State House members gave preliminary approval yesterday to a bill that would cap Hawaii gas prices, although there were mixed feelings about its effectiveness. House passes measure
Other bills in progress
to cap gas prices
despite objectionsBy Pat Omandam
pomandam@starbulletin.com"The gas market is broken and needs to be fixed," said House Consumer Protection Chairman Kenneth Hiraki (D, Kakaako).
Hiraki said while he has great faith in the competitive market, it is the Legislature's duty to serve as a watchdog and intervene when necessary.
Specifically, he pointed to a recent briefing by San Francisco attorney Spencer Hosie, who spearheaded the state's case against the local oil companies over alleged claims of price fixing. The state had accused Hawaii's two refiners and several major wholesalers of overcharging dealers and consumers as much as 40 cents a gallon for many years.
Hosie told lawmakers depositions taken in the case, which has been settled out-of-court, showed there is little competition in the market but a lot of profit-taking by local oil companies.
The House approved the third reading of Senate Bill 2179, Senate Draft 2, House Draft 1, yesterday after a lengthy debate. The bill, among other things, requires the state Department of Business, Economic Development and Tourism to set maximum wholesale gasoline prices on a quarterly basis based on certain criteria, including the cost of a barrel of crude oil.
The law bans gas manufacturers from charging more than the maximum wholesale price to retailers and sets fines of $500,000 for each violation.
The measure now heads to a joint House-Senate conference committee.
Supporters of the measure, like Rep. Ed Case (D, Manoa), say price control is needed because there is such a tremendous gap from what motorists pay for gas and what it costs oil companies to provide it. Case said state regulation of gas prices is the best alternative because it is the only way to control pump prices.
"This market is an uncompetitive market," Case said.
Even so, legislators from both parties raised concerns about such a plan.
House Transportation Chairman Joe Souki (D, Wailuku) supported the price cap but said he had reservations about the bill because regulation has not always meant lower prices in Hawaii.
For example, state regulation of public utilities like Hawaiian Electric Co. has not meant lower electricity costs for Hawaii. Souki added it is "wishful thinking" to believe regulation of Hawaii gas prices will actually result in lower prices.
State Rep. Colleen Meyer (R, Laie) added regulation of gas prices will just affirm to mainland businesses that Hawaii is unfriendly to business. She added Hosie's briefing to lawmakers was one-sided and legislators did not hear from the oil companies.
Oil companies have contended that factors such as high state taxes, few suppliers at the wholesale level and barriers to entry for competitors all contribute to Hawaii's high gasoline costs.
Price cap opponents say more must be done to encourage competition, such as providing land and tax breaks to oil companies to bring in other competitors and drive down prices.
Meyer said she believes the Legislature is moving too quickly on this complicated issue and it needs much further study. "The last time I looked, it was not illegal to make a profit," Meyer said.
The national average for regular unleaded gasoline yesterday was $1.42 a gallon, according to AAA. Average per gallon prices in Hawaii ranged from $1.54 in Honolulu to $1.79 in Hilo and $1.87 in Wailuku.
The Associated Press contributed to this report.
Legislature Directory
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Legislature Bills & Hawaii Revised Statutes
Include in the email the committee name; bill number;
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The House and Senate worked on more than 225 bills yesterday. Legislative bills
still in progressStar-Bulletin staff
Here are some of the important measures under consideration that now are expected to go to joint House-Senate conference committees:
Approved by Senate:
>> HB2195 Tourism Authority: Requires Senate confirmation for the Hawaii Tourism Authority executive director and limits the salary. >> HB2167 Camera Vans: Requires the Transportation Department to terminate all contracts for photo traffic enforcement services. >> HB2844 Campaign Spending: Limits a person's political contributions to an aggregate of $25,000 in any calendar year; restricts contributions by state and county contractors. >> HB2843 Elections: Requires special elections to be conducted by mail, calls for separate ballots for each party in primary elections and recounts in close elections. >> HB2821 Government Reorganization: Abolishes the state deputy director position in each department and prohibits state departments from hiring public relations personnel. >> HB2834 Drug Prices: Controls prescription drug prices setting up the Hawaii Rx program, which would allow participants to save money by bulk buying, discounted prices and a rebate program negotiated by the state. >> HB2506 Birth and Death Tax: $20 fee for burial permits and raises fee for birth certificates to $20 from $5. >> HB2300 Court Budget: Increase state Judiciary budget by $2.5 million for court construction and increased court personnel. >> HB2741 Cigarette Tax: Raises the excise tax on cigarettes to 10 cents from 5 cents. >> HB2381 Liquor Tax: Increase the liquor tax by 25 percent
Approved by House:
>> SB2337 Speeding: Speeders caught going 30 miles an hour or more over the speed limit would be liable for fines of $2,000 and a year in jail. >> SB2336 Minors Driving at Night: Requires drivers under 17 to have a licensed 18-year-old or older driver with them between hours of midnight and 4 a.m. >> SB2900 Emergency Workforce: Continues the environmental workforce program to help laid-off workers. >> SB2416 Long-term Care: Sets up a long-term care state program with a board of trustees.
Legislature Directory
Testimony by email: testimony@capitol.hawaii.gov
Legislature Bills & Hawaii Revised Statutes
Include in the email the committee name; bill number;
date, time and place of the hearing; and number of copies
(as listed on the hearing notice.) For more information,
see http://www.hawaii.gov/lrb/par
or call 587-0478.
