By: Junell H.B. No. 863 73R2542 LJD-F A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to the marketing of motor fuel; providing penalties. 1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-4 SECTION 1. Title 2, Business & Commerce Code, is amended by 1-5 adding Chapter 20 to read as follows: 1-6 CHAPTER 20. MOTOR FUEL MARKETING 1-7 SUBCHAPTER A. GENERAL PROVISIONS 1-8 Sec. 20.01. DEFINITIONS. In this chapter: 1-9 (1) "Actual cost" means the cost incurred by a person 1-10 in acquiring motor fuel for purposes of sale at the person's 1-11 service facility, computed on a per gallon basis, plus: 1-12 (A) applicable taxes and fees paid per gallon by 1-13 the person to the state, the United States, or another governmental 1-14 agency or instrumentality; and 1-15 (B) transportation costs paid by the person per 1-16 gallon for the motor fuel sold. 1-17 (2) "Distribution point" means a facility at which 1-18 petroleum products are sold or transferred to distributors for 1-19 further distribution by transport vehicle or cargo tanker. The 1-20 term includes a pipeline or barge terminal, refinery, and railcar 1-21 loading rack. 1-22 (3) "Distributor" means a person engaged in the sale 1-23 of motor fuel to a retailer at wholesale, a commercial end-user in 1-24 bulk quantities, or another person who engages in those sales. The 2-1 term does not include a refinery selling directly or through a 2-2 broker to a person who sells the motor fuel to the public at a 2-3 service facility. 2-4 (4) "Motor fuel" means gasoline and diesel fuel of a 2-5 type distributed for use as a fuel in self-propelled vehicles 2-6 designed primarily for use on public streets, roads, and highways. 2-7 (5) "Retail price" means the price per gallon at which 2-8 motor fuel is sold to the public at a service facility. If the 2-9 motor fuel is sold or offered at different prices for a cash 2-10 transaction than for a credit transaction, the retail price is the 2-11 lower of the prices, adjusted for the cost of consumer credit. If 2-12 the motor fuel is sold with another item or service at a combined 2-13 price, the retail price is the price per gallon adjusted to include 2-14 an amount that reflects the price per gallon of the other item or 2-15 service less the cost per gallon of the item or service. 2-16 (6) "Sale" includes a transfer, gift, product 2-17 exchange, and offer or advertisement for sale made in any manner or 2-18 by any means. 2-19 (7) "Service facility" means a facility at which motor 2-20 fuel is sold to the public, including motorists or other end-users. 2-21 (8) "Transfer price" means a price equal to: 2-22 (A) the price a person charges for motor fuel 2-23 sold to a distributor at the distribution point nearest to the 2-24 person's service facility; or 2-25 (B) if a person does not sell motor fuel to 2-26 distributors, the average selling price for motor fuel sold to 2-27 distributors at the distribution point nearest to the person's 3-1 service facility, computed without including the highest and lowest 3-2 selling price for distributors at that distribution point. 3-3 (9) "Transportation cost" means the cost of 3-4 transporting motor fuel by a highway vehicle as prescribed by a 3-5 common carrier tariff of the Railroad Commission of Texas. 3-6 Sec. 20.02. PRESUMED COST. (a) The presumed cost per 3-7 gallon of motor fuel is an amount equal to: 3-8 (1) the transfer price per gallon of motor fuel of the 3-9 same or similar grade or quality as the motor fuel for which the 3-10 presumption is made at the distribution point closest to the 3-11 service facility from which, and on the date that, the motor fuel 3-12 for which the presumption is made was sold; 3-13 (2) applicable taxes and fees paid per gallon required 3-14 to be paid to the state, the United States, or another governmental 3-15 agency or instrumentality; and 3-16 (3) the transportation cost per gallon for the motor 3-17 fuel. 3-18 (b) For the purpose of this section, motor fuel is of the 3-19 same or similar grade or quality if one motor fuel contains an 3-20 additive that does not change its octane or cetane rating to more 3-21 than one point above the rating of the other. 3-22 Sec. 20.03. LIBERAL CONSTRUCTION. This chapter is remedial 3-23 legislation and shall be liberally construed. 3-24 (Sections 20.04-20.10 reserved for expansion 3-25 SUBCHAPTER B. PROHIBITED MARKETING 3-26 PRACTICES; ENFORCEMENT 3-27 Sec. 20.11. PROHIBITED MARKETING PRACTICES; DEFENSES. (a) 4-1 A person may not engage in the sale of motor fuel at a service 4-2 facility at a retail price that is less than the person's presumed 4-3 cost if the person's intent or the effect of the sale is to injure 4-4 a competitor or destroy competition. 4-5 (b) It is a defense to an action brought under this chapter 4-6 that the sale was made: 4-7 (1) as part of a promotional activity ending not later 4-8 than the 30th day after the date of the seller's initial market 4-9 area entry; 4-10 (2) in an isolated transaction and not in the usual 4-11 course of business; 4-12 (3) as part of a complete final liquidation of a 4-13 business; 4-14 (4) for charitable purposes; 4-15 (5) in a good faith effort to meet the equally low or 4-16 lower legal price of a competitor; or 4-17 (6) at a retail price greater than the defendant's 4-18 actual cost. 4-19 (c) A person is presumed to be a competitor for purposes of 4-20 Subsection (b)(5) of this section if the person sells motor fuel at 4-21 a service facility located within a radius of one mile from the 4-22 service facility at which a sale in violation of Subsection (a) of 4-23 this section is alleged to have been made. This presumption may be 4-24 rebutted by clear and convincing evidence of a larger relevant 4-25 competitive market for motor fuel than the one described by this 4-26 subsection. 4-27 Sec. 20.12. CIVIL PENALTY. A person who violates this 5-1 chapter is liable to the state for a civil penalty of not more than 5-2 $5,000 for each sale in violation. The attorney general may sue to 5-3 collect the penalty. 5-4 Sec. 20.13. PRIVATE ACTION FOR DAMAGES. A person who 5-5 violates this chapter is liable to a person, including a 5-6 competitor, injured in the person's business or property for: 5-7 (1) actual damages; 5-8 (2) an amount equal to the greater of: 5-9 (A) three times the actual damages sustained by 5-10 the claimant; or 5-11 (B) the sum of $5,000 for each sale in violation 5-12 of this chapter; 5-13 (3) court costs; and 5-14 (4) reasonable attorney's fees and expert witness 5-15 fees. 5-16 Sec. 20.14. ADDITIONAL EQUITABLE RELIEF. The attorney 5-17 general or a person threatened with loss or damage by a violation 5-18 of this chapter may sue for and obtain injunctive relief under this 5-19 chapter. The court may grant equitable relief as the court 5-20 determines necessary to remedy the effects of a violation, 5-21 including a declaratory judgment, mandatory or prohibitive 5-22 injunctive relief, and interim equitable relief. 5-23 SECTION 2. This Act applies only to sales of motor fuel that 5-24 occur on or after the effective date of this Act. 5-25 SECTION 3. The importance of this legislation and the 5-26 crowded condition of the calendars in both houses create an 5-27 emergency and an imperative public necessity that the 6-1 constitutional rule requiring bills to be read on three several 6-2 days in each house be suspended, and this rule is hereby suspended, 6-3 and that this Act take effect and be in force from and after its 6-4 passage, and it is so enacted.