[Congressional Record Volume 140, Number 141 (Monday, October 3, 1994)]
[House]
[Page H]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


[Congressional Record: October 3, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
          PETROLEUM MARKETING PRACTICES ACT AMENDMENTS OF 1994

  Mr. SHARP. Mr. Speaker, I move to suspend the rules and pass the bill 
(H.R. 1520), to amend the Petroleum Marketing Practices Act, as 
amended.
  The Clerk read as follows:

                               H.R. 1520

       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 1994''.

     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 extend lease or purchase agreement);
       ``(II) environmental contamination to (or originating from) 
     the marketing premises; or
       ``(III) the operation of 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 paragraph:
       ``(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 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. 2801(13)) is amended--
       (1) by striking ``or'' at the end of subparagraph (A);
       (2) by striking the period at the end of subparagraph (B) 
     and inserting in lieu thereof ``; or''; and
       (3) by adding at the end the following new subparagraph:
       ``(C) any failure based on a provision of the franchise 
     which is illegal or unenforceable under the law of any State 
     (or subdivision thereof).''.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Indiana [Mr. Sharp] will be recognized for 20 minutes, and the 
gentleman from California [Mr. Moorhead] will be recognized for 20 
minutes.
  The Chair recognizes the gentleman from Indiana [Mr. Sharp].
  Mr. SHARP. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, H.R. 1520 makes several clarifying changes to the 
gasoline franchising provisions of title I of the Petroleum Marketing 
Practices Act of 1978, known as the PMPA.
  These changes have all been negotiated and agreed to by the major 
segments of the gasoline and diesel fuel industries, including the 
refiners, the marketers and jobbers, and the retail service station 
dealers.
  It has taken them over 5 years to reach this agreement, and I 
strongly urge my colleagues to support it now.
  Mr. Speaker, the amendment proposed to the bill passed by the 
committee deletes the committee's amendment to section 106 of the 
Petroleum Marketing Practices Act. That change to section 106 would 
have made clear the ability of a State to regulate any specific 
provision of a franchise agreement. Instead, the bill passed by the 
committee would be amended by changing the failure definition in 
section 101(13) by stating that ``failure'' does not include any 
failure based on a provision of the franchise which is illegal and 
unenforceable under the law of the relevant State.
  Some had expressed a concern, not shared by the sponsor of the bill, 
that amending section 106 would significantly weaken or even eliminate 
PMPA preemption. Amending the ``failure'' definition is an alternative 
way of addressing the same concerns about the interplay of State law 
and the PMPA. Despite differences of interpretation among us, I am 
pleased that we all agree on the plain language of the bill as amended.
  Mr. Speaker, I reserve the balance of my time.
  Mr. MOORHEAD. Mr. Speaker, I yield myself such time as I may consume.
  (Mr. MOORHEAD asked and was given permission to revise and extend his 
remarks.)
  Mr. MOORHEAD. Mr. Speaker, I rise in support of H.R. 1520, the 
Petroleum Marketing Practices Act Amendments of 1994. H.R. 1520 is a 
balanced bill which I believe will be good for the entire motor fuel 
industry.
  Nearly 4 years ago, 25 members of the Energy and Commerce Committee 
sent a letter to the parties in the petroleum marketing industry urging 
them to reach a compromise on title 1 PMPA issues. As of May of last 
year, when the Energy and Commerce Committee marked up this bill, not 
all affected parties were on board with the compromise language. Since 
then, these parties have worked hard to reach a compromise to which 
everyone can agree.
  The amended version of H.R. 1520 which is before us today, is the 
result of years of negotiations and it is now supported by nearly 
everyone in the motor fuel industry including: The American Petroleum 
Institute, Service Station Dealers of America, Petroleum Marketers 
Association of America and the Society of Independent Gasoline 
Marketers of America.
  H.R. 1520 amends the Petroleum Marketing Practices Act to clarify the 
relationships between motor fuel franchisors and franchisees. It 
prohibits a refiner from terminating a dealer in order to turn a 
location into a company-operated station; defines dealer and supplier 
rights and obligations in third party situations: prohibits dealers 
from being forced to waive their rights under Federal Law in order to 
obtain or renew a lease; and with the new language clarifies that 
States may legislate regarding some aspects of the franchise agreement.
  I believe that H.R. 1520 represents a fair compromise and I want to 
commend everyone who worked so hard in reaching this agreement. I would 
also like to thank Chairman Dingell for all his hard work on this bill. 
I believe everyone who is involved in the motor fuel industry will 
benefit from these amendments.
  Mr. Speaker, I would also like to thank the gentleman from Michigan 
[Mr. Dingell], the committee chairman, for his hard work on this bill. 
I believe everyone involved in the motor fuel industry will benefit 
from these amendments.
  Mr. Speaker, I want to say that we will certainly miss our friend, 
the gentleman from Indiana [Mr. Sharp] when he leaves to go back to 
Indiana. He has done an outstanding job as he has worked in the 
committee and in their particular field for many years, so we will miss 
him.
  Mr. SHARP. Mr. Speaker, I yield 1 minute to the distinguished 
gentleman from Oregon [Mr. Wyden], who has been a key participant in 
these negotiations for many years.
  (Mr. WYDEN asked and was given permission to revise and extend his 
remarks.)
  Mr. WYDEN. Mr. Speaker, I, too, want to thank the gentleman from 
Indian [Mr. Sharp] for all his years of hard work. The gentleman is 
right, we have been at this I guess almost 5 years. I want to thank him 
for all his patience, and also thank our friend, the gentleman from 
California [Mr. Moorhead], who has also worked with me and others in 
terms of trying to fashion this legislation.
  Mr. Speaker, the reason this legislation is so important is that our 
small gas stations in our country are literally an endangered species. 
All over our country we are seeing rural communities in particular lose 
these small gas stations. What we have seen is that very often this is 
due to the fact that some oil companies, not all of them but some of 
them, have set in place crippling conditions on these small service 
stations, who simply want to renew their franchises.

                              {time}  1610

  As the gentleman from California [Mr. Moorhead] has stated, this 
legislation outlines a number of provisions to strike a balance that is 
fair to both sides, the small service stations and the oil companies. I 
think it is critical that we pass this bill.
  Mr. MOORHEAD. Mr. Speaker, I have no further requests for time, and I 
yield back the balance of my time.
  Mr. SHARP. Mr. Speaker, I have no further requests for time, and I 
yield back the balance of my time.
  The SPEAKER pro tempore (Mr. de la Garza). The question is on the 
motion offered by the gentleman from Indiana [Mr. Sharp] that the House 
suspend the rules and pass the bill, H.R. 1520, as amended.
  The question was taken.
  Mr. LEWIS of California. Mr. Speaker, on that I demand the yeas and 
nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 5, rule I, and the 
Chair's prior announcement, proceedings on this motion will be 
postponed.

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