May 2012 Number 613 OMEGA Members Partner with the Department of Education to Keep Kids Safe

Providing Life’s Essentials to - Fuel, Food and Convenience. Providing Life’s Essentials to West Virginia -- Fuel, Food and Convenience.

Marathon Ad

2 From the President ...

It’s been a busy time in the OMEGA office. The election is now over until the Fall and a full report is on pages 4 & 5.

On Sunday we will complete our month long campaign for the Children’s Home Society. It has been a wonderful campaign and we appreciate all of the hard work. We will report our success next month but please enjoy the photos on page 5.

Up next for May:

Connections 2012 Trade Expo May 16th Glade Springs Resort 10:00 a.m. to 3:30 p.m.

If you are not signed up to attend the Connections 2012 Trade Expo on Wednesday, May 16th, you need to do so! We are giving away an Apple iPad 2! All you need to do to win is attend the show and visit every booth and your name will be entered into a drawing. Please note that only retailers are eligible to win this prize.

Hope to see you on the 16th!

Douglas M. Roach Associate Supplier Members Douglas M. Roach Tom Jamieson Associate Supplier Members OMEGA R. M. Roach & Sons Jamieson Family Markets Proctor Dean 2011 --- 2013 Officers Board Members Rick Joseph Eagle Transport Corp. Chairman Cory Beasley Kanawha City Foodland Randy Emanuelson Jim Oppe Little General Store, Inc. Jeffrey L. Kramer Sledd Co. TWJ, Inc. Sam Chico, III Prima Marketing LLC Victor Flanagan Vice Chairman Chico Enterprises Inc. H. C. Lewis, III Pullin Fowler Flanagan Greg Rogers H. C. Lewis Oil Co. Brown & Poe LLC Edward J. Coyne, II R. T. Rogers Oil Co. Tri-State Petroleum Corp. Thad Ours Randal Flesch

Secretary/Treasurer Petersburg Oil Co. Marathon Petroleum Co. Greg Darby Joe DeFazio Little General Store, Inc. Steve Roach Denny Huff DeFazio Oil Co. Sammie Huff Contractors R. M. Roach & Sons Patrick C. Graney, III

President Petroleum Products Co. R. T. "Ted" Rogers Jim Linsenmeyer

Jan Vineyard R. T. Rogers Oil Co. Proud Eagle, Inc. Michael Graney

Immediate Past Chairman One Stop Darroll Talbott Rod Moore Enviroprobe Integrated Sandra Morgenstern Wayne Harris Guttman Oil Co. Par Mar Oil Co. Solutions Harris Oil Co. Dennis Thompson Greg Walls Gary Hatch Dawson-Thompson Oil Co. Greg Walls Frito Lay Senior Board Members Bruceton Petroleum Curt Woodford Allan Williams John Heater Art Hartley, Jr. Woodford Oil Co. Allan Williams BrickStreet Insurance Go-Mart, Inc. City Ice & Fuel Co.

H. C. Lewis, II Sam Heater 3 H. C. Lewis Oil Co. Go-Mart, Inc.

West Virginia News

Election Results

The primary election was held on May 8th and as we go to press we are analyzing the results and beginning to think about the November 6th General Election.

Following are a few of the highlights:

The biggest news of the election was that Keith Judd, the inmate doing time in a Texas prison, got four out of every ten votes in the Democratic Primary for President in West Virginia. We knew that President Obama was unpopular, but certainly had not envisioned that Judd would get that many votes when the majority of those going to the poll didn’t even know that he would be on the ballot. We suspect the vast majority of those who voted for Judd did not know anything about him, but rather they simply cast a protest vote against the President.

Republican Presidential Nominee Mitt Romney still has some work to do in West Virginia. Nearly one in three of the republicans and independents who voted in Tuesday’s Republican Primary, voted for someone other than Romney.

Senator easily won re-nomination Tuesday and will run against John Raese in the Fall.

For U. S. House of Representatives it will be:

◊ Sue Thorn vs. David McKinley ◊ William McCann vs. ◊ Nick J. Rahall, II vs. Rick Snuffer

Governor Earl Ray Tomblin faired very well in the Primary against his opponent and will face Bill Maloney again in the Fall.

For of Board of Public Works and Supreme Court:

◊ For Secretary of State Natalie Tennant will face Brian Savilla ◊ Auditor Glen B. Gainer, II vs. Larry V. Faircloth ◊ State Treasurer John Perdue may really have a race against Senate Minority Leader Mike Hall from Putnam County ◊ With Gus Douglas retiring there is no incumbent for Commissioner of Agriculture. Senator Walt Helmick will face Kent Leonhardt in the Fall. ◊ Attorney General Darrell McGraw, Jr. will definitely have a race on his hands with . The republican has been out working hard already. ◊ Justice Robin Jean Davis and Tish Chafin will run against John Yoder and Allen Loughry for two seats, which are each 12-year terms. This is a very important race and one in which we will need to be involved.

4 In the State Senate we lost incumbent Richard Browning who is the current majority leader. His opponent Delegate Daniel Hall will still have to face Eppe Cline in the Fall. Nine of the 17 State Senate races in the general have one candidate running for the seat. Seven of those are democrats who are currently unopposed, while the other two are republicans. It is very likely that a few of the seats currently held by democrats will go to republicans in the Fall. Senator Jack Yost, in the 1st District, has a strong contender in Pat McGeehan, Senator Mark Wills in the 6th has Bill Cole who is a strong businessman, who owns a car dealership and is very involved in the community and should fair very well. An open seat in the 8th could go to Republican Chris Walters. The 15th will be represented by Craig Blair, a former Delegate, who has no opposition in the Fall. And lastly, the 16th in the eastern panhandle has Senator Herb Snyder being challenged by a strong republican, Jim Ruland.

In the House of Delegates, only one incumbent was beaten and that was Joe Talbott from the 44th district, Webster County. With all 100 seats up for grabs it will be interesting to see how the races will stack up. Again, it appears that we will be dealing with more republicans come January 1, 2013.

The turnout Tuesday was historic… historically bad. Unofficially, only about 25 percent of registered voters cast ballots. That would be the lowest turnout for a Primary Election in West Virginia in 60 years. The next lowest turnout was 39 percent in 2004. One reason could be election fatigue; this was the sixth election in West Virginia since the 2010 primary.

Trish at Par Mar 37 Little General at Crossings Mall Go-Mart on Harper Road

Children’s Home Society Board Member Tish Chafin, Jan Vineyard, First Lady Joanne Tomblin, OMEGA Board Member Michael Graney, Children’s Home Society Chairman Katherine Dooley and Mary White of Children’s Home Society.

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Federal Issues

Both the House and Senate were in recess this week. The House returns next week. The Senate remains in recess for another week.

Looking Ahead in Washington Post-Election Lame Duck Frenzy Expected

◊ Bush tax rates, debt-ceiling negotiations and automatic budget cuts are expected to create a frenzied Congressional session after the Presidential election. Other legislative issues requiring action include the expiration of the payroll tax cut, extending unemployment benefits, spikes in the Alternative Minimum Tax (AMT) and the estate tax and the renewal of a tax-extenders package.

◊ Conferees from both the House and Senate will continue negotiation toward a surface transportation reauthorization proposal.

◊ The Federal District Court in the District of Columbia is expected to rule by May 15 on legal challenges to the National Labor Relations Board's "ambush election" rule brought by the Coalition for a Democratic Workplace, of which NATSO is a member, and the U.S. Chamber of Commerce. The rule went into effect April 30.

◊ The Federal Motor Carrier Safety Administration's (FMCSA) rule requiring commercial drivers to pass more stringent health exams will take effect May 21. Drivers and examiners must be in compliance two years later. FMCSA estimates the program will cost $232 million over 10 years to implement.

Highway Reauthorization Update

Both the Senate and House have named conferees on the transportation bill. As a reminder, the Senate passed a comprehensive two-year reauthorization bill covering fiscal years 2012 (which is more than half over) and 2013. The House, unable to garner enough Republican votes for the bill reported from the Transportation and Infrastructure (T&I) Committee, passed another 90-day extension of the program, through September 30, 2012, combined with approval of the Keystone pipeline, the environmental streamlining provisions of the T&I bill, and several other provisions unrelated to transportation. (Note: this is a very unique situation, even for Congress. Normally, the Senate and House pass bills at least dealing with the same basic subject matter before going to conference.)

The Senate appointed 8 Democrats and 6 Republicans to the Conference. Among them were Senator Rockefeller (D-WV) who is Chairman of the Commerce Committee.

While each Senate Conferee has an equal vote on the overall conference report, House conferees' votes are limited to the areas under their jurisdictions. The House has appointed a total of 33 conferees. Among them are both Congresswoman Capito (R-WV) and Congressman Rahall (D-WV), Ranking Member on Committee on Transportation and Infrastructure, 12 Republicans and 9 Democrats, with jurisdiction over all provisions of the bill except the tax provisions.

The first meeting of the Conference Committee was held on May 8th. Most of the session will likely consist of opening statements by the Members. But there could be some discussion of what will be "in scope", a very important matter. Most of the House transportation bill's reforms were not included in the bill the House passed. If the Senate bill does not address the issue (productivity, for example), the matter will generally be out of scope. However, the conferees make the rules for the conference, so they could agree to look at "scope" broadly or narrowly. What we expect is that any provisions from the House bill that are not addressed in the Senate bill will only be made in scope at the request of a Senator or Senators. 6 Senate Rejects Enzi Resolution to Overturn NLRB “Quickie/Ambush” Election Rule

The Senate voted to defeat a motion to proceed on S enator Mike Enzi’s Resolution of Disapproval (S.J. Res. 36), which would have started the process toward overturning the National Labor Relations Board’s election procedures final rule. The NLRB’s rule will speed up union representation election procedures.

The vote on S.J. Res. 36 was 54 nays to 45 yeas; Senator Lisa Murkowski (R-AK) was the sole Republican to vote “no” on the motion to proceed. The Resolution only needed a simple majority for approval. The Board’s so-called “quickie/ambush” election final rule became effective April 30, 2012. Employer groups are saying the NLRB rule could shorten election timeframes to as little as 10-days, down significantly from the current average time of about 38-days.

A legal challenge to the NLRB’s final rule was filed back in November 2011 by the U.S. Chamber of Commerce’s Litigation Center and the Coalition for a Democratic Workplace (CDW), and the challenge is pending before the Federal District Court for the District of Columbia. The Chamber and CDW most recently filed a motion for a temporary stay of the NLRB rule. D.C. District Judge James E. Boasberg ruled that the Court intends to decide on the merits of the U.S. Chamber/CDW case by May 15, which would be before any union representation election could take place under the expedited time table of the new rule.

NLRB Poster Rule on Hold – No Enforcement While Case is on Appeal

EEOC Issues New Guidance on Criminal Background Checks

The Equal Employment Opportunity Commission (EEOC) has issued its long awaited guidance on employer use of criminal background checks for making employment decisions under Title VII of the Civil Rights Act. The guidance updates and clarifies prior guidance going as far back as 1987 and 1990. Citing the need for the guidance, EEOC has repeatedly stated its concern over the disparate impact that criminal background checks are having on certain minorities, especially African Americans and Hispanics.

In brief, the new EEOC guidance document is a Catch-22 for employers. Employers may continue to use criminal background checks as a screening tool for applicants and employees, but the Commission is strongly discouraging employers from asking about criminal records on an application and is urging employers instead to conduct “individualized assessments” of applicants and employees when job exclusion occurs due to a criminal record.

According to EEOC, an employer must have some basis for drawing a connection between the crime and its importance to the job, such as “fact-based evidence, legal requirements, and/or relevant and available studies.” For example, a policy that excludes an applicant convicted of theft or dishonesty for a position in which the perspective employee would have access to personal financial information or money, and where the conviction occurred in the four years prior to the application, may be an appropriate targeted exclusion if the employer can explain, with reference to some fact or study, why the policy was adopted.

The Commission’s guidance further notes that Title VII does not preempt federal laws that prohibit employment of individuals with specific convictions in certain industries or positions in the public or private sector. On the other hand, state and local laws are preempted by Title VII if they result in an unlawful employment practice. This means that following a state or local law is not a defense. An employer must still show job relatedness and business necessity.

A number of experts on the subject of how employers screen applicants are predicting that many employers will shy away from conducting criminal background checks, which may result in both employees and customers being placed at greater risk or making a business more vulnerable to theft. As part of issuing the new guidance, EEOC has also provided a Question and answer (Q&A) document on the guidance.

EEOC Commissioner Constance Baker voted against adoption of the guidance and issued dissenting views, stating there was no transparency in the approval process of adopting the guidance. Baker stated that EEOC has exceeded its authority on the grounds the agency cannot make substantive changes in the law by issuing guidance that goes beyond what is contained in statutes as interpreted by the courts.

7 FDA Starting to Fine Retail Stores for Tobacco Sales Violations

The Tobacco Control Act enacted in 2009 gave the Food and Drug Administration (FDA) authority to regulate tobacco products. Pursuant to this authority, FDA is now enforcing underage sales violations and marketing violations. The agency recently began issuing fines to retailers. One violation triggers a warning letter; retailers with a repeat violation within a 12 month period will be fined $250. Six violations within a 48 month period will result in a $10,000 fine. Violations are considered repeat violations when the particular retail outlet has multiple violations within a specified period (i.e.store #784 has two violations in a 12 month period). Violations are not considered on a chain-wide basis (i.e. stores 785 and 786 each had a single violation in a 12 month period—not a repeat violation).

Federal Reserve Releases Statistics on Swipe Fees

On May 1st the Federal Reserve published a report comparing swipe fees before and after the implementation of the Durbin amendment. The new rule implemented by the Fed in October 2011 prevents banks with more than $10 billion in assets from charging an interchange fee that exceeds 21 cents plus 0.05 percent multiplied by the value of the transaction, plus a 1-cent fraud-prevention adjustment, if eligible. The rule does not apply to credit unions and banks with less than $10 billion in assets.

Throughout the debate, banks argued capping fees the larger banks could charge would also harm the smaller banks and credit unions. The report that was released this week completely debunks that argument. Prior to reform, banks with less than $10 billion in assets charged an average of 43 cents per debit transaction in swipe fees. According to the Fed report, these rates did not drop a single penny post reform. While fees for small and banks that were exempt from the reforms did not drop, large banks were required to drop their fees under the rule. Now, six months after implementation, the larger banks are charging an average 24 cents per transaction. The Fed report solidifies the point that the Merchants Payment Coalition (MPC) made throughout the inter- change debate: capping fees large banks can charge will not harm the smaller banks but will benefit the customer. In fact, post-reform smaller “exempt” banks have actually increased their market share and are competing with the larger banks. To see the Fed- eral Reserve release and report click here.

Brief…DOJ Looks into Visa’s Debit Card Business

During Visa’s earnings conference call on May 2, Jo- seph Saunders, Visa Chairman and CEO, announced that the Department of Justice (DOJ) had initiated an antitrust investigation into the part of Visa’s debit card business that routes transactions to banks and a new fee the company is charging. The new fee charged by Visa would make merchants pay for both credit and debit cards, potentially coercing merchants into ac- cepting cards they do not want. The new fee could also undercut merchants’ competitive choice of which network they use for transactions, which would be in violation of the financial reform law. Under the swipe fee reforms, banks now have to allow more than one company, such as Visa, to carry debit card transac- tions, which in turn would give merchants a choice of which network they use.

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Convenience Store News

House-Passed Bill Ends Taxpayer-Funded Ads Against C-Store Products

Recently, the U.S. House of Representatives passed H.R. 4628, the Interest Rate Reduction Act, by a vote of 215 to 196. NACS called on members of Congress to support the bill, which includes a provision that would repeal the Prevention and Public Health Fund (PPHF) established by the health-care law (Patient Protection and ).

NACS learned last year that the government has been blatantly using taxpayer dollars to fund campaigns against certain products sold inside convenience stores. The Centers for Disease Control and Prevention (CDC) has been awarding grants to states and localities with the express purpose of influencing state and local legislation to promote increased taxation and regulation of tobacco products and products determined to contribute to obesity.

“Convenience stores sell legal products in a legal fashion. Unfortunately, the PPHF is being used to fund state and local campaigns advocating against many of the products we sell. This is disconcerting, particularly in light of the fact that it violates federal law prohibiting appropriated money from being used to lobby federal, state or local government officials. Regardless of its purpose, the Department of Health and Human Services should not utilize extra-legal methods to achieve its objectives,” wrote NACS.

Documentation supplied by grant recipients shows taxpayers have been funding unlawful lobbying efforts, such as the promotion of tax increases and prohibitions on product sales.

For example, King County, Washington, received a $15.5 million CDC Grant to lobby for:

◊ “...Nutrition standards in government activities and in government funded community settings (especially child-care)...Economic policies to change price of unhealthy food relative to healthy food (especially soda tax)...

◊ “... Changing relative prices of healthy vs. unhealthy items by exploring the feasibility of enacting city privilege tax of fee on sugar sweetened beverages...”

◊ The inclusion of language to end abuse of taxpayer-funded grants is a critical part of the appropriations package, and I urge lawmakers to support these efforts to restrict unlawful and wasteful spending in the final 2012 appropriations legislation.

Future of C-Stores to Depend on Foodservice

NRA Show educational session includes insights on executing world-class convenience store foodservice.

As fuel consumption continues to decline, “The future of the convenience store industry will depend on foodservice,” declared Dean Dirks, founder and CEO of c-store and foodservice consulting firm Dirks & Associates, speaking at the 2012 National Restaurant Association Show in Chicago this past weekend.

During an educational session titled “How to Do World-Class C-Store Foodservice,” Dean stressed the importance that foodservice will play on convenience store profits, stressing it must be “done right.”

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“You must do your due diligence to make sure that it’s going to work,” he said, offering up an example of a situation with one small c-store operator where it didn’t make sense to offer a QSR. For those to succeed, “you must have at least 1,500 people a day in your store,” he said. Anything less won’t be able to turn a profit.

The panel session included insights by Dr. Jack Cushman, executive vice president of foodservices for Nice N Easy Grocery Shoppes, and Jim Bressi, director of food research and development for Kwik Trip, Inc. Cushman began by laying out three essential considerations for succeeding with a foodservice program:

◊ Maximize the foodservice real estate by providing customers what they want. To do so requires a thorough understanding of the customer psychographic.

◊ Maximize gross margins by choosing distributors wisely, engaging in menu engineering to add value, and viewing labor as a variable cost.

◊ Differentiate your business by continuously reviewing and implementing foodservice and convenience store industry trends.

Bressi said that foodservice is “a daily challenge,” one that requires a near fanatical attention to detail, especially cleanliness — paramount as convenience stores try to change consumer perceptions as to the quality of c-store foodservice.

Alternative Fuel Stations Could Hit 10,000

A new report from the U.S. Energy Information Administration (EIA) suggests that although gasoline remains by far the dominant transportation fuel, a variety of alternative fuels are currently in use, primarily by government and private fleets. These fuels include electricity, propane, higher ethanol-gasoline blends (E85), hydrogen, and natural gas. In aggregate, there are currently about 10,000 alternative fuel stations in the United States, compared to approximately 160,000 gasoline stations in the country.

Several alternative fuels have been developed for use in motor vehicles. Most alternative fuels require vehicles specifically made to handle that fuel, such as electric vehicles. Other fuels such as E85 may be used in flex-fuel vehicles. The use of alternative fuels often requires new refueling station infrastructure. Biodiesel blends differ in the proportion of petroleum diesel and bio-based fuel. More than half of the stations are private access (for government or private fleets only). Of the 347 private access stations, nearly a third are in North Carolina. Natural gas can be compressed and stored in tanks at pressures up to 3,600 pounds per square inch to be used as transportation fuel. More than half of the compressed natural gas (CNG) fuel stations in the nation are private access. There are more than 3,000 existing electric charging stations across the country, more stations than for any other alternative fuel. Of these, nearly 85% are publicly accessible. In total, there are more than 8,000 electric charging units available at these stations. This does not include residential electric charging units. Nearly all gasoline sold in the United States is blended with 10% ethanol content. There is a major concentration of E85 stations in the corn-producing Midwest region of the United States. Use of hydrogen as a transportation fuel requires reducing its volume by compressing the fuel (at pressures up to 10,000 pounds per square inch), cooling to very low temperatures (-423°F) to produce liquid hydrogen, or chemically bonding hydrogen to other compounds. Of the alternative fuels discussed here, hydrogen has the fewest number of fuel stations. Liquefied natural gas (LNG) is produced by purifying and condensing natural gas to a liquid state by cooling to - 260°F. Because it needs to be stored at such cold temperatures, LNG vehicles require specialized vacuum- insulated pressure vessels. LNG is typically only used in heavy-duty vehicles. Compared to the number of existing LNG fuel stations, there is a large network of stations planned along interstate highways. Propane has the second-highest number of fuel stations among alternative fuels. Over 90% of the existing stations are publicly accessible. Of the private access stations, nearly 60% are located in Indiana.

Recently NACS released "The Future of Fuels: An Analysis of Future Energy Trends and Potential Retail Market Opportunities.” The complete 48-page report includes projections and analysis using the U.S. Energy Information’s 2011 Annual Energy Outlook. Visit www.nacsonline.com for more information on alternative fuels and how to receive this publication. 10 Oil Marketers Update

Update on PMAA Priorities

◊ Biodiesel Tax Credit. The one dollar-per-gallon biodiesel tax credit expired on December 31, 2011. There was an attempt to attach a one-year extension of the credit to the Senate Highway bill, but the vote failed to gain 60 votes for passage. Although the biodiesel tax credit has general wide spread support, the cost is likely to prohibit Congress from renewing and extending the credit.

◊ Biodiesel Content Labeling. When marketers load diesel at the rack, PMAA believes any biodiesel content should be disclosed on the PTD’s. Under current rules, biodiesel content less than five percent does not have to be disclosed. PMAA has asked the National Conference on Weights and Measures (NCWM) to amend the rules requiring biodiesel disclosure. Currently, NCWM has a task force working on the issue.

◊ Climate Change. EPA has promulgated several rules to restrict carbon emissions from large emitters; however, those rules are being challenged in the courts. House and Senate legislators have introduced bills to limit EPA’s authority to regulate carbon but without any overwhelming bipartisan support, those measures won’t be enacted. Recently, EPA adopted a rule that will essentially end any new coal fired electric generation plants. The basis for this rule is limiting CO2.

◊ Commercialization of Rest Stops. Some state governments asked Congress to change the law to allow states to commercially develop rest stops. Senator Rob Portman (R-OH) tried to attach a rest area commercialization amendment to the Senate Highway bill, but his effort failed after heavy PMAA and coalition grassroots opposition. The amendment collected only 12 votes in which 60 votes were needed for passage. PMAA continues to aggressively oppose commercialization of rest stops.

◊ Ethanol Blend Wall. EPA approved E-15 fuel for cars made after 2001. Many barriers to E-15 exist and PMAA has advised retailers to be very cautious. Retailers wanting to sell E-15 should obtain expert legal and regulatory advice before moving forward. Senators John Hoeven (R-ND) and Roy Blunt (R-MO) have introduced the “Domestic Fuels Act of 2012,” which would provide an improved legal and regulatory pathway for marketers to sell E-15 and other EPA-approved fuels. Representatives John Shimkus (R-IL) and Collin Peterson (D-MN) introduced companion House legislation.

◊ Ethanol Tax Credit/Ethanol Import Tariff. The 45 cents-per-gallon ethanol blender’s tax credit and ethanol import tariff expired December 31, 2011. PMAA is supporting a coalition and working to have the excise tax credit extended for E-85.

◊ Futures Market Reform. Futures market regulatory reform is still a work in progress including oil futures capital/margin and mandatory clearing requirements. PMAA has submitted 19 comments to CFTC proposed rules and is fighting for full funding to implement the derivatives language. Recently, the CFTC issued its final rule on energy position limits with final implementation likely to go into effect in late 2012. However, the financial industry is challenging the position limits final rule. A federal judge is likely to issue a decision on the rule’s fate this Spring.

◊ Health Care Reform Employer Mandates. The controversial healthcare law is uniquely unfair to petroleum marketing and convenience store companies. In 2014, companies with more than 50 employees will have to pay hundreds of thousands of dollars in penalties if health insurance is not provided to all full time (30 hours per week) employees. PMAA is supporting legislative efforts to repeal the healthcare law. The Supreme Court heard arguments on the healthcare law and a decision is likely this year.

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◊ Heating Oil Efficiency Tax Credits. PMAA is working with a coalition to focus efforts on the Congressional Tax Committees to expand tax credit availability to more Oilheat equipment. Energy tax credits will be difficult to move until after the November elections and even then any changes that would add to the cost of the original credits will be particularly difficult to pass.

◊ Highway Bill/Gas Tax Increase. Highway funding and motor fuels taxes were extended until June 30, 2012. Because of the need for greater highway infrastructure funding, some groups have decided to support an increase in the federal fuel excise tax in order to build up the depleted highway trust fund. However, Congress is unlikely to increase motor fuels excise taxes in 2012. Included in the Senate Highway bill was language which would transfer three billion dollars from the leaking underground storage tank trust fund that would go towards the highway trust fund. PMAA vehemently opposes the three billion dollars transfer and intends to work with the House to find other ways to pay for the highway bill. The House bill includes wetlines language which calls for a cost benefit analysis of the DOT’s wetlines proposed rule.

◊ Interchange Fees. The Durbin amendment is now making it easier for retailers to offer discounts for debit cards or cash and to place credit card purchase minimums not to exceed ten dollars. The rule caps debit swipe fee rates at 21 cents per transaction and includes a 0.05 percent ad valorem tax. Separate from the Federal Reserve, the Department of Justice released its consent decree, which aims to address some of Visa and MasterCard’s anticompetitive practices related to credit cards. Petroleum marketers may offer discounts, incentives, and other benefits to encourage customers to use a particular form of payment, brand or type of credit card. The consent decree is specific to credit cards and does not deal with debit or address fees. PMAA continues to support efforts by the MPC to pursue legislation limiting credit card interchange fees.

◊ Keystone XL Pipeline. PMAA members own and maintain over $500 billion worth of liquid fuels infrastructure. When the Keystone XL pipeline is operational, it will be a reliable source of crude oil for US refineries to make gasoline and distillates. PMAA is supporting all efforts to get the Keystone pipeline approved.

◊ LIHEAP and LIHEAP Reform. The proposed 2013 budget would cut the program down to three billion dollars. The final LIHEAP number under the FY12 Consolidated Appropriations Act was $3.5 billion. PMAA continues to lobby for the full authorized level of $5.1 billion and we continue to express our concerns about margin over rack programs and leveraging policies.

◊ National Oilheat Research Alliance. Bipartisan NORA legislation, S. 949 and H.R. 1756, were introduced in May 2011. Both bills promote Oilheat efficiency, research and education by reauthorizing, strengthening and making important technical corrections to the National Oilheat Research Alliance Act of 2000. Your efforts have already garnered 67 House cosponsors and 15 cosponsors in the Senate.

◊ Natural Gas Act. This Act would promote purchase of CNG/ LNG vehicles with tax credits: $7,500 for an 8,500 lbs vehicle, $16,000 for 14,000 lbs, $40,000 for 26,000 lbs, and $64,000 for more than 26,000 lbs. It would provide a producers credit for vehicles fueled by CNG or LNG, making up 10 percent of the basis cost or $4,000 with an aggregate credit of $200 million. Dispenser installation credits of 50 percent or $100,000 are also included in the bill. The program would be funded with a special tax on CNG and LNG. Senator Menendez (D-NJ) attempted to attach this legislation to the Highway bill and secured 51 votes, but needed 60. PMAA is developing a position on the legislation to be considered in May 2012.

◊ PCI Compliance. The costly ongoing PCI mandates imposed on retailers are never ending. PMAA is supporting efforts by the Association Coalition for Data Security (ACDS) to scrutinize and oppose unwarranted new PCI mandates. When retailers make investments in PCI compliance, extended shelf life of equipment and software needs to be built in.

◊ Roll Your Own Tobacco. Congresswoman Diane Black (R-TN) has introduced legislation which will close loopholes used by RYO shops and language was also included in the Senate Highway bill. The legislation will probably be included in a Highway Bill that clears both the House and the Senate. PMAA supports the legislation because it is likely RYO shops will eventually be closed by federal agents while in the interim they severely undermine convenience stores. 12 ◊ Stage II: Widespread Use. EPA announced that “widespread use” of onboard refueling vapor recovery (ORVR) systems will be achieved nationally on June 30, 2013. PMAA had several discussions with EPA about the need to determine when widespread use has been achieved and urged the agency to make that determination. Since then, PMAA sent a letter to EPA urging the agency to recognize widespread use of on-board canisters as a "comparable measure" for the Ozone Transport Region (OTR). Some state governments are moving forward to decommission Stage ll.

◊ Tier 3 Gasoline. EPA is making gradual progress towards proposing a new national standard for gasoline which is commonly referred to as “Tier 3”. The new specifications will result in significantly higher gasoline prices with very little environmental benefit. PMAA is opposed to Tier 3 gasoline and will be participating with industry groups and consumer groups opposed to the rule.

◊ Tribal Gaming Bill. PMAA is urging Congress to support S. 771, the Tribal Gaming Eligibility Act, which would provide guidance and standards for the determination for eligible land for use in development of Indian reservation casinos and other businesses.

◊ ULSD Corrosion. PMAA is supporting a study by Battelle Labs concerning unusual corrosion occurring in some UST storing ULSD. A report from Battelle should be issued soon.

◊ Underground Storage Tanks. The President and Congress continue to underfund the LUST program around levels of $115 million which is well short of the $200 million the Energy Policy Act of 2005 authorized per fiscal year. Congress extended the 1/10 cents per gallon LUST tax to June 30, 2012. In October 2011, the EPA Office of Underground Storage Tanks (OUST) announced proposed revisions to the 1988 federal UST regulations. PMAA’s UST task force carefully reviewed the proposed rule and submitted comments based on our finding that EPA cost estimates to small business were too low. The proposed rule comment period closed in mid-April. PMAA believes that the EPA must withdraw the proposed rule, form a SBREFA panel to adequately address stakeholder concerns on all pertinent issues and collect appropriate and accurate data to justify the economic burden that any new UST regulatory framework will impose on small business petroleum marketers.

◊ Wetlines. DOT released its proposed rule in January 2011. PMAA filed comments urging DOT to withdraw the proposed rule citing incorrect data and perform a cost-benefit analysis with accurate data. We are working with Congress to communicate to DOT. PMAA sent a letter asking Secretary LaHood to withdraw the proposed rule. We were successful in including a wetlines study in the House Transportation Committee’s highway bill which calls for a cost benefit analysis requiring the Secretary of Transportation to coordinate with an independent non-partisan organization before the proposed wetlines rule can be finalized.

E-15 at Retail: New Report Published by API

The American Petroleum Institute (API) has released its E15 infrastructure impact analysis that summarizes the ten E15 compatibility studies that have been issued to date. As a conclusion, API states, “Retailers choosing to sell E15 are required by OSHA and fire codes to use listed equipment, and EPA rules require that equipment be proven compatible with E15. The result is that very few sites will be able to sell E15 fuel with existing equipment. Equipment modifications could be as little as new hanging hardware (i.e., hose, nozzle, etc.) or as much as an entirely new fuel dispensing system. Additionally, selling E15 may increase the risk for staff and customer safety, and present environmental consequences. The possibility of customer misfueling and the adverse effects of E15 on vehicle engines are also issues that should be considered. The only alternative is to not store E15 at the facility.”

The Renewable Fuels Association (RFA) responded to the report acknowledging that some retail infrastructure will need to be replaced or upgraded for E-15 but the investment by retailers will have many benefits for retailers and consumers. “The nation didn't have the infrastructure in place for a transcontinental railroad, but that didn't stop us from moving forward because it was in the best interest of the nation," said Matt Hartwig, RFA Chief Spokesperson. "The same is true with America's fueling infrastructure. Because some upgrades may be needed is no reason to accept the status quo as the best we can do”.

13 Grocery Highlights

USDA/FSIS Announces Actions to Improve Food Safety Investigations

Recently the USDA’s Food Safety and Inspection Service (FSIS) announced several new measures to “improve the ability of both plants and USDA to trace contaminated food materials in the supply chain, to act against contaminated products sooner and to establish the effectiveness of food safety systems.” Specifically, FSIS Under Secretary Dr. Elizabeth Hagen outlined three sets of policy changes:

1. FSIS will initiate food safety investigations and trace-back before routine tests are confirmed positive for E. coli O157:H7 (working at the presumption stage); 2. FSIS is implementing three provisions included in the 2008 Farm Bill that require establishments to prepare and maintain recall procedures, to notify FSIS within 24 hours that a meat or poultry product that could harm consumers has been shipped into commerce, and to document each reassessment of their hazard control and critical control point (HACCP) system food safety plans 3. New guidance on FSIS "validation” of plants’ HACCP food safety systems.

During the Q&A period of FSIS’s press announcement, a reporter asked the status of potential agency action on ground meat traceability at retail. FSIS acknowledged that it is working on a proposed rule to address past issues but also that the agency is working with the retail industry to address these issues. FMI is working with USDA to ensure that the rule is practical and not burdensome. An FMI member, cross-committee task force is working on ground meat traceability issues. Given the announcements made this week, we can expect additional FSIS activity.

The State of the Food Retail Industry

Food Marketing Institute (FMI recently) previewed the findings of its 2012 U.S. Grocery Shopper trends research in a presentation by FMI President/CEO Leslie G. Sarasin, who addressed participants at FMI2012, the Food Retail Show in Dallas. Seeking to help retailers shape their strategies for future growth, Sarasin identified and examined the implications of four significant and interrelated movements.

The presentation outlined four trends and was undergirded by data provided by FMI research partner and global consulting firm Booz & Company. Those four trends — value-seeking as a way of life, technology as a fact of shopping life, online shopping eating away at the center store, and format innovation pointing to new differentiators — will impact shoppers this year and into the future.

Consumers responded to the 2007–2009 recession by choosing private brands and less expensive food options, making fewer trips and buying fewer items at the grocery store, shopping around for deals, and generally seeking value in their grocery shopping. Interestingly, even consumers in segments not directly affected by the recession exhibited some of these behaviors. As the slow economic recovery continues, research indicates these cost-cutting behaviors are persisting and will continue to do so in the immediate future. This has resulted in a “new normal,” reshaping consumer shopper patterns.

More than half of all shoppers now use technology either before or during their shopping trips. Much of this activity focuses on “value discovery” — deals, coupons, price comparisons, etc. As technology improves, more and more customers will be able to readily discover the lowest prices for the goods they want.

More than a decade has elapsed since online grocer Webvan sank without a trace. But online grocery shopping is making a comeback, as specialist online retailers carve out target categories. Sales numbers of these new specialists now equal those of full-line e-commerce grocers. Online “old-timers” also continue to chip away at key categories with simple searching and subscription purchasing. More than half of shoppers buy a grocery category online at least occasionally. As digital natives become household shoppers, this is likely to become 14 much more common, pushing retailers to look for ways to better blend their bricks-and-mortar stores with their (or others’) online presence.

Over the last five years, the grocery industry has Would you like added approximately 150 million square feet of new capacity. None of that new space was built by traditional supermarket retailers; rather, it was added by supercenters, dollar stores, drugstores, to see your ad and other small formats like fresh specialists and hard discounters. New formats continue to expand, making it more likely that tomorrow’s shopper will have a landscape of options to meet here? any and all of his or her food retail needs. In this environment, retailers will seek ways to differentiate themselves through merchandise selection, value, convenience, in-store services, customer relationships, and innumerable combinations of these attributes. Call

304.343.5500

15 A Vision for the Next Generation

Develop talent now for a successful future While incentives such as bonuses and profit sharing are important, recognizing achievements and building self-esteem are priceless.

Some business owners procrastinate or avoid communicating their succession plans because they fear how family members and employees might react. However, their silence may actually create more stress and cause harm to the business. Most employees— including family members—will feel more secure about the future if they know what to expect and how they will fit in.

It’s never too late to develop a business succession plan. But the earlier you start, the better. Estate planning experts agree that long-term plans to transfer businesses are generally much more successful than those “patched together” following the unexpected death or disability of an owner.

Business succession actually begins with each employee’s first day on the job.

Think about it. Whether he or she is one of your children or a high school student working part-time, that young person could someday be the head of the company.

Experts agree—succession planning includes creating an environment that motivates employees to use their talents and skills to reach their full potential and contribute to the success of the business. Sounds simple, but how do you accomplish it?

Perhaps a mentor program or an apprenticeship is a good start. Talented young people are more likely to stay with the company if they feel involved in something bigger than their own job. It is wise to provide opportunities by matching experienced workers with newer employees to guide them as they grow in their jobs.

As employees gain experience, they become assets to your business and their value increases. Providing key employees opportunities to gain well-rounded business experience through cross-functional training and experience is admirable. This no doubt helps them become dependable managers who can make good decisions and take initiatives to improve operations .

Mark Your Calendar!

Designated Risk Management Seminar September 25th Stonewall Resort Roanoke, WV

16 PLAN TO ATTEND Connections 2012

Trade Expo May 16th

The Resort at Glade Springs

We have the following companies signed up to exhibit at this show. If you attend and visit every booth, your name will be entered into a drawing to win an iPad! We hope to see you there!

A. J. Silberman & Co. Frito Lay Profit Impact Associates Air Valet Geloso Beverage Group Red Bull Energy Drink Airgas National Carbonation H. T. Hackney Co. Reliable Oil Equipment Anheuser-Busch Home City Ice Retalix BBU/Heiner's Bakery Hooten Equipment Company RFS Financial Systems BrickStreet Insurance Hunt Brothers Pizza S & D Coffee Broughton Foods Company Inter-Continental Cigar Co. Secure US C.J.S. Sales Inc. J. T. Davenport & Sons Simon & Associates, Inc. Change the Future WV J. T. International USA Sledd Co. Chico Bakery Kappus Company Snyder of Berlin Children's Home Society Liberty USA Solaray Corporation Cintas Corporation Lykins Transportation Southern Food Systems Coca Cola Bottling Company Make-A-Wish Stanwade Metal Products, Inc. Consolidated/Monster Energy McKee Foods Steptoe & Johnson PLLC Commonwealth - Altadis Mid Valley Supply/M & M Services Superior Services Convenience Store Services (A Division of Ryan Environmental) Miller Environmental Inc. Swedish Match

CORE Environmental Services, Inc. MillerCoors Swisher International C-Store Equippers Modern Welding Company of Ohio The Sign Guy LC (A Division of Douglas Equipment) Mountain State Beverage United Dairy Inc. Custom Environmental Insurance North American Breweries VP Distributors, LLC D. G. Yuengling & Son Oilmen's Truck Tanks, Inc. West Virginia DEP - UST Unit DANA Insurance & Risk Pepsi Beverages Company West Virginia Lottery Management

Dr. Pepper Snapple Group Petroleum Transport Company WV Alcohol Beverage Control Administration Potesta & Associates, Inc. Eagle Transport Corp. WV Weights & Measures Eby-Brown Company LLC Power Service Products Enviroprobe Integrated Solutions Primo Water/Blue Rhino

Federated Insurance Private Investigation Professionals 17

18 Miscellaneous

OMEGA PAC - Thanks!

It’s an election year and we need to build funds in our PAC to support Calendar of Events candidates who understand and work well with our industries. If you have not written your personal check to the OMEGA PAC, please do so Connections 2012 today. We would like to thank the following members who have given Trade Expo & in 2012: Golf Outing Steve Roach Greg Rogers May 14 - 16 Greg Darby Jill Oliver Thornton The Resort at Glade Springs Joe DeFazio Denny Thompson Daniels, WV Michael Graney Mike Dawson Jim Linsenmeyer Thad Ours Designated Risk Denny Huff Rick Joseph Management Seminar Marshall Bishop Sandra Morgenstern September 25 Tom Jamieson Jim Oppe Stonewall Resort Pat Graney Roanoke, WV

MAW Charity Golf Outing & Awards Banquet September 25 & 26 Letter from Stonewall Resort Delegate Ruth Roanoke, WV Rowan – 50th UST Re-certification Training District October 23 & 24 Holiday Inn Express Dear Ms. Vineyard, Charleston, WV Thank you so much for all that you do for the Romney children’s Home Society. The Kick-off for the Mothers’ Day flowers campaign at L & M Market in Augusta was great. Your efforts have made such a big difference in the lives of so many children. I greatly At The Pump & Down appreciate all that you and the Aisle your members do for all of is a Monthly Publication of our children. Sincerely – Ruth

We will have results from this campaign in the June newsletter. Thanks to all our members who have worked so hard on this West Virginia Oil Marketers campaign. and Grocers Association 2506 Kanawha Blvd., East Charleston, WV 25311 www.omegawv.com Phone: 304.343.5500 FAX: 304.343.5810

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