H.B. 162

1

MOTOR FUEL MARKETING ACT
2 2001 GENERAL SESSION
3 STATE OF UTAH
4 Sponsor: David Ure
5 This act modifies the Motor Fuel Marketing Act. The act amends definitions. The act
6 addresses the requirement to establish and disclose certain prices. The act amends
7 provisions against unlawful sales. The act addresses sales not considered violations. The act
8 transfers civil enforcement authority from the Division of Consumer Protection to the
9 attorney general. The act repeals the rebuttable presumption and the right of a purchaser
10 to obtain price and cost information. The act provides a sunset date.
11 This act affects sections of Utah Code Annotated 1953 as follows:
12 AMENDS:
12a h 13-2-1, as last amended by Chapters 150 and 324, Laws of Utah 1998 h
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 13-16-10, as last amended by Chapter 300, Laws of Utah 1992
19 13-16-11, as enacted by Chapter 260, Laws of Utah 1991
20 ENACTS:
21 63-55-213.1, Utah Code Annotated 1953
22 REPEALS:
23 13-16-5, as last amended by Chapter 189, Laws of Utah 1987
24 13-16-8, as last amended by Chapter 189, Laws of Utah 1987
25 13-16-9, as last amended by Chapter 189, Laws of Utah 1987
26 Be it enacted by the Legislature of the state of Utah:
26a h Section 1. Section 13-2-1 is amended to read: h

26b h 13-2-1. Consumer protection division established -- Functions.
26c There is established within the Department of Commerce the Division of Consumer Protection.
26d The division shall administer and enforce the following:
26e (1) Chapter 5, Unfair Practices Act;
26f (2) Chapter 10a, Music Licensing Practices Act;
26g (3) Chapter 11, Consumer Sales Practices Act;
26h (4) Chapter 15, Business Opportunity Disclosure Act;
26i [(5) Chapter 16, Motor Fuel Marketing Act;]
26j [(6)] (5) Chapter 20, New Motor Vehicle Warranties Act;
26k [(7)] (6) Chapter 21, Credit Services Organizations Act;
26l [(8)] (7) Chapter 22, Charitable Solicitations Act;
26m [(9)] (8) Chapter 23, Health Spa Services Protection Act;
26n [(10)] (9) Chapter 25a, Telephone and Facsimile Solicitation Act;
26o [(11)] (10) Chapter 26, Telephone Fraud Prevention Act; and
26p [(12)] (11) Chapter 28, Prize Notices Regulation Act.
26q [(13)] (12) Chapter 30, Utah Personal Introduction Services Protection Act. h
27 Section h [ 1. ] 2. h Section 13-16-2 is amended to read:

28 13-16-2. Definitions.
29 As used in this chapter:
30 (1) "Affiliate" means [an entity] a person that owns or controls, or is owned or controlled
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; [less]
45 (b) [trade discounts, allowances, or rebates] less each of the following that the purchaser
46 receives on the particular invoice or transfer:
47 (i) a trade discount;
48 (ii) an allowance; or
49 (iii) a rebate; [plus] and
50 (c) [the reasonable cost of doing business as determined by generally accepted accounting
51 principles, which, with respect to retail sales and in the absence of proof of a lesser cost, is
52 presumed to be a margin of 6% of the posted retail price;] plus the following if not included in the
53 invoice cost or transfer price:
54 [(d)] (i) freight charges [and];
55 (ii) all applicable federal, state, and local taxes [not already included in the invoice cost
56 or transfer price]; and
57 (iii) charges imposed by a federal, state, or local government that are not taxes.
58 (3) "Motor fuel" means gasoline, diesel fuel, gasohol, and all other fuels of a type

59 designated for use as a motor fuel in self-propelled vehicles designated primarily for use on public
60 streets, roads, and highways.
61 (4) "Person" means any individual, partnership, corporation, or legal entity.
62 (5) (a) "Posted rack price" means the price at which a refiner or other person offers a grade
63 of motor fuel for sale at the rack before:
64 (i) a reduction for:
65 (A) a trade discount;
66 (B) an allowance; or
67 (C) a rebate; or
68 (ii) the addition of:
69 (A) a charge for freight;
70 (B) a federal, state, or local tax; or
71 (C) a charge imposed by a federal, state, or local government that is not a tax.
72 (b) Notwithstanding Subsection (5)(a), the posted rack price for a refiner or other person
73 offering motor fuel for sale at the rack who does not establish a posted rack price shall be the
74 lowest posted rack price of any person for motor fuel of like grade or quality in the geographic area
75 served by the refiner or other person.
76 (6) "Purchase," "purchases," or "purchased" means the acquisition of motor fuel as a result
77 of a sale or resale.
78 (7) "Rack" means a deck, platform, or open bay that consists of a series of metered pipes
79 and hoses for the delivery or removal of motor fuel from the refinery or terminal into:
80 (a) a motor vehicle;
81 (b) a rail car; or
82 (c) a vessel.
83 (8) "Receipt" or "received" has the same meaning as purchase under Subsection (6).
84 (9) "Resale" or "resales" has the same meaning as sale under Subsection (11).
85 [(5)] (10) "Retail sale" means any sale of motor fuel to a member of the motoring public
86 for consumption.
87 [(6)] (11) (a) "Sale," "sales," "sell," "sells," or "sold" means [any] the transfer of, [gift,
88 sale,] or offer [for sale, or advertisement for sale in any manner or by any means, including any
89 transfer of motor fuel by a person to himself or his affiliate.] to transfer:

90 (i) ownership, title to, or possession of, motor fuel from one person to another; and
91 (ii) with or without consideration.
92 (b) "Sale," "sales," "sell," "sells," or "sold" includes any method by which any person
93 transfers or offers to transfer ownership, title to, or possession of, motor fuel to itself or an affiliate
94 for resale at another marketing level.
95 (12) "Terminal" means a facility:
96 (a) for the storage of motor fuel that is:
97 (i) part of a refinery; or
98 (ii) supplied by:
99 (A) a motor vehicle;
100 (B) a pipeline; or
101 (C) a vessel; and
102 (b) from which motor fuel is removed for distribution at a rack.
103 [(7)] (13) "Transfer price" means the price used by a refiner [in transferring] in connection
104 with any sale of motor fuel to itself or an affiliate for resale at another marketing level.
105 Section 2. Section 13-16-3 is amended to read:
106 13-16-3. Requirement to establish and disclose "transfer prices" and "posted rack
107 prices."
108 [Each] (1) A refiner engaged in commerce in this state is required to:
109 (a) establish [and publicly disclose upon request]:
110 (i) its transfer price on all grades of motor fuel [transferred or] sold to itself or an affiliate
111 for resale in this state at a different marketing level of distribution[.]; and
112 (ii) a posted rack price on all grades of motor fuel the refiner or other person sells at the
113 rack in this state; and
114 (b) at the request of the attorney general, disclose to the attorney general:
115 (i) any transfer price described in Subsection (1)(a)(i); or
116 (ii) any posted rack price described in Subsection (1)(a)(ii).
117 (2) Information disclosed to the attorney general under Subsection (1)(b) shall be
118 considered protected records for purposes of Section 63-2-304 .
119 Section 3. Section 13-16-4 is amended to read:
120 13-16-4. Unlawful sale by persons engaged in commerce.

121 (1) It is unlawful for any person engaged in commerce within this state to sell [or offer to
122 sell] motor fuel in this state below cost as defined in Subsection 13-16-2 (2) if[: (a)] the intent or
123 effect of the sale [or offer] is to:
124 (a) injure competition; [or]
125 (b) [the intent and purpose of the sale or offer is to] induce the [purchase] buying of other
126 merchandise[, to];
127 (c) unfairly divert trade from a competitor[,]; or
128 (d) otherwise [to] injure a competitor.
129 (2) It is unlawful for any person engaged in commerce [within] in this state, in the course
130 of such commerce, either directly or indirectly, to:
131 (a) sell motor fuel through an affiliate for retail sale in this state on a different marketing
132 level of distribution at a price lower than the price it charges a person who purchases motor fuel
133 of like grade and quality at reasonably the same time for retail sale in this state on the same level
134 of distribution, if the intent or effect of the sale is to injure competition; or
135 (b) sell [or offer to sell] motor fuel for resale in this state at a price lower than the seller
136 charges other persons [at the same time and] purchasing motor fuel of like grade and quality at
137 reasonably the same time for resale in this state on the same level of distribution, if the intent or
138 effect of the sale [or offer] is to injure competition.
139 Section 4. Section 13-16-6 is amended to read:
140 13-16-6. Sales not considered violations.
141 (1) It is not a violation of [Section] Subsection 13-16-4 (2) [or 13-16-5 ] if:
142 (a) a difference exists at the same level of distribution between the transfer price or sales
143 price of motor fuel of like grade and quality and the price charged to a person who purchases for
144 resale, including any discount, rebate, allowance, service, or facility granted to any person,
145 including any of a supplier's own marketing operations, who purchases for resale, in excess of
146 those provided to [a] any other person who purchases for resale if the difference [is] makes only
147 due [to a difference] allowance for differences in the cost of:
148 (i) manufacturing;
149 (ii) transportation, shipping, or other delivery method[, transportation,]; or
150 (iii) marketing[,] or sale[, or] resulting from the method or quantity in which the motor
151 fuel is sold[.] or delivered; or

152 [(2)] (b) [It is not a violation of Section 13-16-4 or 13-16-5 if] a difference exists in
153 transfer price and sales price or between sales prices at the same marketing level if the difference
154 exists because of a good faith effort to meet the equally low price of a competitor or if the sale is
155 exempt under Section 13-5-12 .
156 [(3)] (2) It is not a violation of Subsection 13-16-4 (1) if [the] a sale below cost is:
157 (a) the result of a good faith effort to meet the equally low price of a competitor [or if the];
158 or
159 (b) a sale [is] exempt under Section 13-5-12 .
160 [(b) In determining whether a person has set the price at which motor fuel is sold or
161 offered for sale to meet the price of a competitor, the court shall consider only whether the seller
162 or offeror has set the price of motor fuel to match the price at which a competitor has sold or
163 offered motor fuel without regard to any other items sold or offered in conjunction with the sale
164 or offer for sale of the motor fuel.]
165 Section 5. Section 13-16-7 is amended to read:
166 13-16-7. Civil actions authorized -- Expenses -- Jurisdiction and venue.
167 (1) (a) If the [Division of Consumer Protection] attorney general has reason to believe that
168 a person has engaged in acts or practices that violate Section 13-16-4 [or 13-16-5 ], the [division]
169 attorney general may [request the attorney general or a county attorney to] commence a civil action
170 to enjoin the acts or practices, seek civil penalties as provided in Subsection (1)(b), and upon a
171 proper showing, a temporary restraining order, preliminary injunction, or permanent injunction
172 shall issue without the necessity of a bond.
173 (b) Any person who violates Section 13-16-4 [or 13-16-5 ] is liable to the state for a civil
174 penalty, assessed by a court, not to exceed $5,000 per day for each business location where a
175 violation occurred.
176 (2) (a) Any person injured as a result of an act or practice that violates Section 13-16-4 [or
177 13-16-5 ] may bring a civil action for appropriate relief, including an action for a declaratory
178 judgment, injunctive relief, a treble award of actual damages, and exemplary damages.
179 (b) Any action under this Subsection (2) shall be brought within two years after the alleged
180 violation occurred.
181 (3) The court, in making an award under Subsection (1) or (2), may award court costs and
182 a reasonable attorney's fee to the prevailing party, except that the court may not award attorney's

183 fees or court costs against the state, a state agency, or a political subdivision of the state.
184 (4) If the state, a state agency, or a political subdivision of the state prevails in an action
185 under this chapter, it is entitled to an award for reasonable investigative expenses in addition to
186 any other relief granted.
187 (5) (a) The district courts of this state may hear and determine all cases brought under this
188 section.
189 (b) Venue lies in any county where the defendant is doing business or in the county where
190 the plaintiff resides.
191 Section 6. Section 13-16-10 is amended to read:
192 13-16-10. Recordkeeping -- Civil penalty.
193 (1) Persons engaged in commerce within this state who sell [or offer to sell] motor fuel
194 in this state shall maintain records accurately indicating the date and the time of day of each change
195 in the sale price of motor fuel and the identity of the person who recorded the price change. In the
196 event the change in price is to meet a lower price of a competitor, the record shall set forth the
197 competitor by name and address, specifying the price which was met. These records shall be
198 maintained for a period of two years.
199 (2) The records shall be made available to [the Division of Consumer Protection and] the
200 attorney general on request and shall be considered protected records for purposes of Section
201 63-2-304 .
202 (3) A person who fails to comply with Subsection (1) is liable to the state for a civil
203 penalty, assessed by a court, of $500 per day for each business location where a violation occurred.
204 Section 7. Section 13-16-11 is amended to read:
205 13-16-11. Applicability.
206 [(1)] Section 13-16-4 applies equally to all persons engaged in commerce in the marketing
207 of motor fuel, regardless of the size of a marketing operation.
208 [(2) Section 13-16-5 applies equally to all refiners engaged in commerce in the marketing
209 of motor fuel, regardless of the size of a marketing operation.]
210 Section 8. Section 63-55-213.1 is enacted to read:
211 63-55-213.1. Repeal dates, Title 13.
212 Title 13, Chapter 16, Motor Fuel Marketing Act, is repealed July 1, 2006.
213 Section 9. Repealer.

214 This act repeals:
215 Section 13-16-5, Unlawful sale by refiner.
216 Section 13-16-8, Burden of proof in civil action.
217 Section 13-16-9, Right of purchaser to obtain price and cost information from
218 marketer.




Legislative Review Note
as of 12-18-00 8:19 AM

A limited legal review of this legislation raises no obvious constitutional or statutory concerns.

Office of Legislative Research and General Counsel