Union Calendar No. 407

103D CONGRESS

2D SESSION H. R. 1520

[Report No. 103–737]

A BILL

To amend the Petroleum Marketing Practices Act.

SEPTEMBER 22, 1994

Reported with an amendment, committed to the Commitordered to be printed tee of the Whole House on the State of the Union, and
IB

Union Calendar No. 407

103D CONGRESS

2D SESSION H. R. 1520

[Report No. 103–737]

To amend the Petroleum Marketing Practices Act.

IN THE HOUSE OF REPRESENTATIVES

MARCH 30, 1993

Mr. WYDEN (for himself, Mr. DINGELL, Mr. SHARP, Mr. SWIFT, Mr. STUDDS,

Mr. LEHMAN, Mr. PALLONE, Mr. KREIDER, Mr. MANTON, Mr. KASICH,

Mr. ROWLAND, Mr. MARKEY, Mr. ACKERMAN, Mrs. COLLINS of Illinois,

Mr. FIELDS of Texas, Mr. GILLMOR, and Mr. OXLEY) introduced the following bill; which was referred to the Committee on Energy and

Commerce

SEPTEMBER 22, 1994

Additional sponsors: Mr. SYNAR, Mr. BOUCHER, Ms. MARGOLIES-MEZVINSKY,

Mr. COYNE, Mr. OBERSTAR, Mrs. MORELLA, Mr. COOPER, Mr. PETERSON of Minnesota, Mr. TAUZIN, Mr. SANTORUM, Mr. GILCHREST, Mr.

WYNN, Mrs. BENTLEY, Mr. CARDIN, Mr. HOYER, Mr. MFUME, and Ms.

NORTON

SEPTEMBER 22, 1994

Reported with an amendment, committed to the Committee of the Whole

House on the State of the Union, and ordered to be printed

[Omit the part struck through and insert the part printed in italic]

A BILL

To amend the Petroleum Marketing Practices Act.
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1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Petroleum Marketing

5 Practices Act Amendments of 1993’’.

6 SEC. 2. CONVERSION TO COMPANY OPERATION.

7 Section 102(b)(3)(A)(ii) of the Petroleum Marketing

8 Practices Act (15 U.S.C. 2802(b)(3)(A)(ii)) is amended

9 by inserting after ‘‘purpose of’’ the following: ‘‘converting

10 the leased marketing premises to operation by employees

11 or agents of the franchisor for the franchisor’s own ac12 count or otherwise’’.

13 SEC. 3. PREEMPTION.

14 Section 106 of the Petroleum Marketing Practices

15 Act (15 U.S.C. 2806) is amended—

16 (1) by adding at the end of subsection (a) the

17 following: ‘‘Nothing in this title shall be deemed to

18 limit the ability of a State or any political subdivi19 sion thereof to regulate any specific provision of a

20 franchise. No State or any political subdivision

21 thereof may adopt, enforce or continue in effect any

22 provision of any law or regulation requiring any pay23 ment for a franchisee’s goodwill upon the occurrence

24 of a termination of a franchise or nonrenewal of a

25 franchise relationship authorized by this title.’’; and
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1 (1) by amending subsection (a) to read as

2 follows:

3 ‘‘(a) To the extent that any provision of this title ap4 plies to the termination (or the furnishing of notification

5 with respect thereto) of any franchise, or to the nonrenewal

6 (or the furnishing of notification with respect thereto) of

7 any franchise relationship, no State or any political sub8 division thereof may adopt, enforce, or continue in effect

9 any provision of any law or regulation (including any rem10 edy or penalty applicable to any violation thereof) with re11 spect to termination (or the furnishing of notification with

12 respect thereto) of any such franchise or to the nonrenewal

13 (or the furnishing of notification with respect thereto) of

14 any such franchise relationship unless such provision of

15 such law or regulation is the same as the applicable provi16 sion of this title. Nothing in this title shall be deemed to

17 limit the ability of a State or any political subdivision

18 thereof to regulate any specific provision of a franchise. No

19 State or any political subdivision thereof may adopt, en20 force, or continue in effect any provision of any law or regu21 lation requiring any payment for a franchisee’s goodwill

22 upon the occurrence of a termination of a franchise or

23 nonrenewal of a franchise relationship authorized by this

24 title.’’; and
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1 (2) by adding at the end of subsection (b) the

2 following: ‘‘Nothing in this title shall be deemed to

3 prohibit any State from specifying the terms and

4 conditions under which any franchise or franchise

5 relationship may be transferred to a franchisee’s

6 designated successor upon the franchisee’s death.’’.

7 SEC. 4. UNDERLYING LEASES.

8 Section 102(c)(4) of the Petroleum Marketing Prac9 tices Act (15 U.S.C. 2802(c)(4)) is amended—

10 (1) by redesignating subparagraphs (A) and

11 (B) as clauses (i) and (ii), respectively and setting

12 such clauses on an 6-em indention;

13 (2) by inserting ‘‘—’’ after ‘‘lease, if’’;

14 (3) by designating the text which follows ‘‘lease,

15 if—’’ as subparagraph (A) and setting such type on

16 a 4-em indention; and

17 (4) by adding at the end the following new sub18 paragraphs:

19 ‘‘(B) during the 90-day period after notifi20 cation was given pursuant to section 104 the

21 franchisor offers to assign to the franchisee any

22 options to extend the underlying lease or op23 tions to purchase the marketing premises which

24 may be held by the franchisor: Provided, That
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1 the franchisor may condition any such assign2 ment upon receipt by the franchisor of—

3 ‘‘(i) an unconditional release executed

4 by both the landowner and the franchisee

5 releasing the franchisor from any and all

6 liability accruing after the date of the as7 signment for—

8 ‘‘(I) financial obligations under

9 any such option (or the resulting ex10 tended lease or purchase agreement);

11 ‘‘(II) environmental contamina12 tion to (or originating from) the mar13 keting premises; or

14 ‘‘(III) the operation or condition

15 of the marketing premises; and

16 ‘‘(ii) an instrument executed by both

17 the landowner and the franchisee assuring

18 the franchisor and its contractors reason19 able access to the marketing premises for

20 the purpose of testing for and remediating

21 any environmental contamination that may

22 be present at such premises; and

23 ‘‘(C) in a situation in which the franchisee

24 acquires possession of such leased marketing

25 premises effective immediately after loss of the
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1 franchisor’s right to grant possession (either

2 through an assignment pursuant to subpara3 graph (B) above or by obtaining a new lease or

4 purchasing the marketing premises from the

5 landowner), the franchisor (if requested in writ6 ing by the franchisee within 30 days after noti7 fication was given pursuant to section 104),

8 during the 90-day period after notification was

9 given pursuant to section 104, either—

10 ‘‘(i) made a bona fide offer to sell,

11 transfer, or assign to the franchisee such

12 franchisor’s interest in any improvements

13 or equipment located on such premises; or

14 ‘‘(ii) if applicable, offered the

15 franchisee a right of first refusal of at

16 least 45 days duration of an offer, made by

17 another, to purchase such franchisor’s in18 terest in such improvements and equip19 ment.’’.

20 SEC. 5. WAIVER OF RIGHTS.

21 Section 105 of the Petroleum Marketing Practices

22 Act (15 U.S.A. 2805) is amended by adding at the end

23 the following new subsection:
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1 ‘‘(f)(1) No franchisor shall require, as a condition of

2 entering into or renewing the franchise relationship, a

3 franchisee to release or waive—

4 ‘‘(A) any rights under this title or other Fed5 eral law; or

6 ‘‘(B) any rights the franchisee may have under

7 any valid and applicable State law.

8 ‘‘(2) No provision of any franchise shall be valid or

9 enforceable which specifies that the interpretation or en10 forcement of the franchise shall be governed by the law

11 of any State other than the State in which the franchisee

12 has its principal place of business.’’.