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103D CONGRESS

2D SESSION H. R. 1520

IN THE SENATE OF THE UNITED STATES

OCTOBER 5 (legislative day, SEPTEMBER 12), 1994

Received

AN ACT

To amend the Petroleum Marketing Practices Act.

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 1994’’.

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 benefit of the franchisor

12 or otherwise’’.
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1 SEC. 3. UNDERLYING LEASES.

2 Section 102(c)(4) of the Petroleum Marketing Prac3 tices Act (15 U.S.C. 2802(c)(4)) is amended—

4 (1) by striking ‘‘lease, if’’ and all that follows

5 through ‘‘(B) of’’ and inserting the following: ‘‘lease,

6 if—

7 ‘‘(A) the franchisee was notified in writing,

8 prior to the commencement of the term of the

9 then existing franchise—

10 ‘‘(i) of the duration of the underlying

11 lease; and

12 ‘‘(ii) of’’; and

13 (2) by adding at the end the following new sub14 paragraphs:

15 ‘‘(B) during the 90-day period after notifi16 cation was given pursuant to section 104, the

17 franchisor offers to assign to the franchisee any

18 option to extend the underlying lease or option

19 to purchase the marketing premises that is held

20 by the franchisor, except that the franchisor

21 may condition the assignment upon receipt by

22 the franchisor of—

23 ‘‘(i) an unconditional release executed

24 by both the landowner and the franchisee

25 releasing the franchisor from any and all
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1 liability accruing after the date of the as2 signment for—

3 ‘‘(I) financial obligations under

4 the option (or the resulting extended

5 lease or purchase agreement);

6 ‘‘(II) environmental contamina7 tion to (or originating from) the mar8 keting premises; or

9 ‘‘(III) the operation or condition

10 of the marketing premises; and

11 ‘‘(ii) an instrument executed by both

12 the landowner and the franchisee that en13 sures the franchisor and the contractors of

14 the franchisor reasonable access to the

15 marketing premises for the purpose of test16 ing for and remediating any environmental

17 contamination that may be present at the

18 premises; and

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

20 acquires possession of the leased marketing

21 premises effective immediately after the loss of

22 the right of the franchisor to grant possession

23 (through an assignment pursuant to subpara24 graph (B) or by obtaining a new lease or pur25 chasing the marketing premises from the land-
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1 owner), the franchisor (if requested in writing

2 by the franchisee not later than 30 days after

3 notification was given pursuant to section 104),

4 during the 90-day period after notification was

5 given pursuant to section 104—

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

7 transfer, or assign to the franchisee the in8 terest of the franchisor in any improve9 ments or equipment located on the prem10 ises; or

11 ‘‘(ii) if applicable, offered the

12 franchisee a right of first refusal (for at

13 least 45 days) of an offer, made by another

14 person, to purchase the interest of the

15 franchisor in the improvements and equip16 ment.’’.

17 SEC. 4. WAIVER OF RIGHTS.

18 Section 105 of the Petroleum Marketing Practices

19 Act (15 U.S.C. 2805) is amended by adding at the end

20 the following new subsection:

21 ‘‘(f)(1) No franchisor shall require, as a condition of

22 entering into or renewing the franchise relationship, a

23 franchisee to release or waive—

24 ‘‘(A) any right that the franchisee has under

25 this title or other Federal law; or
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1 ‘‘(B) any right that the franchisee may have

2 under any valid and applicable State law.

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

4 enforceable if the provision specifies that the interpreta5 tion or enforcement of the franchise shall be governed by

6 the law of any State other than the State in which the

7 franchisee has the principal place of business of the

8 franchisee.’’.

9 SEC. 5. PREEMPTION.

10 Section 106 of the Petroleum Marketing Practices

11 Act (15 U.S.C. 2806) is amended—

12 (1) in subsection (a)—

13 (A) by inserting ‘‘(1)’’ after ‘‘(a)’’; and

14 (B) by adding at the end the following new

15 paragraph:

16 ‘‘(2) No State or political subdivision of a State may

17 adopt, enforce, or continue in effect any provision of law

18 (including a regulation) that requires a payment for the

19 goodwill of a franchisee on the termination of a franchise

20 or nonrenewal of a franchise relationship authorized by

21 this title.’’; and

22 (2) in subsection (b)—

23 (A) by inserting ‘‘(1)’’ after ‘‘(b)’’; and

24 (B) by adding at the end the following new

25 paragraph:
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1 ‘‘(2) Nothing in this title shall prohibit any State

2 from specifying the terms and conditions under which any

3 franchise or franchise relationship may be transferred to

4 the designated successor of a franchisee upon the death

5 of the franchisee.’’.

6 SEC. 6. DEFINITION OF FAILURE.

7 Section 101(13) of the Petroleum Marketing Prac8 tices Act (15 U.S.C. 2801(13)) is amended—

9 (1) by striking ‘‘or’’ at the end of subparagraph

10 (A);

11 (2) by striking the period at the end of sub12 paragraph (B) and inserting in lieu thereof ‘‘; or’’;

13 and

14 (3) by adding at the end the following new sub15 paragraph:

16 ‘‘(C) any failure based on a provision of

17 the franchise which is illegal or unenforceable

18 under the law of any State (or subdivision

19 thereof).’’.

Passed the House of Representatives October 4,

1994.

Attest: DONNALD K. ANDERSON,

Clerk.