STATE OF OKLAHOMA

1st Session of the 54th Legislature (2013)

HOUSE BILL 1365	By:	Sanders

AS INTRODUCED

An Act relating to contracts; providing legislative findings; amending 15 O.S. 2011, Sections 598.1, 598.2, 598.3, 598.4, 598.5, 598.7 and 598.8, which relate to the Unfair Sales Act; renaming Unfair Sales Act to Unfair Fuel and Legend Drug Products Sales Act; updating language; modifying definitions; restricting applicability of act to sales of gasoline, diesel fuel or legend drug products; and providing for noncodification.

BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1.     NEW LAW     A new section of law not to be codified in the Oklahoma Statutes reads as follows:
The Legislature finds as follows:
1.  For most products, competitive pricing, subject to the limitations of the Sherman Antitrust Act, 15 U.S.C. Section 1, et seq., the Robinson-Patman Act, 15 U.S.C. Section 13, and the Oklahoma Antitrust Reform Act, Sections 201 through 212 of Title 79 of the Oklahoma Statutes, establishes market equilibrium and benefits consumers.
2.  For fuel and legend drug products, which are produced in highly regulated industries, different pricing standards may help ensure orderly market conditions and benefit the welfare of the citizens of Oklahoma.  These different standards ensure Retailer and Wholesaler pricing does not lead to unfair competition, which ultimately harms consumers, in the markets for these select products.	
SECTION 2.     AMENDATORY     15 O.S. 2011, Section 598.1, is amended to read as follows:
Section 598.1  This act shall be known and designated, and may be cited as the “Unfair Fuel and Legend Drug Products Sales Act”.
SECTION 3.     AMENDATORY     15 O.S. 2011, Section 598.2, is amended to read as follows:
Section 598.2   (a) When used in this act the Unfair Fuel and Legend Drug Products Sales Act, the term “cost to the retailer Retailer” shall mean the invoice cost of the merchandise to the retailer Retailer or the replacement cost of the merchandise to the retailer Retailer, whichever is the lower; less all trade discounts except customary discounts for cash; to which shall be added (1) freight charges not otherwise included in the invoice cost or the replacement cost of the merchandise as herein set forth, and (2) cartage to the retail outlet if done or paid for the retailer Retailer, which cartage cost, in the absence of proof of a lesser cost, shall be deemed to be three-fourths of one percent (3/4 of 1%) of the cost to the retailer Retailer as herein defined after adding thereto freight charges but before adding thereto cartage, and taxes, (3) all State and Federal taxes not heretofore added to the cost as such, and (4) 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 six percent (6%) of the cost of the retailer Retailer as herein set forth after adding thereto freight charges and cartage but before adding thereto a markup.
(b) When used in this act, the term “cost to the wholesaler Wholesaler” shall mean the invoice cost of the merchandise to the wholesaler Wholesaler, or the replacement cost of the merchandise to the wholesaler Wholesaler, whichever is the lower; less all trade discounts except customary discounts for cash; to which shall be added, (1) freight charges, not otherwise included in the invoice cost or the replacement cost of the merchandise as herein set forth, and (2) cartage to the retail outlet if done or paid for by the wholesaler Wholesaler, which cartage cost, in the absence of proof of a lesser cost, shall be deemed to be three-fourths of one percent (3/4 of 1%) of the cost to the wholesaler Wholesaler as herein set forth after adding thereto freight charges but before adding thereto cartage, and taxes, and (3) all State and Federal taxes not heretofore added to the cost as such.
(c) When used in this act the term “replacement costs” shall mean the cost per unit at which the merchandise sold or offered for sale could have been bought by the seller at any time within thirty (30) days prior to the date of sale or the date upon which it is offered for sale by the seller if bought in the same quantity or quantities as the seller’s last purchase of said merchandise.
(d) When one or more items are advertised, offered for sale, or sold with one or more other items at a combined price, or are advertised, offered as a gift, or given with the sale of one or more other items, each and all of said items shall for the purposes of this act be deemed to be advertised, offered for sale, or sold, and the price of each item named shall be governed by the provisions of paragraphs subsection (a) or (b) of Section 2 this section, respectively.
(e) The terms “sell at retail”, “sales at retail”, and “retail sale” shall mean and include any transfer for a valuable consideration made in the ordinary course of trade or in the usual prosecution of the seller’s business of title to tangible personal property to the purchaser for consumption or use other than resale or further processing or manufacturing.  The above terms shall include any transfer of such property where title is retained by the seller as security for the payment of the purchase price.
(f) The terms “sell at wholesale”, “sales at wholesale”, and “wholesale sales” shall mean and include any transfer for a valuable consideration made in the ordinary course of trade or the usual conduct of the seller’s business, of title to tangible personal property to the purchaser for purposes of resale or further processing or manufacturing.  The above terms shall include any transfer of such property where title is retained by the seller as security for the payment of the purchase price.
(g) The term “retailer” “Retailer” shall mean and include every person, partnership, corporation or association engaged in the business of making sales at retail of gasoline, diesel fuel or legend drug products within this state; provided that, in the case of a person, partnership, corporation or association engaged in the business of making both sales at retail and sales at wholesale, such term shall be applied only to the retail portion of such business.
(h) The term “wholesaler” “Wholesaler” shall mean and include every person, partnership, corporation, or association engaged in the business of making sales at wholesale of gasoline, diesel fuel or legend drug products within this state; provided that, in the case of a person, partnership, corporation or association engaged in the business of making both sales at wholesale and sales at retail, such term shall be applied only to the wholesale portion of such business.
SECTION 4.     AMENDATORY     15 O.S. 2011, Section 598.3, is amended to read as follows:
Section 598.3  It is hereby declared that any advertising, offer to sell, or sale of any merchandise gasoline, diesel fuel or legend drug products, either by retailers Retailers or wholesalers Wholesalers, at less than cost as defined in this act with the intent and purpose of inducing the purchase of other merchandise gasoline, diesel fuel or legend drug products or of unfairly diverting trade from a competitor or otherwise injuring a competitor, impair and prevent fair competition, injure public welfare, are unfair competition and contrary to public policy and the policy of this act, where the result of such advertising, offer or sale is to tend to deceive any purchaser or prospective purchaser, or to substantially lessen competition, or to unreasonably restrain trade, or to tend to create a monopoly in any line of commerce.
SECTION 5.     AMENDATORY     15 O.S. 2011, Section 598.4, is amended to read as follows:
Section 598.4  Any retailer Retailer who shall, in contravention of the policy of this act, advertise, offer to sell or sell at retail any item of merchandise gasoline, diesel fuel or legend drug products at less than cost to the retailer Retailer as defined in this act; or any wholesaler Wholesaler who shall in contravention of the policy of this act, advertise, offer to sell, or sell at wholesale any item of merchandise gasoline, diesel fuel or legend drug products at less than cost to the wholesaler Wholesaler as defined in this act, shall be guilty of a misdemeanor and upon conviction thereof shall be punished by a fine of not more than Five Hundred Dollars ($500.00).
SECTION 6.     AMENDATORY     15 O.S. 2011, Section 598.5, is amended to read as follows:
Section 598.5   (a) In addition to the penalties provided in this act, any person injured by any violation, or who shall suffer injury from any threatened violation of this act, may maintain an action in any court of equitable jurisdiction to prevent, restrain or enjoin such violation or threatened violation.  If in such action a violation or threatened violation of this act shall be established, the court shall enjoin and restrain or otherwise prohibit, such violation or threatened violation and, in addition thereto, shall assess in favor of the plaintiff and against the defendant the cost of suit.  In such action if damages are alleged and proved, the plaintiff in said action, in addition to such injunctive relief and costs of suit, shall be entitled to recover from the defendant the actual damages sustained by him the plaintiff.
(b) In the event no injunctive relief is sought or required, any person injured by a violation of this act may maintain an action for damages alone in any court of general jurisdiction, and the measure of damages in such action shall be the same as prescribed in subsection (a) of this section.  Provided this act shall not authorize suits or actions against newspapers, radio broadcasters, or other advertising agencies through which such advertisements are published, broadcast or otherwise made.
(c) Evidence of advertisement, offering to sell, or sale of merchandise by any retailer Retailer or wholesaler Wholesaler at less than cost to him, shall be prima facie evidence of intent to injure competitors and to destroy or substantially lessen competition.
SECTION 7.     AMENDATORY     15 O.S. 2011, Section 598.7, is amended to read as follows:
Section 598.7  Any retailer Retailer or wholesaler Wholesaler may advertise, offer to sell, or sell merchandise gasoline, diesel fuel or legend drug products at a price made in good faith to meet the price of a competitor who is selling the same article gasoline, diesel fuel or legend drug products or such products of comparable quality at cost to him as a wholesaler Wholesaler or retailer Retailer.  The price of merchandise gasoline, diesel fuel or legend drug products advertised, offered for sale or sold under the exemptions specified in Section 6 598.6 of this title, shall not be considered the price of a competitor and shall not be used as a basis for establishing prices below cost, nor shall the price established at a bankrupt sale be considered the price of a competitor within the purview of the first sentence of this section.
SECTION 8.     AMENDATORY     15 O.S. 2011, Section 598.8, is amended to read as follows:
Section 598.8  In establishing the cost of merchandise to the retailer Retailer or wholesaler Wholesaler, the invoice cost of such merchandise gasoline, diesel fuel or legend drug products purchased at a forced, bankrupt, closeout sale, or other sale outside of the ordinary channels of trade, may not be used as a basis for justifying a price lower than one based upon the replacement cost of the merchandise to the retailer Retailer or wholesaler Wholesaler, within thirty (30) days prior to the date of sale, in the quantity last purchased through the ordinary channels of trade.

54-1-6576	EK	01/08/13