Honolulu, Hawaii
                                                   , 1999

                                 RE: H.B. No. 1350
                                     H.D. 1

Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 1999
State of Hawaii


     Your Committee on Energy and Environmental Protection, to
which was referred H.B. No. 1350 entitled: 


begs leave to report as follows:

     The purpose of this bill is to promote the use of recycled
products by state and county procurement agencies by requiring
procurement officers to purchase lubricating and industrial oil
from a seller whose oil contains the greatest percentage of
recycled oil.

     The following testified in support of this measure: the
Department of Business, Economic Development, and Tourism
(DBEDT), the Hawaii Automotive Repair and Gasoline Dealers
Association, Na Leo Pohai, Pacific Island Petroleum, Inc.,
Hon/Hawaii, Cool As New Hawaii Inc., and Environmental Services,

     Your Committee finds that federal procurement laws already
require the use of recycled oil by federal agencies and
contractors who are awarded federal contracts.

     Passage of this bill will help to create a large market for
rerefined diesel.  According to DBEDT, a Honolulu-based company
is considering rerefining used oil into higher value diesel oil
that meets all state and federal laws.  The local product would
have 100 percent recycled content and would benefit from the
"Made in Hawaii" procurement law.

                                 STAND. COM. REP. NO. 423
                                 Page 2


     Just as importantly, the rerefining of oil represents a
clean industry.  The waste product from oil rerefining can be
used as an asphalt component, and the waste gas produced can be
looped back to the furnace to provide a free heat source.

     Your Committee has amended this bill by:

     (1)  Clarifying that an oil product containing a lower
          percentage of recycled oil may be purchased if the oil
          product containing recycled oil is likely to breach a
          warranty that prohibits the use of products containing
          recycled oil as it relates to equipment; and

     (2)  Making technical, nonsubstantive amendments for the
          purpose of clarity.

     As affirmed by the record of votes of the members of your
Committee on Energy and Environmental Protection that is attached
to this report, your Committee is in accord with the intent and
purpose of H.B. No. 1350, as amended herein, and recommends that
it pass Second Reading in the form attached hereto as H.B. No.
1350, H.D. 1, and be referred to the Committee on Judiciary and
Hawaiian Affairs.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Energy and
                                   Environmental Protection,

                                   HERMINA M. MORITA, Chair