepared a memorandum on the final rule to assist with compliance that is available to SIGMA members. If you would like a copy of the memorandum, please contact Amy Rider at arider@sigma.org. If you have questions regarding the rule, please contact Eva Rigamonti at erigamonti@steptoe.com.

 

Privacy Legislation Introduced, Senate Commerce Committee Holds Hearing

  • On December 4, the Senate Commerce, Science, and Transportation Committee held a hearing on data privacy entitled, “Examining Legislative Proposals to Protect Consumer Data Privacy.”
  • Earlier in the week, Committee Chairman Roger Wicker (R-MS) released a discussion draft and Committee Ranking Member Maria Cantwell (D-WA) introduced a bill reflecting their respective approaches to privacy legislation.
  • Last week, in response to Democratic members of the Committee unveiling a set of policy principles they believe should form the foundation for any federal privacy bill, SIGMA sent to the Committee the principles it believes should be incorporated.
  • Congress had hoped to move quickly on a bipartisan data privacy proposal before the end of the year because California’s consumer privacy law goes into effect in January. At this point, meeting that deadline is likely impossible.

 

FDA Sends Warning Letters on CBD Products

  • On November 25, the U.S. Food and Drug Administration (FDA) issued warning letters to 15 cannabidiol (CBD)-producing companies for illegally selling products that violate federal statute.
  • Significantly, the letters for the first time target CBD foods, products intended for infants and children, and products intended for use by animals.
  • Additionally, the letters indicate an expansion of the agency’s reasoning regarding CBD and foods. The letters are significant in that they could indicate the beginning of a crackdown by the agency against the production, and perhaps eventually sale, of CBD products.

 

Waiver Update

  • On December 4th, the New Hampshire Department of Safety declared that an emergency exists pertaining to the delivery of propane within the State of New Hampshire as a result of a shortage of propane gas caused by the effects of a labor dispute in Canada that has limited propane gas delivery via rail into the region.
  • As a result of the declaration, federal Hours of Service (HOS) requirements are waived for motor carriers providing delivery of propane to homes and businesses within the state of New Hampshire. Commercial drivers operating under the waiver are required to have a copy of the emergency declaration in their possession. Size and weight restrictions are not waived by the declaration.

 

Register Now for the SIGMA 2020 ELC!

  • SIGMA is excited to bring the Fuels Institute to the Executive Leadership Conference for two mornings of fuel market education and discussion.
  • Come prepared to think about the future and what some of these trends might mean for your own company.
  • Register for the 2020 ELC
 
PDI
 

SIGMA Submits Comments on EPA Supplemental RFS RVO Notice

On November 27th, SIGMA submitted comments to EPA on its Supplemental Notice of Proposed Rulemaking on its Renewable Fuel Standard (RFS) Required Volume Obligations (RVOs) for 2020 and 2021 RVOs for biomass-based diesel fuel.

 

The comments reiterated those communicated to EPA in an August 30th letter which suggested that “EPA provide clarity with respect to (1) the standard for obtaining a waiver and the factors used to evaluate an application and (2) transparency with respect to the announcement of a waiver.” Specifically, SIGMA said EPA should “notify the recipient of the waiver and the entire market that a particular waiver (i.e., the volumes of renewable obligations that have been waived for the recipient) has been granted at exactly the same time.” Absent an understanding of how, if at all, waived RVOs will be reallocated, “it is impossible for market participants to evaluate the impact of any waivers being granted upon the market,” the comments state.

 

EPA issued the Supplemental Notice following its proposal to adjust the 2020 RVOs “to project the volume of gasoline and diesel that will be exempt in 2020 due to small refinery exemptions based on a three-year average of the relief recommended by the Department of Energy (DOE). From 2016–2018 the relief recommended by the DOE would have resulted in a reduction to the  RVOs of approximately 770 million Renewable Identification Numbers (RINs) per year.” The biofuel community and other environmental groups objected to that proposal as insufficient and in violation of an agreement reached with refiners and the White House to increase the amount of renewable fuels required to be blended into the domestic gasoline supply because the DOE recommendations are lower than the actual volumes exempted as a result of EPA’s small refinery waivers.

 

EPA will now review all of the comments submitted into the docket before publishing a final rule. A final rule, which should contain the RVOs for 2020, is expected by the end of the year.

 

SIGMA Sends Letter to House Transportation and Infrastructure Committee on EVs

On December 2nd, SIGMA sent a letter to the House Transportation and Infrastructure Committee expressing a desire to work with the Committee as it develops policies to improve U.S. surface transportation infrastructure. The letter was also signed by NACS and NATSO.

 

In the letter, the associations recognized the role that electric vehicles (EVs) can play “to mitigate carbon emissions from the transportation sector” and noted that “[f]uel retailers in the United States are well positioned to play an important role in this transition.” The associations cautioned, however, that “it is essential that Congress does not allow regulated utilities to misuse their monopolistic status to crowd out private market participation in EV refueling.” “Allowing utilities to do this would be to learn all the wrong lessons from the past fifteen years of fuels policy – and past sixty years of highway policy – in the United States. It will undoubtedly discourage private companies from investing in electric vehicle charging infrastructure,” the letter states.

 

In support of the argument in favor of a level playing field for the development of EV charging infrastructure, the associations cited both the establishment of the federal Interstate highway system and the Renewable Fuel Standard program. Monopolistic, government-run programs were not adopted in either instance. Rather, the private sector was allowed to respond to the policy goals set by Congress, which successfully established a nationwide network of retail fuel stations along the Interstate corridors and made the needed investments to bring new renewable fuels to the market.

 

In addition to prohibiting regulated utilities from charging ratepayers pay for their investment in EV charging infrastructure, the associations also stated that additional “critical policies” should be considered as Committee investigates ways to grow the EV marketplace:

 

  • Developing a standard system allowing operators of charging stations to profitably sell electricity to individual consumers without interference by state laws;
  • Establishing grant programs for alternative fuel infrastructure investments, similar to the program established in America’s Transportation Infrastructure Act of 2019 (S. 2032), which was unanimously approved by the Senate Committee on Environment and Public Works in July 2019; and
  • Maintaining the ban on commercialized Interstate rest areas and not permitting EV charging within federal Interstate rights of way, as this will discourage off-highway businesses from making investments in EV charging.

 

House Subcommittee Holds Hearing on FDA E-Cig Flavor Ban Guidance

On December 4, the House Oversight and Reform Subcommittee on Economic and Consumer Policy held a hearing entitled, “Broken Promises: Examining the Administration’s Retreat on Banning Vaping Flavors.” Mitch Zeller, Director of the Food and Drug Administration’s (FDA’s) Center for Tobacco Products, testified at the hearing on the status of the FDA’s guidance that would ban flavored e-cigarettes.

 

In general, Mr. Zeller was hesitant to provide specific details on the guidance to lawmakers on the Subcommittee—much to their frustration. Mr. Zeller failed to clarify when the guidance would be released, if the guidance includes a ban on mint and/or menthol e-cigarettes, and if any retail channels have been exempted.

 

Of interest to SIGMA members, Mr. Zeller conceded that FDA does not have the legal authority to exempt vape shops from the guidance while banning convenience stores from selling flavored e-cigarettes. In an exchange with Representative Gerry Connolly (D-VA), Mr. Zeller acknowledged that the Tobacco Control Act does not provide FDA that authority saying, “I think under the law [FDA] would not be able to differentiate between types of retail outlets.” 

 

Representative Connolly later cited data from FDA and the Centers for Disease Control and Prevention that indicates underage users are more likely to get e-cigarettes from a vape shop than a convenience store or gas station.  Representative Connolly asked, “how would that [data] support a hypothetical plan that allows flavors in vape shops but bans them in gas stations when the numbers suggest just the opposite of where the problem is?” Mr. Zeller admitted that Representative Connolly made “a very good point.”

 

SIGMA supports a level playing field for all retailers and opposes efforts that would pick winners and losers in the marketplace. 

 

SIGMA Submits Comments on DOL Overtime Fluctuating Workweek Proposed Rule

On December 5th, SIGMA submitted comments in response to the Department of Labor’s (“DOL’s”) proposal to update the regulations governing how to compute overtime compensation for salaried, nonexempt employees who work hours that vary or fluctuate each week. Today, regulations permit an employer to hire a worker on a “fluctuating workweek” schedule provided the employer, per an agreement with the employee, pays the employee with a fixed salary as straight time compensation, which is separate and apart from overtime premiums, no matter how many hours the employee is asked to work in a particular week.

 

DOL’s proposed rule would permit employers to pay bonuses and other incentive-based compensation to employees under the fluctuating workweek method. The purpose of this rulemaking is to provide clarity for employers as courts have differed in their interpretation as to whether FLSA allows for bonuses and other incentive-based pay for employees using the fluctuating workweek method. The proposal also provides examples of how to calculate overtime for fluctuating workweek employees, which DOL believes will help employers with compliance.

 

Under the Fair Labor Standards Act (“FLSA”), a worker with fixed hours is guaranteed a minimum wage for all hours worked and 1.5 times that rate for overtime, or hours worked beyond the traditional 40 hours. Different from traditional overtime compensation, however, a worker with a fluctuating workweek is compensated for overtime at a rate of 0.5 times his base rate for each hour worked beyond 40 for a particular week—and the base (or regular) rate must be calculated separately each week depending on the number of hours the employee worked.

 

SIGMA supports the proposed rule. Specifically, SIGMA commented that “the Proposed Rule appropriately adjusts the regulations regarding the fluctuating workweek method of computing overtime to clarify that bonuses, premium payments, and other types of pay are compatible with this method of compensation” and noted that proposed rule’s inclusion of clarifying examples of how to calculate overtime payments for employees compensated via the fluctuating workweek method will make it easier for employers to comply with overtime regulations.

 

Reminder! Overtime Rule is Effective January 1st!

The Department of Labor’s (DOL’s) final overtime rule, which replaces the Obama Administration’s more expansive overtime rule that had been halted by a federal court, goes into effect on January 1, 2020. Under this final rule, DOL will:

  • Update the salary threshold that triggers the overtime exemption from the current level of $455 per week (approximately $23,660 per year) to $684 per week ($35,568 per year);
  • Permit nondiscretionary bonuses and incentive payments (including commissions), which are paid yearly or more frequently, to count towards up to 10 percent of an employee’s salary for purposes of the exemption; and
  • Commit to more “regular” updates of the salary level through a formal notice-and-comment rulemaking.

Employers should familiarize themselves with the updated regulations and conduct a thorough review of their employee-compensation structure to ensure their business will be in compliance with the final rule once it goes into effect.  

 

SIGMA counsel has prepared a memorandum on the final rule to assist with compliance that is available to SIGMA members. If you would like a copy of the memorandum, please contact Amy Rider at arider@sigma.org. If you have questions regarding the rule, please contact Eva Rigamonti at erigamonti@steptoe.com.

 

Privacy Legislation Introduced, Senate Commerce Committee Holds Hearing

On December 4, the Senate Commerce, Science, and Transportation Committee held a hearing on data privacy entitled, “Examining Legislative Proposals to Protect Consumer Data Privacy.” Earlier in the week, Committee Chairman Roger Wicker (R-MS) released a discussion draft and Committee Ranking Member Maria Cantwell (D-WA) introduced a bill reflecting their respective approaches to privacy legislation.

 

Last week, in response to Democratic members of the Committee unveiling a set of policy principles they believe should form the foundation for any federal privacy bill, SIGMA sent to the Committee the principles it believes should be incorporated. Congress had hoped to move quickly on a bipartisan data privacy proposal before the end of the year because California’s consumer privacy law goes into effect in January. At this point, meeting that deadline is likely impossible.

 

Notably, Ranking Member Cantwell’s bill would penalize companies who fail to meet federal data protection standards and includes a private right of action that would allow consumers to sue in certain circumstances if their private data is violated. In addition, Ranking Member Cantwell’s bill would allow states to set their own privacy standards, which business groups oppose as it would create a patchwork of compliance requirements. Chairman Wicker’s draft bill, in contrast, would prevent states from enforcing data privacy or security laws that would affect companies covered by the bill, although it would not preempt state rules that require businesses to notify consumers in the event of a data breach.

 

The private right of action has been a sticking point between Chairman Wicker and Ranking Member Cantwell, although in an interview this week Chairman Wicker indicated he may be open to a more limited proposal that would allow a very narrow private right of action, such as injunctive relief, in which a civil court orders a defendant to stop a specified act or behavior. Chairman Wicker’s discussion draft does allow state attorneys general to bring civil actions on behalf of consumers for alleged privacy violations. Ranking Member Cantwell’s bill would allow consumers to directly sue technology companies for privacy violations.

 

In addition to Chairman Wicker’s and Ranking Member Cantwell’s legislation, Senators Jerry Moran (R-KS) and Richard Blumenthal (D-CT) are working on a separate Senate bipartisan bill, and in the House, Representative Jan Schakowsky (D-IL) is discussing a bipartisan proposal with Representative Cathy McMorris Rodgers (R-WA).

 

The purpose of Wednesday’s hearing was to “discuss how legislative proposals intend to provide consumers with more security, transparency, choice, and control over personal information both online and offline.” Committee members also considered proposals that would provide the Federal Trade Commission (FTC) with “more resources and authority to oversee business data practices in the marketplace.”

 

Committee members and the panel of witnesses concurred that any federal privacy law will only be as good as its enforcement authority. In this regard, Senators Schatz, Moran, and Jon Tester (D-MT) all said they believe the FTC will need both additional rulemaking authority and additional resources for privacy enforcement to be effective. In contrast, Senator Blumenthal argued that enforcement should not be restricted to the FTC and that privacy legislation should also allow for private enforcement, particularly if state laws are preempted.

 

On the issue of preemption of state privacy laws, there was agreement among Republicans that preemption will be necessary, as a patchwork of state laws is unworkable for businesses that operate in multiple states. Democratic members, however, said they want to preserve the ability for states to pass laws that are more stringent than federal standards.

 

Finally, Ranking Member Cantwell raised the issue of data sharing with third-parties, which she noted is a concern, and several Senators cautioned that small and medium-sized businesses would face significant compliance burdens and there should be language in the bill to address that.

 

FDA Sends Warning Letters on CBD Products

On November 25, the U.S. Food and Drug Administration (FDA) issued warning letters to 15 cannabidiol (CBD)-producing companies for illegally selling products that violate federal statute. Significantly, the letters for the first time target CBD foods, products intended for infants and children, and products intended for use by animals. Additionally, the letters indicate an expansion of the agency’s reasoning regarding CBD and foods. The letters are significant in that they could indicate the beginning of a crackdown by the agency against the production, and perhaps eventually sale, of CBD products.

 

The letters provide guidance what claims could result in classification of CBD products by the agency as an unapproved drug, and has FDA published a revised Consumer Update detailing specific safety concerns associated with CBD products.

 

In announcing the warning letters, FDA indicated that it plans to provide an update on its progress regarding CBD products in the coming weeks.

 

Waiver Update

On December 4th, the New Hampshire Department of Safety declared that an emergency exists pertaining to the delivery of propane within the State of New Hampshire as a result of a shortage of propane gas caused by the effects of a labor dispute in Canada that has limited propane gas delivery via rail into the region. According to the Department of Safety, “The emergency declaration is required to ensure the continuation of these essential services to both residential and commercial establishments within the State.”

 

As a result of the declaration, federal Hours of Service (HOS) requirements are waived for motor carriers providing delivery of propane to homes and businesses within the state of New Hampshire. Commercial drivers operating under the waiver are required to have a copy of the emergency declaration in their possession. Size and weight restrictions are not waived by the declaration.

 

Register Now for the SIGMA 2020 ELC!

SIGMA is excited to bring the Fuels Institute to the Executive Leadership Conference for two mornings of fuel market education and discussion.

 

The fuel marketing business is ever changing and understanding the trends can enable you to make the best decisions for your companies.  Over the course of two mornings, John Eichberger, Executive Director of the Fuels Institute, will present four major trends affecting the fuel marketing industry through 2030, evaluate their likely direction and market implications and harvest ideas for the industry to adapt and take advantage of the opportunities these trends present.

 

Come prepared to think about the future and what some of these trends might mean for your own company.

 

Register for the 2020 ELC

 
 
 

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