Calendar No. 576

104TH CONGRESS

2D SESSION H. R. 1514

AN ACT

To authorize and facilitate a program to enhance

and for other purposes.the benefit of propane consumers and the public,safety education in the propane gas industry forsafety, training, research and development, and

SEPTEMBER 5, 1996

Received; read twice and placed on the calendar
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Calendar No. 576

104TH CONGRESS

2D SESSION H. R. 1514

IN THE SENATE OF THE UNITED STATES

SEPTEMBER 5, 1996

Received; read twice and placed on the calendar

AN ACT

To authorize and facilitate a program to enhance safety,

training, research and development, and safety education

in the propane gas industry for the benefit of propane

consumers and the public, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
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1 SECTION 1. SHORT TITLE.

2 This Act may be cited as the ‘‘Propane Education

3 and Research Act of 1996’’.

4 SEC. 2. FINDINGS.

5 The Congress finds that—

6 (1) propane gas, or liquefied petroleum gas, is

7 an essential energy commodity providing heat, hot

8 water, cooking fuel, and motor fuel among its many

9 uses to millions of Americans;

10 (2) the use of propane is especially important to

11 rural citizens and farmers, offering an efficient and

12 economical source of gas energy;

13 (3) propane has been recognized as a clean fuel

14 and can contribute in many ways to reducing the

15 pollution in our cities and towns; and

16 (4) propane is primarily domestically produced

17 and its use provides energy security and jobs for

18 Americans.

19 SEC. 3. DEFINITIONS.

20 For the purposes of this Act—

21 (1) the term ‘‘Council’’ means a Propane Edu22 cation and Research Council created pursuant to

23 section 4 of this Act;

24 (2) the term ‘‘industry’’ means those persons

25 involved in the production, transportation, and sale

26 of propane, and in the manufacture and distribution
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1 of propane utilization equipment, in the United

2 States;

3 (3) the term ‘‘industry trade association’’

4 means an organization exempt from tax, under sec5 tion 501(c) (3) or (6) of the Internal Revenue Code

6 of 1986, representing the propane industry;

7 (4) the term ‘‘odorized propane’’ means pro8 pane which has had odorant added to it;

9 (5) the term ‘‘producer’’ means the owner of

10 propane at the time it is recovered at a gas process11 ing plant or refinery;

12 (6) the term ‘‘propane’’ means a hydrocarbon

whose chemical composition is predominantly C3H8 13 ,

14 whether recovered from natural gas or crude oil, and

15 includes liquefied petroleum gases and mixtures

16 thereof;

17 (7) the term ‘‘public member’’ means a member

18 of the Council, other than a representative of pro19 ducers or retail marketers, representing significant

20 users of propane, public safety officials, academia,

21 the propane research community, or other groups

22 knowledgeable about propane;

23 (8) the term ‘‘qualified industry organization’’

24 means the National Propane Gas Association, the

25 Gas Processors Association, a successor association
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1 of such associations, or a group of retail marketers

2 or producers who collectively represent at least 25

3 percent of the volume of propane sold or produced

4 in the United States;

5 (9) the term ‘‘retail marketer’’ means a person

6 engaged primarily in the sale of odorized propane to

7 the ultimate consumer or to retail propane dispens8 ers;

9 (10) the term ‘‘retail propane dispenser’’ means

10 a person who sells odorized propane to the ultimate

11 consumer but is not engaged primarily in the busi12 ness of such sales; and

13 (11) the term ‘‘Secretary’’ means the Secretary

14 of Energy.

15 SEC. 4. REFERENDA.

16 (a) CREATION OF PROGRAM.—The qualified industry

17 organizations may conduct, at their own expense, a ref18 erendum among producers and retail marketers for the

19 creation of a Propane Education and Research Council.

20 The Council, if established, shall reimburse the qualified

21 industry organizations for the cost of the referendum ac22 counting and documentation. Such referendum shall be

23 conducted by an independent auditing firm agreed to by

24 the qualified industry organizations. Voting rights in such

25 referendum shall be based on the volume of propane pro-
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1 duced or odorized propane sold in the previous calendar

2 year or other representative period. Upon approval of

3 those persons representing two-thirds of the total volume

4 of propane voted in the retail marketer class and two5 thirds of all propane voted in the producer class, the Coun6 cil shall be established, and shall be authorized to levy an

7 assessment on odorized propane in accordance with section

8 6. All persons voting in the referendum shall certify to

9 the independent auditing firm the volume of propane rep10 resented by their vote.

11 (b) TERMINATION.—On the Council’s own initiative,

12 or on petition to the Council by producers and retail mar13 keters representing 35 percent of the volume of propane

14 in each class, the Council shall, at its own expense, hold

15 a referendum, to be conducted by an independent auditing

16 firm selected by the Council, to determine whether the in17 dustry favors termination or suspension of the Council.

18 Termination or suspension shall not take effect unless it

19 is approved by persons representing more than one-half

20 of the total volume of odorized propane in the retail mar21 keter class and more than one-half of the total volume of

22 propane in the producer class, or is approved by persons

23 representing more than two-thirds of the total volume of

24 propane in either such class.
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1 SEC. 5. PROPANE EDUCATION AND RESEARCH COUNCIL.

2 (a) SELECTION OF MEMBERS.—The qualified indus3 try organizations shall select all retail marketer, public,

4 and producer members of the Council. The producer orga5 nizations shall select the producer members of the Council,

6 the retail marketer organizations shall select retail mar7 keter members, and all qualified industry organizations

8 shall jointly select the public members. Vacancies in unfin9 ished terms of Council members shall be filled in the same

10 manner as were the original appointments.

11 (b) REPRESENTATION.—In selecting members of the

12 Council, the qualified industry organizations shall give due

13 regard to selecting a Council that is representative of the

14 industry, including representation of—

15 (1) gas processors and oil refiners among pro16 ducers;

17 (2) interstate and intrastate operators among

18 retail marketers;

19 (3) large and small companies among producers

20 and retail marketers, including agricultural coopera21 tives; and

22 (4) diverse geographic regions of the country.

23 (c) MEMBERSHIP.—The Council shall consist of 21

24 members, with 9 members representing retail marketers,

25 9 members representing producers, and 3 public members.

26 Other than the public members, Council members shall be
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1 full-time employees or owners of businesses in the industry

2 or representatives of agricultural cooperatives. No em3 ployee of a qualified industry organization or other indus4 try trade association shall serve as a member of the Coun5 cil, and no member of the Council may serve concurrently

6 as an officer of the Board of Directors of a qualified indus7 try organization or other industry trade association. Only

8 one person at a time from any company or its affiliate

9 may serve on the Council.

10 (d) COMPENSATION.—Council members shall receive

11 no compensation for their services, nor shall Council mem12 bers be reimbursed for expenses relating to their service,

13 except that public members, upon request, may be reim14 bursed for reasonable expenses directly related to their

15 participation in Council meetings.

16 (e) TERMS.—Council members shall serve terms of

17 3 years and may serve not more than 2 full consecutive

18 terms. Members filling unexpired terms may serve not

19 more than a total of 7 consecutive years. Former members

20 of the Council may be returned to the Council if they have

21 not been members for a period of 2 years. Initial appoint22 ments to the Council shall be for terms of 1, 2, and 3

23 years, staggered to provide for the selection of 7 members

24 each year.
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1 (f) FUNCTIONS.—The Council shall develop programs

2 and projects and enter into contracts or agreements for

3 implementing this Act, including programs to enhance

4 consumer and employee safety and training, to provide for

5 research and development of clean and efficient propane

6 utilization equipment, to inform and educate the public

7 about safety and other issues associated with the use of

8 propane, and to provide for the payment of the costs there9 of with funds collected pursuant to this Act. The Council

10 shall coordinate its activities with industry trade associa11 tion and others as appropriate to provide efficient delivery

12 of services and to avoid unnecessary duplication of activi13 ties.

14 (g) USE OF FUNDS.—Not less than 5 percent of the

15 funds collected through assessments pursuant to this Act

16 shall be used for programs and projects intended to bene17 fit the agriculture industry in the United States. The

18 Council shall coordinate its activities in this regard with

19 agriculture industry trade associations and other organiza20 tions representing the agriculture industry. The percent21 age of funds collected through assessments pursuant to

22 this Act to be used for projects relating to the use of pro23 pane as an over-the-road motor fuel shall not exceed the

24 percentage of the total market for odorized propane that
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1 is used as a motor vehicle fuel, based on the historical

2 average of such use over the previous 3-year period.

3 (h) PRIORITIES.—Issues related to research and de4 velopment, safety, education, and training shall be given

5 priority by the Council in the development of its programs

6 and projects.

7 (i) ADMINISTRATION.—The Council shall select from

8 among its members a Chairman and other officers as nec9 essary, may establish committees and subcommittees of

10 the Council, and shall adopt rules and bylaws for the con11 duct of business and the implementation of this Act. The

12 Council shall establish procedures for the solicitation of

13 industry comment and recommendations on any signifi14 cant plans, programs, and projects to be funded by the

15 Council. The Council may establish advisory committees

16 of persons other than Council members.

17 (j) ADMINISTRATIVE EXPENSES.—(1) The adminis18 trative expenses of operating the Council (not including

19 costs incurred in the collection of the assessment pursuant

20 to section 7) plus amounts paid under paragraph (2) shall

21 not exceed 10 percent of the funds collected in any fiscal

22 year.

23 (2) The Council shall annually reimburse the Sec24 retary for costs incurred by the Federal Government relat25 ing to the Council, except that such reimbursement for
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1 any fiscal year shall not exceed the amount that the Sec2 retary determines is the average annual salary of two em3 ployees of the Department of Energy.

4 (k) BUDGET.—Before August 1 each year, the Coun5 cil shall publish for public review and comment a budget

6 plan for the next calendar year, including the probable

7 costs of all programs, projects, and contracts and a rec8 ommended rate of assessment sufficient to cover such

9 costs. Following this review and comment, the Council

10 shall submit the proposed budget to the Secretary and to

11 the Congress. The Secretary may recommend programs

12 and activities the Secretary considers appropriate.

13 (l) RECORDS; AUDITS.—The Council shall keep min14 utes, books, and records that clearly reflect all of the acts

15 and transactions of the Council and make public such in16 formation. The books of the Council shall be audited by

17 a certified public accountant at least once each fiscal year

18 and at such other times as the Council may designate.

19 Copies of such audit shall be provided to all members of

20 the Council, all qualified industry organizations, and to

21 other members of the industry upon request. The Sec22 retary shall receive notice of meetings and may require

23 reports on the activities of the Council, as well as reports

24 on compliance, violations, and complaints regarding the

25 implementation of this Act.
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1 (m) PUBLIC ACCESS TO COUNCIL PROCEEDINGS.—

2 (1) All meetings of the Council shall be open to the public

3 after at least 30 days advance public notice.

4 (2) The minutes of all meetings of the Council shall

5 be made available to and readily accessible by the public.

6 (n) ANNUAL REPORT.—Each year the Council shall

7 prepare and make publicly available a report which in8 cludes an identification and description of all programs

9 and projects undertaken by the Council during the pre10 vious year as well as those planned for the coming year.

11 Such report shall also detail the allocation or planned allo12 cation of Council resources for each such program and

13 project.

14 SEC. 6. ASSESSMENTS.

15 (a) AMOUNT.—The Council shall set the initial as16 sessment at no greater than one tenth of 1 cent per gallon

17 of odorized propane. Thereafter, annual assessments shall

18 be sufficient to cover the costs of the plans and programs

19 developed by the Council. The assessment shall not be

20 greater than one-half cent per gallon of odorized propane,

21 unless approved by a majority of those voting in a referen22 dum in both the producer and the retail marketer class.

23 In no case may the assessment be raised by more than

24 one tenth of 1 cent per gallon of odorized propane annu25 ally.
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1 (b) OWNERSHIP.—The owner of odorized propane at

2 the time of odorization, or the time of import of odorized

3 propane, shall make the assessment based on the volume

4 of odorized propane sold and placed into commerce. As5 sessments collected are payable to the Council on a month6 ly basis by the 25th of the month following the month

7 of such collection. Propane exported from the United

8 States to another country is not subject to the assessment.

9 (c) ALTERNATIVE COLLECTION RULES.—The Coun10 cil may establish an alternative means of collecting the as11 sessment if another means is found to be more efficient

12 and effective. The Council may establish a late payment

13 charge and rate of interest to be imposed on any person

14 who fails to remit or pay to the Council any amount due

15 under this Act.

16 (d) INVESTMENT OF FUNDS.—Pending disbursement

17 pursuant to a program, plan, or project, the Council may

18 invest funds collected through assessments, and any other

19 funds received by the Council, only in obligations of the

20 United States or any agency thereof, in general obligations

21 of any State or any political subdivision thereof, in any

22 interest-bearing account or certificate of deposit of a bank

23 that is a member of the Federal Reserve System, or in

24 obligations fully guaranteed as to principal and interest

25 by the United States.
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1 (e) STATE PROGRAMS.—The Council shall establish

2 a program coordinating the operation of the Council with

3 those of any State propane education and research council

4 created by State law or regulation, or similar entity. Such

5 coordination shall include a joint or coordinated assess6 ment collection process, a reduced assessment, or an as7 sessment rebate. A reduced assessment or rebate shall be

8 20 percent of the regular assessment collected in that

9 State under this section. Assessment rebates shall be paid

10 only to—

11 (1) a State propane education and research

12 council created by State law or regulation that meets

13 requirements established by the Council for specific

14 programs approved by the Council; or

15 (2) a similar entity, such as a foundation estab16 lished by the retail propane gas industry in that

17 State, that meets requirements established by the

18 Council for specific programs approved by the

19 Council.

20 SEC. 7. COMPLIANCE.

21 The Council may bring suit in Federal court to com22 pel compliance with an assessment levied by the Council

23 under this Act. A successful action for compliance under

24 this section may also require payment by the defendant
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1 of the costs incurred by the Council in bringing such

2 action.

3 SEC. 8. LOBBYING RESTRICTIONS.

4 No funds collected by the Council shall be used in

5 any manner for influencing legislation or elections, except

6 that the Council may recommend to the Secretary changes

7 in this Act or other statutes that would further the pur8 poses of this Act.

9 SEC. 9. MARKET SURVEY AND CONSUMER PROTECTION.

10 (a) PRICE ANALYSIS.—Beginning 2 years after es11 tablishment of the Council and annually thereafter, the

12 Secretary of Commerce, using only data provided by the

13 Energy Information Administration and other public

14 sources, shall prepare and make available to the Council,

15 the Secretary of Energy, and the public an analysis of

16 changes in the price of propane relative to other energy

17 sources. The propane price analysis shall compare indexed

18 changes in the price of consumer grade propane to a com19 posite of indexed changes in the price of residential elec20 tricity, residential natural gas, and refiner price to end

21 users of No. 2 fuel oil on an annual national average basis.

22 For purposes of indexing changes in consumer grade pro23 pane, residential electricity, residential natural gas, and

24 end user No. 2 fuel oil prices, the Secretary of Commerce
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1 shall use a 5-year rolling average price beginning with the

2 year 4 years prior to the establishment of the Council.

3 (b) AUTHORITY TO RESTRICT ACTIVITIES.—If in any

4 year the 5-year average rolling price index of consumer

5 grade propane exceeds the 5-year rolling average price

6 composite index of residential electricity, residential natu7 ral gas, and refiner price to end users of No. 2 fuel oil

8 in an amount greater than 10.1 percent, the activities of

9 the Council shall be restricted to research and develop10 ment, training, and safety matters. The Council shall in11 form the Secretary of Energy and the Congress of any

12 restriction of activities under this subsection. Upon expira13 tion of 180 days after the beginning of any such restric14 tion of activities, the Secretary of Commerce shall again

15 conduct the propane price analysis described in subsection

16 (a). Activities of the Council shall continue to be restricted

17 under this subsection until the price index excess is 10.1

18 percent or less.

19 SEC. 10. PRICING.

20 In all cases, the price of propane shall be determined

21 by market forces. Consistent with the antitrust laws, the

22 Council may take no action, nor may any provision of this

23 Act be interpreted as establishing an agreement to pass

24 along to consumers the cost of the assessment provided

25 for in section 6.
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1 SEC. 11. RELATION TO OTHER PROGRAMS.

2 Nothing in this Act may be construed to preempt or

3 supersede any other program relating to propane edu4 cation and research organized and operated under the laws

5 of the United States or any State.

6 SEC. 12. REPORTS.

7 Within 2 years after the date of enactment of this

8 Act, and at least once every 2 years thereafter, the Sec9 retary of Commerce shall prepare and submit to the Con10 gress and the Secretary a report examining whether oper11 ation of the Council, in conjunction with the cumulative

12 effects of market changes and Federal programs, has had

13 an effect on propane consumers, including residential, ag14 riculture, process, and nonfuel users of propane. The Sec15 retary of Commerce shall consider and, to the extent prac16 ticable, shall include in the report submissions by propane

17 consumers, and shall consider whether there have been

18 long-term and short-term effects on propane prices as a

19 result of Council activities and Federal programs, and

20 whether there have been changes in the proportion of pro21 pane demand attributable to various market segments. To

22 the extent that the report demonstrates that there has

23 been an adverse effect, the Secretary of Commerce shall

24 include recommendations for correcting the situation.

25 Upon petition by affected parties or upon request by the

26 Secretary of Energy, the Secretary of Commerce may pre-
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1 pare and submit the report required by this section at less

2 than 2-year intervals.

Passed the House of Representatives September 4,

1996.

Attest: ROBIN H. CARLE,

Clerk.