H. R. 1514

One Hundred Fourth Congress

of the

United States of America

AT THE SECOND SESSION

Begun and held at the City of Washington on Wednesday,

the third day of January, one thousand nine hundred and ninety-six

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.

Be it enacted by the Senate and House of Representatives of

the United States of America in Congress assembled,

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 C3H8, whether recovered from

natural gas or crude oil, and includes liquefied petroleum gases

and mixtures thereof;
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(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
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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
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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.
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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.
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SEC. 8. LOBBYING RESTRICTIONS.

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

for influencing legislation or elections, except that the 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
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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 shortterm 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.