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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.

                                CONTENTS

                                                                   Page
The Amendment....................................................     2
Purpose and Summary..............................................     6
Background and Need for Legislation..............................     7
Hearings.........................................................     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
                               Amendment

    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 
of 1996''.

SEC. 2. FINDINGS.

    The Congress finds that--
          (1) propane gas, or liquefied petroleum gas, is an essential 
        energy commodity providing heat, hot water, cooking fuel, and 
        motor fuel among its many uses to millions of Americans;
          (2) the use of propane is especially important to rural 
        citizens and farmers, offering an efficient and economical 
        source of gas energy;
          (3) propane has been recognized as a clean fuel and can 
        contribute in many ways to reducing the pollution in our cities 
        and towns; and
          (4) propane is primarily domestically produced and its use 
        provides energy security and jobs for Americans.

SEC. 3. DEFINITIONS.

    For the purposes of this Act--
          (1) the term ``Council'' means a Propane Education and 
        Research Council created pursuant to section 4 of this Act;
          (2) the term ``industry'' means those persons involved in the 
        production, transportation, and sale of propane, and in the 
        manufacture and distribution of propane utilization 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 
        industry;
          (4) the term ``odorized propane'' means propane which has had 
        odorant added to it;
          (5) the term ``producer'' means the owner of propane at the 
        time it is recovered at a gas processing plant or refinery;
          (6) the term ``propane'' means a hydrocarbon whose 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 
vote.
    (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 
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 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 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 
fiscal year.
    (2) The Council shall annually reimburse the Secretary for costs 
incurred by the Federal Government relating to the Council, except that 
such reimbursement for any fiscal year shall not exceed the amount that 
the Secretary determines is the average annual salary of two employees 
of the Department of Energy.
    (k) Budget.--Before August 1 each year, the Council shall publish 
for public review and comment a budget plan for the next calendar year, 
including the probable costs of all programs, projects, and contracts 
and a recommended rate of assessment sufficient to cover such costs. 
Following this review and comment, the Council shall submit the 
proposed budget to the Secretary and to the Congress. The Secretary may 
recommend programs and activities the Secretary considers appropriate.
    (l) Records; Audits.--The Council shall keep minutes, books, and 
records that clearly reflect all of the acts and transactions of the 
Council and make public such information. The books of the Council 
shall be audited by a certified public accountant at least once each 
fiscal year and at such other times as the Council may designate. 
Copies of such audit shall be provided to all 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 
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.

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 
Council.

SEC. 7. COMPLIANCE.

    The Council may bring suit in Federal court to compel compliance 
with an assessment levied by the Council under this Act. A successful 
action for compliance under this section may also require payment by 
the defendant of the costs incurred by the Council in bringing such 
action.

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 
own.

                                Hearings

    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.

                        committee Consideration

    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.

                             RollCall Votes

    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:

                                     U.S. Congress,
                               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 
year.
    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).
            Sincerely,
                                         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 
legislation.

             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 
consumers.

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 
frequently.

         Changes in Existing Law Made by the Bill, as Reported

    This legislation does not amend any existing Federal 
statute.