senate Bill S855

Relates to zone pricing of gasoline

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Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor
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actions

  • 09 / Jan / 2013
    • REFERRED TO CONSUMER PROTECTION
  • 08 / Jan / 2014
    • REFERRED TO CONSUMER PROTECTION

Summary

Relates to zone pricing of gasoline.

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Bill Details

Versions:
S855
Legislative Cycle:
2013-2014
Current Committee:
Senate Consumer Protection
Law Section:
General Business Law
Laws Affected:
Amd §399-ee, Gen Bus L; amd §2, Chap 579 of 2008
Versions Introduced in 2011-2012 Legislative Cycle:
A7775B, S4170B

Sponsor Memo

BILL NUMBER:S855

TITLE OF BILL:
An act
to amend the general business law, in relation to zone pricing of
gasoline, and to amend chapter 579 of the laws of 2008, amending the
general business law relating to zone pricing of gasoline, in relation
to zone pricing for retail motor fuel based on geographic location

PURPOSE:
To amend the current law, Chapter 579 of the laws of 2008, to put an
end to unfair zone pricing based on geographical location.

SUMMARY OF PROVISIONS:
Section 1. Paragraph (a) of subdivision 1 of Section 399-ee of the
general business law is relettered paragraph (a-l) and a new
paragraph (a) is added to define "Additional costs" to mean all
replacement and transportation costs and taxes incurred.

Section 2. Paragraph (g) of subdivision 1 of Section 399-ee of the
general business law is amended to redefine "Relevant geographic
market" to mean the geographic area which is supplied by the same
terminal facility.

Section 3. The definition of "Zone pricing" as defined by paragraph
(m) of subdivision 1 of Section 399-ee of the general business law is
amended to mean the establishment of price differences based on
geographical location of the retail outlet within the relevant
geographic market, without regard to the posted terminal price any
additional costs where the effect is to injure competition.

Section 4. Subdivision 2 of Section 399-ee of the general business law
is amended to provide that no wholesaler or dealer shall engage in
zone pricing with respect to any motor fuel of like grade or quality
which is supplied to dealer' operated retail outlets.

Section 5. Subdivision 3 of Section 399-ee of the general business law
is amended by adding a new undesignated paragraph to allow a
wholesaler or dealer who has been injured by reason of a violation of
this section to bring an action in his or her name to enjoin such
unlawful act, however no damages of any nature shall be recoverable
in such action.

Section 6. The Legislative Findings set forth in Section 2 of Chapter
579 of the Laws of 2008 are amended to state that zone pricing is the
setting of different wholesale prices for retail motor fuel based on
geographic location.

Section 7. This act shall take effect immediately.

JUSTIFICATION:
Over the past several years motor fuel prices have greatly fluctuated
and in some cases unfairly so based on geographical location. Natural
market occurrences may lead to price fluctuations; however zone
pricing is an inequitable and harmful act that is devastating to
consumers who are already financially overburdened during these


difficult economic times. In 2008, New York State enacted the first
law in the nation to outlaw the practice of zone pricing for gasoline
(Chapter 579 of the Laws of 2008). Since that time, however,
compliance has been sporadic and enforcement has been difficult.

In March 2011, the Attorney General of the State of New York began
conducting a comprehensive review of gasoline prices across the State
in an effort to examine how prices are determined at various levels
and to protect residents from gas price gouging. The State of New
York Attorney General Eric T. Schneiderman released a report on
December 28, 2011 entitled "Report on New York Gasoline Prices" which
revealed that the surges in gas prices as unrest spread throughout
t.he Middle East did not lead to price gouging in New York. The
increases in gasoline prices during the spring of 2011, for example,
were not a result of price gouging by gasoline retailers or
wholesalers; but were primarily driven by changes in the price of
crude oil. The Attorney General's study found that price gouging by
gas stations was not behind the price spikes.

However, during Tropical Storm Irene in August 2011, gas gouging did
occur and the report revealed that the Attorney General has since
taken enforcement action against two downstate retailers.
Investigations on price gouging during other major storms that hit
New York in 2011 are ongoing.

Finally, the report concluded that some wholesalers continue to charge
different prices to different retail gas locations even after the
enactment of Chapter 579 of the Laws of 2008. The Attorney General
indicated several flaws in the current statute and recommended
various amendments in order to have an effective zone pricing law in
New York State. This legislation incorporates such recommendations by
providing a meaningful definition of the "relevant geographic
market" and addresses the issue of "arbitrary" price differences. The
weak definition of these terms in current law, among others, has
resulted in no enforcement actions being brought forth pursuant to
the zone pricing law since its enactment.

It is clear that consumers need further protection from this unfair
business practice. This legislation is necessary to strengthen the
zone pricing law by correcting several flaws which currently
preclude effective enforcement by the New York State Attorney General.

LEGISLATIVE HISTORY:
2011-12: S.4170B/A7775B - Passed the Assembly; Died in
Consumer Protection
2010: A.7775/S.4170

FISCAL IMPLICATIONS:
None.

EFFECTIVE DATE:
This act shall take effect immediately.

view bill text
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                   855

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                               (PREFILED)

                             January 9, 2013
                               ___________

Introduced  by  Sen.  PARKER -- read twice and ordered printed, and when
  printed to be committed to the Committee on Consumer Protection

AN ACT to amend the general business law, in relation to zone pricing of
  gasoline, and to amend chapter 579 of the laws of 2008,  amending  the
  general business law relating to zone pricing of gasoline, in relation
  to zone pricing for retail motor fuel based on geographic location

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Paragraph (a) of subdivision 1 of  section  399-ee  of  the
general  business  law is relettered paragraph (a-1) and a new paragraph
(a) is added to read as follows:
  (A) "ADDITIONAL COSTS" MEANS ALL REPLACEMENT AND TRANSPORTATION  COSTS
AND TAXES INCURRED.
  S  2.  Paragraph (g) of subdivision 1 of section 399-ee of the general
business law, as added by chapter 579 of the laws of 2008, is amended to
read as follows:
  (g) "Relevant geographic market" means the geographic area [of  effec-
tive competition] WHICH IS SUPPLIED BY THE SAME TERMINAL FACILITY.
  S  3.  Paragraph (m) of subdivision 1 of section 399-ee of the general
business law, as added by chapter 579 of the laws of 2008, is amended to
read as follows:
  (m) "Zone  pricing"  means  the  [arbitrary]  ESTABLISHMENT  OF  price
differences  BASED  ON  THE  GEOGRAPHICAL  LOCATION OF THE RETAIL OUTLET
within the relevant geographic market, [based on] WITHOUT REGARD TO  the
posted  terminal price [or] AND ANY ADDITIONAL COSTS where the effect is
to injure competition.
  S 4. Subdivision 2 of section 399-ee of the general business  law,  as
added by chapter 579 of the laws of 2008, is amended to read as follows:

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD02886-01-3

S. 855                              2

  2.  No wholesaler, OR DEALER shall engage in zone pricing with respect
to any motor fuel of like grade or quality, WHICH IS SUPPLIED TO  DEALER
OPERATED RETAIL OUTLETS.
  S  5.  Subdivision 3 of section 399-ee of the general business law, is
amended by adding a new undesignated paragraph to read as follows:
  NOTWITHSTANDING ANY  RIGHT  OF  ACTION  TO  THE  ATTORNEY  GENERAL  AS
PROVIDED IN THIS SECTION, A WHOLESALER OR DEALER WHO HAS BEEN INJURED BY
REASON  OF A VIOLATION OF THIS SECTION MAY BRING AN ACTION IN HIS OR HER
OWN NAME TO ENJOIN SUCH UNLAWFUL ACT, HOWEVER, NO DAMAGES OF ANY  NATURE
SHALL BE RECOVERABLE IN SUCH ACTION.
  S 6. Section 2 of chapter 579 of the laws of 2008, amending the gener-
al business law relating to zone pricing of gasoline, is amended to read
as follows:
  S 2. Legislative findings and intent. The legislature hereby finds and
declares  that for the past several years motor fuel prices have greatly
fluctuated. In some cases, price  fluctuations  are  caused  by  natural
market  conditions.  In other cases, fluctuations result from artificial
manipulation of the market. One such artificial pricing manipulation  is
zone  pricing. Zone pricing is the setting of different wholesale prices
for retail motor fuel [that operate in different geographic areas] BASED
ON GEOGRAPHIC LOCATION. Zone pricing increases the price of retail motor
fuel for certain consumers, leading to inequities  among  consumers  and
regions  around  the state.   Therefore, the legislature hereby declares
that while natural market occurrences may lead  to  price  fluctuations,
artificial  changes  in  motor  fuel prices unfairly harm many consumers
around the state.
  S 7. This act shall take effect immediately.

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