[104th Congress Public Law 284]
[From the U.S. Government Printing Office]

[DOCID: f:publ284.104]

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Public Law 104-284
104th Congress

                                 An Act

   To authorize and facilitate a program to enhance safety, training, 
   research and development, and safety education in the propane gas 
 industry for the benefit of propane consumers and the public, and for 
         other purposes. <<NOTE: Oct. 11, 1996 -  [H.R. 1514]>> 

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled, <<NOTE: Propane 
Education and Research Act of 1996.>> 

SECTION 1. <<NOTE: 15 USC 6401 note.>>  SHORT TITLE.

    This Act may be cited as the ``Propane Education and Research Act of 

SEC. 2. <<NOTE: 15 USC 6401.>>  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. <<NOTE: 15 USC 6402.>>  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 C<SUP>3</SUP>H<SUP>8</SUP>, whether 
        recovered from natural gas or crude oil, and includes liquefied 
        petroleum gases and mixtures thereof;

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            (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. <<NOTE: 15 USC 6403.>>  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.


    (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

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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 
            (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 
    (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.-- <<NOTE: Contracts.>> 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

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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 
    (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 
    (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.

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SEC. 6. <<NOTE: 15 USC 6405.>>  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 
    (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. <<NOTE: 15 USC 6406.>>  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.

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    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.


    (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. <<NOTE: 15 USC 6409.>>  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.


    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. <<NOTE: 15 USC 6411.>>  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

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Secretary of Commerce shall consider and, to the extent practicable, 
shall include in the report submissions by propane consumers, and shall 
consider whether there have been long-term and short-term effects on 
propane prices as a result of Council activities and Federal programs, 
and whether there have been changes in the proportion of propane demand 
attributable to various market segments. To the extent that the report 
demonstrates that there has been an adverse effect, the Secretary of 
Commerce shall include recommendations for correcting the situation. 
Upon petition by affected parties or upon request by the Secretary of 
Energy, the Secretary of Commerce may prepare and submit the report 
required by this section at less than 2-year intervals.

    Approved October 11, 1996.


HOUSE REPORTS: No. 104-655, Pt. 1 (Comm. on Commerce).
            Sept. 4, considered and passed House.
            Sept. 28, considered and passed Senate.