BILL ANALYSIS
H.B. 2520
By: Horn
April 12, 1995
Committee Report (Amended)
BACKGROUND
In 1989, H.B. 504 was passed which instructed the comptroller's
office to institute a program that would require the labeling of
motor fuel pumps at service stations that dispensed mixtures of
gasoline and alcohol. Furthermore, the bill contained enforcement
provisions whereby the comptroller's office was required to
establish a testing program to ensure compliance. However, the
comptroller's office has found it difficult to implement the
testing program. Now, the Texas Department of Agriculture has
agreed to accept the enforcement authority for the program and
intends to incorporate it into its current weights and measures
program.
H.B. 504 was intended to alleviate "ethanol fraud;" however, since
its passage another consumer problem has arisen which is commonly
referred to as "octane fraud." Octane fraud refers to the illegal
process of labeling a pump with a higher octane rating than the gas
which is actually in the pump. This deceptive trade practice is
almost always undetectable to the consumer. DOA has agreed to
accept responsibility for enforcement of accurate octane labeling
along with their enforcement of ethanol/methanol labeling.
PURPOSE
This bill would transfer regulatory authority of the pump labeling
program from the Comptroller's office to the Department of
Agriculture and would give the department authority to combat
octane fraud along with the enforcement of the pump labeling
program.
RULEMAKING AUTHORITY
This bill transfers authority to promulgate all rules necessary to
enforce the provisions of Article 8614 V.T.C.S. from the
Comptroller of Public Accounts to the Texas Department of
Agriculture. However, it is the committee's opinion that this bill
does not expressly grant any additional rulemaking authority to a
state officer, department, agency or institution.
SECTION BY SECTION ANALYSIS
H.B. 2520 would amend Article 8614, Vernon's Texas Civil Statutes,
as follows:
SECTION 1. Amends Section 1 by adding Subsection (3) which defines
the term "Automotive Fuel Rating" as the meaning assigned by 15
United States Code, Section 2821.
SECTION 2. Amends Section 2 by including Sections 3A & 3B (ADDED
IN SECTION 3 of THIS BILL) to a list of Sections to be enforced
through fuel testing by the Commissioner of Agriculture or a
representative of the Commissioner or others authorized to enforce
this Article. This authority is removed from the
comptroller's office.
SECTION 3. Amends Article 8614 (V.T.C.S.) by adding Sections 3A
and 3B as follows:
Sec. 3A prohibits sale by a fuel dealer of motor fuel with
automotive fueling rating lower than the rating posted on
pump label.
Sec. 3B prohibits delivery by a distributor or supplier of
motor fuel of automotive fuel rated lower than the rating
certified by transfer.
SECTION 4. Amends Sec. 4, Subsections (c), (d), and (e) to
transfer enforcement authority from the comptroller's office to
the commissioner of agriculture.
SECTION 5. Amends Sec. 5 to transfer authority regulating dealer
and delivery documents from the comptroller's office to the
commissioner of agriculture.
SECTION 6. Amends Article 8614 (V.T.C.S.) by adding Sec. 5A to
require each motor fuel dealer to retain copies of each delivery
ticket, records of any automotive fuel rating determination,
and each delivery ticket which was delivered to the dealer for one
year. Furthermore, documents required to be kept under this
section are subject to inspection by the same officials listed in
Sec. 2 of the Article.
SECTION 7. Amends Sec. 6 to include Sections 3A and 3B (ADDED IN
SECTION 3 of THIS BILL) to the list of Sections by which a fuel
purchaser may bring civil actions against a motor fuel dealer,
supplier, wholesaler, or jobber of motor fuel for non-compliance.
Also provides for damage awards and sets an award limit of
three times actual damages.
SECTION 8. Amends Sec. 7 to set fines at no less than $200 and no
more than $10,000. Adds Sections 3A & 3B to the list of Sections
that, if violated, would result in the imposition of the
fines.
SECTION 9. Amends Section 8, Subsections (a), (b), and (e), as
follows:
Subsection (a) is amended to transfer enforcement from the
comptroller to the commissioner of agriculture. Also adds Sections
3A & 3B to the list of Sections that create an offense if
violated;
Subsection (b) is amended to include documents required by
Section 5A (ADDED IN SECTION 6 of THIS BILL) in the list of
documents a representative of the Commissioner of Agriculture is
entitled to inspect; and,
Subsection (e) is amended to transfer enforcement from the
comptroller to the commissioner of agriculture.
SECTION 10. Amends Section 9, Subsections (a) and (f) to transfer
enforcement from the comptroller to the commissioner of
agriculture. Additionally, Subsection (f) allows the comptroller's office access to fees collected under this section to
defray the cost of collecting fees and penalties collected
under the act.
SECTION 11. Amends Section 10 to transfer authority for
contracting for enforcement of the Act from the commissioner
of agriculture to the comptroller's office.
SECTION 12. Amends Article 8614 (V.T.C.S.) by adding Sec. 11 which
allows the commissioner of agriculture, a representative of the
commissioner, or the attorney general to make copies of any
document they are entitled to inspect under this Act. Additionally,
they may deliver the copies to the federal government for
purposes of prosecution of violations of federal law.
SECTION 13. Changes regarding violations of Article 8614 apply
only to violations which occur after the effective date of this
legislation.
SECTION 14. The provisions of this act which were in effect prior
to the adoption of the amended language remain in effect until
amended.
SECTION 15. Effective Date: September 1, 1995. Affects
transactions occurring only after this date.
SECTION 16. Emergency Clause.
EXPLANATION OF AMENDMENTS
Committee amendment No. 1 limits to $25,000 the amount of money the
Comptroller's office may retain from fees and penalties imposed by
this act.
Committee amendment No. 2 would limit awarding of triple damages to
suits involving violations of Sections 3, 4, or 5 of the Act.
(Specifically excluding Sections 3A and 3B relating to octane
ratings.)
SUMMARY OF COMMITTEE ACTION
H.B. 2520 was considered by the Energy Resources Committee in a
public hearing on April 3, 1995. The committee considered one
amendment to the bill. The amendment was adopted without objection.
The following witnesses testified in favor of the bill:
Jerdy Gary, representing the Texas Oil Marketers Association:
and,
Scott Fisher, also representing the Texas Oil Marketers
Association.
Barry R. McBee of the Texas Department of Agriculture testified
neutrally on the bill.
The bill was referred to a subcommittee consisting of
Representatives Jackson (Chair), Holzheauser, and Hirschi.
H.B. 2520 was considered by the subcommittee in a formal meeting on
April 11, 1995. The subcommittee considered one amendment to the
bill. The amendment was adopted without objection. The bill was
reported favorably as amended to the full committee by a record
vote of 2 ayes, 0 nays, 0 PNV, and 1 absent.
Pursuant to a suspension of the 48-hour subcommittee report layout
rule, H.B. 2520 was considered on subcommittee report by the
committee in a formal meeting on April 12, 1995. The amendment
adopted in subcommittee was adopted by the committee without
objection. The bill was reported favorably as amended, with the
recommendation that it do pass and be printed and be sent to the
Committee on Local and Consent Calendars, by a record vote of 5
ayes, 0 nays, 0 PNV, and 4 absent.