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 equip-
ment, 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 chemi-
cal composition is predominantly C3H8, whether recovered from
natural gas or crude oil, and includes liquefied petroleum gases
and mixtures thereof;
H. R. 1514—2
(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 Associa-
tion, 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 organiza-
tions may conduct, at their own expense, a referendum among
producers and retail marketers for the creation of a Propane Edu-
cation 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 peti-
tion 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 deter-
mine 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 organiza-
tions 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
H. R. 1514—3
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 select-
ing 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 rep-
resenting 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 indus-
try 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
H. R. 1514—4
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 solicita-
tion 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 mem-
bers 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.
H. R. 1514—5
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 estab-
lish 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.
H. R. 1514—6
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 residen-
tial 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 resi-
dential, agriculture, process, and nonfuel users of propane. The
H. R. 1514—7
Secretary of Commerce shall consider and, to the extent practicable,
shall include in the report submissions by propane consumers,
and shall consider whether there have been long-term and short-
term effects on propane prices as a result of Council activities
and Federal programs, and whether there have been changes in
the proportion of propane demand attributable to various market
segments. To the extent that the report demonstrates that there
has been an adverse effect, the Secretary of Commerce shall include
recommendations for correcting the situation. Upon petition by
affected parties or upon request by the Secretary of Energy, the
Secretary of Commerce may prepare and submit the report required
by this section at less than 2-year intervals.
Speaker of the House of Representatives.
Vice President of the United States and
President of the Senate.