[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5479 Introduced in House (IH)]







106th CONGRESS
  2d Session
                                H. R. 5479

To prohibit certain discriminatory pricing policies in wholesale motor 
                  fuel sales, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            October 17, 2000

 Mr. Thompson of California (for himself, Mrs. Capps, and Mr. Filner) 
 introduced the following bill; which was referred to the Committee on 
                                Commerce

_______________________________________________________________________

                                 A BILL


 
To prohibit certain discriminatory pricing policies in wholesale motor 
                  fuel sales, 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 ``Wholesale Motor Fuel Fairness and 
Competition Restoration Act''.

SEC. 2. FINDINGS.

    The Congress finds that--
            (1) both wholesale and retail motor fuel prices are the 
        result of a number of complex factors, including those related 
        to supply, refining, consumer demand, and oil company cost, 
        pricing, and marketing practices;
            (2) certain cost, pricing, and marketing practices employed 
        by the oil companies are unfair and anticompetitive, and 
        contribute to the unjustified price of retail motor fuel 
        charged the American consumer;
            (3) among the unfair and anticompetitive oil company 
        practices are price zoning, redlining, discriminatory wholesale 
        motor fuel pricing, and a complex system of cost allocation 
        that hides the factors on which wholesale costs are based;
            (4) the oil companies' practice known as price zoning is 
        one by which prices for motor fuel are set solely because of 
        the retail station's geographic location unrelated to cost-of-
        business factors;
            (5) price zoning allows an oil company to artificially 
        increase or depress retail motor fuel prices in order to secure 
        an unfair market advantage against competitors;
            (6) the oil companies engage in a practice known as 
        redlining, whereby a refiner refuses to sell motor fuel to 
        distributors or particular geographic markets;
            (7) redlining allows an oil company to force concessions 
        from a distributor and affords the company the opportunity to 
        exert undue influence in a particular area or region;
            (8) the oil companies engage in a practice of 
        discriminatory wholesale pricing of motor fuel based on the 
        relationship of the purchaser to the oil company and the degree 
        of competition they provide;
            (9) discriminatory pricing allows oil companies to charge 
        different wholesale prices to company owned and operated retail 
        stations, franchisees, and independent retailers though all may 
        be situated in the same community and face the same competitive 
        and operating factors;
            (10) the oil companies engage in a complex system of cost 
        allocations by which they employ rebates, incentives, credits, 
        and market enhancement allowances that hide the factors on 
        which wholesale prices are based or published;
            (11) the complex system of cost allocation allows oil 
        companies to post a ``wholesale price'' that is far different 
        from the actual wholesale price that would be revealed if the 
        cost factors were publicly identified and appropriately 
        allocated; and
            (12) it is appropriate for the Federal Government to 
        prohibit these unfair oil company cost, pricing, and marketing 
        practices, to restore fair and competitive practices to the 
        wholesale sale of motor fuel, and to allow American consumers 
        to assess for themselves the factors that contribute to the 
        price changes they pay at the retail pump.

SEC. 3. PRICE DISCRIMINATION PROHIBITION.

    (a) Prohibition.--
            (1) In general.--It shall be a violation of this Act for an 
        owner or operator of a terminal facility to sell motor fuel 
        from the terminal facility to a distributor or retailer at a 
        price in excess of the price it charges any other distributor 
        or retailer, including a distributor or retailer which it owns 
        or with which it is affiliated.
            (2) Price determination.--For purposes of this subsection, 
        the price an owner or operator of a terminal facility charges a 
        distributor or retailer which it owns or with which it is 
        affiliated shall be the price determined pursuant to the 
        regulations issued under section 4(a).
            (3) Exception.--A sale shall not be in violation of this 
        subsection if it is made pursuant to the terms of a franchise 
        or sales contract entered into before October 17, 2000.
    (b) Civil Penalty.--The Federal Trade Commission may assess a civil 
penalty, not to exceed $1,000,000, for each violation described in 
subsection (a).
    (c) Criminal Penalty.--Whoever knowingly violates subsection (a) 
shall be fined under title 18, United States Code, or imprisoned not 
more than 5 years.
    (d) Effective Date.--This section shall take effect 6 months after 
the date of the enactment of this Act.

SEC. 4. FULL DISCLOSURE.

    (a) Requirement.--The Federal Trade Commission, in consultation 
with the Secretary of Energy, shall issue regulations requiring full 
disclosure by refiners and distributors of their wholesale motor fuel 
pricing policies, including rebates, incentives, and market enhancement 
allowances. Such regulations shall establish procedures for determining 
the price an owner or operator of a terminal facility charges a 
distributor or retailer which it owns or with which it is affiliated.
    (b) Effective Date.--The regulations issued under subsection (a) 
shall take effect 6 months after the date of the enactment of this Act.
    (c) Public Dissemination.--The Federal Trade Commission shall 
ensure that all information acquired pursuant to the regulations issued 
under subsection (a) are made available to the public, except trade 
secrets and commercial or financial information protected from 
disclosure under subsection (b)(4) of section 552 of title 5, United 
States Code (commonly referred to as the Freedom of Information Act). 
Such information may be disseminated through the Energy Information 
Administration.

SEC. 5. OWNERSHIP STUDY AND REPORT.

    Not later than 18 months after the date of the enactment of this 
Act, the Federal Trade Commission, in consultation with the Secretary 
of Energy, shall transmit to the Congress a report containing the 
results of a study of whether ownership or operation by a refiner of a 
facility for the retail sale of motor fuel has anticompetitive effects 
on the price of motor fuel. Such report shall include any 
recommendations for legislative or administrative actions the Federal 
Trade Commission, in consultation with the Secretary of Energy, 
considers appropriate.

SEC. 6. DEFINITIONS.

    For purposes of this Act, any term defined in section 101 of the 
Petroleum Marketing Practices Act (15 U.S.C. 2801) shall have the 
meaning given the term in that Act.
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