[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[S. 338 Reported in Senate (RS)]

                                                       Calendar No. 693

103d CONGRESS

  2d Session

                                 S. 338

                          [Report No. 103-387]

_______________________________________________________________________

                                 A BILL

 To amend the Petroleum Marketing Practices Act to clarify the Federal 
 standards governing the termination and nonrenewal of franchises and 
   franchise relationships for the sale of motor fuel, and for other 
                               purposes.

_______________________________________________________________________

           September 29 (legislative day, September 12), 1994

                        Reported with amendments





                                                       Calendar No. 693
103d CONGRESS
  2d Session
                                 S. 338

                          [Report No. 103-387]

 To amend the Petroleum Marketing Practices Act to clarify the Federal 
 standards governing the termination and nonrenewal of franchises and 
   franchise relationships for the sale of motor fuel, and for other 
                               purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

             February 4 (legislative day, January 5), 1993

 Mr. Ford (for himself and Mr. Krueger) introduced the following bill; 
   which was read twice and referred to the Committee on Energy and 
                           Natural Resources

           September 29 (legislative day, September 12), 1994

               Reported by Mr. Johnston, with amendments
  [Omit the part struck through and insert the part printed in italic]

_______________________________________________________________________

                                 A BILL


 
 To amend the Petroleum Marketing Practices Act to clarify the Federal 
 standards governing the termination and nonrenewal of franchises and 
   franchise relationships for the sale of motor fuel, and for other 
                               purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Petroleum Marketing Practices Act 
Amendments of 1993''.

SEC. 2. CONVERSION TO COMPANY OPERATION.

    Section 102(b)(3)(A)(ii) of the Petroleum Marketing Practices Act 
(15 U.S.C. 2802(b)(3)(A)(ii)) is amended by inserting after ``purpose 
of'' the following: ``converting the leased marketing premises to 
operation by employees or agents of the franchisor for the benefit of 
the franchisor or otherwise''.

SEC. 3. UNDERLYING LEASES.

    Section 102(c)(4) of the Petroleum Marketing Practices Act (15 
U.S.C. 2802(c)(4)) is amended--
            (1) by striking ``lease, if'' and all that follows through 
        ``(B) of'' and inserting the following: ``lease, if--
                    ``(A) the franchisee was notified in writing, prior 
                to the commencement of the term of the then existing 
                franchise--
                            ``(i) of the duration of the underlying 
                        lease; and
                            ``(ii) of''; and
            (2) by adding at the end the following new subparagraphs:
                    ``(B) during the 90-day period after notification 
                was given pursuant to section 104, the franchisor 
                offers to assign to the franchisee any option to extend 
                the underlying lease or option to purchase the 
                marketing premises that is held by the franchisor, 
                except that the franchisor may condition the assignment 
                upon receipt by the franchisor of--
                            ``(i) an unconditional release executed by 
                        both the landowner and the franchisee releasing 
                        the franchisor from any and all liability 
                        accruing after the date of the assignment for--
                                    ``(I) financial obligations under 
                                the option (or the resulting extended 
                                lease or purchase agreement);
                                    ``(II) environmental contamination 
                                to (or originating from) the marketing 
                                premises; or
                                    ``(III) the operation or condition 
                                of the marketing premises; and
                            ``(ii) an instrument executed by both the 
                        landowner and the franchisee that ensures the 
                        franchisor and the contractors of the 
                        franchisor reasonable access to the marketing 
                        premises for the purpose of testing for and 
                        remediating any environmental contamination 
                        that may be present at the premises; and
                    ``(C) in a situation in which the franchisee 
                acquires possession of the leased marketing premises 
                effective immediately after the loss of the right of 
                the franchisor to grant possession (through an 
                assignment pursuant to subparagraph (B) or by obtaining 
                a new lease or purchasing the marketing premises from 
                the landowner), the franchisor (if requested in writing 
                by the franchisee not later than 30 days after 
                notification was given pursuant to section 104), during 
                the 90-day period after notification was given pursuant 
                to section 104--
                            ``(i) made a bona fide offer to sell, 
                        transfer, or assign to the franchisee the 
                        interest of the franchisor in any improvements 
                        or equipment located on the premises; or
                            ``(ii) if applicable, offered the 
                        franchisee a right of first refusal (for at 
                        least 45 days) of an offer, made by another 
                        person, to purchase the interest of the 
                        franchisor in the improvements and 
                        equipment.''.

SEC. 4. WAIVER OF RIGHTS.

    Section 105 of the Petroleum Marketing Practices Act (15 U.S.C. 
2805) is amended by adding at the end the following new subsection:
    ``(f)(1) No franchisor shall require, as a condition of entering 
into or renewing the franchise relationship, a franchisee to release or 
waive--
            ``(A) any right that the franchisee has under this title or 
        other Federal law; or
            ``(B) any right that the franchisee may have under any 
        valid and applicable State law.
    ``(2) No provision of any franchise shall be valid or enforceable 
if the provision specifies that the interpretation or enforcement of 
the franchise shall be governed by the law of any State other than the 
State in which the franchisee has the principal place of business of 
the franchisee.''.

SEC. 5. PREEMPTION.

    Section 106 of the Petroleum Marketing Practices Act (15 U.S.C. 
2806) is amended--
            (1) in subsection (a)--
                    (A) by inserting ``(1)'' after ``(a)''; and
                    (B) by adding at the end the following new 
                paragraphs:
    -`-`-(-2-) -N-o-t-h-i-n-g -i-n -t-h-i-s -t-i-t-l-e -s-h-a-l-l 
-l-i-m-i-t -t-h-e -a-b-i-l-i-t-y -o-f -a -S-t-a-t-e -o-r -a-n-y 
-p-o-l-i-t-i-c-a-l -s-u-b-d-i-v-i-s-i-o-n -o-f -a -S-t-a-t-e -t-o 
-r-e-g-u-l-a-t-e -a-n-y -s-p-e-c-i-f-i-c -p-r-o-v-i-s-i-o-n -o-f -a 
-f-r-a-n-c-h-i-s-e-.
    ``-(-3-) (2) No State or political subdivision of a State may 
adopt, enforce, or continue in effect any provision of law (including a 
regulation) that requires a payment for the goodwill of a franchisee on 
the termination of a franchise or nonrenewal of a franchise 
relationship authorized by this title.''; and
            (2) in subsection (b)--
                    (A) by inserting ``(1)'' after ``(b)''; and
                    (B) by adding at the end the following new 
                paragraph:
    ``(2) Nothing in this title shall prohibit any State from 
specifying the terms and conditions under which any franchise or 
franchise relationship may be transferred to the designated successor 
of a franchisee upon the death of the franchisee.''.

SEC. 6. DEFINITION OF FAILURE.

    Section 101(13) of the Petroleum Marketing Practices Act (15 U.S.C. 
2901(13)), is amended--
            (1) by striking ``or'' at the end of (A);
            (2) by deleting ``.'' and inserting ``; or'' at the end of 
        (B); and adding the following new subsection:
                    ``(C) any failure based on a provision of the 
                franchise which is illegal or unenforceable under the 
                law of any State (or subdivision thereof).''.