A bill preventing businesses from selling gas below cost was hammered in a House committee even though it passed easily in the Senate last month.

The House Transportation Committee gave Senate Bill 2389 a "do not pass" recommendation Friday on a 10-3 vote. The bill passed the Senate 30-13 last month.

Rep. LeRoy Bernstein, R-Fargo, said the bill is not friendly to consumers and it will affect competition.

"Competition can be cruel, it can be mean and it can be downright nasty," Bernstein said. "But, ladies and gentlemen, that's the name of the game."

Voting against the "do not pass" recommendation were Reps. Arlo Schmidt, D-Maddock, Shirley Meyer, D-Dickinson, and Mark Owens, R-Grand Forks.

The bill, backed by the North Dakota Retail Petroleum Marketers Association, is aimed largely at Wal-Mart, which will be constructing larger stores across the state in the near future.

Some fear Wal-Mart will sell gas at some locations below cost just to lure customers into their stores. However, it is not certain if Wal-Mart has plans to get into the gasoline business in North Dakota.

The bill allows a business to sue another if it is proven that a retailer sold below cost. It also allows the attorney general to take action to stop a business from selling below cost.

Meyer said if Wal-Mart begins selling gas below cost, it will drive gas stations out of business, even ones in small towns where Wal-Mart doesn't have stores.

"When you have a super Wal-Mart come in, they can virtually run them out of business, and they can do it overnight and it's been proven in other states," Meyer said.

Schmidt said he supports the bill because Wal-Mart has already pushed small businesses out of business.

"I'm voting for this bill because of what Wal-Mart has done to our rural communities," Schmidt said.

Opponents of the bill were skeptical that people from small towns will drive long distances to fill up at gas stations to save a few cents a gallon.

Rep. Mark Dosch, R-Bismarck, said Wal-Mart or other large stores should not be blamed for the demise of small businesses.

"The consumers will decide where they want to shop," Dosch said.

The next step is for the full House to take a vote on the bill. That could happen as early as Monday.

(Reach reporter Tom Rafferty at 223-8482 or tom.rafferty@bismarcktribune.com.)