H-1641

AN ACT Relating to the marketing of motor fuels; adding a new chapter to Title 78 RCW; adding a new chapter to Title 82 RCW; creating new sections; providing an effective date; and declaring an emergency.

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

NEW SECTION. Sec. 1. DECLARATION OF POLICY. The legislature finds and declares that the distribution and sale of motor fuels in the state of Washington vitally affects the general economy of the state and the public interest and the public welfare, and that in order to promote the public interest and public welfare, it is necessary to eliminate excessive wholesale prices and prevent unfair allocation of motor fuels.

NEW SECTION. Sec. 2. DEFINITIONS. The definitions set forth in this section apply throughout this chapter.

(1) "Affiliate" means a person, firm, or corporation controlling or controlled by an oil company, and includes a 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) "Brand name" or "trademark" means a trademark, trade name, service mark, or other identifying symbol or name.

(3) "Company-operated station" means a service station that is operated by an oil company, its subsidiary, or its affiliate.

(4) "Cost of selling motor fuel to the public" means the fair market value of transporting the motor fuel from the terminal to the company-operated station, goods, services, facilities, space, construction, utilities, insurance, labor, repair, maintenance, and all products, services, or materials consumed, furnished, expended, or incurred by an oil company to own and operate a company-operated station and sell motor fuel at that facility. "Cost of selling motor fuel to the public" does not include the cost of refining crude oil into motor fuel, the cost of delivering motor fuel to the truck loading terminal, or the cost of selling products or services other than motor fuel at the company-operated station.

(5) "Dealer price" means the net price per gallon of motor fuel sold to an independent dealer and delivered to a service station by an oil company after adjustment for the fair market value of transportation of the motor fuel from the truck loading terminal, commissions, brokerages, rebates, discounts, services or facilities furnished, or other such adjustment. An adjustment of the dealer price must take into account the service station rents, credit fees, franchise fees, or other charges related to the sale of motor fuel paid to the oil company by the independent dealer.

(6) "Discriminatory wholesale price" means a price that is prohibited by section 4 of this act.

(7) "Independent dealer" means a person who or entity that operates a service station, whether or not the station is owned by an oil company, its subsidiary, or its affiliate. "Independent retail operator" does not include an oil company.

(8) "Motor fuel" means a particular blend of gasoline or diesel fuel used in motor vehicles, however modified, that meets industry standards for composition and octane and that is marketed under the same brand name or trademark.

(9) "Oil company" means a person, firm, or corporation, including an affiliate of the person, firm, or corporation, engaged in the refining of crude oil into motor fuel.

(10) "Retail price" means the net price per gallon of motor fuel sold by an oil company at a company-operated station to a retail customer, after adjustment for the costs of selling motor fuel to the public.

(11) "Service station" means a facility that sells motor fuels that are dispensed directly into motor vehicles and not operated by an oil company.

(12) "Truck loading terminal" means the point of transfer of motor fuel from a pipeline or a tank storage facility into a truck or other vehicle for delivery to a wholesale purchaser or retail service station.

(13) "Wholesale price" means the net price per gallon of motor fuel sold to a wholesale purchaser by an oil company at a truck loading terminal after adjustment for the fair market value of commissions, brokerages, rebates, discounts, services or facilities furnished, or other such adjustment. An adjustment of the wholesale price must take into account the service station rents, credit fees, franchise fees, or other charges related to the sale of motor fuel paid to the oil company by the wholesale purchaser.

(14) "Wholesale purchaser" means a person, firm, or corporation that purchases motor fuel from an oil company for resale to the public or others. "Wholesale purchaser" does not include government agencies, railroad companies, airlines, public utilities, or an oil company.

NEW SECTION. Sec. 3. SUPPLY LIMITATIONS--UNIFORMITY. If the supply of motor fuel is limited by an oil company for any reason, the oil company shall impose the limitations equally and uniformly on company-operated stations, independent dealers, and all wholesale purchasers that have a supply agreement with the oil company and are supplied motor fuel from the same truck loading terminal.

NEW SECTION. Sec. 4. DISCRIMINATORY OIL COMPANY WHOLESALE PRICES. (1) When establishing a retail price, dealer price, or wholesale price for motor fuel sold at or delivered from the same truck loading terminal, an oil company may not:

(a) Discriminate in dealer price between independent dealers or charge a dealer price that is higher than its retail price;

(b) Discriminate in wholesale price between wholesale purchasers or charge a higher wholesale price than either its dealer price or its retail price.

(2) Nothing in this section prevents differentials that make only due allowance for differences in an oil company's actual cost of manufacture, sale, or delivery resulting from the differing methods or quantities in which motor fuels are sold or delivered to independent dealers or wholesale purchasers.

NEW SECTION. Sec. 5. DISCRIMINATORY WHOLESALE PRICES--ILLEGALITY. It is unlawful for an oil company to charge an independent dealer or wholesale purchaser a discriminatory wholesale price. Charging a discriminatory wholesale price is a violation of this chapter.

NEW SECTION. Sec. 6. RECORDS. An oil company that sells motor fuel in this state shall keep for three years from the date of sale a written record consisting of its wholesale prices, its dealer prices, and its retail prices for each location in this state at which it sells or delivers motor fuel and for each grade of motor fuel sold.

NEW SECTION. Sec. 7. CIVIL ACTIONS BY THE ATTORNEY GENERAL. (1) The attorney general may bring an action in the name of the state against an oil company to restrain and prevent an oil company from violating any provision of this chapter. In the discretion of the court, the attorney general may recover the costs of the action, including a reasonable attorney's fee.

(2) The court may make such additional orders or judgments as may be necessary to restore to a person in interest any moneys or property, real or personal, that may have been acquired by an oil company as a result of violations of this chapter.

NEW SECTION. Sec. 8. CIVIL ACTIONS BY A PURCHASER. An independent dealer or wholesale purchaser of motor fuel from an oil company who has been damaged by a violation of this chapter may bring an action in superior court to enjoin further violation of this chapter and to recover damages sustained, including costs of the suit and reasonable attorneys' fees.

NEW SECTION. Sec. 9. DAMAGES. (1) In an action brought under this chapter, upon proof that a discriminatory wholesale price has been charged and paid, the court shall conclusively presume that the damages sustained are at least equal to the number of gallons sold at the discriminatory wholesale price times the amount that the price exceeds either:

(a) The dealer price under section 4 of this act, if the motor fuel was delivered to the purchaser; or

(b) The wholesale price under section 4 of this act, if delivery of the motor fuel was taken at the truck loading terminal.

(2) In addition to the damages established under subsection (1) of this section, the plaintiff may establish any further damages sustained as a result of a violation of this chapter, including but not limited to costs of the suit and reasonable attorneys' fees.

NEW SECTION. Sec. 10. MOTOR FUEL ANTITRUST ENFORCEMENT TRUST ACCOUNT. (1) The motor fuel antitrust enforcement trust account is established in the custody of the state treasurer. All funds appropriated for this chapter shall be deposited in the account. Expenditures from the account shall be used exclusively by the attorney general for the purposes of this chapter. The account is subject to allotment procedures under chapter 43.88 RCW. No appropriation is required for expenditures from the account. The earnings on any surplus balances in the trust account shall be credited to the account notwithstanding RCW 43.84.090.

(2) Each calendar quarter, the attorney general shall report to the senate ways and means and house of representatives revenue committees expenditures and balances for this account. The attorney general shall notify the department of revenue of this amount by the fifteenth day of each calendar quarter.

NEW SECTION. Sec. 11. INTENT. It is the intent of this chapter to impose a tax only once for each petroleum product possessed in this state and to tax the first possession of all petroleum products. This chapter is not intended to exempt any person from tax liability under any other law.

NEW SECTION. Sec. 12. DEFINITIONS. Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.

(1) "Petroleum product" means plant condensate, lubricating oil, gasoline, aviation fuel, kerosene, diesel motor fuel, benzol, fuel oil, residual oil, liquefied or liquefiable gases such as butane, ethane, and propane, and every other product derived from the refining of crude oil, but the term does not include crude oil.

(2) "Possession" means the control of a petroleum product located within this state and includes both actual and constructive possession. "Actual possession" occurs when the person with control has physical possession. "Constructive possession" occurs when the person with control does not have physical possession. "Control" means the power to sell or use a petroleum product or to authorize the sale or use by another.

(3) "Previously taxed petroleum product" means a petroleum product in respect to which a tax has been paid under this chapter and that has not been remanufactured or reprocessed in any manner (other than mere repackaging or recycling for beneficial reuse) since the tax was paid.

(4) "Wholesale value" means fair market wholesale value, determined as nearly as possible according to the wholesale selling price at the place of use of similar products of like quality and character, in accordance with rules of the department.

(5) Except for terms defined in this section, the definitions in chapters 82.04, 82.08, and 82.12 RCW apply to this chapter.

NEW SECTION. Sec. 13. ANTITRUST TAX ON MOTOR FUEL. (1) A tax is imposed on the privilege of possession of motor fuel in this state. The rate of the tax shall be ten one-hundredths of one percent multiplied by the wholesale value of the motor fuel.

(2) Moneys collected under this section shall be deposited in the trust account established under section 10 of this act.

(3) Chapter 82.32 RCW applies to the tax imposed by this section. The tax due dates, reporting periods, and return requirements applicable to chapter 82.04 RCW apply equally to the tax imposed by this section.

(4) Within thirty days after the end of each calendar quarter the attorney general shall determine the "quarterly balance," which shall be the balance in the trust account as of the last day of that calendar quarter. Balance determinations by the attorney general under this section are final and shall not be used to challenge the validity of any tax imposed under this section. For each subsequent calendar quarter, the tax shall be imposed under this section during the entire calendar quarter unless:

(a) Tax was imposed under this section during the immediately preceding calendar quarter, and the most recent quarterly balance is more than one million dollars; or

(b) Tax was not imposed under this section during the immediately preceding calendar quarter, and the most recent quarterly balance is more than five hundred thousand dollars.

NEW SECTION. Sec. 14. EXEMPTIONS. The following are exempt from the tax imposed in this chapter:

(1) Successive possession of a previously taxed petroleum product. If tax due under this chapter has not been paid with respect to a petroleum product, the department may collect the tax from a person who has had possession of the petroleum product. If the tax is paid by a person other than the first person having taxable possession of a petroleum product, the amount of tax paid constitutes a debt owed by the first person having taxable possession to the person who paid the tax.

(2) Possession of a petroleum product by a natural person under circumstances where the substance is used, or is to be used, for a personal or domestic purpose (and not for any business purpose) by that person or a relative of, or person residing in the same dwelling as, that person.

(3) Persons or activities that the state is prohibited from taxing under the United States Constitution.

(4) Persons possessing a petroleum product where the possession first occurred before the effective date of this section.

(5) Possession of (a) natural gas, (b) petroleum coke, or (c) liquid fuel or fuel gas used in petroleum processing.

(6) Possession of petroleum products that are exported for use or sale outside this state as fuel.

(7) Possession of petroleum products packaged for sale to ultimate consumers.

NEW SECTION. Sec. 15. CREDITS. (1) Credit shall be allowed in accordance with rules of the department of revenue for taxes paid under this chapter with respect to fuel carried from this state in the fuel tank of an airplane, ship, truck, or other vehicle.

(2) Credit shall be allowed, in accordance with rules of the department, against the taxes imposed in this chapter for petroleum product tax paid to another state with respect to the same petroleum product. The amount of the credit shall not exceed the tax liability arising under this chapter with respect to that petroleum product. For the purpose of this subsection:

(a) "Petroleum product tax" means a tax:

(i) That is imposed on the act or privilege of possessing petroleum products, and that is not generally imposed on other activities or privileges; and

(ii) That is measured by the value of the petroleum product, in terms of wholesale value or other terms, and in the determination of which the deductions allowed would not make the tax an income tax or value added tax.

(b) "State" means (i) a state of the United States other than Washington, or a political subdivision of such other state, (ii) the District of Columbia, and (iii) a foreign country or political subdivision thereof.

NEW SECTION. Sec. 16. SHORT TITLE. This act shall be known as the "Gasoline Price and Supply Fairness Act."

NEW SECTION. Sec. 17. SEVERABILITY. 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 act.

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. CODIFICATION. Sections 1 through 10 of this act shall constitute a new chapter in Title 78 RCW, mines, minerals, and petroleum law. Sections 11 through 15 of this act shall constitute a new chapter in Title 82 RCW, excise taxes.

NEW SECTION. Sec. 22. EFFECTIVE DATE. 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. Sections 1 through 10 and 16 through 21 of this act shall take effect immediately. Sections 11 through 15 of this act shall take effect July 1, 1991.