Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2001

State of Hawaii

Sir:

Your Committee on Commerce, Consumer Protection and Housing, to which was referred S.B. No. 653 entitled:

begs leave to report as follows:

The purpose of this measure is to allow a manufacturer or jobber to operate a former dealer-operated retail service station if the current or new dealer is in agreement with or has a contract interest in the operation.

An individual testified in support of this measure. The Hawaii Coalition of Retail Gasoline Marketers, Western States Petroleum Association, and three individuals testified in support of the measure with amendments. Aloha Petroleum, Tesoro Hawaii, and two individuals opposed the measure. The Hawaii Automotive Repair and Gasoline Dealers Association presented comments on the measure.

This measure would continue to prohibit gasoline manufacturers and jobbers from converting dealer-operated retail service stations to company-operated retail service stations, but would allow an exception when the current or new dealer agrees to and has a contract interest in the manufacturer's or jobber's operation of the retail service station.

Proponents of this measure favor relaxing the prohibition against the conversion of dealer-operated retail service stations because the current law restricts rather than protects dealers and does not allow for changing conditions in the marketplace. Some opponents of the measure argue that the divorcement law is not working or is no longer needed and advocate for its total repeal.

Your Committee finds that the issues raised in this measure merit further review and discussion. Accordingly, your Committee has amended this measure by delaying its effective date to July 1, 2050, to allow for further discussion.

As affirmed by the record of votes of the members of your Committee on Commerce, Consumer Protection and Housing that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 653, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 653, S.D. 1, and be placed on the calendar for Third Reading.