KANSAS AND PACE

By now, many of you are well aware that Kansas has sent our notification to the Missouri Petroleum Marketers and Convenience Store Association (MPCA) informing them of our intentions to cancel the current contract between both organizations regarding the PACE Trade Show. You should also know that in accordance with our contract, we are required to give written notice to MPCA of our intent to cancel the contract. The cancellation of this agreement will become effective 3 years after written notification has been received. Therefore, unless the terms of the current agreement change, Kansas will continue to participate in PACE for the next 3 years.

The PMCA staff and board of directors are extremely happy that PACE 2007 will be in Kansas next year — at the Overland Park Convention Center. We hope for an excellent turnout of Kansas distributors and convenience store owners/employees at the 2007 show.

All PMCA members will receive, under separate cover, additional information about PACE and the direction the PMCA board of directors wishes to pursue.

TANK BILL NOW TO THE SENATE

HB 2756 – a bill that will reimburse aboveground tank owners for compliance with SPCC requirements has a hearing scheduled for Thursday, March 9, Room 423 South, at 8:30 a.m. in the statehouse. This bill passed the House 123-1-1, and we feel we have a good chance to move this bill through the Senate favorably. Listed below are the committee members that we need you to contact to urge their support for this bill. We’ve also attached a list of talking points for you to use when talking with these Senators…emails work well, and we encourage you to send them, but phone calls put you in direct contact with the decision maker.

The bill has been titled "Kansas Essential Fuels Supply Act," and the bill will assist aboveground tank owners and bulk plant owners in complying with a federal mandate by the Environmental Protection Agency (EPA). The revised EPA rule could potentially shut down many aboveground tanks and bulk plants, leaving many communities without fuel supply. As an example, the 1988 EPA rule requiring underground tank owners to upgrade their tanks by the year 1998 forced many small gas stations throughout Kansas to close their doors because they could not justify expenses or afford the upgrades that were required by EPA. In the end, the Kansas consumer was the biggest loser with this regulation. HB 2756 is aimed at preventing a repeat performance of an EPA "unfunded mandate." Call the committee members today!

Natural Resources

Carolyn McGinn R-31st (Chair) Sedgwick 785-296-7377 mcginn@senate.state.ks.us

Ralph Ostmeyer R-40th (Vice Chair) Grinnell 785-296-7399 ostmeyer@senate.state.ks.us

Terry Bruce R-34th Hutchinson 785-296-7300 bruce@senate.state.ks.us

Tim Huelskamp R-38th Fowler 785-296-7359 huelskamp@senate.state.ks.us

Dennis Pyle R-1st Hiawatha 785-296-7379 pyle@senate.state.ks.us

Mark Taddiken R-21st Clifton 785-296-7371 taddiken@senate.state.ks.us

Ruth Teichman R -33rd Stafford 785-296-7394 teichman@senate.state.ks.us

Marci Francisco D-2nd (Ranking Member) Lawrence 785-296-7364 francisco@senate.state.ks.us

Janis Lee D-36th Kensington 785-296-7366 lee@senate.state.ks.us

HB 2619 MACHINERY AND EQUIPMENT BILL PROVIDES TAX RELIEF

The Senate Assessment and Taxation Committee is holding hearings on HB 2619 – a bill that exempts all commercial and industrial machinery and equipment that is newly purchased or leased after July 1, 2006 from property taxes. The fiscal note is around $316 million. The bill passed the House 114 - 4. The Senate is very concerned about the fiscal note, and rumors have it that the bill will have a hard time getting out of committee in its present form…if at all. Small businesses feel this bill provides a "shot-in-the-arm" to grow Kansas and view HB 2619 as an investment in Kansas. In a study conducted by Wichita State University, the Kansas economy is growing at a slower pace than the rest of the country. The study concluded by saying that with the exception of job growth, which equaled the regional average, Kansas is in the bottom third of states for economic performance measure such as: population growth, personal income growth, per capita personal income growth, growth in earning by place of work and average earnings per job growth.

EPA TO PROPOSE MORE GASOLINE REGULATIONS

Even with motorists and truckers expected to pay dearly for EPA motor fuels regulations in 2006, EPA yesterday announced plans to add even more regulations in the near future. EPA will soon publish its Mobile Source Air Toxics Rule in the Federal Register and will offer a 60 day comment period. EPA estimates refiners will need to spend $500 million to meet the new specifications.

The proposed rule would cap the benzene content of gasoline at 0.62 percent by volume. The current benzene content of gasoline is about 0.97 percent, except in California, which has already implemented standards similar to those being proposed by EPA. In addition, the proposed rule seeks to limit hydrocarbon emissions from vehicles operating in temperatures below 75 degrees Fahrenheit, as well as from gasoline cans. Also, provisions in the rule would reduce emissions of volatile organic compounds and fine particles. PMAA will be seeking input from marketers and submitting comments to EPA during the comment period.

-- PMAA Weekly Review

TAX INCENTIVES FOR ALTERNATIVE VEHICLES

Senate Finance Committee Chairman Charles Grassley (R-IA) introduced legislation this week (S. 2345) that would increase tax incentives for business owners to buy alternative energy vehicles. The legislation would allow business owners to expense up to $100,000 for alternative energy vehicles. Current regulations set expensing limits for automobiles at $14, 800. The tax incentive would apply to electric cars, hybrid electric-fuel vehicles, and vehicles that run entirely on alternative fuels such as natural gas. Senator Grassley said the legislation is necessary to break the country’s "addiction" to oil.

A similar bill, SB 391, considered by the Kansas Senate Agriculture Committee, would allow a taxpayer who purchased a qualified alternative-fueled motor vehicle a percentage of the incremental cost or the conversion cost for each vehicle that is 10,000 pounds or less, up to $3,000, depending on the date placed in service. However, SB 391 most likely will not make it out of committee.

NATIVE AMERICAN CAMPAIGN FINANCE AMENDMENT

Next week, the Senate will take up lobbying reform legislation that was approved by two Senate committees this week. Notably absent from these Senate bills is a provision to close the Native American campaign finance loophole — a provision that allows Native American tribes to contribute virtually unlimited funds from their casinos and tax-free outlets to federal legislators. Clearly, this loophole gives the tribes an enormous political advantage when supporting federal legislators financially. Senator Tom Coburn (R-OK) and others are drafting an amendment to close this loophole when the lobbying bills reach the Senate floor next week. PMCA, in cooperation with PMAA and Sigma, is writing to our Kansas delegation to urge support of the Coburn Amendment. (See attached letter.)