II
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.
Be it enacted by the Senate and House of Representa-
tives 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 Prac-
tices 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 sub-
paragraphs:
‘‘(B) during the 90-day period after notifi-
cation 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 as-
signment for—
‘‘(I) financial obligations under
the option (or the resulting extended
lease or purchase agreement);
‘‘(II) environmental contamina-
tion to (or originating from) the mar-
keting premises; or
‘‘(III) the operation or condition
of the marketing premises; and
‘‘(ii) an instrument executed by both
the landowner and the franchisee that en-
sures the franchisor and the contractors of
the franchisor reasonable access to the
marketing premises for the purpose of test-
ing 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 subpara-
graph (B) or by obtaining a new lease or pur-
chasing the marketing premises from the land-
owner), 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 in-
terest of the franchisor in any improve-
ments or equipment located on the prem-
ises; 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 equip-
ment.’’.
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 interpreta-
tion 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 inserting ‘‘(1)’’ after ‘‘(b)’’; and
(B) 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 Prac-
tices 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 sub-
paragraph (B) and inserting in lieu thereof ‘‘; or’’;
and
(3) by adding at the end the following new sub-
paragraph:
‘‘(C) any failure based on a provision of
the franchise which is illegal or unenforceable
under the law of any State (or subdivision
thereof).’’.
Passed the House of Representatives October 4,
1994.
Attest:
DONNALD K. ANDERSON,
Clerk.