senate Bill S2124

2013-2014 Legislative Session

Relates to zone pricing of gasoline

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Archive: Last Bill Status - In Committee


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

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Actions

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Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Jan 08, 2014 referred to consumer protection
Jun 21, 2013 committed to rules
May 22, 2013 advanced to third reading
May 21, 2013 2nd report cal.
May 20, 2013 1st report cal.620
Jan 11, 2013 referred to consumer protection

Votes

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May 20, 2013 - Consumer Protection committee Vote

S2124
8
0
committee
8
Aye
0
Nay
3
Aye with Reservations
0
Absent
0
Excused
0
Abstained
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Consumer Protection Committee Vote: May 20, 2013

aye wr (3)

S2124 - Bill Details

See Assembly Version of this Bill:
A2290
Current Committee:
Senate Consumer Protection
Law Section:
General Business Law
Laws Affected:
Amd §399-ee, Gen Bus L; amd §2, Chap 579 of 2008

S2124 - Bill Texts

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Relates to zone pricing of gasoline.

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BILL NUMBER:S2124

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-1) 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. Establishes the effective date.

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 the 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: 2012: A.7775-B/S.41170-B -- Passed Assembly

FISCAL IMPLICATIONS: None.

EFFECTIVE DATE: This act shall take effect on the thirtieth day after
it shall have become a law.

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

    S. 2124                                                  A. 2290

                       2013-2014 Regular Sessions

                      S E N A T E - A S S E M B L Y

                            January 11, 2013
                               ___________

IN SENATE -- Introduced by Sen. LAVALLE -- read twice and ordered print-
  ed,  and  when  printed  to  be committed to the Committee on Consumer
  Protection

IN ASSEMBLY -- Introduced by M.  of  A.  THIELE,  COOK,  GALEF,  JAFFEE,
  LUPARDO, LOSQUADRO, MAISEL, McKEVITT, RAIA, ROBERTS, SALADINO, ZEBROW-
  SKI -- Multi-Sponsored by -- M. of A. BRENNAN, CUSICK, DUPREY, GABRYS-
  ZAK, HOOPER, RA, RABBITT -- read once and referred to the Committee on
  Economic Development

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

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD02886-02-3

S. 2124                             2                            A. 2290

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:
  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 on the thirtieth day after it shall
have become a law.

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