Contact: Mark Morgan, NEFI Regulatory Counsel (mark@nefi.com)

Victory! SBA Changes Heating Oil & Propane Dealer Size Standards
We are pleased to inform you that--due in large part to the work of NEFI's Legislative & Regulatory Action Center and NEFI Regulatory Counsel Mark S. Morgan, Esq., (mark@nefi.com)--the SBA has finalized a rule changing the small business size standards for heating fuel dealers. The change applies to all heating oil dealers (NACIS code 454311) and propane dealers (NAICS code 454312) and changes the size threshold for definition as a "small business" from annual gross receipts to number of employees. The rule, which becomes affective August 22, 2008, will help more heating fuel dealers become eligible for small business loans and other benefits, and will keep them from a costly $2,500 increase in HAZMAT fees for large businesses expected in 2009. NEFI had lobbied the SBA for the change since 2006, and the rule represents a significant victory for the industry. For complete details see the recent Regulatory Alert.

DOT Amends Driver Drug And Alcohol Testing Procedures
The Department of Transportation (DOT) issued a final rule recently that amends certain provisions of its drug and alcohol testing procedures. The final rule changes instructions to collectors, laboratories, medical review officers and employers regarding adulterated, substituted, diluted and invalid urine specimen results. The DOT adopted these changes to clarify existing regulations and create consistency with specimen validity requirements established by the U.S. Department of Health and Human Services. The DOT said one key factor for the changes is the multitude of products now available to drivers that mask positive test results for drugs and alcohol. The following changes and clarifications are made under the rule:

- Laboratories must now conduct urine specimen validity testing to detect adulteration.

- Medical review officers (MRO) must conduct direct observation specimen collection whenever a diluted sample is collected.

- MROs must follow new procedures when multiple verified results occur during the same testing/collection event.

- Employees can no longer request split specimen testing for invalid results.

- Establishes a new list of factors that require a drug test to be canceled and rescheduled.

The new rule, effective August 25th, is important for petroleum marketers with transportation operations not only because it establishes new procedures for driver drug and alcohol testing, but also because it means those tests will likely become more expensive. TAKE THE WORRY OUT OF DRUG TESTING COMPLIANCE. JOIN NEFI'S DRUG TESTING PROGRAM! (DETAILS IN MEMBER BENEFITS SPOTLIGHT BELOW!)

TSA Releases Security Recommendations For Hazmat Transporters
The Transportation Security Administration (TSA) announced this week a set of non-mandatory security recommendations for the transportation of hazardous materials (including petroleum) across the nation's highways. According to the TSA, the recommendations are designed to help ensure the secure transportation of potentially dangerous materials that could cause a significant impact if used in an act of terrorism. Petroleum transporters are already required to prepare security plans and conduct driver security training and background checks. The TSA recommendations build on security requirements already in place for those transporters who want to do more. The TSA's security action items have been divided into the following four categories.

General Security: Security Assessment and Security Plan Requirements; Awareness of Industry Security Practices; Inventory Control Process; Business and Security Critical Information

Personnel Security: Possession of a Valid Commercial Drivers License - Hazardous Materials Endorsement; Background Checks for Highway Transportation Sector Hazmat Employees other than Motor Vehicle Drivers with a Valid CDL with HME; Security Awareness Training for Hazmat Employees.

Unauthorized Access: Access Control System for Drivers; Access Control System for Facilities Incidental to Transport;

En-Route Security: Establish Communications Plan; Establish Appropriate Vehicle Security Program; Establish Appropriate Cargo Security Program; Implement a Seal/Lock Control Program; High Alert Level Protocols; Establish Security Inspection Policy and Procedures; Establish Reporting Policy and Procedures.

General security measures pertain to security threat assessments, security planning, protecting critical information, and awareness of industry security practices. Personnel security and unauthorized access refer to practices affecting the security of the motor carrier's employees, contracted employees, and its property. En-route security refers to the actual movement and handling of motor vehicles containing security sensitive hazardous materials. A full list of the non-mandatory recommendations can be found on TSA's Web site under www.tsa.gov/highway.

EPA Plans On Updating Renewable Fuels Standard This Fall
PMAA has reported that the EPA expects to propose an updated renewable fuel standard (RFS) for motor vehicles by this fall, an agency official told a Senate subcommittee last week. The final rule should be ready no later than Summer 2009. The "RFS II" rule would implement portions of the Energy Independence and Security Act of 2007 that mandates production of 36 billion gallons of renewable fuels by 2022. The agency is struggling to determine how to reach the ambitious annual goal, which many believe is unattainable without a scientific breakthrough in cellulosic biofuels. PMAA is working closely with the EPA to ensure that the new rule is flexible and does not place any undue burdens on small business petroleum marketers.

Over 80 Participate In NEFI SPCC Compliance Webinar; Fall Webinar Planned
On July 24, NEFI held the much anticipated webinar on SPCC Compliance. It was presented by Mark S. Morgan, Esq., (NEFI's regulatory counsel) and Tim Laughlin, a certified engineer from the North Carolina Petroleum Marketers Association. Those in attendance found it to be quite helpful. NEFI would like to thank NCPMA for all their efforts in making this possible. ANOTHER WEBINAR IS BEING PLANNED FOR SEPTEMBER!!! Dates are uncertain, but if you missed this one, do not panic! You will be notified of the next one when we have a date certain. You can visit www.nefi.com for more information or write to dave@nefi.com with your feedback on the webinar.

Fuel Merchants Assoc. Of NJ Responds to Home Depot Push for Conversions
The Fuel Merchants Association of New Jersey (FMANJ) recently responded to a brochure a New Jersey Home Depot was distributing that encouraged contractors to consider switching from oil to natural gas. FMANJ Executive Director Eric DeGesero sent a letter to Home Depot refuting the claims made in the brochure. FMANJ staff visited other New Jersey Home Depots to find similar brochures available for consumers advising them to convert. Read the response from FMANJ and the brochure from Home Depot. If you have seen a similar advertisement at your local Home Depot or another Retail Store, let us know! Contact Shane Sweet, NEFI CEO at shane@nefi.com.

PMAA Successful In Preventing Action on National Temp Comp Mandate
The Petroleum Marketers Association of America (PMAA), along with several members of the Partnership for Uniform Marketing Practices (PUMP) Coalition, attended the 92nd annual meeting of the National Conference on Weights and Measures (NCWM) in Burlington, Vermont. PMAA told the Specifications and Tolerances (S & T) committee that any action to mandate automatic temperature compensation (ATC) is premature and asked the committee to delay action and change the status of ATC from a "voting" item to an "informational" item. Several requests were made and accepted by the Laws and Regulations (L & R) committee that if ATC adoption moved forward, it should be in tandem with the S & T committee. This was very significant for PMAA because it delayed action on ATC adoption until next year.

PMAA also advised the S & T committee that requiring retail gas station owners to install ATC equipment would be highly detrimental considering that 95 percent of the gasoline stations are independently owned across the country. It would only put an unnecessary burden on small businesses and the cost of implementation would ultimately be passed onto the consumer. Until further studies are completed, weights and measures officials will wait on any decision to implement ATC. Currently, the California Energy Commission is working on a study which will be completed by the end of the year. Also, the Government Accountability Office (GAO) is actively working on a study which will report its findings.