1. (a) Beginning August 1, 1997, no manufacturer or jobber shall convert an existing dealer retail station to a company retail station; provided that nothing in this section shall limit a manufacturer or jobber from:

   1. (1) Continuing to operate any company retail station legally in existence on July 31, 1997;
   2. (2) Constructing and operating any new retail service station as a company retail station constructed after August 1, 1997, subject to subsection (b); or
   3. (3) Operating a former dealer retail station for up to twenty-four months until a replacement dealer can be found if the former dealer vacates the retail station, cancels the franchise, or is properly terminated or not renewed.
2. (b) No new company retail station shall be located within one-eighth mile of a dealer retail station in an urban area, and within one-quarter mile in other areas.

3. (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. (1) Such renewal shall not be scheduled more frequently than once every three years; and

   2. (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 retail station as defined in section 486H-1 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 that the manufacturer or jobber is required to pay the lessor under the ground lease for the service station.

      The provisions of this subsection shall not apply to any existing contracts that may be in conflict with its provisions.

4. (d) Nothing in this section shall prohibit a gasoline dealer from selling a retail service station in any manner.

[L 1997, c 257, §3; am L 2002, c 77, §2(3); am L 2008, c 19, §59]

Law Journals and Reviews

Price Controls in Paradise: Foreshadowing the Legal and Economic Consequences of Hawai‘i's Gasoline Price Cap Law. 27 UH L. Rev. 549.

Case Notes

The "substantially advances" formula announced in Agins v. City of Tiburon is not a valid method of identifying regulatory takings for which the Fifth Amendment requires just compensation. Since oil company claiming that the rent cap provision of Act 257 [L 1997 (§486H-10.4(c))], on its face, effected a taking of its property argued only a "substantially advances" theory in support of its takings claim, it was not entitled to summary judgment on that claim. 544 U.S. 528.

In an action to recover payments which plaintiffs claimed exceeded the amount permissible under this section, defendants' motion for summary judgment granted, as there was no lease renewal. 460 F. Supp. 2d 1215.