August 12, 2002

CONGRESS OUT OF SESSION; WASHINGTON ENJOYS "DOG DAYS"

With Congress out of session until after Labor Day, little seems to be happening in Washington of direct impact on marketers. There are a few things going on "behind the scenes", but for the most part they are minor. Major issues such as UST legislation and the proposed ethanol mandate will wait until the fall. With that caveat, there are a few developments of note.

CHEMICAL SECURITY

Chemical Security legislation which passed out of Senate committee just before adjournment was amended during the markup session, but the version "as passed" is not yet available. We’re told that the committee tried to address our concern that the bill covered typical retail motor fuel outlets. If the reports are correct, the bill would have the same threshold for chemical security as was adopted years ago by EPA for the so-called Bhopal Rule – i.e., facilities with less than 42,000 gallons of storage capacity would not be covered by the rule. (EPA would have the power to overrule this exemption, but only with cause.) Most retail outlets would thereby be exempted, but bulk plants, terminals, and larger truckstops would still be covered, and would be required to develop and file security plans with EPA. The Bush Administration is said to be developing an alternative to the Senate bill which would rely more on voluntary standards than mandatory rules -- run by the Dept. of Homeland Security, not EPA.

COMMERCIAL DRIVERS

We spoke in haste last week, and apologize. Our attorneys are developing a detailed memo outlining the new commercial drivers license rules, but the memo was not intended to be ready this week as we stated. It will be available soon. The new rules go into effect on Sept. 30 of this year.

CINCINNATI AIR RULES

The Kentucky part of the Cincinnati, Ohio metro area have been re-designated as "in attainment" with the new ozone standard, but the rest of Cincinnati remains designated as non-attainment, pending some changes to the State Implementation Plan (SIP) for Ohio.

SIGMA COMMENTS ON TAX RULE

On Friday, SIGMA submitted formal comments to the Internal Revenue Service (IRS) regarding a proposed change in the rules for liability for payment of fuel taxes. As the rules are currently written, a retailer who sold untaxed fuel for taxable purposes – whether or not he knew the tax had not been paid – is liable for the tax. The proposed change would make the retailer and the supplier "jointly and severally liable" for the unpaid tax. SIGMA’s comments supported the proposal, with one reservation. We suggested that IRS should explicitly list defenses a retailer could use to establish non-liability for the tax – demonstration that the violation was not caused by the retailer, its employee, or agent. SIGMA’s comments were made with input from our individual members in response to a notice in the 5/20/02 edition of SIGMA Weekly Report.

NAFTA REJECTS MTBE CLAIM

An arbitration panel under NAFTA has ruled largely against a claim by Canadian methanol producer Methanex Corp., which had charged that California’s MTBE ban violated that free trade agreement. The ruling came August 7. The only part of the case that will be allowed to go forward – and then only with a new "pleading" by Methanex – is a charge that the California ban was instituted at the urging of ethanol producer ADM, and that Gov. Davis’s action was intended to reduce energy imports and instead to favor domestic industry.

SIGMA MEETINGS

The cutoff is next Monday, Aug. 19, for discounted "Advance" registration fees for the SIGMA Annual Meeting in Chicago, Nov. 8-10, and for a SIGMA Masters program on Insurance the day before. Details are in your mailbox. Act today!