H. R. 1520
One Hundred Third Congress
of the
United States of America
AT THE SECOND SESSION
Begun and held at the City of Washington on Tuesday,
the twenty-fifth day of January, one thousand nine hundred and ninety-four
An Act
To amend the Petroleum Marketing Practices Act.
Be it enacted by the Senate and House of Representatives 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 ‘‘pur-
pose 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 Practices 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 fran-
chise—
‘‘(i) of the duration of the underlying lease; and
‘‘(ii) of’’; and
(2) by adding at the end the following new subparagraphs:
‘‘(B) during the 90-day period after notification 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 assignment for—
‘‘(I) financial obligations under the option (or
the resulting extended lease or purchase agree-
ment);
‘‘(II) environmental contamination to (or origi-
nating from) the marketing premises; or
‘‘(III) the operation or condition of the market-
ing premises; and
H. R. 1520—2
‘‘(ii) an instrument executed by both the landowner
and the franchisee that ensures the franchisor and
the contractors of the franchisor reasonable access to
the marketing premises for the purpose of testing 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 imme-
diately after the loss of the right of the franchisor to
grant possession (through an assignment pursuant to
subparagraph (B) or by obtaining a new lease or purchasing
the marketing premises from the landowner), 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 interest of the franchisor
in any improvements or equipment located on the
premises; 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 equipment.’’.
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 interpretation 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