BILL NUMBER: SB 123	AMENDED
	BILL TEXT

	AMENDED IN SENATE   MARCH 18, 1999

INTRODUCED BY   Senator Peace

                        DECEMBER 21, 1998

   An act to add Sections 21200.1 and 21200.2 to the Business and
Professions Code, relating to petroleum.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 123, as amended, Peace.  Petroleum:  unfair practices.
   Under existing law, a refiner, distributor, manufacturer, or
transporter of motor vehicle fuels is prohibited from discriminating
in price between different purchasers if the effect of the
discrimination is harmful to competition, as specified.
   This bill would provide that a refiner, distributor, manufacturer,
or transporter of petroleum products may not prevent a branded
gasoline franchisee from purchasing the franchisor's branded
petroleum products from any location or through any vendor in the
franchisor's wholesale network.  In addition, the bill would also
prohibit a refiner, distributor, manufacturer, or transporter of
petroleum products from discriminating in price between different
franchisee purchasers of the franchisor's branded petroleum products
if the price discrimination effectively prevents a franchisee from
taking advantage of price differences at different locations or
between different vendors.   The bill would also provide that
eligible branded franchise service station operators may only secure
branded gasoline from refiner owned or operated terminals.  It would
clarify that these provisions shall not prevent refiners from
charging different terminal prices to different wholesale customers
if those differences are not based upon the location of the wholesale
customer's retail facility, and would also enact related provisions.

   Vote:  majority.  Appropriation:  no.  Fiscal committee:  no.
State-mandated local program:  no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 21200.1 is added to the Business and
Professions Code, to read:
   21200.1.  The Legislature finds and declares that gasoline is an
essential fuel that facilitates California residents' access to
necessary goods and services.  A well-functioning gasoline market has
gasoline prices that accurately reflect the value of gasoline to its
users.  A well-functioning gasoline market is free from commercial
arrangements that distort the pricing of gasoline, causing consumers
to pay more than they otherwise would.  The current branded wholesale
gasoline market structure in California distorts the price of
gasoline by preventing franchise operators of branded retail service
stations from seeking the least expensive branded gasoline available
at any location and transporting it to their stations.
  SEC. 2.  Section 21200.2 is added to the Business and Professions
Code, to read:
   21200.2.  (a) A refiner, distributor, manufacturer, or transporter
of petroleum products may not prevent a branded gasoline franchisee
from purchasing the franchisor's branded petroleum product from any
location or through any vendor in the franchisor's wholesale
petroleum product network.
   (b) A refiner, distributor, manufacturer, or transporter of
petroleum products may not discriminate in price between different
franchisee purchasers of the franchisor's branded petroleum products
if the price discrimination effectively prevents a franchisee from
taking advantage of price differences at different locations or
between different vendors.  
   (c) This section does not apply to jobbers or their branded
franchise service station operators.
   (d) Eligible branded franchise service station operators may only
secure branded gasoline from refiner owned or operated terminals.
   (e) In order to ensure that refiners can reliably serve their
local customers, refiner terminals may reserve up to 110 percent of
the previous month's volumes to supply those contractual customers.
   (f) Contracts in force prior to January 1, 2000, are not affected
by this section.  All contracts, including renewals, entered into
after January 1, 2000, shall conform to the provisions of this
section.
   (g) This section shall not prevent refiners from charging
different terminal prices to different wholesale customers if those
differences are not based upon the location of the wholesale customer'
s retail facility.