With the highway bill expiring June 30, the Agricultural Retailers Association (ARA), the Agricultural and Food Transporters Conference (AFTC) of the American Trucking Associations, the National Council of Farmer Cooperatives (NCFC) and The Fertilizer Institute (TFI) applaud Congress for approving the conference report on the Moving Ahead for Progress in the 21st Century Act (MAP–21). The two-year re-authorization of the Surface Transportation bill includes a clarification of regulations critical to the agriculture industry’s ability to distribute farm supplies in a timely manner, especially during the busy planting and harvest seasons.
Some of the key provisions for the industry include:
Transportation of Agricultural Commodities and Farm Supplies – Section 32101, Page 381: ARA, TFI, AFTC and NCFC worked for four years to achieve changes to the Hours of Service Agricultural Exemption due to misinterpretation of the statute by officials within the U.S. Department of Transportation’s (DOT) Federal Motor Carrier Safety Administration (FMCSA). Under the provision, now all farm supplies are authorized under the exemption and can be transported from any location throughout the supply chain. The driver can only utilize the HOS agricultural exemption as long as the state or state(s) have adopted exemption; they are operating during the designated planting and harvesting dates; and within the new 150 air-mile radius which replaces the current 100 air-mile radius.
Section 229(a)(1) of the Motor Carrier Safety Improvement Act of 1999 (49 U.S.C. 31136 note) is amended to read as follows:
(1) TRANSPORTATION OF AGRICULTURAL COMMODITIES AND FARM SUPPLIES.—Regulations prescribed by the Secretary under sections 31136 and 31502 regarding maximum driving and onduty time for drivers used by motor carriers shall not apply during planting and harvest periods, as determined by each State, to—
(A) drivers transporting agricultural commodities from the source of the agricultural commodities to a location within a 150 air-mile radius from the source;
(B) drivers transporting farm supplies for agricultural purposes from a wholesale or retail distribution point of the farm supplies to a farm or other location where the farm supplies are intended to be used within a 150 air-mile radius from the distribution point; or
(C) drivers transporting farm supplies for agricultural purposes from a wholesale distribution point of the farm supplies to a retail distribution point of the farm supplies within a 150 air-mile radius from the wholesale distribution point.
Motor Carrier Safety Permits– Section 33041, Page 444: ARA, TFI, AFTC and NCFC advocated for the inclusion of this provision that directs the Secretary to conduct a review of the implementation of the hazardous material safety permit (HMSP) program. The conference report requires the Secretary to consider factors, including the list of hazardous materials requiring a safety permit, the criteria used by PHMSA to determine whether a hazardous material safety permit issued by a State is equivalent to the Federal permit, and actions to improve the program including an additional level of fitness review. Based on the findings of the review, the Secretary may either issue a rulemaking to make any necessary improvements to the program, or publish in the Federal Register justification for why a rulemaking is not necessary.
Improved Daytime and Nighttime Visibility of Agricultural Equipment – Section 31601, Page 378: ARA supported provision included that requires the U.S. Department of Transportation (DOT) after consultation with representatives of the American Society of Agricultural and Biological Engineers (ASABE) and appropriate federal agencies to promulgate a rule to improve the daytime and nighttime visibility of agricultural equipment that may be operated on the public road. The methods, materials, specifications and equipment to be employed with such standards would be equivalent to the ASABE Standard 279.14 (Lighting and Marking of Agricultural Equipment on Highways) published in July 2008. ARA believes a federal DOT standard for this type of agricultural equipment makes more sense for industry rather than be subjected to the potential for differing state standards
Sense of Congress on Harbor Maintenance – Section 1536, Page 185: The Conference report modifies a Senate provision highlighting the significance of the nation’s ports for efficient movement of goods and products and the need for increased investment in the maintenance of these ports to promote the economic competiveness of the U.S. The provision states the Sense of Congress that the Administration should request and the Congress should fully expend each year all of the revenues collected in the Harbor Maintenance Trust Fund (HMTF) for the operation and maintenance of the nation’s federally maintained ports. The provision also expresses the importance of protecting other critical Army Corps programs, including inland navigation, flood and coastal storm protection, and ecosystem restoration, from funding reductions. ARA, TFI, AFTC and NCFC had urged Congress to include provisions that would ensure all funds collected as part of the HMT and deposited into the HMTF are to be used for the operation and maintenance of U.S. ports, waterways and harbors.
Pension Funding Stabilization: ARA supports efforts by conferees to address pension funding issues being faced by many American businesses. The Senate’s Pension Funding Stabilization provision (Sec. 40312) would help free up billions of dollars for businesses to re-invest back into their companies and the economy by making necessary interest rate adjustments and allow for the reduction of tax-free contributions to pension plans. Essentially, the conference report stabilizes discount rates used for calculating pension funding obligations by basing rates on a 25-year historical average. This change would result in 9.4 billion dollars in revenue over a 10-year period but also allow capital to free up for American businesses to use as they feel free for their needs.
The Pension Benefit Guaranty Program (PBGC) has increased single-employer flat rate premiums from the current $35 per participant to $42 per participant in 2013 and $49 per participant in 2014. This provision has been said to be a new tax on businesses at a time when the PBGC has said it can maintain benefit guarantees. Multi-employer premiums are seeing only a slight increase from $9 in 2012 to $13 in 2013. The increase in these premiums from the PBGC are being met with some negative reaction, the impact of using the stabilization of discount rate is a major positive for American agribusinesses.
Electronic Logging Devices – Section 31137, Page 390: The conference report includes provisions opposed by ARA, Owner-Operator Independent Drivers Association, National Federation of Independent Business (NFIB) and others that direct the Secretary to issue regulations requiring electronic logging devices for recording hours of service in commercial motor vehicles and sets basic performance standards for the device. The conference report directs the Secretary, in prescribing regulations, to consider how the rule may reduce or eliminate requirements for drivers and motor carriers to retain supporting documentation associated with paper-based records. The conference report changes the name of the device and adds other language to make clear that the devices are to be used only to enforce federal regulations. The report also includes a definition of “tamper resistant” and provisions to ensure that appropriate measures are taken to protect the privacy of individuals and the confidentiality of the data.
ARA has shared that it opposes these provisions and believes this creates an unnecessary expansion of current regulations. ARA believes it will also substantially increase the financial burdens on the nation’s agricultural retailers and distributors. The Obama administration estimates the implementation of electronic on-board recording devices in commercial motor vehicles would cost $2 billion, making it one of the seven costliest regulations sought by administration. While there may be some unrelated safety benefits to EOBR technologies, it is ARA’s belief that it should remain voluntary for motor carriers to utilize EOBR on their CMV, not be forced to do so through a federal government mandate.
Other Funding Sources: A $2.4 billion dollar transfer was made the Leaking Underground Storage Tank Trust (LUST) Fund to the Highway Trust Fund. The LUST Fund was made up of a 1 cent excise tax per gallon stored of gasoline, diesel fuel, kerosene and alternative fuels.
An additional excise tax was imposed on cigarettes made at retail location with Roll-Your-Own (RYO) tobacco machines. These machines allowed certain businesses to exploit a tax loophole by blending and rolling pipe tobacco (taxed at roughly $2.83/lb) into cigarettes for retail sale while manufactured and prepackaged cigarettes are taxed roughly in the $20/lb range. This provision is expected to raise roughly $94 billion dollars over a 10-year period.
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