STAND. COM. REP. NO. 3403

 

Honolulu, Hawaii

                  

 

RE:    H.B. No. 3407

       H.D. 1

       S.D. 1

 

 

 

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fourth State Legislature

Regular Session of 2008

State of Hawaii

 

Madam:

 

     Your Committees on Energy and Environment and Commerce, Consumer Protection, and Affordable Housing, to which was referred H.B. No. 3407, H.D. 1, entitled:

 

"A BILL FOR AN ACT RELATING TO GASOLINE DEALERS,"

 

beg leave to report as follows:

 

     The purpose of this measure is to remove the restriction on converting an existing gasoline dealer retail station to a company retail station by a gasoline manufacturer or petroleum products wholesaler (jobber).

 

     Specifically, this measure repeals the gasoline service station anti-encroachment laws under chapter 486H, Hawaii Revised Statutes.

 

     Testimony in support of this measure was submitted by the Western States Petroleum Association; Aloha Petroleum, Ltd.; Mid Pac Petroleum, LLC; Kahala Shell Auto Care; and four private citizens.  Testimony in opposition to this measure was submitted by Aiea Shell; Aloha Shell Service; and one private citizen.  Comments were submitted by the Department of Economic Development, and Tourism (DBEDT).

 

     Your Committees are aware of the concern that, by allowing existing dealer gasoline stations to be converted into company stations, this measure may have the unintended effect of creating a more concentrated market with fewer competitors, resulting in higher prices.

 

     However, testimony from DBEDT noted that economic research published by the Federal Trade Commission in 1999 indicates that divorcement and anti-encroachment laws tend to increase retail gasoline prices.  In addition, DBEDT pointed out that Hawaii's divorcement law previously stifled the efforts of a refinery to create a low-priced volume retail business.  Therefore, this measure may benefit the public by helping to lower gasoline prices.

 

     As gasoline prices affect every person and business in this State, your Committees find that the important issues raised by this measure should be further explored by the Legislature in conference committee.

 

     Accordingly, your Committees have amended this measure by changing the effective date to July 1, 2050, to ensure further discussion and consideration.

 

     As affirmed by the records of votes of the members of your Committees on Energy and Environment and Commerce, Consumer Protection, and Affordable Housing that are attached to this report, your Committees are in accord with the intent and purpose of H.B. No. 3407, H.D. 1, as amended herein, and recommend that it pass Second Reading in the form attached hereto as H.B. No. 3407, H.D. 1, S.D. 1, and be placed on the calendar for Third Reading.

 

Respectfully submitted on behalf of the members of the Committees on Energy and Environment and Commerce, Consumer Protection, and Affordable Housing,

 

____________________________

RUSSELL S. KOKUBUN, Chair

 

____________________________

RON MENOR, Chair