News Briefs

by Matthew Enis

President George W. Bush enjoyed a short honeymoon during his first four months in office, drawing mixed reviews from retailers and trade associations that had hoped the former Texas oilman would keep a watchful eye over the convenience store and petroleum marketing industry.

Bush has had numerous tough issues to deal with, ranging from estate taxes to diesel regulations. With an equally divided Congress, the Bush administration knew it was facing a rocky road, especially on environmental issues.

"With Bush, we have a White House that is interested in listening to the concerns of our industry and the needs of small business," said Dan Abraham, president of Saginaw, Mich.-based Garb-Ko Inc., which operates 109 7-Eleven convenience stores.

Here's how others in the industry graded the administration's first 100 days in office based on some key issues:

OSHA Ergonomics Regulations

The industry breathed a collective sigh of relief in March, when the U.S. Occupational Safety and Health Administration's (OSHA) ergonomics regulations were overturned.

"This was an absolutely huge victory," said Lyle Beckwith, senior director of government relations for the National Association of Convenience Stores (NACS). Beckwith explained that the lobbying efforts of NACS had proven especially fruitful since Bush declared early that he would not veto the overturn.

An independent study sponsored last year by NACS indicated that compliance with these rules, which were passed during the final days of the Clinton administration, would have cost most c-store owners $19,000 per store initially and $4,000 per store per year afterward.

Diesel Sulfur Content Regulations

Despite intensive lobbying efforts by the convenience industry and major refiners, in February the Bush administration directed the Environmental Protection Agency (EPA) to move forward on schedule with U.S. 2007 emissions standards.

"I think that the Bush administration may be trying to let this issue play out in court," said Tom Robinson, CEO of San Jose, Calif.-based Robinson Oil Corp. and president of the Society of Independent Gasoline Marketers of America (SIGMA). After failing to reach a compromise during the past several years, SIGMA and the National Petrochemical and Refiners Association (NPRA) have recently sued the EPA over the new standards.

Refiners, retailers and truckers took issue both with the stringency of the standards, which will require a 15 parts per million (ppm) cap on diesel sulfur by 2010. With the EPA's phase-in schedule, 80 percent of fuel sold in the United States would have to meet this cap by June 2006. This phase-in, opponents argue, will exacerbate existing supply problems and cost retailers thousands of dollars in infrastructure upgrades.

Campaign Finance Reform

If passed, the McCain-Feingold bill for campaign finance reform, which has garnered a great deal of public attention lately, will prevent soft-money contributions by major oil companies and important industry suppliers such as Philip Morris.

However, most political analysts agree that the power and influence of membership-based organizations ? such as NACS and SIGMA ? would likely increase with the passage of the bill, since the campaign and lobbying efforts of these groups do not typically fall under the soft-money umbrella. "If this bill passes, regulated hard money will be the most important commodity for lobbyists," said Lyle Beckwith.

Estate Tax

The estate tax was repealed by a 274-to-154 roll-call vote in the House in April. As the last major item in his $1.6-trillion tax-cut proposal to pass the House, President Bush described the repeal as "a victory for fairness and a vote for economic growth."

The tax forces many small family businesses and farms to liquidate assets in order to pay up to 55 percent of an estate's value to the IRS upon the death of the owner. Much of the convenience industry is comprised of such family-operated businesses.

"It's ridiculous. After working your entire life to build a business while paying taxes on profits, products and land, the IRS wants to take another half of what you have created before you can pass it on to your heirs," said Ronald Ross, president and owner of Piedmont, Mont.-based Ross Oil Co., a chain of 13 convenience stores.

Yet as of press time, it appeared that a general reduction of the cut would be forced in the Senate. The repeal might weather the reduction, said Garb-Ko's Abraham, "since a coalition of businesses and families is vested in the outcome of this repeal."