Requires DOT to establish and maintain a gasoline storage facility; allows Governor to sell gasoline from facility at wholesale price determined by PUC in times of shortage or drastic increases in gasoline prices; makes appropriation.

A BILL FOR AN ACT

SECTION 1. The legislature finds that, with crude oil costs having exceeded $60 a barrel during the recent past and, at best, static United States petroleum refinery capacity, future gasoline prices become uncertain and could lead to a volatile situation with shortages or drastic increases in the local price of gasoline. Drastic price increases could lead to gasoline lines and potential shortages in the local supply of gasoline.

The legislature finds that it is in the public interest that the State develop or acquire and maintain a gasoline reserve capacity in time of drastic increases in gasoline prices or shortages.

The purpose of this Act is to establish and maintain a gasoline storage facility in the State, along with an import terminal, that can be utilized in the event of drastic increases in the price of gasoline or shortages in the supply of gasoline.

SECTION 2. Chapter 486H, Hawaii Revised Statutes, is amended by adding a new part to be appropriately designated and to read as follows:

"Part ii. gasoline storage facility

§486H-A Import terminal and storage facility; purchase of gasoline. (a) The department of transportation shall develop or acquire and maintain a gasoline import terminal and storage facility in the State with a minimum storage capacity of          gallons for the storage of regular unleaded gasoline used for motor vehicles.

(b) From time to time, at the discretion of the director of transportation, the department of transportation shall purchase regular unleaded gasoline and transport and store the regular unleaded gasoline at the storage facility to maintain, at all times, the required minimum storage capacity. The department of transportation, in its discretion, may also purchase and store higher grades of gasoline, as long as the minimum amount of regular unleaded gasoline is maintained.

§486H-B Governor's determination of shortage; wholesale price of gasoline. (a) Upon a finding of a shortage of gasoline in the State or drastic increases in the price of gasoline that cause a major adverse impact on the economy, public order, or health, welfare, and safety of the people of the State, the governor shall direct the director of transportation to sell the gasoline in the gasoline storage facility at wholesale prices to nonrefiner marketers for resale to retail stations.

(b) The director of transportation shall sell the gasoline at a wholesale price to be determined by the public utilities commission; provided that the wholesale price shall:

§486H-C Cessation of wholesale gasoline sales. Upon the determination by the governor that the conditions that required the sale of gasoline from the gasoline storage facility no longer exist, the governor shall direct the director of transportation to cease the sale of gasoline from the gasoline storage facility.

486H-D Rules. The department of transportation, in consultation with the public utilities commission, may adopt rules, pursuant to chapter 91, in order to implement this part."

SECTION 3. Chapter 486H, Hawaii Revised Statutes, is amended by designating sections 486H-1 to 486H-17 as part I, entitled "General Provisions".

SECTION 4. There is appropriated out of the general revenues of the State of Hawaii the sum of $        , or so much thereof as may be necessary for fiscal year 2006-2007, for the purpose of developing or acquiring and maintaining the gasoline import terminal and storage facility.

SECTION 5. The sum appropriated shall be expended by the department of transportation for the purposes of this Act.

SECTION 6. In codifying the new sections added by section 2 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.

SECTION 7. This Act shall take effect upon its approval; provided that sections 4 and 5 shall take effect on July 1, 2006.