First Substitute H.B. 162

Representative David Ure proposes to substitute the following bill:

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 sets standards for the confidentiality and use
11 of information. The act provides a sunset date.
12 This act affects sections of Utah Code Annotated 1953 as follows:
13 AMENDS:
14 13-16-2, as last amended by Chapter 260, Laws of Utah 1991
15 13-16-3, as last amended by Chapter 189, Laws of Utah 1987
16 13-16-4, as last amended by Chapter 300, Laws of Utah 1992
17 13-16-6, as last amended by Chapter 279, Laws of Utah 1994
18 13-16-7, as last amended by Chapter 260, Laws of Utah 1991
19 13-16-10, as last amended by Chapter 300, Laws of Utah 1992
20 13-16-11, as enacted by Chapter 260, Laws of Utah 1991
21 ENACTS:
22 13-16-13, Utah Code Annotated 1953
23 63-55-213, Utah Code Annotated 1953
24 REPEALS:
25 13-16-5, as last amended by Chapter 189, Laws of Utah 1987

26 13-16-8, as last amended by Chapter 189, Laws of Utah 1987
27 13-16-9, as last amended by Chapter 189, Laws of Utah 1987
28 13-16-12, as enacted by Chapter 279, Laws of Utah 1994
29 Be it enacted by the Legislature of the state of Utah:
30 Section 1. Section 13-16-2 is amended to read:
31 13-16-2. Definitions.
32 As used in this chapter:
33 (1) "Affiliate" means [an entity] a person that owns or controls, or is owned or controlled
34 by, another person, whether through stock ownership or otherwise.
35 (2) "Cost" means an amount calculated as follows:
36 (a) (i) if motor fuel is not purchased from an affiliate:
37 (A) the lowest invoice cost that the seller charged to the purchaser for motor fuel of like
38 grade and quality within five days prior to the date of any alleged unlawful resale by the purchaser;
39 or
40 (B) if there was no sale to the purchaser within the preceding five days, the purchaser's last
41 invoice cost for motor fuel of like grade and quality; or
42 (ii) if motor fuel is purchased or received from an affiliate:
43 (A) the lowest transfer price that the affiliate charged to the purchaser or receiver for motor
44 fuel of like grade and quality within five days prior to the date of any alleged unlawful resale by
45 the purchaser or receiver; or
46 (B) if there was no purchase or receipt within the preceding five days, the last transfer
47 price for motor fuel of like grade and quality; [less]
48 (b) [trade discounts, allowances, or rebates] less each of the following that the purchaser
49 receives on the particular invoice or transfer:
50 (i) a trade discount;
51 (ii) an allowance; or
52 (iii) a rebate; [plus] and
53 (c) [the reasonable cost of doing business as determined by generally accepted accounting
54 principles, which, with respect to retail sales and in the absence of proof of a lesser cost, is
55 presumed to be a margin of 6% of the posted retail price;] plus the following if not included in the
56 invoice cost or transfer price:

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

88 [(5)] (10) "Retail sale" means any sale of motor fuel to a member of the motoring public
89 for consumption.
90 [(6)] (11) (a) "Sale," "sales," "sell," "sells," or "sold" means [any] the transfer of, [gift,
91 sale,] or offer [for sale, or advertisement for sale in any manner or by any means, including any
92 transfer of motor fuel by a person to himself or his affiliate.] to transfer:
93 (i) ownership, title to, or possession of, motor fuel from one person to another; and
94 (ii) with or without consideration.
95 (b) "Sale," "sales," "sell," "sells," or "sold" includes any method by which any person
96 transfers or offers to transfer ownership, title to, or possession of, motor fuel to itself or an affiliate
97 for resale at another marketing level.
98 (12) "Terminal" means a facility:
99 (a) for the storage of motor fuel that is:
100 (i) part of a refinery; or
101 (ii) supplied by:
102 (A) a motor vehicle;
103 (B) a pipeline; or
104 (C) a vessel; and
105 (b) from which motor fuel is removed for distribution at a rack.
106 [(7)] (13) "Transfer price" means the price used by a refiner [in transferring] in connection
107 with any sale of motor fuel to itself or an affiliate for resale at another marketing level.
108 Section 2. Section 13-16-3 is amended to read:
109 13-16-3. Requirement to establish and disclose "transfer prices" and "posted rack
110 prices."
111 [Each] A refiner engaged in commerce in this state is required to:
112 (1) establish [and publicly disclose upon request]:
113 (a) its transfer price on all grades of motor fuel [transferred or] sold to itself or an affiliate
114 for resale in this state at a different marketing level of distribution[.]; and
115 (b) a posted rack price on all grades of motor fuel the refiner or other person sells at the
116 rack in this state; and
117 (2) at the request of the attorney general, disclose to the attorney general:
118 (a) any transfer price described in Subsection (1)(a); or

119 (b) any posted rack price described in Subsection (1)(b).
120 Section 3. Section 13-16-4 is amended to read:
121 13-16-4. Unlawful sale by persons engaged in commerce.
122 (1) It is unlawful for any person engaged in commerce within this state to sell [or offer to
123 sell] motor fuel in this state below cost as defined in Subsection 13-16-2 (2) if[: (a)] the intent or
124 effect of the sale [or offer] is to:
125 (a) injure competition; [or]
126 (b) [the intent and purpose of the sale or offer is to] induce the [purchase] buying of other
127 merchandise[, to];
128 (c) unfairly divert trade from a competitor[,]; or
129 (d) otherwise [to] injure a competitor.
130 (2) It is unlawful for any person engaged in commerce [within] in this state, in the course
131 of such commerce, either directly or indirectly, to:
132 (a) sell motor fuel through an affiliate for retail sale in this state on a different marketing
133 level of distribution at a price lower than the price it charges a person who purchases motor fuel
134 of like grade and quality at reasonably the same time for retail sale in this state on the same level
135 of distribution, if the intent or effect of the sale is to injure competition; or
136 (b) sell [or offer to sell] motor fuel for resale in this state at a price lower than the seller
137 charges other persons [at the same time and] purchasing motor fuel of like grade and quality at
138 reasonably the same time for resale in this state on the same level of distribution, if the intent or
139 effect of the sale [or offer] is to injure competition.
140 Section 4. Section 13-16-6 is amended to read:
141 13-16-6. Sales not considered violations.
142 (1) It is not a violation of [Section] Subsection 13-16-4 (2) [or 13-16-5 ] if:
143 (a) a difference exists at the same level of distribution between the transfer price or sales
144 price of motor fuel of like grade and quality and the price charged to a person who purchases for
145 resale, including any discount, rebate, allowance, service, or facility granted to any person,
146 including any of a supplier's own marketing operations, who purchases for resale, in excess of
147 those provided to [a] any other person who purchases for resale if the difference [is] makes only
148 due [to a difference] allowance for differences in the cost of:
149 (i) manufacturing;

150 (ii) transportation, shipping, or other delivery method[, transportation,]; or
151 (iii) marketing[,] or sale[, or] resulting from the method or quantity in which the motor
152 fuel is sold[.] or delivered; or
153 [(2)] (b) [It is not a violation of Section 13-16-4 or 13-16-5 if] a difference exists in
154 transfer price and sales price or between sales prices at the same marketing level if the difference
155 exists because of a good faith effort to meet the equally low price of a competitor or if the sale is
156 exempt under Section 13-5-12 .
157 [(3)(a)] (2) It is not a violation of Subsection 13-16-4 (1) if [the] a sale below cost is:
158 (a) the result of a good faith effort to meet the equally low price of a competitor [or if the];
159 or
160 (b) a sale [is] exempt under Section 13-5-12 .
161 [(b) In determining whether a person has set the price at which motor fuel is sold or
162 offered for sale to meet the price of a competitor, the court shall consider only whether the seller
163 or offeror has set the price of motor fuel to match the price at which a competitor has sold or
164 offered motor fuel without regard to any other items sold or offered in conjunction with the sale
165 or offer for sale of the motor fuel.]
166 Section 5. Section 13-16-7 is amended to read:
167 13-16-7. Investigations and civil actions authorized -- Expenses -- Jurisdiction and
168 venue.
169 (1) (a) The attorney general may conduct investigations of violations of this chapter and
170 may issue civil investigative demands as provided in Subsections 76-10-917 (1) through (7), and
171 (9), stating the nature of the activities under investigation constituting the alleged violation of this
172 chapter and the applicable provision of law and that any information provided in response to the
173 demand may be used in a civil proceeding. If the [Division of Consumer Protection] attorney
174 general has reason to believe that a person has engaged in acts or practices that violate Section
175 13-16-4 [or 13-16-5 ], the [division] attorney general may [request the attorney general or a county
176 attorney to] commence a civil action to enjoin the acts or practices, seek civil penalties as provided
177 in Subsection (1)(b), and upon a proper showing, a temporary restraining order, preliminary
178 injunction, or permanent injunction shall issue without the necessity of a bond.
179 (b) Any person who violates Section 13-16-4 [or 13-16-5 ] is liable to the state for a civil
180 penalty, assessed by a court, not to exceed $5,000 per day for each business location where a

181 violation occurred.
182 (2) (a) Any person injured as a result of an act or practice that violates Section 13-16-4 [or
183 13-16-5 ] may bring a civil action for appropriate relief, including an action for a declaratory
184 judgment, injunctive relief, a treble award of actual damages, and exemplary damages.
185 (b) Any action under this Subsection (2) shall be brought within two years after the alleged
186 violation occurred.
187 (3) The court, in making an award under Subsection (1) or (2), may award court costs and
188 a reasonable attorney's fee to the prevailing party, except that the court may not award attorney's
189 fees or court costs against the state, a state agency, or a political subdivision of the state.
190 (4) If the state, a state agency, or a political subdivision of the state prevails in an action
191 under this chapter, it is entitled to an award for reasonable investigative expenses in addition to
192 any other relief granted.
193 (5) (a) The district courts of this state may hear and determine all cases brought under this
194 section.
195 (b) Venue lies in any county where the defendant is doing business or in the county where
196 the plaintiff resides.
197 Section 6. Section 13-16-10 is amended to read:
198 13-16-10. Recordkeeping -- Civil penalty.
199 (1) Persons engaged in commerce within this state who sell [or offer to sell] motor fuel
200 in this state shall maintain records accurately indicating the date and the time of day of each change
201 in the sale price of motor fuel and the identity of the person who recorded the price change. In the
202 event the change in price is to meet a lower price of a competitor, the record shall set forth the
203 competitor by name and address, specifying the price which was met. These records shall be
204 maintained for a period of two years.
205 (2) The records shall be made available to [the Division of Consumer Protection and] the
206 attorney general on request.
207 (3) A person who fails to comply with Subsection (1) is liable to the state for a civil
208 penalty, assessed by a court, of $500 per day for each business location where a violation occurred.
209 Section 7. Section 13-16-11 is amended to read:
210 13-16-11. Applicability.
211 [(1)] Section 13-16-4 applies equally to all persons engaged in commerce in the marketing

212 of motor fuel, regardless of the size of a marketing operation.
213 [(2) Section 13-16-5 applies equally to all refiners engaged in commerce in the marketing
214 of motor fuel, regardless of the size of a marketing operation.]
215 Section 8. Section 13-16-13 is enacted to read:
216 13-16-13. Confidentiality and use of information.
217 (1) Any transfer price or posted rack price disclosed to the attorney general pursuant to
218 Subsection 13-16-3 (2), any records disclosed to the attorney general pursuant to Section 13-16-10 ,
219 and any testimony, responses to interrogatories, documents or materials provided to the attorney
220 general pursuant to a civil investigative demand shall be kept confidential by the attorney general
221 unless confidentiality is waived in writing by the person who has provided the transfer price,
222 posted rack price or records or has testified, answered interrogatories, provided documents or
223 materials.
224 (2) Notwithstanding any other provision of this section, the attorney general may disclose
225 any records, testimony, documents, materials, or other information obtained under this section,
226 without either the consent of the person from whom it was received or the person being
227 investigated, to:
228 (a) any court; and
229 (b) officers and employees of federal or state law enforcement agencies, provided the
230 person from whom the information, documents, or objects were obtained is notified 20 days prior
231 to disclosure, and the federal or state law enforcement agency certifies that the information will
232 be:
233 (i) maintained in confidence, as required by Subsection 13-16-13 (1); and
234 (ii) used only for official law enforcement purposes.
235 Section 9. Section 63-55-213 is enacted to read:
236 63-55-213. Repeal dates, Title 13.
237 Title 13, Chapter 16, Motor Fuel Marketing Act, is repealed July 1, 2006.
238 Section 10. Repealer.
239 This act repeals:
240 Section 13-16-5, Unlawful sale by refiner.
241 Section 13-16-8, Burden of proof in civil action.
242 Section 13-16-9, Right of purchaser to obtain price and cost information from

243 marketer.
244 Section 13-16-12, Rulemaking authority.