REPORT TITLE: 
Gasoline dealers


DESCRIPTION:
Provides that a manufacturer of jobber may operate a retail
service station provided that there be an effective agreement
between the contract dealer and the manufacturer or jobber.
Defines contract dealer as dealer that surrenders its unexpired
franchise and does not sell more than 75,000 gallons of gasoline
per month.  Requires a manufacturer or jobber to report to the
petroleum advisory council for public inspection all changes in
ownership or type of operation involving a branded service
station and contract dealer gasoline sales.  (HB1977 HD2)



 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        1977
HOUSE OF REPRESENTATIVES                H.B. NO.           H.D. 2
TWENTIETH LEGISLATURE, 2000                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                     A BILL FOR AN ACT

RELATING TO GASOLINE DEALERS.



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

 1      SECTION 1.  Section 486H-10.4, Hawaii Revised Statutes, is
 
 2 amended to read as follows:
 
 3      "[[]§486H-10.4[]]  Restrictions on manufacturers or jobbers
 
 4 in operating service stations; lease rent controls; definitions.
 
 5 (a)  Beginning August 1, 1997, no manufacturer or jobber shall
 
 6 convert an existing dealer operated retail service station to a
 
 7 company operated retail service station; provided that nothing in
 
 8 this section shall limit a manufacturer or jobber from:
 
 9      (1)  Continuing to operate any company operated retail
 
10           service stations legally in existence on July 31, 1997;
 
11      (2)  Constructing and operating any new retail service
 
12           stations as company operated retail service stations
 
13           constructed after August 1, 1997, subject to subsection
 
14           (b); or
 
15      (3)  Operating a former dealer operated retail service
 
16           station for up to [twenty-four months]           until
 
17           a replacement dealer can be found if the former dealer
 
18           vacates the service station, cancels the franchise, or
 

 
Page 2                                                     1977
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1           is properly terminated or not renewed[.]; provided
 
 2           that:
 
 3           (A)  The        time limit shall not be applicable so
 
 4                long as there is an effective agreement between a
 
 5                contract dealer and the manufacturer or jobber who
 
 6                owns, leases, or controls the retail service
 
 7                station; and
 
 8           (B)  The manufacturer or jobber shall report to the
 
 9                petroleum advisory council within thirty days
 
10                after the expiration of every six-month period
 
11                commencing from the effective date of the
 
12                agreement between the contract dealer and the
 
13                manufacturer or jobber.  The report shall contain
 
14                the amount of gasoline sold during the six-month
 
15                period, and any other information that the council
 
16                deems necessary to monitor compliance with the
 
17                requirements of this chapter.
 
18      (b)  No new company operated retail service station shall be
 
19 located within one-eighth mile of a dealer operated retail
 
20 service station in an urban area, and within one-quarter mile in
 
21 other areas.  For purposes of this subsection [,]:
 
22      (1)  A contract dealer operated retail service station shall
 
23           not be deemed a new company operated retail service
 
24           station;
 

 
Page 3                                                     1977
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1      (2)  ["urban"] "Urban" means the first congressional
 
 2           district of the State[,]; and]
 
 3      (3)  ["other areas"] "Other areas" means the second
 
 4           congressional district of the State.
 
 5      (c)  All leases as part of a franchise as defined in section
 
 6 486H-1, existing on August 1, 1997, or entered into thereafter,
 
 7 shall be construed in conformity with the following:
 
 8      (1)  Such renewal shall not be scheduled more frequently
 
 9           than once every three years; and
 
10      (2)  Upon renewal, the lease rent payable shall not exceed
 
11           fifteen per cent of the gross sales, except for
 
12           gasoline, which shall not exceed fifteen per cent of
 
13           the gross profit of product, excluding all related
 
14           taxes by the dealer operated retail service station as
 
15           defined in section 486H-1 and 486H-10.4 plus, in the
 
16           case of a retail service station at a location where
 
17           the manufacturer or jobber is the lessee and not the
 
18           owner of the ground lease, a percentage increase equal
 
19           to any increase which the manufacturer or jobber is
 
20           required to pay the lessor under the ground lease for
 
21           the service station.  For the purposes of this
 
22           subsection, "gross amount" means all monetary earnings
 
23           of the dealer from a dealer operated retail service
 

 
Page 4                                                     1977
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1           station after all applicable taxes, excluding income
 
 2           taxes, are paid.
 
 3 The provisions of this subsection shall not apply to any existing
 
 4 contracts that may be in conflict with its provisions.
 
 5      (d)  Nothing in this section shall prohibit a dealer from
 
 6 selling a retail service station in any manner.
 
 7      (e)  Every manufacturer or jobber shall report to the
 
 8 petroleum advisory council:
 
 9      (1)  All changes in ownership or type of operation involving
 
10           a branded service station within fourteen days of any
 
11           change; and
 
12      (2)  Contract dealer gasoline sales under subsection (a).
 
13      [(e)] (f)  For the purposes of this section:
 
14      "Company operated retail service station" means a retail
 
15 service station owned and operated by a manufacturer or jobber
 
16 and where retail prices are set by that manufacturer or jobber.
 
17      "Contract dealer" means a dealer operated retail service
 
18 station:
 
19      (1)  That surrenders its unexpired franchise agreement to
 
20           the manufacturer or jobber who owns, leases or controls
 
21           the retail service station in consideration for an
 
22           agreement with the manufacturer or jobber to operate
 
23           the retail service station on mutually acceptable
 
24           terms; and
 

 
Page 5                                                     1977
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1      (2)  Who does not sell at retail more than an average of
 
 2           75,000 gallons of gasoline per month for every six
 
 3           month period in the operation of the retail service
 
 4           station as reported to the petroleum advisory council
 
 5           pursuant to section 486H-10.4(a)(3)(B). 
 
 6      "Dealer operated retail service station" means a retail
 
 7 service station owned by a manufacturer or jobber and operated by
 
 8 a qualified gasoline dealer under a franchise.
 
 9      "Operate" means to engage in the business of selling motor
 
10 vehicle fuel at a retail service station through any employee,
 
11 commissioned agent, subsidiary company, or person managing a
 
12 retail service station under a contract and on a fee arrangement
 
13 with the manufacturer or jobber.
 
14      "Retail" means a sale of gasoline made to the general public
 
15 at prices that are displayed on the dispensing equipment."
 
16      SECTION 2.  Section 486J-22, Hawaii Revised Statutes, is
 
17 amended to read as follows:
 
18      "[[]§486J-22[]]  Duties of the council.  The council shall:
 
19      (1)  Advise the department of trends and activities in the
 
20           retail petroleum industry that may require statutory
 
21           consideration; [and]
 

 
 
 
 
 
Page 6                                                     1977
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1      (2)  Make available for inspection by the public:
 
 2           (A)  All reports prepared by a manufacturer or jobber
 
 3                under section 486H-10.4 relating to any changes in
 
 4                ownership or type of operation involving a branded
 
 5                service station; and
 
 6           (B)  Contract dealer gasoline sales;
 
 7           and 
 
 8     [(2)] (3)  Take such other action as may be necessary to
 
 9           ensure that the department is informed of all relevant
 
10           developments in the retail petroleum industry affecting
 
11           the health, safety, and welfare of the people of this
 
12           State."
 
13     SECTION 3.  Statutory material to be repealed is bracketed.
 
14 New statutory material is underscored.
 
15     SECTION 4.  This Act shall take effect                    .