An Act To Amend the Motor Fuel Distribution and Sales Act
Maine Legislature, Session 126, LD 1360
Committee: Labor, Commerce, Research and Economic Development
Sponsors: TUTTLE
Amends: 10 MRSA §1453, 10 MRSA §1454, 10 MRSA §1456

Legislative Document 
No. 1360 
S.P. 479 
In Senate, April 9, 2013 
An Act To Amend the Motor Fuel Distribution and Sales Act 
Reference to the Committee on Labor, Commerce, Research and Economic Development 
suggested and ordered printed. 
DAREK M. GRANT 
Secretary of the Senate 
Presented by Senator TUTTLE of York. 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  10 MRSA §1453, sub-§1-C is enacted to read: 
1-C.  Consignment.  "Consignment" means a written or oral agreement between a 
franchisor and a franchisee whereby the franchisor maintains ownership of motor fuel 
provided to the franchisee and the franchisee sells the motor fuel on behalf of the 
franchisor at a price determined by the franchisor. 
Sec. 2.  10 MRSA §1453, sub-§4, as enacted by PL 1975, c. 549, is amended to 
read: 
4.  Franchise agreement. "Franchise agreement" shall mean any means a written or 
oral agreement, for a definite or indefinite period, between a refiner and a retail dealer or 
between a distributor and a retail dealer or between a refiner and a distributor under 
which:  
A.  A retail dealer or a distributor promises to sell or distribute the any petroleum 
product or products of the a refiner; or 
B.  A retail dealer or a distributor is granted the right to use a trademark, trade name, 
service mark or other identifying symbol or name owned by a refiner; or 
C.  A retail dealer or a distributor is granted the right to occupy premises owned, 
leased or controlled by a refiner or distributor. and: 
(1)  Promises to sell or distribute any petroleum products of the refiner or the 
distributor; or 
(2)  Is granted the right to use a trademark, trade name, service mark or other 
identifying symbol or name owned by the refiner or the distributor. 
Sec. 3.  10 MRSA §1453, sub-§8, as enacted by PL 1975, c. 549, is amended to 
read: 
8.  Person.  "Person" shall mean any means a natural person, corporation, 
partnership, trust or other entity, and, in the case of any entity, the term shall also include 
includes any other entity which that has a majority interest in such the entity or 
effectively controls such the entity as well as the officers, directors and other persons in 
active control of each such entity;. 
Sec. 4.  10 MRSA §1454, sub-§1, as enacted by PL 1975, c. 549, is amended to 
read: 
1.  Franchise agreements.  When a franchise agreement between a refiner and a 
retail dealer or a distributor or between a distributor and a retail dealer covers the sale of 
petroleum products and those sales constitute more than 35% of the retail dealer's gross 
sales and such those gross sales are more than $30,000 annually, every such the franchise 
agreement shall be is subject to the nonwaivable provisions set forth in this subsection, 
whether or not they are expressly set forth in the agreement.  
A.  Each A retail dealer and each or distributor as franchisee shall have has the right 
to cancel a franchise agreement until midnight of the 7th business day after the day 
on which the agreement was signed, by giving the franchisor written notice of the 
cancellation. Upon the franchisee's giving the franchisor such a notice, all money, 
equipment and merchandise loaned, sold or delivered to the franchisee under the 
agreement shall must be returned to the franchisor for full credit, or the cash 
equivalent. If the franchisor is the owner of the real estate upon which the franchisee 
conducted his business, the franchisee shall deliver full possession of the real estate 
to the franchisor immediately upon such cancellation. 
B.  No An agreement shall may not contain any a provision which that in any way 
limits the right of either party to trial by jury, the interposition of counterclaims or 
crossclaims. 
C.  The price at which a franchisee sells products shall may not be fixed or 
maintained by a franchisor, nor shall may any person seek to do so, nor shall may the 
price of products be subject to enforcement or coercion by any person in any manner. 
Nothing herein shall, but this paragraph may not be construed to prohibit a franchisor 
from suggesting prices and to franchisees or counseling with franchisees concerning 
prices. Each agreement shall must have, in ten-point 10-point type, the legend: 
"PRICE FIXING OR MANDATORY PRICES FOR ANY PRODUCTS COVERED 
IN THIS AGREEMENT IS PROHIBITED. A SERVICE STATION DEALER OR 
WHOLESALE DISTRIBUTOR MAY SELL ANY PRODUCTS LISTED IN THIS 
AGREEMENT FOR A PRICE WHICH HE THAT THE SERVICE STATION 
DEALER OR WHOLESALE DISTRIBUTOR ALONE MAY DECIDE."  The 
provisions of this paragraph do not apply to any petroleum products included in a 
franchisor's consignment agreement with a franchisee or to any franchise agreement 
that provides for petroleum products to be sold on consignment by a franchisee on 
behalf of a franchisor. 
D.  No A franchisor shall may not withhold his consent to any assignment, transfer or 
sale of the franchise agreement, provided that as long as the assignee, transferee or 
purchaser of the franchise agreement meets the qualifications required in the 
franchise agreement. 
E.  If the franchise agreement requires the franchisee to provide a cash deposit in 
advance for the use of the service station or delivery of fuel, except as advance 
payment in whole or in part for product ordered, such the cash deposit shall must be 
held by the franchisor, and may be used by the franchisor in his the franchisor's 
business, and shall be retained for the term of the agreement unless it is sooner 
terminated. Interest at a rate of at least 6% shall the one-year United States Treasury 
bill rate, or the rate of a comparable instrument if the one-year United States Treasury 
bill rate is not offered, as of the first business day of the year in which the interest is 
paid must be paid to the franchisee at least annually on the use of the cash deposit to 
the extent not otherwise applied by the franchisor to obligations of the franchisee as 
provided in the franchise agreement. Within 90 days after the termination of the 
agreement, any portion of the cash deposit shall that has not otherwise been applied 
by the franchisor to obligations of the franchisee as provided in the franchise 
agreement must be returned, together with any unpaid interest on such any unused 
cash deposit at the rate of at least 6% per year the one-year United States Treasury 
bill rate, or the rate of a comparable instrument if the one-year United States Treasury 
bill is not offered, as of the first business day of the year in which the interest is paid. 
For purposes of this paragraph, "one-year United States Treasury bill rate" means the 
weekly average one-year constant maturity Treasury yield, as published by the Board 
of Governors of the Federal Reserve System, for the last full week of the calendar 
year immediately prior to the year in which interest is paid. 
F.  No An agreement shall may not provide for the use of any promotion, premium, 
coupon, give-away or rebate in the operation of the business, except that a dealer may 
participate in a promotion, premium, coupon, give-away or rebate sponsored by the 
franchisor, if the dealer so desires. 
Sec. 5.  10 MRSA §1454, sub-§2, as amended by PL 1975, c. 623, §§6-C and 
6-D, is further amended to read: 
2.  Termination of franchise agreements.  No refiner or distributor, as A franchisor, 
shall may not, directly or through any officer, agent or employee, terminate, cancel or fail 
to renew a franchise agreement, except for good cause.  For purposes of this section,  
"good cause shall include " includes, but is not be limited to: 
A.  With respect to franchise agreements wherein in which the franchisor leases real 
property and improvements to the franchisee,: 
(1)  The sale or lease of such the real property and improvements by the 
franchisor to other than a subsidiary or affiliate of the franchisor for any use; 
(2)  The sale or lease of such the real property and improvements to a subsidiary 
or affiliate of the franchisor, for a purpose other than the wholesale distribution or 
the retail sale of motor fuels;  
(3)  The conversion of such the real property and improvements to a use other 
than the wholesale distribution or the retail sale of motor fuels; or  
(4)  The lawful termination of lease, license or other nonownership under which 
the franchisor is entitled to possession or control of such the real property and 
improvements; 
B.  Mutual agreement of the franchisor and franchisee to terminate, cancel or not 
renew the franchise agreement; 
C.  Criminal misconduct or a violation of law relating to the business or premises of 
the dealer franchisee; 
D.  Fraud, which shall include, includes but is not be limited to the following:  
(1)  Adulteration of the franchisor's products;  
(2)  Commingling of funds;  
(3)  Misleading consumers or misbranding of gasoline;  
(4)  Trademark violations;  
(5)  Intentionally overcharging or deceiving customers as to repairs which that 
are not needed; and 
(6)  Intentionally deceiving the franchisor regarding a term of the term of the 
lease; 
E.  Failure of the dealer franchisee to open for business for 5 consecutive days, 
exclusive of holidays, and reasonable vacation and sick days.; 
F.  Bankruptcy or insolvency of the dealer. franchisee; 
G.  Nonpayment of rent, or loss by the franchisor of its legal right to grant possession 
of leased premises to the dealer franchisee; or 
H.  Public condemnation or other public taking.; and 
I.  Substantial noncompliance with the obligations of the franchise agreement. 
Sec. 6.  10 MRSA §1454, sub-§3, as enacted by PL 1975, c. 549, is amended to 
read: 
3.  Notice of termination.  The Except when a franchise agreement is terminated, 
cancelled or not renewed by mutual agreement of the franchisor and the franchisee, the 
franchisor shall give the franchisee advance written notice of termination, cancellation or 
intent not to renew. Notwithstanding any statute to the contrary, advance notice required 
by this subsection shall must precede the effective date of such termination, cancellation 
or nonrenewal by at least:  
A.  45 Forty-five days where when the asserted cause is substantial noncompliance 
with the obligations of the franchise agreement specified in subsection 2, paragraph H 
or I; 
B.  120 One hundred twenty days where when the asserted cause is among those 
specified in subsection 2, paragraph A; or 
C.  7 Seven days where when the asserted cause is among those specified in 
subsection 2, paragraphs paragraph C, D and, E, F or G. 
Sec. 7.  10 MRSA §1454, sub-§4, as enacted by PL 1975, c. 549, is amended to 
read: 
4.  Compensation on termination of franchise.  Upon the termination of any 
franchise, the franchisee shall be is entitled to fair and reasonable compensation by the 
franchisor for the franchisee's remaining inventory, supplies, equipment and furnishings 
purchased by the franchisee from the franchisor or its approved sources and costs and 
expenses paid to the franchisor under the terms of the franchise or any ancillary or 
collateral agreement; provided no except that compensation shall be is not allowed for 
personalized items which that have no value to the franchisor. 
Sec. 8.  10 MRSA §1456, sub-§2, as enacted by PL 1975, c. 549, is amended to 
read: 
2.  Court action.  The court shall grant such equitable relief as is necessary to 
remedy the effects of conduct prohibited under this chapter, which it that the court finds 
to exist, including declaratory judgment and mandatory or prohibitive injunctive relief. 
The court may grant interim equitable relief, and actual and punitive damages where 
when indicated, in suits under this chapter and may, unless such suit is frivolous, direct 
that costs, reasonable attorney attorney's and expert witness fees incurred by the 
franchisee in those portions of the action in which the franchisee is the prevailing party be 
paid by the franchisor. 
SUMMARY 
This bill makes changes to the Motor Fuel Distribution and Sales Act by allowing a 
franchisor that has entered into a consignment agreement with a franchisee to set the price 
at which the motor fuel must be sold without being subject to the motor fuel price-fixing 
prohibition for motor fuel franchise agreements.  The bill also makes a variety of 
technical changes to the laws governing motor fuel franchise agreements.