REPORT TITLE: 
Gasoline dealers


DESCRIPTION:
Requires a manufacturer or jobber to report all changes in
ownership or type of operation involving a branded service
station to the petroleum advisory council for public inspection.
Reduces the period for a manufacturer or jobber to operate a
former dealer operated retail service station from twenty-four
months to sixty days until a replacement dealer can be found.
Directs DCCA to update its 1991 study on the impact of direct
retailing of motor fuel by refiners and distributors in
competition with franchised and independent service stations.
(HB1977 HD1)



 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        1977
HOUSE OF REPRESENTATIVES                H.B. NO.           H.D. 1
TWENTIETH LEGISLATURE, 2000                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                     A BILL FOR AN ACT

RELATING TO GASOLINE DEALERS.



BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1      SECTION 1.  Section 486H-10.4, Hawaii Revised Statutes, is
 
 2 amended to read as follows:
 
 3      "[[]§486H-10.4[]]  Restrictions on manufacturers or jobbers
 
 4 in operating service stations; lease rent controls; definitions.
 
 5 (a)  Beginning August 1, 1997, no manufacturer or jobber shall
 
 6 convert an existing dealer operated retail service station to a
 
 7 company operated retail service station; provided that nothing in
 
 8 this section shall limit a manufacturer or jobber from:
 
 9      (1)  Continuing to operate any company operated retail
 
10           service stations legally in existence on July 31, 1997;
 
11      (2)  Constructing and operating any new retail service
 
12           stations as company operated retail service stations
 
13           constructed after August 1, 1997, subject to subsection
 
14           (b); or
 
15      (3)  Operating a former dealer operated retail service
 
16           station for up to [twenty-four months] sixty days until
 
17           a replacement dealer can be found if the former dealer
 
18           vacates the service station, cancels the franchise, or
 
19           is properly terminated or not renewed.
 

 
Page 2                                                     1977
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      (b)  No new company operated retail service station shall be
 
 2 located within one-eighth mile of a dealer operated retail
 
 3 service station in an urban area, and within one-quarter mile in
 
 4 other areas.  For purposes of this subsection, "urban" means the
 
 5 first congressional district of the State, and "other areas"
 
 6 means the second congressional district of the State.
 
 7      (c)  All leases as part of a franchise as defined in section
 
 8 486H-1, existing on August 1, 1997, or entered into thereafter,
 
 9 shall be construed in conformity with the following:
 
10      (1)  Such renewal shall not be scheduled more frequently
 
11           than once every three years; and
 
12      (2)  Upon renewal, the lease rent payable shall not exceed
 
13           fifteen per cent of the gross sales, except for
 
14           gasoline, which shall not exceed fifteen per cent of
 
15           the gross profit of product, excluding all related
 
16           taxes by the dealer operated retail service station as
 
17           defined in section 486H-1 and 486H-10.4 plus, in the
 
18           case of a retail service station at a location where
 
19           the manufacturer or jobber is the lessee and not the
 
20           owner of the ground lease, a percentage increase equal
 
21           to any increase which the manufacturer or jobber is
 
22           required to pay the lessor under the ground lease for
 
23           the service station.  For the purposes of this
 

 
Page 3                                                     1977
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1           subsection, "gross amount" means all monetary earnings
 
 2           of the dealer from a dealer operated retail service
 
 3           station after all applicable taxes, excluding income
 
 4           taxes, are paid.
 
 5 The provisions of this subsection shall not apply to any existing
 
 6 contracts that may be in conflict with its provisions.
 
 7      (d)  Nothing in this section shall prohibit a dealer from
 
 8 selling a retail service station in any manner.
 
 9      (e)  Any manufacturer or jobber shall report all changes in
 
10 ownership or type of operation involving a branded service
 
11 station to the petroleum advisory council within fourteen days of
 
12 any change.
 
13      [(e)] (f)  For the purposes of this section:
 
14      "Company operated retail service station" means a retail
 
15 service station owned and operated by a manufacturer or jobber
 
16 and where retail prices are set by that manufacturer or jobber.
 
17      "Dealer operated retail service station" means a retail
 
18 service station owned by a manufacturer or jobber and operated by
 
19 a qualified gasoline dealer under a franchise.
 
20      "Operate" means to engage in the business of selling motor
 
21 vehicle fuel at a retail service station through any employee,
 
22 commissioned agent, subsidiary company, or person managing a
 
23 retail service station under a contract and on a fee arrangement
 
24 with the manufacturer or jobber.
 

 
Page 4                                                     1977
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      "Retail" means a sale of gasoline made to the general public
 
 2 at prices that are displayed on the dispensing equipment."
 
 3      SECTION 2.  Section 486J-22, Hawaii Revised Statutes, is
 
 4 amended to read as follows:
 
 5      "[[]§486J-22[]]  Duties of the council.  The council shall:
 
 6      (1)  Advise the department of trends and activities in the
 
 7           retail petroleum industry that may require statutory
 
 8           consideration; [and]
 
 9      (2)  Make available for inspection by the public all reports
 
10           prepared by a manufacturer or jobber under section
 
11           486H-10.4 relating to any changes in ownership or type
 
12           of operation involving a branded service station; and
 
13     [(2)] (3)  Take such other action as may be necessary to
 
14           ensure that the department is informed of all relevant
 
15           developments in the retail petroleum industry affecting
 
16           the health, safety, and welfare of the people of this
 
17           State."
 
18     SECTION 3.  The department of commerce and consumer affairs
 
19 shall prepare a report that provides an update of its 1991 study
 
20 pursuant to Act 295, Session Laws of Hawaii 1991, on the impact
 
21 of direct retailing of motor fuel by refiners and distributors in
 
22 competition with franchised and independent service stations.
 

 
 
 
Page 5                                                     1977
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1 The department shall submit the update to the legislature no
 
 2 later than twenty days prior to the convening of the regular
 
 3 session of 2001.
 
 4     SECTION 4.  Statutory material to be repealed is bracketed.
 
 5 New statutory material is underscored.
 
 6     SECTION 5.  This Act shall take effect upon its approval.