It is clear from the language of section 7(b)(3) that the exemption
which it provides is available to an enterprise only if it is a ``local
enterprise''. The other tests of exemption must also, of course be met.
A ``local'' enterprise is not defined in the Act, and the word
``local'', which appears in a different context elsewhere in the Act
(see clause (2) of the last sentence of section 3(r) and sections
13(b)(7), 13(b)(11)), is likewise given no express definition. There is
no fixed legal meaning of the term ``local''; it is usually a flexible
and comparative term whose meaning may vary in different contexts. As
used here, certain guides are available from the context in which it is
used, the legislative history surrounding adoption of section 7(b)(3),
and the law of which it forms a part. A ``local'' enterprise engaged in
the wholesale or bulk distribution of petroleum products is clearly
intended to embrace the kind of enterprise operated by the merchants who
requested the amendment; that is, one which provides farmers,
homeowners, country merchants, and others in its locality with petroleum
products in bulk quantities or at wholesale. The language of section
7(b)(3) makes it clear also that the enterprise will not be regarded as
other than ``local'' merely because it has more than one bulk storage
establishment. On the other hand, the section makes it equally clear
that ordinarily an enterprise which is not located within a single State
is not a local enterprise of the kind to which the exemption will apply.
This follows from the express requirement that more than 75 percent of
the enterprise's annual dollar volume of sales must be made ``within the
State in which such enterprise is located.'' The legislative history
provides further evidence of this intent. At the hearings before the
Senate Labor Subcommittee a proponent of the amendment which eventually
was enacted in somewhat different language (sec. 13(b)(10) of the Act
which was repealed by the 1966 Amendments to the Act and replaced by
section 7(b)(3)), stated with respect to the significance of the word
``local'':
* * * the language which we have suggested in the proposed amendment
``locally owned and controlled establishments'', I admit that can point
up some trouble and make some work for lawyers.
We, however, in our endeavor to show our sincerity of only trying to
cover local intrastate establishments, went overboard on this language.
You will note that 75 percent of our business has to be performed in
one State. I think that ``locally owned and controlled establishments''
language should better read ``independently owned and controlled local
enterprises or establishment.'' (Sen. Hearings on amendments to the Fair
Labor Standards Act, 87th Cong., first session, p. 416.)
The same witness also quoted from the Congressional Record of August 18,
1960, the discussion in the course of the consideration of the
amendments to the Act by the Senate during the 86th Congress, second
session, as follows:
These wholesale and bulk distributors of petroleum products,
commonly referred to as oil jobbers, are primarily local businessmen who
acquire these products from their suppliers' bulk terminal in the State
in which the jobber does business and sell these products to service
stations, farmers, and homeowners in the State in which they maintain
their place of business * * * I am advised that 98.3 percent of all the
oil jobbers in the United States sell their products only in the State
in which their place of business is located thus qualifying by any
definition as local merchants. (Sen. Hearings on amendments to the Fair
Labor Standards Act 87th Cong., first session, pp. 415-416.)
It thus appears that the word ``local'' was intended to confine the
exemption to enterprises of such local merchants. The enterprise need
not, of course, conduct all of its business within the State in which it
is physically located, since the exemption specifically provides that it
may make a portion of its sales outside the State in which it is
located.
