EMA Journal • PMAA Journal Fall 2018 • From Capitol Hill

For the past year, PMAA has been meeting with offices to ensure that a provision be included in the 2018 farm bill that would reauthorize the National Oilheat Research Alliance (NORA). Fortunately, a provision was included in the Senate version of the farm bill that would permanently reauthorize NORA, and after the bills passed each chamber, a conference committee was formed to discuss reconciling the two bills. 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 used in 6.3 million homes, serving more than 16 million Americans across the country. The current NORA program is authorized through February 2019.

Lawmakers have been looking to finalize and agree to a final bill as soon as possible; however, one major issue has caused a roadblock in discussions — SNAP reform. House Republicans passed their bill that includes a requirement that able-bodied adult SNAP recipients meet certain work requirements to receive their benefits and would also limit states’ ability to waive the work requirements. The Senate, on the other hand, passed a largely noncontroversial bill that does not include the work requirement for SNAP recipients. PMAA sent a letter last month, along with the National Biodiesel Board (NBB) and the Advanced Biofuels Association (ABFA), to House and Senate agriculture committee leadership urging them to include a permanent reauthorization of NORA in the final farm bill.

In August, PMAA submitted written comments on the EPA’s proposed calendar year 2019 volumetric blending mandates for cellulosic biofuels, advanced biofuel and total renewable fuels required under the RFS. Citing UST system compatibility concerns, PMAA urged the EPA to set the blending mandate for corn ethanol at no more than 9.7 percent of projected gasoline demand as determined by the Energy Information Administration (EIA). PMAA said adopting arbitrary volumetric blending mandates chosen by Congress over 10 years ago produces more ethanol-blended gasoline than the marketplace demands, which RIN credits can no longer offset. PMAA warned that if the EPA continues to set blending mandates in this arbitrary manner, the E10 blend wall would be breached and E15 forced onto the marketplace, setting off a UST system compatibility crisis that threatens to disrupt the petroleum distribution chain. Furthermore, setting arbitrary blending volumes that surpass actual demand has created a market where too many obligated blenders are chasing too few RINs credits. As a result, RIN values have risen, which in turn has caused market chaos at the pump. PMAA concluded that an ethanol blending mandate set at 9.7 percent of actual gasoline demand is the only feasible way to move forward given E15 equipment compatibility issues and the current disruption of the RINs market.

In September, House Republicans released a tax reform outline for the second round of tax cuts. House Ways and Means Committee Chairman Kevin Brady (R-Texas) released papers explaining the three central points of the new tax bill: to protect family tax cuts from last year’s Tax Cuts and Jobs Act, promote family savings and grow brand-new entrepreneurs. The new plan would make individual tax cuts and the $10,000 cap on state and local tax (SALT) deductions permanent, while also expanding retirement savings options for small businesses and allowing startups to deduct more costs. Finally, the proposed second-round cuts would eliminate the alternative minimum tax (AMT), and they would include a new universal savings account for families and a provision that would allow families to tap into their own retirement accounts without penalty after having or adopting a child.

Also in September, the Pipeline and Hazardous Materials Safety Administration (PHMSA) released its determination in response to a preemption application by the National Tank Truck Carriers, Inc. (NTTC) that California’s meal and rest break requirements are pre-empted with respect to all drivers of motor vehicles transporting hazardous materials (whether interstate or intrastate). This means the state meal and rest break provisions no longer apply to interstate and intrastate hazardous materials motor carriers in California. Fortunately, in its determination, PHMSA found that California’s meal and rest break laws create unnecessary delay in the transportation of hazardous materials in conflict with provisions of the federal Hazardous Materials Transportation Act. PHMSA also found the California’s laws pre-empted on additional grounds as to specific subsets of hazmat drivers. The determination recognizes the impact meal and rest break laws have on delaying motor carrier service. Standing alone, the decision should be beneficial in mitigating the explosion of class action claims centered on violations of California’s meal and rest break laws in particular and likely similar laws in other states. Unfortunately, however, meal and rest break language that was going to be included in the upcoming Federal Aviation Administration (FAA) reauthorization bill was creating an uproar from some lawmakers and was ultimately left out of the bill. PMAA believes the inclusion of the pre-emption provision in an upcoming spending bill is necessary because it will bring nationwide uniformity to the issue.