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S.B. 46
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5 AN ACT RELATING TO COMMERCE AND THE MOTOR FUEL MARKETING ACT;
6 AMENDING DEFINITIONS; ADDRESSING REQUIREMENT TO ESTABLISH AND
7 DISCLOSE CERTAIN PRICES; AMENDING PROVISIONS AGAINST UNLAWFUL SALES;
8 ADDRESSING SALES NOT CONSIDERED VIOLATIONS; ADDRESSING CIVIL
9 ENFORCEMENT; ADDRESSING REBUTTABLE PRESUMPTIONS; ADDRESSING
10 ADMINISTRATIVE REMEDIES; AND MAKING TECHNICAL CHANGES.
11 This act affects sections of Utah Code Annotated 1953 as follows:
12 AMENDS:
13 13-16-2, as last amended by Chapter 260, Laws of Utah 1991
14 13-16-3, as last amended by Chapter 189, Laws of Utah 1987
15 13-16-4, as last amended by Chapter 300, Laws of Utah 1992
16 13-16-6, as last amended by Chapter 279, Laws of Utah 1994
17 13-16-7, as last amended by Chapter 260, Laws of Utah 1991
18 13-16-8, as last amended by Chapter 189, Laws of Utah 1987
19 13-16-9, as last amended by Chapter 189, Laws of Utah 1987
20 13-16-10, as last amended by Chapter 300, Laws of Utah 1992
21 13-16-11, as enacted by Chapter 260, Laws of Utah 1991
22 ENACTS:
23 13-16-13, Utah Code Annotated 1953
24 REPEALS:
25 13-16-5, as last amended by Chapter 189, Laws of Utah 1987
26 Be it enacted by the Legislature of the state of Utah:
27 Section 1. Section 13-16-2 is amended to read:
28 13-16-2. Definitions.
29 As used in this chapter:
30 (1) "Affiliate" means [
31 by, another person, whether through stock ownership or otherwise.
32 (2) "Cost" means an amount calculated as follows:
33 (a) (i) if motor fuel is not purchased from an affiliate:
34 (A) the lowest invoice cost that the seller charged to the purchaser for motor fuel of like
35 grade and quality within five days prior to the date of any alleged unlawful resale by the purchaser;
36 or
37 (B) if there was no sale to the purchaser within the preceding five days, the purchaser's last
38 invoice cost for motor fuel of like grade and quality; or
39 (ii) if motor fuel is purchased or received from an affiliate:
40 (A) the lowest transfer price that the affiliate charged to the purchaser or receiver for motor
41 fuel of like grade and quality within five days prior to the date of any alleged unlawful resale by
42 the purchaser or receiver; or
43 (B) if there was no purchase or receipt within the preceding five days, the last transfer
44 price for motor fuel of like grade and quality; [
45 (b) [
46 receives on the particular invoice or transfer:
47 (i) a trade discount;
48 (ii) an allowance; or
49 (iii) a rebate; [
50 (c) [
51
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53 invoice cost or transfer price:
54 [
55 (ii) all applicable federal, state, and local taxes [
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57 (iii) charges imposed by a federal, state, or local government that are not taxes.
58 (3) "Division" means the Division of Consumer Protection.
59 [
60 designated for use as a motor fuel in self-propelled vehicles designated primarily for use on public
61 streets, roads, and highways.
62 (5) "Opening" means the first retail sale of motor fuel at a new retail station.
63 [
64 (7) (a) "Posted rack price" means the price at which a refiner or other person offers a grade
65 of motor fuel for sale at the rack before:
66 (i) a reduction for:
67 (A) a trade discount;
68 (B) an allowance; or
69 (C) a rebate; or
70 (ii) the addition of:
71 (A) a charge for freight;
72 (B) a federal, state, or local tax; or
73 (C) a charge imposed by a federal, state, or local government that is not a tax.
74 (b) Notwithstanding Subsection (7)(a), the posted rack price for a refiner or other person
75 offering motor fuel for sale at the rack who does not establish a posted rack price shall be the
76 lowest posted rack price of any person for motor fuel of like grade or quality in the geographic area
77 served by the refiner or other person.
78 (8) "Purchase," "purchases," or "purchased" means the acquisition of motor fuel as a result
79 of a sale or resale.
80 (9) "Rack" means a deck, platform, or open bay that consists of a series of metered pipes
81 and hoses for the delivery or removal of motor fuel from the refinery or terminal into:
82 (a) a motor vehicle;
83 (b) a rail car; or
84 (c) a vessel.
85 (10) "Receipt" or "received" has the same meaning as purchase under Subsection (8).
86 (11) "Resale" or "resales" has the same meaning as sale under Subsection (14).
87 [
88 for consumption.
89 (13) "Retail station" means a station, store, or other outlet from which motor fuel is sold
90 at retail in this state.
91 [
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94 (i) ownership, title to, or possession of, motor fuel from one person to another; and
95 (ii) with or without consideration.
96 (b) "Sale, "sales," "sell," "sells," or "sold" includes any method by which any person
97 transfers or offers to transfer ownership, title to, or possession of, motor fuel to itself or an affiliate
98 for resale at another marketing level.
99 (15) "Terminal" means a facility:
100 (a) for the storage of motor fuel that is:
101 (i) part of a refinery; or
102 (ii) supplied by:
103 (A) a motor vehicle;
104 (B) a pipeline; or
105 (C) a vessel; and
106 (b) from which motor fuel is removed for distribution at a rack.
107 [
108 with any sale of motor fuel to itself or an affiliate for resale at another marketing level.
109 Section 2. Section 13-16-3 is amended to read:
110 13-16-3. Requirement to establish and disclose "transfer prices" and "posted rack
111 prices."
112 [
113 (1) establish [
114 (a) its transfer price on all grades of motor fuel [
115 for resale in this state at a different marketing level of distribution[
116 (b) a posted rack price on all grades of motor fuel the refiner or other person sells at the
117 rack in this state; and
118 (2) notwithstanding the provisions of Section 13-16-9 , at the request of any person disclose
119 to the requesting person:
120 (a) any transfer price described in Subsection (1)(a); or
121 (b) any posted rack price described in Subsection (1)(b).
122 Section 3. Section 13-16-4 is amended to read:
123 13-16-4. Unlawful sale by persons engaged in commerce.
124 (1) It is unlawful for any person engaged in commerce within this state to sell [
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126 effect of the sale [
127 (a) injure competition; [
128 (b) [
129 merchandise[
130 (c) unfairly divert trade from a competitor[
131 (d) otherwise [
132 (2) It is unlawful for any person engaged in commerce [
133 of such commerce, either directly or indirectly, to:
134 (a) sell motor fuel to itself or an affiliate for resale in this state on a different marketing
135 level of distribution at a transfer price lower than the price it charges a person who purchases
136 motor fuel of like grade and quality at reasonably the same time for resale in this state on the same
137 level of distribution, if the intent or effect of the sale is to injure competition; or
138 (b) sell [
139 charges other persons [
140 reasonably the same time for resale in this state on the same level of distribution, if the intent or
141 effect of the sale [
142 Section 4. Section 13-16-6 is amended to read:
143 13-16-6. Sales not considered violations.
144 (1) It is not a violation of [
145 (a) a difference exists at the same level of distribution between the transfer price or sales
146 price of motor fuel of like grade and quality and the price charged to a person who purchases for
147 resale, including any discount, rebate, allowance, service, or facility granted to any person,
148 including any of a supplier's own marketing operations, who purchases for resale, in excess of
149 those provided to [
150 due [
151 (i) manufacturing;
152 (ii) transportation, shipping, or other delivery method, [
153 (iii) marketing[
154 fuel is sold or delivered.
155 [
156 transfer price and sales price or between sales prices at the same marketing level if the difference
157 exists because of a good faith effort to meet the equally low price of a competitor or if the sale is
158 exempt under Section 13-5-12 .
159 [
160 (i) the result of a good faith effort to meet the equally low price of a competitor [
161 (ii) a sale [
162 (iii) in connection with the opening of a retail station if:
163 (A) the below cost sale occurs only from the retail station that is opening;
164 (B) the first sale of motor fuel at a price below cost in connection with the opening occurs
165 within 60 days from the day of the retail station's opening;
166 (C) the below cost sale of motor fuel at the retail station in connection with the opening
167 occurs no later than 72 hours from the first sale of motor fuel at a price below cost in connection
168 with the opening; and
169 (D) the opening occurs only once.
170 (b) Notwithstanding Subsection (2)(a)(iii)(D), a sale described in Subsection (2)(a)(iii) is
171 not a violation of Subsection 13-16-4 (1) if:
172 (i) the retail station at which an opening previously occurred is reopening after:
173 (A) the retail station stopped the sale of motor fuel at the retail station for a period of not
174 less than 72 continuous hours because of remodeling; or
175 (B) the transfer of the retail station to a new owner who is not an affiliate;
176 (ii) the below cost sale occurs only from the retail station that is reopening;
177 (iii) the first sale of motor fuel at a price below cost in connection with the reopening
178 occurs within 60 days from the day the retail station makes its first sale of motor fuel after the
179 reopening; and
180 (iv) the below cost sale of motor fuel at the retail station in connection with the reopening
181 occurs no later than 72 hours from the first sale of motor fuel at a price below cost in connection
182 with the reopening.
183 (3) Notwithstanding Subsection (2), any below cost price for the sale of motor fuel made
184 by any person to meet the price at which a competitor has made a sale of motor fuel in connection
185 with an opening or reopening may not occur after the 72 hour period described in:
186 (a) Subsection (2)(a)(iii)(C); or
187 (b) Subsection (2)(b)(iv).
188 [
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190 [
191 [
192 sale [
193 (5) Notwithstanding Section 13-16-2 , for purposes of Subsection (2)(a)(iii)(C) and
194 Subsection (2)(b)(iv) the term "sale" does not include an offer to sale.
195 Section 5. Section 13-16-7 is amended to read:
196 13-16-7. Civil actions authorized -- Expenses -- Jurisdiction and venue.
197 (1) (a) If the [
198 person has engaged in acts or practices that violate Section 13-16-4 [
199 request the attorney general or a county attorney to commence a civil action to enjoin the acts or
200 practices, seek civil penalties as provided in Subsection (1)(b), and upon a proper showing, a
201 temporary restraining order, preliminary injunction, or permanent injunction shall issue without
202 the necessity of a bond.
203 (b) Any person who violates Section 13-16-4 [
204 penalty, assessed by a court, not to exceed $5,000 per day for each business location where a
205 violation occurred.
206 (2) (a) Any person injured as a result of an act or practice that violates Section 13-16-4 [
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208 judgment, injunctive relief, a treble award of actual damages, and exemplary damages.
209 (b) Any action under this subsection shall be brought within two years after the alleged
210 violation occurred.
211 (3) The court, in making an award under Subsection (1) or (2), may award court costs and
212 a reasonable attorney's fee to the prevailing party, except that the court may not award attorney's
213 fees or court costs against the state, a state agency, or a political subdivision of the state.
214 (4) If the state, a state agency, or a political subdivision of the state prevails in an action
215 under this chapter, it is entitled to an award for reasonable investigative expenses in addition to
216 any other relief granted.
217 (5) (a) The district courts of this state may hear and determine all cases brought under this
218 section.
219 (b) Venue lies in any county where the defendant is doing business or in the county where
220 the plaintiff resides.
221 Section 6. Section 13-16-8 is amended to read:
222 13-16-8. Rebuttable presumption in a civil or administrative action.
223 (1) In [
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226 brought under Section 13-16-13 :
227 (a) a rebuttable presumption described in Subsection (2)(a) is created if the person bringing
228 the action shows that the defendant:
229 (i) engages in commerce within this state; and
230 (ii) sells motor fuel in this state below cost; or
231 (b) a rebuttable presumption described in Subsection (2)(b) is created if the person
232 bringing the action shows that the defendant engages in commerce within this state and in the
233 course of such commerce, either directly or indirectly:
234 (i) sells motor fuel for resale in this state at a price lower than the price it charges other
235 persons purchasing motor fuel of like grade and quality at reasonably the same time for resale in
236 this state on the same level of distribution; or
237 (ii) sells motor fuel:
238 (A) to itself or an affiliate;
239 (B) for resale in this state on a different marketing level of distribution; and
240 (C) at a transfer price lower than the price it charges a person that purchases motor fuel
241 of like grade and quality at reasonably the same time for resale in this state on the same level of
242 distribution.
243 (2) (a) If the showing described in Subsection (1)(a) is made, there is a rebuttable
244 presumption that the intent or effect of the sale is to:
245 (i) injure competition;
246 (ii) induce the buying of other merchandise;
247 (iii) unfairly divert trade from a competitor; or
248 (iv) otherwise injure a competitor.
249 (b) If the showing described in Subsection (1)(b) is made, there is a rebuttable presumption
250 that the intent or effect of the sale is to injure competition.
251 (3) (a) The defendant may rebut the presumption described in Subsection (2)(a) by:
252 (i) producing evidence that proves by a preponderance of the evidence that it is more
253 probable than not that the sale was made without the intent or effect described in Subsection (2)(a);
254 or
255 (ii) showing that the sale is not a violation under Section 13-16-6 .
256 (b) The defendant may rebut the presumption described in Subsection (2)(b) by:
257 (i) producing evidence that proves by a preponderance of the evidence that it is more
258 probable than not that the sale was made without the intent or effect described in Subsection (2)(b);
259 or
260 (ii) showing that the sale is not a violation under Section 13-16-6 .
261 Section 7. Section 13-16-9 is amended to read:
262 13-16-9. Right of purchaser to obtain price and cost information from marketer.
263 A person who purchases motor fuel for resale and who has cause to believe that another
264 person marketing motor fuel has violated Section 13-16-4 [
265 court and a proper showing of cause, obtain an order requiring the marketer to provide the
266 following information:
267 (1) the price or transfer price at which [
268 fuel to each level of distribution in [
269 (2) information relevant to the market area to which [
270 motor fuel in this state; and
271 (3) the cost of, amount, and the nature of all discounts, rebates, allowances, services, or
272 facilities connected with the handling[
273 marketer provides to:
274 (a) each level of [
275 (b) the local market area of the complainant.
276 Section 8. Section 13-16-10 is amended to read:
277 13-16-10. Recordkeeping -- Civil penalty.
278 (1) Persons engaged in commerce within this state who sell [
279 in this state shall maintain records accurately indicating the date and the time of day of each change
280 in the sale price of motor fuel and the identity of the person who recorded the price change. In the
281 event the change in price is to meet a lower price of a competitor, the record shall set forth the
282 competitor by name and address, specifying the price which was met. These records shall be
283 maintained for a period of two years.
284 (2) The records shall be made available to the Division of Consumer Protection and the
285 attorney general on request.
286 (3) A person who fails to comply with Subsection (1) is liable to the state for a civil
287 penalty, assessed by a court or by the division in an administrative action, of $500 per day for each
288 business location where a violation occurred.
289 Section 9. Section 13-16-11 is amended to read:
290 13-16-11. Applicability.
291 [
292 of motor fuel, regardless of the size of a marketing operation.
293 [
294
295 Section 10. Section 13-16-13 is enacted to read:
296 13-16-13. Administrative actions.
297 (1) In addition to other penalties and remedies provided in this chapter, if a person violates
298 this chapter, the division may do one or more of the following:
299 (a) issue a cease and desist order;
300 (b) impose an administrative fine not to exceed $5,000 for each day on which a violation
301 of this chapter occurs for each business location where a violation of this chapter occurs; or
302 (c) take any action permitted under Section 13-2-6 .
303 (2) All money received through administrative fines imposed under this section shall be
304 deposited in the Consumer Protection Education and Training Fund created by Section 13-2-8 .
305 Section 11. Repealer.
306 This act repeals:
307 Section 13-16-5, Unlawful sale by refiner.
Legislative Review Note
as of 1-21-99 7:02 AM
This legislation raises the following constitutional or statutory concerns:
State and federal constitutional issues concerning due process limits may be raised when the state
restricts below cost sales of or discriminatory market activities involving a commodity such as
motor fuel and creates rebuttable presumptions in establishing unlawful those acts. The Utah
Supreme Court, while upholding as constitutional the Motor Fuel Marketing Act (as it read prior
to 1987) against a due process challenge, reserved ruling on the issue of whether a showing of
intent is required by due process. State v. Rio Vista Oil, 786 P.2d 1343 (Utah 1990). A limited
examination of case law in other states is not conclusive in determining what is required by due
process.