AN ACT CONCERNING THE FAIR PRICING OF GASOLINE.

With a few exceptions, this bill prohibits, businesses furnishing gasoline to resellers or retail gas stations from setting prices based on geographic location or using a system preventing them from setting equal prices across the state. The exceptions are price modifications for transportation costs, volume discounts, and loans or financial accommodations to a station.

The bill requires businesses furnishing gasoline to maintain written or electronic records for at least five years and allows the Department of Consumer Protection (DCP) commissioner or the attorney general to inspect them. The records must include the dates and times of sales, names of sellers and purchasers, delivery or purchase locations, and volume discounts.

The bill authorizes the attorney general to bring a civil action against violators to recover civil penalties up to $ 25,000 per violation and equitable relief.

The bill also sets parameters allowing gasoline suppliers to adjust their prices during an “abnormal market disruption,” allowing sellers to price their product during the disruption so that the seller's margin is less than or equal to the margin in the 90 days before the disruption. An “abnormal market disruption” refers to any stress to an energy resource market resulting from weather conditions, acts of nature, failure or shortage of a source of energy, strike, civil disorder, war, national or local emergency, oil spill, or other extraordinary adverse circumstance.

EFFECTIVE DATE: July 1, 2009, except for the section on abnormal market disruption, which is effective on October 1, 2009.

This bill prohibits businesses furnishing gasoline to resellers or retail gas stations from using a pricing system based on geographic location or any system preventing resellers or retail gas stations from paying prices on an equal basis with the rest of the state. The bill defines a reseller as an individual, partnership, corporation, limited liability company (LLC), association, or entity. It includes manufacturers, refiners, suppliers, wholesalers, haulers, blenders, agents, jobbers, and distributers supplying gasoline for resale to consumers in the state. A retail gas station is defined as an individual, partnership, corporation, LLC, association, or other entity selling gasoline directly to customers from a fixed location.

Gasoline suppliers may not discriminate on price except to recover transportation costs. But they may offer volume discounts for specialized volumes offered equally to all resellers or retail gas stations meeting or exceeding the specified volume. These discounts must be disclosed in writing and the discount, specified sales volume, and time period of the discount must be included as a separate line item on invoices.

The bill sets conditions under which resellers can modify prices charged to retail gas stations, specifically if (1) the reseller is providing a loan or financial accommodation to the station, (2) the loan or accommodation is financed through the modified price, and (3) the modified price solely and directly correlates to the loan. The parties must document in writing (1) the terms and purpose of the loan or accommodation, (2) evidence the purpose was fulfilled, (3) the price of gas if the loan or accommodation had not been made, and (4) the price paid because the loan was made.

The bill also requires anyone in the business of furnishing gasoline to resellers or retail gas stations to keep and maintain written or electronic records for inspection by the attorney general or the DCP commissioner upon written request. Failure to supply the records within five days may result in a civil penalty of $ 1,000 per day, which the attorney general may petition to recovery. The records must include, at least, the date and time of sales, names of the seller and purchaser, delivery or purchase location, and volume discount details for at least five years. The records are confidential and proprietary trade secrets and may only be released by court order or written consent of the person who kept and maintained the records.

The bill authorizes the attorney general to bring a civil action against violators to recover civil penalties up to $ 25,000 per violation and equitable relief the court considers appropriate.

Under current law, sellers may not sell gasoline for an unconscionably excessive price during a period of abnormal market disruption or reasonably anticipated period of abnormal disruption. Prima facie evidence that a price is unconscionably excessive exists where the price is grossly disparate to the price in the usual course of business immediately before the disruption or anticipated disruption started, and the price is not attributable to the seller's costs related to sale of the product. Under this bill, a seller does not violate this prohibition if, in offers to sell gasoline during or in anticipation of a market disruption, the seller's margin is less than or equal to the seller's margin in the 90 days before the onset of the disruption. The bill defines “margin” as the excess percentage of a motor gasoline seller's selling price over the price the seller paid.

Yea

Nay

(03/05/2009)