II

104TH CONGRESS

2D SESSION S. 1646

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 SENATE OF THE UNITED STATES

MARCH 27 (legislative day, MARCH 26), 1996

Mr. DOMENICI (for himself, Mr. FORD, Mr. DOLE, Mr. LOTT, Mr. HEFLIN,

Mr. SHELBY, Mr. FAIRCLOTH, Mr. SIMPSON, Mr. COCHRAN, Mr.

INHOFE, Mr. WARNER, Mr. HELMS, Mr. MCCONNELL, Mr. THURMOND,

Mr. BURNS, Mr. JOHNSTON, Mr. BINGAMAN, Mr. NICKLES, Mr. LUGAR,

Mrs. KASSEBAUM, Mr. COATS, and Mr. GRAMS) introduced the following

bill; which was read twice and referred to the Committee on Energy and

Natural Resources

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

5 and Research Act of 1996’’.
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1 SEC. 2. FINDINGS.

2 Congress finds that—

3 (1) propane gas (also known as liquefied petro4 leum gas) is an essential energy commodity that pro5 vides heat, hot water, cooking fuel, and motor fuel,

6 and has many other uses to millions of Americans;

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

8 rural citizens and farmers, offering an efficient and

9 economical source of gas energy;

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

11 and can contribute in many ways to reducing pollu12 tion in cities and towns of the United States; and

13 (4) propane is primarily domestically produced,

14 and the use of propane provides energy security and

15 jobs for Americans.

16 SEC. 3. DEFINITIONS.

17 In this Act:

18 (1) COUNCIL.—The term ‘‘Council’’ means a

19 Propane Education and Research Council estab20 lished under section 4.

21 (2) INDUSTRY.—The term ‘‘industry’’ means

22 persons involved in the United States in—

23 (A) the production, transportation, and

24 sale of propane; and

25 (B) the manufacture and distribution of

26 propane utilization equipment.
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1 (3) INDUSTRY TRADE ASSOCIATION.—The term

2 ‘‘industry trade association’’ means an organization

3 exempt from tax, under paragraph 3 or 6 of section

4 501(c) of the Internal Revenue Code of 1986, that

5 represents the propane industry.

6 (4) ODORIZED PROPANE.—The term ‘‘odorized

7 propane’’ means propane that has had odorant

8 added to it.

9 (5) PRODUCER.—The term ‘‘producer’’ means

10 the owner of propane at the time at which the pro11 pane is recovered at a gas processing plant or refin12 ery.

13 (6) PROPANE.—The term ‘‘propane’’—

14 (A) means a hydrocarbon, the chemical

composition of which is predominantly C3H8 15 ,

16 whether recovered from natural gas or from

17 crude oil; and

18 (B) includes liquefied petroleum gas or a

19 mixture of liquefied petroleum gases.

20 (7) PUBLIC MEMBER.—The term ‘‘public mem21 ber’’ means a member of the Council, other than a

22 representative of producers or retail marketers, rep23 resenting significant users of propane, public safety

24 officials, academia, the propane research community,

25 or other groups knowledgeable about propane.
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1 (8) QUALIFIED INDUSTRY ORGANIZATION.—The

2 term ‘‘qualified industry organization’’ means the

3 National Propane Gas Association, the Gas Proc4 essors Association, a successor of the National Pro5 pane Gas Association or the Gas Processors Associa6 tion, or a group of retail producers or marketers

7 that collectively represent at least 25 percent of the

8 volume of propane produced or sold, respectively, in

9 the United States.

10 (9) RETAIL MARKETER.—The term ‘‘retail mar11 keter’’ means a person engaged primarily in the sale

12 of odorized propane to ultimate consumers or to re13 tail propane dispensers.

14 (10) RETAIL PROPANE DISPENSER.—The term

15 ‘‘retail propane dispenser’’ means a person that

16 sells, but is not engaged primarily in the business of

17 selling odorized propane to ultimate consumers.

18 (11) SECRETARY.—The term ‘‘Secretary’’

19 means the Secretary of Energy.

20 SEC. 4. REFERENDA.

21 (a) CREATION OF PROGRAM.—

22 (1) IN GENERAL.—The qualified industry orga23 nizations may conduct a referendum among produc24 ers and retail marketers for the creation of a Pro25 pane Education and Research Council.
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1 (2) EXPENSES.—A referendum under para2 graph (1) shall be conducted at the expense of the

3 qualified industry organizations.

4 (3) REIMBURSEMENT.—The Council, if estab5 lished, shall reimburse the qualified industry organi6 zations for the cost of the referendum accounting

7 and documentation.

8 (4) INDEPENDENT AUDITING FIRM.—The ref9 erendum shall be conducted by an independent au10 diting firm agreed to by the qualified industry orga11 nizations.

12 (5) VOTING RIGHTS.—Voting rights in the ref13 erendum shall be based on the volume of propane

14 produced or odorized propane sold in the calendar

15 year previous to the year in which the referendum

16 is conducted, or other representative period agreed

17 to by the qualified industry organizations.

18 (6) CERTIFICATION OF VOLUME OF PRO19 PANE.—All persons voting in the referendum shall

20 certify to the independent auditing firm the volume

21 of propane the person represents.

22 (7) APPROVAL.—On the approval of persons

representing 2 23 ⁄3 of the total volume of propane voted

in the retail marketer class and 2 24 ⁄3 of all propane
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1 voted in the producer class, the Council shall be es2 tablished.

3 (b) TERMINATION OR SUSPENSION.—

4 (1) REFERENDUM.—On the Council’s initiative,

5 or on petition to the Council by producers and retail

6 marketers representing 35 percent of the volume of

7 propane produced and sold, respectively, in the Unit8 ed States, the Council shall conduct a referendum to

9 determine whether the industry favors termination

10 or suspension of the Council.

11 (2) EXPENSE.—A referendum under paragraph

12 (1) shall be conducted at the expense of the Council.

13 (3) INDEPENDENT AUDITING FIRM.—The ref14 erendum shall be conducted by an independent au15 diting firm selected by the Council.

16 (4) TERMINATION OR SUSPENSION.—Termi17 nation or suspension shall take effect if approved

18 by—

(A) persons representing more than 1 19 ⁄2 of

20 the total volume of odorized propane in the producer class and more than 1 21 ⁄2 of the total vol22 ume of propane in the retail marketer class; or

(B) persons representing more than 2 23 ⁄3 of

24 the total volume of propane in produced or sold

25 in the United States.
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1 SEC. 5. PROPANE EDUCATION AND RESEARCH COUNCIL.

2 (a) SELECTION OF MEMBERS.—

3 (1) SELECTION BY QUALIFIED INDUSTRY ORGA4 NIZATIONS.—The qualified industry organizations

5 shall select all retail marketer, public, and producer

6 members of the Council.

7 (2) ALLOCATION.—The producer organizations

8 shall select the producer members of the Council,

9 the retail marketer organizations shall select retail

10 marketer members, and all qualified industry organi11 zations shall select the public members.

12 (3) VACANCIES.—Vacancies in unfinished terms

13 of Council members shall be filled in the same man14 ner as original appointments.

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

16 Council, the qualified industry organizations shall give due

17 regard to selecting a Council that is representative of the

18 industry, including representation of—

19 (1) gas processors and oil refiners among pro20 ducers;

21 (2) interstate and intrastate operators among

22 retail marketers;

23 (3) large and small companies among producers

24 and retail marketers, including agricultural coopera25 tives; and

26 (4) all geographic regions of the country.
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1 (c) MEMBERSHIP.—

2 (1) IN GENERAL.—The Council shall consist of

3 21 members, including—

4 (A) 9 members representing retail market5 ers;

6 (B) 9 members representing producers;

7 and

8 (C) 3 public members.

9 (2) QUALIFICATIONS.—Each Council member

10 representing retail marketers or producers shall be a

11 full-time employee or owner of a business in the in12 dustry that the member represents or a representa13 tive of an agricultural cooperative.

14 (3) DISQUALIFICATION.—No employee of a

15 qualified industry organization or other industry

16 trade association shall serve as a member of the

17 Council, and no member of the Council may serve

18 concurrently as an officer of the board of directors

19 of a qualified industry organization or other industry

20 trade association.

21 (4) LIMITED COMPANY REPRESENTATION.—Not

22 more than 1 person from any company (or affiliate

23 of the company) may serve on the Council at any

24 given time.

25 (d) COMPENSATION.—
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1 (1) IN GENERAL.—Subject to paragraph (2),

2 Council members shall receive no compensation for

3 services performed or reimbursement for expenses

4 relating to services performed.

5 (2) EXCEPTION FOR PUBLIC MEMBERS.—A

6 public member may, on request, be reimbursed for

7 reasonable expenses directly related to participation

8 by the member in Council meetings.

9 (e) TERMS.—

10 (1) LENGTH OF TERMS.—A Council member

11 shall serve a term of 3 years.

12 (2) NUMBER OF TERMS.—A Council member

13 may not serve more than 2 full consecutive terms.

14 (3) MAXIMUM CONSECUTIVE YEARS.—A mem15 ber filling an unexpired term may serve not more

16 than 7 consecutive years.

17 (4) RETURN OF FORMER MEMBERS.—A former

18 member of the Council may return to the Council

19 only if the member has not been a member for a pe20 riod of 2 years.

21 (5) INITIAL APPOINTMENTS.—Initial appoint22 ments to the Council shall be for terms of 1, 2, and

23 3 years, and shall be staggered to provide for the se24 lection of 7 members each year.

25 (f) FUNCTIONS.—
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1 (1) IN GENERAL.—The Council shall develop

2 programs and projects and enter into contracts or

3 agreements for implementing this Act, including pro4 grams to—

5 (A) enhance consumer and employee safety

6 and training;

7 (B) provide for research and development

8 of clean and efficient propane utilization equip9 ment;

10 (C) inform and educate the public about

11 safety and other issues associated with the use

12 of propane; and

13 (D) provide for the payment of the costs of

14 implementing subparagraphs (A) through (C)

15 with funds collected under this Act.

16 (2) COORDINATION.—The Council shall coordi17 nate activities with industry trade associations and

18 others as appropriate to provide efficient delivery of

19 services and to avoid unnecessary duplication of ac20 tivities.

21 (g) USE OF FUNDS.—

22 (1) UNITED STATES AGRICULTURE INDUS23 TRY.—Not less than 5 percent of the funds collected

24 through assessments under this Act shall be used for
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1 programs and projects intended to benefit the agri2 culture industry in the United States.

3 (2) COORDINATION.—The Council shall coordi4 nate the use of funds under paragraph (1) with agri5 culture industry trade associations and other organi6 zations representing the agriculture industry.

7 (3) USE OF PROPANE AS AN OVER-THE-ROAD

8 MOTOR FUEL.—The percentage of funds collected

9 through assessments under this Act to be used in

10 any year for projects relating to the use of propane

11 as an over-the-road motor fuel shall not exceed the

12 percentage of the total market for odorized propane

13 that is used as an over-the-road motor fuel, based on

14 an historical average of the use of propane as an

15 over-the-road motor fuel during the 3-year period

16 preceding the year in which the funds are used.

17 (h) PRIORITIES.—Issues related to research and de18 velopment, safety, education, and training shall be given

19 priority by the Council in the development of programs

20 and projects.

21 (i) ADMINISTRATION.—

22 (1) CHAIRMAN.—The Council shall select a

23 Chairman from among the members of the Council.
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1 (2) OFFICERS.—The Council shall select from

2 among the members of the Council such officers as

3 the Council considers necessary.

4 (3) COMMITTEES.—The Council may establish

5 committees and subcommittees of the Council.

6 (4) RULES AND BYLAWS.—The Council shall

7 adopt rules and bylaws for the conduct of business

8 and the implementation of this Act.

9 (5) INDUSTRY COMMENT AND RECOMMENDA10 TIONS.—The Council shall establish procedures for

11 the solicitation of industry comment and rec12 ommendations on any significant plan, program, or

13 project to be funded by the Council.

14 (6) ADVISORY COMMITTEES.—The Council may

15 establish advisory committees of persons other than

16 Council members.

17 (j) ADMINISTRATIVE EXPENSES.—

18 (1) LIMITATION ON EXPENSES.—The adminis19 trative expenses of operating the Council (not in20 cluding costs incurred in the collection of the assess21 ment under section 6) plus amounts paid under

22 paragraph (2) shall not exceed 10 percent of the

23 funds collected by the Council in any fiscal year.
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1 (2) REIMBURSEMENT.—The Council shall an2 nually reimburse the Secretary for costs incurred by

3 the United States relating to the Council.

4 (3) LIMITATION ON REIMBURSEMENT.—A reim5 bursement under paragraph (2) for any fiscal year

6 shall not exceed the amount that the Secretary de7 termines is the average annual salary of employees

8 of the Department of Energy.

9 (k) BUDGET.—

10 (1) REVIEW AND COMMENT.—Prior to August

11 1 of each year, the Council shall publish for public

12 review and comment a budget plan for the next cal13 endar year, including the probable costs of all pro14 grams, projects, and contracts and a recommended

15 rate of assessment sufficient to cover the costs.

16 (2) SUBMISSION.—Following review and com17 ment under paragraph (1), the Council shall submit

18 the proposed budget to the Secretary and to Con19 gress.

20 (3) RECOMMENDATIONS BY SECRETARY.—The

21 Secretary may recommend any program or activity

22 that the Secretary considers appropriate.

23 (l) RECORDS.—
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1 (1) IN GENERAL.—The Council shall keep min2 utes, books, and records that clearly reflect all of the

3 actions of the Council.

4 (2) PUBLIC AVAILABILITY.—The Council shall

5 make the minutes, books, and records available to

6 the public.

7 (3) AUDIT.—The Council shall have the books

8 audited by a certified public accountant at least once

9 each fiscal year and at such other times as the

10 Council may determine.

11 (4) COPIES.—Copies of an audit under para12 graph (3) shall be provided to all members of the

13 Council, all qualified industry organizations, and any

14 other member of the industry on request.

15 (5) NOTICE.—The Council shall provide the

16 Secretary with notice of meetings.

17 (6) ADDITIONAL REPORTS.—The Secretary may

18 require the Council to provide reports on the activi19 ties of the Council and on compliance, violations,

20 and complaints regarding the implementation of this

21 Act.

22 (m) PUBLIC ACCESS TO COUNCIL PROCEEDINGS.—

23 (1) IN GENERAL.—All meetings of the Council

24 shall be open to the public.
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1 (2) NOTICE.—The Council shall provide the

2 public at least 30 days’ notice of Council meetings.

3 (3) MINUTES.—The minutes of all meetings of

4 the Council shall be made readily available to the

5 public.

6 (n) ANNUAL REPORT.—

7 (1) IN GENERAL.—Each year the Council shall

8 prepare and make publicly available a report that in9 cludes an identification and description of all pro10 grams and projects undertaken by the Council dur11 ing the previous year and those planned for the up12 coming year.

13 (2) RESOURCES.—The report shall detail the

14 allocation and planned allocation of Council re15 sources for each program and project.

16 SEC. 6. ASSESSMENTS.

17 (a) IN GENERAL.—The Council may levy an assess18 ment on odorized propane in accordance with this section.

19 (b) AMOUNT.—

20 (1) INITIAL ASSESSMENT.—The Council shall

set the initial assessment at no greater than 1 21 ⁄10

22 cent per gallon of odorized propane sold and placed

23 into commerce.

24 (2) SUBSEQUENT ASSESSMENTS.—Subsequent

25 to the initial assessment, annual assessments shall
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1 be sufficient to cover the costs of the plans and pro2 grams developed by the Council.

3 (3) ASSESSMENT MAXIMUM.—An assessment

shall not be greater than 1 4 ⁄2 cent per gallon of odor5 ized propane, unless approved by a majority of those

6 voting in a referendum in the producer class and the

7 retail marketer class.

8 (4) MAXIMUM INCREASE.—An assessment may

not be raised by more than 1 9 ⁄10 cent per gallon of

10 odorized propane annually.

11 (5) OWNERSHIP.—The owner of odorized pro12 pane at the time of odorization, or at the time of im13 port of odorized propane, shall make the assessment

14 based on the volume of odorized propane sold and

15 placed into commerce.

16 (6) DUE DATE.—Assessments shall be payable

17 to the Council on a monthly basis not later than the

18 25th of the month following the month in which the

19 assessment is made.

20 (7) EXPORTED PROPANE.—Propane exported

21 from the United States is not subject to the assess22 ment.

23 (8) LATE FEE.—The Council may establish a

24 late payment charge and rate of interest to be im-
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1 posed on a person that fails to remit or pay to the

2 Council any amount due under this Act.

3 (c) ALTERNATIVE COLLECTION RULES.—The Coun4 cil may establish an alternative means of collecting the as5 sessment if the Council determines that the alternative

6 means is more efficient and effective.

7 (d) INVESTMENT OF FUNDS.—Pending disbursement

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

9 invest funds collected through assessments, and any other

10 funds received by the Council, only in—

11 (1) obligations of the United States or an agen12 cy of the United States;

13 (2) general obligations of a State or political

14 subdivision of a State;

15 (3) an interest-bearing account or certificate of

16 deposit of a bank that is a member of the Federal

17 Reserve System; or

18 (4) obligations fully guaranteed as to principal

19 and interest by the United States.

20 (e) STATE PROGRAMS.—

21 (1) IN GENERAL.—The Council shall establish a

22 program coordinating the operation of the Council

23 with the programs of any State propane education

24 and research council created by State law, or any

25 similar entity.
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1 (2) COORDINATION.—The coordination shall in2 clude a joint or coordinated assessment collection

3 process, a reduced assessment, or an assessment re4 bate.

5 (3) REDUCED ASSESSMENT OR REBATE.—A re6 duced assessment or rebate shall be 20 percent of

7 the regular assessment collected in a State under

8 this section.

9 (4) PAYMENT OF ASSESSMENT REBATES.—An

10 assessment rebate may be paid only to—

11 (A) a State propane education and re12 search council created by State law or regula13 tion that meets requirements established by the

14 Council for specific programs approved by the

15 Council; or

16 (B) a similar entity, such as a foundation

17 established by the retail propane gas industry

18 in a State that meets requirements established

19 by the Council for specific programs approved

20 by the Council.

21 SEC. 7. COMPLIANCE.

22 (a) IN GENERAL.—The Council may bring a civil ac23 tion in a United States district court to compel compliance

24 with an assessment levied by the Council under this Act.
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1 (b) COSTS.—A successful action for compliance under

2 this section may require payment by the defendant of the

3 costs incurred by the Council in bringing the compliance

4 action.

5 SEC. 8. LOBBYING RESTRICTIONS.

6 No funds collected by the Council shall be used in

7 any manner to influence legislation or an election, but the

8 Council may recommend to the Secretary changes in this

9 Act or other statutes that would further the purposes of

10 this Act.

11 SEC. 9. MARKET SURVEY AND CONSUMER PROTECTION.

12 (a) PRICE ANALYSIS.—

13 (1) IN GENERAL.—Not later than 2 years after

14 establishment of the Council and annually there15 after, the Secretary of Commerce, using only data

16 provided by the Energy Information Administration

17 and other public sources, shall prepare and make

18 available to the Council, the Secretary, and the pub19 lic an analysis of changes in the price of propane rel20 ative to other energy sources.

21 (2) METHODOLOGY.—

22 (A) IN GENERAL.—The propane price

23 analysis shall compare indexed changes in the

24 price of consumer grade propane to a composite

25 of indexed changes in the price of residential
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1 electricity, residential natural gas, and refiner

2 price to end-users of number 2 fuel oil on an

3 annual national average basis.

4 (B) ROLLING AVERAGE PRICE.—For pur5 poses of indexing changes in consumer grade

6 propane, residential electricity, residential natu7 ral gas, and end-user number 2 fuel oil prices,

8 the Secretary of Commerce shall use a 5-year

9 rolling average price beginning with the year 4

10 years prior to the establishment of the Council.

11 (b) AUTHORITY TO RESTRICT ACTIVITIES.—

12 (1) IN GENERAL.—If in any year the 5-year av13 erage rolling price index of consumer grade propane

14 exceeds the 5-year rolling average price composite

15 index of residential electricity, residential natural

16 gas, and refiner price to end-users of number 2 fuel

17 oil in an amount greater than 10.1 percent, the ac18 tivities of the Council shall be restricted to research

19 and development, training, and safety matters.

20 (2) NOTIFICATION.—The Council shall inform

21 Congress and the Secretary of Energy of any restric22 tion of activities under this subsection.

23 (3) REANALYSIS.—On the expiration of each

24 180-day period beginning on the date on which ac25 tivities are restricted under paragraph (1), the Sec-
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1 retary of Commerce shall conduct a new propane

2 price analysis described in subsection (a).

3 (4) END OF RESTRICTION.—Activities of the

4 Council shall continue to be restricted under this

5 subsection until the percentage described in para6 graph (1) is 10.1 percent or less.

7 SEC. 10. PRICING.

8 Notwithstanding any other provision of this Act, the

9 price of propane shall be determined by market forces.

10 The Council shall take no action, and no provision of this

11 Act shall establish an agreement to, pass along to consum12 ers the cost of the assessment provided for in section 6.

13 SEC. 11. RELATION TO OTHER PROGRAMS.

14 Nothing in this Act shall preempt or supersede any

15 other program relating to propane education and research

16 organized and operated under the laws of the United

17 States or any State.

18 SEC. 12. REPORTS.

19 (a) IN GENERAL.—Not later than 2 years after the

20 date of enactment of this Act, and not less than once every

21 2 years thereafter, the Secretary of Commerce shall pre22 pare and submit to Congress and the Secretary a report

23 examining whether operation of the Council, in conjunc24 tion with the cumulative effects of market changes and

25 Federal programs, has had an effect on propane consum-
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1 ers, including residential, agriculture, process, and nonfuel

2 users of propane.

3 (b) CONSIDERATION BY THE SECRETARY OF COM4 MERCE.—The Secretary of Commerce shall—

5 (1) consider and, to the extent practicable, in6 clude in the report submissions by propane consum7 ers;

8 (2) consider whether there have been long-term

9 and short-term effects on propane prices as a result

10 of Council activities and Federal programs; and

11 (3) consider whether there have been changes in

12 the proportion of propane demand attributable to

13 various market segments.

14 (c) RECOMMENDATIONS.—To the extent that the re15 port demonstrates that there has been an adverse effect

16 on propane prices, the Secretary of Commerce shall in17 clude recommendations for reversing or mitigating the ef18 fect.

19 (d) FREQUENT REPORTS.—On petition by an af20 fected party or on request by the Secretary of Energy,

21 the Secretary of Commerce may prepare and submit the

22 report required by this section at less than 2-year inter23 vals.

Æ