SB1632

SECTION 1. 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 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:

(1) The weekly average of the spot daily price for conventional regular unleaded gasoline for Los Angeles;

(2) The weekly average of the spot daily price for conventional regular unleaded gasoline for New York Harbor;

(3) The weekly average of the spot daily price for conventional regular unleaded gasoline for the United States Gulf Coast; and

(4) The weekly average of the spot daily price for conventional regular unleaded gasoline for Singapore,

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

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

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

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

(1) Zone 1 shall include the island of Oahu;

(2) Zone 2 shall include the island of Kauai;

(3) Zone 3 shall include the island of Maui, except the district of Hana;

(4) Zone 4 shall include the district of Hana on the island of Maui;

(5) Zone 5 shall include the island of Molokai;

(6) Zone 6 shall include the island of Lanai;

(7) Zone 7 shall include the districts of Puna, south Hilo, north Hilo, and Hamakua on the island of Hawaii; and

(8) Zone 8 shall include the districts of north Kohala, south Kohala, north Kona, south Kona, and Kau on the island of Hawaii.

(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, set forth in subsection (g), shall be divided as follows:

(1) Thirty per cent of the zone price adjustment shall be allocated to the shipper of the gasoline from zone to zone;

(2) Twenty per cent of the zone price adjustment shall be allocated to the terminal holding the gasoline in zones 2 through 8; and

(3) Fifty per cent of the zone price adjustments shall be allocated to the person or entity that delivers the gasoline to the retail station in zones 2 through 8.

(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[; provided that notwithstanding any law to the contrary, the maximum pre-tax wholesale price under this section shall be suspended indefinitely upon the effective date of Act 78, Session Laws of Hawaii 2006, and shall not thereafter become effective until and unless the governor publishes a notice statewide in accordance with section 1-28.5 that the reinstatement of the maximum pre-tax wholesale price under this section is beneficial to the economic well-being, health, and safety of the people of the State. The maximum pre-tax wholesale price shall become effective five days after the publication of the notice by the governor unless otherwise specified by the governor, and shall remain in effect for thirty days, after which time it shall be automatically suspended. Thereafter, the governor may reinstate the maximum pre-tax wholesale price for thirty-day periods on the same conditions as set forth above. Upon a finding that the maximum pre-tax wholesale price would impose a financial hardship upon a distributor within a zone, the governor, in the governor's discretion, may increase the maximum pre-tax wholesale price for the zone in an amount determined necessary to eliminate the financial hardship on any affected distributor who does not operate a refinery within the State. Any increase in the maximum pre-tax wholesale price shall be included in the notice published by the governor.

(l) The suspension of the maximum pre-tax wholesale gasoline price shall suspend the commission's duty to calculate and publish the maximum pre-tax wholesale gasoline price that would have been in effect but for the suspension, but shall not suspend or affect:

~~(1)~~ ~~Any duty to register, timely provide information, make a report, or file a statement under chapter 486J; or~~

~~(2)~~ ~~Any duty of the commission to:~~

~~(A)~~ ~~Timely obtain, analyze, or publicly disclose or report information under chapter 486J; and~~

~~[(B)]~~ ~~Enforce chapter 486B~~].

[~~(m)~~](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 gasoline price established pursuant to subsection (b).

[~~(n)~~](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 pursuant to chapter 486J collected in determining such compliance.

[~~(o)~~](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.

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

SECTION 2. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 3. This Act shall take effect upon its approval.

INTRODUCED BY:	_____________________________

THE SENATE	S.B. NO.	1632
TWENTY-FOURTH LEGISLATURE, 2007
STATE OF HAWAII