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S.B. 46
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MOTOR FUEL MARKETING AMENDMENTS
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2000 GENERAL SESSION
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STATE OF UTAH
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Sponsor: Parley Hellewell
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AN ACT RELATING TO COMMERCE AND THE MOTOR FUEL MARKETING ACT;
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AMENDING DEFINITIONS; ADDRESSING REQUIREMENT TO ESTABLISH AND
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DISCLOSE CERTAIN PRICES; AMENDING PROVISIONS AGAINST UNLAWFUL SALES;
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ADDRESSING SALES NOT CONSIDERED VIOLATIONS; ADDRESSING CIVIL
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ENFORCEMENT; ADDRESSING REBUTTABLE PRESUMPTIONS; ADDRESSING
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ADMINISTRATIVE REMEDIES; AND MAKING TECHNICAL CHANGES.
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This act affects sections of Utah Code Annotated 1953 as follows:
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AMENDS:
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13-16-2, as last amended by Chapter 260, Laws of Utah 1991
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13-16-3, as last amended by Chapter 189, Laws of Utah 1987
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13-16-4, as last amended by Chapter 300, Laws of Utah 1992
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13-16-6, as last amended by Chapter 279, Laws of Utah 1994
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13-16-7, as last amended by Chapter 260, Laws of Utah 1991
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13-16-8, as last amended by Chapter 189, Laws of Utah 1987
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13-16-9, as last amended by Chapter 189, Laws of Utah 1987
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13-16-10, as last amended by Chapter 300, Laws of Utah 1992
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13-16-11, as enacted by Chapter 260, Laws of Utah 1991
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ENACTS:
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13-16-13, Utah Code Annotated 1953
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REPEALS:
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13-16-5, as last amended by Chapter 189, Laws of Utah 1987
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Be it enacted by the Legislature of the state of Utah:
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Section 1.
Section
13-16-2
is amended to read:
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13-16-2. Definitions.
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As used in this chapter:
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(1) "Affiliate" means [an entity] a person that owns or controls, or is owned or controlled
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by, another person, whether through stock ownership or otherwise.
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(2) "Cost" means an amount calculated as follows:
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(a) (i) if motor fuel is not purchased from an affiliate:
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(A) the lowest invoice cost that the seller charged to the purchaser for motor fuel of like
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grade and quality within five days prior to the date of any alleged unlawful resale by the purchaser;
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or
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(B) if there was no sale to the purchaser within the preceding five days, the purchaser's last
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invoice cost for motor fuel of like grade and quality; or
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(ii) if motor fuel is purchased or received from an affiliate:
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(A) the lowest transfer price that the affiliate charged to the purchaser or receiver for motor
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fuel of like grade and quality within five days prior to the date of any alleged unlawful resale by
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the purchaser or receiver; or
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(B) if there was no purchase or receipt within the preceding five days, the last transfer
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price for motor fuel of like grade and quality; [less]
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(b) [trade discounts, allowances, or rebates] less each of the following that the purchaser
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receives on the particular invoice or transfer:
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(i) a trade discount;
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(ii) an allowance; or
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(iii) a rebate; [plus] and
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(c) [the reasonable cost of doing business as determined by generally accepted accounting
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principles, which, with respect to retail sales and in the absence of proof of a lesser cost, is
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presumed to be a margin of 6% of the posted retail price;] plus the following if not included in the
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invoice cost or transfer price:
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[(d)] (i) freight charges [and];
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(ii) all applicable federal, state, and local taxes [not already included in the invoice cost
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or transfer price]; and
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(iii) charges imposed by a federal, state, or local government that are not taxes.
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(3) "Division" means the Division of Consumer Protection.
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[(3)] (4) "Motor fuel" means gasoline, diesel fuel, gasohol, and all other fuels of a type
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designated for use as a motor fuel in self-propelled vehicles designated primarily for use on public
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streets, roads, and highways.
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(5) "Opening" means the first retail sale of motor fuel at a new retail station.
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[(4)] (6) "Person" means any individual, partnership, corporation, or other legal entity.
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(7) (a) "Posted rack price" means the price at which a refiner or other person offers a grade
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of motor fuel for sale at the rack before:
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(i) a reduction for:
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(A) a trade discount;
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(B) an allowance; or
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(C) a rebate; or
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(ii) the addition of:
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(A) a charge for freight;
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(B) a federal, state, or local tax; or
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(C) a charge imposed by a federal, state, or local government that is not a tax.
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(b) Notwithstanding Subsection (7)(a), the posted rack price for a refiner or other person
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offering motor fuel for sale at the rack who does not establish a posted rack price shall be the
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lowest posted rack price of any person for motor fuel of like grade or quality in the geographic area
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served by the refiner or other person.
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(8) "Purchase," "purchases," or "purchased" means the acquisition of motor fuel as a result
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of a sale or resale.
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(9) "Rack" means a deck, platform, or open bay that consists of a series of metered pipes
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and hoses for the delivery or removal of motor fuel from the refinery or terminal into:
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(a) a motor vehicle;
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(b) a rail car; or
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(c) a vessel.
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(10) "Receipt" or "received" has the same meaning as purchase under Subsection (8).
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(11) "Resale" or "resales" has the same meaning as sale under Subsection (14).
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[(5)] (12) "Retail sale" means any sale of motor fuel to a member of the motoring public
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for consumption.
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(13) "Retail station" means a station, store, or other outlet from which motor fuel is sold
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at retail in this state.
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[(6)] (14) (a) "Sale," "sales," "sell," "sells," or "sold" means [any] the transfer of, [gift,
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sale,] or offer [for sale, or advertisement for sale in any manner or by any means, including any
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transfer of motor fuel by a person to himself or his affiliate.] to transfer:
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(i) ownership, title to, or possession of, motor fuel from one person to another; and
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(ii) with or without consideration.
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(b) "Sale, "sales," "sell," "sells," or "sold" includes any method by which any person
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transfers or offers to transfer ownership, title to, or possession of, motor fuel to itself or an affiliate
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for resale at another marketing level.
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(15) "Terminal" means a facility:
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(a) for the storage of motor fuel that is:
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(i) part of a refinery; or
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(ii) supplied by:
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(A) a motor vehicle;
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(B) a pipeline; or
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(C) a vessel; and
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(b) from which motor fuel is removed for distribution at a rack.
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[(7)] (16) "Transfer price" means the price used by a refiner [in transferring] in connection
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with any sale of motor fuel to itself or an affiliate for resale at another marketing level.
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Section 2.
Section
13-16-3
is amended to read:
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13-16-3. Requirement to establish and disclose "transfer prices" and "posted rack
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prices."
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[Each] A refiner engaged in commerce in this state is required to:
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(1) establish [and publicly disclose upon request]:
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(a) its transfer price on all grades of motor fuel [transferred or] sold to itself or an affiliate
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for resale in this state at a different marketing level of distribution[.]; and
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(b) a posted rack price on all grades of motor fuel the refiner or other person sells at the
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rack in this state; and
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(2) notwithstanding the provisions of Section
13-16-9
, at the request of any person disclose
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to the requesting person:
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(a) any transfer price described in Subsection (1)(a); or
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(b) any posted rack price described in Subsection (1)(b).
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Section 3.
Section
13-16-4
is amended to read:
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13-16-4. Unlawful sale by persons engaged in commerce.
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(1) It is unlawful for any person engaged in commerce within this state to sell [or offer to
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sell] motor fuel in this state below cost as defined in Subsection
13-16-2
(2) if[: (a)] the intent or
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effect of the sale [or offer] is to:
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(a) injure competition; [or]
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(b) [the intent and purpose of the sale or offer is to] induce the [purchase] buying of other
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merchandise[, to];
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(c) unfairly divert trade from a competitor[,]; or
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(d) otherwise [to] injure a competitor.
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(2) It is unlawful for any person engaged in commerce [within] in this state, in the course
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of such commerce, either directly or indirectly, to:
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(a) sell motor fuel to itself or an affiliate for resale in this state on a different marketing
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level of distribution at a transfer price lower than the price it charges a person who purchases
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motor fuel of like grade and quality at reasonably the same time for resale in this state on the same
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level of distribution, if the intent or effect of the sale is to injure competition; or
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(b) sell [or offer to sell] motor fuel for resale in this state at a price lower than the seller
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charges other persons [at the same time and] purchasing motor fuel of like grade and quality at
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reasonably the same time for resale in this state on the same level of distribution, if the intent or
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effect of the sale [or offer] is to injure competition.
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Section 4.
Section
13-16-6
is amended to read:
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13-16-6. Sales not considered violations.
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(1) It is not a violation of [Section] Subsection
13-16-4
(2) [or
13-16-5
] if:
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(a) a difference exists at the same level of distribution between the transfer price or sales
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price of motor fuel of like grade and quality and the price charged to a person who purchases for
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resale, including any discount, rebate, allowance, service, or facility granted to any person,
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including any of a supplier's own marketing operations, who purchases for resale, in excess of
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those provided to [a] any other person who purchases for resale if the difference [is] makes only
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due [to a difference] allowance for differences in the cost of:
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(i) manufacturing;
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(ii) transportation, shipping, or other delivery method, [transportation,]; or
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(iii) marketing[,] or sale[, or] resulting from the method or quantity in which the motor
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fuel is sold or delivered.
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[(2)] (b) [It is not a violation of Section
13-16-4
or
13-16-5
if] a difference exists in
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transfer price and sales price or between sales prices at the same marketing level if the difference
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exists because of a good faith effort to meet the equally low price of a competitor or if the sale is
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exempt under Section
13-5-12
.
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[(3)] (2) (a) It is not a violation of Subsection
13-16-4
(1) if [the] a sale below cost is:
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(i) the result of a good faith effort to meet the equally low price of a competitor [or if the];
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(ii) a sale [is] exempt under Section
13-5-12
[.]; or
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(iii) in connection with the opening of a retail station if:
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(A) the below cost sale occurs only from the retail station that is opening;
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(B) the first sale of motor fuel at a price below cost in connection with the opening occurs
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within 60 days from the day of the retail station's opening;
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(C) the below cost sale of motor fuel at the retail station in connection with the opening
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occurs no later than 72 hours from the first sale of motor fuel at a price below cost in connection
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with the opening; and
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(D) the opening occurs only once.
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(b) Notwithstanding Subsection (2)(a)(iii)(D), a sale described in Subsection (2)(a)(iii) is
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not a violation of Subsection
13-16-4
(1) if:
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(i) the retail station at which an opening previously occurred is reopening after:
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(A) the retail station stopped the sale of motor fuel at the retail station for a period of not
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less than 72 continuous hours because of remodeling; or
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(B) the transfer of the retail station to a new owner who is not an affiliate;
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(ii) the below cost sale occurs only from the retail station that is reopening;
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(iii) the first sale of motor fuel at a price below cost in connection with the reopening
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occurs within 60 days from the day the retail station makes its first sale of motor fuel after the
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reopening; and
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(iv) the below cost sale of motor fuel at the retail station in connection with the reopening
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occurs no later than 72 hours from the first sale of motor fuel at a price below cost in connection
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with the reopening.
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(3) Notwithstanding Subsection (2), any below cost price for the sale of motor fuel made
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by any person to meet the price at which a competitor has made a sale of motor fuel in connection
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with an opening or reopening may not occur after the 72 hour period described in:
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(a) Subsection (2)(a)(iii)(C); or
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(b) Subsection (2)(b)(iv).
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[(b)] (4) In determining whether a person has set the price at which motor fuel is sold [or
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offered for sale] to meet the price of a competitor, the court shall consider only whether the seller
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[or offeror] has set the price of motor fuel to [match] meet the price at which a competitor has sold
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[or offered] motor fuel without regard to any other items sold [or offered] in conjunction with the
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sale [or offer for sale] of the motor fuel.
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(5) Notwithstanding Section
13-16-2
, for purposes of Subsection (2)(a)(iii)(C) and
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Subsection (2)(b)(iv) the term "sale" does not include an offer to sale.
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Section 5.
Section
13-16-7
is amended to read:
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13-16-7. Civil actions authorized -- Expenses -- Jurisdiction and venue.
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(1) (a) If the [Division of Consumer Protection] division has reason to believe that a
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person has engaged in acts or practices that violate Section
13-16-4
[or
13-16-5
], the division may
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request the attorney general or a county attorney to commence a civil action to enjoin the acts or
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practices, seek civil penalties as provided in Subsection (1)(b), and upon a proper showing, a
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temporary restraining order, preliminary injunction, or permanent injunction shall issue without
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the necessity of a bond.
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(b) Any person who violates Section
13-16-4
[or
13-16-5
] is liable to the state for a civil
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penalty, assessed by a court, not to exceed $5,000 per day for each business location where a
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violation occurred.
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(2) (a) Any person injured as a result of an act or practice that violates Section
13-16-4
[or
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13-16-5
] may bring a civil action for appropriate relief, including an action for a declaratory
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judgment, injunctive relief, a treble award of actual damages, and exemplary damages.
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(b) Any action under this subsection shall be brought within two years after the alleged
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violation occurred.
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(3) The court, in making an award under Subsection (1) or (2), may award court costs and
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a reasonable attorney's fee to the prevailing party, except that the court may not award attorney's
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fees or court costs against the state, a state agency, or a political subdivision of the state.
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(4) If the state, a state agency, or a political subdivision of the state prevails in an action
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under this chapter, it is entitled to an award for reasonable investigative expenses in addition to
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any other relief granted.
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(5) (a) The district courts of this state may hear and determine all cases brought under this
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section.
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(b) Venue lies in any county where the defendant is doing business or in the county where
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the plaintiff resides.
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Section 6.
Section
13-16-8
is amended to read:
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13-16-8. Rebuttable presumption in a civil or administrative action.
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(1) In [any] a civil action brought under Section
13-16-7
[, the burden of proof, upon a
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prima facie showing of a violation, shall shift to the defendant to show justification. Unless
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justification is shown, the court shall award judgment for the plaintiff.] or an administrative action
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brought under Section
13-16-13
:
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(a) a rebuttable presumption described in Subsection (2)(a) is created if the person bringing
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the action shows that the defendant:
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(i) engages in commerce within this state; and
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(ii) sells motor fuel in this state below cost; or
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(b) a rebuttable presumption described in Subsection (2)(b) is created if the person
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bringing the action shows that the defendant engages in commerce within this state and in the
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course of such commerce, either directly or indirectly:
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(i) sells motor fuel for resale in this state at a price lower than the price it charges other
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persons purchasing motor fuel of like grade and quality at reasonably the same time for resale in
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this state on the same level of distribution; or
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(ii) sells motor fuel:
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(A) to itself or an affiliate;
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(B) for resale in this state on a different marketing level of distribution; and
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(C) at a transfer price lower than the price it charges a person that purchases motor fuel
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of like grade and quality at reasonably the same time for resale in this state on the same level of
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distribution.
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(2) (a) If the showing described in Subsection (1)(a) is made, there is a rebuttable
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presumption that the intent or effect of the sale is to:
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(i) injure competition;
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(ii) induce the buying of other merchandise;
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(iii) unfairly divert trade from a competitor; or
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(iv) otherwise injure a competitor.
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(b) If the showing described in Subsection (1)(b) is made, there is a rebuttable presumption
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that the intent or effect of the sale is to injure competition.
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(3) (a) The defendant may rebut the presumption described in Subsection (2)(a) by:
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(i) producing evidence that proves by a preponderance of the evidence that it is more
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probable than not that the sale was made without the intent or effect described in Subsection (2)(a);
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or
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(ii) showing that the sale is not a violation under Section
13-16-6
.
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(b) The defendant may rebut the presumption described in Subsection (2)(b) by:
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(i) producing evidence that proves by a preponderance of the evidence that it is more
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probable than not that the sale was made without the intent or effect described in Subsection (2)(b);
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or
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(ii) showing that the sale is not a violation under Section
13-16-6
.
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Section 7.
Section
13-16-9
is amended to read:
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13-16-9. Right of purchaser to obtain price and cost information from marketer.
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A person who purchases motor fuel for resale and who has cause to believe that another
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person marketing motor fuel has violated Section
13-16-4
[or
13-16-5
] may, upon motion to the
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court and a proper showing of cause, obtain an order requiring the marketer to provide the
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following information:
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(1) the price or transfer price at which [he transfers] the marketer sells each grade of motor
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fuel to each level of distribution in [his] the marketer's marketing operations in this state;
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(2) information relevant to the market area to which [he transfers] the marketer sells the
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motor fuel in this state; and
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(3) the cost of, amount, and the nature of all discounts, rebates, allowances, services, or
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facilities connected with the handling[,] or sale[, or offering for sale] of any motor fuel [he] the
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marketer provides to:
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(a) each level of [his] the marketer's marketing operations in this state; and [to]
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(b) the local market area of the complainant.
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Section 8.
Section
13-16-10
is amended to read:
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13-16-10. Recordkeeping -- Civil penalty.
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(1) Persons engaged in commerce within this state who sell [or offer to sell] motor fuel
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in this state shall maintain records accurately indicating the date and the time of day of each change
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in the sale price of motor fuel and the identity of the person who recorded the price change. In the
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event the change in price is to meet a lower price of a competitor, the record shall set forth the
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competitor by name and address, specifying the price which was met. These records shall be
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maintained for a period of two years.
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(2) The records shall be made available to the Division of Consumer Protection and the
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attorney general on request.
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(3) A person who fails to comply with Subsection (1) is liable to the state for a civil
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penalty, assessed by a court or by the division in an administrative action, of $500 per day for each
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business location where a violation occurred.
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Section 9.
Section
13-16-11
is amended to read:
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13-16-11. Applicability.
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[(1)] Section
13-16-4
applies equally to all persons engaged in commerce in the marketing
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of motor fuel, regardless of the size of a marketing operation.
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[(2) Section
13-16-5
applies equally to all refiners engaged in commerce in the marketing
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of motor fuel, regardless of the size of a marketing operation.]
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Section 10.
Section
13-16-13
is enacted to read:
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13-16-13. Administrative actions.
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(1) In addition to other penalties and remedies provided in this chapter, if a person violates
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this chapter, the division may do one or more of the following:
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(a) issue a cease and desist order;
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(b) impose an administrative fine not to exceed $5,000 for each day on which a violation
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of this chapter occurs for each business location where a violation of this chapter occurs; or
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(c) take any action permitted under Section
13-2-6
.
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(2) All money received through administrative fines imposed under this section shall be
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deposited in the Consumer Protection Education and Training Fund created by Section
13-2-8
.
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Section 11. Repealer.
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This act repeals:
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Section 13-16-5, Unlawful sale by refiner.
Legislative Review Note
as of 1-21-99 7:02 AM
This legislation raises the following constitutional or statutory concerns:
State and federal constitutional issues concerning due process limits may be raised when the state
restricts below cost sales of or discriminatory market activities involving a commodity such as
motor fuel and creates rebuttable presumptions in establishing unlawful those acts. The Utah
Supreme Court, while upholding as constitutional the Motor Fuel Marketing Act (as it read prior
to 1987) against a due process challenge, reserved ruling on the issue of whether a showing of
intent is required by due process. State v. Rio Vista Oil, 786 P.2d 1343 (Utah 1990). A limited
examination of case law in other states is not conclusive in determining what is required by due
process.