Petroleum Marketing Competition Enhancement Act

Petroleum Marketing Competition Enhancement Act - Amends the Petroleum Marketing Practices Act to prohibit a refiner from: (1) selling motor fuel to a customer for resale (customer) at a price higher than the refiner's adjusted retail price for the same or a similar grade or quality of motor fuel sold from a direct operated outlet in the same geographic area (sale of fuel at higher prices); and (2) entering into a scheme or agreement to set, change, or maintain maximum retail prices of motor fuel, except with respect to a refiner's retail sales at its direct operated outlets.

Requires that: (1) in comparing a refiner's adjusted retail price to a refiner's price to other customers, adjustments be made to account for differences in freight, taxes, and inspection fees, whether or not the items are separately listed as part of the price; and (2) if a refiner includes consumer credit as part of its price, an adjustment for the cost of such credit be made in comparing the prices.

Sets forth enforcement provisions, including: (1) proceedings by the Attorney General (establishes fines ranging from $5,000 to $25,000 for each violation, and authorizes civil actions and equitable relief); (2) private civil actions, including class actions, (and establishes a right to jury trial); and (3) proceedings by State attorneys general.

Allows a person bringing an action to enforce provisions concerning the sale of fuel at higher prices to establish a prima facie case by showing that the refiner has sold motor fuel to a customer at a price that is higher than: (1) 94 percent of its consumer retail price per gallon (or, in the event of a sale to a branded wholesaler, 90 percent); or (2) the refiner's consumer retail price per gallon less the most recently available average retail operating expenses per gallon (and, in the event of a sale by a refiner to a branded wholesaler, also less the most recently available average wholesale operating expenses per gallon for the State in which the consumer retail price was charged).

Specifies that: (1) in the event that the relevant State has not conducted an annual survey (pursuant to this Act) to determine the average retail or average wholesale operating expenses, the average operating expenses for the retail and wholesale petroleum industry, as determined by the Secretary of Energy, shall be used; and (2) such prima facie case may be overcome by a preponderance of evidence that the refiner's actual retail and average wholesale operating expenses, if applicable, are less than the evidence presented by the plaintiff to establish such prima facie case.

Directs the Secretary to conduct an annual survey to determine the average retail and average wholesale operating expenses per gallon for the petroleum industry.

Permits a State or State agency to authorize an annual State survey to reflect local conditions with respect to motor fuels sold to the public in that State. Directs that any such survey regarding: (1) retail operating expenses and actual wholesale operating expenses be based upon all direct and indirect expenses attributable to the sale of a gallon of motor fuel to the public by direct and nondirect operated outlets; and (2) wholesale operating expenses be based on all direct and indirect expenses attributable to the wholesale sale of a gallon of motor fuel by a refiner or a branded wholesaler to a branded dealer.

 
HR 2966 IH
102d CONGRESS
1st Session
 H. R. 2966
To amend the Petroleum Marketing Practices Act.
IN THE HOUSE OF REPRESENTATIVES
July 22, 1991
Mr. SYNAR (for himself, Mr. LENT, Mr. BLILEY, and Mr. COOPER) introduced
the following bill; which was referred jointly to the Committees on Energy
and Commerce and the Judiciary
A BILL
To amend the Petroleum Marketing Practices Act.
  Be it enacted by the Senate and House of Representatives of the United
  States of America in Congress assembled,
SECTION 1. SHORT TITLE.
  This Act may be cited as the `Petroleum Marketing Competition Enhancement
  Act'.
SEC. 2. PROHIBITED MARKETING PRACTICES.
  The Petroleum Marketing Practices Act (15 U.S.C. 2801 et seq.) is amended
  by adding at the end the following new title:
`TITLE IV--MOTOR FUEL
`SEC. 401. PROHIBITED MARKETING PRACTICES.
  `(a) It shall be unlawful for a refiner to sell motor fuel, to any customer
  for resale, at a price which is higher than the refiner's adjusted retail
  price for the same or similar grade or quality of motor fuel sold from a
  direct operated outlet in the same geographic area.
  `(b) It shall be unlawful for a refiner to enter into any scheme or
  agreement to set, change, or maintain maximum retail prices of motor fuel,
  except that this subsection shall not apply to a refiner's retail sales
  at its direct operated outlets.
`SEC. 402. DEFINITIONS.
  `As used in this title:
  `(1) The term `agreement' means any oral or written contract, combination,
  conspiracy, arrangement, or other similar understanding.
  `(2) The term `adjusted retail price' means the consumer retail price per
  gallon of motor fuel sold from a direct operated outlet less the refiner's
  average retail operating expenses per gallon of motor fuel sold from such
  direct operated outlet, and in the event of a sale by the refiner to a
  branded wholesaler, also less the refiner's average wholesale operating
  expenses attributable to the wholesale sale of a gallon of motor fuel to
  its branded dealers in the same geographic area. In comparing a refiner's
  adjusted retail price to a refiner's price to other customers for resale,
  adjustments shall be made to account for differences in freight, taxes,
  and inspection fees, whether or not such items are separately listed as
  part of the price. If a refiner includes consumer credit as part of its
  price, then an adjustment for the cost of consumer credit shall be made
  in comparing these prices.
  `(3) The term `affiliate' means any person who (by means of direct or
  indirect authority of a person to vote more than 50 percent of the voting
  stock or partnership interest in any other person) controls, is controlled
  by, or is under common control with any other person.
  `(4) The term `branded dealer' means any retailer who purchases motor
  fuel from a refiner under an arrangement whereby the refiner permits the
  retailer to market such motor fuel under a trademark owned or controlled
  by the refiner.
  `(5) The term `branded wholesaler' means any person who purchases motor
  fuel from a refiner for resale to a retailer under an arrangement whereby
  the refiner permits such person or retailer to market the motor fuel under
  a trademark owned or controlled by the refiner.
  `(6) The term `consumer retail price' means the price per gallon at which
  motor fuel is sold to the public at a direct operated outlet. If motor fuel
  is sold or offered to the public at one price for cash transactions and
  at another price for credit transactions, the consumer retail price shall
  mean the lower of such prices, adjusted for the cost of consumer credit. If
  motor fuel is sold with another item or service at a combined price, then
  the consumer retail price shall be adjusted to include the price per gallon
  of any such item or service less the cost per gallon of such item or service.
  `(7) The term `cost' of any item or service sold at a combined price
  with motor fuel means all direct and indirect expenses attributable to
  the acquisition and retail sale of such item or service by the direct
  operated outlet.
  `(8) The term `cost of consumer credit' with respect to motor fuel or
  other items and services sold by credit means the lesser of--
  `(A) 4 percent of the sales price of such goods sold by credit; or
  `(B) all direct and indirect expenses of the direct operated outlet
  attributable to the use of credit with respect to such sale.
  `(9) The term `cost of wholesale credit' with respect to motor fuel sold
  by credit to a branded dealer means the lesser of--
  `(A) 2 percent of the sales price of such motor fuel; or
  `(B) the average of all direct and indirect expenses of the refiner
  attributable to the use of credit with respect to a sale by the refiner
  to all of its branded dealers.
  `(10) The term `customer for resale' means any person who purchases motor
  fuel for the purpose of reselling such motor fuel to another person.
  `(11) The term `direct and indirect expenses' means, without limitation,
  labor costs, fair market rental value, repair and maintenance, utilities,
  supplies, property taxes, other third-party payments, sales and promotional
  costs, advertising, inventory shrinkage, and accounts servicing.
  `(12) The term `direct operated outlet' means any service facility at
  which the employees are subject to the Federal Insurance Contributions Act
  (26 U.S.C. 3101 et seq.) paid by the refiner or an affiliate of the refiner.
  `(13) The term `fair market rental value' means the amount of rent which
  would be paid in a transaction negotiated by unrelated parties for the use
  of the specific direct operated outlet utilized for the sale of motor fuel.
  `(14) The term `freight' means the per gallon rate at which a third party,
  unaffiliated petroleum carrier will deliver motor fuel in tank truck
  quantities. Said rate shall be established by reference to a published
  common carrier rate within the particular geographic area.
  `(15) The term `inventory shrinkage' means all losses of inventory from
  whatever cause or source including theft by suppliers, employees, or
  customers, contamination, drive-offs, or evaporation.
  `(16) The term `motor fuel' means gasoline and diesel fuel of a type
  distributed for use as a fuel in self-propelled vehicles designed primarily
  for use on public streets, roads, and highways.
  `(17) The term `person' means any individual, firm, partnership, corporation,
  municipal corporation, public corporation, or trade association.
  `(18) The term `refiner' means any person engaged in the refining of crude
  oil to produce motor fuel and includes any affiliate of such person.
  `(19) The term `retail operating expenses' means all direct and indirect
  expenses attributable to the retail sale of a gallon of motor fuel from
  a direct operated outlet.
  `(20) The term `retailer' means any person who purchases motor fuel for
  sale to the general public for ultimate consumption.
  `(21) The term `sale' or `sell' means any transfer, gift, sale, offer for
  sale, or advertisement for sale in any manner or by any means whatsoever,
  including product exchanges.
  `(22) The term `same geographic area' means the area served by any terminal
  from which a direct operated outlet obtains its motor fuel or any terminal
  within a commercially reasonable distance of such outlet.
  `(23) The term `same or similar grade or quality of motor fuel' means
  motor fuel containing an additive which does not change the octane or
  cetane rating of such product by more than 1 point.
  `(24) The term `scheme' means any threat, intimidation, communication,
  boycott, pattern of action, inducement, or coercion.
  `(25) The term `trademark' means any trademark, tradename, servicemark,
  or other identifying symbol or name.
  `(26) The term `wholesale operating expenses' means the direct and indirect
  expenses, and the cost of wholesale credit, attributable to the sale of a
  gallon of motor fuel by a refiner or a branded wholesaler to its branded
  dealers.
`SEC. 403. ENFORCEMENT.
  `(a) PROCEEDINGS BY THE ATTORNEY GENERAL OF THE UNITED STATES-
  `(1) Any person who shall violate section 401(a) shall forfeit and pay to the
  United States a penalty of not more than $5,000 for each such violation. Any
  refiner who shall violate section 401(b) shall forfeit and pay to the
  United States a penalty of $25,000 for each such violation. The Attorney
  General may bring a civil action under this subsection in any district
  court of the United States in which the defendant resides or has an agent.
  `(2) The several district courts of the United States are hereby vested
  with jurisdiction to prevent and restrain violation of this title. In any
  action under this subsection, the court shall grant such equitable relief
  as the court determines is necessary to remedy the effects of any violation;
  including declaratory judgment, mandatory or prohibitive injunctive relief,
  and interim equitable relief.
  `(b) MAINTENANCE OF PRIVATE CIVIL ACTION-
  `(1) Any person who shall be injured in his business or property by reason
  of anything prohibited by this title may sue therefore acting either in an
  individual capacity or as a member of a class in any district court of the
  United States in the district in which the defendant resides or has an agent.
  `(2) Any person shall be entitled to sue for and have injunctive relief,
  in any court of the United States having jurisdiction over the parties,
  against threatened loss or damage by a violation of section 401. In any
  action under paragraph (1) of this subsection, the court shall grant such
  equitable relief as the court determines is necessary to remedy the effects
  of any violation; including declaratory judgment, mandatory or prohibitive
  injunctive relief, and interim equitable relief.
  `(3) For the purposes of section 401(a), any person who purchases motor
  fuel in an unlawful sale under this title shall be deemed injured in his
  business or property.
  `(4) No person shall be precluded from bringing suit under paragraph (1) or
  (2) of this subsection on grounds that he is a competitor of the defendant,
  or that no injury to competition has occurred.
  `(5) If the claimant in any action under paragraph (1) or (2) of this
  subsection prevails, he shall recover--
  `(A) the greater of--
  `(i) threefold the actual damages by him sustained to include, but not be
  limited to, the difference between the actual price paid by him and the
  lawful price; or
  `(ii) the sum of $5,000 for each violation; and
  `(B) the cost of suit, including reasonable attorneys' fees and expert
  witness fees.
  `(c) PROCEEDINGS BY STATE ATTORNEYS GENERAL-
  `(1) The attorney general of any State of the United States may bring
  a civil action in the name of such State, as parens patriae on behalf
  of persons residing in such State, in any district court of the United
  States having jurisdiction over the defendant to secure monetary relief as
  provided in subsection (b) for injury sustained by such persons to their
  business or property by reason of any violations of section 401.
  `(2)(A) Any refiner who shall violate section 401(a) shall forfeit and
  pay to each State of the United States where such violation has occurred a
  penalty of $1,000 for each such violation and an additional $5,000 for each
  such violation which occurs more than 3 business days after the refiner's
  receipt of a notice of probable violation related thereto from the attorney
  general of such State.
  `(B) Any refiner who shall violate section 401(b) shall forfeit and pay
  to each State of the United States where such violation has occurred,
  a penalty of $25,000 for each violation and an additional $5,000 per day
  for each day such violation continues more than 3 business days after the
  refiner's receipt of a notice of probable violation related thereto from
  the attorney general of such State.
  `(C) The attorney general of any State may bring a civil action under this
  paragraph in any district court of the United States or any appropriate
  State court having jurisdiction over the defendant. In any action under
  this paragraph, the court shall grant such equitable relief as the court
  determines is necessary to remedy the effects of any violation; including
  declaratory judgment, mandatory or prohibitive injunctive relief, and
  interim equitable relief.
  `(3) After determination by the attorney general of any State of the United
  States of a probable violation of this title in such State by a refiner, the
  attorney general may, but shall not be obligated to, send written notice of
  such probable violation to the refiner. Neither the failure of any attorney
  general to give notice under this paragraph nor any lack of adequacy of
  such notice shall affect the right of any attorney general to maintain a
  proceeding under this subsection or to collect the damages set forth herein.
  `(d) ESTABLISHMENT OF PRIMA FACIE CASE-
  `(1) Any person bringing an action to enforce the provisions of section
  401(a) may establish a prima facie case that a refiner has violated such
  provision by establishing that the refiner has sold motor fuel to a customer
  for resale, at a price which is higher than--
  `(A) 94 percent of its consumer retail price per gallon;
  `(B) in the event of a sale to a branded wholesaler, 90 percent of its
  consumer retail price per gallon; or
  `(C) the refiner's consumer retail price per gallon less the most recently
  available average retail operating expenses per gallon and, in the event of
  a sale by a refiner to a branded wholesaler, also less the most recently
  available average wholesale operating expenses per gallon for the State
  in which the consumer retail price was charged.
In the event that the relevant State has not conducted an annual survey under
section 404 to determine such average retail operating expenses or such
average wholesale operating expenses, then the average operating expenses
for the retail petroleum industry and the wholesale petroleum industry,
as determined by the Secretary of Energy, shall be used instead.
  `(2) The average retail operating expenses and average wholesale operating
  expenses for the petroleum industry shall be established as set forth in
  this subsection.
  `(3) Such prima facie case may be overcome by a preponderance of evidence
  that the refiner's actual retail operating expenses and average wholesale
  operating expenses, if applicable, are less than the evidence presented
  by the plaintiff to establish such prima facie case.
  `(e) JURY TRIAL- In any action brought under subsection (b)(1) of this
  section there shall be a right of trial by jury.
`SEC. 404. ANNUAL SURVEY.
  `The Secretary of Energy shall conduct an annual survey to determine the
  average retail operating and average wholesale operating expenses per gallon
  for the petroleum industry. Any State or any agency thereof may authorize
  an annual State survey to reflect local conditions with respect to motor
  fuels sold to the public in that State. Any such survey with respect to
  retail operating expenses and actual wholesale operating expenses shall
  be based upon all direct and indirect expenses attributable to the sale
  of a gallon of motor fuel to the public by direct operated outlets and
  by nondirect operated outlets. Any such survey with respect to wholesale
  operating expenses shall be based upon all direct and indirect expenses
  attributable to the wholesale sale of a gallon of motor fuel by a refiner
  or a branded wholesaler to a branded dealer.
`SEC. 405. CONSTRUCTION.
  `This title shall be construed liberally so that its purposes may be
  served.'.
SEC. 3. CONFORMING AMENDMENT.
  The table of contents for the Petroleum Marketing Practices Act (15
  U.S.C. 2801 note) is amended by adding at the end the following new items:
`TITLE IV--MOTOR FUEL
`Sec. 401. Prohibited Marketing Practices.
`Sec. 402. Definitions.
`Sec. 403. Enforcement.
`Sec. 404. Annual Survey
`Sec. 405. Construction.'.
SEC. 4. EFFECTIVE DATE.
  The amendments made by this Act shall become effective 30 days after the
  date of the enactment of this Act.