§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)  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)  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 collected
pursuant to chapter 486J in determining such compliance.



(o)  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)  The commission
may adopt rules pursuant to chapter 91 as may be necessary to implement this
section and section 486H-16. [L 2002, c 77, pt of §2(1); am L 2004, c 242, §3;
am L 2006, c 78, §17]



 



Note



 



  The effective date of Act 78,
Session Laws of Hawaii 2006 is May 5, 2006.



 



Law Journals and Reviews



 



  Price Controls in Paradise: 
Foreshadowing the Legal and Economic Consequences of Hawai‘i's Gasoline Price
Cap Law.  27 UH L. Rev. 549.