Report Title:
Energy Efficiency in State Facilities; Maximum Wholesale Gasoline Prices
Description:
Adds a new part to chapter 196, HRS, energy efficiency in state facilities; Requires DBEDT to establish quarterly, maximum wholesale gasoline price for Hawaii based on the average price of crude oil prices in four markets, prohibits oil companies from charging more than the maximum price to retailers, establishes civil penalties. (SB2179 HD1)
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THE SENATE |
S.B. NO. |
2179 |
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TWENTY-FIRST LEGISLATURE, 2002 |
S.D. 2 |
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STATE OF HAWAII |
H.D. 1 |
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A BILL FOR AN ACT
relating to energy resources.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
PART I. ENERGY RESOURCES
SECTION 1. Chapter 196, Hawaii Revised Statutes, is amended by adding a new part to be appropriately designated and to read as follows:
"Part . ENERGY EFFICIENCY in STATE facilities
§196-A Definitions. As used in this part:
"Acquisition" means acquiring by contract supplies or services, including construction, by and for the use of the State through purchase or lease, whether the supplies or services are already in existence or must be created, developed, demonstrated, or evaluated. Acquisition begins at the point when agency needs are established and includes the description of requirements to satisfy agency needs, solicitation and selection of sources, award of contracts, contract financing, contract performance, contract administration, and those technical and management functions directly related to the process of fulfilling agency needs by contract.
"Agency" means any executive department, independent commission, board, bureau, office, or other establishment of the State, or any quasi-public institution that is supported in whole or in part by state funds.
"Energy-savings performance contract" means an agreement for the provision of energy services and equipment, including building energy conservation enhancing retrofits and alternate energy technologies, in which a private sector person or company agrees to finance, design, construct, install, maintain, operate, or manage energy systems or equipment to improve the energy efficiency of, or produce energy in connection with, a facility in exchange for a portion of the cost savings, lease payments, or specified revenues including utility rebates and any other available incentives, and the level of payments is made contingent upon the verified energy savings, energy production, avoided maintenance, avoided energy equipment replacement, or any combination of the foregoing bases.
"ENERGY STAR" means a labeling program introduced by the United States Environmental Protection Agency in 1992 as a voluntary labeling program designed to identify and promote energy-efficient products, in order to reduce carbon dioxide emissions.
"Exempt facility" or "exempt mobile equipment" means a facility or mobile equipment for which an agency utilizes criteria established by the energy resources coordinator to determine that compliance with this part is not practical.
"Facility" means a building or buildings or similar structure owned or leased by, or otherwise under the jurisdiction of, an agency.
"Life-cycle cost-effective" means the life-cycle costs of a product, project, or measure that are estimated to be equal to or less than the base case, i.e., current or standard practice or product.
"Life-cycle costs" means the sum of the present values of investment costs, capital costs, installation costs, energy costs, operating costs, maintenance costs, and disposal costs, over the lifetime of the project, product, or measure.
"Mobile equipment" means any state-owned vessel, aircraft, or off-road vehicle.
"Renewable energy" means energy produced by solar, energy conserved by passive solar design/daylighting, ocean thermal, wind, wave, geothermal, waste-to-energy, or biomass power.
"Renewable energy technology" means technology that uses renewable energy to provide light, heat, cooling, or mechanical or electrical energy for use in facilities or other activities. The term includes the use of integrated whole-building designs that rely upon renewable energy resources, including passive solar design/daylighting.
"Source energy" means the energy that is used at a site and consumed in producing and delivering energy to a site, including power generation, transmission, and distribution losses, and that is used to perform a specific function, such as space conditioning, lighting, or water heating.
"Utility" means a public utility as defined in section 269-1. Utility includes federally owned nonprofit producers, county organizations, and investor or privately owned producers regulated by the state or federal government, cooperatives owned by members and providing services mostly to their members, and other nonprofit state and county agencies serving in this capacity.
"Utility energy-efficiency service" means demand-side management services provided by a utility to improve the efficiency of use of the commodity, such as electricity and gas being distributed. Services may include energy efficiency and renewable energy project auditing, financing, design, installation, operation, maintenance, and monitoring.
§196-B Greenhouse gases reduction goal. Through life-cycle cost-effective energy measures, each agency shall reduce its greenhouse gas emissions attributed to facility energy use by thirty per cent by January 1, 2012, compared to emission levels in calendar year 1990. In order to encourage optimal investment in energy improvements, agencies may count greenhouse gas reductions from improvements in non-facility energy use toward this goal to the extent that these reductions are approved by the coordinator.
§196-C Energy efficiency improvement goals. (a) Through life-cycle cost-effective measures, each agency shall reduce energy consumption per gross square foot of its facilities, excluding laboratory facilities, by twenty per cent by January 1, 2007, and thirty per cent by January 1, 2012, relative to calendar year 1990. No facility shall be exempt from these goals unless it meets criteria for exemptions established by the coordinator.
(b) Through life-cycle cost-effective measures, each agency shall reduce energy consumption per square foot, per unit of production, or per other unit as applicable, of its laboratory facilities by fifteen per cent by January 1, 2007, and twenty-five per cent by January 1, 2012, relative to calendar year 1995. No facility shall be exempt from these goals unless it meets criteria for exemptions established by the coordinator.
(c) Each agency shall strive to expand the use of renewable energy within its facilities and in its activities by implementing renewable energy projects and by purchasing electricity from renewable energy sources. Through life-cycle cost-effective measures, each agency shall provide twenty per cent of its remaining energy requirements, after energy efficiency improvement goals have been achieved, with renewable energy resources.
(d) Through life-cycle cost-effective measures, each agency shall reduce the use of petroleum generated energy within its facilities. Agencies may accomplish this reduction by switching to less greenhouse gas-intensive or renewable energy sources, by eliminating unnecessary fuel use, or by other appropriate methods. Where alternative fuels are not practical or life-cycle cost-effective, agencies shall strive to improve the efficiency of their facilities.
(e) The State shall strive to reduce total energy use and associated greenhouse gas and other air emissions, as measured at the source. To that end, agencies shall undertake life-cycle cost-effective projects in which source energy decreases, even if site energy use increases. In those cases, agencies shall receive credit toward energy reduction goals through guidelines established by the coordinator.
(f) Through life-cycle cost-effective measures, agencies shall reduce water consumption and associated energy use in their facilities to reach the goals set under this part. Where possible, water cost savings and associated energy cost savings shall be included in energy-savings performance contracts and other financing mechanisms.
(g) Each agency's biennial budget submission shall include funding necessary to achieve the goals of this part. Budget submissions shall include the costs associated with encouraging the use of, administering, and fulfilling agency responsibilities under energy-savings performance contracts, utility energy-efficiency service contracts, and other contractual provisions for achieving conservation goals implementing life-cycle cost-effective measures, procuring life-cycle cost-effective products, and constructing sustainably designed new buildings, among other energy costs.
The director of finance shall issue guidelines to assist agencies in developing appropriate requests that support sound investments in energy improvements and energy-using products, and shall consider establishing a fund that agencies may draw on to finance exemplary energy management activities and investments with higher initial costs but lower life-cycle costs.
(h) Each agency shall develop an annual implementation plan for fulfilling the requirements of this part. The plans shall be included in the annual reports to the coordinator.
§196-D Annual report. Beginning January 1, 2004, each agency shall measure and report annually to the coordinator on its progress in meeting the requirements of this part.
The report shall include:
(1) How the agency is using each of the strategies described in this part to help meet energy and greenhouse gas reduction goals;
(2) A listing and explanation as to why certain strategies, if any, have not been used; and
(3) A listing and explanation of exempt facilities.
§196-E Senior agency official. Each agency shall designate a senior official to be responsible for meeting the goals and requirements of this part, including preparation of the annual report. Designated officials shall participate in the interagency energy policy committee established under section 196-G(c).
§196-F Agency energy teams. Each agency shall form a technical support team consisting of appropriate procurement, legal, budget, management, and technical representatives to expedite and encourage the agency’s use of appropriations, energy-savings performance contracts, and other alternative financing mechanisms necessary to meet the goals and requirements of this part. Agency energy team activities shall be undertaken in collaboration with each agency's representative to the interagency energy policy committee.
§196-G Interagency coordination; policy committee. (a) The coordinator shall be responsible for evaluating each agency’s progress in improving energy management and for submitting agency energy scorecards to the governor and the legislature to report progress.
The coordinator, in consultation other agencies, shall develop the agency energy scorecards and scoring system to evaluate each agency’s progress in meeting the goals of this part. The scoring criteria shall include:
(1) The extent to which agencies are taking advantage of key tools to save energy and reduce greenhouse gas emissions, such as energy-savings performance contracts, utility energy-efficiency service contracts, ENERGY STAR and other energy efficient products, renewable energy technologies, electricity from renewable energy sources, and other strategies and requirement;
(2) Overall efficiency;
(3) Greenhouse gas reduction; and
(4) Use of other innovative energy efficiency practices. The scorecards shall be based on the annual energy reports submitted to the coordinator.
(b) The coordinator shall be responsible for working with agencies to ensure that they meet the goals of this part and report their progress. The coordinator shall develop and issue guidelines for agencies’ preparation of their annual reports to the coordinator on energy management. The coordinator shall also have primary responsibility for collecting and analyzing the data and shall ensure that agency reports are received in a timely manner.
(c) There is established within the department of business, economic development, and tourism, an interagency energy policy committee consisting of senior agency officials, to be chaired by the coordinator. The committee shall be responsible for encouraging implementation of energy efficiency policies and practices. The major energy-consuming agencies, as designated by the coordinator, shall participate on the committee. The committee shall communicate its activities to all designated senior agency officials to promote coordination and achievement of the goals of this part.
§196-H Public-private advisory committee. (a) The coordinator shall appoint an advisory committee consisting of representatives from:
(1) State agencies;
(2) County governments;
(3) Energy service companies;
(4) Utility companies;
(5) Equipment manufacturers;
(6) Construction and architectural companies;
(7) Environmental, energy, and consumer groups; and
(8) Other energy-related organizations.
(b) The committee shall provide input on state energy management, including how to:
(1) Improve the use of energy-savings performance contracts and utility energy-efficiency service contracts;
(2) Improve procurement of ENERGY STAR and other energy efficient products;
(3) Improve building design;
(4) Reduce process energy use; and
(5) Enhance applications of efficient and renewable energy technologies at state facilities.
(c) The committee shall be placed in the department of business, economic development, and tourism for administration purposes.
§196-I Life-cycle cost analysis. Agencies shall use life-cycle cost analysis in making decisions about their investments in products, services, construction, and other projects to lower the State's costs and to reduce energy and water consumption. Where appropriate, agencies shall consider the life-cycle costs of combinations of projects, particularly to encourage bundling of energy efficiency projects with renewable energy projects.
Agencies shall retire inefficient equipment on an accelerated basis where replacement results in lower life-cycle costs. Agencies that minimize life-cycle costs with efficiency measures shall be recognized in their scorecard evaluations established under section 196-G(a).
§196-J Facility energy audits. Agencies shall conduct energy and water audits for approximately ten per cent of their facilities each year, either independently or through energy-savings performance contracts or utility energy-efficiency service contracts.
§196-K Financing mechanisms. (a) Agencies shall maximize their use of available alternative financing contracting mechanisms, including energy-savings performance contracts and utility energy-efficiency service contracts, when life-cycle cost-effective, to reduce energy use and cost in their facilities and operations. Energy-savings performance contracts and utility energy-efficiency service contracts shall provide significant opportunities for making state facilities more energy efficient at no net cost to taxpayers.
(b) Agencies that perform energy efficiency and renewable energy system retrofitting may continue to receive budget appropriations for energy expenditures at an amount that will not fall below the pre-retrofitting energy budget but will rise in proportion to any increase in the agency's overall budget for the duration of the performance contract or project payment term. A portion of the moneys saved through efficiency and renewable energy system retrofitting shall be set aside to pay for any costs directly associated with administering energy efficiency and renewable energy system retrofitting programs incurred by the agency.
(c) Notwithstanding any law to the contrary relating to the award of public contracts, any agency desiring to enter into an energy performance contract shall do so in accordance with the following provisions:
(1) The agency shall issue a public request for proposals, advertised in the same manner as provided in chapter 103D, concerning the provision of energy efficiency services or the design, installation, operation, and maintenance of energy equipment, or both. The request for proposals shall contain terms and conditions relating to submission of proposals, evaluation, and selection of proposals, financial terms, legal responsibilities, and other matters as may be required by law and as the agency determines appropriate;
(2) Upon receiving responses to the request for proposals, the agency may select the most qualified proposal or proposals on the basis of the experience and qualifications of the proposers, the technical approach, the financial arrangements, the overall benefits to the agency, and other factors determined by the agency to be relevant and appropriate;
(3) The agency thereafter may negotiate and enter into an energy performance contract with the person or company whose proposal is selected as the most qualified based on the criteria established by the agency;
(4) The term of any energy performance contract entered into pursuant to this section shall not exceed fifteen years;
(5) Any energy performance contract may provide that the agency ultimately shall receive title to the energy system being financed under the contract; and
(6) Any energy performance contract shall provide that total payments shall not exceed total savings.
§196-L State energy projects. State energy projects may be implemented under this chapter with the approval of the comptroller and the director of finance. Notwithstanding section 196-K or 36-41, the comptroller or the senior agency official of the department of accounting and general services, along with the director of finance, may exempt a state energy project from the advertising and competitive bidding requirements of section 196-K or 36-41 and chapters 103 and 103D, if the comptroller deems exemption appropriate for energy projects with proprietary technology or necessary to meet the goals of the legislature. In addition, this section shall be construed to provide the greatest possible flexibility to agencies in structuring agreements entered into so that economic benefits and existing energy incentives may be used and maximized and financing and other costs to agencies may be minimized. The specific terms of energy performance contracting under section 36-41 may be altered if deemed advantageous to the agency and approved by the director of finance and the senior agency official.
§196-M Energy efficient products. (a) Agencies shall select, where life-cycle cost-effective, ENERGY STAR and other energy efficient products when acquiring energy-using products. For product groups where ENERGY STAR labels are not yet available, agencies may select products that are in the upper twenty-five per cent of energy efficiency as designated by the United States Department of Energy, Office of Energy Efficiency and Renewable Energy, Federal Energy Management Program.
Agencies shall incorporate energy efficient criteria consistent with designated energy efficiency levels into all guide specifications and project specifications developed for new construction and renovation, as well as into product specification language developed for all purchasing procedures.
The State shall also consider the creation of financing agreements with private sector suppliers to provide private funding to offset higher up-front costs of efficient products.
(b) Agencies shall strive to meet the ENERGY STAR building criteria for energy performance and indoor environmental quality in their eligible facilities to the maximum extent practicable by December 31, 2005. Agencies may use energy-savings performance contracts, utility energy-efficiency service contracts, or other means to conduct evaluations and make improvements to facilities. Facilities that rank in the top twenty-five per cent in energy efficiency relative to comparable commercial and state buildings shall receive the ENERGY STAR building label or its equivalent as determined by the coordinator. Agencies shall integrate this rating tool into their general facility audits.
(c) The State shall employ sustainable design principles and agencies shall apply the principles to the siting, design, and construction of new facilities. Agencies shall optimize life-cycle costs, pollution, and other environmental and energy costs associated with the construction, life-cycle operation, and decommissioning of the facility. Agencies shall consider using energy-savings performance contracts or utility energy-efficiency service contracts to aid them in constructing sustainably designed buildings.
(d) Agencies entering into leases, including the renegotiation or extension of existing leases, shall incorporate lease provisions that encourage energy and water efficiency wherever life-cycle cost-effective. Build-to-suit lease solicitations shall contain criteria encouraging sustainable design and development, energy efficiency, and verification of facility performance. Agencies shall include a preference for facilities having an ENERGY STAR building label in their selection criteria for acquiring leased facilities. In addition, all agencies shall encourage lessors to apply for an ENERGY STAR building label and to explore and implement projects that will reduce costs to the State, including projects carried out through the lessors' energy-savings performance contracts or utility energy-efficiency service contracts.
(e) Agencies shall implement energy reduction systems, and other highly efficient systems, in new construction or retrofit projects when life-cycle cost-effective. Agencies shall consider combined cooling, heat, and power systems when determined to be the most cost-effective when measured against other alternatives on a life-cycle cost basis. Agencies shall survey local natural resources to optimize use of available solar, ocean thermal, biomass, bioenergy, geothermal, or other naturally occurring energy sources.
(f) Agencies shall use off-grid generation systems, including solar hot water, solar electric, solar outdoor lighting, small wind turbines, fuel cells, and other off-grid alternatives, where such systems are life-cycle cost-effective and offer benefits including energy efficiency, pollution prevention, source energy reductions, avoided infrastructure costs, or expedited service.
§196-N Electricity use. To advance the greenhouse gas and renewable energy goals of this part, and reduce source energy use, each agency shall strive to use electricity from clean, efficient, and renewable energy sources. An agency's efforts in purchasing electricity from efficient and renewable energy sources shall be taken into account in assessing the agency’s progress and formulating its score card under section 196-G(a).
§196-O Competition. Agencies shall take advantage of competitive opportunities in the electricity and natural gas markets to reduce costs and enhance services. Agencies are encouraged to aggregate demand across facilities or agencies to maximize their economic advantage.
§196-P Reduced greenhouse gas intensity of electric power. When selecting electricity providers, agencies shall purchase electricity from sources that use high efficiency electric generating technologies when life-cycle cost-effective. Agencies shall consider the greenhouse gas intensity of the source of the electricity and strive to minimize the greenhouse gas intensity of purchased electricity.
§196-Q Purchasing electricity from renewable energy sources. Each agency shall evaluate its current use of electricity from renewable energy sources and report this level in its annual report to the coordinator. Based on this review, each agency shall adopt policies and pursue projects that increase the use of such electricity. Agencies shall include provisions for the purchase of electricity from renewable energy sources as a component of their requests for bids whenever procuring electricity. Agencies may use savings from energy efficiency projects to pay additional incremental costs of electricity from renewable energy sources.
In evaluating opportunities to comply with this section, agencies shall consider any renewable portfolio standard specified in the restructuring guidelines for the State and the United States Environmental Protection Agency guidelines on crediting renewable energy power.
§196-R Mobile equipment. Each agency shall seek to improve the design, construction, and operation of its mobile equipment, and shall implement all life-cycle cost-effective energy efficiency measures that result in cost savings while improving mission performance. To the extent that such measures are life-cycle cost-effective, agencies shall consider enhanced use of alternative or renewable-based fuels.
§196-S Management strategies. Agencies shall use the following management strategies in meeting the goals of this part:
(1) Employee incentive programs to reward exceptional performance in implementing this part;
(2) Performance evaluations of successful implementation of this part in areas such as energy-savings performance contracts, sustainable design, energy efficient procurement, energy efficiency, water conservation, and renewable energy projects and performance evaluations of agency heads, members of the agency energy team, principal program managers, heads of field offices, facility managers, energy managers, and other appropriate employees;
(3) Agencies shall be allowed to retain a portion of savings generated from efficient energy and water management and shall use the savings at the facility or site where the savings occur to provide greater incentives for that facility and its site managers to undertake more energy management initiatives, invest in renewable energy systems, and purchase electricity from renewable energy sources;
(4) Training and education shall be provided for all appropriate personnel relating to the energy management strategies contained in this part, including the incorporation into existing procurement courses information on energy management tools, energy-savings performance contracts, utility energy-efficiency service contracts, energy efficient products, and life-cycle cost analysis; and
(5) Agencies shall designate showcase facilities to highlight energy or water efficiency and renewable energy improvements."
SECTION 2. Chapter 196, Hawaii Revised Statutes, is amended by designating sections 196-1 to 196-7 as:
"PART I. GENERAL PROVISIONS"
SECTION 3. Within one hundred twenty days after the effective date of this Act, the director of finance shall:
(1) Develop and issue guidelines to agency budget officers on the preparation of annual funding requests associated with the implementation of this Act for the budget for fiscal year 2003-2004;
(2) In collaboration with the coordinator, inform agencies how to retain savings and reinvest in other energy and water management projects; and
(3) In collaboration with the coordinator, periodically brief agency procurement executives on the use of energy management tools, including energy-savings performance contracts, utility energy-efficiency service contracts, and procurement of energy efficient products and electricity from renewable energy sources.
SECTION 4. Within one hundred eighty days after the effective date of this Act, the coordinator, in collaboration with other agency heads, shall:
(1) Develop and issue guidelines to assist agencies in measuring energy per square foot, per unit of production, or other applicable unit in industrial, laboratory, research, and other energy-intensive facilities;
(2) Establish criteria for determining which facilities are exempt from the Act and provide guidance for agencies to request proposed exemptions;
(3) Develop and issue guidelines to assist agencies in calculating appropriate energy baselines for previously exempt facilities and facilities occupied after December 31, 2002, in order to measure progress toward goals;
(4) Develop and issue guidelines to clarify how agencies determine the life-cycle cost for investments required by this Act, including how to compare different energy and fuel options and assess the current tools;
(5) Develop and issue guidelines for providing credit toward energy efficiency goals for cost-effective projects where source energy use declines but site energy use increases;
(6) Develop and issue guidelines to assist each agency to determine a baseline of water consumption;
(7) Develop and issue guidelines to assist agencies in ensuring that all project cost estimates, bids, and agency budget requests for design, construction, and renovation of facilities are based on life-cycle costs, and that incentives for contractors involved in facility design and construction are structured to encourage the contractors to design and build at the lowest life-cycle cost;
(8) Make information available on opportunities to purchase electricity from renewable energy sources, including relevant state and county regulations, and update the information as necessary based on technological advances and market changes, but at least every two years;
(9) Develop Internet-based tools to assist individual and agency purchasers in identifying and purchasing energy efficient products for acquisition;
(10) Develop and issue sustainable design and development principles for the siting, design, and construction of new facilities; and
(11) Develop model lease provisions that incorporate energy efficiency and sustainable design.
SECTION 5. Within three hundred sixty-five days after the effective date of this Act, the coordinator, in collaboration with other agency heads, shall:
(1) Provide guidance for counting renewable and highly efficient energy projects and purchases of electricity from renewable and highly efficient energy sources toward agencies’ progress in reaching greenhouse gas and energy reduction goals;
(2) Develop goals for the amount of energy generated at state facilities from renewable energy technologies;
(3) Support efforts to develop standards for the certification of low environmental impact renewable energy facilities to facilitate the State's purchase of such power;
(4) Work with the director of finance to develop a plan for purchasing advanced energy products in bulk quantities for use by multiple agencies;
(5) Develop and issue guidelines for agency use estimating the greenhouse gas emissions attributable to facility energy use, including emissions associated with the production, transportation, and use of energy consumed in state facilities; and
(6) Establish water conservation goals for state agencies.
SECTION 6. If an agency determines that a provision in this Act is inconsistent with its mission, the agency may ask the coordinator for a waiver of the provision. The coordinator shall include a list of any waivers it grants in the annual report to the governor and the legislature.
PART II. MAXIMUM WHOLESALE GASOLINE PRICES
SECTION 7. Chapter 486H, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:
"§486H- Restrictions on the sale of gasoline to dealer operated retail service stations; civil actions. (a) Notwithstanding any law to the contrary, and except as provided in subsection (c), no manufacturer or jobber may sell, offer to sell, or agree to sell any gasoline to a dealer operated retail service station, the price of which is in excess of the maximum wholesale price of gasoline established by the department as provided in subsection (b).
(b) The department on a quarterly basis shall determine the maximum wholesale price of gasoline, which shall consist of the average price per barrel of West Texas Intermediate, Alaska North Slope, Saudi Arabian light, and North Sea Brent crude oil, multiplied by 0.035, and based on an octane rating of 87; provided that:
(1) When the octane rating is greater than 87, the maximum wholesale price for each gallon of gasoline sold shall be increased by two cents for each single point increase in octane rating above 87; and
(2) When the octane rating is less than 87, the maximum wholesale price for each gallon of gasoline sold shall be decreased by two cents for each single point decrease in octane rating below 87.
The department shall publish the maximum wholesale price of gasoline by means that shall include the department's internet website.
(c) A manufacturer or jobber may petition the department to readjust the maximum wholesale price of gasoline in the event of an abrupt change in crude oil prices in the world market. The department shall publish its findings and any change in the maximum wholesale price of gasoline by means that shall include the department's internet website.
(d) Any manufacturer or jobber who violates any requirement imposed or rule adopted under this section shall be liable to the State in an amount equal to the sum of:
(1) Three times the amount of actual damages sustained or $500,000, whichever is greater; and
(2) In the case of any successful action to enforce the foregoing liability, the costs of the action, together with reasonable attorney's fees as determined by the court.
An action brought under this section shall be considered a civil action and shall be brought in a court of competent jurisdiction without regard to the amount in controversy within two years from the date on which the liability occurred. The department may refer any such action to the attorney general as it deems appropriate.
(e) The department shall adopt rules pursuant to chapter 91 as may be necessary to implement this section without regard to the public hearing and notice provisions of that chapter."
SECTION 8. Section 486H-1, Hawaii Revised Statutes, is amended by adding five new definitions to be appropriately inserted and to read as follows:
""Company operated retail service station" means a retail service station owned and operated by a manufacturer or jobber and where retail prices are set by that manufacturer or jobber.
"Dealer operated retail service station" means a retail service station owned by a manufacturer or jobber and operated by a qualified gasoline dealer under a franchise.
"Department" means the department of business, economic development, and tourism.
"Operate" means to engage in the business of selling motor vehicle fuel at a retail service station through any employee, commissioned agent, subsidiary company, or person managing a retail service station under a contract and on a fee arrangement with the manufacturer or jobber.
"Retail" means a sale of gasoline made to the general public at prices that are displayed on the dispensing equipment."
SECTION 9. Section 486H-10.4, Hawaii Revised Statutes, is amended to read as follows:
"[[]§486H-10.4[]] Restrictions on manufacturers or jobbers in operating service stations; lease rent controls; definitions. (a) Beginning August 1, 1997, no manufacturer or jobber shall convert an existing dealer operated retail service station to a company operated retail service station; provided that nothing in this section shall limit a manufacturer or jobber from:
(1) Continuing to operate any company operated retail service stations legally in existence on July 31, 1997;
(2) Constructing and operating any new retail service stations as company operated retail service stations constructed after August 1, 1997, subject to subsection (b); or
(3) Operating a former dealer operated retail service station for up to twenty-four months until a replacement dealer can be found if the former dealer vacates the service station, cancels the franchise, or is properly terminated or not renewed.
(b) No new company operated retail service station shall be located within one-eighth mile of a dealer operated retail service station in an urban area, and within one-quarter mile in other areas. For purposes of this subsection, "urban" means the first congressional district of the State, and "other areas" means the second congressional district of the State.
(c) All leases as part of a franchise as defined in section 486H-1, existing on August 1, 1997, or entered into thereafter, shall be construed in conformity with the following:
(1) Such renewal shall not be scheduled more frequently than once every three years; and
(2) Upon renewal, the lease rent payable shall not exceed fifteen per cent of the gross sales, except for gasoline, which shall not exceed fifteen per cent of the gross profit of product, excluding all related taxes by the dealer operated retail service station as defined in section 486H-1 and 486H-10.4 plus, in the case of a retail service station at a location where the manufacturer or jobber is the lessee and not the owner of the ground lease, a percentage increase equal to any increase which the manufacturer or jobber is required to pay the lessor under the ground lease for the service station. For the purposes of this subsection, "gross amount" means all monetary earnings of the dealer from a dealer operated retail service station after all applicable taxes, excluding income taxes, are paid.
The provisions of this subsection shall not apply to any existing contracts that may be in conflict with its provisions.
(d) Nothing in this section shall prohibit a dealer from selling a retail service station in any manner.
[(e) For the purposes of this section:
"Company operated retail service station" means a retail service station owned and operated by a manufacturer or jobber and where retail prices are set by that manufacturer or jobber.
"Dealer operated retail service station" means a retail service station owned by a manufacturer or jobber and operated by a qualified gasoline dealer under a franchise.
"Operate" means to engage in the business of selling motor vehicle fuel at a retail service station through any employee, commissioned agent, subsidiary company, or person managing a retail service station under a contract and on a fee arrangement with the manufacturer or jobber.
"Retail" means a sale of gasoline made to the general public at prices that are displayed on the dispensing equipment.]"
PART III. GENERAL PROVISIONS
SECTION 10. In codifying the new sections added by section 1 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.
SECTION 11. New statutory material is underscored. Statutory material to be repealed is bracketed and stricken.
SECTION 12. This Act shall take effect upon its approval.