Mr. Windeli K. Kimura
Acting Director
legislative Reference Bureau
Attention:	Mr. Mark Rosen
State of Hawaii, State Capitol
Honolulu, Hawaii 96813

Dear Mr. Kimura:

	As requested by Mr. Mark Rosen in an October 12, 1995, telephone
conversation with Dr. John Tantlinger regarding the study on gasoline
dealers, requested by House Resolution 174, H.D. 2, this is to provide
our comments on and an estimate of the annual cost for necessary
resources, if the Department of Business Economic, Development, and
Tourism ~BEDT) were required to implement the sections of Chapter 4861,
Hawaii Revised Statutes (HRS), which we interpret would not be
redundant of the oil industry supplyiproductionidem and data gathering,
analyses and reporting DBEDT currently does under the provisions of
Chapter 486E, HRS.

	First, we offer the following comments regarding Chapter 4861, HRS,
implementation of which by the Public Utilities Commission has, as we
understand it, not yet been initiated:

1.	We believe that the reporting requirements of Chapter 4861-3 (a)
are generally the same data currently reported to DBEDT under Chapter
486E. Additionally, in collaboration with Hawaii's petroleum companies
over the past 18 months, DBEDT has completely overhauled the data
reporting forms and system for this oil supplylproductionldemand dat~
Industry has been completely cooperative in this initiative and we
beheve concurs with the new forms and system of reporting.

2.	Chapter 4861-3 ~) requires reporting of data on capacities of major
petroleum transportation and storage capacities. This information would
be very useful, particularly for energy emergency plarning. However, we
believe that the purpose of collecting this information can be achieved
w~der Chapter 125C-2, HRS, which provides that: "[~Ilthe Governor may
require importers of any petroleum product or other fuel to monitor and
report to the Department of Business Economic, Development, and Tourism
relevant supply and demand data." Chapter 125C, HRS, is the enabling
legislation for the state's energy emergency preparedness program,
which by this statute is the responsibility of the DBEDT Dictor to
maintain and implement In addition, one of the newly developed
reporting forms is one designed to gather oil transportation and
storage, and other supply/demand data during market emergencies.

3.	With respect to the requirement for a "annual industry forecast for
Petroleum Administration for Defense District V (covering Arizona,
Nevada, Washington, Oregon, California, Alaska and HawaijY', we believe
this is redundant of information already available from the U.S.
Government. The U.S. Energy Information Administration ~IA) produces
volumes of information on the petroleum and other energy industries in
the U.S. and internationally. Supplylproductionldemand data and
projections by Petroleum Adrninjstration for Defense Districts of the
U.S. are available from regular EIA reports.

4.	Chapter 4861-3 Qi) requires reporting of petroleum product prices
and sales volumes by end-use sector and petroleum producL Again,
consumption information is available from data gathered under Chapter
486E, HRS. With respect to the reporting of price information, unless
this information is to be used for regulatory purposes, it is unclear
as to its utility, especially when markat price information on various
petroleum products is also available through EIA reports and other
private sources, such as Platt's publications, American Automobile
Association publications, etc. If this price information is desired for
a regulatory purpose, we do not believe it is necessary, and collection
by DBEDT would be inconsistent with the DBEDT Director's role as the
State's Energy Resources Coordinator (ERC). The ERC is to serve as an
energy advisor, coordinator, and facilitator for the Governor,
industry, and all levels and branches of governmenL However, the ERC is
not a regulator.

5.	Chapter 48614 deals with the analysis and reporting of data
regarding potential or actual petroleum shortages, price changes, and
fmancial information on a Hawaii's petroleum companies; e.g., income,
expenses, profits, return on equity and capital, price/earning ratios,
etc. This section asso allows for audits of a company's books for the
purpose of determining whether their may have been violations of
"policies, laws, or rules" (Chapter 4861-4 (b)).

With respect to information required to plan for and respond to
petroleum shortages, we believe the Governor has adequately broad
powers under Chapter 12SC, to retrieve any data relevant to the
implementation of that statute. With respect to the requirements of
reporting data relative to the fmancial condition of a petroleum
company, we do not concur that this information is necessary, unless
the industry is to be regulated, which DBEDT opposes. With respect to
audits to determine whether the petroleum industry has violated
"policies, laws, or rules", we believe that this power already exists
within the purview of the Office of the Attorney General with its
subpoena power.

6.	Conclusion. We conclude that implementation of several sections
of Chapter 4861, HRS, would be redundant of data gathering, analyses,
and reporting activities aheady conducted by other government agencies,
such as DBEDT, U.S. EIA, etc. While not all of this information is
reported within the structure of a regular monthly report or other
periodic basis, it is available to the state when and if it is needed
and does not constitute an excessive resource burden on industry or
state government when it comes to data reporting and analyses.

	Notwithstanding our conclusion above, if DBEDT were requiredto
implement Chapter 4861, we would need the following additional
resources to start-up and continue these activities on an annual basis:


RESOURCE (Recurring annual)
	Note: Does not include
cost of office space and
certain other recurring
expenses; e.g.,
telephone, photocopies,
general office supplies,
etc.) 								

			 Salaries			Fringes (33.63%)
Accountant (1)		 $36,000				$12,107

Data Entry/Analytical
 Assistant (1)           $30,000				$10,089


TOTAL RECURRING
ANNUAL COST              $66,000   				$22,196


GRAND TOTAL RECURRING ANNUAL COST    	              $88,196



RESOURCE (Start-up cost)				AMOUNT

Computers wlhardware
peripherals; e.g.,
pnnter, etc., and
workstations (chairs and
computer table) (2) 			               $15,000
	

Software (2)                                           $15,000

TOTAL START-UP COST		                       $16,200

GRAND TOTAL FIRST YEAR			               $104,396

	
	Thank you for the opportumty to provide these comments. Should you
have any questions regarding this matter, please call me.

Sincerely,
Seiji F. Naya

	Appendix K (gif image file)	Appendix L	Table of Contents