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LEGISLATIVE AND REGULATORY ACTIVITIES 2006 SSDA/NCPR-AT Legislative Update Before the start of the second session of the 109th Congress begins we present a quick review of the legislation SSDA/NCPR-AT is actively lobbying.
The passage of the Lawsuit Abuse Reduction Act (LARA), H. R. 420, on October 27th, 2005 was a big step in reducing the trial lawyer abuse of small businesses. LARA specifically requires sanctions against frivolous lawsuits and will prevent forum shopping for sympathetic judges. Passage in the Senate will be an uphill battle but this is very encouraging first step.
SSDA/NCPR-AT has long supported the Work Opportunity Tax Credit (WOTC) since its inception in 1996. Tax credits ranging from $750 to $2400 per eligible employee have proved very beneficial to employers smart enough to take advantage of this legislation. Unfortunately the WOTC is set to expire on December 31st unless our coalition is able to include an extension of the WOTC in the Continuing Resolution Congress will pass to fund the government. Even if we succeed there will be likely be a 25% reduction in the WOTC funding from $20 million to $15 million due to across the board budget cuts in all agencies (except Veterans) of 1% . Our ultimate goal is to make this excellent small business tool part of the permanent tax code.
It goes without saying that the issue of employee health care cost is second only to supplier relations in dealers’ minds. We have participated in the coalition to lower health care costs through Association Health Plan (AHP) legislation for three years now. The proposed legislation remains a carefully constructed small business approach to bringing quality health care to hundreds of thousands of uninsured citizens. SSDA/NCPR-AT believes it is only fair to grant the same options that are available for unions and large corporations to established associations. Unfortunately, the years-long saga of AHP legislation continues unabated. The latest twist in the process is the upcoming debate concerning S. 406, the coalition bill and S. 1955, Chairman Enzi’s own health plan bill. SSDA/NCPR-AT has some very real concerns about the Chairman’s approach to state mandates but we have to acknowledge that his assessment of S. 406’s slim chances without some compromise is probably accurate.
The Motor Vehicle Owner’s Right to Repair Act, H. B. 2048, also has been on an interesting path. Many of you know that SSDA/NCPR-AT has submitted written testimony, testified and attended every hearing on this bill. The bill will enter recess with 77 co-sponsors (four are committee chairmen) and a good deal of momentum. We are hoping this bill will go into mark-up even as the National Automotive Service Task Force (NASTF) hashes out the proposed reorganization of its board. There is a struggle brewing trying to determine which industry players have a right to be on the board. This is difficult because NASTF was founded by the auto manufacturers in response to the right to repair controversy. In their defense there has been a vast improvement in the amount of and access to repair information. It remains our position that this has only come about due the threat of legislation, and without some form of government enforcement independent repair shops will not have easy access in the long term.
The amendments to the Petroleum Marketing Practices Act that we are seeking have been introduced again in the House by Rep. Al Wynn (D-MD) under bill number H. R. 3926. The changes this bill makes to the PMPA address three major issues of concern to independent service stations owners. The Supreme Court’s opinion in State Oil v. Khan allows fuel suppliers to fix the maximum price charged by its dealers without violating federal antitrust laws.
· This bill establishes a motor fuel dealer’s right to set his or her own retail prices. Independent dealers have invested significant capital into their businesses with the expectation that they would remain free to make their own pricing decisions. They should not be subject to retail prices set by distant suppliers having limited knowledge of local market conditions.
· The second concern addresses a loophole that currently exists in the PMPA. This measure provides motor fuel dealers a right of first refusal to purchase their service stations prior to any assignment of their franchise agreements to a distributor or any other assignee. With the mega-merger trend in the fuel industry, clearly some service stations are being sacrificed. Service station dealers should have the first option to purchase the businesses they have worked so hard to establish.
The third amendment would prohibit suppliers from using their superior economic might to include fee-shifting provisions in franchise agreements, which compel the dealer to pay the supplier’s attorney’s fees and expenses if the dealer is unsuccessful in litigation with the supplier. Such provisions only magnify the inherent inequality that exists between supplier and dealer. The threat of ruinous attorney’s fees that they impose serves as a club to discourage dealers from asserting their legal rights, no matter how strong their case.
Rep. Mike Thompson (D-CA) has re-introduced the Wholesale Motor Fuel Fairness and Competition Restoration Act, H.R. 3780 in the 109th Congress with the help of consumer outrage in the aftermath of the hurricane related run-up in gasoline prices. This bill would make it much more difficult for suppliers to engage in practices such as zone-pricing, redlining, discriminatory wholesale fuel pricing and a complex system of cost allocations used to hide factors on which wholesale costs are based and published. The primary anti-discriminatory mechanism in the bill would require that the price charged by a supplier at a terminal is the same, regardless of who is making the wholesale purchase. It also calls for the Federal Trade Commission to issue regulations for full disclosure by refiners and distributors of their wholesale motor fuel pricing policies, with a separate listing of each component contributing to prices.
SSDA/NCPR-AT has remained steadfast in our attempts to clarify the date at which the Service Station Dealer Exemption (SSDE) for waste oil is available as a defense in Superfund cases. As many of you know, there is a seven-year window of dealer exposure due to the length of time it took the EPA to promulgate the rules requested by Congress in 1986. The rules were finally issued by the EPA in 1993. As a result, any dealer named in a Superfund site clean-up between 1986 and 1993 is still held liable and H.R. 2211 seeks to set that date back to November 8th, 1986 and provide immediate relief to numerous repair facilities around the country.
The following is a summary of the most topical (industry specific) legislation pending before the 109th Congress and the respective co-sponsors. Please look for your Representatives on the list of co-sponsors. If they are not on the list we ask that you call their office, ask them to support H. R….. (insert bill number) and explain why the bill is important to you. For any questions or concerns please call the SSDA-AT office at 301-390-4405 and ask for extension 102.
H. R. 2211
When the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA, the Superfund Law) was passed, very few people suspected the harm that would befall service station dealers and repair shop owners around the country. The nightmare probably began innocently enough when the EPA realized that it did not have the manpower to administrate all of these Superfund sites and consequently turned them over the larger Potentially Responsible Parties (PRPs). The larger PRPs turned out be major oil companies and large electric utility providers. These administrators were able to determine through manifests and log books at the sites that they could pass on substantial costs to gas station and repair shops that had contributed waste oil to the sites. Over the years many small mom-and-pop businesses have suffered severe financial harm or outright bankruptcy after being named as a PRP. SSDA/NCPR-AT immediately sought some form of relief and in 1986, and as part of the Superfund Amendments and Reauthorization Act (SARA) created the Service Station Dealer Exemption (SSDE) which stated that dealer and repair shops were exempt from liability if they recycled do-it-yourselfer’s waste oil and managed waste oil according to existing federal and state standards. As many of you know, there is a seven-year window of dealer exposure due to the length of time it took the EPA to promulgate the rules requested by Congress in 1986. The rules were finally issued by the EPA in 1993. As a result, any dealer named in a Superfund site between 1986 and 1993 is still held liable and H.R. 2211 seeks to set that date back to November 8th, 1986 and provide immediate relief to numerous repair facilities around the country.
Rep Barrett, J. Gresham [SC-3] - 10/26/2005 Rep Bass, Charles F. [NH-2] - 5/10/2005 Rep Bradley, Jeb [NH-1] - 5/10/2005 Rep Brown, Henry E., Jr. [SC-1] - 9/15/2005 Rep Clay, Wm. Lacy [MO-1] - 9/21/2005 Rep Doyle, Michael F. [PA-14] - 6/13/2005 Rep Frank, Barney [MA-4] - 5/10/2005 Rep Inglis, Bob [SC-4] - 10/20/2005 Rep Lynch, Stephen F. [MA-9] - 5/10/2005 Rep Manzullo, Donald A. [IL-16] - 5/10/2005 Rep McGovern, James P. [MA-3] - 5/10/2005 Rep Meehan, Martin T. [MA-5] - 5/10/2005 Rep Michaud, Michael H. [ME-2] - 5/10/2005 Rep Neal, Richard E. [MA-2] - 5/10/2005 Rep Pascrell, Bill, Jr. [NJ-8] - 5/10/2005 Rep Pitts, Joseph R. [PA-16] - 10/20/2005 Rep Sessions, Pete [TX-32] - 5/10/2005 Rep Tiahrt, Todd [KS-4] - 9/21/2005
H. R. 3780
No current problem in the independent service station dealer community tops the issue of zone-pricing. Apparently this issue is migrating to the jobber/distributor supplied dealer as these jobbers gain the lion’s share of a given market through oil company pull-outs and grow accordingly. This issue is complicated by tremendous gains in market share picked by the hyper-marketers and the need to price competitively. The Wholesale Motor Fuel Fairness and Competition Restoration Act would make it much more difficult for suppliers to engage in practices such as zone-pricing, redlining, discriminatory wholesale fuel pricing and the complex system of cost allocations used to hide factors on which wholesale costs are based and published. The primary anti-discriminatory mechanism in the bill would require that the price charged by a supplier at a terminal is the same, regardless of who is making the wholesale purchase. It also calls for the Federal Trade Commission to issue regulations for full disclosure by refiners and distributors of their wholesale motor fuel pricing policies, with a separate listing of each component contributing to prices.
Rep Berkley, Shelley [NV-1] - 9/28/2005 Rep Capps, Lois [CA-23] - 9/14/2005 Rep Case, Ed [HI-2] - 9/14/2005 Rep Davis, Susan A. [CA-53] - 9/14/2005 Rep DeFazio, Peter A. [OR-4] - 9/14/2005 Rep Eshoo, Anna G. [CA-14] - 9/14/2005 Rep Honda, Michael M. [CA-15] - 9/14/2005 Rep Lipinski, Daniel [IL-3] - 9/14/2005 Rep McIntyre, Mike [NC-7] - 9/14/2005 Rep Obey, David R. [WI-7] - 9/28/2005 Rep Sanchez, Linda T. [CA-39] - /14/2005 Rep Stark, Fortney Pete [CA-13] -/14/2005 Rep Woolsey, Lynn C. [CA-6] - 9/14/2005
H. R. 3926
You will notice that there are no co-sponsors listed at the end of this bill summary and that is frustrating. We are talking about amendments to the Petroleum Marketing and Practices Act that would provide critical protection to independent dealers in any market.
This bill establishes a motor fuel dealer’s right to set his or her own retail prices. Independent dealers have invested significant capital into their businesses with the expectation that they would remain free to make their own pricing decisions. They should not be subject to retail prices set by distant suppliers having limited knowledge of local market conditions.
The second concern addresses a loophole that currently exists in the PMPA. This measure provides motor fuel dealers a right of first refusal to purchase their service stations prior to any assignment of their franchise agreements to a distributor or any other assignee. With the mega-merger trend in the fuel industry, clearly some service stations are being sacrificed. Service station dealers should have the first option to purchase the businesses they have worked so hard to establish.
The third amendment would prohibit suppliers from using their superior economic might to include fee-shifting provisions in franchise agreements, which compel the dealer to pay the supplier’s attorney’s fees and expenses if the dealer is unsuccessful in litigation with the supplier. Such provisions only magnify the inherent inequality that exists between supplier and dealer. The threat of ruinous attorney’s fees that they impose serves as a club to discourage dealers from asserting their legal rights, no matter how strong their case.
The need for this legislation has never been greater and it will take a coordinated effort to get co-sponsors on board.
· Current automotive technology is being used to successfully “lock out” car owners from being able to repair and maintain their own vehicles. Modern automobiles contain many computers that control virtually every component such as the braking system, steering mechanism, air bags, ignition, and the climate control system.
· Lacking the ability to “talk” to the car’s computers, owners or their auto technicians cannot accurately diagnose and repair mechanical problems. · This means that later model cars will only be serviced and repaired at automobile dealerships, which makes shopping around for the best prices and most convenient service locations impossible.
· Without the ability to choose, consumers are denied competitive prices and the right to choose where, how, and when to have their vehicles repaired – at affordable prices and convenient locations.
P Please note that the list of co-sponsors contains four committee chairmen. This bill has momentum. Rep Alexander, Rodney [LA-5] - 12/13/2005 Rep Andrews, Robert E. [NJ-1] - 12/13/2005 Rep Baldwin, Tammy [WI-2] - 6/8/2005 Rep Berkley, Shelley [NV-1] -12/13/2005 Rep Bilirakis, Michael [FL-9] - 9/20/2005 Rep Boozman, John [AR-3] - 11/2/2005 Rep Bordallo, Madeleine Z. [GU] - 7/27/2005 Rep Boucher, Rick [VA-9] - 12/13/2005 Rep Burgess, Michael C. [TX-26] - 5/26/2005 Rep Butterfield, G. K. [NC-1] - 12/13/2005 Rep Clay, Wm. Lacy [MO-1] - 7/14/2005 Rep Cleaver, Emanuel [MO-5] - 12/18/2005 Rep Clyburn, James E. [SC-6] - 6/24/2005 Rep Conaway, K. Michael [TX-11] - 11/2/2005 Rep Cummings, Elijah E. [MD-7] - 9/7/2005 Rep Deal, Nathan [GA-10] - 11/15/2005 Rep DeFazio, Peter A. [OR-4] - 9/20/2005 Rep DeGette, Diana [CO-1] - 6/24/2005 Rep Eshoo, Anna G. [CA-14] - 9/20/2005 Rep Fattah, Chaka [PA-2] - 6/29/2005 Rep Fitzpatrick, Michael G. [PA-8] - 9/20/2005 Rep Foley, Mark [FL-16] - 6/30/2005 Rep Fortuno, Luis G. [PR] -6/24/2005 Rep Fossella, Vito [NY-13] - 11/15/2005 Rep Franks, Trent [AZ-2] - 6/8/2005 Rep Gerlach, Jim [PA-6] - 6/24/2005 Rep Gibbons, Jim [NV-2] - 6/30/2005 Rep Gingrey, Phil [GA-11] - 11/2/2005 Rep Goodlatte, Bob [VA-6] - 9/7/2005 Rep Green, Gene [TX-29] - 11/2/2005 Rep Grijalva, Raul M. [AZ-7] - 6/29/2005 Rep Hastings, Alcee L. [FL-23] - 9/20/2005 Rep Herseth, Stephanie [SD] - 6/24/2005 Rep Holt, Rush D. [NJ-12] - 10/17/2005 Rep Issa, Darrell E. [CA-49] -5/3/2005 Rep Jones, Stephanie Tubbs [OH-11] -6/30/2005 Rep LaHood, Ray [IL-18] - 7/14/2005 Rep Lantos, Tom [CA-12] - 9/29/2005 Rep Lofgren, Zoe [CA-16] - 10/18/2005 Rep Lynch, Stephen F. [MA-9] - 6/8/2005 Rep Manzullo, Donald A. [IL-16] - 5/26/2005 Rep Markey, Edward J. [MA-7] - 7/14/2005 Rep McGovern, James P. [MA-3] - 7/14/2005 Rep Meek, Kendrick B. [FL-17] - 10/7/2005 Rep Meeks, Gregory W. [NY-6] -5/26/2005 Rep Miller, Gary G. [CA-42] - 5/26/2005 Rep Miller, George [CA-7] -12/18/2005 Rep Miller, Jeff [FL-1] - 11/15/2005 Rep Moore, Dennis [KS-3] - 5/26/2005 Rep Moran, James P. [VA-8] - 7/26/2005 Rep Moran, Jerry [KS-1] - 9/29/2005 Rep Myrick, Sue [NC-9] -9/20/2005 Rep Owens, Major R. [NY-11] -7/26/2005 Rep Peterson, John E. [PA-5] - 9/20/2005 Rep Petri, Thomas E. [WI-6] - 10/24/2005 Rep Platts, Todd Russell [PA-19] - 5/26/2005 Rep Price, David E. [NC-4] -10/18/2005 Rep Radanovich, George [CA-19] -7/14/2005 Rep Rangel, Charles B. [NY-15] -10/17/2005 Rep Renzi, Rick [AZ-1] - 10/18/2005 Rep Rothman, Steven R. [NJ-9] - 9/7/2005 Rep Rush, Bobby L. [IL-1] -9/20/2005 Rep Sanders, Bernard [VT] -6/24/2005 Rep Schakowsky, Janice D. [IL-9] -11/2/2005 Rep Schwartz, Allyson Y. [PA-13] - 10/24/2005 Rep Sensenbrenner, F. James, Jr. [WI-5] - 5/26/2005 Rep Shaw, E. Clay, Jr. [FL-22] - 10/7/2005 Rep Smith, Christopher H. [NJ-4] -7/26/2005 Rep Snyder, Vic [AR-2] - 12/18/2005 Rep Solis, Hilda L. [CA-32] - 9/7/2005 Rep Stark, Fortney Pete [CA-13] - 7/27/2005 Rep Strickland, Ted [OH-6] -9/20/2005 Rep Towns, Edolphus [NY-10] - 5/3/2005 Rep Van Hollen, Chris [MD-8] -9/22/2005 Rep Waxman, Henry A. [CA-30] -6/8/2005 Rep Wicker, Roger F. [MS-1] -7/14/2005 Rep Wynn, Albert Russell [MD-4] -9/7/2005
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