By: Parker S.B. No. 1412
A BILL TO BE ENTITLED
AN ACT
1-1 relating to motor fuel marketing and prohibited business practices,
1-2 providing exemptions.
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 refiner
1-10 in acquiring motor fuel for purposes of sale at the refiner's
1-11 retail facility, computed on a per gallon basis, plus:
1-12 (A) applicable taxes and fees paid per gallon by
1-13 the refiner to the state, the United States, or another
1-14 governmental agency or instrumentality; and
1-15 (B) transportation costs paid by the refiner per
1-16 gallon for the motor fuel sold.
1-17 (2) "Affiliate" means any person who (by means of
1-18 direct or indirect authority of a person to vote more than 50% of
1-19 the voting stock or a partnership interest in any other person)
1-20 controls, is controlled by or is under common control with any
1-21 other person.
1-22 (3) "Distribution point" means a facility at which
1-23 petroleum products are sold or transferred to distributors for
2-1 further distribution by transport vehicle or cargo tanker. The
2-2 term includes a pipeline or barge terminal, refinery, and railcar
2-3 loading rack.
2-4 (4) "Distributor" means a person engaged in the sale
2-5 of motor fuel to a retailer at wholesale, a commercial end-user in
2-6 bulk quantities, or another person who engages in those sales. The
2-7 term does not include a refinery selling directly or through a
2-8 broker to a person who sells the motor fuel to the public at a
2-9 retail facility.
2-10 (5) "Motor fuel" means gasoline and diesel fuel of a
2-11 type distributed for use as a fuel in self-propelled vehicles
2-12 designed primarily for use on public streets, roads, and highways.
2-13 (6) "Refiner" means any person engaged in the refining
2-14 of crude oil to produce motor fuel and includes any affiliate of
2-15 such person.
2-16 (7) "Retail price" means the price per gallon at which
2-17 motor fuel is sold to the public at a retail facility. If the
2-18 motor fuel is sold or offered at different prices for a cash
2-19 transaction than for a credit transaction, the retail price is the
2-20 lower of the prices, adjusted for the cost of consumer credit. If
2-21 the motor fuel is sold with another item or service at a combined
2-22 price, the retail price is the price per gallon adjusted to include
2-23 an amount that reflects the price per gallon of the other item or
2-24 service less the cost per gallon of the item or service.
2-25 (8) "Sale" includes a transfer, gift, product
3-1 exchange, and offer or advertisement for sale made in any manner or
3-2 by any means.
3-3 (9) "Retail facility" means a facility at which motor
3-4 fuel is sold to the public, including motorists or other end-users.
3-5 (10) "Transfer price" means a price equal to:
3-6 (A) the price a refiner charges for motor fuel
3-7 sold to a distributor at the distribution point nearest to the
3-8 refiner's retail facility; or
3-9 (B) if a refiner does not sell motor fuel to
3-10 distributors, the average selling price for motor fuel sold to
3-11 distributors at the distribution point nearest to the refiner's
3-12 retail facility, computed without including the highest and lowest
3-13 selling price for distributors at that distribution point.
3-14 (11) "Transportation cost" means the cost of
3-15 transporting motor fuel by a highway vehicle as prescribed by a
3-16 common carrier tariff of the Railroad Commission of Texas.
3-17 Sec. 20.02. PRESUMED COST. (a) The presumed cost per
3-18 gallon of motor fuel is an amount equal to:
3-19 (1) the transfer price per gallon of motor fuel of the
3-20 same or similar grade or quality as the motor fuel for which the
3-21 presumption is made at the distribution point closest to the retail
3-22 facility from which, and on the date that, the motor fuel for which
3-23 the presumption is made was sold;
3-24 (2) applicable taxes and fees paid per gallon required
3-25 to be paid to the state, the United States, or another governmental
4-1 agency or instrumentality; and
4-2 (3) the transportation cost per gallon for the motor
4-3 fuel.
4-4 (b) For the purpose of this section, motor fuel is of the
4-5 same or similar grade or quality if one motor fuel contains an
4-6 additive that does not change its octane or cetane rating to more
4-7 than one point above the rating of the other.
4-8 Sec. 20.03. LIBERAL CONSTRUCTION. This chapter is remedial
4-9 legislation and shall be liberally construed to promote its purpose
4-10 of enhancing competition in motor fuel markets in the State of
4-11 Texas by making unlawful certain sales below cost.
4-12 (Sections 20.04-20.10 reserved for expansion
4-13 SUBCHAPTER B. PROHIBITED MARKETING
4-14 PRACTICES; ENFORCEMENT
4-15 Sec. 20.11. PROHIBITED MARKETING PRACTICES; DEFENSES.
4-16 (a) A refiner may not engage in the sale of motor fuel at a retail
4-17 facility operated by such refiner at a retail price that is less
4-18 than the refiner's presumed cost if the refiner's intent or the
4-19 effect of the sale is to injure a competitor or destroy
4-20 competition.
4-21 (b) It is a defense to an action brought under this chapter
4-22 that the sale was made:
4-23 (1) as part of a promotional activity ending not later
4-24 than the 30th day after the date of the refiner's initial market
4-25 area entry;
5-1 (2) in an isolated transaction and not in the usual
5-2 course of business;
5-3 (3) as part of a complete final liquidation of a
5-4 business;
5-5 (4) for charitable purposes;
5-6 (5) in a good faith effort to meet the equally low or
5-7 lower legal price of a competitor; or
5-8 (6) at a retail price greater than the refiner's
5-9 actual cost.
5-10 (c) A refiner asserting a defense set forth in Subsection
5-11 (b)(5) of this section shall bear the burden of establishing by a
5-12 preponderance of the evidence that any other person is a competitor
5-13 for purposes of the defense. Where, however, the refiner asserting
5-14 the defense establishes that it sold motor fuel at a price
5-15 established to meet the equally low or lower retail price of a
5-16 retail facility located within a radius of two miles of such sale,
5-17 the defense set forth in Subsection (b)(5) of this section shall be
5-18 conclusively established as a matter of law.
5-19 Sec. 20.12. PRIVATE ACTION FOR DAMAGES. A refiner who
5-20 violates this chapter is liable to a person, including a
5-21 competitor, injured in the person's business or property for:
5-22 (1) actual damages;
5-23 (2) an amount equal to three times the actual damages
5-24 sustained by the claimant for willful violations;
5-25 (3) court costs; and
6-1 (4) reasonable attorney's fees and expert witness
6-2 fees.
6-3 Sec. 20.13. ADDITIONAL EQUITABLE RELIEF. A person
6-4 threatened with loss or damage by a violation of this chapter may
6-5 sue for and obtain injunctive relief under this chapter. The court
6-6 may grant equitable relief as the court determines necessary to
6-7 remedy the effects of a violation, including a declaratory
6-8 judgment, mandatory or prohibitive injunctive relief, and interim
6-9 equitable relief.
6-10 SECTION 2. This Act applies only to sales of motor fuel that
6-11 occur on or after the effective date of this Act.
6-12 SECTION 3. The importance of this legislation and the
6-13 crowded condition of the calendars in both houses create an
6-14 emergency and an imperative public necessity that the
6-15 constitutional rule requiring bills to be read on three several
6-16 days in each house be suspended, and this rule is hereby suspended,
6-17 and that this Act take effect and be in force from and after its
6-18 passage, and it is so enacted.