STAND. COM. REP. NO. 1184-04

Honolulu, Hawaii

, 2004

RE: S.B. No. 3193

S.D. 2

H.D. 2

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committee on Finance, to which was referred S.B. No. 3193, S.D. 2, H.D. 2, entitled:

"A BILL FOR AN ACT RELATING TO CONSUMERS,"

begs leave to report as follows:

The purpose of this bill is to improve upon and make more effective the goal of ensuring that Hawaii consumers are charged a fair price by making certain amendments to Act 77, Session Laws of Hawaii 2002, which imposed maximum pre-tax wholesale and retail gasoline prices on the sale of gasoline in the State. Among other things, this bill:

(1) Changes the baseline for determining maximum pre-tax wholesale gasoline prices by using a national unweighted average spot price of all unleaded gasoline as reported by the Oil Price Information Service;

(2) Extends maximum pre-tax wholesale price limits to mid- and premium grade gasoline;

(3) Repeals price limits on the sale of gasoline on the islands of Molokai and Lanai and the district of Hana on the island of Maui;

(4) Repeals the maximum pre-tax retail gasoline price;

(5) Provides a wholesale adjustment factor to jobbers serving the islands of Kauai, Maui, and Hawaii;

(6) Requires refiners, wholesalers, and jobbers to:

(A) Provide discounts, deductions, price reductions, and incentive uniformly and evenly to all retailers; and

(B) Distributes supplies equitably and proportionately to all retailers during periods of short supply;

(7) Makes illegal any act to limit or control petroleum products in response to this Act;

(8) Changes the effective date for the imposition of the price limit;

(9) Transfers the responsibility for collecting and analyzing information received from the petroleum industry to the Legislative Auditor;

(10) Establishes a legislative task force to investigate the petroleum industry and its operations on the islands of Hawaii, Maui, Molokai, Lanai, and Kauai; and

(11) Directs the Legislative Auditor to undertake a study to determine the most appropriate methodology that should be used in establishing a baseline gasoline price.

The Advocates for Consumer Rights, Kokua Council, Consumers Against Gas Price Gouging, and concerned citizens testified in support of this bill. The Department of Business, Economic Development, and Tourism, Chamber of Commerce of Hawaii, Western States Petroleum Association, Tesoro Hawaii Corporation, Aloha Petroleum, Diamond Head Petroleum, Inc., Maui Petroleum, Inc., Hawaii Petroleum, Inc., Garlow Petroleum, Inc., Kahala Shell Auto Care, Inc., West 1 Properties LLC, Hawaii Island Portuguese Chamber of Commerce, Duke's Management Corporation, Kawamata Brothers, Ltd., Sure Save Super Market, Ltd., and numerous

petroleum retailers, jobbers, and concerned individuals testified in opposition to this measure. The Public Utilities Commission and Life of the Land offered comments on this bill.

As affirmed by the record of votes of the members of your Committee on Finance that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 3193, S.D. 2, H.D. 2, and recommends that it pass Third Reading.

Respectfully submitted on behalf of the members of the Committee on Finance,

 

____________________________

DWIGHT Y. TAKAMINE, Chair