STAND. COM. REP. NO. 116________

                                 Honolulu, Hawaii
                                                   , 1999

                                 RE: H.B. No. 376
                                     H.D. 1




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

Sir:

     Your Committee on Economic Development and Business
Concerns, to which was referred H.B. No. 376 entitled: 

     "A BILL FOR AN ACT RELATING TO PUBLIC UTILITIES,"

begs leave to report as follows:

     The purpose of this bill is to enable the Public Utilities
Commission (PUC) to more effectively handle its regulatory
responsibilities by:

     (1)  Creating two panels within the PUC as follows:  one to
          be assigned jurisdiction over the regulation of public
          telecommunications services and the other to be
          assigned jurisdiction over all other utility matters;
          and

     (2)  Double the number of PUC commissioners from three to
          six. 

     Hawaiian Electric Company, Inc., while supporting the intent
of the bill, could not support increasing the number of the PUC
commissioners when the State is having difficulty meeting
existing needs.  The PUC, the Division of Consumer Advocacy of
the Department of Commerce and Consumer Affairs, GTE, AT&T, Kauai
Electric, and the Gas Company opposed this bill.

     Based on the testimony presented, your Committee finds that
the creation of two separate panels in the PUC will create

 
 
 
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                                 Page 2

 
unnecessary duplication and is not the most cost-effective means
of addressing the growing needs of the PUC.

     Further, your Committee has been made aware that it may not
be in the best public interest to continue regulating motor
carriers.   For one thing, the motor carrier industry is not a
naturally monopolistic industry.  In addition, federal law
governs motor carrier activity and, at the state level, the
Department of Transportation regulates motor carrier safety.

     As a result, your Committee finds that removing the
regulation of motor carriers from the scope of PUC
responsibilities may be a more effective way of helping the PUC
conduct its business more efficiently.  Accordingly, your
Committee has amended this bill by deleting its substance and
instead inserting provisions that would deregulate all state-
regulated aspects of motor carriers, except for the regulation of
motor carrier safety, which will continue to be regulated by the
Department of Transportation.

     Your Committee recognizes the complex nature of the existing
motor carrier law and that it encompasses many considerations,
such as the financial viability of the motor carrier, sufficient
bond and insurance coverage, and motor carrier safety.  As such,
your Committee requests subsequent committees to consider whether
these issues are adequately addressed.

     As affirmed by the record of votes of the members of your
Committee on Economic Development and Business Concerns that is
attached to this report, your Committee is in accord with the
intent and purpose of H.B. No. 376, as amended herein, and
recommends that it pass Second Reading in the form attached
hereto as H.B. No. 376, H.D. 1, and be referred to the Committee
on Transportation.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Economic
                                   Development and Business
                                   Concerns,



                                   ______________________________
                                   ROBERT N. HERKES, Chair