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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.
1 22 2. The purpose of the Iowa fair motor fuel marketing Act
1 23 is to carry out the policy stated in subsection 1 in the
1 24 public interest, providing for exceptions under certain
1 25 circumstances, and providing for penalties and enforcement.
1 26 Sec. 3. NEW SECTION. 323B.3 DEFINITIONS.
1 27 For purposes of this chapter, the following definitions
1 28 apply:
1 29 1. "Cost" means, as applied to the wholesale or retail
1 30 vendor of motor fuel, the actual current delivered invoice or
1 31 replacement cost, whichever is lower, without deducting
1 32 customary cash discounts, plus any excise or sales taxes or
1 33 fees imposed on such commodity, goods, wares, or merchandise
1 34 subsequent to the purchase of the commodity, goods, wares, or
1 35 merchandise and prior to the resale of the commodity, goods,
2 1 wares, or merchandise.
2 2 2. "Department" means the department of agriculture and
2 3 land stewardship.
2 4 3. "Motor fuel" means as defined in section 452A.2.
2 5 4. "Motor fuel pump" means a stationary pump, meter, or
2 6 similar measuring device used for measuring retail motor
2 7 vehicle fuel.
2 8 5. "Producer" means any person who is engaged in the
2 9 production of crude oil when it is produced, whether such
2 10 production occurs in this state or elsewhere, and includes any
2 11 affiliate of such person.
2 12 6. "Refiner" means any person engaged in the refining of
2 13 crude oil to produce motor fuel, whether or not such refining
2 14 occurs in this state, and includes any affiliate of such
2 15 person.
2 16 Sec. 4. NEW SECTION. 323B.4 UNLAWFUL FUEL SALES.
2 17 1. Any offer for sale of motor fuel by a refiner,
2 18 wholesaler, or retailer by way of posted price or indicating
2 19 meter that is below cost is a violation of this chapter unless
2 20 one of the following exceptions applies:
2 21 a. The offer to sell is an isolated transaction and not in
2 22 the usual course of business.
2 23 b. The offer to sell is pursuant to a bona fide clearance
2 24 sale for the purpose of discontinuing trade in such motor
2 25 fuel.
2 26 c. The motor fuel offered for sale is advertised or sold
2 27 as imperfect or damaged and the advertisement or offer to sell
2 28 states the imperfection or damage and the quantity of motor
2 29 fuel being sold.
2 30 d. The offer to sell is upon the final liquidation of a
2 31 business.
2 32 e. The offer to sell is by any fiduciary or other officer
2 33 of the court under the order or direction of a court.
2 34 f. The offer to sell is made in good faith to meet the
2 35 price of a competitor who is offering the same product.
3 1 2. a. A retail motor fuel outlet in this state shall be
3 2 operated by a retail motor fuel dealer.
3 3 b. A retail motor fuel outlet in this state shall not be
3 4 operated by a producer or refiner of motor fuel in either of
3 5 the following manners:
3 6 (1) By a commissioned agent, company personnel, or a
3 7 subsidiary company of the producer or refiner.
3 8 (2) Pursuant to a contract with a person who manages the
3 9 retail motor fuel outlet on a fee arrangement with the
3 10 producer or refiner.
3 11 3. A retail motor fuel outlet is exempt from subsection 2
3 12 if, prior to the effective date of this Act, the retail motor
3 13 fuel outlet was operated by a subsidiary of a producer or
3 14 refiner of motor fuel.
3 15 Sec. 5. NEW SECTION. 323B.5 PENALTIES.
3 16 A person found to be in violation of this chapter shall be
3 17 subject to a penalty by the department as follows:
3 18 1. For an initial violation, the motor fuel pumps at the
3 19 site of the violation shall be tagged and rendered inoperable
3 20 for twenty-four hours.
3 21 2. For a second violation within two years, the motor fuel
3 22 pumps at the site of the violation shall be tagged and
3 23 rendered inoperable for forty-eight hours.
3 24 3. For a third violation within two years, the motor fuel
3 25 pumps at the site of the violation shall be tagged and
3 26 rendered inoperable for seven days.
3 27 4. For a fourth violation within two years, the motor fuel
3 28 pumps at the site of the violation shall be tagged and
3 29 rendered inoperable for thirty days.
3 30 Sec. 6. NEW SECTION. 323B.6 RULES.
3 31 The department shall adopt rules pursuant to chapter 17A as
3 32 necessary to administer this chapter.
3 33 EXPLANATION
3 34 This bill relates to the marketing of motor fuel.
3 35 New Code section 323B.4 prohibits sales of motor fuel by
4 1 refiners, wholesalers, and retailers that are below cost
4 2 unless the offer to sell meets a specified exception: (1) it
4 3 is an isolated transaction not in the usual course of
4 4 business; (2) it is pursuant to a bona fide clearance sale for
4 5 the purpose of discontinuing business; (3) the goods are
4 6 advertised and sold as imperfect; (4) it is part of the final
4 7 liquidation of the business; (5) it is by a fiduciary or other
4 8 officer of the court under order or other direction of the
4 9 court; or (6) it is a good faith offer to meet the price of a
4 10 competitor offering the same product.
4 11 New Code section 323B.4 also requires a motor fuel outlet
4 12 to be operated by a retail motor fuel dealer, and requires
4 13 that it not be operated by a producer or a refiner either by a
4 14 commissioned agent, company personnel, or subsidiary company
4 15 of the producer or refiner or pursuant to a contract with a
4 16 person who manages the retail motor fuel outlet on a fee
4 17 arrangement with the producer or refiner. Motor fuel outlets
4 18 operated by a subsidiary of a producer or a refiner prior to
4 19 July 1, 2004, are exempt from this requirement, however.
4 20 Penalties for violations of Code section 323B.4 are set
4 21 forth in new Code section 323B.5, and involve tagging and
4 22 rendering the motor fuel pumps inoperable at the site of the
4 23 violation for periods of time ranging from 24 hours to 30
4 24 days, depending on whether the violation is a first, second,
4 25 third, or fourth violation within a two-year period. The
4 26 penalties are enforced by the department of agriculture and
4 27 land stewardship.
4 28 The bill also contains a short title, a statement of
4 29 legislative intent, and definitions.
4 30 LSB 5294XS 80
4 31 da/pj/5
Text: SF02217 Text: SF02219 Text: SF02200 - SF02299 Text: SF Index Bills and Amendments: General Index Bill History: General Index
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