Senate Committee To Vote on Remote Sales of Tobacco Legislation

The Senate Judiciary Committee is scheduled to vote on November 5 on legislation that would crackdown on the illegal sale of tobacco products via the Internet and mail order. NACS has been leading a business coalition of retailers and distributors to rally around this legislation.

The Prevent All Cigarette Trafficking (PACT) Act (S. 1147) closes a number of gaps in current federal law regulating “remote” or “delivery” sales of cigarettes and smokeless tobacco products. The PACT Act, which represents an important opportunity to further protect the legitimate channels of distribution for cigarettes and smokeless tobacco, has broad support and strikes a balance between the needs of law enforcement and the legitimate interests of retailers and distributors.

The legislation:

* Requires payment of state and local excise taxes on remote tobacco sales.
* Regulates delivery methods, including age‐verification and shipping requirements.
* Makes cigarettes and smokeless tobacco non-mailable to consumers through the U.S. Postal Service
* Gives the Bureau of Alcohol, Tobacco, Firearms and Explosives authority to inspect records and inventories of remote sellers.

On May 21, the House of Representatives overwhelmingly passed its version of the PACT Act by a vote of 397-11. NACS supports the legislation because existing federal law is inadequate to effectively deal with the problems created by remote sales. NACS is believes that this action by the Senate Judiciary Committee will spur the full Senate to take up this important legislation before the end of the year.

Staff Contact: Chris Tampio, [email protected], (703) 518-4283

House Health Bill Still Unacceptable to Business Owners
Led by Speaker Nancy Pelosi (D-CA), House Democrats yesterday confidently unveiled their “blended” health care bill. The $894 billion overhaul bill was released after many closed door negotiating sessions within the Democratic caucus. The compromise in the bill is a public option that negotiates provider rates with the U.S. Health and Human Services Secretary as opposed to basing the rates on Medicare. This compromise tempered some of the moderate Democrats and didn’t anger the liberal left too much. It may be a move that helps Speaker Pelosi garner the critical 218 votes needed to pass the bill out of the House. No Republican support has been gained.

Most relevant to retailers, the bill still requires that employers provide coverage or pay a tax as a percentage of payroll varying from 2% to 8% — no significant changes were made to this provision. The bill also contains an individual surtax on those who choose not to obtain coverage. The individual surtax originally applied to those with adjusted gross incomes of $280,000 (individual) and $350,000 (joint). In the revised bill the income threshold is increased to $500,000 individual and $1 million joint. This still does not do much for those small business owners who report their company income on their individual tax return.

As of now, the House could vote on the bill by the end of next week or, at the latest, before Congress recesses for Veterans Day on November 11. There will still be a lot of vote counting and bargaining and Democrats still have to face issues on abortion and immigration within their own caucus. The Senate is crafting its own bill and Majority Leader Harry Reid (D-NV) has promised a public option that allows states to opt out. The Senate timeline is uncertain at this time.

Staff Contact: Julie Fields, [email protected], (703) 518-4251

Appropriations Bill Funds LUST, Climate Change Research
House and Senate conferees this week finalized legislation funding the Environmental Protection Agency. Of particular interest to retailers, this bill provides $113.1 million for the Leaking Storage Tank Trust Program (LUST) for FY2010. In addition, the legislation provides an additional $2.5 million for LUST from the State and Tribal Assistance Grants (STAG) program.

NACS has worked consistently to increase the LUST funding levels. In March of this year, President Obama signed into law a measure establishing the funding levels for the federal government through September 30, 2009, which appropriated $115 million for LUST. In addition, a one-time appropriation of $200 million specifically for LUST clean-up activities was included in the economic stimulus legislation passed in February 2009. The overall FY2010 is slightly higher than the FY2009 level and is significantly higher than the typical appropriations prior to FY2006, which averaged $72 million annually.

Also included in this appropriations bill was $385 million to address climate change, $21 million to implement the 36 billion gallon renewable fuels standard, $51 million for the Energy Star program to educate consumers about the energy efficiency of appliances, and $10 million for communities to cut greenhouse gas emissions. To further climate change mitigation activities, the bill includes another $55 million to monitor climate change effects on national parks, wildlife refuges and other public lands and $32 million for the Forest Service to conduct climate change related research.

Staff Contact: Chris Tampio, [email protected], (703) 518-4283

Senate Climate Bill Slams Petroleum Industry
Senate Environment and Public Works Committee Chairman Barbara Boxer (D-CA) released on October 23 a revised climate change bill that will serve as the basis for her committee’s consideration and vote in the coming weeks. Of particular interest to NACS has been the previously undisclosed allocation of emissions allowances. This concerns the emissions permitted by each industry in the new regulatory regime. The petroleum industry is being held accountable for the emissions from each vehicle on the road and consequently represents 44% of all greenhouse gas emissions. The House-passed legislation allocates only 2.25% of allowable emissions to the petroleum industry. Unfortunately, Boxer’s legislation follows the same pattern and allocates only 2.25% of allowable emissions.

The effect of such policy will be to dramatically increase the cost of petroleum production, likely result in the reduction in overall production as refiners seek any avenue to meet their emissions targets, and could result in the closure of domestic refineries which will be relocated in countries without such onerous requirements. For retailers and their customers, each of these possible outcomes will put upward pressure on prices.

NACS has urged Congress not to pick winners and losers in its regulatory scheme and not to burden retailers, consumers and the national economy by forcing prices at the pump higher. Clearly, Congress is not listening. Of course, Congress will be the first to squeal if prices do indeed increase as a result of their proposals — but they will seek to blame market participants rather than look in the mirror.

NACS will continue to work with its colleagues in the petroleum industry in opposition to such lop-sided, anti-consumer proposals.

Staff Contact: John Eichberger, [email protected], (703) 518-4247

New FMLA Benefits for Military
This week President Obama signed into law the National Defense Authorization Act which includes an expansion of the recently-enacted exigency and caregiver leave provisions for military families under the Family and Medical Leave Act of 1993 (FMLA).

In January 2008, Congress amended the FMLA to provide up to 12 weeks of leave for urgent needs related to a reservist family member’s (spouse, son, daughter or parent) call to active service. This new law expands the exigency leave benefits to include family members of active duty service members. Under prior law, only family members of National Guard and Reservists are eligible for “exigency leave.

Prior to enactment, the law provided up to 26 weeks of unpaid leave to an employee to care for a family member (spouse, son, daughter, parent, or next of kin) who is injured while serving on active military duty. This new law expands the caregiver leave provision to include veterans who are undergoing medical treatment, recuperation or therapy for serious injury or illness that occurred any time during the five years preceding the date of treatment.

These previsions are effective as of October 28, 2009.

Staff Contact: Chris Tampio, [email protected], (703) 518-4283

NACS Urges Extension and Expansion of Small Business Loan Programs
This week NACS joined the Small Business Access to Credit Coalition on a letter (PDF) urging Congress to unfreeze the credit markets for small businesses. The letter specifically advocated for an extension of the Small Business Administration’s loan guaranty provisions through FY2010. These provisions were established in the stimulus bill passed earlier this year and have made a significant difference in the market. The SBA estimates an additional $479 million is needed to fully fund the extension.

In addition, the coalition advocated for an increase in the maximum loan size and maximum guaranteed portion of SBA loans. The current House bill increases the loans from $2 million to $3 million, but the Senate bill and the Administration support an increase to $5 million.

Staff Contact: Chris Tampio, [email protected], (703) 518-4283
Oct 30, 2009

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