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