December 24, 2001

CONGRESS ADJOURNS; NO ACTION IN STIMULUS, ENERGY, FARM BILLS

The First Session of the 107th Congress adjourned on Thursday after the House and Senate completed their work on the FY 2002 appropriations bills. Congress did not, prior to adjournment, pass other important pending legislation to stimulate the nation’s economy, revamp the nation’s energy policy or establish farm programs for the next several years. Congress will return at the end of January 2002 with all these bills, as well as many others, awaiting its attention.

The final legislative days were filled with a great deal of action, if not a great deal of accomplishments. Early Thursday morning, the House passed a slimmed-down $75 billion economic stimulus package, only to have it die when Senate Democrats refused to take up the bill. GOP Senators again tried to attach portions of a national energy bill to the final appropriations bills, but were rebuffed by Senate Majority Leader Tom Daschle (D-SD). Senator Daschle has promised that a vote on a national energy plan will take place before the end of February 2002.

Congress also failed to come to agreement on farm legislation in the waning hours of the session and will return to this issue in 2002. SIGMA has been watching this legislation for potential efforts to adopt an ethanol fuels mandate.

Chafee Introduces UST Bill

As predicted in last week’s issue, Sen. Lincoln Chafee (R-RI) has introduced his bill (S. 1850) that would, in part, increase spending from the Leaking Underground Storage Tank (LUST) Trust Fund for State enforcement of existing underground storage tank (UST) regulations. Senate Environment and Public Works Committee Chairman Jim Jeffords (I-VT), Ranking Minority Member Bob Smith (R-NH), and Sens. Jim Inhofe (R-OK) and Tom Carper (D-DE) co-sponsored the new UST bill.

Key elements of S. 1850 include expanding the allowable uses of the LUST Trust Fund monies for State UST enforcement; requiring that every tank be inspected at least once every two years; requiring the Environmental Protection Agency (EPA) to publish guidelines for UST operator training; requiring EPA and the State to publish strategies for ensuring that tanks owned or operated by the Federal government, State and local governments, and Indian Tribes comply with the UST regulations; and providing additional funding for the remediation of certain MTBE releases. The Chafee bill includes over $460 million in increased authorizations from the $1.8 billion LUST Trust Fund.

SIGMA is generally supportive of S. 1850, particularly because it emphasizes even-handed enforcement of the UST program. Sen. Chafee has indicated his willingness to work with SIGMA on one provision of concern to the Association. As introduced, S. 1850 limits the use of LUST Trust monies by State reimbursement funds to cases where the UST owner or operator would be financially strapped but for the reimbursement. SIGMA is seeking the elimination of the limitation as a means to expedite cleanups and leverage limited remediation funds.

It is expected that a hearing on S. 1850 could be held as early as February. In addition, efforts are being made by SIGMA and other associations to have similar legislation introduced in the House of Representatives.

EPA Opens National UST Conference

The Environmental Protection Agency’s (EPA) Office of Underground Storage Tanks (OUST) has decided to allow any interested party to attend its annual, national underground storage tank (UST) conference, beginning in March 2002. Until now, OUST has restricted attendance to Agency officials, State UST personnel and invited guests. SIGMA counsel Jeff Leiter has addressed the annual conference several times, speaking on UST issues from the perspective of independent petroleum marketers.

OUST’s 2002 national UST conference will be held outside of Orlando, Florida from March 10-13. EPA has asked State UST programs to inform State petroleum marketing groups of the change in attendance policy.

OUST will be sending materials on the conference, including the agenda, in coming weeks to national trade associations, including SIGMA.

SIGMA Files Comments on EPA Transition Proposal

SIGMA filed comments Friday in response to EPA’s proposed rule designed to ease the transition from winter to summer reformulated gasoline. EPA proposed that terminals be permitted to received only summer-specification RFG on or after April 15 of each year and requested comments on several other issues.

SIGMA’s comments stated that SIGMA does not support the April 15 “terminal receipt” mandate proposed by EPA because marketers are not convinced that this additional government mandate will help in the transition from winter to summer gasoline. SIGMA also made the following points in its comments:

EPA should maintain the May 1 deadline after which terminals may sell only summer-specification gasoline. EPA had requested comment on whether to eliminate or delay this terminal transition mandate. SIGMA stated that the elimination or delay of this mandate could make it much more difficult for marketers to turn their retail tanks prior to the June 1 retail deadline;

EPA must finalize any changes to the transition program by February 1, 2002 so that refiners, pipelines, marketers, and others can set their plans for the summer gasoline season;

EPA should not “advertise” the April 15 terminal receipt mandate as a complete solution to the supply problems and price volatility many markets have experienced during transitions in the past two years. SIGMA warned EPA about overselling this change and advised EPA to be prepared to revisit transition issues after the summer of 2002 for determine if additional changes are needed.

EPA should grant testing tolerance flexibility to terminals for the first “turn” of their tanks on May 1 of each year and should extend this flexibility down to the retail level, permitting the same flexibility to marketers for the first “turn” of their retail tanks.

EPA is expected to consider SIGMA’s and other comments and make any changes to the transition program by late January 2002.

“Suspicious Activity Reports” Start January 1, 2002

SIGMA has been informed by staff of the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) that the Agency intends to announce that the effective date of the regulations requiring Money Services Businesses (MSBs) to file Suspicious Activity Reports (SARs) will be January 1, 2002. There had been some discussion at FinCEN to delay the effective date, but the Agency has decided to stick to its original deadline.

FinCEN recently announced that certain MSBs must register with the Treasury Department no later than December 31, 2001. Most SIGMA members will not be required to register; however, they WILL be required to comply with the SAR regulations. SAR forms must be filed within 30 days of the suspicious activity. The SAR reporting form is available on FinCEN’s web site at http://treas.gov/fincen/bsaf_main.html#902247. SIGMA counsel has prepared a compliance guide for use by SIGMA members in establishing their corporate reporting guidelines and filing the SARs. Access this guide by clicking here.

For more information, please consult the FinCEN web site, or a new site created specifically for MSBs at www.msb.gov . <