Propane Education and Research Act of 1996

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Propane Education and Research Act 
of 1996''.

SEC. 2. FINDINGS.

    The Congress finds that--
        (1) propane gas, or liquefied petroleum gas, is an essential 
    energy commodity providing heat, hot water, cooking fuel, and motor 
    fuel among its many uses to millions of Americans;
        (2) the use of propane is especially important to rural 
    citizens and farmers, offering an efficient and economical source 
    of gas energy;
        (3) propane has been recognized as a clean fuel and can 
    contribute in many ways to reducing the pollution in our cities and 
    towns; and
        (4) propane is primarily domestically produced and its use 
    provides energy security and jobs for Americans.

SEC. 3. DEFINITIONS.

    For the purposes of this Act--
        (1) the term ``Council'' means a Propane Education and Research 
    Council created pursuant to section 4 of this Act;
        (2) the term ``industry'' means those persons involved in the 
    production, transportation, and sale of propane, and in the 
    manufacture and distribution of propane utilization equipment, in 
    the United States;
        (3) the term ``industry trade association'' means an 
    organization exempt from tax, under section 501(c) (3) or (6) of 
    the Internal Revenue Code of 1986, representing the propane 
    industry;
        (4) the term ``odorized propane'' means propane which has had 
    odorant added to it;
        (5) the term ``producer'' means the owner of propane at the 
    time it is recovered at a gas processing plant or refinery;
        (6) the term ``propane'' means a hydrocarbon whose chemical 
    composition is predominantly C&lt;SUP&gt;3H&lt;SUP&gt;8, whether recovered from 
    natural gas or crude oil, and includes liquefied petroleum gases 
    and mixtures thereof;
        (7) the term ``public member'' means a member of the Council, 
    other than a representative of producers or retail marketers, 
    representing significant users of propane, public safety officials, 
    academia, the propane research community, or other groups 
    knowledgeable about propane;
        (8) the term ``qualified industry organization'' means the 
    National Propane Gas Association, the Gas Processors Association, a 
    successor association of such associations, or a group of retail 
    marketers or producers who collectively represent at least 25 
    percent of the volume of propane sold or produced in the United 
    States;
        (9) the term ``retail marketer'' means a person engaged 
    primarily in the sale of odorized propane to the ultimate consumer 
    or to retail propane dispensers;
        (10) the term ``retail propane dispenser'' means a person who 
    sells odorized propane to the ultimate consumer but is not engaged 
    primarily in the business of such sales; and
        (11) the term ``Secretary'' means the Secretary of Energy.

SEC. 4. REFERENDA.

    (a) Creation of Program.--The qualified industry organizations may 
conduct, at their own expense, a referendum among producers and retail 
marketers for the creation of a Propane Education and Research Council. 
The Council, if established, shall reimburse the qualified industry 
organizations for the cost of the referendum accounting and 
documentation. Such referendum shall be conducted by an independent 
auditing firm agreed to by the qualified industry organizations. Voting 
rights in such referendum shall be based on the volume of propane 
produced or odorized propane sold in the previous calendar year or 
other representative period. Upon approval of those persons 
representing two-thirds of the total volume of propane voted in the 
retail marketer class and two-thirds of all propane voted in the 
producer class, the Council shall be established, and shall be 
authorized to levy an assessment on odorized propane in accordance with 
section 6. All persons voting in the referendum shall certify to the 
independent auditing firm the volume of propane represented by their 
vote.
    (b) Termination.--On the Council's own initiative, or on petition 
to the Council by producers and retail marketers representing 35 
percent of the volume of propane in each class, the Council shall, at 
its own expense, hold a referendum, to be conducted by an independent 
auditing firm selected by the Council, to determine whether the 
industry favors termination or suspension of the Council. Termination 
or suspension shall not take effect unless it is approved by persons 
representing more than one-half of the total volume of odorized propane 
in the retail marketer class and more than one-half of the total volume 
of propane in the producer class, or is approved by persons 
representing more than two-thirds of the total volume of propane in 
either such class.

SEC. 5. PROPANE EDUCATION AND RESEARCH COUNCIL.

    (a) Selection of Members.--The qualified industry organizations 
shall select all retail marketer, public, and producer members of the 
Council. The producer organizations shall select the producer members 
of the Council, the retail marketer organizations shall select retail 
marketer members, and all qualified industry organizations shall 
jointly select the public members. Vacancies in unfinished terms of 
Council members shall be filled in the same manner as were the original 
appointments.
    (b) Representation.--In selecting members of the Council, the 
qualified industry organizations shall give due regard to selecting a 
Council that is representative of the industry, including 
representation of--
        (1) gas processors and oil refiners among producers;
        (2) interstate and intrastate operators among retail marketers;
        (3) large and small companies among producers and retail 
    marketers, including agricultural cooperatives; and
        (4) diverse geographic regions of the country.
    (c) Membership.--The Council shall consist of 21 members, with 9 
members representing retail marketers, 9 members representing 
producers, and 3 public members. Other than the public members, Council 
members shall be full-time employees or owners of businesses in the 
industry or representatives of agricultural cooperatives. No employee 
of a qualified industry organization or other industry trade 
association shall serve as a member of the Council, and no member of 
the Council may serve concurrently as an officer of the Board of 
Directors of a qualified industry organization or other industry trade 
association. Only one person at a time from any company or its 
affiliate may serve on the Council.
    (d) Compensation.--Council members shall receive no compensation 
for their services, nor shall Council members be reimbursed for 
expenses relating to their service, except that public members, upon 
request, may be reimbursed for reasonable expenses directly related to 
their participation in Council meetings.
    (e) Terms.--Council members shall serve terms of 3 years and may 
serve not more than 2 full consecutive terms. Members filling unexpired 
terms may serve not more than a total of 7 consecutive years. Former 
members of the Council may be returned to the Council if they have not 
been members for a period of 2 years. Initial appointments to the 
Council shall be for terms of 1, 2, and 3 years, staggered to provide 
for the selection of 7 members each year.
    (f) Functions.--The Council shall develop programs and projects and 
enter into contracts or agreements for implementing this Act, including 
programs to enhance consumer and employee safety and training, to 
provide for research and development of clean and efficient propane 
utilization equipment, to inform and educate the public about safety 
and other issues associated with the use of propane, and to provide for 
the payment of the costs thereof with funds collected pursuant to this 
Act. The Council shall coordinate its activities with industry trade 
association and others as appropriate to provide efficient delivery of 
services and to avoid unnecessary duplication of activities.
    (g) Use of Funds.--Not less than 5 percent of the funds collected 
through assessments pursuant to this Act shall be used for programs and 
projects intended to benefit the agriculture industry in the United 
States. The Council shall coordinate its activities in this regard with 
agriculture industry trade associations and other organizations 
representing the agriculture industry. The percentage of funds 
collected through assessments pursuant to this Act to be used for 
projects relating to the use of propane as an over-the-road motor fuel 
shall not exceed the percentage of the total market for odorized 
propane that is used as a motor vehicle fuel, based on the historical 
average of such use over the previous 3-year period.
    (h) Priorities.--Issues related to research and development, 
safety, education, and training shall be given priority by the Council 
in the development of its programs and projects.
    (i) Administration.--The Council shall select from among its 
members a Chairman and other officers as necessary, may establish 
committees and subcommittees of the Council, and shall adopt rules and 
bylaws for the conduct of business and the implementation of this Act. 
The Council shall establish procedures for the solicitation of industry 
comment and recommendations on any significant plans, programs, and 
projects to be funded by the Council. The Council may establish 
advisory committees of persons other than Council members.
    (j) Administrative Expenses.--(1) The administrative expenses of 
operating the Council (not including costs incurred in the collection 
of the assessment pursuant to section 7) plus amounts paid under 
paragraph (2) shall not exceed 10 percent of the funds collected in any 
fiscal year.
    (2) The Council shall annually reimburse the Secretary for costs 
incurred by the Federal Government relating to the Council, except that 
such reimbursement for any fiscal year shall not exceed the amount that 
the Secretary determines is the average annual salary of two employees 
of the Department of Energy.
    (k) Budget.--Before August 1 each year, the Council shall publish 
for public review and comment a budget plan for the next calendar year, 
including the probable costs of all programs, projects, and contracts 
and a recommended rate of assessment sufficient to cover such costs. 
Following this review and comment, the Council shall submit the 
proposed budget to the Secretary and to the Congress. The Secretary may 
recommend programs and activities the Secretary considers appropriate.
    (l) Records; Audits.--The Council shall keep minutes, books, and 
records that clearly reflect all of the acts and transactions of the 
Council and make public such information. The books of the Council 
shall be audited by a certified public accountant at least once each 
fiscal year and at such other times as the Council may designate. 
Copies of such audit shall be provided to all members of the Council, 
all qualified industry organizations, and to other members of the 
industry upon request. The Secretary shall receive notice of meetings 
and may require reports on the activities of the Council, as well as 
reports on compliance, violations, and complaints regarding the 
implementation of this Act.
    (m) Public Access To Council Proceedings.--(1) All meetings of the 
Council shall be open to the public after at least 30 days advance 
public notice.
    (2) The minutes of all meetings of the Council shall be made 
available to and readily accessible by the public.
    (n) Annual Report.--Each year the Council shall prepare and make 
publicly available a report which includes an identification and 
description of all programs and projects undertaken by the Council 
during the previous year as well as those planned for the coming year. 
Such report shall also detail the allocation or planned allocation of 
Council resources for each such program and project.

SEC. 6. ASSESSMENTS.

    (a) Amount.--The Council shall set the initial assessment at no 
greater than one tenth of 1 cent per gallon of odorized propane. 
Thereafter, annual assessments shall be sufficient to cover the costs 
of the plans and programs developed by the Council. The assessment 
shall not be greater than one-half cent per gallon of odorized propane, 
unless approved by a majority of those voting in a referendum in both 
the producer and the retail marketer class. In no case may the 
assessment be raised by more than one tenth of 1 cent per gallon of 
odorized propane annually.
    (b) Ownership.--The owner of odorized propane at the time of 
odorization, or the time of import of odorized propane, shall make the 
assessment based on the volume of odorized propane sold and placed into 
commerce. Assessments collected are payable to the Council on a monthly 
basis by the 25th of the month following the month of such collection. 
Propane exported from the United States to another country is not 
subject to the assessment.
    (c) Alternative Collection Rules.--The Council may establish an 
alternative means of collecting the assessment if another means is 
found to be more efficient and effective. The Council may establish a 
late payment charge and rate of interest to be imposed on any person 
who fails to remit or pay to the Council any amount due under this Act.
    (d) Investment of Funds.--Pending disbursement pursuant to a 
program, plan, or project, the Council may invest funds collected 
through assessments, and any other funds received by the Council, only 
in obligations of the United States or any agency thereof, in general 
obligations of any State or any political subdivision thereof, in any 
interest-bearing account or certificate of deposit of a bank that is a 
member of the Federal Reserve System, or in obligations fully 
guaranteed as to principal and interest by the United States.
    (e) State Programs.--The Council shall establish a program 
coordinating the operation of the Council with those of any State 
propane education and research council created by State law or 
regulation, or similar entity. Such coordination shall include a joint 
or coordinated assessment collection process, a reduced assessment, or 
an assessment rebate. A reduced assessment or rebate shall be 20 
percent of the regular assessment collected in that State under this 
section. Assessment rebates shall be paid only to--
        (1) a State propane education and research council created by 
    State law or regulation that meets requirements established by the 
    Council for specific programs approved by the Council; or
        (2) a similar entity, such as a foundation established by the 
    retail propane gas industry in that State, that meets requirements 
    established by the Council for specific programs approved by the 
    Council.

SEC. 7. COMPLIANCE.

    The Council may bring suit in Federal court to compel compliance 
with an assessment levied by the Council under this Act. A successful 
action for compliance under this section may also require payment by 
the defendant of the costs incurred by the Council in bringing such 
action.

SEC. 8. LOBBYING RESTRICTIONS.

    No funds collected by the Council shall be used in any manner for 
influencing legislation or elections, except thatthe Council may 
recommend to the Secretary changes in this Act or other statutes that 
would further the purposes of this Act.

SEC. 9. MARKET SURVEY AND CONSUMER PROTECTION.

    (a) Price Analysis.--Beginning 2 years after establishment of the 
Council and annually thereafter, the Secretary of Commerce, using only 
data provided by the Energy Information Administration and other public 
sources, shall prepare and make available to the Council, the Secretary 
of Energy, and the public an analysis of changes in the price of 
propane relative to other energy sources. The propane price analysis 
shall compare indexed changes in the price of consumer grade propane to 
a composite of indexed changes in the price of residential electricity, 
residential natural gas, and refiner price to end users of No. 2 fuel 
oil on an annual national average basis. For purposes of indexing 
changes in consumer grade propane, residential electricity, residential 
natural gas, and end user No. 2 fuel oil prices, the Secretary of 
Commerce shall use a 5-year rolling average price beginning with the 
year 4 years prior to the establishment of the Council.
    (b) Authority To Restrict Activities.--If in any year the 5-year 
average rolling price index of consumer grade propane exceeds the 5-
year rolling average price composite index of residential electricity, 
residential natural gas, and refiner price to end users of No. 2 fuel 
oil in an amount greater than 10.1 percent, the activities of the 
Council shall be restricted to research and development, training, and 
safety matters. The Council shall inform the Secretary of Energy and 
the Congress of any restriction of activities under this subsection. 
Upon expiration of 180 days after the beginning of any such restriction 
of activities, the Secretary of Commerce shall again conduct the 
propane price analysis described in subsection (a). Activities of the 
Council shall continue to be restricted under this subsection until the 
price index excess is 10.1 percent or less.

SEC. 10. PRICING.

    In all cases, the price of propane shall be determined by market 
forces. Consistent with the antitrust laws, the Council may take no 
action, nor may any provision of this Act be interpreted as 
establishing an agreement to pass along to consumers the cost of the 
assessment provided for in section 6.

SEC. 11. RELATION TO OTHER PROGRAMS.

    Nothing in this Act may be construed to preempt or supersede any 
other program relating to propane education and research organized and 
operated under the laws of the United States or any State.

SEC. 12. REPORTS.

    Within 2 years after the date of enactment of this Act, and at 
least once every 2 years thereafter, the Secretary of Commerce shall 
prepare and submit to the Congress and the Secretary a report examining 
whether operation of the Council, in conjunction with the cumulative 
effects of market changes and Federal programs, has had an effect on 
propane consumers, including residential, agriculture, process, and 
nonfuel users of propane. The Secretary of Commerce shall consider and, 
to the extent practicable, shall include in the report submissions by 
propane consumers, and shall consider whether there have been long-term 
and short-term effects on propane prices as a result of Council 
activities and Federal programs, and whether there have been changes in 
the proportion of propane demand attributable to various market 
segments. To the extent that the report demonstrates that there has 
been an adverse effect, the Secretary of Commerce shall include 
recommendations for correcting the situation. Upon petition by affected 
parties or upon request by the Secretary of Energy, the Secretary of 
Commerce may prepare and submit the report required by this section at 
less than 2-year intervals.

                               Speaker of the House of Representatives.

                            Vice President of the United States and    
                                               President of the Senate.

Summary: Propane Education and Research Act of 1996 - Authorizes the qualified industry organizations to conduct, at their own expense, a referendum among producers and retail marketers for the creation of a Propane Education and Research Council. Directs the Council, if established, to develop programs and enter into contracts for: (1) propane research and development, (2) consumer education. And (3) payment for program costs with funds collected under this Act. Requires the Council to reimburse the Secretary of Energy annually for any costs incurred by the United States, but not more than the average annual salary of two Department of Energy employees. Prescribes guidelines under which the Council shall set annual assessments on odorized propane to cover program costs. Directs the Council to establish a program to coordinate its operations with any State propane education and research council. Prohibits Council funds from being used for lobbying activities. Directs the Secretary of Commerce to annually prepare and make available to the Council, the Secretary of Energy (Secretary), and the public, an analysis of changes in propane prices relative to other energy resources. Requires the Council to restrict its activities to research and development, training, and safety whenever in any year the five-year average rolling price index of consumer grade propane exceeds by more than 10.1 percent the five-year rolling average price composite index of residential electricity, residential natural gas, and refiner price to end users of Number 2 fuel oil. Requires the price of propane to be determined by market forces in all cases. Prohibits the Council from taking action to pass the cost of the annual assessments to consumers. Requires the Secretary of Commerce to report biennially to the Congress and the Secretary on: (1) whether operation of the Council, in conjunction with the cumulative effects of market changes and Federal programs, has had an effect on propane consumers, including residential, agriculture, process, and nonfuel users. And (2) whether there have been long-term and short-term effects on propane prices as a result of Council activities and Federal programs.