CONGRESS MOVING ON KEY INDUSTRY ISSUES

JOANNA RAMEY

WASHINGTON (FNS) -- The supermarket industry is starting to see some movement in Congress on key legislative issues.

In session for five months, Congress is giving food-industry issues an airing amidst a Congressional agenda gaining more attention for debate on international issues like the war in Kosovo and trade with China. Top items on the supermarket agenda include the following:

Eliminating the estate tax.

Making electronically dispersed food stamps portable from state-to-state.

Delaying Occupational Safety and Health Administration efforts to set nationwide workplace ergonomics standards.

Also on lawmakers' screens is the movement to require all food to carry a country-of-origin label and to set safety and enforcement standards for imported foods.

Getting lawmakers to delay OSHA's release of an ergonomics standard leads the supermarket industry's list of urgently needed action. The OSHA in February released preliminary standards that would govern how all businesses protect workers from injuries caused by repetitive motions.

Rep. Roy Blunt, R-Mo., recently introduced legislation that would delay release of a final OSHA standard until a National Academy of Sciences ergonomics study is completed. Congress last year funded the NAS study as a means to settle the dispute between businesses and the OSHA over whether an ergonomics standard is needed. Businesses say existing OSHA workplace regulations are sufficient and a separate ergonomics standard would be costly and cumbersome to follow.

"We would be affected dramatically, all the way from warehouse workers to those operating scanners at checkouts," said John Motley, senior vice president of government and public affairs for the Food Marketing Institute here.

Supporters of Blunt's measure are working to gain bipartisan support for the bill to ensure its passage, given the thin majority held by Republicans in both chambers.

"If we get a mix of Democrats and Republicans sponsoring the legislation, it has a good chance of passing," said Tom Wenning, senior vice president and general counsel for the National Grocers Association, Reston, Va.

A tax issue on distributors' legislative wish lists is the elimination of the estate tax. So far the estate tax hasn't been the subject of hearings, however it is considered a likely candidate for debate over, and possible inclusion in, a legislative tax package later this year.

"It is our No. 1 priority," said Wenning, whose organization of largely small grocery chains, many family-owned, would benefit from estate-tax elimination.

Two estate-tax bills are being considered. One, the Family Heritage Preservation Act, sponsored by Rep. Chris Cox, R-Calif., and Sen. Jon Kyl, R-Ariz., would immediately eliminate the tax, which can be as high as 55% on assets above $650,000. Another bill, the Estate and Gift Tax Rate Reduction Act, sponsored by Sen. Ben. Nighthorse Campbell, R-Colo., and Reps. Jennifer Dunn, R-Wash., and John Tanner, D-Tenn., would phase out the tax by 5% each year until it's eliminated.

Motley said some estate-tax bill is "doable," forecasting the 11-year phaseout of the tax is probably the most politically palatable, particularly among balanced-budget hawks. However, he said the big unknown about the tax break is whether the President would sign it.

Kevin Burke, vice president of Food Distributors International, Falls Church, Va., also considers a phaseout of the tax as the most likely bill to succeed. "Our feeling is that with the budget surplus that's going to be produced there is no reason to argue you can't get rid of the estate tax," Burke said.

Getting Congress to make electronic food stamp and Women, Infants and Children nutrition benefits portable between states appears to be easily achieved before Congress adjourns in October, Motley said. He said House and Senate Agriculture Committee members appear amenable to spending the $1.4 million a year it would cost to provide the service.

Another issue before the Agriculture Committees is whether food should be labeled as to its country of origin. There's been a groundswell of pressure for labeling from U.S. beef and pork producers and a contingent of produce farmers. They consider labeling as a way to promote U.S.-grown food in the face of flagging prices, particularly for meat.

Retailers, wholesalers, food processors, meat packers and produce importers, among others, are rallying against mandatory labeling. It would be a costly hassle to have to label and would confuse customers by insinuating that a U.S. food is somehow safer than something imported,, they argue.

So far the labeling issue hasn't moved in a committee and there is concern among opponents that a labeling mandate could be attached at the last minute to a U.S. Department of Agriculture appropriations bill. Spending bills traditionally become a home for extraneous measures that otherwise wouldn't move alone.

How money in the agriculture spending bills will be appropriated for food-safety programs at the USDA and Food and Drug Administration is also being tracked by the supermarket and food industries. Action on these bills is expected in the next one or two months.

Concerns include how money earmarked for more imported-food inspectors will be used. This issue is also being debated in regard to redeploying some 3,000 USDA meat inspectors, whose jobs have become defunct because of new, streamlined Hazard Analysis Critical Control Point-based poultry- and meat-inspection programs.

Retailers, in particular, are concerned some of these inspectors will be reassigned in the marketplace to keep tabs on meat safety in the channels of distribution and in stores. The USDA's Food Safety Inspection Service is testing such a pilot distribution-inspection model in three cities.

Retailers have long cited as counterproductive a USDA ground-beef sampling program at supermarkets as a means to detect dangerous bacteria. Such testing is only effective when it's done at the slaughterhouse or packing plant, they argue. So they are opposed to any notion of expanding USDA oversight at the retail level, which is already scrutinized by local government health inspectors.

An alternative use of excess USDA personnel being examined in Congress is to detail them to the FDA, which is in need of staff to handle new imported-food inspection responsibilities.

Brian Folkerts, vice president for government affairs at the National Food Processors Association here, said he's "cautiously" examining this USDA-FDA inspector reassignment. "It may have some merit," Folkerts said, while expressing some concern about what he describes as inefficient USDA managerial philosophies being forced on an otherwise better managed FDA inspection regime.

How the FDA should carry out imported-food inspections is the topic of a pending bill by Sen. Susan Collins, R-Maine, one which retailers, wholesalers and food processors will be watching. Collins has indicated her bill will focus on inspections of farms and producers of foreign food. Should there be an outbreak of illness tied to a foreign food, the shipments from the supplier would be cut off, not from an entire country.

"The Collins bill will go after the bad players," said Susan Stout, senior director of federal affairs at the Grocery Manufacturers of America here. "We're not going to be in the position of shutting down a whole country just because there's one bad player."

A wage issue particular to wholesale grocers and distributors involves changing the way in-house sales staff are treated under the Federal Labor Standards Act. A bill re-introduced March 25 in the House calls for treating so-called inside sales staff as managerial employees, thus exempting them from being paid overtime after working 40 hours. Contract or outside sales staff are already exempt.

Wholesalers argue the exemption is needed for inside sales staff as a way to increase sales, which in turn would generate more employee income via commissions. An inside sales staff measure cleared the House last year but died in the Senate.

The FDI's Burke said this year's bill has been recast to be more palatable with organized labor. Under the bill, if a worker's annual wages and commission fall below $25,000, then he or she would be eligible for time-and-a-half after working 40 hours a week.

A bill to be introduced that is of significance to food processors is one calling for national uniformity of additive and warning labels. Processors want to head off having to comply with a myriad of state labeling requirements.