Senate Bill S332

                                 BILL NUMBER:  S332

 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 re-lettered 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 and
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 399-33 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 the 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, of resample, were not a
result of price gouging by gasoline retailers or wholesales; 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 his 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 :  2013-14 S.2124/A.2290; 2011 S.4170

 FISCAL IMPLICATIONS : None

 EFFECTIVE DATE :  This act shall take effect the thirtieth day from
which it shall have become law.