STAND. COM. REP. NO. 334-00

                                 Honolulu, Hawaii
                                                   , 2000

                                 RE: H.B. No. 3021
                                     H.D. 1




Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Energy and Environmental Protection, to
which was referred H.B. No. 3021 entitled: 

     "A BILL FOR AN ACT RELATING TO GASOLINE,"

begs leave to report as follows:

     The purpose of this bill is to protect Hawaii's groundwater
and drinking water from contamination by methyl tertiary-butyl
ether (MTBE) by prohibiting the sale of gasoline containing MTBE
for use in motor vehicles after July 1, 2001.

     The Department of Health (DOH), the Board of Water Supply,
Life of the Land, Chevron, the Sierra Club, Hawaii Chapter, and
two individuals testified in support of this bill.

     MTBE is an oxygenate used to meet oxygen levels mandated by
the 1990 federal Clean Air Act Amendments.  Oxygenates are
principally added to gasoline to reduce emissions in areas which
have failed to meet federal air quality standards.

     According to the DOH, MTBE is known to have contaminated
extensive drinking water and groundwater resources nationally.
An EPA-appointed Clean Air Act Advisory Committee Panel on
Oxygenate Use in Gasoline recognized that MTBE can pose risks to
drinking water supplies; accordingly, "the use of MTBE should be
reduced substantially."  Relatedly, California has announced a
phase-out of MTBE in California gasoline by 2002.


 
 
 
                                 STAND. COM. REP. NO. 334-00
                                 Page 2

 
     In Hawaii, a 1997 DOH survey indicated that MTBE had been
used in the past in the formulation of gasoline at an Oahu
refinery.  All major gasoline retailers and the Department of
Defense facilities have most likely stored and sold gasoline sold
by this refinery.  The survey also indicated that importation of
gasoline into Hawaii containing MTBE had occurred in 1997.

     Since January, 1999, the DOH has required testing for MTBE
at active leaking underground storage tank facilities.
Currently, the DOH has detected MTBE in the soil or groundwater
adjacent to 24 underground storage tank facilities.  One of these
facilities, the Halawa Medium Security Correctional Facility, has
reported MTBE above the DOH's action level.

     The DOH has tested 33 groundwater sources (out of 430
groundwater sources) serving public water systems for MTBE.  None
were found to contain MTBE.

     Recognizing MTBE's potential to cause significant harm on
the public health and environment, your Committee has amended
this bill by:

     (1)  Establishing a fine of $25,000 or treble the cost of
          cleaning up the contamination, whichever is greater;

     (2)  Requiring that any fines be deposited into the
          Emergency Response Revolving Fund; and

     (3)  Making technical, nonsubstantive amendments for the
          purpose of consistency.

     As affirmed by the record of votes of the members of your
Committee on Energy and Environmental Protection that is attached
to this report, your Committee is in accord with the intent and
purpose of H.B. No. 3021, as amended herein, and recommends that
it pass Second Reading in the form attached hereto as H.B. No.
3021, H.D. 1, and be referred to the Committee on Finance.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Energy and
                                   Environmental Protection,



                                   ______________________________
                                   HERMINA M. MORITA, Chair