May 29, 2001

JEFFORDS DEFECTION SWINGS SENATE TO DEMOCRATS

Senator Jim Jeffords (R-VT) Thursday announcement that he would become an Independent and vote with Senate Democrats dramatically shifted Washington's power structure. As a result, the balance in the Senate will swing to the Democrats, who will take over committee chairmanships and membership majorities in the committees. Jeffords said that he will postpone the move until the President's tax cut bill is signed.

For SIGMA members, the Democratic takeover provides both challenges and opportunities for our legislative agenda. Senator Max Baucus (D-MT), author of legislation to repeal the Special Occupational Tax on Alcohol, is expected to chair the Senate Finance Committee. Senator Daniel Inouye (D-HI), a staunch defender of Native American rights, will take over the Senate Indian Affairs Committee.

Senator Jeff Bingaman (D-NM) will chair the Senate Energy and Natural Resources Committee -- a key position as Congress debates legislation on the establishment of a national energy policy.

And while it had not been confirmed at press time, it is expected that Senator Jeffords will be offered the chair of the Senate Environment and Public Works Committee, which will be considering legislation to revamp the Clean Air Act regarding MTBE use, the oxygenate mandate, and a possible ethanol mandate, as well as legislation to strengthen the underground storage tank program. Senator Jeffords, while a moderate on many fiscal issues, has voted with Democrats on many environmental issues during his career in the Senate.

LETTERS ON DIESEL SULFUR LEGISLATION NEEDED

As reported last week, Congressmen Ed Bryant (R-TN) and Bart Gordon (D-TN) introduced legislation (H.R. 1891) to eliminate the phase-in requirement of EPA's diesel sulfur rule. SIGMA supports this legislation and seeks to assist the authors in gaining co-sponsors for the legislation. Attached to this Weekly Report is a draft grassroots letter that SIGMA would like every member to send to legislators representing states where you have retail outlets urging them to co-sponsor this important legislation. A list of House members is included in the SIGMA membership directory. Please personalize the letter and send it by mail or fax as soon as possible to those legislators who represent states in which your company has operations.

On a related note, last week's story on the introduction of H.R. 1891 failed to mention that the National Association of Truck Stop Operators (NATSO) also played a key role in getting this important legislation introduced. In the interest of giving credit where credit is due, NATSO's efforts are to be commended.

BI-PARTISAN MTBE LEGISLATION INTRODUCED

Senators Bob Smith (R-NH) and Harry Reid (D-NV), the Chairman and Ranking Minority Member of the Senate Environment and Public Works Committee, introduced on Thursday S.950, the "Federal Reformulated Fuels Act of 2001." S.950 would ban the use of MTBE as a gasoline additive four years after enactment and permit states to opt-out of the federal RFG oxygenate mandate. The bill also would eliminate the one pound RVP waiver for ethanol blends of conventional gasoline and permit any area of the country (regardless of ozone attainment status) to opt-in to the federal RFG program. Notably, S. 950 does not include provisions relating to a renewable fuels mandate -- a provision included in Senator Smith's committee-approved 2000 MTBE bill. Last year, SIGMA expressed its opposition to Senator Smith's bill because of the ethanol mandate.

The fact that these provisions have been dropped from S. 950 is encouraging, but other portions of the new bill remain problematic. SIGMA has not vet taken a position on S.950, but the Legislative Committee and the Board will be studying the bill in the near future to determine whether the Association should support the legislation.

HOUSE APPROVES SMALL BUSINESS SUPERFUND BILL

The House voted 419-0 to approve legislation that would provide liability relief to small businesses that disposed of less than 100 gallons of liquid or 200 pounds of solid hazardous material before April 1, 2001 at listed Superfund sites. H.R. 1831 also exempts businesses that disposed of only municipal solid waste at a Superfund site. The measure is pending in the Senate.

The House bill, if enacted, benefits SIGMA members that contributed less than two 55-gallon drums of hazardous materials to a Superfund site or whose trash hauler took routine wastes in dumpsters to a Superfund site. Under H.R. 1831, if a small business is sued for cost recovery by a larger party, the burden of proof is with the larger party. However, the small business will carry the burden of proof if sued by the government.

SIGMA MEETS WITH EPA ON BOUTIQUE FUELS

Following President Bush' call for an EPA study on reducing the number of boutique fuels across the country while maintaining these fuels' air quality benefits, SIGMA counsel Tim Columbus, former Congressman Tom Bliley, and a NACS representative met with EPA's acting Assistant Administrator for Air Rob Brenner this week. At the meeting, it become clear that SIGMA's message on the need to restore fungibility to the nation's motor fuels distribution system has reached the highest levels of EPA and that officials there are searching for solutions to the nation's balkanized fuel markets. All meeting attendees agreed that solutions would be difficult given the range of stakeholders with interests in these issues. EPA committed to a continuing dialogue with SIGMA and other stakeholders as its study moves forward.

SENATE STAFF REVIEWING TRIBAL TAX BILL

SIGMA counsel Greg Scott and NACS staff represented the Coalition Against Sales and Excise Tax (CASETE) in a meeting with the chief counsel of the Senate Indian Affairs Committee this week to discuss draft Native American tax legislation. Senator Ben Nighthorse Campbell (R-CO) expressed positive reactions to the draft CASETE tribal tax bill during a meeting with members of the Colorado/Wyoming Petroleum Marketers Association during PMAA's legislative conference last month, and suggested that the attendees continue discussion with his committee staff. During this week=s follow-up meeting, committee chief counsel Paul Morehead pledged to review the legislation, discuss it with Senator Campbell, and respond to CASETE in the near future. CASETE also is seeking a meeting with Senator Inouye's (D-HI) staff. Senator Inouye will become chairman of the Indian Affairs Committee when the Democrats take control of the Senate. SIGMA is a founding member of CASETE.

"NEW DEMOCRATS" OUTLINE ENERGY POLICY

The "New Democrats Coalition," a group of 72 moderate, pro-business Democrats in the House of Representatives, released its "21st Century Energy Agenda" this week. In many ways, the Coalition's plan differs from the proposals put forth by Democratic House and Senate leaders last week. The Coalition's plan balances new energy production with conservation measures and contains several provision of particular interest to SIGMA members. The Agenda calls for the development "of a more uniform fuel standard, including diesel, to reduce refinery bottlenecks and mitigate effects for small and independent refiners:" The Coalition also called for accelerated depreciation on capital investments made by refiners to improve pollution controls at refineries and for expanding the Strategic Petroleum Reserve and the Northeast Home Heating Oil Reserve. SIGMA counsel has met, and will continue to meet, with Coalition members to build support for comprehensive energy policy legislation.

CONGRESS APPROVES TAX CUT BEFORE BREAK

Both the House and Senate approved the President=s $1.35 trillion tax cut Saturday before adjourning for the Memorial Day recess. Twenty-eight House Democrats, along with twelve in the Senate, joined Republicans to pass the largest tax cut in two decades. Congress will return to work on Tuesday, June 5th.

SIGMA UPDATES

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