1a35 
        H.R.1520

                       One Hundred Third Congress

                                 of the

                        United States of America


                          AT THE SECOND SESSION

          Begun and held at the City of Washington on Tuesday,
 the twenty-fifth day of January, one thousand nine hundred and ninety-
                                  four


                                 An Act

  
 
  To amend the Petroleum Marketing Practices Act.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Petroleum Marketing Practices Act 
Amendments of 1994''.

SEC. 2. CONVERSION TO COMPANY OPERATION.

    Section 102(b)(3)(A)(ii) of the Petroleum Marketing Practices Act 
(15 U.S.C. 2802(b)(3)(A)(ii)) is amended by inserting after ``purpose 
of'' the following: ``converting the leased marketing premises to 
operation by employees or agents of the franchisor for the benefit of 
the franchisor or otherwise''.

SEC. 3. UNDERLYING LEASES.

    Section 102(c)(4) of the Petroleum Marketing Practices Act (15 
U.S.C. 2802(c)(4)) is amended--
        (1) by striking ``lease, if'' and all that follows through 
    ``(B) of'' and inserting the following: ``lease, if--
            ``(A) the franchisee was notified in writing, prior to the 
        commencement of the term of the then existing franchise--
                ``(i) of the duration of the underlying lease; and
                ``(ii) of''; and
        (2) by adding at the end the following new subparagraphs:
            ``(B) during the 90-day period after notification was given 
        pursuant to section 104, the franchisor offers to assign to the 
        franchisee any option to extend the underlying lease or option 
        to purchase the marketing premises that is held by the 
        franchisor, except that the franchisor may condition the 
        assignment upon receipt by the franchisor of--
                ``(i) an unconditional release executed by both the 
            landowner and the franchisee releasing the franchisor from 
            any and all liability accruing after the date of the 
            assignment for--

                    ``(I) financial obligations under the option (or 
                the resulting extended lease or purchase agreement);
                    ``(II) environmental contamination to (or 
                originating from) the marketing premises; or
                    ``(III) the operation or condition of the marketing 
                premises; and

                ``(ii) an instrument executed by both the landowner and 
            the franchisee that ensures the franchisor and the 
            contractors of the franchisor reasonable access to the 
            marketing premises for the purpose of testing for and 
            remediating any environmental contamination that may be 
            present at the premises; and
            ``(C) in a situation in which the franchisee acquires 
        possession of the leased marketing premises effective 
        immediately after the loss of the right of the franchisor to 
        grant possession (through an assignment pursuant to 
        subparagraph (B) or by obtaining a new lease or purchasing the 
        marketing premises from the landowner), the franchisor (if 
        requested in writing by the franchisee not later than 30 days 
        after notification was given pursuant to section 104), during 
        the 90-day period after notification was given pursuant to 
        section 104--
                ``(i) made a bona fide offer to sell, transfer, or 
            assign to the franchisee the interest of the franchisor in 
            any improvements or equipment located on the premises; or
                ``(ii) if applicable, offered the franchisee a right of 
            first refusal (for at least 45 days) of an offer, made by 
            another person, to purchase the interest of the franchisor 
            in the improvements and equipment.''.

SEC. 4. WAIVER OF RIGHTS.

    Section 105 of the Petroleum Marketing Practices Act (15 U.S.C. 
2805) is amended by adding at the end the following new subsection:
    ``(f)(1) No franchisor shall require, as a condition of entering 
into or renewing the franchise relationship, a franchisee to release or 
waive--
        ``(A) any right that the franchisee has under this title or 
    other Federal law; or
        ``(B) any right that the franchisee may have under any valid 
    and applicable State law.
    ``(2) No provision of any franchise shall be valid or enforceable 
if the provision specifies that the interpretation or enforcement of 
the franchise shall be governed by the law of any State other than the 
State in which the franchisee has the principal place of business of 
the franchisee.''.

SEC. 5. PREEMPTION.

    Section 106 of the Petroleum Marketing Practices Act (15 U.S.C. 
2806) is amended--
        (1) in subsection (a)--
            (A) by inserting ``(1)'' after ``(a)''; and
            (B) by adding at the end the following new paragraph:
    ``(2) No State or political subdivision of a State may adopt, 
enforce, or continue in effect any provision of law (including a 
regulation) that requires a payment for the goodwill of a franchisee on 
the termination of a franchise or nonrenewal of a franchise 
relationship authorized by this title.''; and
        (2) in subsection (b)--
            (A) by inserting ``(1)'' after ``(b)''; and
            (B) by adding at the end the following new paragraph:
    ``(2) Nothing in this title shall prohibit any State from 
specifying the terms and conditions under which any franchise or 
franchise relationship may be transferred to the designated successor 
of a franchisee upon the death of the franchisee.''.

SEC. 6. DEFINITION OF FAILURE.

    Section 101(13) of the Petroleum Marketing Practices Act (15 U.S.C. 
2801(13)) is amended--
        (1) by striking ``or'' at the end of subparagraph (A);
        (2) by striking the period at the end of subparagraph (B) and 
    inserting in lieu thereof ``; or''; and
        (3) by adding at the end the following new subparagraph:
            ``(C) any failure based on a provision of the franchise 
        which is illegal or unenforceable under the law of any State 
        (or subdivision thereof).''.







                               Speaker of the House of Representatives.







                            Vice President of the United States and    
                                               President of the Senate.

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