110th Congress Organizes

VISA Chargeback Info

New Excise Tax System?

SIGMA Files RFS Comments

Alternative Fuels Task Force

110^th CONGRESS ORGANIZES
Now that the Democrats have control of both the House and Senate as a result of the 2006 Midterm Elections, both bodies will waste no time in the election process for new leaders.  In the Senate, Democrats and Republicans will hold elections on Nov. 14 and 15, respectively.  Not many changes are expected, although Sen. Trent Lott (R-MS) is likely to become GOP whip after Sen. Rick Santorum (R-PA) lost his own reelection bid.  Sen. Mitch McConnell (R-KY), currently holding the post, is expected to become Minority Leader.  On the House side, Democrats will meet Nov. 16 to hold elections.  Current Minority Leader Nancy Pelosi (D-CA) is expected to become House Speaker next year.  Republicans will hold their elections Nov. 17, and current Majority Leader John Boehner (R-OH) and Republican Study Committee Chairman Mike Pence (R-IN) are vying for the minority leader post.  SIGMA will keep you updated as leadership and pertinent committee posts are selected.

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VISA CHARGEBACK INFO
Visa’s newly posted merchant handbook now addresses the issue of Reason Code 96 chargebacks.  For the uninitiated, these are the chargebacks Visa imposes if a gasoline purchase exceeds $50.  Retailers complained about these chargebacks during two Congressional hearings this year.  When those hearings occurred, Visa had not provided retailers with written information about the Reason Code 96 rules.  Retailers have consistently maintained that these chargebacks are unfair and that they conflict with Visa rules prohibiting retailers from setting a maximum transaction amount. Now, Visa’s handbook for the first time admits that retailers have no recourse when gasoline transactions are more than $50, but it tells retailers they may be able to avoid these chargebacks by setting a transaction limit of $50 on fuel pumps.  The handbook does not explain how retailers can do this when MasterCard prohibits retailers from setting a maximum transaction amount. Even though this new disclosure by Visa is inadequate and confusing, it at least demonstrates that Visa is feeling pressure from retailers about the need for more disclosure.

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NEW EXCISE TAX SYSTEM?
The Internal Revenue Service (IRS) in a Nov. 8 Federal Register notice proposed a new Privacy Act system of records titled “excise compliance programs” that would include information about individuals engaged in any taxable activity related to excise taxes. Activities considered by the proposal include the filing, preparing, or transmitting of federal excise taxes. The system also would include information about witnesses or other parties with knowledge of such taxable activity. IRS explained that the current excise tax compliance programs have grown and have become so distinct that they merit their own system of records. Comments on the proposal must be received no later than December 8, 2006. The system will become effective on Dec 18 unless adverse comments are received. 

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SIGMA FILES RFS COMMENTS
SIGMA filed formal comments with EPA on Friday on the agency's proposed rules to implement the Energy Policy Act of 2005's Renewable Fuels Standard (RFS).  The RFS requires increased use of alternative fuels such as ethanol and biodiesel over the next decade.  SIGMA's comments generally reflected SIGMA’s testimony at an EPA public hearing last month.  Specifically, SIGMA (which joined with NACS in filing these comments) stated:  (1) the proposal generally reflects congressional intent; (2) the proposal should be modified to assure that alternative fuel credits (which EPA calls "RINs") are not separated from the physical gallon of alternative fuel until the gallon is blended into gasoline or diesel fuel; and, (3) SIGMA opposes that portion of EPA's proposal which allows third parties to own and trade RINs.  A copy of SIGMA's comments is posted on the SIGMA website at www.sigma.org.  EPA is expected to review the comments filed by all parties and finalize an RFS rule early in 2007 for implementation in mid-2007. 
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ALTERNATIVE FUELS TASK FORCE
At its 2007 Annual Meeting in Chicago, SIGMA announced  the formation of an Alternative Fuels Task Force to act as a forum for marketers to discuss issues with the retailing of ethanol blends, including E-85, and biodiesel blends.  The Task Force will be chaired by SIGMA Board Member Michael Newman.  In addition to acting as a clearinghouse for information on retailing alternative fuels -- such as the recent controversy surrounding UL certification of E-85 dispensing equipment -- the Task Force also will liaise with the Legislative Committee regarding the development of SIGMA positions on legislative and regulatory initiatives regarding alternative fuels.  Regular and Associate SIGMA members and other interested parties interested in participating on the Task Force should contact SIGMA Executive Vice President Ken Doyle at kdoyle@sigma.org or SIGMA counsel Greg Scott at gscott@kelleydrye.com.
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SIGMA Weekly Report November 13, 2006 © Copyright SIGMA, 2006