(1) Adds Singapore spot daily price in determination of baseline price, with lowest three of the four average weekly geographic prices averaged for State baseline; (2) in event of a holiday or holidays, requires PUC to use average of remaining business days of the week; (3) removes the location adjustment factor; (4) reduces the marketing margin factor to 14 cents; (5) allocates different percentages of zone price adjustments to different distributors performing different functions; (6) provides for adjustment of zone price adjustments and allocation of zone price adjustments on a zone by zone basis; (7) establishes (a) petroleum industry monitoring, analysis, and reporting program; (b) petroleum industry monitoring, analysis, and reporting special fund; and (c) unfair practices by petroleum industry; (8) suspends enforcement of gasoline pricing program by PUC; and (9) repeals gasoline pricing program 1/1/11. Effective date July 1, 2020. (SB3186 HD2)

A BILL FOR AN ACT

PART I

SECTION 1. Various federal courts have found, and the petroleum industry itself acknowledges, that the wholesale gasoline industry in this state is an uncompetitive oligopoly with industry parties enjoying supra-competitive margins in their wholesale transactions, all to the detriment of Hawaii's consumers. It was for this reason that the legislature enacted Act 77, Session Laws of Hawaii 2002, establishing a maximum pre-tax wholesale gasoline price program, codified as chapter 486H, Hawaii Revised Statutes. Prior to the implementation of the program, the legislature enacted Act 242, Sessions Laws of Hawaii 2004, amending chapter 486H and the process by which the maximum pre-tax wholesale gasoline price was to be determined.

However, in establishing the maximum pre-tax wholesale gasoline price program, the legislature recognized that the daily dynamics of the gasoline market did not allow for the legislature to take timely action to make the necessary course corrections in the implementation of chapter 486H. It was with this in mind that the legislature granted the public utilities commission substantial latitude in the implementation of chapter 486H. In determining the baseline gasoline price, the public utilities commission had discretion in using the geographic markets set forth in the statute or any other geographic market or markets it felt were more relevant. It was also granted latitude to use the price information service named in the statute or another price information service of its choice. In addition, the public utilities commission in implementing chapter 486H had the discretion to change the location adjustment factor, the marketing margin factor, and the mid-grade and premium adjustment factors. Furthermore, the public utilities commission was granted the sole authority to establish the various zone price adjustments for the various zones established throughout the state.

Unfortunately and in some case contrary to the advice and recommendations of its own consultant, the public utilities commission failed to use its discretion in the best interests of Hawaii's consumers and simply relied on the numerical factors and adjustments contained in the statute. This lack of a proactive implementation of chapter 486H may have resulted in unnecessarily higher margins in the maximum pre-tax wholesale gasoline prices and higher gasoline costs to Hawaii's consumers. Accordingly, the legislature finds that certain amendments may be required for the proper implementation of chapter 486H.

The legislature further finds that the establishment of a petroleum industry monitoring, analysis, and reporting program to oversee the petroleum industry in the state would be an important additional approach to ensuring that Hawaii's consumers enjoy fair and competitive gasoline prices. The collection, aggregation, analysis, and reporting on real time data and information relating all facets of the petroleum industry in the state may make the gasoline pricing program imposed by chapter 486H unnecessary. However, the legislature does not feel that the gasoline pricing program should be repealed until the petroleum industry monitoring, analysis, and reporting program is established and proves that it can ensure the delivery of fair and competitive gasoline prices for Hawaii's consumer.

Another approach that may be used along with the monitoring, analysis, and reporting program to ensure that Hawaii's consumer enjoy fair and competitive gasoline prices is to clearly delineate what constitutes unfair trade practices in the petroleum industry.

Accordingly, the purposes of this Act are to:

PART II

SECTION 2. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:

"Chapter

§ -1 Definitions. As used in this chapter, unless the context otherwise requires:

"Advertising" includes the use of any banner, sign, placard, poster, streamer, card, or any publication in the media.

"Gasoline" means a volatile mixture of liquid hydrocarbons, generally containing small amounts of additives, suitable for use as a fuel in spark-ignition internal combustion engines.

"Person" means an individual, corporation, government, or governmental subdivision or agency, business trust, estate, trust, partnership, unincorporated association, two or more of any of the foregoing having a joint or common interest, or any other legal or commercial entity.

"Petroleum products" means gasoline, diesel fuel, liquefied petroleum gas only when used as a motor fuel, kerosene, thinner, solvent, liquefied natural gas, pressure appliance fuel, white gasoline, or any motor fuel, or any oil represented as engine lubricant, engine oil, lubricating or motor oil, or any oil used to lubricate transmissions, gears, or axles.

"Sell" or any of its variants means attempt to sell, offer for sale or assist in the sale of, permit to be sold or offered for sale or delivery, offer for delivery, trade, barter, or expose for sale.

§ -2 Misrepresentations. (a) It is unlawful for any person to make any deceptive, false, or misleading statement by any means whatsoever regarding quality, quantity, performance, price, discount, profit, or savings used in the sale or selling of any petroleum product regulated pursuant to this chapter or chapter 486H or 486J.

(b) It is unlawful for any person offering to sell any petroleum product that is regulated by this chapter or chapter 486H or 486J to commit or permit any of the following misleading, unfair, or deceptive acts or practices:

§ -3 Unlawful profiteering. Any person who sells petroleum products and who, with intent to enhance the price or restrict the supply of petroleum products:

shall commit an unlawful trade practice.

§ -4 Penalty. Any person who sells petroleum products or commits an unlawful trade practice in violation of this chapter shall be fined not more than $10,000 for each violation, imprisoned for not more than five years, or both.

§ -5 Injunctions. Any person in violation of this chapter may be enjoined by the circuit court by a mandatory injunction or restraining order necessary or proper to effectuate the purposes of this chapter in a suit brought by the attorney general in the name of the State or by any private person in the person's own name.

§ -6 Remedies cumulative. The remedies prescribed in this chapter are cumulative and in addition to any other remedies provided by law."

SECTION 3. Section 486H-13, Hawaii Revised Statutes, is amended to read as follows:

"§486H-13 Maximum pre-tax wholesale price for the sale of gasoline; civil actions. (a) Notwithstanding any law to the contrary, no manufacturer, wholesaler, or jobber may sell regular unleaded, mid-grade, or premium gasoline to a dealer retail station, an independent retail station, or to another jobber or wholesaler at a price above the maximum pre-tax wholesale prices established pursuant to subsection (b). The commission shall publish the maximum pre-tax wholesale prices by means that shall include the Internet website for the State of Hawaii.

(b) On a weekly basis, the commission shall determine the maximum pre-tax wholesale price of regular unleaded, mid-grade, and premium gasoline as follows: the maximum pre-tax wholesale price of regular unleaded gasoline shall consist of the baseline price for regular unleaded gasoline, plus [the location adjustment factor,] the marketing margin factor[,] and the zone price adjustment, and for mid-grade and premium gasoline, the applicable mid-grade and premium adjustment factor, such that the maximum pre-tax wholesale gasoline prices reflect and correlate with competitive market conditions.

(c) The baseline price for regular unleaded gasoline referred to in subsection (b) shall be determined on a weekly basis and shall be equal to the average of[:] the three lowest of the four weekly averages of the spot daily price for conventional regular unleaded gasoline or its equivalent standard:

as reported and published by the Oil Price Information Service for the five business days of the preceding week; provided that if the preceding week contains a holiday or holidays, then the average of the remaining business days of the preceding week shall be used; and provided further that the commission, in its discretion, may determine a more appropriate baseline or a more appropriate price information reporting service[.] or use multiple price information reporting services.

[(d) The location adjustment factor referred to in subsection (b) shall be $.04 per gallon or as otherwise determined by the commission and shall thereafter be subject to adjustment pursuant to section 486H-16(a).

(e)] (d) The marketing margin factor referred to in subsection (b) shall be [$.18] 14 cents per gallon or as otherwise determined by the commission and shall thereafter be subject to adjustment pursuant to section 486H-16(a).

[(f)] (e) The mid-grade adjustment factor shall be [$.05] 5 cents per gallon or as otherwise determined by the commission and shall thereafter be subject to adjustment pursuant to section 486H-16(a).

[(g)] (f) The premium adjustment factor shall be [$.09] 9 cents per gallon or as otherwise determined by the commission and shall thereafter be subject to adjustment pursuant to section 486H-16(a).

[(h)] (g) For purposes of this chapter, the [State] state shall be divided into the following zones:

[(i)] (h) The commission shall establish zone price adjustments to the maximum pre-tax wholesale regular unleaded, mid-grade, and premium gasoline prices on a zone by zone basis.

(i) The zone price adjustments for zones 2 through 8, established in subsection (g) shall be allocated as follows:

(j) Every manufacturer, wholesaler, or jobber, upon the request of the commission, shall furnish to the commission, in the form requested, all documents, data, and information the commission may require to make its determination on zone price adjustments. Any person who refuses or fails to comply with a request for information by the commission shall be subject to a fine of up to $50,000 per day. Each day a violation continues shall constitute a separate offense.

(k) The maximum pre-tax wholesale gasoline price imposed by this section shall take effect on September 1, 2005, notwithstanding the lack of the adoption of rules pursuant to this section.

(l) Any manufacturer, wholesaler, or jobber who knowingly violates any requirement imposed or rule adopted under this section, except for subsection (j), shall be subject to a civil penalty, for each violation, equal to three times the amount of the overcharge or $250,000, whichever is greater, and shall be liable for the costs of the action and reasonable attorney's fees as determined by the court. Within two years from the date the commission obtains actual knowledge of the violation, the commission may institute a civil action in a court of competent jurisdiction to collect the civil penalty, the costs, and attorney's fees. In the case of ongoing violation, the two-year period shall start from the date of the last violation. The commission may refer any such action to the attorney general as it deems appropriate. As used in this subsection, "overcharge" means the number of gallons of gasoline sold, times the wholesale price at which the manufacturer or jobber sold regular unleaded, mid-grade, or premium gasoline to a dealer retail station, an independent retail station, or another jobber or wholesaler, less taxes assessed, less the maximum pre-tax wholesale price established pursuant to subsection (b).

(m) The commission shall have the power to determine the extent to which a manufacturer, wholesaler, or jobber is complying with any requirement imposed or rule adopted under this section, including the power to compel a manufacturer, wholesaler, or jobber to submit documents, data, and information necessary and appropriate for the commission to determine [such] compliance. The commission may use data collected [by the department of business, economic development, and tourism] pursuant to chapter 486J[, as well as obtain the assistance of that department] in determining [such] compliance.

(n) The commission shall report to the governor and the legislature, in a timely manner, on any significant aberrations, trends, or conditions that may adversely impact the gasoline consumers in the [State.] state.

(o) The commission [shall] may adopt rules pursuant to chapter 91 as may be necessary to implement this section and section 486H-16."

SECTION 4. Section 486H-16, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) A manufacturer, wholesaler, or jobber may petition the commission to adjust the maximum pre-tax wholesale price of regular unleaded, mid-grade, or premium gasoline in the event of a change in the value of the baseline price for regular unleaded gasoline, [the location adjustment factor,] the marketing margin factor, the mid-grade adjustment factor, the premium adjustment factor, [or] a zone price adjustment[.] on a zone-by-zone basis, or the allocation of a zone price adjustment on a zone-by-zone basis. The petitioner shall bear the burden of proof to establish by clear and convincing evidence the need for and the amount of any adjustment. The adjustments shall be determined as follows:

PART IV

SECTION 5. Chapter 486J, Hawaii Revised Statutes, is amended by adding three new sections to be appropriately designated and to read as follows:

"§486J-A Informational cost reports. (a) Each refiner, on a semi-annual basis, at such reporting dates as the commission may establish, shall file with the commission, on forms prescribed, prepared, and furnished by the commission, a certified statement of operating and overhead costs for the refiner's Hawaii operations that shall include but not be limited to the following:

(b) In addition to the reporting required under subsection (a), each distributor shall file with the commission all Securities and Exchange Commission Forms 10-K, 10-Q, annual reports, quarterly reports, and earnings supplements published by the distributor.

(c) Each distributor, except a distributor who is so defined solely by criteria in paragraph (4) of that definition in section 486J-1, who sells liquid fuel only at retail and is not a refiner, shall file with the commission, on a semi-annual basis by such reporting dates as the commission may establish, on forms prescribed, prepared, and furnished by the commission, a certified statement of operating and overhead costs that shall include the following:

§486J-B Petroleum industry monitoring, analysis, and reporting program. The commission shall establish a petroleum industry monitoring, analysis, and reporting program that includes development and maintenance of an automated reporting system that meets the requirements of government, industry, and the public while promoting sound policy-making and consumer information and protection. The purpose of the petroleum industry monitoring, analysis, and reporting program is to conduct and facilitate the efficient analysis and reporting of all information and data provided by the petroleum industry pursuant to this chapter. The commission shall develop the petroleum industry monitoring, analysis, and reporting program in a manner that will result in greater market transparency and provide useful information to the commission and any other affected agency in conducting oversight of the petroleum industry and ensure compliance with all relevant laws.

§486J-C Petroleum industry monitoring, analysis, and reporting special fund. (a) There is established a petroleum industry monitoring, analysis, and reporting special fund to be administered by the commission.

(b) The legislature may make appropriations from the general revenues of the State of Hawaii, not to exceed $2,000,000 in any fiscal year, for the petroleum industry monitoring, analysis, and reporting special fund.

(c) Moneys in the special fund shall be used to:

SECTION 6. Section 486J-1, Hawaii Revised Statutes, is amended as follows:

1. By adding five new definitions to be appropriately inserted and to read:

""Classes of retail trade" means the separate subdivisions, or "classes", of outlets or methods of retail sales of liquid fuels, typically but not limited to gasoline and diesel for motor vehicles, and includes any:

"Commission" means the public utilities commission.

"Corporate overhead expenses" means the expenses or costs allocated by refiners that reflect their Hawaii business units' share of corporate staff costs, including legal, finance, accounting, information technology, and similar costs.

"Liquid fuel" means fuels in liquid form, commercially usable for energy needs, power generation, and fuels manufacture that may be manufactured, produced, or imported into the state or that may be exported from the state, including petroleum and petroleum products and all fuel alcohols.

"Wholesale liquid fuel prices" means the prices at which liquid fuel is sold at wholesale for resale at wholesale or retail, typically but not limited to gasoline and diesel for motor vehicles, and includes:

2. By amending the definitions of "distributor", "fuel", "person", and "refiner" to read:

""Distributor" means [and includes]:

"Fuel" means [and includes] fuels, whether liquid, solid, or gaseous, commercially usable for energy needs, power generation, and fuels manufacture, that may be manufactured, grown, produced, or imported into the [State] state or that may be exported [therefrom;] from the state, including petroleum and petroleum products and gases, coal, coal tar, vegetable ferments, and all fuel alcohols.

"Person"[,] means any person, firm, association, organization, partnership, business trust, corporation, or company[. "Person" also] and includes any city, county, public district or agency, the State or any department or agency [thereof,] of the State, and the United States to the extent authorized by federal law.

"Refiner" means any person who owns, operates, or controls the operations of one or more refineries[.] in Hawaii."

3. By repealing the definition of "petroleum commissioner".

[""Petroleum commissioner" or "commissioner" means the administrator of the energy, resources, and technology division of the department of business, economic development, and tourism."]

SECTION 7. Section 486J-2, Hawaii Revised Statutes, is amended to read as follows:

"§486J-2 Distributors to register. Every distributor, and any person before becoming a distributor, shall register [as such] with the [commissioner] commission on forms to be prescribed, prepared, and furnished by the [commissioner.] commission."

SECTION 8. Section 486J-3, Hawaii Revised Statutes, is amended to read as follows:

"§486J-3 Statements. (a) Each distributor [shall, at such] by reporting dates [as the commissioner may establish,] established by the commission, shall file with the [commissioner,] commission, on forms prescribed, prepared, and furnished by the [commissioner,] commission, a certified statement showing separately for each county and for the islands of Lanai and Molokai within which and [whereon] where fuel is sold or used during the last preceding reporting period, the following:

The [commissioner] commission shall prescribe [by rule when the first report shall be submitted.] standards and practices for reporting to facilitate uniformity, consistency, and comparability of the data to be submitted.

[(b) In addition to the above reporting, each distributor shall file with the commissioner, Federal Form FEO-1000 or an equivalent state form to be prescribed, prepared, and furnished by the commissioner, showing the expected supply of fuel products for the coming month, and their intended distribution as categorized by Form FEO-1000 or the equivalent state form. The state form shall be supplied in the event that the Federal Mandatory Petroleum Allocation Regulations should expire, be revoked, or be amended to delete or substantially change the reporting requirements provided therein.

(c)] (b) Each major marketer shall submit to the [commissioner,] commission, at a time and in a form as the [commissioner] commission shall prescribe, information, including petroleum and petroleum product receipts, exchanges, inventories, and distributions. [The commissioner shall prescribe by rule when the first report shall be submitted.

(d)] (c) The [commissioner] commission may request additional information as and when [[the commissioner]] the commission deems necessary to perform [[the commissioner's]] the commission's responsibilities under this chapter."

SECTION 9. Section 486J-4, Hawaii Revised Statutes, is amended to read as follows:

"§486J-4 Informational reports. (a) Each major oil producer, refiner, marketer, oil transporter, and oil storer shall submit to the [commissioner,] commission, in such form as the [commissioner] commission shall prescribe, information [which] that includes the following:

[The commissioner shall prescribe by rule when the first report shall be submitted.]

(b) The [commissioner] commission may request additional information as and when [[the commissioner]] the commission deems it necessary to perform [[the commissioner's]] the commission's responsibilities under this chapter."

SECTION 10. Section 486J-5, Hawaii Revised Statutes, is amended to read as follows:

"§486J-5 Analysis of information; [audits and inspections;] summary reports. (a) The [petroleum commissioner,] commission, with the [commissioner's] commission's own staff and other support staff with expertise and experience in, or with, the petroleum industry, shall gather, analyze, and interpret the information submitted to it pursuant to sections 486J-3 [and], 486J-4, and 486J-A and other information relating to the supply [and price], prices, margins, and profits of petroleum products, with particular emphasis on motor vehicle fuels, including[,] but not limited to[,] all of the following:

(b) The commissioner shall conduct random or periodic audits and inspections of any supplier or suppliers of oil or petroleum products to determine whether they are unnecessarily withholding supplies from the market or are violating applicable policies, laws, or rules. The commissioner may solicit assistance of the department of taxation in any such audit. The commissioner shall cooperate with other state and federal agencies to ensure that any audit or inspection conducted by the commissioner is not duplicative of the data received by any of their audits or inspections which is available to the commissioner.] price, margins, and profits.

[(c)] (b) The [commissioner] commission shall analyze the [impacts] effects of state and federal policies, rules, and regulations upon the supply and pricing of petroleum products.

[(d)] (c) The [commissioner] commission shall publish annually and submit to the governor and the legislature twenty days prior to the [first day] convening of [the current] each regular legislative session a summary, including any analysis and interpretation of the information submitted to it pursuant to this chapter, and any other activities taken by the [commissioner,] commission, including civil penalties imposed and referrals of violations to the attorney general under section 486J-9. Any person may submit comments in writing regarding the accuracy or sufficiency of the information submitted. [At the option of the director, this report may be combined with reporting required by section 196-4(11), in the director's role as state energy resources coordinator.]"

SECTION 11. Section 486J-6, Hawaii Revised Statutes, is amended to read as follows:

"§486J-6 Confidential information. (a) Confidential commercial information [presented] provided to the [commissioner] commission pursuant to this chapter shall be held in confidence by the [commissioner] commission or aggregated to the extent necessary to [assure] ensure confidentiality as governed by chapter 92F, including its penalty provisions.

[(b) No data or information submitted to the commissioner shall be deemed confidential if the person submitting the information or data has made it public.

(c)] (b) Unless otherwise provided by law, with respect to data provided pursuant to [sections] section 486J-3 [and], 486J-4, or 486J-A, neither the [commissioner,] commission, nor any employee of the [department,] commission, may do any of the following:

SECTION 12. Section 486J-7, Hawaii Revised Statutes, is amended to read as follows:

"§486J-7 Confidential information obtained by another state agency. Any confidential information pertinent to the responsibilities of the [commissioner] commission specified in this chapter that is obtained by another state agency, including the department of taxation, [the public utilities commission,] the attorney general, and the consumer advocate, shall be made available only to the attorney general, the attorney general's authorized representatives, and the [commissioner] commission, and shall be treated in a confidential manner."

SECTION 13. Section 486J-8, Hawaii Revised Statutes, is amended to read as follows:

"§486J-8 Sharing of information obtained by the [commissioner.] commission. The [commissioner] commission shall make [all] any information obtained by the [commissioner] commission under this chapter, including confidential information, available only to the attorney general, the department of taxation, [the public utilities commission,] the consumer advocate, the department of business, economic development, and tourism, and the authorized representative of each, who shall safeguard the confidentiality of all confidential information received."

SECTION 14. Section 486J-9, Hawaii Revised Statutes, is amended to read as follows:

"§486J-9 Failure to timely provide information; failure to make and file statements; false statements; penalties; referral to the attorney general. (a) The [petroleum commissioner] commission shall notify those persons who have failed to timely provide the information specified in section 486J-3 [or], 486J-4, or 486J-A or requested by the [commissioner] commission under section 486J-3 [or], 486J-4[.], or 486J-A. If, within five business days after being notified of the failure to provide the specified or requested information, the person fails to supply the specified or requested information, the person shall be subject to a civil penalty of not less than $50,000 per day nor more than $100,000 per day for each day the submission of information is refused or delayed[, unless the person has timely filed objections with the commissioner regarding the information and the commissioner has held a hearing and, following a ruling by the commissioner, the person has properly submitted the issue to a court of competent jurisdiction for review].

(b) Any person who wilfully makes any false statement, representation, or certification in any record, report, plan, or other document filed with the [commissioner] commission shall be subject to a civil penalty not to exceed $500,000[,] and shall be deemed to have committed an unfair or deceptive act or practice in the conduct of a trade or commerce and subject to the penalties specified in chapter 480.

(c) The [commissioner] commission shall refer any matter under [this] subsection (a) or (b) to the attorney general, who may exercise any appropriate legal or equitable remedies that may be available to the State.

[(c)] (d) For the purposes of this section, "person" means, in addition to the definition contained in section 486J-1, any responsible corporate officer."

SECTION 15. Section 486J-10, Hawaii Revised Statutes, is amended as follows:

1. By amending subsection (a) to read:

"(a) The [commissioner] director shall adopt rules in accordance with chapter 91 to require that gasoline sold in the [State] state for use in motor vehicles contain ten per cent ethanol by volume. The amounts of gasoline sold in the [State] state containing ten per cent ethanol shall be in accordance with rules as the [commissioner] director may deem appropriate. The [commissioner] director may authorize the sale of gasoline that does not meet these requirements as provided in subsection (d)."

2. By amending subsections (d), (e), and (f) to read:

"(d) The [commissioner] director may authorize the sale of gasoline that does not meet the provisions of this section:

(e) Each distributor, at such reporting dates as the [commissioner] director may establish, shall file with the [commissioner,] director, on forms prescribed, prepared, and furnished by the [commissioner,] director, a certified statement showing:

(f) Provisions with respect to confidentiality of information shall be the same as provided in section [486J-7.] 486J-6."

3. By amending subsection (h) to read:

"(h) The [commissioner,] director, in accordance with chapter 91, shall adopt rules for the administration and enforcement of this section."

SECTION 16. Section 486J-12, Hawaii Revised Statutes, is repealed.

["§486J-12 Rules. The commissioner shall adopt, amend, or repeal such rules as [the commissioner] may deem proper to fully effectuate this chapter."]

PART V

SECTION 17. Chapter 486H, Hawaii Revised Statutes, is amended as follows:

1. By repealing section 486H-13.

["§486H-13 Maximum pre-tax wholesale price for the sale of gasoline; civil actions. (a) Notwithstanding any law to the contrary, no manufacturer, wholesaler, or jobber may sell regular unleaded, mid-grade, or premium gasoline to a dealer retail station, an independent retail station, or to another jobber or wholesaler at a price above the maximum pre-tax wholesale prices established pursuant to subsection (b). The commission shall publish the maximum pre-tax wholesale prices by means that shall include the Internet website for the State of Hawaii.

(b) On a weekly basis, the commission shall determine the maximum pre-tax wholesale price of regular unleaded, mid-grade, and premium gasoline as follows: the maximum pre-tax wholesale price of regular unleaded gasoline shall consist of the baseline price for regular unleaded gasoline, plus the location adjustment factor, the marketing margin factor, and the zone price adjustment, and for mid-grade and premium gasoline, the applicable mid-grade and premium adjustment factor, such that the maximum pre-tax wholesale gasoline prices reflect and correlate with competitive market conditions.

(c) The baseline price for regular unleaded gasoline referred to in subsection (b) shall be determined on a weekly basis and shall be equal to the average of:

(d) The location adjustment factor referred to in subsection (b) shall be $.04 per gallon or as otherwise determined by the commission and shall thereafter be subject to adjustment pursuant to section 486H-16(a).

(e) The marketing margin factor referred to in subsection (b) shall be $.18 per gallon or as otherwise determined by the commission and shall thereafter be subject to adjustment pursuant to section 486H-16(a).

(f) The mid-grade adjustment factor shall be $.05 per gallon or as otherwise determined by the commission and shall thereafter be subject to adjustment pursuant to section 486H-16(a).

(g) The premium adjustment factor shall be $.09 per gallon or as otherwise determined by the commission and shall thereafter be subject to adjustment pursuant to section 486H-16(a).

(h) For purposes of this chapter, the State shall be divided into the following zones:

(i) The commission shall establish zone price adjustments to the maximum pre-tax wholesale regular unleaded, mid-grade, and premium gasoline prices on a zone by zone basis.

(j) Every manufacturer, wholesaler, or jobber, upon the request of the commission, shall furnish to the commission, in the form requested, all documents, data, and information the commission may require to make its determination on zone price adjustments. Any person who refuses or fails to comply with a request for information by the commission shall be subject to a fine of up to $50,000 per day. Each day a violation continues shall constitute a separate offense.

(k) The maximum pre-tax wholesale gasoline price imposed by this section shall take effect on September 1, 2005, notwithstanding the lack of the adoption of rules pursuant to this section.

(l) Any manufacturer, wholesaler, or jobber who knowingly violates any requirement imposed or rule adopted under this section, except for subsection (j), shall be subject to a civil penalty, for each violation, equal to three times the amount of the overcharge or $250,000, whichever is greater, and shall be liable for the costs of the action and reasonable attorney's fees as determined by the court. Within two years from the date the commission obtains actual knowledge of the violation, the commission may institute a civil action in a court of competent jurisdiction to collect the civil penalty, the costs, and attorney's fees. In the case of ongoing violation, the two-year period shall start from the date of the last violation. The commission may refer any such action to the attorney general as it deems appropriate. As used in this subsection, "overcharge" means the number of gallons of gasoline sold, times the wholesale price at which the manufacturer or jobber sold regular unleaded, mid-grade, or premium gasoline to a dealer retail station, an independent retail station, or another jobber or wholesaler, less taxes assessed, less the maximum pre-tax wholesale price established pursuant to subsection (b).

(m) The commission shall have the power to determine the extent to which a manufacturer, wholesaler, or jobber is complying with any requirement imposed or rule adopted under this section, including the power to compel a manufacturer, wholesaler, or jobber to submit documents, data, and information necessary and appropriate for the commission to determine such compliance. The commission may use data collected by the department of business, economic development, and tourism pursuant to chapter 486J, as well as obtain the assistance of that department in determining such compliance.

(n) The commission shall report to the governor and the legislature, in a timely manner, on any significant aberrations, trends, or conditions that may adversely impact the gasoline consumers in the State.

(o) The commission shall adopt rules pursuant to chapter 91 as may be necessary to implement this section and section 486H-16."]

2. By repealing section 486H-15.

["§486H-15 Governor's emergency powers. (a) Notwithstanding any law to the contrary, the governor may suspend, in whole or in part, section 486H-13 or any rule adopted pursuant to that section whenever the governor issues a written determination that strict compliance with the section or a rule will cause a major adverse impact on the economy, public order, or the health, welfare, or safety of the people of Hawaii. In the written determination, the governor shall state the specific provision of the section or rule that strict compliance with will cause a major adverse impact on the economy, public order, or the health, welfare, or safety of the people of the State, along with specific reasons for that determination. The governor shall publish this determination in accordance with section 1-28.5. The suspension shall take effect upon issuance of the written determination by the governor.

(b) Except as provided in subsection (c), the suspension under subsection (a) shall remain in effect until the earlier of:

(c) If the written determination is issued while the legislature is in session, the suspension under subsection (a) shall remain in effect until the earlier of:

provided that if the legislature has passed legislation to address the major adverse impact, and the governor vetoes the presented legislation, the suspension shall terminate on the date of that veto, and the maximum pre-tax wholesale gasoline prices in effect immediately prior to the issuance of the written determination by the governor shall take effect on the day after the date of the veto; and provided further that if no action is taken by the legislature during the regular or special session to address the major adverse impact, then the maximum pre-tax wholesale gasoline prices in effect immediately prior to the issuance of the written determination by the governor shall take effect on the day after adjournment sine die of the regular or special session."]

3. By repealing section 486H-16.

["§486H-16 Adjustments. (a) A manufacturer, wholesaler, or jobber may petition the commission to adjust the maximum pre-tax wholesale price of regular unleaded, mid-grade, or premium gasoline in the event of a change in the value of the baseline price for regular unleaded gasoline, the location adjustment factor, the marketing margin factor, the mid-grade adjustment factor, the premium adjustment factor, or a zone price adjustment. The petitioner shall bear the burden of proof to establish by clear and convincing evidence the need for and the amount of any adjustment. The adjustments shall be determined as follows:

(b) If the commission adjusts the maximum pre-tax wholesale gasoline prices, the commission shall publish its findings and the adjusted prices by means that shall include the Internet website for the State of Hawaii.

(c) Regardless of whether a petition has been filed and notwithstanding a determination of the adjustments made pursuant to subsection (a), the commission, in its discretion, may make such other and further adjustments deemed necessary and appropriate to establish maximum pre-tax wholesale gasoline prices that reflect and correlate with competitive market conditions."]

SECTION 18. On the effective date of this Act, the public utilities commission shall suspend any and all duties with respect to sections 486H-13 and 486H-16, Hawaii Revised Statutes.

PART VI

SECTION 19. 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 to be deposited into the petroleum industry monitoring, analysis, and reporting special fund.

The sum appropriated shall be expended by the public utilities commission for the purposes of this Act.

SECTION 20. There is appropriated out of the petroleum industry monitoring, analysis, and reporting special fund the sum of $           or so much thereof as may be necessary for fiscal year 2006-2007 to establish the petroleum industry monitoring, analysis, and reporting program established under section 486J-B, Hawaii Revised Statutes.

The sum appropriated shall be expended by the public utilities commission for the purposes of this Act.

PART VII

SECTION 21. In codifying the new sections added by section 5 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 22. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 23. This Act shall take effect on July 1, 2020.