OPMCA Connection
Keeping You Informed!
OPMCA Connection keeps you informed and current on regulations from all state and national agencies as well as laws pertaining to the petroleum marketing/c-store industry.

Candace McGinnis
Executive Director  

Hannah Fite
Director of Member Services  

6420 N. Santa Fe, Suite B
Oklahoma City, OK 73116
Phone: (405) 842-6625 
(800) 256-5013 
Fax: (405) 842-9562
2018-2019 Board of Directors
Tommy Shreffler, Chairman 
 OnCue Marketing, LLC

Jerry Davidson
Pete’s Corporation

Jason Flinn 
Flowers Oil Company

Teresa Hollenbeck
Red Rock Distributing Company

Kurtis Hutchinson
Hutchinson Oil Company

Brian Lohman
ASAP Energy, Inc.

John Netherton
Danielson Fuel Services

Duff Thompson
AVP Metro Petroleum LLC

Rob Toth
Coffeyville Resource
Monday, Dec. 17, 2018
  • Bill Requests Top 4,300 for the 2019 Legislative Session
  • Congress Passes Farm Bill with 10 Year NORA Reauthorization
  • EPA Releases 2019 RFS RVOs
  • House Subcommittee Holds Hearing on RFS Reform Draft 
  • Menu Labeling Online Course and Information
  • Government Funding Extended Two-Weeks
  • PMAA Journal Fall Issue is Online Now
  • Federated Insurance Complimentary Webinar
Bill Requests Top 4,300 for the 2019 Legislative Session
Lawmakers submitted more than 4,300 bill requests for the 2019 legislative session.

Some 2,595 requests were submitted in the House and 1,755 requests were submitted in the Senate, according to officials in each chamber, for a total of 4,370 requests. Last Friday was the deadline for members to submit bill drafting requests.

Not every request will become a piece of legislation. Some will not be drafted when a member learns another legislator is pursing the same or similar language or for other reasons. In some cases, a single request may turn into more than one piece of legislation in order to accommodate what the author hopes to achieve.
The 4,370 requests are significantly higher than the 3,020 requests submitted in 2016, the pre-filing period before the First Session of the 56th Legislature. That year's requests resulted in just over 2,200 bills being pre-filed.

As of last Monday morning, 33 bills had been filed in the Senate and none in the House.

The deadline for filing bills and joint resolutions to be heard during the 2019 legislative session is Jan. 17. The regular session begins Jan. 8 when lawmakers meet for organizational day. Legislators will return to the Capitol to begin considering bills and to hear Governor-elect Kevin Stitt's first state of the state speech Feb. 4.

Be reminded of following additional deadlines for the upcoming session:
January 2019
January 8 - House and Senate organizational day
January 17  - House and Senate deadline for introduction of bills and joint resolutions
February 2019
February 4 - 1st Regular Session of the 57th Legislature convenes at noon
February 28 - Senate Measures from Senate Committees Deadline
March 2019
March 14 - House & Senate deadline for third reading of bills and joint resolutions in the chamber of origin
April 2019
April 11 - House Measures from Senate Committees Deadline (See note below)
April 25 - House & Senate deadline for third reading of bills and joint resolutions from opposite Chamber
May 2019
May 31 - 1st Regular Session adjourn Sine die no later than 5:00 pm
Congress Passes Farm Bill with 10 Year NORA Reauthorization 
SNAP also Reauthorized for Five Years
Last week, the House passed the Farm Bill (H.R. 2) as approved in conference with the Senate by a vote of 369-47. The Senate passed the compromise with an 87-13 vote yesterday, and the President is expected to sign the bill into law. The language includes a 10 year reauthorization of the National Oilheat Research Alliance (NORA) in which 25% of the funding will be escrowed each year that can be accessed on year 11. Passage of the bill is a huge victory for heating fuels dealers. PMAA would like to thank all of our state/regional associations that reached out to their lawmakers to get us to this point, but most especially, NEFI, all of the Northeast state associations, Wisconsin, Kansas, Ohio, Michigan, North Carolina, South Carolina, Kentucky, Illinois, Washington state and Oregon.

PMAA played a critical role in reauthorizing the NORA in 2014 and now again in 2018. After the House passed its version of a Farm Bill in June, without a NORA provision, the Senate passed its own version a week later which included an amendment that would permanently reauthorize NORA. A conference committee was formed to hash out the details of a final Farm Bill, yielding a 10 year reauthorization of NORA.

Senators who played a key role in the process included Senator Jeanne Shaheen (D-NH), Senator Patrick Leahy (D-NH), Senator Susan Collins (R-ME), Senate Majority Leader Mitch McConnell (R-KY), Senator Richard Burr (R-NC), Senator Rob Portman (R-OH) and Senator Jack Reed (D-RI). In the House, key lawmakers included: Paul Tonko (D-NY), Jeff Duncan (R-SC), Frank Pallone (D-NJ), Peter Welch (D-VT), John Faso (R-NY), Ann Kuster (D-NH), Cathy McMorris Rodgers (R-WA), and David Rouzer (R-NC).

NORA was first authorized in 2000 to provide funding that would allow the oilheat industry to provide more efficient and reliable heat and hot water to American consumers. As a “check-off” program, NORA receives $0.002 at the wholesale level on every gallon of heating oil sold. NORA provides critical training opportunities and supports the necessary research and development for the industry. Oilheat is currently used in 6.3 million homes, serving more than 16 million Americans across the country. The current NORA program is authorized through February 2019.

The Farm Bill also reauthorizes the Supplemental Nutrition Assistance Program (SNAP) thru 2023. The measure would largely maintain existing SNAP work requirements. The agreement requires the creation of a clearinghouse to prevent individuals from receiving SNAP benefits in more than one state simultaneously, and the USDA must review group facilities to ensure they aren’t receiving nutrition benefits from multiple programs.

Most significantly for retailers, the bill prohibits electronic benefit transfer processing fees through fiscal 2023. Specifically, it prohibits fees assessed by State benefit issuers related to the switching or routing of electronic benefit transfer transactions; requires a GAO study to examine EBT fees, outages and intermediaries providing services in-between redemption at retail food store and state-contracted EBT processors; requires USDA to review state EBT contract service agreements and compatibility of such systems with USDA fraud monitoring systems, and the use of third-party applications that access EBT systems; directs the Secretary to issue guidance and regulations as appropriate based on the findings of the GAO study and USDA review; requires the Secretary to issue guidance to retail food stores on selecting EBT equipment and service providers that are able to provide sufficient transaction information to minimize the risk of fraudulent transactions; it also allows the Secretary to require applicant retailers to provide certain EBT-related information to the Secretary during the retail authorization process.

The final Farm Bill also legalizes hemp by removing it from the list of controlled substances. Hemp is classified as a schedule I drug -- those deemed to have a high abuse potential and no medical use -- along with marijuana and tetrahydrocannabinol (THC), making it largely illegal at the federal level. The measure excludes hemp, which comes from the same plant species as marijuana but has low THC, from those definitions. The bill allows states and American Indian tribes to have primary regulatory authority over hemp production. USDA would have to approve their plans to regulate it in advance.

EPA Releases 2019 RFS RVOs
As was reported a couple of weeks ago, the Environmental Protection Agency (EPA) released the 2019 renewable fuel blending volume obligations (RVOs) as required by the Renewable Fuel Standard (RFS) program. The EPA increased the total renewable fuel volume by 590 million gallons from 19.29 billion gallons in 2018 to 19.88 billion gallons for 2019. However, the corn ethanol renewable volume remained at 15 billion gallons, the same level set as the past two years and the statutory maximum established by Congress. Moreover, against the wishes of the renewable fuel industry, the final RFS rule does not contain a provision to reallocate the 2.25 billion gallons of corn ethanol waived under the small refinery exemptions to the 2019 renewable volumes. The renewable fuel industry argued that the agency should reset the ethanol RVO for 2019 so that waived gallons would not be “lost.” 

The EPA is raising the RVO for cellulosic biofuel by 130 million gallons from 288 million gallons in 2018 to 418 million gallons in 2019. Advanced biofuels increased by over 630 million gallons from 4.29 billion gallons in 2018 to 4.92 billion gallons in 2019. The EPA also set the 2020 renewable fuel volume for biomass-based diesel at 2.43 billion gallons, up 330 million gallons when compared with the 2018 RVO. 

Expressed as a volume percentage of fuel, the breakdown is as follows: Cellulosic biofuel; 0.230 percent, biomass-based diesel; 1.73 percent, advanced biofuel; 2.71 percent, renewable fuel 10.97 percent. The amount of renewable fuel (ethanol) over a 10 percent volume is offset by obligated parties through the purchase of RIN credits rather than moving to E15. The percentage standards represent the ratio of the national applicable volume of renewable fuel volume to the national projected non-renewable gasoline and diesel volume less any gasoline and diesel attributable to small refineries granted an exemption prior to the date the standards are set.

House Subcommittee Holds Hearing on RFS Reform Draft 
Last Tuesday, the House Energy and Commerce Subcommittee on Environment held a hearing examining the “21st Century Transportation Fuels Act,” a discussion draft introduced by Subcommittee Chairman John Shimkus (R-IL) and Rep. Bill Flores (R-TX) to revamp the Renewable Fuel Standard (RFS) by moving towards a fuel performance standard to reduce emissions and preserve the liquid fuels industry. The discussion draft would nix the 15-billiongallon corn ethanol mandate in 2022 and transition to a national octane standard. In other words, the legislation would swap out a government mandate for a performance standard that autos, refiners and petroleum marketers would need to meet. 

The draft legislation aims to encourage the production of high compression engines (HCEs) warrantied up to E20 and refiners to produce higher octane fuels known as 95 research octane number (RON) that would be compatible with HCEs. 95 RON is similar to today’s premium fuel that would lower emissions and preserve the liquid fuels distribution network. Although PMAA is concerned that implementing a higher-octane fuel may be used as an excuse to mandate E15 or higher ethanol blends, moving towards a performance standard versus a governmentimposed mandate may have its benefits. 95 RON can be produced with an E0 blend, but given ethanol’s octane boost, E10 would likely be used to meet the 95 RON standard.

Referring to the discussion draft during the hearing, Rep. Flores stated, "We have to put consumers and the environment first, not our own self interests. Either we can go with the status quo that everyone says is broken or have a compromise solution. There's not going to be a solution that makes everyone 100 percent happy." 

Testifying before the Committee included Chet Thompson, President of the American Fuel and Petrochemical Manufacturers (AFPM), who said that “if implemented correctly, a transition from the RFS to a fuel-neutral, 95-RON performance standard has the potential to better address the needs of all stakeholders: the auto industry, marketers, biofuel producers, farmers, refiners, and most importantly consumers.” However, he stated that AFPM cannot support the draft as it is currently written because some provisions “fail to promote free market competition for fuels” and doesn’t do enough to fix the RFS. 

Tim Columbus, general counsel for NACS and SIGMA, outlined several issues with the draft. He stated that the text of the draft must state that misfuelling technology must be cost-effective for retailers, not just auto manufacturers and said that the associations have cost concerns related to the size of the nozzles used to dispense fuels. He also said that the associations were pleased to see the draft include misfuelling liability protections but said that retailers who comply with the misfuelling prevention requirements must be protected from “all liability under state, federal, and common law with regard to any damages resulting from the misfuelling activity of a consumer.” Also, in his testimony, Columbus stated, “Currently, NACS and SIGMA have no position on the draft legislation.”

Geoff Cooper, President and CEO of the Renewable Fuels Association (RFA), stated that RFA cannot the support the draft because eliminating the RFS “would undermine the considerable progress our nation has made toward greater energy security, economic vitality and environmental health.” Cooper also stated that RFA does not support a 95 RON standard because it “is not a suitable replacement for the RFS beyond 2022.” 

David Fialkov, Vice President of Government Relations for NATSO, stated that the small refinery waivers have “resulted in more volatility in RIN markets and lower demand for advanced biofuels.” Kurt Kovarik, Vice President of Federal Affairs with the National Biodiesel Board (NBB), echoed those comments and said that the draft doesn’t do enough to address the fact that EPA has negatively affected the demand for biodiesel by issuing small refinery waivers that allow small refineries to be exempted from obligations under the RFS.

Ethanol groups argue that their members are being hurt by the RFS small refinery exemptions because it indirectly reduces the corn ethanol mandate which drives down the value of RINs and negatively impacts their ability to make E15 a viable fuel in the marketplace.  

PMAA applauds Reps. Shimkus and Flores’ work on trying to find common ground between the corn, refining and marketing interests. While this legislation may be a mixed bag for petroleum marketers, keep in mind that current law puts the responsibility of the RFS in the hands of the EPA to set yearly RVOs following 2022. Therefore, this bill is the first step that serves as a blueprint for future legislation where all parties must give something up to preserve the liquid fuels industry. PMAA will continue to monitor the progress of the draft.

Menu Labeling Online Course and Information to Help Comply with Labeling Requirements
During this first year of implementation, the FDA is working with covered establishments to achieve high levels of compliance with the menu labeling requirements that went into effect May 7, 2018. The FDA has made available an online education module to help industry, regulators, and consumers understand the regulations. This online module describes what types of establishments and types of foods are covered by the menu labeling regulations and how to comply with the regulations. The FDA has also published industry fact sheets on labeling and declaring calories.

The menu labeling requirements apply to restaurants and similar retail food establishments that are part of a chain with 20 or more locations. In addition, they must be doing business under the same name and offering for sale substantially the same menu items.

For more information, or to access the module, click here .

Government Funding Extended Two-Weeks
Last week, the House and the Senate passed (without dissent) a two-week spending bill and delayed final spending resolutions through December 22. The President will sign the bill before the government shutdown deadline of midnight tonight.

President Trump, Senate Minority Leader Chuck Schumer (D-NY), and House Minority Leader Nancy Pelosi (D-CA) had planned to meet on December 4 but that meeting was postponed due to the former President George H.W. Bush memorial services. Now they plan to meet on Tuesday to attempt to come to final agreement on the seven-bill spending package. Senate Minority Leader Schumer says his party will provide no more than $1.6 billion for "border security" but the President wants $5 billion for parts of a concrete wall on the southern border.

Most of the $1.2 trillion discretionary budget has been appropriated already by Congress for this fiscal year. The seven departments that are part of the spending package are the departments of State, Interior, Agriculture, Commerce, Justice, Treasury and Homeland Security.

Also remaining to be finalized is the tax extenders package that holds provisions of importance to petroleum marketers. In particular, a retroactive renewal and gradual phase down of the $1 per gallon biodiesel blenders tax credit through 2024. Specifically, it would keep the credit at its current rate of $1 per gallon for 2018 through 2021 but gradually reduce it to 75 cents in 2022, 50 cents in 2023, 33 cents per gallon in 2024 and then allow it to expire. Credits of importance that would be extended retroactively for 2018 only are the tax credit for the installation of qualified alternative fuel vehicle refueling property in a home or business; the Alternative Fuels Excise Tax Credit for the use of propane as a transportation fuel, known as the “propane autogas tax credit;” and the Section 25C tax credit for the installation of qualified highefficiency residential HVAC systems and certain energy-saving home retrofits.

Additionally, the tax extenders package includes a renewal of the Oil Spill Liability Tax (OSLT) through December 31, 2019. The 9 cents per barrel OSLT tax is imposed on crude oil at the refinery gate. Proceeds from the OSLT go into a trust fund used by the Coast Guard to pay for clean-up after accidents like oil spills. PMAA is concerned that if Congress fails to act on tax extenders before the end of the year, jobbers may end up in the same situation they faced in early 2018 when some refiners continued to charge the tax even though it expired. This created unnecessary and problematic accounting problems throughout the industry. Congress can prevent the confusion from occurring again by extending the OSLT before December 31st. If Congress does not tackle extenders before December 31st but addresses it next year, PMAA urges Congress not to make the tax retroactive. Click here to read the letter and click here for a refresher on the OSLT.

Finally, the tax extenders language includes a technical fix to the Section 168 of the “Tax Cuts and Jobs Act” so that businesses can receive the 100 percent bonus depreciation benefit that Congress intended to provide in the law.

PMAA Journal Fall Issue is Online Now
The annual PMAA Fall Directory is now available online! PMAA is happy to bring the PMAA Journal in another feature-packed format. In addition to its printed version, PMAA Journal is now available in a new and improved digital format! Now the magazine can be easily viewed on any device, whether smartphone, tablet or computer screen! Scroll vertically through all the content in the magazine and easily select individual articles to read or share via the buttons at the top.

Want to see past issues? They can be found on the left side of your browser screen (or the top of your mobile device’s window) - just one click and they're at your fingertips! Additionally, the flipping-page digital version is still available and easily accessible through the menu bar in the upper left corner.

Federated Insurance Complimentary Webinar
The Ripple Effect: How The News and Politics Impact the Workplace 
Tuesday, December 18, 2018, 1:00 p.m. CT
60 minutes | Advance registration required

In this webinar, we will discuss how the superheated news environment and the immediacy of social media impact businesses today. Regardless of size, companies increasingly struggle to find the right line in managing or supporting engagement around the issues of the day, without losing customers, good will or good employees. We’ll provide some concrete examples and warn of some pitfalls, and will provide concrete suggestions for what you can do today to safeguard against these risks. We’ll round out our discussion with a few simple steps you can take using FEPN resources that are available to you at no additional cost. 

Recommended Participants:
Owners/Operators, Operations Managers, HR Professionals, Risk Managers