Propane Education and Research Act
Public Law 104-284
October 11, 1996
Section 1 - Short Title. Propane
Education and Research Act of 1996
15 USC 6401 note.
This Act may be cited as the
"Propane Education and Research Act of 1996".
Section 2 - Findings
15 USC 6401.
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
3. propane has been recognized as a clean fuel
and can contribute in many ways to reducing the pollution in our cities and
4 .propane is primarily domestically produced
and its use provides energy security and jobs for Americans.
Section 3 - Definitions
15 USC 6402.
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
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
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
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;
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.
Section 4 - Referenda
15 USC 6403.
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
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
Section 5 - Propane Education and
15 USC 6404.
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.
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
2. interstate and intrastate operators among
3. large and small companies among producers and
retail marketers, including agricultural cooperatives; and
4. diverse geographic regions of the country.
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.
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.
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.
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
g. USE OF
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 motor vehicle fuel, based on the
historical average of such use over the previous 3-year period.
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.
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.
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.
3. 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.
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.
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.
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.
Section 6 - Assessments
15 USC 6405.
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.
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
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
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
Section 7 - Compliance
15 USC 6406.
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.
Section 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.
Section 9 - Market Survey and
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 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.
Section 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.
Section 11 - Relation to Other
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 under the laws of the United
States or any State.
Section 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 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.
October 11, 1996.