S-0388

AN ACT Relating to the regulation of oil company practices; adding a new chapter to Title 80 RCW; creating new sections; prescribing penalties; providing an effective date; and declaring an emergency.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. INTENT. Currently there is a need to assure that gasoline and petroleum products are readily available at fair prices to all consumers in Washington. Oil companies should not be allowed to use practices that unfairly raise prices to consumers throughout the state or in select areas. While oil companies should receive a fair return on their investments, they should not be allowed to use the event of an oil spill to raise prices to Washington consumers.

Oil spills pose an extreme threat to Washington's seaborne petroleum supplies, coastal waters, seabeds, shorelines, scenic beauty, fisheries, and tourism. Prevention is the only method of avoiding the harm caused by oil spills. Those responsible for oil spills should bear the full cleanup expense. A powerful incentive to avoid oil spills will exist if oil spill cleanup costs cannot be passed onto the public.

The regulation of oil company practices is necessary to accomplish the goals of this act. Criminal penalties for willful violators are needed as a deterrent to those who would profit by breaking the law.

NEW SECTION. Sec. 2. DEFINITIONS. Unless specifically defined otherwise or unless the context clearly indicates otherwise, the definitions in this section apply throughout this chapter.

(1) "Affiliate of the person, firm, or corporation" means a person, firm, or corporation, that controls or is controlled by an oil company, and includes any subsidiary or affiliated corporation in which the oil company or its shareholders, officers, agents, or employees hold or control more than twenty-five percent of the voting shares.

(2) "Class of trade" has the same meaning as used by oil companies and the industry. Motor fuel retailers operated by an oil company, its subsidiary, or its affiliate shall be considered in the same class of trade as motor fuel retailers as defined in RCW 19.120.010(7).

(3) "Commission" means the Washington utilities and transportation commission.

(4) "Fund" means the "consumer protection fund" as established in section 4 of this act.

(5) "Oil company" means any person, firm, or corporation, including any affiliate of the person, firm, or corporation engaged in the refining of crude oil into petroleum products. Each oil company shall be deemed a public service company under this title.

(6) "Petroleum" or "petroleum products" means gasoline, lube oils, diesel, heating oil, and liquid petroleum, however modified, except aviation fuel, propane, coke, and bunker fuel.

(7) "Price" has the same meaning as in RCW 19.120.010(10). The value of petroleum products, services, or facilities supplied, exchanged, or transferred to a retail motor fuel outlet operated by the same oil company, its subsidiary, or its affiliate shall be considered the price.

(8) "Retail motor fuel outlet" has the same meaning as in RCW 19.120.010(12).

NEW SECTION. Sec. 3. OIL COMPANIES‑-REPORTS OF GROSS REVENUE‑-FEES. (1) Every oil company subject to regulation by the commission shall, on or before the first day of April of each year, file with the commission a statement under oath, in a form that has been prescribed under RCW 80.04.090, showing the company's gross operating revenue from intrastate operations for the preceding calendar year.

(2) Unless decreased as provided in subsection (3) of this section, every oil company subject to regulation by the commission shall pay to the commission a fee equal to one-tenth of one percent of the first fifty thousand dollars of gross operating revenue, plus two-tenths of one percent of any gross operating revenue in excess of fifty thousand dollars. The fee shall in no case be less than one dollar.

(3) The percentage rates of gross operating revenue as set forth in subsection (2) of this section may be decreased by the commission for oil companies by general order entered before March 1st of such year.

(4) The statement filed with the commission under subsection (1) of this section shall be made available to the public by the commission as soon as possible.

(5) All moneys collected under the provisions of this section shall within thirty days be paid to the state treasurer and credited to the consumer protection fund established by section 4 of this act.

NEW SECTION. Sec. 4. CONSUMER PROTECTION FUND. The consumer protection fund is created in the custody of the state treasurer to be used by the commission or attorney general as a revolving fund for carrying out the purposes of this chapter. Fees paid pursuant to section 3 of this act and any cost recovery awarded the attorney general under section 13 of this act shall be deposited into the fund. Only the secretary of the commission or the attorney general may authorize expenditures from the fund. The fund is subject to allotment procedures under chapter 43.88 RCW, but no appropriation is required for expenditures.

Moneys in the fund not needed to meet the obligations of the commission or attorney general in the exercise of their powers, duties, and functions under this chapter shall be deposited with the state treasurer to the credit of the fund and may be invested in such manner as is provided for by law. Interest received on such investment shall be credited to the fund.

NEW SECTION. Sec. 5. ALLOCATION AND USE OF FUND. (1) Moneys in the consumer protection fund shall be disbursed for the following purposes and no others:

(a) Costs of the commission related to the fulfilling of its powers and duties under this chapter; and

(b) Costs of the attorney general related to the fulfilling of its powers and duties under this chapter.

(2) The money remaining after the disbursement under subsection (1) (a) and (b) of this section shall be allocated by the state treasurer, to be used for fulfilling the purposes of this chapter, as follows: Seventy-five percent of the moneys shall be allocated to the commission and twenty-five percent to the attorney general.

NEW SECTION. Sec. 6. POWERS AND DUTIES. The commission and the attorney general shall:

(1) Exercise all the powers and perform all the duties prescribed by this chapter;

(2) Make rules necessary to carry out the purposes, powers, or duties assigned by this chapter;

(3) Regulate in the public interest, as provided by the public service laws or this chapter, the prices, rates, services, and practices of all oil companies within the state in the business of supplying petroleum products or any service or facility connected to or with petroleum products to any person, firm, or corporation within the state for compensation, excluding transactions occurring between one oil company and a different oil company. Except as provided in sections 6 through 11 of this act, the commission does not have the power to set or establish prices, rates, charges, rentals, or tolls of an oil company; and

(4) Regulate, make rules, or enforce this chapter consistent with the powers and duties granted to the commission and attorney general for public service companies under this title.

NEW SECTION. Sec. 7. OIL COMPANY PROHIBITIONS. An oil company shall not:

(1) Directly or indirectly, include in the price of petroleum, petroleum products, services, or facilities any costs accruing from oil or petroleum spills resulting from the negligent or intentional acts of the oil company or any person, firm, or corporation affiliated with or performing services for the oil company. Nothing herein shall prevent an oil company from including in the price of petroleum, petroleum products, or services its actual costs of establishing oil spill contingency plans required under any federal, state, or local law;

(2) Directly or indirectly, include in the price of petroleum, petroleum products, services, or facilities any costs accruing from the fees established in section 3 of this act;

(3) Directly or indirectly, or by special rate, rebate, drawback, or other device or method including but not limited to increased or reduced charges, allowances, or compensation for other services, facilities, or products provided by the oil company, discriminate in availability or price of petroleum or petroleum products among or between different persons or corporations within a class of trade, or among or between different geographical areas of the state. Price differentials are permitted to the extent that such differentials make only due allowance for actual costs of manufacture, sale, or delivery resulting from the differing methods or quantities in which such products are sold or delivered to such purchasers. Nothing herein shall prevent price or availability changes from time to time where the oil company satisfies the burden of proving that the differential is based on transactions occurring at materially different times and such differential is reasonably related to changes in availability or differences in actual costs of manufacture, sale, or delivery, and is not arbitrary;

(4) Charge, demand, collect, or receive a greater, lesser, or different compensation for any service rendered or to be rendered than the prices, rates, and charges applicable to such service as specified in the schedule filed under section 8 of this act and in effect at the time, nor shall any such company directly or indirectly refund or remit in any manner or by any device any portion of the prices, rates, or charges so specified;

(5) Extend to any person or corporation any form of contract or agreement or any rule or regulation or any privilege or facility except those regularly and uniformly extended to all persons and corporations under like circumstances; and

(6) Make or grant any undue or unreasonable preference or advantage to any person, corporation, or locality, or to any particular class of trade or description of service in any respect whatsoever, or subject any particular person, corporation, or locality or any particular class of trade or description of service to any undue or unreasonable prejudice or disadvantage in any respect whatsoever.

NEW SECTION. Sec. 8. OIL COMPANY DISCLOSURE. Each oil company shall file with the commission, and the commission shall provide for public inspection, schedules in such form as the commission prescribes, showing:

(1) All prices, rates, and charges made, established, or enforced, or to be charged or enforced, all forms of contract or agreement, all rules relating to prices, rates, charges, or service used or to be used, and all general privileges and facilities granted or allowed by such oil company;

(2) All actual costs accruing from oil or petroleum spills resulting from the negligent or intentional acts of the oil company or any person, firm, or corporation affiliated with or performing services for the oil company and identification of the method such costs were paid and accounted for;

(3) All actual costs of establishing oil spill contingency plans required under any federal, state, or local law and identification of the method such costs were paid and accounted for; and

(4) Any other information deemed by the commission to be necessary to fulfill its duties under this chapter.

NEW SECTION. Sec. 9. TARIFF CHANGES‑-NOTICE. No change shall be made in any price, rate, or charge or in any form of contract or agreement or in any rule relating to any price, rate, charge, or service or in any general privilege or facility that must have been filed by an oil company in compliance with the requirements of section 8 of this act except after prior notice to the commission. The notice shall plainly state the changes to be made in the schedule then in force, the reasons for such changes including identification of any changes in the actual costs of doing business since the filing of the current schedule, and the time when the change will go into effect. All changes shall be shown by filing new schedules. The commission shall make available to the public any changes or new schedules in the shortest time possible and not later than the effective date of changes shown in the new schedule. Nothing in this section shall prevent the commission from adopting notice requirements that comply with state or federal antitrust laws.

NEW SECTION. Sec. 10. COMPLAINTS‑-HEARINGS. Complaint may be made by the commission of its own motion or by any person or corporation, chamber of commerce, board of trade, or any commercial, mercantile, agricultural or manufacturing society, or any political subdivision or municipal corporation, or by the public counsel section of the office of the attorney general, or its successor, by petition or complaint in writing, setting forth any act or thing done or omitted to be done by any oil company in violation, or claim to be in violation, of any provision of the law or of any order or rule of the commission. No complaint shall be entertained by the commission except upon its own motion, as to the reasonableness of the schedule of the rates or charges of an oil company, unless the same be signed by the mayor, council, or commission of the county, city, or town in which the oil company complained of is engaged in business, or by not less than twenty-five consumers or purchasers of such petroleum service.

All matters upon which complaint may be founded may be joined in one hearing, and no motion shall be entertained against a complaint for misjoinder of complaints or grievances or misjoinder of parties. In any review by the courts of orders of the commission the same rule shall apply and pertain with regard to the joinder of complaints and parties as herein provided. All grievances to be inquired into shall be plainly set forth in the complaint. No complaint shall be dismissed because of the absence of direct damage to the complainant.

Upon the filing of a complaint, the commission shall cause a copy thereof to be served upon the oil company complained of, which shall be accompanied by a notice fixing the time and place a hearing will be had upon such complaint. The time fixed for such hearing shall not be less than ten days after the date of the service of such notice and complaint, except as herein provided. Rules of practice and procedure not otherwise provided for in this title may be prescribed by the commission.

At the time fixed for the hearing, the complainant and the oil company complained of shall be entitled to be heard and introduce such evidence as he, she, or it may desire. The commission shall issue process to enforce attendance of all necessary witnesses. At the conclusion of such hearing the commission shall make and render findings concerning the subject matter and facts inquired into and enter its order based thereon.

NEW SECTION. Sec. 11. COMMISSION TO REVIEW RATES. The commission shall:

(1) Upon finding after a hearing had upon its own motion or upon complaint, that the prices, rates, or charges demanded, exacted, charged, or collected by any oil company for petroleum products or any equipment, services, real estate, or facilities used in conjunction with the sale of petroleum products, or that an oil company's rules, regulations, practices, or contracts affecting the availability, prices, rates, or charges are unjust, unreasonable, unjustly discriminatory, or unduly preferential, or in any wise in violation of the provisions of the law or this chapter, or that such prices, rates, or charges are insufficient to yield a reasonable compensation for the service rendered, supply its findings in a written order to the public, the attorney general, appropriate standing committees of the legislature, and the oil company. Nothing contained in this subsection shall detract from the powers, duties, and functions given to the commission or the attorney general in this chapter, this title, or any other law;

(2) Compare the lowest price, rate, or charge offered in an adjacent state or other states located within petroleum allocation defense district 5 by an oil company and the highest price, rate, or charge offered in Washington state by the same oil company for similar products or services, along with other factors when determining whether prices, rates, or charges are reasonable, just, sufficient, or discriminatory.

NEW SECTION. Sec. 12. CRIMINAL PENALTIES IMPOSED. (1) Any oil company, or any of its employees, who willfully violates any of the provisions of this chapter, except for those violations enumerated in subsection (2) of this section, is guilty of a gross misdemeanor, and upon conviction shall be punished as provided in RCW 9A.20.021.

(2) Any oil company, or any of its employees, who willfully commits any of the following is guilty of a class C felony and upon conviction shall be punished as provided in RCW 9A.20.021:

(a) Falsifying any information contained in a schedule filed with the commission or failing to file schedules required under section 3 or 8 of this act;

(b) Violating section 7 of this act.

(3) Each day upon which a willful violation of the provisions of this chapter occurs may be deemed a separate and additional violation.

For the purposes of this section, "willful" or "willfully" is defined in the manner as those terms are defined in RCW 9A.08.010.

NEW SECTION. Sec. 13. ATTORNEY GENERAL EMPOWERED TO RESTRAIN PROHIBITED ACTS‑-COSTS‑-RESTORATION OF PROPERTY. (1) The attorney general may bring an action in the name of the state against any oil company to restrain and prevent the doing of any act herein prohibited or declared unlawful. The attorney general may in the discretion of the court, recover the costs of an action including reasonable attorneys' fees.

The court may make such additional orders or judgments as may be necessary to restore to any person in interest any moneys, real property, or personal property, which may have been acquired by means of an act prohibited or declared to be unlawful by this chapter.

(2) Nothing in this chapter limits the power of the state to punish any oil company for any conduct that constitutes a crime by statute or at common law.

NEW SECTION. Sec. 14. CIVIL ACTIONS AVAILABLE. (1) Any person or corporation may commence a civil action against the commission to compel performance of any nondiscretionary duty under this chapter.

(2) Any person or corporation who is injured by the commission of any action of an oil company in violation of any portion of this chapter or this title, or any person or corporation so injured because he or she refuses to accede to a proposal or arrangement with an oil company which, if consummated would be a violation of this chapter or this title, may bring a civil action in superior court to enjoin further violations, to recover the actual damages sustained by him or her, or both. The court may in its discretion increase the award of damages to an amount not to exceed three times the actual damage sustained.

(3) A civil action under this section may be brought in the superior court of: (a) Thurston county, (b) the county in which the alleged violation occurred, or (c) the county in which any injury or damage occurred or may occur. At least thirty days before commencing the action, the person or corporation filing suit under this section must give notice to the apparent defendant or defendants of the intent to sue. The courts shall award attorney fees, expert witness fees, and the other costs of the suit to a prevailing plaintiff.

NEW SECTION. Sec. 15. This act shall be known as the "gasoline consumers bill of rights act."

NEW SECTION. Sec. 16. Sections 2 through 14 of this act shall constitute a new chapter in Title 80 RCW.

NEW SECTION. Sec. 17. SEVERABILITY CLAUSE. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION. Sec. 18. PROSPECTIVE APPLICATION. This act applies prospectively to all actions and conduct occurring after the effective date of this section.

NEW SECTION. Sec. 19. LIBERAL CONSTRUCTION. This act shall be liberally construed to give full effect to the objectives and purposes for which it was enacted.

NEW SECTION. Sec. 20. CAPTIONS. Section headings used in this act do not constitute any part of the law.

NEW SECTION. Sec. 21. EFFECTIVE DATE. (1) Except as provided for in subsection (2) of this section, this act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and shall take effect immediately.

(2) Sections 7, 8, and 9 of this act shall take effect thirty days after the effective date of the remainder of this act.