I
105TH CONGRESS
2D SESSION
H. R. 3610
To authorize and facilitate a program to enhance training, research and
development, energy conservation and efficiency, and consumer education
in the oilheat industry for the benefit of oilheat consumers and the
public, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
MARCH 31, 1998
Mr. GREENWOOD (for himself, Mr. MANTON, Mr. PAXON, Mr. ENGEL, Mr.
OXLEY, Mr. NORWOOD, Mr. SHIMKUS, Mr. STUPAK, Mr. BOEHLERT, Mr.
SOLOMON, Mr. KING, Mrs. MCCARTHY of New York, Mr. HOLDEN, Mr.
MCDADE, Mr. ANDREWS, Mrs. ROUKEMA, Mr. GEKAS, Mrs. KENNELLY
of Connecticut, Mr. MCHALE, Mr. FRELINGHUYSEN, Mr. EHRLICH, Mr.
PAPPAS, Mr. WELDON of Pennsylvania, Mr. ACKERMAN, Mr. CARDIN,
Mr. HOYER, Mr. NEAL of Massachusetts, Mr. OLVER, Mr. GOODE, Mr.
ROEMER, Mr. FOX of Pennsylvania, Mr. MEEKS of New York, Mr. BASS,
and Mr. BALDACCI) introduced the following bill; which was referred to
the Committee on Commerce
A BILL
To authorize and facilitate a program to enhance training,
research and development, energy conservation and effi-
ciency, and consumer education in the oilheat industry
for the benefit of oilheat consumers and the public, and
for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘National Oilheat
Research Alliance Act of 1998’’.
SEC. 2. FINDINGS.
The Congress finds that—
(1) oilheat is an important commodity relied
upon by approximately 30,000,000 Americans annu-
ally as an efficient and economical energy source for
commercial and residential space and hot water
heating;
(2) oilheat equipment operates at efficiencies
among the highest of any space heating energy
source, reducing fuel costs and making oilheat an ec-
onomical means of space heating;
(3) the production, distribution, and marketing
of oilheat and oilheat equipment plays a significant
role in the economy of the United States accounting
for approximately $12,900,000,000 in expenditures
annually and employing millions of Americans in all
aspects of the industry;
(4) only very limited Federal resources have
been made available for oilheat research, develop-
ment, safety, training, and education efforts, to the
detriment of both the oilheat industry and its
30,000,000 consumers; and
(5) the cooperative development, self-financing,
and implementation of a coordinated national oilheat
industry program of research and development,
training, and consumer education is necessary and
important for the welfare of the oilheat industry, in-
cluding wholesale distributors and retail marketers,
as well as for the general economy of the United
States and the millions of Americans who rely on
oilheat for commercial and residential space and hot
water heating.
SEC. 3. DEFINITIONS.
For the purposes of this Act—
(1) the term ‘‘Alliance’’ means a National
Oilheat Research Alliance created pursuant to sec-
tion 4 of this Act;
(2) the term ‘‘consumer education’’ means the
provision of information that will assist consumers
and other persons in making evaluations and deci-
sions regarding oilheat and other nonindustrial com-
mercial or residential space or hot water heating
fuels;
(3) the term ‘‘exchange’’ means an agreement
that entitles each party or its customers to receive
product from the other party and requires only an
insubstantial portion of the volumes involved in the
exchange to be settled in cash or property other than
the product;
(4) the term ‘‘industry’’ means those persons
involved in the production, transportation, and sale
of oilheat, and in the manufacture and distribution
of oilheat utilization equipment, in the United
States, but such term does not include the ultimate
consumers of oilheat;
(5) the term ‘‘industry trade association’’
means an organization exempt from tax, under sec-
tion 501(c) (3) or (6) of the Internal Revenue Code
of 1986, representing participants in the industry;
(6) the term ‘‘No. 1 distillate’’ means fuel oil
classified as No. 1 distillate by the American Society
for Testing and Materials;
(7) the term ‘‘No. 2 dyed distillate’’ means fuel
oil classified as No. 2 distillate by the American So-
ciety for Testing and Materials which is indelibly
dyed in accordance with regulations prescribed by
the Secretary of the Treasury pursuant to section
4082(a)(2) of the Internal Revenue Code of 1986;
(8) the term ‘‘oilheat’’ means—
(A) No. 1 distillate; or
(B) No. 2 dyed distillate,
which is used as a fuel for nonindustrial commercial
or residential space or hot water heating;
(9) the term ‘‘public member’’ means a member
of the Alliance described in section 5(c)(6);
(10) the term ‘‘qualified industry organization’’
means the National Association for Oilheat Research
and Education or a successor organization;
(11) the term ‘‘qualified State association’’
means the industry trade association or other orga-
nization that the qualified industry organization, or,
after its establishment under this Act, the Alliance,
determines best represents retail marketers in a
State;
(12) the term ‘‘retail marketer’’ means a person
engaged primarily in the sale of oilheat to the ulti-
mate consumer;
(13) the term ‘‘Secretary’’ means the Secretary
of Energy; and
(14) the term ‘‘wholesale distributor’’ means a
person who—
(A) produces;
(B) imports; or
(C) transports across State boundaries and
among local marketing areas, and
No. 1 distillate or No. 2 dyed distillate, and sells
such distillate to another person who does not
produce, import, or transport distillates as described
in this paragraph.
SEC. 4. REFERENDA.
(a) CREATION OF PROGRAM.—The industry, through
the qualified industry organization, may conduct, at its
own expense, a referendum among retail marketers and
wholesale distributors for the creation of a National
Oilheat Research Alliance. The Alliance, if established,
shall reimburse the qualified industry organization for the
cost of referendum accounting and documentation. Such
referendum shall be conducted by an independent auditing
firm. Voting rights of a retail marketer in such referen-
dum shall be based on the volume of oilheat sold in a State
by the retail marketer in the previous calendar year or
other representative period. Voting rights of a wholesale
distributor in such referendum shall be based on the vol-
ume of No. 1 distillate and No. 2 dyed distillate sold in
a State by the wholesale distributor in the previous cal-
endar year or other representative period, weighted by the
ratio of the total volume of No. 1 distillate and No. 2 dyed
distillate sold for nonindustrial commercial and residential
space and hot water heating in that State to the total vol-
ume of No. 1 distillate and No. 2 dyed distillate sold in
that State. Upon approval of those persons representing
two-thirds of the total volume of oilheat voted in the retail
marketer class and two-thirds of the total weighted volume
of No. 1 distillate and No. 2 dyed distillate voted in the
wholesale distributor class, the Alliance shall be estab-
lished, and shall be authorized to levy assessments in ac-
cordance with section 6. All persons voting in the referen-
dum shall certify to the independent auditing firm the vol-
ume of oilheat, No. 1 distillate, or No. 2 dyed distillate
represented by their vote. Except as provided in subsection
(b), a State shall not participate in the Alliance if less
than 50 percent of the retail marketer vote in that State,
subject to the volumetric voting rules established by this
subsection, is in favor of the creation of the Alliance. A
qualified State association may notify the qualified indus-
try organization within 90 days after the date of the enact-
ment of this Act in writing that a referendum under this
subsection will not be conducted in that State.
(b) SUBSEQUENT STATE PARTICIPATION.—A State
that has not participated initially in the Alliance may sub-
sequently elect to participate by conducting a referendum
in accordance with subsection (a).
(c) TERMINATION
OR SUSPENSION.—On the Alli-
ance’s own initiative, or on petition to the Alliance by re-
tail marketers and wholesale distributors representing 35
percent of the volume of oilheat or weighted No. 1 dis-
tillate and No. 2 dyed distillate in each class, the Alliance
shall, at its own expense, hold a referendum, to be con-
ducted by an independent auditing firm selected by the
Alliance, to determine whether the industry favors termi-
nation or suspension of the Alliance. Termination or sus-
pension shall not take effect unless it is approved by per-
sons representing more than one-half of the total volume
of oilheat voted in the retail marketer class and more than
one-half of the total volume of weighted No. 1 distillate
and No. 2 dyed distillate voted in the wholesale distributor
class, or is approved by persons representing more than
two-thirds of the total volume of fuel voted in either such
class.
SEC. 5. NATIONAL OILHEAT RESEARCH ALLIANCE.
(a) SELECTION OF MEMBERS.—Except as otherwise
provided in subsection (c)(3), the qualified industry orga-
nization shall select all members of the Alliance. The
qualified industry organization shall select a member rep-
resenting a State from a list of nominees submitted by
that State’s qualified State association. Vacancies in un-
finished terms of Alliance members shall be filled in the
same manner as were the original appointments.
(b) REPRESENTATION.—In selecting members of the
Alliance, the qualified industry organization shall give due
regard to selecting a Alliance that is representative of the
industry, including representation of—
(1) interstate and intrastate operators among
retail marketers;
(2) wholesale distributors of No. 1 distillate and
No. 2 dyed distillate;
(3) large and small companies among wholesale
distributors and retail marketers; and
(4) diverse geographic regions of the country.
(c) MEMBERSHIP.—The membership of the Alliance
shall be as follows:
(1) One member representing each State with
oilheat sales in excess of 32,000,000 gallons per
year.
(2) If less than 24 States are represented under
paragraph (1), one member representing each of the
States with the highest volume of annual oilheat
sales as necessary to cause the total number of
States represented under paragraph (1) and this
paragraph combined to equal 24.
(3) 5 representatives of retail marketers, one
each to be selected by the qualified State associa-
tions of the 5 States with the highest volume of an-
nual oilheat sales.
(4) 5 additional representatives of retail mar-
keters.
(5) 21 representatives of wholesale distributors.
(6) 6 public members, who shall be representa-
tives of significant users of oilheat, the oilheat re-
search community, or other groups knowledgeable
about oilheat.
Other than the public members, Alliance members shall
be full-time employees or owners of businesses in the in-
dustry, except that members described in paragraphs (3),
(4), and (5) may be employees of the qualified industry
organization or an industry trade association.
(d) COMPENSATION.—Alliance members shall receive
no compensation for their services, nor shall Alliance
members be reimbursed for expenses relating to their serv-
ice, except that public members, upon request, may be re-
imbursed for reasonable expenses directly related to their
participation in Alliance meetings.
(e) TERMS.—Alliance 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 Alliance may be returned to the Alliance if they
have not been members for a period of 2 years. Initial
appointments to the Alliance shall be for terms of 1, 2,
and 3 years, as determined by the qualified industry orga-
nization, staggered to provide for the subsequent selection
of one-third of the members each year.
(f) FUNCTIONS.—The Alliance shall develop pro-
grams 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 oilheat
utilization equipment, to inform and educate the public
about safety and other issues associated with the use of
oilheat, and to provide for the payment of the costs thereof
with funds collected pursuant to this Act. The Alliance
shall coordinate its activities with industry trade associa-
tions and others as appropriate to provide efficient deliv-
ery of services and to avoid unnecessary duplication of ac-
tivities.
(g) PRIORITIES.—Issues related to research and de-
velopment, safety, consumer education, and training shall
be given priority by the Alliance in the development of its
programs and projects.
(h) ADMINISTRATION.—The Alliance shall select from
among its members a Chairman and other officers as nec-
essary, may establish and authorize committees and sub-
committees of the Alliance to take specific actions the Alli-
ance is authorized to take, and shall adopt rules and by-
laws for the conduct of business and the implementation
of this Act. The Alliance shall establish procedures for the
solicitation of industry comment and recommendations on
any significant plans, programs, and projects to be funded
by the Alliance. The Alliance may establish advisory com-
mittees of persons other than Alliance members. Each
member of the Alliance shall have 1 vote in matters before
the Alliance.
(i) ADMINISTRATIVE EXPENSES.—(1) The adminis-
trative expenses of operating the Alliance (not including
costs incurred in the collection of the assessment pursuant
to section 6) plus amounts paid under paragraph (2) shall
not exceed 7 percent of the funds collected in any fiscal
year, except that during the first year of its operation such
expenses and amounts shall not exceed 10 percent of such
funds.
(2) The Alliance shall annually reimburse the Sec-
retary for costs incurred by the Federal Government relat-
ing to the Alliance. Such reimbursement for any fiscal
year shall not exceed the amount that the Secretary deter-
mines is 2 times the average annual salary of 1 employee
of the Department of Energy.
(j) BUDGET.—Before August 1 each year, the Alli-
ance 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 rec-
ommended rate of assessment sufficient to cover such
costs. Following this review and comment, the Alliance
shall submit the proposed budget to the Secretary and to
the Congress. The Secretary may recommend programs
and activities the Secretary considers appropriate. The
Alliance shall not implement a proposed budget until after
receiving the Secretary’s recommendations, or after the
expiration of 60 days after submitting the proposed budg-
et, whichever occurs first.
(k) RECORDS; AUDITS.—The Alliance shall keep
books and records that clearly reflect all of the acts and
transactions of the Alliance and make public such infor-
mation. The books of the Alliance, including fee assess-
ment reports and applications for refunds, shall be audited
by a certified public accountant at least once each fiscal
year and at such other times as the Alliance may des-
ignate. Copies of such audit shall be provided to all mem-
bers of the Alliance, the qualified industry organization,
and to other members of the industry upon request. The
Alliance shall establish policies and procedures for audit-
ing compliance with this Act. The Secretary shall make
available to the Alliance any information the Alliance re-
quests for auditing compliance, except for information the
Secretary is prohibited by law from releasing.
(l) PUBLIC ACCESS TO ALLIANCE PROCEEDINGS.—
(1) All meetings of the Alliance shall be open to the public
after at least 30 days advance public notice.
(2) The minutes of all meetings of the Alliance shall
be made available to and readily accessible by the public.
(m) ANNUAL REPORT.—Each year the Alliance shall
prepare and make publicly available a report which in-
cludes an identification and description of all programs
and projects undertaken by the Alliance during the pre-
vious year as well as those planned for the coming year.
Such report shall also detail the allocation or planned allo-
cation of Alliance resources for each such program and
project.
(n) CALCULATION OF OILHEAT SALES.—For pur-
poses of this section, the volume of oilheat sold annually
in a State shall be determined on the basis of information
provided by the Energy Information Administration with
respect to the preceding calendar year or other equivalent
period.
SEC. 6. ASSESSMENTS.
(a) AMOUNT.—The Alliance shall set the initial as-
sessment at no greater than two tenths of 1 cent per gal-
lon of No. 1 distillate and No. 2 dyed distillate. There-
after, annual assessments shall be sufficient to cover the
costs of the plans and programs developed by the Alliance,
except that under no circumstances shall the assessment
be greater than one-half cent per gallon of No. 1 distillate
and No. 2 dyed distillate unless approved by a majority
of those voting in a referendum in both the retail marketer
class and the wholesale distributor class. In no case may
the assessment be raised by more than one tenth of 1 cent
per gallon of No. 1 distillate and No. 2 dyed distillate an-
nually, and no increases may occur unless approved by a
two-thirds vote of the Alliance.
(b) COLLECTION RULES.—The assessment shall be
collected upon the sale of No. 1 distillate and No. 2 dyed
distillate by a wholesale distributor to a person other than
a wholesale distributor, including a sale made pursuant
to an exchange. The wholesale distributor shall be respon-
sible for payment of the assessment to the Alliance and
shall provide to the Alliance certification of the volume of
fuel sold. A person who has no ownership interest in No.
1 distillate or No. 2 dyed distillate shall not be responsible
for payment of an assessment under this section. Assess-
ments shall be made on all No. 1 distillate and No. 2 dyed
distillate sold in a State that is participating in the Alli-
ance, and are payable to the Alliance on a quarterly basis.
Any No. 1 distillate or No. 2 dyed distillate previously as-
sessed shall not be subject to further assessment. A whole-
sale distributor who fails within one year of sale to receive
payments from a purchaser for No. 1 distillate or No. 2
dyed distillate sold may apply for a refund directly from
the Alliance. Such refund may not exceed the amount of
the assessments levied upon the No. 1 distillate and No.
2 dyed distillate for which payment was not received. The
owner of No. 1 distillate and No. 2 dyed distillate im-
ported after the point of sale described in the first sen-
tence of this subsection shall be responsible for payment
of the assessment to the Alliance at the point at which
the product enters the United States, and shall provide
to the Alliance certification of the volume of fuel so im-
ported.
(c) EXCLUSIONS.—No. 1 distillate and No. 2 dyed
distillate sold for uses other than oilheat are excluded from
the assessment. The Alliance shall establish rules and pro-
cedures for refunding to wholesale distributors, and to re-
tail marketers or other end users who purchase from a
wholesale distributor, assessments collected on excluded
gallons.
(d) ALTERNATIVE COLLECTION RULES.—The Alli-
ance may establish, or approve a State’s request for, an
alternative means of collecting the assessment if another
means is found to be more efficient and effective. The Alli-
ance may establish a late payment charge and rate of in-
terest to be imposed on any person who fails to remit or
pay to the Alliance any amount due under this Act.
(e) INVESTMENT OF FUNDS.—Pending disbursement
pursuant to a program, plan, or project, the Alliance may
invest funds collected through assessments, and any other
funds received by the Alliance, 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.
(f) STATE PROGRAMS.—
(1) COORDINATION.—The Alliance shall estab-
lish a program coordinating the operation of the Al-
liance with those of any similar State, local, or re-
gional program created by State law or regulation,
or similar entity.
(2) FUNDS
MADE
AVAILABLE
TO
QUALIFIED
STATE ASSOCIATIONS.—Not less than 85 percent of
the funds raised in a State pursuant to the assess-
ment under this section shall be made available to
that State’s qualified State association. In order to
ensure that qualified State associations will comply
with this Act, such associations shall be required to
submit a proposal to the Alliance before receiving
funding under this paragraph. No funding shall be
made available under this paragraph unless the Alli-
ance determines that the funding will directly benefit
the oilheat industry.
SEC. 7. COMPLIANCE.
The Alliance may bring suit in Federal court to com-
pel compliance with an assessment levied by the Alliance
under this Act. A successful action for compliance under
this section may also require payment by the defendant
of the costs incurred by the Alliance in bringing such ac-
tion.
SEC. 8. LOBBYING RESTRICTIONS.
No funds collected by the Alliance shall be used in
any manner for influencing legislation or elections, except
that the Alliance may recommend to the Secretary
changes in this Act or other statutes that would further
the purposes of this Act.
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