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Senate File 2218

Partial Bill History

Bill Text

PAG LIN
  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
     

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