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HomeMy WebLinkAboutOrd 1998-2720 NOT APPROVED ORDINANCE NO. 2720 AN ORDINANCE OF THE CITY OF CHULA VISTA ADDING A CHAPTER TO THE CHULA VISTA MUNICIPAL CODE RELATING TO REGULATING THE DISTRIBUTION OF GASOLINE AND THE OPERATION OF GASOLINE SERVICE STATIONS The City Council of the City of Chula Vista does ordain as follows: SECTION I. That Chapter 5.6 (commencing with Section 5.66.010) is hereby added to Title 5 of the Chula Vista Municipal Code to read as follows: Chapter 5.66 SERVICE STATIONS Sec. 5.66.010. PURPOSE AND INTENT. The City Council finds that the provisions of this chapter 5.66 are necessary to promote competition between motor fuel retailers in the City of Chula Vista. Such competition will result in the City of Chula Vista consumers paying reasonable prices for motor fuel. In addition, this chapter is intended to cause retail prices of motor fuel in the City of Chula Vista to compare more favorably with prices charged to motor fuel consumers in other parts of the State of California. Sec. 5.66.020. DEFINITIONS. As used in this chapter 5.66, the following terms shall have the meanings respectively ascribed to them in this section: (a) "Affiliate" means any person who, other than by means of a franchise, controls, is controlled by or is under cornmon control with any other person. (b) "Company operated station" means a retail service station operated by a refiner with employees of the refiner or by a commissioned agent, contractor or consignee of the refiner for the sale of motor fuel to the general public for ultimate consumption. A retail service station operated by a franchisee shall not constitute a company operated station. (c) "Control" means the direct or indirect ownership of or the right to exercise a directing influence over more than 50 percent of the beneficial interest in any person. (d) "Cost of doing business" means the expenses, on a per gallon sold basis, incurred by a refiner to sell motor fuel at a company operated retail service station and includes, without limitation, the value of all goods, the costs of delivery of any goods or commodities, services, facilities, real property and improvements, labor and overhead used, consumed, expended or reasonably allocated by a refiner in connection with the retail activity. "Cost of doing business" does not include the cost of extracting or purchasing raw crude oil, the cost of refining crude oil into motor fuel or the cost of delivering motor fuel to the truck loading terminal. Ordinance 2720 Page 2 (e) "Franchise" means any contract between a refiner and a motor fuel retailer under which a refiner authorizes or permits a motor fuel retailer to use, in connection with the sale, consignment or distribution of motor fuel, a trademark that is owned or controlled by the refiner. "Franchise" includes: ( 1 ) Any contract under which a motor fuel retailer is authorized or permitted to occupy leased marketing prernises to be employed in connection with the sale, consignment or distribution of motor fuel under a trademark which is owned or controlled by such refiner; (2) Any contract between a refiner and a motor fuel retailer pertaining to the supply of motor fuel that is to be sold, consigned or distributed under a trademark owned or controlled by a refiner; and (3) The unexpired portion of any franchise, as defined in this subsection, that is transferred or assigned as authorized by the provisions of such franchise or by any applicable provisions of law that permit such transfer or assignment without regard to any provisions of the franchise. (f) "Franchisee" means a motor fuel retailer who is authorized or permitted under a franchise to use a trademark in connection with the sale, consignment or distribution of motor fuel. (g) "Franchisor" means a refiner who, under a franchise, authorizes or permits a motor fuel retailer to use a trademark in connection with the sale, consignment or distribution of motor fuel. (h) "Grade of motor fuel" means motor fuel of a particular quality or class and sold under a particular trademark, trade name or brand. (i) "Leased marketing premises" means marketing premises owned, leased or in any way controlled by a franchisor and which the franchise is authorized or permitted, under the franchise, to employ in connection with the sale, consignment or distribution of motor fuel. (j) "Market retail price" means the per gallon price at which a refiner sells or offers to sell to the public a grade of motor fuel at a company operated station, less the cost of doing business at the retail service station, (k) "Market premises" means, in the case of any franchise, premises which, under the franchise, are to be employed by the franchisee in connection with the sale, consignment or distribution of motor fuel. (I) "Motor fuel" means gasoline and diesel fuel of a type distributed for use as a fuel in self-propelled vehicles designed primarily for use on public streets, roads and highways. (m) "Motor fuel retailer" means a person who is not an affiliate of a refiner and who purchases motor fuel primarily for sale to the general public for ultimate consumption at a retail service station. Ordinance 2720 Page 3 (n) "Overcharge" means a sale of or offer to sell motor fuel to a motor fuel retailer at a price that exceeds the price charged any other motor fuel retailer for motor fuel supplied from the same truck loading terminal. "Overcharge" shall not be construed to prevent due allowances for the refiner's actual costs, including delivery, marketing, facility, and real estate COSTS, (o) "Person" means an individual, proprietorship, firm, partnership, joint venture, syndicate, company, association, committee, corporation, trust or any other organization or group of individuals acting in concert. "Person" does not include governmental entities. (p) "Price" means the price of a gallon of motor fuel paid to a refiner by a motor fuel retailer, less the value, on a per gallon sold basis, of all rebates, discounts, credits, incentives and other benefits extended by the refiner to the motor fuel retailer. (q) "Refiner" means any person engaged in the refining of crude oil to produce motor fuel and includes any affiliate of such person. (r) "Retail service station" or "service station" means a facility, including land and improvements, where motor fuel is sold at retail to the nqotoring public. Sec. 5.66.030. RESTRICTIONS ON COMPANY OPERATED STATIONS. (a) On or after July 1, 1998, a refiner shall not open a new company operated retail service station in the City of Chula Vista. (b) On or after January 1, 1999, no more than fifty percent (50%) of retail service stations owned by a refiner in the City of Chula Vista shall be company operated stations. (c) On or after January 1,2000, no retail service stations owned by a refiner in the City of Chula Vista shall be company operated stations. Sec. 5.66.040. TEMPORARY COMPANY OPERATED STATIONS. (a) Notwithstanding section 5.66.030, a refiner may open and operate a company operated retail service station, at a site described in subsection (b) of this section, for a period not to exceed 90 days when, in accordance with state and federal law: (1) A motor fuel retailer voluntarily determines to terminate or not to renew a franchise with the refiner; or (2) The franchise between the refiner and the motor fuel retailer is terminated or not renewed by the refiner. (b) The company operated station referred to in subsection (a) of this section shall be opened and operated at the same site as the retail service station operated by the motor fuel retailer who was the franchisee. Sec. 5.66,050 WHOLESALE PURCHASING RIGHTS. (a) On or after the operative date of this chapter, a refiner shall not enter into any contract or take any other action to prevent a branded motor fuel franchisee operating in the Ordinance 2720 Page 4 City of Chula Vista from purchasing the refiner's branded motor fuel from any location or through any vendor in the refiner's wholesale fuel network. This section shall not affect any contracted rights in existence on the date immediately preceding operative date of this chapter. (b) A refiner shall not discriminate in price between the different franchisee purchasers of the refiner's branded motor fuel if the price discrimination effectively prevents a franchisee from taking advantage of price differences at different locations or between different wholesale vendors. Sec. 5.66.060 PRICE DISCRIMINATION PROHIBITION. A refiner may not: (a) Sell or offer to sell to a motor fuel retailer any grade of motor fuel at a price that exceeds the then current market retail price for the same grade of motor fuel supplied by the refiner, from the same terminal, to a cornpany operated station; or (b) Overcharge a motor fuel retailer for motor fuel. Sec. 5.66.070 ENFORCEMENT RESPONSIBILITY. (a) The City Attorney shall enforce the provisions of this chapter. (b) Any person who believes that a violation of any portion of this chapter has occurred may file a complaint with the City Attorney. If the City Attorney determines that there is a reason to believe a violation of this chapter has occurred, the City Attorney shall investigate. (c) The City Attorney may exercise such investigative power as are necessary for the performance of the duties prescribed in this chapter and may demand and shall be furnished with all records of refiners and motor fuel retailers which may be pertinent to such investigation. Sec. 5.66.080 VIOLATIONS CONSTITUTE MISDEMEANORS. Any person violating the provisions of this chapter shall be guilty of a misdemeanor and upon conviction shall be fined in an amount not to exceed five hundred dollars ($500.00) or by imprisonment for a period of not rnore than six (6) months in the County Jail or by both such fine and imprisonment. Sec. 5.66.090. CIVIL ENFORCEMENT. (a) Any aggrieved person may enforce the provisions of this chapter by means of a civil action. (b) Any person who commits, or proposes to commit, an act in violation of this chapter may be enjoined therefrom by a court of competent jurisdiction. (c) An action for injunction under subsection 5.66.090 (b) may be brought by an aggrieved person or by any person or entity which will fairly and adequately represent the interests of the aggrieved person. Ordinance 2720 Page 5 (d) Nothing in this chapter shall I~reclude any aggrieved person from seeking any other remedy provided by law. Section II. Effective Date. This ordinance shall become effective no earlier than thirty (30) days after its adoption and not before the Board of Supervisors for the County of San Diego makes operative an ordinance which is the same as or substantially similar to this ordinance and the County of San Diego and/or the City of San Diego executes a legally binding agreement with the City of Chula Vista to the satisfaction of the City Attorney which provides for the County and/or the City of San Diego to indemnify the City of Chula Vista from any legal action challenging the City of Chu~a Vista's adoption of this ordinance. Presented and Approved as to Form By John M. Kaheny City Attorney Ordinance 2720 Page 6 PASSED, APPROVED, and ADOPTED by the City Council of the City of Chula Vista, California, this AYES: NAYS: ABSENT: ABSTAIN: day of by the followin9 vote: Councilmembers: None Councilmembers: None Councilmembers: None Councilmembers: None Shirley Horton, Mayor ATTEST: Beverly A. Authelet, City Clerk STATE OF CALIFORNIA ) COUNTY OF SAN DIEGO ) ss. CITY OF CHULA VISTA ) I, Beverly A. Authelet, City Clerk of the City of Chula Vista, California, do hereby certify that the foregoing Ordinance No. 2720 had its first reading at a regular meeting held on the 2nd day of February, 1998 and its second reading and adoption at a regular meeting of said City Council held on the ~ day of __ , 1998. Executed this day of , 1998. Beverly A. Authelet, City Clerk