II
Calendar No. 576
104TH CONGRESS
2D SESSION
H. R. 1514
IN THE SENATE OF THE UNITED STATES
SEPTEMBER 5, 1996
Received; read twice and placed on the calendar
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 Representa-
tives 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 Edu-
cation 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 sec-
tion 501(c) (3) or (6) of the Internal Revenue Code
of 1986, representing the propane industry;
(4) the term ‘‘odorized propane’’ means pro-
pane 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 process-
ing 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;
(7) the term ‘‘public member’’ means a member
of the Council, other than a representative of pro-
ducers 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 dispens-
ers;
(10) the term ‘‘retail propane dispenser’’ means
a person who sells odorized propane to the ultimate
consumer but is not engaged primarily in the busi-
ness 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 ref-
erendum 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 ac-
counting 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 pro-
duced 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 Coun-
cil 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 rep-
resented by their vote.
(b) TERMINATION.—On the Council’s own initiative,
or on petition to the Council by producers and retail mar-
keters 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 in-
dustry 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 mar-
keter 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 indus-
try organizations shall select all retail marketer, public,
and producer members of the Council. The producer orga-
nizations shall select the producer members of the Council,
the retail marketer organizations shall select retail mar-
keter members, and all qualified industry organizations
shall jointly select the public members. Vacancies in unfin-
ished 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 pro-
ducers;
(2) interstate and intrastate operators among
retail marketers;
(3) large and small companies among producers
and retail marketers, including agricultural coopera-
tives; 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 em-
ployee of a qualified industry organization or other indus-
try trade association shall serve as a member of the Coun-
cil, and no member of the Council may serve concurrently
as an officer of the Board of Directors of a qualified indus-
try 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 mem-
bers be reimbursed for expenses relating to their service,
except that public members, upon request, may be reim-
bursed 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 appoint-
ments 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 there-
of with funds collected pursuant to this Act. The Council
shall coordinate its activities with industry trade associa-
tion and others as appropriate to provide efficient delivery
of services and to avoid unnecessary duplication of activi-
ties.
(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 bene-
fit the agriculture industry in the United States. The
Council shall coordinate its activities in this regard with
agriculture industry trade associations and other organiza-
tions representing the agriculture industry. The percent-
age of funds collected through assessments pursuant to
this Act to be used for projects relating to the use of pro-
pane as an over-the-road motor fuel shall not exceed the
percentage of the 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 de-
velopment, 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 nec-
essary, may establish committees and subcommittees of
the Council, and shall adopt rules and bylaws for the con-
duct of business and the implementation of this Act. The
Council shall establish procedures for the solicitation of
industry comment and recommendations on any signifi-
cant 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 adminis-
trative 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 Sec-
retary for costs incurred by the Federal Government relat-
ing to the Council, except that such reimbursement for
any fiscal year shall not exceed the amount that the Sec-
retary determines is the average annual salary of two em-
ployees of the Department of Energy.
(k) BUDGET.—Before August 1 each year, the Coun-
cil 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 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 min-
utes, books, and records that clearly reflect all of the acts
and transactions of the Council and make public such in-
formation. 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 Sec-
retary 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 in-
cludes an identification and description of all programs
and projects undertaken by the Council 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 Council resources for each such program and
project.
SEC. 6. ASSESSMENTS.
(a) AMOUNT.—The Council shall set the initial as-
sessment 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 referen-
dum 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 annu-
ally.
(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. As-
sessments collected are payable to the Council on a month-
ly 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 Coun-
cil may establish an alternative means of collecting the as-
sessment 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 assess-
ment collection process, a reduced assessment, or an as-
sessment 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 estab-
lished 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 com-
pel 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