HB3583 104TH GENERAL ASSEMBLY

LRB104 12144 SPS 22243 b

104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
HB3583

Introduced 2/18/2025, by Rep. Kevin John Olickal

SYNOPSIS AS INTRODUCED:

New Act
815 ILCS 505/HHHH new

Creates the Motor Fuel Minimum Markup Act. Provides that it is unlawful for a retailer, wholesaler, or refiner to sell or offer to sell motor fuel at less than a specified cost with the intent or effect of inducing the purchase of other merchandise or diverting trade from a competitor. Sets forth notice requirements. Provides that a violation of the Act constitutes a violation of the Consumer Fraud and Deceptive Business Practices Act. Amends the Consumer Fraud and Deceptive Business Practices Act to make a conforming change.

A BILL FOR

AN ACT concerning business.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 1. Short title. This Act may be cited as the Motor Fuel Minimum Markup Act.

Section 5. Definitions. As used in this Act:

"Average posted terminal price" means the average posted rack price, as published by a petroleum price reporting service, at which motor fuel is offered for sale at the close of business on the determination date by all refiners and wholesalers of motor fuel at a terminal plus any excise, sales or use taxes imposed on the motor fuel or on its sale, any cost incurred for transportation and any other charges that are not otherwise included in the average posted rack price. In this paragraph, "average" means the arithmetic mean.

"Cost to retailer" means:

(1) In the case of the retail sale of motor fuel by a refiner at a retail station owned or operated either directly or indirectly by the refiner, the refiner's lowest selling price to other retailers or to wholesalers of motor fuel on the date of the refiner's retail sale, less all trade discounts except customary discounts for cash, plus any excise, sales or use taxes imposed on the motor fuel or on its sale and any cost incurred for transportation and any other charges not otherwise included in the invoice cost of the motor fuel, plus a markup of OPIS plus one cent to cover a proportionate part of the cost of doing business; or the average posted terminal price at the terminal located closest to the retail station plus a markup of OPIS plus one cent to cover a proportionate part of the cost of doing business, whichever is greater.

(2) In the case of the retail sale of motor fuel by a wholesaler, who is not a refiner, at a retail station owned or operated either directly or indirectly by the wholesaler, the invoice cost of the motor fuel to the wholesaler at least 10 days before the date of sale, or the replacement cost of the motor fuel, whichever is lower, less all trade discounts except customary discounts for cash, plus any excise, sales or use taxes imposed on the motor fuel or on its sale, and any cost incurred for transportation and any other charges not otherwise included in the invoice cost or replacement cost of the motor fuel, plus a markup of OPIS plus one cent to cover a proportionate part of the cost of doing business; or the average posted terminal price at the terminal located closest to the retail station plus a markup of OPIS plus one cent to cover a proportionate part of the cost of doing business, whichever is greater.

(3) In the case of the retail sale of motor fuel by a person other than a refiner or a wholesaler at a retail station, the invoice cost of the motor fuel to the retailer at least 10 days before the date of sale, or the replacement cost of the motor fuel, whichever is lower, less all trade discounts except customary discounts for cash, plus any excise, sales or use taxes imposed on the motor fuel or on its sale and any cost incurred for transportation and any other charges not otherwise included in the invoice cost or the replacement cost of the motor fuel, plus a markup of OPIS plus one cent to cover a proportionate part of the cost of doing business; or the average posted terminal price at the terminal located closest to the retailer plus a markup of OPIS plus one cent price to cover a proportionate part of the cost of doing business, whichever is greater.

(4) In the case of a retail sale of motor fuel by a refiner at a place other than a retail station, the refiner's lowest selling price to other retailers or to wholesalers of motor fuel on the date of the refiner's retail sale, less all trade discounts except customary discounts for cash, plus any excise, sales or use taxes imposed on the motor fuel or on its sale and any cost incurred for transportation and any other charges not otherwise included in the invoice cost of the motor fuel to which shall be added a markup to cover a proportionate part of the cost of doing business, which markup, in the absence of proof of a lesser cost, shall be OPIS plus one cent of the cost to the retailer.

(5) In the case of a retail sale of motor fuel by a person other than a refiner at a place other than a retail station, the invoice cost of the motor fuel to the retailer at least 10 days before the date of the sale, or the replacement cost of the motor fuel, whichever is lower, less all trade discounts except customary discounts for cash, plus any excise, sales or use taxes imposed on the motor fuel or on its sale and any cost incurred for transportation and any other charges not otherwise included in the invoice cost or the replacement cost of the motor fuel to which shall be added a markup to cover a proportionate part of the cost of doing business, which markup, in the absence of proof of a lesser cost, shall be OPIS plus one cent of the cost to the retailer.

"Cost to retailer" and "cost to wholesaler" mean bona fide costs; and purchases made by retailers, wholesalers, and refiners at prices which cannot be justified by prevailing market conditions in this State shall not be used in determining cost to the retailer and cost to the wholesaler. Prices at which purchases of merchandise other than motor fuel are made by retailers or wholesalers cannot be justified by prevailing market conditions in this State when they are below the lowest prices at which the manufacturer or producer of the merchandise sells to other retailers or wholesalers in this State. Prices at which sales of motor fuel are made by retailers, wholesalers, and refiners cannot be justified by prevailing market conditions in this state when they are below the applicable cost to retailers and cost to wholesalers.

(1) With respect to the wholesale sale of motor fuel by a refiner, "cost to wholesaler" means the refiner's lowest selling price to other retailers or to wholesalers of motor fuel on the date of the refiner's wholesale sale, less all trade discounts except customary discounts for cash, plus any excise, sales or use taxes imposed on the motor fuel or on its sale and any cost incurred for transportation and any other charges not otherwise included in the invoice cost of the motor fuel, to which shall be added a markup to cover a proportionate part of the cost of doing business, which markup, in the absence of proof of a lesser cost, shall be 3% of the cost to the wholesaler as set forth in this subdivision.

(2) With respect to the wholesale sale of motor fuel by a person other than a refiner, "cost to wholesaler" means the invoice cost of the motor fuel to the wholesaler at least 10 days before the date of the sale or the replacement cost of the motor fuel, whichever is lower, less all trade discounts except customary discounts for cash, plus any excise, sales or use taxes imposed on the motor fuel or on its sale and any cost incurred for transportation and any other charges not otherwise included in the invoice cost or the replacement cost of the motor fuel to which shall be added a markup to cover a proportionate part of the cost of doing business, which markup, in the absence of proof of a lesser cost, shall be 3%of the cost to the wholesaler as set forth in this subdivision.

"Determination date" means the day preceding the day of the sale at retail of motor fuel. If a retailer sells motor fuel on a day other than the day on which the retailer last purchased any motor fuel and the sale of the motor fuel by the retailer occurs at least 10 days after its last purchase by the retailer, "determination date" means the following dates selected by the retailer:

(1) the day preceding the day of the sale of motor vehicle fuel by the retailer; or

(2) the day on which motor vehicle fuel was last purchased by the retailer.

"Existing price of a competitor" means a price being simultaneously offered to a buyer for merchandise of like quality and quantity by a person who is a direct competitor of the retailer, wholesaler, or refiner and from whom the buyer can practicably purchase the merchandise.

"Oil Price Information Service" or "OPIS" means the daily publication containing oil price information that is a widely accepted independent fuel price benchmark for supply.

"Petroleum price reporting service" means a wholesale petroleum product price reporting service that is recognized nationwide.

"Refiner" means a manufacturer, producer or refiner of motor fuel.

"Replacement cost" means the cost computed at which the merchandise sold could have been bought by the retailer or wholesaler at any time if bought in the same quantity as the retailer or wholesaler's last purchase of the merchandise.

"Retailer" includes every person engaged in the business of making motor fuel sales at retail in this State, but, in the case of a person engaged in the business of selling motor fuel both at retail and at wholesale, the term shall be applied only to the retail portion of the business.

"Sell" includes any advertising or offer to sell or any transfer of motor fuel where title is retained by the retailer, wholesaler, or refiner as security for the payment of the purchase price. In determining the selling price of merchandise by wholesalers, wholesalers of motor fuel, retailers and refiners under this Section, all fractions of a cent shall be carried to the next full cent.

"Sell at retail" means any transfer for a valuable consideration, made in the ordinary course of trade or in the usual prosecution of the retailer's business, of title to tangible personal property to the purchaser for consumption or use other than resale or further processing or manufacturing.

"Sell at wholesale" include any transfer for a valuable consideration made in ordinary course of trade or the usual conduct of the wholesaler's business, of title to tangible personal property to the purchaser for purposes of resale or further processing or manufacturing.

"Terminal" means a motor fuel storage and distribution facility that is supplied by a pipeline or marine vessel, from which facility motor fuel may be removed at a rack and from which facility at least 3 refiners or wholesalers of motor fuel sell motor fuel. For the purposes of this definition, if 2 or more terminals are included in the same geographic area by a petroleum price reporting service, they shall be considered one terminal.

"Wholesaler" includes:

(1) a person who stores motor fuel and sells it through 5 or more retail outlets that the person owns or operates;

(2) a person who acquires motor fuel from a refiner or as a sale at wholesale and stores it in a bulk storage facility other than a retail station for further sale and distribution;

(3) a person engaged in the business of making sales at wholesale of motor fuel in this State; and

(4) a person engaged in the business of selling diesel fuel if that person's sales of diesel fuel accounted for at least 60% of that person's total sales of motor fuel in the previous year or, if that person did not engage in the business of selling diesel fuel in the previous year, if that person reasonably anticipates that sales of diesel fuel will account for at least 60% of that person's total sales of motor fuel in the current year.

Section 10. Prohibition of loss leaders.

(a) It is unlawful for a retailer, wholesaler, or refiner to sell or offer to sell motor fuel at less than the cost provided in subsection (c) with the intent or effect of inducing the purchase of other merchandise or diverting trade from a competitor.

(b) A sale of motor fuel by a retailer, wholesaler, or refiner at less than the cost provided in subsection (c) shall be prima facie evidence of intent or effect to induce the purchase of other merchandise, or to unfairly divert trade from a competitor, or to otherwise injure a competitor.

(c) For the purposes of this Section:

(1) a retailer shall not sell motor fuel at a price greater than the cost to retailer, as specified in Section 5; and

(2) a wholesaler, or refiner shall not sell motor fuel at a price greater than the cost to wholesaler, as specified in Section 5.

Section 15. Notice requirements.

(a) If a retailer, wholesaler, or refiner, acting in good faith, lowers the price of motor fuel below the applicable price specified in subsection (b) of Section 10 to meet an existing price of a competitor, the retailer, wholesaler, or refiner shall submit to the Attorney General notification of the lower price before the close of business on the day the price was lowered in the form and the manner required by the Attorney General.

(b) A retailer, wholesaler, or refiner that fails to comply with subsection (a) creates a rebuttable presumption that the retailer, wholesaler, or refiner did not lower the price to meet the existing price of a competitor.

(c) If a retailer, wholesaler, or refiner complies with subsection (a) they shall not be held liable for violating this Act.

Section 20. Exceptions. This Act does not apply to sales at retail or sales at wholesale if motor fuel is sold by a person to a wholesaler, who may sell the motor fuel at either retail or wholesale.

Section 25. Enforcement. A violation of this Act constitutes a violation of the Consumer Fraud and Deceptive Business Practices Act. All remedies, penalties, and authority granted to the Attorney General by that Act shall be available to the Attorney General for the enforcement of this Act.

Section 30. Rulemaking. The Attorney General may adopt rules to implement and administer this Act.

Section 35. The Consumer Fraud and Deceptive Business Practices Act is amended by adding Section HHHH as follows:

(815 ILCS 505/HHHH new)

Sec. HHHH. Violations of the Motor Fuel Minimum Markup Act. Any person who violates the Motor Fuel Minimum Markup Act commits an unlawful practice within the meaning of this Act.