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1 1 Section 1. NEW SECTION. 323B.1 SHORT TITLE.
1 2 This chapter shall be known and may be cited as the "Iowa
1 3 Fair Motor Fuel Marketing Act".
1 4 Sec. 2. NEW SECTION. 323B.2 LEGISLATIVE FINDINGS AND
1 5 INTENT.
1 6 1. The general assembly finds and declares all of the
1 7 following:
1 8 a. Marketing of motor fuel in the state of Iowa is
1 9 affected by the public interest and is vital to the state's
1 10 economic well-being.
1 11 b. The state of Iowa and petroleum marketers have invested
1 12 millions of dollars in maintaining an environmentally safe
1 13 delivery system for motor fuel to all areas of the state.
1 14 c. It is the policy of this state to promote the general
1 15 welfare through the prohibition of sales that create
1 16 monopolies or unfair methods of competition, in transactions
1 17 involving the sale of, or offer, or inducement to sell motor
1 18 fuel in the wholesale and retail markets in this state, and
1 19 the advertising, offering for sale, or sale of motor fuel
1 20 below cost or at a cost lower than that charged other persons
1 21 on the same marketing level is an unfair and deceptive
1 22 practice.
1 23 2. The purpose of the Iowa fair motor fuel marketing Act
1 24 is to carry out the policy stated in subsection 1 in the
1 25 public interest, providing for exceptions under certain
1 26 circumstances, and providing for penalties and enforcement.
1 27 Sec. 3. NEW SECTION. 323B.3 DEFINITIONS.
1 28 For purposes of this chapter, the following definitions
1 29 apply:
1 30 1. "Cost" means, as applied to the wholesale or retail
1 31 vendor of motor fuel, the actual current delivered invoice or
1 32 replacement cost, whichever is lower, without deducting
1 33 customary cash discounts, plus any excise or sales taxes or
1 34 fees imposed on such commodity, goods, wares, or merchandise
1 35 subsequent to the purchase of the commodity, goods, wares, or
2 1 merchandise and prior to the resale of the commodity, goods,
2 2 wares, or merchandise.
2 3 2. "Department" means the department of agriculture and
2 4 land stewardship.
2 5 3. "Motor fuel" means as defined in section 452A.2.
2 6 4. "Motor fuel pump" means a stationary pump, meter, or
2 7 similar measuring device used for measuring retail motor
2 8 vehicle fuel.
2 9 5. "Producer" means any person who is engaged in the
2 10 production of crude oil when it is produced, whether such
2 11 production occurs in this state or elsewhere, and includes any
2 12 affiliate of such person.
2 13 6. "Refiner" means any person engaged in the refining of
2 14 crude oil to produce motor fuel, whether or not such refining
2 15 occurs in this state, and includes any affiliate of such
2 16 person.
2 17 Sec. 4. NEW SECTION. 323B.4 UNLAWFUL FUEL SALES.
2 18 1. Any offer for sale of motor fuel by a refiner,
2 19 wholesaler, or retailer by way of posted price or indicating
2 20 meter that is below cost is a violation of this chapter unless
2 21 one of the following exceptions applies:
2 22 a. The offer to sell is an isolated transaction and not in
2 23 the usual course of business.
2 24 b. The offer to sell is pursuant to a bona fide clearance
2 25 sale for the purpose of discontinuing trade in such motor
2 26 fuel.
2 27 c. The motor fuel offered for sale is advertised or sold
2 28 as imperfect or damaged and the advertisement or offer to sell
2 29 states the imperfection or damage and the quantity of motor
2 30 fuel being sold.
2 31 d. The offer to sell is upon the final liquidation of a
2 32 business.
2 33 e. The offer to sell is by any fiduciary or other officer
2 34 of the court under the order or direction of a court.
2 35 f. The offer to sell is made in good faith to meet the
3 1 price of a competitor who is offering the same product.
3 2 2. a. A retail motor fuel outlet in this state shall be
3 3 operated by a retail motor fuel dealer.
3 4 b. A retail motor fuel outlet in this state may not be
3 5 operated by a producer or refiner of motor fuel in either of
3 6 the following manners:
3 7 (1) By a commissioned agent, company personnel, or a
3 8 subsidiary company of the producer or refiner.
3 9 (2) Pursuant to a contract with a person who manages the
3 10 retail motor fuel outlet on a fee arrangement with the
3 11 producer or refiner.
3 12 3. A retail motor fuel outlet is exempt from subsection 2
3 13 if, prior to July 1, 2002, the retail motor fuel outlet was
3 14 operated by a subsidiary of a producer or refiner of motor
3 15 fuel.
3 16 Sec. 5. NEW SECTION. 323B.5 PENALTIES.
3 17 A person found to be in violation of this chapter shall be
3 18 subject to a penalty by the department as follows:
3 19 1. For an initial violation, the motor fuel pumps at the
3 20 site of the violation shall be tagged and rendered inoperable
3 21 for twenty-four hours.
3 22 2. For a second violation within two years, the motor fuel
3 23 pumps at the site of the violation shall be tagged and
3 24 rendered inoperable for forty-eight hours.
3 25 3. For a third violation within two years, the motor fuel
3 26 pumps at the site of the violation shall be tagged and
3 27 rendered inoperable for seven days.
3 28 4. For a fourth violation within two years, the motor fuel
3 29 pumps at the site of the violation shall be tagged and
3 30 rendered inoperable for thirty days.
3 31 Sec. 6. NEW SECTION. 323B.6 RULES.
3 32 The department shall adopt rules pursuant to chapter 17A as
3 33 necessary to administer this chapter.
3 34 Sec. 7. EFFECTIVE DATE. This Act, being deemed of
3 35 immediate importance, takes effect upon enactment.
4 1 EXPLANATION
4 2 This bill relates to the marketing of motor fuel.
4 3 New Code section 323B.4 prohibits sales of motor fuel by
4 4 refiners, wholesalers, and retailers that are below cost
4 5 unless the offer to sell meets a specified exception: (1) it
4 6 is an isolated transaction not in the usual course of
4 7 business; (2) it is pursuant to a bona fide clearance sale for
4 8 the purpose of discontinuing business; (3) the goods are
4 9 advertised and sold as imperfect; (4) it is part of the final
4 10 liquidation of the business; (5) it is by a fiduciary or other
4 11 officer of the court under order or other direction of the
4 12 court; or (6) it is a good faith offer to meet the price of a
4 13 competitor offering the same product.
4 14 New Code section 323B.4 also requires a motor fuel outlet
4 15 to be operated by a retail motor fuel dealer, and requires
4 16 that it not be operated by a producer or a refiner either by a
4 17 commissioned agent, company personnel, or subsidiary company
4 18 of the producer or refiner or pursuant to a contract with a
4 19 person who manages the retail motor fuel outlet on a fee
4 20 arrangement with the producer or refiner. Motor fuel outlets
4 21 operated by a subsidiary of a producer or a refiner prior to
4 22 July 1, 2002, are exempt from this requirement, however.
4 23 Penalties for violations of Code section 323B.4 are set
4 24 forth in new Code section 323B.5, and involve tagging and
4 25 rendering the motor fuel pumps inoperable at the site of the
4 26 violation for periods of time ranging from 24 hours to 30
4 27 days, depending on whether the violation is a first, second,
4 28 third, or fourth violation within a two-year period. The
4 29 penalties are enforced by the department of agriculture and
4 30 land stewardship.
4 31 The bill also contains a short title, a statement of
4 32 legislative intent, and definitions.
4 33 The bill is effective upon enactment.
4 34 LSB 5538XS 79
4 35 jj/pj/5
Text: SF02232 Text: SF02234 Text: SF02200 - SF02299 Text: SF Index Bills and Amendments: General Index Bill History: General Index
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