2007 Legislation
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HOUSE BILL NO. 333 – Biofuels, franchise agreements

HOUSE BILL NO. 333

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Bill Status



H0333.....................................................by WAYS AND MEANS
BIOFUELS - Adds to existing law relating to biofuels to require that
certain franchise agreements comply with specific federal law; to provide
that certain supply agreements and contracts shall be null and void; to
provide exceptions to applicability and to clarify application of
provisions; to provide for violations and penalties; and to provide that
the attorney general and specified prosecutors shall render assistance in
executing provisions and prosecuting cases.
                                                                        
03/28    House intro - 1st rdg - to printing
    Rpt prt - to W/M

Bill Text


                                                                        
                                                                        
  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-ninth Legislature                   First Regular Session - 2007
                                                                        
                                                                        
                              IN THE HOUSE OF REPRESENTATIVES
                                                                        
                                     HOUSE BILL NO. 333
                                                                        
                                BY WAYS AND MEANS COMMITTEE
                                                                        
  1                                        AN ACT
  2    RELATING TO BIOFUELS; AMENDING CHAPTER 1, TITLE 29, IDAHO CODE, BY  THE  ADDI-
  3        TION  OF  A  NEW  SECTION 29-116, IDAHO CODE, TO DECLARE POLICY, TO DEFINE
  4        TERMS, TO REQUIRE THAT CERTAIN FRANCHISE AGREEMENTS COMPLY  WITH  SPECIFIC
  5        FEDERAL LAW, TO PROVIDE THAT CERTAIN SUPPLY AGREEMENTS AND CONTRACTS SHALL
  6        BE  NULL  AND  VOID,  TO  PROVIDE  EXCEPTIONS TO APPLICABILITY, TO CLARIFY
  7        APPLICATION OF PROVISIONS, TO PROVIDE FOR VIOLATIONS AND PENALTIES, AND TO
  8        PROVIDE THAT THE ATTORNEY GENERAL AND SPECIFIED PROSECUTORS  SHALL  RENDER
  9        ASSISTANCE IN EXECUTING PROVISIONS AND PROSECUTING CASES.
                                                                        
 10    Be It Enacted by the Legislature of the State of Idaho:
                                                                        
 11        SECTION  1.  That  Chapter  1,  Title  29, Idaho Code, be, and the same is
 12    hereby amended by the addition thereto of a NEW SECTION, to be known and  des-
 13    ignated as Section 29-116, Idaho Code, and to read as follows:
                                                                        
 14        29-116.  IDAHO RENEWABLE FUEL CONTRACTS AND CONSUMER CHOICE. (1) It is the
 15    policy  of  the state of Idaho to encourage use of renewable biofuels that are
 16    agriculturally derived thereby  allowing  consumers  the  choice  to  purchase
 17    renewable biofuels from fuel retail dealers.
 18        (2)  As used in this section:
 19        (a)  "Biofuel"  means any renewable fuel offered for sale as a motor vehi-
 20        cle fuel that is agriculturally  derived  and  meets  applicable  American
 21        Society  for Testing and Materials (ASTM) standards as required in section
 22        37-2506, Idaho Code, including, but not limited to, ethanol, and  ethanol-
 23        blended fuel;
 24        (b)  "Distributor" means any person who receives motor fuel in this state,
 25        and includes a special fuels dealer. Any person who sells or receives gas-
 26        eous fuels will not be considered a distributor unless the gaseous fuel is
 27        delivered  into  the fuel supply tank or tanks of a motor vehicle not then
 28        owned or controlled by him;
 29        (c)  "Ethanol blended fuel" means any conventional motor fuel blended with
 30        not to exceed ten percent (10%) ethanol;
 31        (d)  "Licensed distributor" means  any  distributor  who  has  obtained  a
 32        license under the provisions of section 63-2427A, Idaho Code;
 33        (e)  "Person"  means any individual, firm, fiduciary, copartnership, asso-
 34        ciation, limited liability company, corporation,  governmental  instrumen-
 35        tality  including the state and all of its agencies and political subdivi-
 36        sions, or any other group or combination acting as a unit, and the  plural
 37        as  well  as the singular number, unless the intent to give a more limited
 38        meaning is disclosed by the context. Whenever used in any clause prescrib-
 39        ing and imposing a fine or imprisonment, or both,  the  term  "person"  as
 40        applied to an association means the partners or members, and as applied to
 41        corporations, the officers;
 42        (f)  "Refiner"  means  any  person  who  controls  the franchise agreement
 43        between a distributor or licensed distributor and  a  retail  dealer,  the
                                                                        
                                       2
                                                                        
  1        franchise  agreement  the  refiner  has  directly  with  a  distributor or
  2        licensed distributor, or the franchise agreement the refiner has  directly
  3        with a retail dealer; and
  4        (g)  "Retail  dealer" means any person engaged in the retail sale of motor
  5        fuels, including biofuels, to the public or for use in the state.
  6        (3)  Franchise agreements as defined in  section  29-110(3),  Idaho  Code,
  7    between   a conventional motor fuel or biofuel franchiser and a franchisee, or
  8    any conventional motor fuel or biofuel supply  agreement  or  supply  contract
  9    between  a  refiner and distributor or licensed distributor, or between a dis-
 10    tributor or licensed distributor and retail dealer, or  directly  between  the
 11    refiner  and  retail dealer, entered into after the effective date of this act
 12    must be in full compliance with 15 U.S.C. section 26a and this section.
 13        (4)  As it pertains to biofuel, a provision of  any  supply  agreement  or
 14    contract  between a refiner and distributor or licensed distributor, or a dis-
 15    tributor or licensed distributor and a retail  dealer,  or  a  refiner  and  a
 16    retail dealer, shall be null and void in the event any provision:
 17        (a)  Prohibits  a  distributor  or  licensed distributor from blending the
 18        refiner's fuel with ethanol and providing biofuels to a retail dealer upon
 19        the request of a retail dealer with whom the distributor or licensed  dis-
 20        tributor or refiner has an agreement or contract so long as no other terms
 21        of the agreement or contract are violated;
 22        (b)  Prohibits  a retail dealer from purchasing and reselling biofuel from
 23        a distributor or licensed distributor as set forth in this section;
 24        (c)  Limits the quantity of such biofuel to be purchased from the distrib-
 25        utor or licensed distributor;
 26        (d)  Prohibits or limits the use of a franchise  refiner's  trademarks,  a
 27        retail  dealer's  location, existing pumps, tanks or other related facili-
 28        ties for the sale or resale of such biofuel so long as the biofuel is pur-
 29        chased from the refiner or distributor or licensed distributor  with  whom
 30        the retail dealer has an agreement or contract; or
 31        (e)  Prohibits  or limits the use of credit instruments in the retail sale
 32        of such biofuel so long as the credit  instruments  for  retail  sale  are
 33        those of the refiner or those approved by a refiner.
 34        (5)  The prohibitions in this section shall not apply to any refiner, dis-
 35    tributor  or  licensed  distributor who makes available sufficient supplies of
 36    biofuel to satisfy a retail dealer's request for biofuels  and  such  biofuels
 37    are  made  available  on terms and conditions which are at least equivalent to
 38    the terms and conditions on which conventional motor  fuel  products  of  such
 39    refiner, distributor or licensed distributor are made available. Nor shall the
 40    prohibitions  in  this  section  apply if any refiner, distributor or licensed
 41    distributor is, after a good faith effort, unable to comply with  the  request
 42    for  biofuels  by a retail dealer due to fuel shortage, strike, natural disas-
 43    ter, or any other circumstance beyond his control.
 44        (6)  Nothing in this section shall:
 45        (a)  Preclude any person, refiner,  distributor  or  licensed  distributor
 46        from  imposing  a  fee for credit on the sale or resale of biofuel if such
 47        credit fee is equivalent in terms and conditions as that imposed  on  con-
 48        ventional  motor  fuel  products  of  such person, refiner, distributor or
 49        licensed distributor;
 50        (b)  Preclude any person, refiner,  distributor  or  licensed  distributor
 51        from requiring labeling of retail dealer pumps dispensing biofuel to indi-
 52        cate  such  biofuel  is not manufactured, blended, distributed, or sold by
 53        such person or refiner;
 54        (c)  Preclude any person from issuing disclaimers of product liability for
 55        damage where such disclaimers are consistent with state and federal label-
                                                                        
                                       3
                                                                        
  1        ing requirements;
  2        (d)  Require any person, refiner, distributor or licensed  distributor  to
  3        provide advertising support for the biofuel;
  4        (e)  Require  any person, refiner, distributor or licensed distributor, or
  5        retail dealer to furnish or provide at their own  expense  any  additional
  6        pumps, tanks or other related facilities for the sale of biofuel;
  7        (f)  Remove the sole liability from the manufacturer of any biofuel compo-
  8        nent  which,  although  purchased  in  good  faith  by  the distributor or
  9        licensed distributor, does not meet ASTM standards; or
 10        (g)  Relieve the distributor or licensed distributor  from  liability  for
 11        contamination  of  any  biofuel  while in his possession which causes such
 12        biofuel to not meet ASTM standards.
 13        (7)  Any distributor or licensed distributor found guilty of violating the
 14    provisions of this section shall be guilty of a misdemeanor and shall be  sub-
 15    ject  to  a  fine not to exceed five hundred dollars ($500). Provided further,
 16    any distributor or licensed distributor remaining out of compliance  with  the
 17    provisions  of this section shall, after thirty (30) calendar days, be subject
 18    to an additional civil penalty of fifty dollars ($50.00)  for  each  day  that
 19    they remain out of compliance.
 20        (8)  Any  refiner found guilty of violating the provisions of this section
 21    shall be guilty of a misdemeanor and shall be subject to a fine not to  exceed
 22    five thousand dollars ($5,000). Provided further, any refiner remaining out of
 23    compliance with the provisions of this section shall, after thirty (30) calen-
 24    dar  days,  be  subject to an additional civil penalty of one thousand dollars
 25    ($1,000) for each day that they remain out of compliance.
 26        (9)  It shall be the duty of the attorney  general,  and  the  prosecuting
 27    attorney  of the county in which a violation of the provisions of this section
 28    has occurred, to render all assistance in their power to  execute  the  provi-
 29    sions of this section and to prosecute cases arising under this section.

Statement of Purpose / Fiscal Impact



                       STATEMENT OF PURPOSE

                             RS 17160

The purpose of this legislation is to clarify that future
contracts between fuel suppliers and fuel retailers cannot
discriminate against bio-fuels.  If a fuel retailer requests bio-
fuels for his customers, the distributor is authorized to provide
a bio-fuel for the franchise agreement.  This legislation further
provides protection for fuel refiners, distributors and retailers
with respect to franchise agreements, and sets out penalties for
non-compliance.




                           FISCAL NOTE

No fiscal impact.





Contact
Name:  Representative Mike Moyle
       Representative Ken Roberts
Phone: 332-1000


STATEMENT OF PURPOSE/FISCAL NOTE                         H 333