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

                                  3653

                       2009-2010 Regular Sessions

                            I N  S E N A T E

                             March 26, 2009
                               ___________

Introduced  by  Sen. LAVALLE -- 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  establishing
  minimum  distances  in  which  a  refiner may operate a retail service
  station; and providing for the repeal of such provisions upon  expira-
  tion thereof

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

  Section 1. Section 199-a of the general business  law  is  amended  by
adding a new subdivision 6 to read as follows:
  6.  "REFINER"  MEANS  ANY  PERSON  WHO IS ENGAGED IN THE PRODUCTION OR
REFINING OF CRUDE OIL TO PRODUCE MOTOR FUEL  WHETHER  SUCH  REFINING  OR
PRODUCTION OCCURS IN THIS STATE OR ELSEWHERE, AND INCLUDES ANY AFFILIATE
OF SUCH PERSON.
  S 2. The general business law is amended by adding a new section 199-o
to read as follows:
  S  199-O. REFINERS OPERATING RETAIL SERVICE STATIONS; DISTANCE LIMITA-
TIONS. 1. NO REFINER WITH A FRANCHISE AGREEMENT WITH  A  RETAIL  SERVICE
STATION  DEALER  OR  DISTRIBUTOR  SHALL OPERATE A RETAIL SERVICE STATION
WITH COMPANY PERSONNEL EMPLOYED BY SUCH REFINER OR EMPLOYED BY A  PARENT
COMPANY OF SUCH REFINER OR WITH ANY PERSON, FIRM OR CORPORATION MANAGING
A  RETAIL SERVICE STATION ON A COMMISSION FEE ARRANGEMENT UNDER CONTRACT
WITH THE REFINER WHERE SUCH REFINER RETAINS OWNERSHIP OF THE MOTOR  FUEL
WITHIN  THE  FOLLOWING  DISTANCES AS MEASURED BY THE MOST DIRECT SURFACE
TRANSPORTATION DISTANCE FROM THE DEALER FRANCHISEE:
  A. IN CITIES WITH A POPULATION OF ONE MILLION OR MORE, ONE MILE.
  B. IN COUNTIES WITH A POPULATION OF NINE HUNDRED THOUSAND OR MORE  NOT
WHOLLY CONTAINED WITHIN A CITY, ONE AND ONE-HALF MILES.
  C. FOR ALL OTHER COUNTIES, TWO MILES.
  2.    THE  DISTANCE LIMITATIONS ESTABLISHED IN SUBDIVISION ONE OF THIS
SECTION SHALL NOT BE APPLICABLE:
  A. TO A RETAIL SERVICE STATION WHICH IS TO BE LOCATED ON THE  OPPOSITE
SIDE  OF  A DIVIDED HIGHWAY FROM AN EXISTING DEALER OR DISTRIBUTOR FRAN-
CHISEE RETAIL SERVICE STATION. A DIVIDED HIGHWAY, FOR PURPOSES  OF  THIS

              

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD07949-01-9

S. 3653                             2

SECTION, SHALL CONSIST OF TWO OR MORE ROADWAYS, WHICH ARE THIRTY FEET OR
MORE  APART  AND  TO  WHICH  ACCESS AND EGRESS IS CONTROLLED OR TO WHICH
ACCESS OR EGRESS IS CONTROLLED FROM ENTRANCES THERETO  OR  EXITS  THERE-
FROM;
  B.  TO A RETAIL SERVICE STATION WHICH IS TO BE LOCATED ON THE OPPOSITE
SIDE OF A NATURAL PHYSICAL BARRIER SUCH AS A  NAVIGABLE  BODY  OF  WATER
WHICH  PROVIDES  A  GEOGRAPHIC  SEPARATION  FROM  AN  EXISTING DEALER OR
DISTRIBUTOR FRANCHISEE RETAIL SERVICE STATION; OR
  C. TO A RETAIL SERVICE STATION WHICH IS TO BE LOCATED ON PROPERTY  THE
TITLE TO WHICH IS IN THE STATE OF NEW YORK OR AN INDIAN TRIBE.
  3.  A REFINER OR A DEALER OR DISTRIBUTOR FRANCHISEE MAY MAKE AN APPLI-
CATION TO AN ARBITRATOR, WHO SHALL BE APPOINTED WITH THE CONSENT OF BOTH
PARTIES, TO DETERMINE ANY DISPUTE ARISING OUT OF  THE  APPLICABILITY  OF
ANY  OF  THE EXEMPTIONS PROVIDED IN SUBDIVISION TWO OF THIS SECTION. ANY
ARBITRATION FEES SHALL BE EQUALLY DIVIDED AMONG THE PARTIES TO THE ARBI-
TRATION, AND SHALL OTHERWISE BE GOVERNED BY THE  PROVISIONS  OF  SECTION
ONE HUNDRED NINETY-NINE-G OF THIS ARTICLE.
  4. THE EFFECT OF THE PROVISIONS OF SUBDIVISION ONE OF THIS SECTION MAY
NOT BE MODIFIED OR DISCLAIMED BY ANY AGREEMENT, WHETHER WRITTEN OR ORAL,
AND  MAY  NOT BE CONTRADICTED BY EVIDENCE OF ANY PRIOR AGREEMENT OR BY A
PRIOR COURSE OF DEALING OR USAGE OF  TRADE.  HOWEVER,  NOTHING  IN  THIS
ARTICLE  SHALL  PROHIBIT  A  REFINER  FROM  OPERATING AN EXISTING RETAIL
SERVICE STATION WITH COMPANY  PERSONNEL  EMPLOYED  BY  SUCH  REFINER  OR
EMPLOYED BY A PARENT COMPANY OF SUCH REFINER OR WITH ANY PERSON, FIRM OR
CORPORATION  MANAGING  A  RETAIL  SERVICE  STATION  ON  A COMMISSION FEE
ARRANGEMENT UNDER CONTRACT WITH THE REFINER WHERE  THE  REFINER  RETAINS
OWNERSHIP  OF  THE MOTOR FUEL, PROVIDED THAT SUCH RETAIL SERVICE STATION
WAS:
  A. SOLD FOR FAIR  COMPENSATION  TO  SUCH  REFINER  BY  THE  DEALER  OR
DISTRIBUTOR  FRANCHISEE.  "FAIR  COMPENSATION," FOR THE PURPOSES OF THIS
SUBDIVISION, SHALL INCLUDE, BUT NOT BE LIMITED  TO,  GOOD  WILL  OF  THE
DEALER  OR  DISTRIBUTOR  FRANCHISEE  WHICH MAY NOT BE FIXED OR OTHERWISE
DETERMINED IN THE FRANCHISE OR LEASE AGREEMENT BETWEEN THE  REFINER  AND
THE DEALER OR DISTRIBUTOR FRANCHISEE; OR
  B.  THE  SUBJECT OF AN AGREEMENT WHICH, PROVIDES THAT FOR FAIR COMPEN-
SATION, THE DEALER OR DISTRIBUTOR FRANCHISEE AGREES IN WRITING THAT  THE
REFINER MAY LOCATE A RETAIL SERVICE STATION IN VIOLATION OF THE DISTANCE
LIMITATIONS ESTABLISHED IN SUBDIVISION ONE OF THIS SECTION.
  S  3.  This  act shall take effect immediately and shall expire and be
deemed repealed three years after such effective date; provided,  howev-
er,  that  the  provisions  of  this  act shall not apply to: (a) retail
service stations operated by a refiner with company  personnel  employed
by  such refiner or employed by a parent company of such refiner or with
any person, firm or corporation managing a retail service station  on  a
commission  fee  arrangement  under  contract with the refiner where the
refiner retains ownership of the motor fuel on  the  effective  date  of
this  act;  (b)  any  retail  service  stations  for which a refiner has
applied for a building permit prior to the effective date  of  this  act
and  for which construction commences within 90 days after the effective
date of this act; and (c) any retail  service  stations  acquired  by  a
refiner  in  a  single transaction involving the purchase of ten or more
retail service stations and which are operated by a refiner with company
personnel, employed by such refiner within 90 days after  the  effective
date of this act.