CHAPTER 556

FORMERLY

HOUSE BILL NO. 950

AS AMENDED BY HOUSE AMENDMENT NO. 1,

SENATE AMENDMENT NO. 4, SENATE AMENDMENT NO. 6,

AS AMENDED BY SENATE AMENDMENT NO. 1

TO SENATE AMENDMENT NO. 6,

AND SENATE AMENDMENT NO. 7

AN ACT TO AMEND CHAPTER 29, PART II, TITLE 6 OF THE DELAWARE CODE RELATING TO COMMERCE AND TRADE; AND REGULATING CERTAIN TRADE PRACTICES WHICH AFFECT THE DISTRIBUTION OF MOTOR FUELS.

Be it enacted by the General Assembly of the State of Delaware:

Section 1. Amend §2901. Chapter 29, Part II, Title 6 of the Delaware Code, by striking said section in its entirety, and substituting in lieu thereof the following:

"§2901. Definitions

The following words, terms and phrases, when used in this Chapter, shall have the meaning ascribed to them except where the context clearly indicates a different meaning:

(a) 'Automotive products' shall mean any product sold or distributed by a retail dealer for use with a motor vehicle, whether or not such product is essential for the maintenance of the motor vehicle and whether or not such product is also used for non-automotive purposes;

(b) 'Deposit in advance' shall mean any deposit, regardless of its purported purpose, which is received by a distributor or manufacturer from the retail dealer as a breakage, security or other similar deposit;

(c) 'Marketing agreement' shall mean a written or parol agreement between a manufacturer and a retail dealer or a distributor and a retail dealer under which (1) the dealer promises to sell or distribute the product or products of the manufacturer or distributor; (2) the retail dealer is granted the right to use a trademark, trade name, service mark or other identifying symbol or name owned by a manufacturer; or (3) the retail dealer is granted the right to occupy premises owned, leased or controlled by a manufacturer or distributor;

(d) 'Coupon' shall include stamps which are given to a customer which may later be redeemed for service or merchandise, and shall include 'green stamps', 'yellow stamps', and similar promotions;

(e) 'Manufacturer' shall mean every producer or refiner of petroleum products, or the producer or fabricator of any automotive product sold or distributed by a service station;

(f) 'Motor fuel' shall mean and include any substance or combination of substances which is intended to be or is capable of being used for the purpose of propelling or running by combustion any internal combustion engine and sold or used for that purpose;

(g) 'Retail fuel outlet' shall mean a place at which gasoline and oil are stored and supplied to service stations or to the public, and which is operated by independent contractors or by persons in the employ of such independent contractors;

(h) 'Retail dealer' shall mean and include any person operating a service station, filling station, store, garage or other place of business for the sale of motor fuel for delivery into the service tank or tanks of any vehicle propelled by an internal combustion engine."

Section 2. Amend §2903, Chapter 29, Part II, Title 6 of the Delaware Code, by striking said section in its entirety, and substituting in lieu thereof the following:

§2903. Manufacturers

All manufacturers of motor fuel, diesel fuel, heating oil, to include refiners and individuals wishing to establish retail service stations shall, before selling or offering for sale motor vehicle fuels or special fuels, under whatever name, for the purpose of powering motor vehicles shall file with the Division of Consumer Affairs of the Department of Community Affairs and Economic Development a declaration or statement that they desire to sell such products in this State. Such declaration or statement shall contain the name, brand or trademark of the products intended to be sold, together with the name and address of the supplier thereof, and a continuing covenant that all such products shall be in conformity with State standards, that no water or other adulterants shall be added to any oil or gasoline products, and that the chemical composition of products shall not be changed except after Notice to the Division of Consumer Affairs. The provisions of this section shall also apply to gasoline and other automotive fuels distributed by the Governor under emergency powers.

Section 3. Amend §2905, Chapter 29, Part II, Title 6 of the Delaware Code, by striking said section in its entirety, and substituting in lieu thereof the following:

§2905. Independence of Retail Dealers

(a) No manufacturer of petroleum products shall open a major brand, secondary brand or unbranded retail gasoline outlet or service station in the State that would be operated by company personnel, a subsidiary company, or a commissioned agent.

(c) The Division of Consumer Affairs of the Department of Community Affairs and Economic Development shall adopt rules or regulations defining the circumstances in which a manufacturer may temporarily operate a service station in times of emergency or similar special circumstances.

Section 4. Amend §2906, Chapter 29, Part II, Title 6 of the Delaware Code, by striking said section in its entirety, and substituting in lieu thereof the following:

§2906. Equal treatment

(a) Every manufacturer, supplying petroleum products to retail dealers and other retail fuel outlets shall extend all voluntary allowances uniformly to every dealer or outlet supplied.

(b) Every manufacturer, supplying petroleum products to retail dealers or other retail fuel outlets shall apply all equipment rentals uniformly to all dealers and outlets supplied.

(c) Every manufacturer, supplying petroleum products to retail dealer or other retail fuel outlets shall apportion uniformly all gasoline and special fuels supplied during periods of shortages, on an equitable basis, and shall not discriminate among dealers and outlets in such allotments.

Section 5. Amend Chapter 29, Part II, Title 6 of the Delaware Code, by adding thereto a new section, designated as §2907, which new section shall read as follows:

§2907. Equipment purchased by Retail Dealer

Property purchased by a retail dealer and affixed or appended to a service station or retail fuel outlet shall remain the property of the person purchasing same, notwithstanding the fact that it is permanently attached. Upon termination of a marketing agreement, termination of a lease or the vacating of the premises by the retail dealer, the purchaser of the property shall have a reasonable time in which to remove same from the premises or may enter into an agreement with the owner of the premises for the purchase of the equipment at a fair and equitable price. In removing property which has become affixed to the premises, the person removing the property shall leave the premises in the same condition as they were at the time the property was attached.

Section 6. Amend Chapter 29, Part II, Title 6 of the Delaware Code, by adding thereto a new section, designated as §2908, which new section shall read as follows:

§2908. Purchase promotion sales

No agreement, formal or informal, shall provide for the use of any promotion, premium, coupon, give-away, or rebate in the operation of the business; provided, however, that a dealer may participate in a promotion, premium, coupon give-away or rebate sponsored by a manufacturer and completely paid for by the manufacturer.

Section 7. Amend Chapter 29, Part II, Title 6 of the Delaware Code, by adding thereto a new section, designated as §2909, which new section shall read as follows:

§2909. Marketing Agreements

Every marketing agreement between a manufacturer and a retail dealer shall be subject to the following non-waivable provisions, whether or not they are expressly set forth in the agreement:

(a) No agreement shall require a retail dealer to keep his station or outlet open for business for any specified number of hours per day, or days per week.

() The retail dealer shall have the right to cancel a marketing agreement until midnight of the seventh business day after the day on which the agreement was signed, by giving the other party Notice in writing of the cancellation. Upon giving the other party such notice, all money, equipment and merchandise loaned, sold or delivered to the retail dealer under the agreement shall be returned to the other party for full credit, or the cash equivalent. If the other party to the agreement is the owner of the real estate upon which the retail dealer conducted his business, the dealer shall deliver full possession of the real estate back to the other party.

(a) No agreement shall contain any provision which in any way limits the right of either party to a trial by jury, the interposition of counter-claims or cross-claims.

(b) The price at which a retail dealers sells products shall not be fixed nor maintained by a manufacturer, nor shall any person seek to do so, nor shall the price of products be subject to enforcement or coercion by any person in any manner. Nothing herein shall be construed to prohibit a manufacturer from suggesting prices and counseling with dealers concerning prices. Each agreement between a manufacturer and a dealer shall have, in ten-point type, the legend: "PRICE FIXING OR MANDATORY PRICES FOR ANY PRODUCTS COVERED IN THIS AGREEMENT IS PROHIBITED. A SERVICE STATION DEALER MAY SELL ANY PRODUCTS LISTED IN THIS AGREEMENT FOR A PRICE WHICH HE ALONE MAY DECIDE."

(e) No party to a marketing agreement with a retail dealer shall unreasonably withhold his consent to any assignment, transfer or sale of the marketing agreement; nor may a manufacturer unreasonably refuse to renew a marketing agreement.

(f) With respect to non-renewal of a marketing agreement, either party must give the other party notice of intent not to renew the marketing agreement at least ninety days prior to the expiration of the term of that marketing agreement, and shall state the reason for such non-renewal.

(g) Notwithstanding any contract provision, no lease agreement or any other contract which bases rent upon the amount of products sold shall permit any increase in such rentals if there is a ceiling on the amount which may be charged for the product.

(h) If the marketing agreement or rental agreement requires the retail dealer to provide to the manufacturer or other party to the agreement any deposit in advance or any other deposit for the use of the service station or delivery of fuel, such deposit shall be held by the person designated to receive it in the agreement and shall be held for the term of the rental agreement unless it is sooner terminated. Within thirty days after the termination of the agreement the deposit shall be returned, together with interest on such deposit at the rate of six percent (6%) per annum.

Section 8. Amend Chapter 29, Part II, Title 6 of the Delaware Code, by adding thereto a new section, designated as §2910, which new section shall read as follows:

§2910. Termination of Contract or Franchise

(a) In the event a marketing agreement between a dealer and manufacturer is terminated or cancelled, whether by mutual consent or otherwise, the manufacturer shall, within thirty days, tender to the dealer, for products which were sold to the dealer which the dealer has been unable to sell, the full price originally paid by the dealer for the products. In the event there is any existing indebtedness owned directly to the manufacturer by the dealer, the value of the products being re-purchased shall first be applied to the existing indebtedness, which shall be reduced not only by the value of the products re-purchased but also by the subtraction of any interest or service charges imposed on the products being re-purchased. If the manufacturer does not make such tender within thirty days, the dealer may sell the products for as reasonable a price as may be obtained, and shall have a cause of action against the manufacturer for the balance.

Section 9. Amend Chapter 29, Part II, Title 6 of the Delaware Code, by adding thereto a new section, designated as §2911, which new section shall read as follows:

§2911. Rules and regulations; Advisory Council

(a) The Office of Retail Gasoline Sales is established within the Division of Consumer Affairs of the Department of Community Affairs and Economic Development, and shall have the power to perform and be responsible for the performance of all the administrative, ministerial, clerical and advisory functions involved in the administration and enforcement of this Chapter. The Office of Retail Gasoline Sales shall determine the rules and regulations necessary for the proper enforcement of this Chapter, but prior to the adoption, amendment or repeal of any rule or regulation the Office shall:

(1) give at least twenty days' notice for a public hearing. Such notice shall include a statement of either the terms or substance of the intended action or a description of the subjects and issues involved, and the time when, the place where, and the manner in which interested persons may present their views thereon. The notice shall be mailed to all persons who have made timely request to the Office for advance notice, and shall be published at least once in each county by a daily newspaper of general circulation and at least once in a weekly newspaper in each county.

(2) afford all interested persons the opportunity to submit data, views or arguments (orally or in writing). The Office shall fully consider all oral and written suggestions respecting the proposed rule or regulation. The Office may make its decision at the public hearing or announce the earliest date as to when it intends to make its decision. Any proceeding to contest a rule or regulation by the Office must be commenced within six months from the effective date of the rule or regulation.

(b) Advisory Council. The Governor shall appoint a council to advise the Office of Retail Gasoline Sales concerning the distribution of motor fuels in the State, and shall assist in the formulation of regulations and policy. The Council shall consist of three residents of Sussex County, three residents of Kent County, three residents of New Castle County outside the City of Wilmington, and three residents from the City of Wilmington. Each member of the Council shall have a general knowledge and acquaintance of the distribution and sale of motor fuel products.

(c) The Office, after consulting with the Advisory Council, may

(1) monitor motor vehicle fuels or special fuels sold, or intended to be sold, within this State, as to the composition of such fuels;

(2) where a marketing agreement is declared by the Office to be in violation of §2909 or §2910 and has not been, within a reasonable time, amended to the satisfaction of all parties thereto, the Office shall have the power to declare the agreement void ab initio, enjoin the parties from continuing in effect any provision thereof, and/or request the Attorney General to initiate appropriate legal action.

Section 10. The provisions of this Act shall be liberally construed in order to effectively carry out the purposes of this Act in the interests of the public health, welfare and safety.

Section 11. If any provision of this Act or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of the Act which can be given effect without the invalid provision or application, and to that end the provisions of this Act are declared to be severable.

Approved July 29, 1974.