You asked for a summary of the attorney general's proposal concerning gasoline zone pricing and for a comparison of the proposal to earlier zone pricing proposals.

SUMMARY

The attorney general's 2002 proposal prohibits anyone supplying gasoline to retailers from establishing a pricing system based on geography or from discriminating in price among retailers except for (1) transportation costs and (2) volume discounts. This approach differs from gasoline zone pricing bills considered in 1997, 1998, and 2001.

In 1997 the General Law Committee raised a bill that would have prohibited price zones. It did not specifically account for price differences caused by transportation costs or volume discounts. The committee favorably reported a bill that would have allowed price zones but limited the maximum price difference between a supplier's zones to five cents. Bills similar to the bill reported by the committee were considered again in 1998 and 2001.

ATTORNEY GENERAL'S 2002 PROPOSAL

The bill (HB 5253) prohibits anyone supplying gasoline to retailers from (1) using a pricing system under which the wholesale price is based on the retailer's location in a price zone established by the supplier or (2) discriminating in the price charged to retailers except for the supplier's charges for transportation and for volume discounts. The bill requires such suppliers to provide retailers with an invoice that includes the base cost per gallon, the transportation cost, taxes, and any other additional costs. It requires suppliers to give retailers an invoice within 20 days after delivery.

1997 BILL

The General Law Committee raised and reported a gasoline zone pricing bill in 1997 (HB 6636). The raised bill would have prohibited anyone supplying gasoline to retailers from establishing price zones. The substitute bill favorably reported by the committee would have prohibited anyone supplying gasoline to retailers from charging retailers located in one price zone more than five cents more for a gallon of gasoline than charged a retailer located in another price zone.

1998 BILL

The General Law Committee raised, but did not report, a gasoline zone pricing bill in 1998 (HB 5441). The bill specifically allowed anyone supplying gasoline to retailers to establish price zones and prohibited such suppliers from charging retailers located in one price zone more than five cents more for a gallon of gasoline than charged a retailer located in another price zone.

The bill was similar to the bill favorably reported by the General Law Committee in 1997.

2001 BILL

The General Law Committee raised, but did not report, a gasoline zone pricing bill in 2001 (HB 6618). The bill specifically allowed anyone supplying gasoline to retailers to establish price zones and prohibited such suppliers from charging retailers located in one price zone more than five cents more for a gallon of gasoline than charged a retailer located in another price zone.

The bill was similar to the bill favorably reported by the General Law Committee in 1997 (sHB6636) and the bill raised in 1998 (HB 5441).

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