House File 2559 - Introduced



                             HOUSE FILE       
                             BY  COMMITTEE ON AGRICULTURE

                             (SUCCESSOR TO HF 2422)


    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 6322HV 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 6322HV 81
  5 29 da:rj/je/5