(PDF provides a complete and accurate display of this text.)
104th Congress Rept. 104-655
HOUSE OF REPRESENTATIVES
2d Session Part 1
PROPANE EDUCATION AND RESEARCH ACT OF 1996
June 27, 1996.--Ordered to be printed
Mr. Bliley, from the Committee on Commerce, submitted the following
R E P O R T
[To accompany H.R. 1514]
[Including cost estimate of the Congressional Budget Office]
The Committee on Commerce, to whom was referred the bill
(H.R. 1514) 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,
having considered the same, report favorably thereon with an
amendment and recommend that the bill as amended do pass.
The Amendment.................................................... 2
Purpose and Summary.............................................. 6
Background and Need for Legislation.............................. 7
Committee Consideration.......................................... 7
Rollcall Votes................................................... 7
Committee Oversight Findings..................................... 7
Committee on Government Reform and Oversight..................... 8
New Budget Authority and Tax Expenditures........................ 8
Committee Cost Estimate.......................................... 8
Congressional Budget Office Estimate............................. 8
Inflationary Impact Statement.................................... 9
Advisory Committee Statement..................................... 9
Section-by-Section Analysis of the Legislation................... 9
Changes in Existing Law Made by the Bill, as Reported............ 12
The amendment is as follows:
Strike out all after the enacting clause and insert in lieu
thereof the following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Propane Education and Research Act
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 equipment,
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
(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 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 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
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 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 organizations may
conduct, at their own expense, a referendum 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 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
(b) Termination.--On the Council's own initiative, or on petition
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 determine 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 organizations
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 in unfinished terms of
Council members shall be filled in the same manner as were the original
(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
(1) gas processors and oil refiners among producers;
(2) interstate and intrastate operators among retail
(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 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 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 industry 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 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 solicitation 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
(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 members 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
(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.
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 establish 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
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
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 residential 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 residential, agriculture, process, and
nonfuel users of propane. The 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.
Purpose and Summary
H.R. 1514 authorizes the Secretary of Energy to establish a
propane check-off program similar to agriculture check-off
programs. The purpose of the check-off program is to create and
provide funding for the Propane Education and Research Council
(PERC). Under the bill, PERC would be authorized to spend the
money on propane education, research and development of propane
utilization equipment, and to inform and educate the public
about safety and other issues associated with the use of
propane. The bill provides for 21 Council members, consisting
of nine representing retail marketers, nine representing
producers, and three members of the public.
The check-off program and the Council cannot be established
unless a majority of the propane industry votes to create the
Council. Specifically, the bill directs qualified industry
organizations to conduct a referendum among propane producers
and retail marketers to determine if such a program is wanted
by the industry. Two-thirds of both the producers and marketers
must vote in favor of this program in order for the program to
be established. A majority vote by both groups or a two-thirds
vote by the combined groups could terminate the program.
Once the program is established, the Council is allowed to
assess a fee from owners of odorized propane at the time of
odorization or at the time of import based on the volume of
odorized propane sold and placed into commerce. The initial
amount of fees to be collected is 1/10 of one cent per gallon.
However, this amount can rise 1/10 of one cent per year until
the fee collects up to 1/2 cent per gallon. Thus, within five
years, this assessment could be 1/2 cent per gallon.
Funds collected through the assessment may be used to fund
consumer and employee propane safety and training programs,
research and development of propane utilization equipment and
for public education (including advertising) on safety and
other issues associated with the use of propane. The bill
requires that not less than five percent of the funds collected
shall be used for programs designed to benefit the agriculture
industry. In addition, funds for projects relating to the use
of propane as an alternative motor vehicle fuel shall not
exceed the percentage of total market for odorized propane that
is used as a motor vehicle fuel for the prior three years.
Importantly, no funds collected through the fee can be used
to lobby Congress. The bill also prohibits use of the funds for
advertising if the price of propane goes up a disproportionate
amount relative to other energy sources. The Secretary of
Commerce is also directed to prepare a report for Congress
every two years examining the effect the operation of the
Council is having on propane consumers.
Finally, the Council may bring suit in Federal court to
compel compliance with the Act.
Background and Need for Legislation
Propane is a fuel source derived primarily from natural
gas. It is used in a variety of ways including: (1) as a
feedstock in chemical processes; (2) as an alternative motor
fuel; (3) for recreational uses; and (4) as an energy source
for millions of homes and farms. Propane is the fourth most-
used fuel in America and is one of the most clean-burning
fossil fuels. The bulk of the propane currently used in the
U.S. is domestically produced. However, almost no Federal funds
are spent on researching alternative uses for propane. Thus,
the propane check-off program established by this bill allows
the industry to join together to conduct education, research
and development, and safety and advertising programs which most
individual propane businesses cannot afford to support on their
The Subcommittee on Energy and Power held a hearing on H.R.
1514 on October 26, 1995. Three witnesses testified at the
hearing: Mr. Charles R. Revere, Revere Gas and Appliance, on
behalf of the National Propane Gas Association; Mr. William A.
Haliburton, Jr., Gas Processors Association; and Mr. Paul
Culver, Farmland Industries, Incorporated.
On March 15, 1996, the Subcommittee on Energy and Power met
in open markup session and approved H.R. 1514, the Propane
Research and Education Act, for Full Committee consideration,
without amendment, by a voice vote.
On April 16, 1996, the Full Committee met in open markup
session and ordered H.R. 1514 reported to the House, as
amended, by a voice vote.
Clause 2(l)(2)(B) of rule XI of the Rules of the House
requires the Committee to list the recorded votes on the motion
to report legislation and amendments thereto. There were no
recorded votes taken in connection with ordering H.R. 1514
reported or in adopting the amendment. The voice votes taken in
Committee are as follows:
Bill: H.R. 1514, Propane Education and Research Act.
Amendment: Amendment by Mr. Tauzin re: technical amendment
to provide adequate reimbursement of costs to the Federal
government for oversight and administration of the program.
Disposition: Agreed to, by a voice vote.
Motion: Motion by Mr. Bliley to order H.R. 1514, as
amended, reported to the House.
Disposition: Agreed to, by a voice vote.
Committee Oversight Findings
Pursuant to clause 2(l)(3)(A) of rule XI of the Rules of
the House of Representatives, the Committee held a legislative
hearing and made findings that are reflected in this report.
Committee on Government Reform and Oversight
Pursuant to clause 2(l)(3)(D) of rule XI of the Rules of
the House of Representatives, no oversight findings have been
submitted to the Committee by the Committee on Government
Reform and Oversight.
New Budget Authority and Tax Expenditures
In compliance with clause 2(l)(3)(B) of rule XI of the
Rules of the House of Representatives, the Committee finds that
H.R 1514 would result in no new or increased budget authority
or tax expenditures or revenues.
Committee Cost Estimate
The Committee adopts as its own the cost estimate prepared
by the Director of the Congressional Budget Office pursuant to
section 403 of the Congressional Budget Act of 1974.
Congressional Budget Office Estimate
Pursuant to clause 2(l)(3)(C) of rule XI of the Rules of
the House of Representatives, the following is the cost
estimate provided by the Congressional Budget Office pursuant
to section 403 of the Congressional Budget Act of 1974:
Congressional Budget Office,
Washington, DC, May 3, 1996.
Hon. Thomas J. Bliley, Jr.,
Chairman, Committee on Commerce,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
reviewed H.R. 1514, the Propane Education and Research Act of
1995, as ordered reported by the House Committee on Commerce on
April 16, 1996. Based on information from the Natural Gas
Processors Association and the National Propane Gas
Association, we estimate that enacting this bill would result
in no net budget impact. However, enacting this bill would
affect both direct spending and receipts; therefore, pay-as-
you-go procedures would apply.
This bill does not contain any intergovernmental mandates
as defined by Public Law 104-4. The bill would impose a private
sector mandate on owners and importers of odorized propane sold
for commercial use.
Bill purpose.--H.R. 1514 would authorize propane industry
organizations to conduct a referendum among producers and
retail marketers to determine if a Propane Education and
Research Council should be established. If there is sufficient
industry support, this Council would be established to promote
enhanced safety, training, research and development, and safety
education in the propane gas industry. The Council would be
funded through an assessment of up to one-tenth of 1 cent per
gallon of propane sold in the retail market. Funds collected
through this assessment would be available to fund the
Council's programs without further appropriation by the
Congress. The bill would allow the propane assessment to be
changed or terminated if there is sufficient industry support.
Federal budgetary impact.--For purposes of this estimate,
we assume that the industry will vote to establish the Propane
Education and Research Council, and that the propane assessment
will be set at one-tenth of 1 cent per gallon of propane sold.
CBO believes that the cash flows related to the Propane
Education and Research Council should appear on budget as
governmental receipts and direct spending because the payments
between companies would stem from exercise of the sovereign
power of the federal government. Based on recent industry data
on the amount of propane sold in the United States retail
market, we estimate this assessment would result in
governmental receipts of about $9 million annually. We assume
the Council would expend these same funds annually, so that
enactment of this bill would have no net budget impact for each
Mandates statement.--The bill does not contain any
intergovernmental mandates as defined by Public Law 104-4, and
might result in increased funding for state propane education
and research councils. If approved by the propane industry, the
Council could opt to transfer a portion of the assessment it
collects to these state-level councils.
This bill would impose a private sector mandate on owners
and importers of odorized propane sold for commercial use. The
mandate would be imposed if the propane producers and retail
marketers vote favorably on a referendum to establish a Propane
Education and Research Council. The Council would establish an
assessment not greater than one-tenth of 1 cent per gallon of
propane sold. Based on an estimate of 9 million gallons of
odorized propane sold annually for commercial use, the annual
direct cost of the mandate would be approximately $9 million,
well below the annual $100 million threshold established by
Public Law 104-4.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contacts are Kim Cawley
(for federal costs), Stephanie Weiner (for revenues), Pepper
Santalucia (for the state and local impact), and Jean Wooster
(for the private sector impact).
June E. O'Neill, Director.
Inflationary Impact Statement
Pursuant to clause 2(l)(4) of rule XI of the Rules of the
House of Representatives, the Committee finds that the bill
would have no inflationary impact.
Advisory Committee Statement
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
Section-by-Section Analysis of the Legislation
Section 1. Short title
Section 1 of the bill establishes the short title of the
bill as the Propane Education and Research Act of 1996.
Section 2. Findings
Section 2 sets forth the findings of the bill.
Section 3. Definitions
Section 3 defines terms used in the Act.
Section 4. Referenda
Section 4 provides for a referendum among producers and
retail marketers for the creation of a Propane Education and
Research Council (Council). A two-thirds vote by members of
qualified producer and retail marketer industry organizations,
whose members vote based on their sales volume, are required to
establish the Council. Costs of conducting the referenda can be
reimbursed by the Council once it is established.
Section 4 also allows for termination of the Council
through a similar referendum process. The process can be
started on the Council's own initiative, or on petition to the
Council by producers and retail marketers representing 35
percent of the volume of propane in each class. Termination
will occur if members representing more than one-half the total
volume of propane in the retail marketer class and more than
one-half of the total volume of the producer class approve.
Termination can also be approved by members representing two-
thirds of the total volume of propane in either class.
Section 5. Propane Education and Research Council
Section 5 provides for the selection of members for the
Council. The bill provides for 21 Council members, consisting
of nine representing retail marketers, nine representing
producers, and three members of the public. Each industry group
will select its own representatives and the public members will
be selected jointly. Representation on the Council should
include gas processors and oil refiners, interstate and
intrastate retail marketers, large and small companies, and
represent regional diversity. Members of the Council shall
receive no salary. Council members shall serve not more than
two consecutive three-year terms. The Council shall select a
Chairman and other officers and may establish advisory panels
of persons other than Council members. The Council shall adopt
by-laws and procedures for the solicitation of industry
comment. The administrative expenses of operating the Council
shall not exceed 10 percent of the funds collected in any
fiscal year. The Council shall also reimburse the Department of
Energy annually for any costs incurred by the Federal
government relating to the Council.
Section 5 also provides for the Council to develop programs
and projects to enhance consumer and employee safety and
training, to provide for research and development of clean and
efficient propane utilization equipment, and to inform and
educate the public about safety and other issues associated
with the use of propane. Not less than five percent of the
funds collected by the fee shall be used for programs intended
to benefit the agricultural industry. In addition, the
percentage of funds used for projects related to using propane
as an alternative 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 previous three-year historical
average. Research and development, safety, education and
training shall be given priority by the Council in the
development of programs.
In addition, Section 5 requires the Council to publish a
prospective budget plan for the next calendar year before
August 1 of each year. The plan shall include the probable
costs of all programs, projects, and contracts, and a
recommended rate of assessment to cover their costs. The budget
proposal shall be submitted to the Secretary of Energy and the
Congress. The Secretary of Energy can recommend programs and
activities for the Council. Council meetings shall be open to
the public after at least 30 days notice. The Council is also
required to keep public, its minutes, books and records
reflective of its activities. These records shall be subject to
an annual audit, the results of which shall be provided to the
Council members and other interested industry members upon
request. The Secretary of Energy shall receive notice of
meetings, and may receive reports on the Council's activities
as well as reports on compliance, violations, and complaints
regarding the implementation of the Act. The Council is also
required to make a public report of all of its programs and
projects for the previous and upcoming year as well as the
planned allocations for such projects.
Section 6. Assessments
Section 6 provides that the initial assessment to fund the
program shall not be greater than one-tenth of one cent per
gallon of odorized propane. The annual assessment can rise one-
tenth of one cent per year until the fee collects up to one-
half cent per gallon. Thus, within five years, this assessment
could be one-half cent per gallon. The annual assessment shall
be sufficient to cover the costs of the plans and programs
developed by the Council. The fees are collected from the
owners of odorized propane at the time of odorization or
import. Propane which is exported to another country is not
subject to the assessment. The Council is permitted to
establish an alternative collection plan and charge late fees
if necessary. The Council is also given a limited ability to
invest funds collected by the fee pending their disbursement.
Section 6 also provides for coordination with propane councils
established under State law.
Section 7. Compliance
Section 7 allows the Council to bring suit in Federal court
to collect the fee. If the Council is successful, it can also
recover its costs of the suit from the defendant.
Section 8. Lobbying restrictions
Section 8 prohibits the use of any funds to lobby Congress.
Section 9. Market survey and consumer protection
Section 9 requires the Department of Commerce to conduct an
annual analysis of the changes of the price of propane relative
to other energy sources. Activities of the Council shall be
restricted to research and development, training, and safety
matters (i.e., no advertising), if the price of propane as
calculated under a formula set in the bill exceeds a composite
price of other specified fuels.
Section 10. Pricing
Section 10 clarifies that the price of propane shall be
determined by market forces and that the Council cannot take
any action to pass the cost of the assessment along to
Section 11. Relation to other programs
Section 11 clarifies that the Act does not preempt or
supersede any other propane research or education programs.
Section 12. Reports
Section 12 sets forth a bi-annual reporting requirement for
the Secretary of Commerce. The Secretary's report, which is
submitted to the Congress and the Secretary of Energy, analyzes
the impact the program has on propane prices and propane demand
in various market segments. To the extent the program has had
adverse impacts, the Secretary of Commerce is required to make
recommendations to correct the situation. The Council may
petition, or the Secretary of Energy or the Secretary of
Commerce can request, that the report be prepared less
Changes in Existing Law Made by the Bill, as Reported
This legislation does not amend any existing Federal