SB1419 HD1

SECTION 1. Hawaii's geographic isolation has made it particularly vulnerable to high gasoline prices, particularly during abnormal disruptions of the gasoline market. Gasoline is one product that consumers cannot do without. No one should be allowed to take advantage of abnormal market conditions to gouge Hawaii consumers of this precious resource.

Due to recent catastrophic events, the cost of gasoline has become a concern for consumers nationally and locally. The purpose of this Act is to protect Hawaii consumers from price gouging in the purchase of gasoline during periods of abnormal disruption of the marketplace caused by extraordinary adverse circumstances.

Currently, absent a local natural disaster, or a formal declaration of emergency by the governor, the only way that the State can prosecute someone for price gouging is pursuant to the unfairness doctrine of chapter 480, Hawaii Revised Statutes. This Act will enhance enforcement authority by specifically making it an unlawful trade practice for any gasoline-related business to sell or offer to sell any gasoline product for an amount that represents an unconscionably excessive price during any abnormal disruption of the market, whether that disruption occurred in Hawaii or in other parts of the world.

SECTION 2. Section 486B-1, Hawaii Revised Statutes, is amended by adding two new definitions to be appropriately inserted and to read as follows:

""Abnormal disruption of the market" means any change in the market resulting from an actual or imminently threatened stress of weather, convulsion of nature, failure or shortage of electric power or other source of energy, strike, civil disorder, war, military action, or national or local emergency.

"Unconscionably excessive price" means a price at which the amount charged represents a gross disparity between the price of the gasoline product and:

(1) The price at which the same grade of gasoline product was sold or offered for sale by the gasoline-related business in the usual course of business immediately prior to the onset of the abnormal disruption of the market; or

(2) The price at which the same or similar grade of gasoline product is readily obtainable by other buyers in the trade area;

and the disparity is not substantially attributable to increased prices charged by suppliers to the gasoline-related business or increased costs attributable to market forces beyond the control of the gasoline-related business selling or offering to sell the gasoline product."

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

"[[]§486B‑3[]] Unlawful profiteering. Any person who sells petroleum products and who, with intent to enhance the price or restrict the supply of petroleum products:

(1) Wilfully causes or permits preventable waste in the production, manufacture, storage, or distribution of petroleum products;

(2) Prevents, limits, lessens, or restricts the manufacture, production, supply, or distribution of petroleum products;

(3) Enters into any contract, combination, or conspiracy in restraint of trade or commerce;

(4) Exacts or demands any unjust or unreasonable profit in the sale, exchange, or handling of petroleum products; [or]

(5) Sells or offers to sell gasoline at an unconscionably excessive price during any abnormal disruption of the market; or

[~~(5)~~] (6) In any way aids or abets the doing of any act prohibited in paragraphs (1) to [~~(4),~~] (5),

commits an unlawful trade practice."

SECTION 4. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun, before its effective date.

SECTION 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 6. This Act shall take effect upon its approval.

THE SENATE	S.B. NO.	1419
TWENTY-FOURTH LEGISLATURE, 2007		S.D. 1
STATE OF HAWAII		H.D. 1