Union Calendar No. 340

104TH CONGRESS

2D SESSION H. R. 1514

[Report No. 104–655, Part 1]

A BILL

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

JULY 10, 1996

Committee on Science discharged; committed to the Comand ordered to be printed mittee of the Whole House on the State of the Union,
IB

Union Calendar No. 340

104TH CONGRESS

2D SESSION H. R. 1514

[Report No. 104–655, Part 1]

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.

IN THE HOUSE OF REPRESENTATIVES

APRIL 7, 1995

Mr. TAUZIN (for himself, Mr. HALL of Texas, Mr. CRAMER, Mr. ROEMER, Mr.

BLUTE, Mr. GILLMOR, Mr. STUMP, Mr. EMERSON, Mr. HANCOCK, Mr.

GEJDENSON, Mr. MINGE, Mr. CALLAHAN, Mr. GENE GREEN of Texas,

Mr. BAESLER, Mr. COLLINS of Georgia, Mr. BISHOP, Mr. EVERETT, Mr.

BEVILL, Mr. TAYLOR of North Carolina, Mr. BACHUS, Mr. KLUG, Mr.

HILLIARD, Mr. PARKER, Mr. JEFFERSON, Mr. LEWIS of Kentucky, Mr.

PAXON, Mr. BONILLA, Mr. MCINTOSH, Mr. TRAFICANT, Mr. OXLEY, Mr.

TALENT, Mr. BROWDER, and Mr. JACOBS) introduced the following bill;

which was referred to the Committee on Commerce, and in addition to

the Committee on Science, for a period to be subsequently determined by

the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned

JUNE 27, 1996

Reported from the Committee on Commerce with an amendment

[Strike out all after the enacting clause and insert the part printed in italic]

Referral to the Committee on Science extended for a period ending not later

than July 26, 1996

JULY 10, 1996

Additional sponsors: Mr. HAMILTON, Mr. MONTGOMERY, Mrs. FOWLER, Mrs.

MEEK of Florida, Ms. KAPTUR, Mr. DUNCAN, Mr. BRYANT of Tennessee,

Mr. MYERS of Indiana, Mr. FOLEY, Mr. GILMAN, Mr. CUNNINGHAM, Mr.

HOEKSTRA, Mr. ROGERS, Mrs. LINCOLN, Mr. SOLOMON, Ms. DANNER,

Mr. HEFNER, Mr. JOHNSON of South Dakota, Mr. BRYANT of Texas, Mr.

BURR, Mr. LARGENT, Mr. GORDON, Mr. LIPINSKI, Mr. MARTINEZ, Mr.
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SENSENBRENNER, Mr. RICHARDSON, Mr. QUILLEN, Mr. PAYNE of Virginia, Mr. WOLF, Mr. FUNDERBURK, Mr. SKELTON, Mr. SISISKY, Mr.

OBERSTAR, Mr. TANNER, Mr. VOLKMER, Mr. ROSE, Ms. LOFGREN, Mr.

SPENCE, Mr. MCCRERY, Mr. BARTLETT of Maryland, Ms. PRYCE, Mr.

SPRATT, Mr. STENHOLM, Mr. BUNNING of Kentucky, Mr. PETERSON of

Minnesota, Mr. HOBSON, Mr. SMITH of New Jersey, Mr. STEARNS, Mr.

MCCOLLUM, Mr. CRAPO, Mrs. MEYERS of Kansas, Mr. FRELINGHUYSEN,

Mr. BENTSEN, Mr. FIELDS of Texas, Mrs. MYRICK, Mr. POMEROY, Mr.

CHAMBLISS, Mr. LUCAS, Mr. PICKETT, Mr. PETRI, Mr. WHITFIELD, Mr.

WARD, Mr. STUPAK, Mr. FRANKS of Connecticut, Mr. SCOTT, Mr.

LAHOOD, Mr. LAZIO of New York, Mr. MANZULLO, Mr. PASTOR, Mr.

LEACH, Mr. BURTON of Indiana, Mr. WICKER, Mr. HALL of Ohio, Mr.

BARCIA, Ms. EDDIE BERNICE JOHNSON of Texas, Mr. BREWSTER, Mr.

KLINK, Mr. HINCHEY, Mr. MOORHEAD, Mr. TAYLOR of Mississippi, Ms.

FURSE, Mr. LINDER, Mr. FRANKS of New Jersey, Mr. GREENWOOD, Mr.

DEUTSCH, Mrs. VUCANOVICH, Mr. GEPHARDT, Mr. SKEEN, Mr. BOEHLERT, Mr. HASTERT, Mr. HUTCHINSON, Mr. THORNBERRY, Mr.

HAYWORTH, Mrs. KELLY, Mr. GRAHAM, Mr. WAMP, Mr. DOOLEY of California, Mr. LOBIONDO, Mr. DICKEY, Mr. ABERCROMBIE, Mr. NORWOOD,

Mr. JOHNSTON of Florida, Mr. KILDEE, Ms. MCCARTHY, Mr. MARTINI,

Mr. ZELIFF, Mrs. LOWEY, Mr. WILSON, Mr. ANDREWS, Mr. BAKER of

Louisiana, Mr. GOODLATTE, Mr. CLAY, Ms. MCKINNEY, Mr. WELDON of

Pennsylvania, Mr. KINGSTON, Mr. BARR of Georgia, Mr. WATT of North

Carolina, Mr. WATTS of Oklahoma, Mr. LIGHTFOOT, Mr. FAZIO of California, Mr. YOUNG of Alaska, Mr. HAYES, Mr. PALLONE, Mr. JONES,

Mr. CALVERT, Mr. TEJEDA, Mr. MCHUGH, Mr. WELLER, Mr. BOEHNER,

Mr. CLEMENT, Mr. OLVER, Mr. DEAL of Georgia, Mr. EVANS, Mr.

COBLE, Mr. DURBIN, Mr. PACKARD, Mr. PETE GEREN of Texas, Ms.

WOOLSEY, Mr. LAUGHLIN, Mr. FAWELL, Mr. MURTHA, Mr. CHRYSLER,

Mr. HEINEMAN, Mrs. SEASTRAND, Mr. TOWNS, Ms. DELAURO, Mr.

SCHIFF, Mr. FARR of California, Mr. EHLERS, Mr. BALLENGER, Mr. RAHALL, Mr. SAXTON, Mr. HASTINGS of Florida, Mr. BILBRAY, Mr. INGLIS

of South Carolina, Mr. CLYBURN, Mrs. CLAYTON, Mrs. CUBIN, Mr.

BASS, Mr. BROWN of Ohio, Mr. THORNTON, Mr. CASTLE, Mr. STUDDS,

Ms. MOLINARI, Mr. STOCKMAN, Mr. HASTINGS of Washington, Mr.

GUTKNECHT, Mr. GOODLING, Mr. GEKAS, Mrs. MORELLA, Mr. FRAZER,

Mr. EDWARDS, Mr. BROWNBACK, Mr. LATHAM, Mr. WALSH, Mr.

TIAHRT, Mr. BILIRAKIS, Mr. DAVIS, Mr. SALMON, Mr. POSHARD, Mr.

ROBERTS, Mr. BATEMAN, Mr. COSTELLO, Mr. SMITH of Texas, Mr.

MCDADE, Mr. PORTER, Mr. BARRETT of Nebraska, Mr. LEWIS of Georgia, Mr. TORRES, Mr. ALLARD, Mr. FROST, Mr. CAMP, Mr. SHAYS, Mr.

GUNDERSON, Mr. HOYER, Mr. COOLEY of Oregon, Mr. LUTHER, and Mr.

MATSUI

JULY 10, 1996

Committee on Science discharged; committed to the Committee of the Whole

House on the State of the Union, and ordered to be printed

[For text of introduced bill, see copy of bill as introduced on April 7, 1995]
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A BILL

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,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Propane Education and

5 Research Act of 1996’’.

6 SEC. 2. FINDINGS.

7 The Congress finds that—

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

9 an essential energy commodity providing heat, hot

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

11 uses to millions of Americans;

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

13 rural citizens and farmers, offering an efficient and

14 economical source of gas energy;

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

16 and can contribute in many ways to reducing the

17 pollution in our cities and towns; and

18 (4) propane is primarily domestically produced

19 and its use provides energy security and jobs for

20 Americans.
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1 SEC. 3. DEFINITIONS.

2 For the purposes of this Act—

3 (1) the term ‘‘Council’’ means a Propane Edu4 cation and Research Council created pursuant to sec5 tion 4 of this Act;

6 (2) the term ‘‘industry’’ means those persons in7 volved in the production, transportation, and sale of

8 propane, and in the manufacture and distribution of

9 propane utilization equipment, in the United States;

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

11 an organization exempt from tax, under section

12 501(c) (3) or (6) of the Internal Revenue Code of

13 1986, representing the propane industry;

14 (4) the term ‘‘odorized propane’’ means propane

15 which has had odorant added to it;

16 (5) the term ‘‘producer’’ means the owner of pro17 pane at the time it is recovered at a gas processing

18 plant or refinery;

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

whose chemical composition is predominantly C3H8 20 ,

21 whether recovered from natural gas or crude oil, and

22 includes liquefied petroleum gases and mixtures there23 of;

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

25 of the Council, other than a representative of produc26 ers or retail marketers, representing significant users
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1 of propane, public safety officials, academia, the pro2 pane research community, or other groups knowledge3 able about propane;

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

5 means the National Propane Gas Association, the Gas

6 Processors Association, a successor association of such

7 associations, or a group of retail marketers or produc8 ers who collectively represent at least 25 percent of the

9 volume of propane sold or produced in the United

10 States;

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

12 engaged primarily in the sale of odorized propane to

13 the ultimate consumer or to retail propane dispensers;

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

15 a person who sells odorized propane to the ultimate

16 consumer but is not engaged primarily in the busi17 ness of such sales; and

18 (11) the term ‘‘Secretary’’ means the Secretary of

19 Energy.

20 SEC. 4. REFERENDA.

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

22 organizations may conduct, at their own expense, a referen23 dum among producers and retail marketers for the creation

24 of a Propane Education and Research Council. The Coun25 cil, if established, shall reimburse the qualified industry or-
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1 ganizations for the cost of the referendum accounting and

2 documentation. Such referendum shall be conducted by an

3 independent auditing firm agreed to by the qualified indus4 try organizations. Voting rights in such referendum shall

5 be based on the volume of propane produced or odorized

6 propane sold in the previous calendar year or other rep7 resentative period. Upon approval of those persons rep8 resenting two-thirds of the total volume of propane voted

9 in the retail marketer class and two-thirds of all propane

10 voted in the producer class, the Council shall be established,

11 and shall be authorized to levy an assessment on odorized

12 propane in accordance with section 6. All persons voting

13 in the referendum shall certify to the independent auditing

14 firm the volume of propane represented by their vote.

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

16 or on petition to the Council by producers and retail mar17 keters representing 35 percent of the volume of propane in

18 each class, the Council shall, at its own expense, hold a ref19 erendum, to be conducted by an independent auditing firm

20 selected by the Council, to determine whether the industry

21 favors termination or suspension of the Council. Termi22 nation or suspension shall not take effect unless it is ap23 proved by persons representing more than one-half of the

24 total volume of odorized propane in the retail marketer class

25 and more than one-half of the total volume of propane in
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1 the producer class, or is approved by persons representing

2 more than two-thirds of the total volume of propane in ei3 ther such class.

4 SEC. 5. PROPANE EDUCATION AND RESEARCH COUNCIL.

5 (a) SELECTION OF MEMBERS.—The qualified industry

6 organizations shall select all retail marketer, public, and

7 producer members of the Council. The producer organiza8 tions shall select the producer members of the Council, the

9 retail marketer organizations shall select retail marketer

10 members, and all qualified industry organizations shall

11 jointly select the public members. Vacancies in unfinished

12 terms of Council members shall be filled in the same manner

13 as were the original appointments.

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

15 Council, the qualified industry organizations shall give due

16 regard to selecting a Council that is representative of the

17 industry, including representation of—

18 (1) gas processors and oil refiners among pro19 ducers;

20 (2) interstate and intrastate operators among re21 tail marketers;

22 (3) large and small companies among producers

23 and retail marketers, including agricultural coopera24 tives; and

25 (4) diverse geographic regions of the country.
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1 (c) MEMBERSHIP.—The Council shall consist of 21

2 members, with 9 members representing retail marketers, 9

3 members representing producers, and 3 public members.

4 Other than the public members, Council members shall be

5 full-time employees or owners of businesses in the industry

6 or representatives of agricultural cooperatives. No employee

7 of a qualified industry organization or other industry trade

8 association shall serve as a member of the Council, and no

9 member of the Council may serve concurrently as an officer

10 of the Board of Directors of a qualified industry organiza11 tion or other industry trade association. Only one person

12 at a time from any company or its affiliate may serve on

13 the Council.

14 (d) COMPENSATION.—Council members shall receive

15 no compensation for their services, nor shall Council mem16 bers be reimbursed for expenses relating to their service, ex17 cept that public members, upon request, may be reimbursed

18 for reasonable expenses directly related to their participa19 tion in Council meetings.

20 (e) TERMS.—Council members shall serve terms of 3

21 years and may serve not more than 2 full consecutive terms.

22 Members filling unexpired terms may serve not more than

23 a total of 7 consecutive years. Former members of the Coun24 cil may be returned to the Council if they have not been

25 members for a period of 2 years. Initial appointments to
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1 the Council shall be for terms of 1, 2, and 3 years, staggered

2 to provide for the selection of 7 members each year.

3 (f) FUNCTIONS.—The Council shall develop programs

4 and projects and enter into contracts or agreements for im5 plementing this Act, including programs to enhance

6 consumer and employee safety and training, to provide for

7 research and development of clean and efficient propane

8 utilization equipment, to inform and educate the public

9 about safety and other issues associated with the use of pro10 pane, and to provide for the payment of the costs thereof

11 with funds collected pursuant to this Act. The Council shall

12 coordinate its activities with industry trade association and

13 others as appropriate to provide efficient delivery of services

14 and to avoid unnecessary duplication of activities.

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

16 funds collected through assessments pursuant to this Act

17 shall be used for programs and projects intended to benefit

18 the agriculture industry in the United States. The Council

19 shall coordinate its activities in this regard with agri20 culture industry trade associations and other organizations

21 representing the agriculture industry. The percentage of

22 funds collected through assessments pursuant to this Act to

23 be used for projects relating to the use of propane as an

24 over-the-road motor fuel shall not exceed the percentage of

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

2 use over the previous 3-year period.

3 (h) PRIORITIES.—Issues related to research and devel4 opment, safety, education, and training shall be given pri5 ority by the Council in the development of its programs and

6 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 the

10 Council, and shall adopt rules and bylaws for the conduct

11 of business and the implementation of this Act. The Council

12 shall establish procedures for the solicitation of industry

13 comment and recommendations on any significant plans,

14 programs, and projects to be funded by the Council. The

15 Council may establish advisory committees of persons other

16 than Council members.

17 (j) ADMINISTRATIVE EXPENSES.—(1) The administra18 tive expenses of operating the Council (not including costs

19 incurred in the collection of the assessment pursuant to sec20 tion 7) plus amounts paid under paragraph (2) shall not

21 exceed 10 percent of the funds collected in any fiscal year.

22 (2) The Council shall annually reimburse the Sec23 retary for costs incurred by the Federal Government relat24 ing to the Council, except that such reimbursement for any

25 fiscal year shall not exceed the amount that the Secretary
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1 determines is the average annual salary of two employees

2 of the Department of Energy.

3 (k) BUDGET.—Before August 1 each year, the Council

4 shall publish for public review and comment a budget plan

5 for the next calendar year, including the probable costs of

6 all programs, projects, and contracts and a recommended

7 rate of assessment sufficient to cover such costs. Following

8 this review and comment, the Council shall submit the pro9 posed budget to the Secretary and to the Congress. The Sec10 retary may recommend programs and activities the Sec11 retary considers appropriate.

12 (l) RECORDS; AUDITS.—The Council shall keep min13 utes, books, and records that clearly reflect all of the acts

14 and transactions of the Council and make public such infor15 mation. The books of the Council shall be audited by a cer16 tified public accountant at least once each fiscal year and

17 at such other times as the Council may designate. Copies

18 of such audit shall be provided to all members of the Coun19 cil, all qualified industry organizations, and to other mem20 bers of the industry upon request. The Secretary shall re21 ceive notice of meetings and may require reports on the ac22 tivities of the Council, as well as reports on compliance,

23 violations, and complaints regarding the implementation of

24 this Act.
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1 (m) PUBLIC ACCESS TO COUNCIL PROCEEDINGS.—(1)

2 All meetings of the Council shall be open to the public after

3 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 previous

10 year as well as those planned for the coming year. Such

11 report shall also detail the allocation or planned allocation

12 of Council resources for each such program and project.

13 SEC. 6. ASSESSMENTS.

14 (a) AMOUNT.—The Council shall set the initial assess15 ment at no greater than one tenth of 1 cent per gallon of

16 odorized propane. Thereafter, annual assessments shall be

17 sufficient to cover the costs of the plans and programs devel18 oped by the Council. The assessment shall not be greater

19 than one-half cent per gallon of odorized propane, unless

20 approved by a majority of those voting in a referendum

21 in both the producer and the retail marketer class. In no

22 case may the assessment be raised by more than one tenth

23 of 1 cent per gallon of odorized propane annually.

24 (b) OWNERSHIP.—The owner of odorized propane at

25 the time of odorization, or the time of import of odorized
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1 propane, shall make the assessment based on the volume of

2 odorized propane sold and placed into commerce. Assess3 ments collected are payable to the Council on a monthly

4 basis by the 25th of the month following the month of such

5 collection. Propane exported from the United States to an6 other country is not subject to the assessment.

7 (c) ALTERNATIVE COLLECTION RULES.—The Council

8 may establish an alternative means of collecting the assess9 ment if another means is found to be more efficient and

10 effective. The Council may establish a late payment charge

11 and rate of interest to be imposed on any person who fails

12 to remit or pay to the Council any amount due under this

13 Act.

14 (d) INVESTMENT OF FUNDS.—Pending disbursement

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

16 invest funds collected through assessments, and any other

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

18 United States or any agency thereof, in general obligations

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

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

21 that is a member of the Federal Reserve System, or in obli22 gations fully guaranteed as to principal and interest by the

23 United States.

24 (e) STATE PROGRAMS.—The Council shall establish a

25 program coordinating the operation of the Council with
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1 those of any State propane education and research council

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

3 coordination shall include a joint or coordinated assessment

4 collection process, a reduced assessment, or an assessment

5 rebate. A reduced assessment or rebate shall be 20 percent

6 of the regular assessment collected in that State under this

7 section. Assessment rebates shall be paid only to—

8 (1) a State propane education and research

9 council created by State law or regulation that meets

10 requirements established by the Council for specific

11 programs approved by the Council; or

12 (2) a similar entity, such as a foundation estab13 lished by the retail propane gas industry in that

14 State, that meets requirements established by the

15 Council for specific programs approved by the

16 Council.

17 SEC. 7. COMPLIANCE.

18 The Council may bring suit in Federal court to compel

19 compliance with an assessment levied by the Council under

20 this Act. A successful action for compliance under this sec21 tion may also require payment by the defendant of the costs

22 incurred by the Council in bringing such action.

23 SEC. 8. LOBBYING RESTRICTIONS.

24 No funds collected by the Council shall be used in any

25 manner for influencing legislation or elections, except that
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1 the Council may recommend to the Secretary changes in

2 this Act or other statutes that would further the purposes

3 of this Act.

4 SEC. 9. MARKET SURVEY AND CONSUMER PROTECTION.

5 (a) PRICE ANALYSIS.—Beginning 2 years after estab6 lishment of the Council and annually thereafter, the Sec7 retary of Commerce, using only data provided by the En8 ergy Information Administration and other public sources,

9 shall prepare and make available to the Council, the Sec10 retary of Energy, and the public an analysis of changes

11 in the price of propane relative to other energy sources. The

12 propane price analysis shall compare indexed changes in

13 the price of consumer grade propane to a composite of in14 dexed changes in the price of residential electricity, residen15 tial natural gas, and refiner price to end users of No. 2

16 fuel oil on an annual national average basis. For purposes

17 of indexing changes in consumer grade propane, residential

18 electricity, residential natural gas, and end user No. 2 fuel

19 oil prices, the Secretary of Commerce shall use a 5-year roll20 ing average price beginning with the year 4 years prior

21 to the establishment of the Council.

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

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

24 grade propane exceeds the 5-year rolling average price com25 posite index of residential electricity, residential natural
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1 gas, and refiner price to end users of No. 2 fuel oil in an

2 amount greater than 10.1 percent, the activities of the

3 Council shall be restricted to research and development,

4 training, and safety matters. The Council shall inform the

5 Secretary of Energy and the Congress of any restriction of

6 activities under this subsection. Upon expiration of 180

7 days after the beginning of any such restriction of activities,

8 the Secretary of Commerce shall again conduct the propane

9 price analysis described in subsection (a). Activities of the

10 Council shall continue to be restricted under this subsection

11 until the price index excess is 10.1 percent or less.

12 SEC. 10. PRICING.

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

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

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

16 Act be interpreted as establishing an agreement to pass

17 along to consumers the cost of the assessment provided for

18 in section 6.

19 SEC. 11. RELATION TO OTHER PROGRAMS.

20 Nothing in this Act may be construed to preempt or

21 supersede any other program relating to propane education

22 and research organized and operated under the laws of the

23 United States or any State.
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1 SEC. 12. REPORTS.

2 Within 2 years after the date of enactment of this Act,

3 and at least once every 2 years thereafter, the Secretary of

4 Commerce shall prepare and submit to the Congress and

5 the Secretary a report examining whether operation of the

6 Council, in conjunction with the cumulative effects of mar7 ket changes and Federal programs, has had an effect on pro8 pane consumers, including residential, agriculture, process,

9 and nonfuel users of propane. The Secretary of Commerce

10 shall consider and, to the extent practicable, shall include

11 in the report submissions by propane consumers, and shall

12 consider whether there have been long-term and short-term

13 effects on propane prices as a result of Council activities

14 and Federal programs, and whether there have been changes

15 in the proportion of propane demand attributable to var16 ious market segments. To the extent that the report dem17 onstrates that there has been an adverse effect, the Secretary

18 of Commerce shall include recommendations for correcting

19 the situation. Upon petition by affected parties or upon re20 quest by the Secretary of Energy, the Secretary of Com21 merce may prepare and submit the report required by this

22 section at less than 2-year intervals.