House File 2422 - Introduced
HOUSE FILE
BY WHITAKER, GASKILL, MURPHY,
BUKTA, D. TAYLOR, MERTZ, WHITEAD,
REICHERT, PETTENGILL, BERRY,
WISE, KRESSIG, R. OLSON, BELL,
SCHUELLER, WENDT, T. TAYLOR,
REASONER, McCARTHY, SHOMSHOR,
LYKAM, SWAIM, SMITH, KUHN, HEDDENS,
JACOBY, THOMAS, and COHOON
Passed House, Date Passed Senate, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act relating to the delivery of E=85 gasoline to franchisees
2 of motor fuel, and providing an effective date.
3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
4 TLSB 6322HH 81
5 da/je/5
PAG LIN
1 1 Section 1. Section 214A.1, Code 2005, is amended by adding
1 2 the following new subsections:
1 3 NEW SUBSECTION. 1A. "E=85 gasoline" means ethanol blended
1 4 gasoline formulated with a minimum percentage of between
1 5 seventy=five and eighty=five percent by volume of ethanol, if
1 6 the formulation meets the standards provided in section
1 7 214A.2.
1 8 NEW SUBSECTION. 1B. "Ethanol" means ethyl alcohol that is
1 9 denatured as required in 23 C.F.R., pts. 20 and 21, for use as
1 10 an oxygenate in gasoline.
1 11 NEW SUBSECTION. 1C. "Ethanol blended gasoline" means a
1 12 formulation of gasoline which is a liquid petroleum product
1 13 blended with ethanol, if the formulation meets the standards
1 14 provided in section 214A.2.
1 15 NEW SUBSECTION. 1D. "Gasoline" means any liquid product
1 16 prepared, advertised, offered for sale or sold for use as, or
1 17 commonly and commercially used as, motor vehicle fuel for use
1 18 in a spark=ignition, internal combustion engine, and which
1 19 meets the standards provided in section 214A.2.
1 20 Sec. 2. Section 214A.2, subsection 1, Code 2005, is
1 21 amended to read as follows:
1 22 1. The secretary department shall adopt rules pursuant to
1 23 chapter 17A for carrying out this chapter. The rules may
1 24 include, but are not limited to, specifications relating to
1 25 motor vehicle fuel or, including but not limited to gasoline
1 26 or renewable fuel such as ethanol blended gasoline and its
1 27 components such as oxygenate octane enhancers. In the
1 28 interest of uniformity, the secretary department shall adopt
1 29 by reference or otherwise specifications relating to tests and
1 30 standards for motor vehicle fuel or oxygenate octane enhancers
1 31 including renewable fuel, established by A.S.T.M. (American
1 32 society for testing and materials) international, unless the
1 33 secretary department determines that those specifications are
1 34 inconsistent with this chapter or are not appropriate to the
1 35 conditions which exist in this state.
2 1 Sec. 3. Section 214A.2, Code 2005, is amended by adding
2 2 the following new subsection:
2 3 NEW SUBSECTION. 2A. For motor fuel advertised for sale or
2 4 sold as ethanol blended gasoline, the gasoline must comply
2 5 with departmental standards which to every extent feasible
2 6 shall comply with specifications adopted by A.S.T.M.
2 7 international. For ethanol blended gasoline, all of the
2 8 following shall apply:
2 9 a. For ethanol blended gasoline other than E=85 gasoline,
2 10 at least ten percent of the gasoline by volume must be
2 11 ethanol.
2 12 b. For E=85 gasoline all of the following must apply:
2 13 (1) From the first day of April until the last day of
2 14 October, at least eighty=five percent of the gasoline by
2 15 volume must be ethanol.
2 16 (2) From the first day of November until the last day of
2 17 March, at least seventy=five percent of the gasoline by volume
2 18 must be ethanol.
2 19 c. In calculating the percentage of ethanol required for
2 20 the formulation of ethanol blended gasoline, a percentage of a
2 21 denaturant or contaminants permitted in the ethanol blended
2 22 gasoline may be excluded as provided by rules adopted by the
2 23 department.
2 24 Sec. 4. Section 323A.1, Code 2005, is amended by adding
2 25 the following new subsections:
2 26 NEW SUBSECTION. 0A. "E=85 gasoline" means the same as
2 27 defined in section 214A.1.
2 28 NEW SUBSECTION. 0B. "Ethanol blended gasoline" means the
2 29 same as defined in section 214A.1.
2 30 Sec. 5. Section 323A.1, subsection 4, Code 2005, is
2 31 amended to read as follows:
2 32 4. "Motor fuel" means gasoline or diesel fuel the same as
2 33 motor vehicle fuel as defined in section 214A.1, which is of a
2 34 type distributed for use as a fuel in self=propelled vehicles
2 35 designed primarily for use on public streets, roads, and
3 1 highways.
3 2 Sec. 6. Section 323A.2, subsection 1, paragraph a, Code
3 3 2005, is amended to read as follows:
3 4 a. At least forty=eight hours prior to entering into an
3 5 agreement to purchase motor fuel from another source, the
3 6 franchisee has requested delivery of motor fuel from the
3 7 franchisor and the requested motor fuel has not been delivered
3 8 and the franchisor has given the franchisee notice that the
3 9 franchisor is unable to provide the requested motor fuel, or
3 10 prior to entering into an agreement the franchisor has stated
3 11 to the franchisee that the requested motor fuel will not be
3 12 delivered. The request to the franchisor for delivery shall
3 13 be for a type of fuel normally provided by the franchisor to
3 14 the franchisee and for a quantity of fuel not exceeding the
3 15 average amount sold by the franchisee in one week, based upon
3 16 average weekly sales in the three months preceding the
3 17 request, except that this provision shall not restrict a
3 18 franchisee from purchasing ethanol blended gasoline from a
3 19 source other than the franchisor or limit the quantity to be
3 20 purchased when the franchisor does not normally supply the
3 21 franchisee with ethanol blended gasoline. A franchisee may
3 22 also purchase E=85 gasoline as provided in section 323A.2A.
3 23 Sec. 7. NEW SECTION. 323A.2A PURCHASE OF E=85 GASOLINE
3 24 FROM OTHER SOURCE.
3 25 1. a. When on and after the effective date of this Act, a
3 26 franchise is entered into or renewed, the franchisor shall
3 27 provide for the delivery of volumes of E=85 gasoline at times
3 28 demanded by the franchisee or shall allow the franchisee to
3 29 purchase those volumes of E=85 gasoline at those times from
3 30 another source.
3 31 b. If a franchise is in effect on the effective date of
3 32 this Act and does not have an expiration date, the franchisor
3 33 shall provide for the delivery of volumes of E=85 gasoline at
3 34 times demanded by the franchisee or shall allow the franchisee
3 35 to purchase those volumes of E=85 gasoline at those times from
4 1 another source.
4 2 2. If the franchisee sells E=85 gasoline delivered from a
4 3 source other than the franchisor, the franchisee shall
4 4 prominently post a sign disclosing this fact to the public on
4 5 each motor fuel pump used for dispensing the E=85 gasoline.
4 6 The size of the sign shall not be less than eight inches by
4 7 ten inches and the letters on the sign shall be at least three
4 8 inches in height.
4 9 3. A franchisee who sells E=85 gasoline delivered from a
4 10 source other than the franchisor shall also fully indemnify
4 11 the franchisor against any claims asserted by a user on which
4 12 the claimant prevails and in which the court determines that
4 13 E=85 gasoline not acquired from the franchisor was the
4 14 proximate cause of the injury.
4 15 4. a. A purchase of E=85 gasoline in accordance with this
4 16 section is not good cause for the termination of a franchise.
4 17 b. A term of a franchise that is inconsistent with this
4 18 section is void and unenforceable.
4 19 Sec. 8. EFFECTIVE DATE. This Act, being deemed of
4 20 immediate importance, takes effect upon enactment.
4 21 EXPLANATION
4 22 This bill amends provisions affecting franchises of motor
4 23 fuel. A franchise is a contract between persons who sell and
4 24 purchase motor fuel, including refiners, distributors, and
4 25 retailers.
4 26 The bill amends Code chapter 214A, which provides authority
4 27 to the department of agriculture and land stewardship which
4 28 regulates motor fuel.
4 29 The bill amends Code section 214A.1 by providing
4 30 definitions for "E=85 gasoline", "ethanol", and "ethanol
4 31 blended gasoline". It also amends Code section 214A.2, which
4 32 provides for different types of gasoline and establishes
4 33 standards or specifications for gasoline. The bill amends the
4 34 section to require that ethanol blended gasoline contain a
4 35 blend of at least 10 percent ethanol. It designates gasoline
5 1 with a minimum seasonal blend of between 75 and 85 percent or
5 2 more ethanol as E=85 blended gasoline.
5 3 Code section 323A.2 provides that when there is a hardship
5 4 in a community served by a franchisee, and the franchisor
5 5 cannot honor a request to deliver motor fuel to the
5 6 franchisee, the franchisee may obtain the motor fuel from
5 7 another source. This bill provides that when a contract is
5 8 entered into or renewed, it must provide for the delivery of
5 9 volumes of E=85 gasoline at times demanded by the franchisee
5 10 or it must allow the franchisee to purchase those volumes of
5 11 E=85 gasoline at those times from another source. However, if
5 12 the contract does not have an expiration date, and the
5 13 franchisor cannot provide for the delivery of E=85 gasoline,
5 14 the franchisee may immediately obtain the E=85 gasoline from
5 15 another source, without regard to the contract.
5 16 The bill provides that if the franchisee obtains the E=85
5 17 gasoline from another source, the franchisee must provide
5 18 notice to the public of its source. The franchisee must fully
5 19 indemnify the franchisor against any claims for liability
5 20 arising out of the use of the E=85 gasoline which was
5 21 delivered by another source.
5 22 The bill provides that a franchisor cannot terminate a
5 23 contract based on a franchisee's purchase of E=85 gasoline in
5 24 accordance with the bill's provisions. The bill also provides
5 25 that a term of a contract that is inconsistent with the bill
5 26 is void.
5 27 The bill takes effect upon enactment.
5 28 LSB 6322HH 81
5 29 da:rj/je/5