HB791 SD1

SECTION 1. The legislature finds that gasoline containing ten per cent ethanol has been an approved fuel for use in automotive spark ignition engines since 1978. Currently, about fifty per cent of the gasoline in the United States contains ethanol. In some areas of the United States, all of the available motor gasoline contains ethanol. There are a few States that do not impose labeling requirements for fuels containing ten per cent ethanol. Diversification of fuel supplies and a transition towards renewable energy sources is in the long-term interest nationally and for the people of Hawaii.

Hawaii's existing ethanol content statute and implementing rules provide significant flexibility in allowing the private sector to supply about seventy million gallons per year of non‑ethanol gasoline for old, incompatible, or non-standard equipment which is not Underwriters Laboratory listed or tested. Nevertheless, there are areas of the State in which the private sector has not stepped forward to address the needs of niche markets, including certain boats, small gasoline-driven tools, and experimental and light-sport aircraft that are in need of non-ethanol gasoline.

In 1987, the Coast Guard issued a directive to recreational boat builders to install fuel hoses compatible with gasoline containing aromatics and alcohols. However, some boats have fiberglass fuel tanks which are not ethanol compatible and will cause fiberglass softening or tank leaks. There have been reports of boats with older fiberglass tanks sustaining engine damage due to fiberglass resin compounds being carried by the fuel into the engine and deposited on to intake valves.

The Underwriters Laboratory listing and testing for fuel system parts has included compatibility with gasoline containing ten per cent ethanol since the 1980s. At the time certain types of power equipment were manufactured, the owners' manuals for the equipment did not explicitly describe or allow the use of ethanol-blended gasoline.

Further, the Federal Aviation Administration has strict regulations in place that require only aviation grade fuels be used in certificated aircraft. There are supplemental type certificates in use that allow some "properly altered" aircraft to use automotive grade fuels. Federal Aviation Administration Special Airworthiness Information Bulletin CE 07-06, dated October 27, 2006, states that gasoline containing ethanol is not acceptable unless specifically approved by the type certificate or supplemental type certificates. This also affects the light sport aircraft that use Rotax engines. Rotax has issued a notice not to use gasoline containing lead or ethanol in their engines.

The purpose of this Act is to require fuel distributors to make available gasoline that does not contain ethanol for those who wish to purchase non-ethanol fuel.

SECTION 2. Chapter 486H, Hawaii Revised Statutes, is amended by adding two new sections to be appropriately designated and to read as follows:

"§486H-A Gasoline; ethanol content by grade. (a) Premium gasoline produced, imported, or sold in the State for use in motor vehicles shall contain no ethanol and shall otherwise meet all standards for such gasoline published by the American Society for Testing and Materials and the Society of Automotive Engineers, including an octane rating of ninety-one or greater.

(b) Mid-grade gasoline sold in the State for use in motor vehicles shall contain up to ten per cent ethanol by volume and shall otherwise meet all standards for such gasoline published by the American Society for Testing and Materials and the Society of Automotive Engineers, including an octane rating greater than or equal to eighty-eight and less than ninety.

(c) Regular gasoline sold in the State for use in motor vehicles shall contain no less than ten per cent ethanol by volume and shall otherwise meet all standards for such gasoline published by the American Society for Testing and Materials and the Society of Automotive Engineers, including an octane rating greater than or equal to eighty-five and less than eighty-eight.

§486H-B Ethanol content requirement. (a) The director of business, economic development, and tourism shall require that gasoline sold in the State for use in motor vehicles shall meet the ethanol content requirements set forth in section 486H‑A. The director may authorize the sale of gasoline that does not meet these requirements as provided in subsection (d).

(b) Gasoline blended with an ethanol-based product, such as ethyl tertiary butyl ether, shall be considered to be in conformance with this section if the quantity of ethanol used in the manufacture of the ethanol-based product represents ten per cent, by volume, of the finished motor fuel.

(c) Ethanol used in the manufacture of ethanol-based gasoline additives, such as ethyl tertiary butyl ether, may be considered to contribute to the distributor's conformance with this section; provided that the total quantity of ethanol used by the distributor is an amount equal to or greater than the amount of ethanol required under this section.

(d) The director may authorize the sale of gasoline that does not meet the provisions of this section:

(1) To the extent that sufficient quantities of competitively-priced ethanol are not available to meet the minimum requirements of this section; or

(2) In the event of any other circumstances for which the director determines compliance with this section would cause undue hardship.

(e) Each distributor, at reporting dates as the director may establish, shall file with the director, on forms prescribed, prepared, and furnished by the director, a certified statement showing:

(1) The price and amount of ethanol available;

(2) The amount of ethanol-blended fuel sold by the distributor;

(3) The amount of non-ethanol-blended gasoline sold by the distributor; and

(4) Any other information the director shall require for the purposes of compliance with this section.

(f) Provisions with respect to confidentiality of information shall be the same as provided in section 486J-6.

(g) Any distributor or any other person violating the requirements of this section shall be subject to a fine of not less than $2 per gallon of nonconforming fuel, up to a maximum of $10,000 per infraction."

SECTION 3. Chapter 486H, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§486H- Ethanol content requirement. (a) The director of business, economic development, and tourism shall require that gasoline sold in the State for use in motor vehicles contain ten per cent ethanol by volume. The amounts of gasoline sold in the State containing ten per cent ethanol shall be in accordance with rules that the director may deem appropriate. The director may authorize the sale of gasoline that does not meet these requirements as provided in subsection (d).

(d) The director may authorize the sale of gasoline that does not meet the provisions of this section:

(1) To the extent that sufficient quantities of competitively-priced ethanol are not available to meet the minimum requirements of this section; or

(2) In the event of any other circumstances for which the director determines compliance with this section would cause undue hardship.

(e) Each distributor, at reporting dates that the director may establish, shall file with the director, on forms prescribed, prepared, and furnished by the director, a certified statement showing:

(1) The price and amount of ethanol available;

(2) The amount of ethanol-blended fuel sold by the distributor;

(3) The amount of non-ethanol-blended gasoline sold by the distributor; and

(4) Any other information the director shall require for the purposes of compliance with this section.

(f) Provisions with respect to confidentiality of information shall be the same as provided in section 486J-6.

SECTION 4. Chapter 486H-1, Hawaii Revised Statutes, is amended by adding four new definitions to be appropriately inserted and to read as follows:

""Comparable grade" means the grade, based on octane rating, of the finished (blended) fuel.

"Mid-grade" means gasoline having an octane rating greater than or equal to eighty-eight and less than or equal to ninety.

"Premium" means gasoline having an octane rating greater than ninety.

"Regular" means gasoline having an octane rating greater than or equal to eighty-five and less than eighty-eight."

SECTION 5. Section 486J-10, Hawaii Revised Statutes, is repealed.

["~~§486J-10 Ethanol content requirement.~~ (a) The director shall adopt rules in accordance with chapter 91 to require that gasoline sold in the State for use in motor vehicles contain ten per cent ethanol by volume. The amounts of gasoline sold in the State containing ten per cent ethanol shall be in accordance with rules as the director may deem appropriate. The director may authorize the sale of gasoline that does not meet these requirements as provided in subsection (d).

~~(d) The director may authorize the sale of gasoline that does not meet the provisions of this section:~~

~~(1)~~ ~~To the extent that sufficient quantities of competitively-priced ethanol are not available to meet the minimum requirements of this section; or~~

~~(2)~~ ~~In the event of any other circumstances for which the director determines compliance with this section would cause undue hardship.~~

~~(e) Each distributor, at reporting dates as the director may establish, shall file with the director, on forms prescribed, prepared, and furnished by the director, a certified statement showing:~~

~~(1)~~ ~~The price and amount of ethanol available;~~

~~(2)~~ ~~The amount of ethanol-blended fuel sold by the distributor;~~

~~(3)~~ ~~The amount of non-ethanol-blended gasoline sold by the distributor; and~~

~~(4)~~ ~~Any other information the director shall require for the purposes of compliance with this section.~~

~~(f) Provisions with respect to confidentiality of information shall be the same as provided in section 486J-6.~~

~~(h) The director, in accordance with chapter 91, shall adopt rules for the administration and enforcement of this section.~~"]

SECTION 6. In codifying the new sections added by section 2 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 7. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 8. This Act shall take effect on July 1, 2020; provided that:

(1) On July 1, 2011, section 2 of this Act shall be repealed; and

(2) Section 3 of this Act shall take effect on July 1, 2011.

HOUSE OF REPRESENTATIVES	H.B. NO.	791
TWENTY-FOURTH LEGISLATURE, 2007		H.D. 1
STATE OF HAWAII		S.D. 1