5350-S2

AN ACT Relating to prohibiting artificially high wholesale prices and resale price maintenance in gasoline marketing; and adding a new chapter to Title 19 RCW.

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

NEW SECTION. Sec. 1. The legislature finds that the marketing of motor fuel in the state of Washington has become highly concentrated. The industry includes a limited number of refiners of crude oil, some of which are integrated with retail operations. The legislature feels that the federal price discrimination act should be supplemented by state law to prevent harm to consumers in the state of Washington.

NEW SECTION. Sec. 2. Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.

(1) "Affiliate" means any person who directly or indirectly controls, is controlled by, or is under common control with any other person.

(2) "Company-operated gasoline retail outlet" means a gasoline retail outlet which is operated by a refiner's personnel, a subsidiary company, an affiliate, a commissioned agent, or a consignee.

(3) "Expenses of operating a company-operated gasoline retail outlet" means the fair market value of all goods, services, facilities, labor, and overhead used, consumed, expended, or allocated by an oil company in connection with the retail selling of motor fuel at a company-operated retail outlet and, for those independent resellers that take delivery at a truck loading terminal, the value of transporting the motor fuel from the truck loading terminal to the company-operated retail outlet. "Expenses of operating a company-operated gasoline retail outlet" does not include the cost of acquiring crude oil, manufacturing motor fuel, or transporting motor fuel to the truck loading terminal or expenses related to the retail sale of products other than motor fuel.

(4) "Gasoline retail outlet" means a facility, including land and improvements, where motor fuel is sold at retail to the motoring public.

(5) "Grade of motor fuel" means motor fuel of a particular quality or class and sold under a particular trademark, trade name, or brand.

(6) "Independent reseller" means a person, firm, or corporation that is not an affiliate of an oil company and that buys motor fuel primarily for resale to others.

(7) "Motor fuel" means any liquid petroleum product used for the propulsion of motor vehicles, not including airplanes, trains, or marine vessels.

(8) "Net wholesale price" means the price at which a refiner sells or offers to sell to the public a grade of motor fuel at a company-operated gasoline retail outlet, less, on a per gallon basis, the expenses of operating that same company-operated gasoline retail outlet.

(9) "Person" means a natural person, partnership, corporation, trust, or unincorporated association.

(10) "Price" means the price of a gallon of motor fuel paid to a refiner by a purchaser less the value, on a per gallon sold basis, of all rebates, discounts, credits, incentives, and other benefits extended by the refiner to the purchaser in connection with or as compensation for such purchase.

(11) "Refiner" or "oil company" means any person, firm, or corporation engaged in the production or refining of petroleum into motor fuel, whether such production or refining occurs in this state or elsewhere, and includes an affiliate of such refiner with respect to such affiliate's sale of motor fuel.

(12) "Set or attempt to set" includes but is not limited to actions that put an independent wholesale purchaser at an economic disadvantage if he or she fails to comply with a suggested price or margin.

(13) "Distributor" means any refiner, oil marketer, jobber, person, firm, or corporation engaged in the wholesaling of motor fuel.

NEW SECTION. Sec. 3. (1) No distributor may sell or offer to sell a grade of motor fuel to an independent reseller at a price that exceeds the contemporaneous net wholesale price of the same grade of motor fuel delivered from the same truck loading terminal.

(2) No distributor may deliver motor fuel from different truck loading terminals to company-operated gasoline retail outlets and to independent gasoline retail outlets, or restrict the truck loading terminals from which independent resellers may purchase motor fuel, where the effect of such action is to circumvent subsection (1) of this section, unless such delivery or restriction serves a legitimate business purpose.

(3) No distributor may set or attempt to set, either directly or indirectly, the retail prices or margins of profit of motor fuel at any gasoline retail outlet other than a company-operated gasoline retail outlet.

NEW SECTION. Sec. 4. The legislature finds that the practices covered by this chapter are matters vitally affecting the public interest for the purpose of applying the consumer protection act, chapter 19.86 RCW. Violations of this chapter are not reasonable in relation to the development and preservation of business. A violation of this chapter is a monopolization of trade or commerce and an unfair method of competition for the purpose of applying the consumer protection act, chapter 19.86 RCW. This remedy is in addition to any other remedy authorized by law.

NEW SECTION. Sec. 5. 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. 6. Sections 1 through 5 of this act shall constitute a new chapter in Title 19 RCW.