PRINTER'S NO. 2120
No. 1684 Session of 1975
INTRODUCED BY SCHWEDER, ZWIKL, McCALL, M. E. MILLER JR., REED,
KOWALYSHYN, RUGGIERO, McLANE, MILANOVICH, O'DONNELL, COLE,
ZELLER, RITTER, PRENDERGAST, MILLIRON, DiCARLO, LAUGHLIN,
BRADLEY, ECKENSBERGER, KERNICK, COHEN, WAGNER, McGINNIS,
POLITE, WHITTLESEY, SPENCER, VALICENTI AND LINCOLN,
JULY 24, 1975
REFERRED TO COMMITTEE ON RULES, JULY 24, 1975
AN ACT
1 Regulating certain trade practices affecting the distribution of
2 motor fuels.
3 The General Assembly of the Commonwealth of Pennsylvania
4 hereby enacts as follows:
5 Section 1. Short Title.--This act shall be known and may be
6 cited as the "Motor Fuel Distribution Control Act."
7 Section 2. Definitions.--As used in this act:
8 "Automotive products." Any product sold or distributed by a
9 retail dealer for use with a motor vehicle, whether or not such
10 product is essential for the maintenance of the motor vehicle
11 and whether or not such product is also used for non-automotive
12 purposes.
13 "Coupon." Stamps which are given to a customer which may
14 later be redeemed for service or merchandise, and includes
15 'green stamps,' 'yellow stamps,' and similar promotions.
16 "Deposit in advance." Any deposit, regardless of its
1 purported purpose, which is received by a distributor or
2 manufacturer from the retail dealer as a breakage, security or
3 other similar deposit.
4 "Distributor." Any jobber or other person who purchases
5 motor fuel and other automotive products from a manufacturer for
6 the re-sale to a retail dealer.
7 "Manufacturer." Every producer or refiner of petroleum
8 products, or the producer or fabricator of any automotive
9 product sold or distributed by a service station.
10 "Marketing agreement." A written or parol agreement between a
11 manufacturer and a retail dealer or a distributor and a retail
12 dealer under which (i) the dealer promises to sell or distribute
13 the product or products of the manufacturer or distributor; (ii)
14 the retail dealer is granted the right to use a trademark, trade
15 name, service mark or other identifying symbol or name owned by
16 a manufacturer or distributor: or (iii) the retail dealer is
17 granted the right to occupy premises owned, leased or controlled
18 by a manufacturer or distributor.
19 "Motor fuel." A substance or combination of substances which
20 is intended to be or is capable of being used for the purpose of
21 propelling or running by combustion any internal combustion
22 engine and sold or used for that purpose.
23 "Retail fuel outlet." A place at which gasoline and oil are
24 stored and supplied to service stations or to the public, and
25 which is operated by independent contractors or by persons in
26 the employ of such independent contractors.
27 "Retail dealer." A person operating a service station,
28 filling station, store, garage or other place of business for
29 the sale of motor fuel for delivery into the service tank or
30 tanks of any vehicle propelled by an internal combustion engine.
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1 Section 3. Manufacturers and Distributors.--Motor fuel
2 distributors, diesel fuel sellers, heating oil distributors
3 selling gasoline, manufacturers, refiners, jobbers and
4 individuals wishing to establish retail service stations shall,
5 before selling or offering for sale motor vehicle or special
6 fuels, under whatever name, for the purpose of powering motor
7 vehicles shall file with the Department of Commerce a
8 declaration that they desire to sell such products in this
9 Commonwealth. Such statement shall contain the name, brand or
10 trademark of the products intended to be sold, together with the
11 name and address of the supplier thereof, and a continuing
12 covenant that all such products shall be in conformity with
13 State standards, that no water or other adulterants shall be
14 added to any oil or gasoline products, and that the chemical
15 composition of products shall not be changed except after notice
16 to the Department of Commerce. The provisions of this section
17 shall also apply to gasoline and other automotive fuels
18 distributed by the Governor under emergency powers.
19 Section 4. Independence of Retail Dealers.--(a) No
20 manufacturer or distributor of petroleum products shall open a
21 major brand, secondary brand or unbranded retail gasoline outlet
22 or service station in this Commonwealth.
23 (b) The Department of Commerce shall adopt rules or
24 regulations defining the circumstances in which a manufacturer
25 or distributor may temporarily operate a service station in
26 times of emergency.
27 Section 5. Equal Treatment.--(a) A manufacturer, distributor
28 or other person supplying petroleum products to retail dealers
29 and other retail fuel outlets shall extend all voluntary
30 allowances uniformly to the dealers or outlets he supplies.
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1 (b) A manufacturer, distributor or other person supplying
2 petroleum products to retail dealers or other retail fuel
3 outlets shall apply all equipment rentals uniformly to the
4 dealers and outlets he supplies.
5 (c) A manufacturer, distributor or other person supplying
6 petroleum products to retail dealers or other retail fuel
7 outlets shall apportion uniformly all gasoline and special fuels
8 supplied during periods of shortages, on an equitable basis, and
9 shall not discriminate among dealers and outlets in such
10 allotments.
11 Section 6. Equipment Purchased by Retail Dealer.--Property
12 purchased by a retail dealer and affixed to a service station or
13 retail fuel outlet shall remain the property of the person
14 purchasing same, notwithstanding the fact that it is permanently
15 attached. Upon termination of a marketing agreement, termination
16 of a lease or the vacating of the premises by the retail dealer,
17 the purchaser of the property shall have a reasonable time in
18 which to remove same from the premises or may enter into an
19 agreement with the owner of the premises for the purchase of the
20 equipment at a fair and equitable price. In removing property
21 which has become affixed to the premises, the person removing
22 the property shall leave the premises in the same condition an
23 they were at the time the property was attached.
24 Section 7. Purchase Promotion Sales.--No agreement shall
25 provide for the use of any promotion, premium, coupon, give-away
26 or rebate in the operation of the business. A dealer may,
27 however, participate in a promotion, premium, coupon, give-away
28 or rebate sponsored by a manufacturer or distributor completely
29 paid for by the manufacturer or distributor.
30 Section 8. Marketing Agreements.--A marketing agreement
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1 between a manufacturer and a retail dealer or between a
2 distributor and a retail dealer shall be subject to the
3 following non-waivable provisions, whether or not set forth in
4 the agreement:
5 (1) No agreement shall require a retail dealer to keep his
6 station or outlet open for business for any specified number of
7 hours per day, or days per week.
8 (2) The retail dealer shall have the right to cancel a
9 marketing agreement until midnight of the seventh business day
10 after the day on which the agreement was signed, by giving the
11 other party notice in writing of the cancellation. Upon giving
12 the other party such notice, all money, equipment and
13 merchandise loaned, sold or delivered to the retail dealer under
14 the agreement shall be returned to the other party for full
15 credit, or the cash equivalent. If the other party to the
16 agreement is the owner of the real estate upon which the retail
17 dealer conducted his business, the dealer shall deliver
18 possession of the real estate to the other party.
19 (3) No agreement shall contain a provision which limits the
20 right of either party to a trial by jury or the making of
21 counterclaims.
22 (4) The price at which a retail dealer sells products shall
23 not be fixed nor maintained by a manufacturer or distributor,
24 nor shall any person seek to do so, nor shall the price of
25 products be subject to enforcement or coercion by any person in
26 any manner. Nothing herein shall be construed to prohibit a
27 manufacturer or distributor from suggesting prices and
28 counseling with dealers concerning prices. Agreements between a
29 manufacturer and a dealer or between a distributor and a dealer
30 shall have, in ten-point type, the legend: price fixing or
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1 mandatory prices for any products covered in this agreement is
2 prohibited. A service station dealer may sell any products
3 listed in this agreement for a price which he alone may decide.
4 (5) A party to a marketing agreement with a retail dealer
5 may unreasonably withhold his consent to an assignment, transfer
6 or sale of the marketing agreement. A manufacturer or
7 distributor may not unreasonably refuse to renew a marketing
8 agreement.
9 (6) The non-renewal of a marketing agreement shall not be
10 effective unless the party intending not to review gives the
11 other party notice of his intention at least 90 days prior to
12 the expiration of the term of that marketing agreement, stating
13 the reason for such non-renewal.
14 (7) Notwithstanding any contract provision, no lease
15 agreement or any other contract which bases rent upon the amount
16 of products sold shall permit any increase in such rentals if
17 there is a ceiling on the amount which may be charged for the
18 product.
19 (8) If the marketing agreement or rental agreement requires
20 the retail dealer to provide to the distributor or manufacturer
21 or other party to the agreement any deposit in advance or any
22 deposit for the use of the service station or delivery of fuel,
23 such deposit shall be held by the person designated to receive
24 it in the agreement and shall be held for the term of the rental
25 agreement unless it is sooner terminated. The deposit shall be
26 returned within 30 days after the termination of the agreement
27 with interest together with interest on such deposit at the rate
28 of 6% per annum.
29 Section 9. Termination of Contract.--Whenever a marketing
30 agreement is terminated the manufacturer shall, within 30 days
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1 thereafter, tender to the dealer, for products sold to the
2 dealer which he has been unable to sell, the full price
3 orginally paid by the dealer for the products. In the event
4 there is any existing indebtedness owned directly to the
5 manufacturer by the dealer, the value of the products being re-
6 purchased shall first be applied to the existing indebtedness,
7 which shall be reduced by the value of the products re-purchased
8 and by the subtraction of any interest or service charges
9 imposed on the products being re-purchased. If the manufacturer
10 makes no tender within 30 days, the dealer may sell the products
11 for as reasonable a price as may be obtained, and shall have a
12 cause of action against the manufacturer for the balance.
13 Section 10. Department of Commerce.--The Department of
14 Commerce shall make such rules and regulations as it deems
15 necessary for the proper enforcement of this act.
16 Section 11. Effective Date.--This act shall take effect
17 immediately.
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