[Congressional Record Volume 140, Number 147 (Tuesday, November 29, 1994)]
[Extensions of Remarks]
[Page E]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: November 29, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
       H.R. 1520, THE PETROLEUM PRACTICES ACT AMENDMENTS OF 1994

                                 ______


                          HON. JOHN D. DINGELL

                              of michigan

                    in the house of representatives

                       Tuesday, November 29, 1994

  Mr. DINGELL. Mr. Speaker, a goal which has been of concern to me over 
several years has been ensuring a strong independent gasoline dealer 
presence in the motor fuel marketing industry. A strong independent 
dealer sector benefits consumers, and keeps this key industry 
competitive.
  Last months's passage of H.R. 1520, the Petroleum Marketing Practices 
Act Amendments [PMPA] of 1994, furthers this goal.
  H.R. 1520 is in many ways a State-law-protection package. It helped 
clarify that the Federal PMPA was and will remain limited in scope, and 
is simply intended to set forth termination standards. State law can 
tell us what meets those standards.
  The Federal PMPA was never intended to preclude State regulation of 
other franchising matters, such as disclosure or content of franchise 
provisions.
  States such as Michigan have laws on the books which H.R. 1520 
protects. It does this in several ways.
  First, the legislation adopts a new definition of the term 
``failure.'' We have strengthened, through clear and unambiguous 
statutory language, the original intent of the act. The PMPA was always 
intended to preclude franchise terminations based on franchise 
provisions which are illegal or unenforceable as determined by the 
governing State law. The term ``the law of the state'' is used in its 
broadest context to include State statutes and regulations, as well as 
State common law.
  The antiwaiver provisions of H.R. 1520 also address this issue, by 
providing that franchise agreements will be governed by the law of the 
franchisee's home State.
  Further, the antiwaiver provision is intended to preclude any claim 
that by reason of signing a new franchise agreement, a franchisee is 
precluded from challenging the validity of the underlying provision 
under the governing law of the State.
  Second, the goodwill amendment must be read as narrowly as it is 
drafted. For example, our law in Michigan that provides for inventory 
repurchase upon termination, has just been upheld against a PMPA 
preemption attack.
  In particular, the goodwill amendment in H.R. 1520 applies only where 
the State seeks to require goodwill as condition of a lawful PMPA 
termination, and only to goodwill generated by the gasoline portion of 
franchisee's business. No interference with regulation of ancillary 
franchises, rebate of sums paid to franchisors, or other provisions of 
law such as ours in Michigan is intended.
  Third, thanks to H.R. 1520, State survivorship laws such as ours in 
Michigan, which allows a dealer to pass his or her business on to their 
family members, should never again be subjected to a Federal PMPA 
preemption attack.
  We have also made in this measure an important addition to the PMPA's 
failure-to-agree test, which generated the controversy in the first 
place.
  Finally, H.R. 1520 expressly provides that the franchisor may not 
insist on changes or additions that would have the effect of the 
station becoming company operated.
  I want especially to acknowledge the hard work of so many of our 
colleagues, including my good friend, the chairman of the subcommittee, 
Mr. Sharp, and the tireless efforts of those who worked on this issue, 
particularly on behalf of the dealers.

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