Blumenthal says gas relief measures on safe legal ground

Blumenthal

HARTFORD, Conn. (Legal Newsline) - Asked by Gov. Jodi Rell if the State of Connecticut should rely on federal law for relief from high gasoline prices, Attorney General Richard Blumenthal said Monday it is up to the state's Legislature. Two days before the start of a special legislative session during which Blumenthal hopes the issue is raised, he told Rell, who had requested a legal opinion on Friday, that lawmakers have his recommendations and should heed them. "There should be no reason for diffidence or delay on legislative action," Blumenthal said. "My proposed gasoline and home heating oil measures require legislation -- not simply regulation -- and may provide sizeable competitive relief to small businesses and consumers seeking cash discounts." Rell wanted to know if federal law would bar gas stations from offering discounts to customers paying with cash. "I conclude that the state has full authority in this area. No federal law -- including the Petroleum Marketing Practices Act (PMPA), federal regulations regarding octane information and the Interstate Commerce or Contract clauses of the United States Constitution -- bar states from regulating cash discounts by gasoline retailers," Blumenthal wrote. "In fact, nothing in state or federal law presently prohibits gasoline retailers from offering a discount for cash purchase." Blumenthal said a provision in as many as 85 percent of franchise agreements prohibit the practice, though. As of last week, the state had the second-highest average gasoline price in the country. The State is safe to go forward with banning franchise agreements with that provision, Blumenthal said. "Legislation requiring gasoline retailers in this state to offer a cash discount or banning franchise agreement provisions prohibiting franchisees from offering cash discounts would not be prohibited by federal law, including the PMPA or federal octane rating posting regulations," Blumenthal said. "Such legislation should be upheld as well against any challenge under the Contracts Clause or the Interstate Commerce Clause of the United States Constitution." Last week, Blumenthal wrote Senate President Pro Tempore Donald Williams and Speaker of the House James Amann. His proposed legislation would also authorize comprehensive analysis of gasoline markets by state and provide consumers with written contracts for heating oil or propane deliveries where additional charges are assessed by the company. "This measure could be approved by the Legislature during the special session, yielding timely, essential information on our gasoline markets and offering much needed consumer protection," Blumenthal said. The special session was scheduled to extend a real estate conveyance tax. Blumenthal stressed a need for consumer protection measures in the absence of federal action. "I understand reservations about opening the special session to additional issues, but this one is different. Our state faces an economic crisis," Blumenthal wrote. "The Legislature must quickly and effectively address the most important issue to the citizens of our state." From Legal Newsline: Reach John O'Brien via e-mail at john@legalnewsline.com.

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