Propane Education and Research Act of 1996
PL 104-284 (H.R.1514), enacted 10/11/1996

110 STAT. 3370 
PUBLIC LAW 104-284—OCT. 11, 1996 
Public Law 104-284 
104th Congress 
An Act 
D t 11 iQQfi 
"^^ authorize and facilitate a program to enhance safety, training, research and 
——'. 
development, and safety education in the propane gas industry for the benefit 
[H.R. 1514] 
of propane consumers and the public, and for other purposes. 
Be it enacted by the Senate and House of Representatives 
of 
Propane 
the United States of America in Congress assembled. 
Education and 
Research Act of 
SECTION 1. SHORT TITLE. 
1996 
15 use 6401 
l^is Act may be cited as the "Propane Education and Research 
note. 
Act of 1996". 
15 use 6401. 
SEC. 2. FINDINGS. 
The Congress finds that— 
(1) propane gas, or Hquefied 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. 
15 u s e 6402. 
SEC. 3. DEFINrnONS. 
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" meeuis 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 C^H^, whether recovered from 
natural gas or crude oil, and includes liquefied petroleum gases 
and mixtures thereof; 
PUBLIC LAW 104-284—OCT. 11, 1996 
110 STAT. 3371 
(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 "Secretar)^' means the Secretary of Energy. 
SEC. 4. REFERENDA. 
15 USC 6403. 
(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 £in independent auditing firm selected by the Coimcil, 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 propeine 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. 
15 USC 6404. 
(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 Covmcil, the retail marketer 
organizations 
shall select retail marketer members, and all qualified industry 
organizations shall jointly select the public members. Vacancies 
110 STAT. 3372 
PUBLIC LAW 104-284—OCT. 11, 1996 
Contracts. 
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, smd 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 
PUBLIC LAW 104-284—OCT. 11, 1996 
110 STAT. 3373 
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 tiie assessment pursuant to section 7) plus 
sunounts paid under paragraph (2) shall not exceed 10 percent 
of the funds collected in any fiscal year. 
(2) The Coxmcil 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. 
(1) RECORDS; AUDITS.—The Council shsJl keep minutes, books, 
and records that clearly reflect all of the acts and transactions 
of the Council and make pubHc 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 quahfied industry orgsmizations, and to 
other members of the industry upon request. The Secretary shsdl 
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. 
110 STAT. 3374 
PUBLIC LAW 104-284—OCT. 11, 1996 
15 use 6405. 
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 ginnually. 
(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 Coimcil may invest ftmds 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. 
15 use 6406. 
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. 
PUBLIC LAW 104-284—OCT. 11, 1996 
110 STAT. 3375 
SEC. 8. LOBBYING RESTRICTIONS. 
15 USC 6407. 
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. 
15 USC 6408. 
(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 avsulable 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 fiiel 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 rolHng 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 smaount 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. 
15 USC 6409. 
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. 
15 USC 6410. 
Nothing in this Act may be construed to preempt or supersede 
any other program relating to propane education and research 
organized and operated \inder the laws of the United States or 
any State. 
SEC. 12. REPORTS. 
15 USC 6411. 
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, £uid nonfuel users of propane. The 
110 STAT. 3376 
PUBLIC LAW 104-284—OCT. 11, 1996 
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. 
Approved October 11, 1996. 
LEGISLATIVE HISTORY—H.R. 1514: 
HOUSE REPORTS: No. 104-655, Pt. 1 (Comm. on Commerce). 
CONGRESSIONAL RECORD, Vol. 142 (1996): 
Sept. 4, considered and passed House. 
Sept. 28, considered and passed Senate.