Senate Bill No. 422–Committee on Commerce and Labor

 

March 24, 2003

____________

 

Referred to Committee on Commerce and Labor

 

SUMMARY—Revises certain provisions relating to operation of service stations by refiners. (BDR 52‑1071)

 

FISCAL NOTE:  Effect on Local Government: No.

                           Effect on the State: No.

 

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EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.

 

AN ACT relating to service stations; revising certain provisions relating to the operation of service stations by a refiner; and providing other matters properly relating thereto.

 

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN

SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

 

1-1  Section 1. NRS 597.440 is hereby amended to read as follows:

1-2  597.440  [1.  Except as otherwise provided in this section and

1-3  NRS 597.443 and 597.446, on or after July 1, 1997, a refiner may

1-4  commence, with his own employees or through a subsidiary or

1-5  commissioned agent or a person on the basis of a fee, the direct

1-6  operation of the following number of additional service stations

1-7  during the calendar years so indicated:

1-8  (a) By the end of calendar year 1997, a total of two service

1-9  stations in addition to the number of service stations directly

1-10  operated by the refiner on July 1, 1997.

1-11      (b) By the end of calendar year 1998, a total of six additional

1-12  service stations in addition to the number of service stations directly

1-13  operated by the refiner on July 1, 1997.

1-14      (c) By the end of calendar year 1999, a total of 10 additional

1-15  service stations in addition to the number of service stations directly

1-16  operated by the refiner on July 1, 1997.

1-17      (d) After the end of calendar year 1999, a total of 15 additional

1-18  service stations in addition to the number of service stations directly

1-19  operated by the refiner on July 1, 1997.

2-1  2.] On or after January 1, 2001, a refiner who engages in the

2-2  direct operation of:

2-3  [(a)] 1.  Less than 30 service stations in this state, with his own

2-4  employees or through a subsidiary or commissioned agent or a

2-5  person on the basis of a fee, may commence the direct operation of

2-6  not more than [five] 5 additional service stations per calendar year,

2-7  but in no case may he commence the direct operation of more than

2-8  30 service stations without complying with the provisions of

2-9  [paragraph (b).

2-10      (b)] subsection 2.

2-11      2.  At least 30 service stations in this state, with his own

2-12  employees or through a subsidiary or commissioned agent or a

2-13  person on the basis of a fee, may commence the direct operation of

2-14  additional service stations per year, with his own employees or

2-15  through a subsidiary or commissioned agent or person on the basis

2-16  of a fee, only if, during the year in which the service stations are

2-17  added, he leases, in addition to the number of service stations leased

2-18  by the refiner to lessee dealers on July 1, 1997, at least [one] 1

2-19  additional service station to a lessee dealer for every [two] 2 directly

2-20  operated service stations added. For the purposes of this

2-21  [paragraph,] subsection, an additional service station leased by the

2-22  refiner to a lessee dealer before the refiner engages in the direct

2-23  operation of at least 30 service stations shall be deemed to be [one]

2-24  1 service station leased to a lessee dealer during any year following

2-25  the year in which the refiner engages in the direct operation of at

2-26  least 30 service stations.

2-27      [3.  A refiner may operate a service station for not more than 90

2-28  days if the:

2-29      (a) Retailer voluntarily terminates or agrees not to renew the

2-30  franchise; or

2-31      (b) Franchise is terminated by the refiner pursuant to NRS

2-32  597.270 to 597.470, inclusive.]

2-33      Sec. 2.  NRS 597.450 is hereby amended to read as follows:

2-34      597.450  1.  If a refiner is unable to commence the direct

2-35  operation of a service station because of the restrictions set forth

2-36  in NRS 597.440, the refiner may operate the service station

2-37  temporarily for not more than 180 days if:

2-38      (a) The retailer voluntarily terminates or agrees not to renew

2-39  the franchise for the service station; or

2-40      (b) The franchise for the service station is terminated by the

2-41  refiner pursuant to NRS 597.270 to 597.470, inclusive.

2-42      2.  During the temporary operation of a service station by a

2-43  refiner, the refiner may sell motor vehicle fuel to other retailers in

2-44  the marketing area of that service station at a price not less than 4

3-1  cents below the retail price of fuel at the service station he is

3-2  operating.

3-3  Sec. 3.  NRS 597.443 and 597.446 are hereby repealed.

 

3-4  TEXT OF REPEALED SECTIONS

 

3-5  597.443  Refiner prohibited from operating service station

3-6   which was leased by refiner to lessee dealer on or before July 1,

3-7   1997.  On or after July 1, 1997, a refiner shall not commence the

3-8   direct operation of a service station with his own employees or

3-9   through a subsidiary or commissioned agent or a person on the

3-10   basis of a fee, if that service station is leased by the refiner to a

3-11   lessee dealer on or before July 1, 1997.

3-12      597.446  Restrictions on sale of service station by contract

3-13   dealer to refiner; restrictions on operation by refiner of service

3-14   station purchased from contract dealer; exception.

3-15      1.  A contract dealer shall not, on or before July 1, 1998, sell a

3-16   service station which he operates to the refiner with whom he has

3-17   entered into a franchise agreement.

3-18      2.  Except as otherwise provided in subsection 3, if a contract

3-19   dealer sells a service station to a refiner in compliance with

3-20   subsection 1, the refiner may not engage in the direct operation of

3-21   that service station with his own employees or through a subsidiary

3-22   or commissioned agent or a person on the basis of a fee.

3-23      3.  On or after July 1, 1998, a contract dealer may authorize a

3-24   refiner to whom he has sold a service station to engage in the

3-25   operation of that service station directly with his own employees or

3-26   through a subsidiary or commissioned agent or person on the basis

3-27   of a fee, by sending a notice to the refiner, by certified mail, return

3-28   receipt requested, offering the refiner to engage in the operation of

3-29   the service station in such a manner. The contract dealer may, at

3-30   any time before the refiner accepts such an offer, rescind the offer

3-31   by sending a notice of rescission to the refiner by certified mail,

3-32   return receipt requested.

3-33      4.  The provisions of this section do not apply to a contract

3-34   dealer who operates or has previously operated three or more

3-35   service stations.

3-36      5.  As used in this section, “contract dealer” means a retailer

3-37   who operates a service station pursuant to a franchise agreement if

3-38   the service station is not leased to the retailer by the refiner with

3-39   whom the retailer has entered into the franchise agreement.

 

3-40  H