[Congressional Record Volume 140, Number 143 (Wednesday, October 5, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: October 5, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
       LEGISLATION TO AMEND THE PETROLEUM MARKETING PRACTICES ACT

  Mr. REID. Mr. President, I would like to take this opportunity to 
address an issue of concern to me in the pending legislation. The 
senior Senator from Louisiana, and chairman of the committee, is to be 
commended for his leadership on this legislation. I am well aware of 
the hard work it takes to get legislation, such as this bill, to the 
floor of the Senate. I support this bill and intend to vote for it.
  Yet, there is one outstanding issue that continues to concern me. 
This legislation is designed to protect independent petroleum 
wholesalers and retailers from arbitrary and unfair termination or 
nonrenewal of their franchise relationship with major oil companies. 
However, this protection is extended only to motor fuel franchises. 
Franchisees of other petroleum products sold by the major oil companies 
lack similar protection.
  My concern is in relation to this lack of protection of other 
petroleum products. I have heard from a constituent in Nevada that his 
franchise agreement to sell lubricating oils to car dealers in Las 
Vegas was arbitrarily canceled with 30 days notice. This seems grossly 
unfair and, in fact, if the product sold by my constituent were 
gasoline or diesel fuel rather than lubricating oil, it would have been 
illegal. I have also been made aware of similar terminations or 
nonrenewals in other States.
  Mr. President, I ask of the distinguished chairman if there are plans 
to address the issue of lubricating oil contracts to be included in the 
protections provided in the Petroleum Marketing Practices Act that 
currently exist for gasoline or diesel fuel franchisees?
  Mr. JOHNSTON. I am aware of the concerns of the gentleman from 
Nevada, and I appreciate his willingness to support the bill before the 
Senate. The gentleman is correct. This legislation represents 
considerable time and effort to get to this stage of the process. The 
issue of concern to the senior Senator from Nevada is not one that has 
been the subject of hearings. I would say to the gentleman that I will 
be happy to schedule a hearing in the Energy Committee early next year 
to examine the magnitude of the problem that he raises and the most 
appropriate remedy to it.
  Mr. REID. I thank the Senator from Louisiana for his understanding 
and his willingness to bring this issue before his committee.
  Mr. LIEBERMAN. Mr. President, I would like to clarify my 
understanding of two aspects of the Petroleum Marketing Practices Act 
Amendments of 1994. First, this legislation has no effect on the 
notification provisions of any State law, such as that provision in 
effect in Connecticut. The Connecticut law requires at least 1 year 
notice of termination and was upheld by the Second Circuit Court of 
Appeals in Bellmore v. Mobil, 783 F.2d 300 (1986). Second, this bill 
looks to State law to determine when a termination of a service station 
dealer's franchise agreement is unlawful because the State law renders 
the franchise provision upon which termination is based unenforceable. 
For example, the Connecticut law regarding hours of operation will now 
be in effect because of this bill.

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