REPORT TITLE:
Petroleum Control Commission


DESCRIPTION:
Establishes the petroleum control commission in the department of
business, economic development, and tourism to regulate and
control petroleum refining and sales of petroleum products in the
State.  Empowers the commission to authorize new retail service
stations and determine whether they may be operated by a
petroleum utility; restrict price increases when prices rise
above a certain percentage over a benchmark market, as determined
by rules adopted by the commission; decide when a utility may
convert a station from one operated by a dealer to one operated
by a utility, and vice versa; and decide when a utility may close
a station, to prevent communities from being underserved.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        
HOUSE OF REPRESENTATIVES                H.B. NO.93         
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
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                     A BILL FOR AN ACT

RELATING TO THE ESTABLISHMENT OF A PETROLEUM CONTROL COMMISSION.



BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1      SECTION 1.  The legislature finds that:
 
 2      (1)  The general welfare and prosperity of the State is
 
 3           dependent upon the availability of an adequate supply
 
 4           of oil;
 
 5      (2)  Hawaii is unique among the states in that it does not
 
 6           have any indigenous energy sources, such as coal,
 
 7           natural gas, or hydroelectric power, and is therefore
 
 8           currently dependent upon imports of petroleum to meet
 
 9           its energy needs;
 
10      (3)  Petroleum is used to generate electricity and
 
11           manufacture synthetic gas;
 
12      (4)  The cost of petroleum is a factor in the cost of every
 
13           item produced or consumed in Hawaii and is shared by
 
14           every user of electricity and propane gas, and by every
 
15           automobile user;
 
16      (5)  The State is seeking to expand its economy, attract new
 
17           industries, and develop itself into a Pacific trade
 
18           center; and
 
19      (6)  Petroleum and petroleum products, the dominant energy
 
20           source for the State, are crucial factors in this
 
21           endeavor.
 
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 1      The purpose of this Act is to regulate and control petroleum
 
 2 refining and sales of petroleum products in Hawaii.
 
 3      SECTION 2.  The Hawaii Revised Statutes is amended by adding
 
 4 a new chapter to be appropriately designated and to read as
 
 5 follows:
 
 6                             "CHAPTER
 
 7                   PETROLEUM CONTROL COMMISSION
 
 8         -1  Definitions.  As used in this chapter:
 
 9      "Commission" means the petroleum control commission.
 
10      "Department" means the department of business, economic
 
11 development, and tourism.
 
12      "Director" means the director of business, economic
 
13 development, and tourism.
 
14      "Gasoline dealer" has the same meaning as defined in section
 
15 486H-1.
 
16      "Petroleum product" has the same meaning as defined in
 
17 section 486H-1.
 
18      "Petroleum utility" includes any person, or the person's
 
19 lessee, trustee, or receiver, who owns, manages, operates,
 
20 leases, or controls within this State any pipeline, plant,
 
21 property, equipment, facility, franchise, license, or permit for
 
22 producing, obtaining, refining, processing, transporting,
 
23 conveying, distributing, delivering, or furnishing crude
 
24 petroleum oil or petroleum products, at wholesale or retail.
 

 
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 1      "Retail service station" has the same meaning as defined in
 
 2 section 486H-1.
 
 3         -2  Petroleum control commission; number; appointment of
 
 4 commissioners.  There is established within the department of
 
 5 business, economic development, and tourism a petroleum control
 
 6 commission, consisting of five members who shall be appointed in
 
 7 the manner prescribed in section 26-34.  No member of the
 
 8 commission shall be a salaried officer or employee of the State.
 
 9 Two members shall be appointed from the city and county of
 
10 Honolulu and one from each of the counties of Hawaii, Maui, and
 
11 Kauai.  The commission shall elect a chairperson from among its
 
12 members.  Each of the members shall receive compensation at the
 
13 rate of $      a day while actually engaged in the performance of
 
14 the member's duties as commissioner and reimbursement for
 
15 expenses, including travel expenses, incurred in the discharge of
 
16 their duties; provided that no member of the commission shall
 
17 receive more than $      in compensation for services for any
 
18 twelve-month period.  No person owning any stock or bonds of any
 
19 petroleum corporation or having any interest in, or deriving any
 
20 remuneration from, petroleum shall be appointed to, or employed
 
21 by the commission.
 
22         -3  Employment of assistants.  The director of business,
 
23 economic development, and tourism may appoint, subject to
 

 
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 1 chapters 76 and 77, clerks, stenographers, agents, engineers,
 
 2 accountants, and other assistants for the petroleum control
 
 3 commission as may be necessary.  The director may appoint a chief
 
 4 administrator who shall be exempt from chapters 76 and 77.  The
 
 5 attorney general or deputy attorneys general shall act as
 
 6 attorneys for the commission.
 
 7         -4  General duties and powers.  The commission shall:
 
 8      (1)  Have general supervision over all petroleum utilities
 
 9           in this State; 
 
10      (2)  Authorize new retail service stations and determine
 
11           whether they may be operated by a petroleum utility.
 
12           For the purposes of this section, the term "operate"
 
13           has the same meaning as defined in section 486H-10(b);
 
14      (3)  Restrict price increases when prices rise above a
 
15           certain percentage over a benchmark market, as
 
16           determined by rules adopted by the commission under
 
17           chapter 91;
 
18      (4)  Decide when a petroleum utility may convert a retail
 
19           service station from one operated by a gasoline dealer
 
20           to one operated by a petroleum utility, and vice versa;
 
21      (5)  Decide when a petroleum utility may close a retail
 
22           service station, to prevent communities from being
 
23           underserved; and
 
24      (6)  Enforce this chapter.
 

 
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 1         -5  Petroleum utilities to furnish information.  Every
 
 2 petroleum utility shall at all times, upon request, furnish to
 
 3 the commission all information the commission may require with
 
 4 respect to any of the matters within its jurisdiction, and the
 
 5 petroleum utility shall permit the examination of its books,
 
 6 records, contracts, maps, and other documents by the commission
 
 7 or any person authorized by it in writing to make an examination,
 
 8 and shall furnish the commission with a complete inventory of its
 
 9 property in such form as the commission may direct.
 
10         -6  Rates to be published.  The rates, fares,
 
11 classifications, and rules of every petroleum utility shall be
 
12 published by the petroleum utility in such manner as the
 
13 commission may require, and copies shall be furnished to any
 
14 person on request.
 
15         -7  Penalty; injunction.  Any petroleum utility
 
16 violating, neglecting, or failing in any particular to conform to
 
17 or comply with this chapter or any order of the commission shall
 
18 forfeit to the State not more than $10,000 for every violation,
 
19 neglect, or failure, to be recovered by action brought in the
 
20 name of the State by the commission.  Each day of violation shall
 
21 be a separate violation.  A petroleum utility may be enjoined by
 
22 the circuit court from carrying on its business while the
 
23 violation, neglect, or failure continues.
 

 
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 1         -8  Rulemaking.  The commission shall adopt rules in
 
 2 accordance with chapter 91, as may be necessary to implement this
 
 3 chapter.
 
 4         -9  Annual report.  The petroleum control commission
 
 5 shall prepare and present to the governor and the legislature,
 
 6 through the director, in January of each year, a report relating
 
 7 to its actions during the preceding fiscal year, including any
 
 8 recommendations for legislation."
 
 9      SECTION 3.  This Act shall take effect upon its approval.
 
10 
 
11                           INTRODUCED BY:  _______________________