With dozens of service station operators watching attentively from the gallery, the Maryland Senate killed a bill today that would have prohibited oil companies from charging a processing fee on their credit cards.
The resounding 31-to-14 vote against the bill came after lobbying against it by four oil companies affected by the bill--Exxon, Amoco, Texaco and Mobil--aided by their dealers, who had been told the companies might pull their credit cards if the bill passed.
The bill was a follow-up to legislation passed by the General Assembly last year designed to force oil companies to eliminate a 3 percent fee that they charge service-station operators for processing credit purchases. Last year's action prohibited charging the fee on accounts that the consumer can pay off over a period of time. The oil companies responded by requiring payment in full upon receipt.
"They found a loophole in what we passed last year and ran right through it," said Sen. John A. Pica Jr. (D-Baltimore). "This vote today shows how conservative the Senate has become this year. Last year the bill passed overwhelmingly in here."
The new proposal was passed 5 to 4 by the Economic Affairs Committee two weeks ago. Since then, senators said today, they have been besieged by phone calls from service-station operators, saying they had been told by the companies they would lose their credit cards.
"My Exxon dealer told me 50 percent of his business was credit-card business," said Sen. Arthur Dorman (D-Prince George's), a proponent of the bill and vice chairman of the committee. "I told him, 'Do you really think these guys will pull their cards?' Texaco did it last year and then restored it because it cost them business. The same thing would have happened with this."
"It was certainly as intense a lobbying effort on both sides as I've seen in a while," said lobbyist James Doyle, who worked against the bill on behalf of Amoco. "There were a lot of people in the middle on this so I had to talk to a lot of people."
The service-station operators sat in the front row of the gallery, often murmuring during the 90-minute debate. One man became so incensed that he yelled at Sen. Tommie Broadwater Jr. (D-Prince George's) when he spoke. Senate President Melvin A. Steinberg had the man evicted.
At one point Broadwater and Sen. Clarence Mitchell III (D-Baltimore) stood no more than 10 feet from one another, yelling into their microphones for opposite sides of the bill, Broadwater insisting that the credit-card fee was "nothing more than a slush fund for the oil companies."
"These service station operators have been bludgeoned, blackjacked and blackmailed," said Sen. Sidney Kramer (D-Montgomery), sponsor of the bill. "They have been told they will lose their credit cards unless they get this bill killed. Their presence in the gallery today, the buttons they are wearing [which read 'Kill SB-62'] has all been orchestrated by the oil companies. This is our chance to send a message that the large megabucks companies do not control Annapolis."
Opponents, led by Sen. Laurence Levitan (D-Montgomery), the chairman of the budget and tax committee, argued that passage would hurt consumers because the oil companies would stop charging a cheaper price to cash customers.
"You can't extend credit without having some cost involved," Levitan said. "We are tampering with the economy with this bill and we're going to hurt the consumer."
Not so insisted Dorman. "We aren't talking about a cash discount," Dorman said. "We are talking about a fee for credit customers. The companies aren't charging less to cash customers, they're just charging more to credit customers."
The arguments for the bill proved fruitless, however, as the lobbyists and station operators had got their message across.
One of those who voted against the bill was Jerome F. Connell (D-Anne Arundel), the chairman of the committee that heard the bill. Chairmen seldom vote against a bill on second reader, the vote in which the full house approves the committee report before sending it to third reader for final passage.
"One of the people who voted for the bill in committee [Sen. James Clark Jr.] told me he was voting against it on the floor, so I didn't feel obligated to vote for it," explained Connell. "It was a bad piece of legislation anyway."