[Congressional Record Volume 142, Number 44 (Wednesday, March 27, 1996)]
[Senate]
[Pages S3019-S3022]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. DOMENICI (for himself, Mr. Ford, Mr. Dole, Mr. Lott, Mr. 
        Heflin, Mr. Shelby, Mr. Faircloth, Mr. Simpson, Mr. Cochran, 
        Mr. Inhofe, Mr. Warner, Mr. Helms, Mr. McConnell, Mr. Thurmond, 
        Mr. Burns, Mr. Johnston, Mr. Bingaman, Mr. Nickles, Mr. Lugar, 
        Mrs. Kassebaum, Mr. Coats, and Mr. Grams):
  S. 1646. A bill 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; to the Committee on Energy and Natural 
Resources.


             the propane education and research act of 1996

 Mr. DOMENICI. Mr. President, today I am very happy to 
introduce the Propane Education and Research Act of 1996. Propane is an 
extremely important source of clean-burning, domestically-produced 
energy in the United States providing fuel for cooking, heating, and 
hot water in over 7.7 million homes, half of all farms, and in millions 
of recreational applications. Even though propane is the fourth most 
used fuel in America, no Federal funds are spent on propane research. 
My legislation keeps it that way and simply provides a mechanism that 
permits, not requires, industry to fund its own research and 
development [R&D] program for propane.
  This act would allow the propane industry, composed of over 165 
producers and 5,000 marketers, to vote to establish a checkoff program 
to fund much needed R&D modeled after the many checkoff programs 
already established in Federal law. Collected from the industry at an 
initial rate of \1/10\th of 1 cent per gallon of odorized--propane 
destined for the retail market--propane sold, these funds would support 
R&D, educational, and safety activities. Propane producers and 
marketers, who would bear the cost of the checkoff programs, have 
indicated broad support for the legislation.
  Propane has traditionally served rural and suburban citizens who are 
beyond reach of most natural gas lines. The propane industry consists 
of mostly small businesses that individually cannot afford the 
necessary R&D, safety, and educational activities that result in 
enormous benefits to consumers. Some of these benefits include 
increased efficiency in propane appliances, safer handling and 
distribution, and an improved environment for Americans from this 
clean-burning fuel. Small businesses have not historically received 
direct benefits from federally sponsored energy R&D. This legislation 
does not fit the traditional heavy-handed approach to energy research 
and development, but gives the propane small business community the 
flexibility and the framework to pursue research, safety, and education 
on their own.

  There are similar programs in energy industries, however, such as the 
Gas Research Institute, the Electric Power Research Institute, the 
Texas Railroad Commission propane checkoff, and similar State programs 
in Louisiana, Missouri, and Alabama. These programs have enjoyed 
considerable success, for example, the Gas Research Institute boasts a 
400-percent return for each dollar collected and invested. Their work 
primarily benefits urban and suburban natural gas consumers, the 
propane legislation will benefit rural and suburban consumers, as well 
as urban and suburban propane consumers.
  The agricultural industry, for example, which accounts for 7 to 8 
percent of all propane consumed in the United States, will see 
substantial benefits from propane research and development. With even 
marginal increases in equipment efficiency, the agricultural propane 
users will reap large returns. More efficient uses of propane in other 
businesses, such as home construction, will further increase the value 
of the return on investment.
  The legislation I am introducing will not actually establish the 
propane checkoff, but calls upon the propane industry to hold a 
referendum among themselves, to authorize establishment of the checkoff 
before it can go into effect. If the industry, propane producers, and 
retail marketers, vote to establish the checkoff, then the Propane 
Education and Research Council consisting of industry representatives, 
will be formed to administer the program. The legislation also looks 
down the road and allows the industry to terminate the program by a 
majority vote of both classes, or by two-thirds majority of a single 
class.
  A companion bill, H.R. 1514, was introduced in the House of 
Representatives and currently enjoys broad bipartisan support. This 
enthusiasm underscores the wide, regional appeal of this innovative 
approach to meeting our domestic energy research needs. Moreover, my 
bill foster industry's efforts toward efficient, clean fuels that 
benefit consumers and producers alike without Federal dollars and with 
minimal governmental involvement.
  I encourage my colleagues to join me in cosponsoring this important 
legislation.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1646

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Propane Education and 
     Research Act of 1996''.

     SEC. 2. FINDINGS.

       Congress finds that--
       (1) propane gas (also known as liquefied petroleum gas) is 
     an essential energy commodity that provides heat, hot water, 
     cooking fuel, and motor fuel, and has many other 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 pollution in cities and 
     towns of the United States; and
       (4) propane is primarily domestically produced, and the use 
     of propane provides energy security and jobs for Americans.

     SEC. 3. DEFINITIONS.

       In this Act:
       (1) Council.--The term ``Council'' means a Propane 
     Education and Research Council established under section 4.
       (2) Industry.--The term ``industry'' means persons involved 
     in the United States in--
       (A) the production, transportation, and sale of propane; 
     and
       (B) the manufacture and distribution of propane utilization 
     equipment.
       (3) Industry trade association.--The term ``industry trade 
     association'' means an

[[Page S3020]]

     organization exempt from tax, under paragraph 3 or 6 of 
     section 501(c) of the Internal Revenue Code of 1986, that 
     represents the propane industry.
       (4) Oderized propane.--The term ``odorized propane'' means 
     propane that has had odorant added to it.
       (5) Producer.--The term ``producer'' means the owner of 
     propane at the time at which the propane is recovered at a 
     gas processing plant or refinery.
       (6) Propane.--The term ``propane''--
       (A) means a hydrocarbon, the chemical composition of which 
     is predominantly C3H8, whether recovered from 
     natural gas or from crude oil; and
       (B) includes liquefied petroleum gas or a mixture of 
     liquefied petroleum gases.
       (7) Public member.--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) Qualified industry organization.--The term ``qualified 
     industry organization'' means the National Propane Gas 
     Association, the Gas Processors Association, a successor of 
     the National Propane Gas Association or the Gas Processors 
     Association, or a group of retail producers or marketers that 
     collectively represent at least 25 percent of the volume of 
     propane produced or sold, respectively, in the United States.
       (9) Retail marketer.--The term ``retail marketer'' means a 
     person engaged primarily in the sale of odorized propane to 
     ultimate consumers or to retail propane dispensers.
       (10) Retail propane dispenser.--The term ``retail propane 
     dispenser'' means a person that sells, but is not engaged 
     primarily in the business of selling odorized propane to 
     ultimate consumers.
       (11) Secretary.--The term ``Secretary'' means the Secretary 
     of Energy.

     SEC. 4. REFERENDA.

       (a) Creation of Program.--
       (1) In general.--The qualified industry organizations may 
     conduct a referendum among producers and retail marketers for 
     the creation of a Propane Education and Research Council.
       (2) Expenses.--A referendum under paragraph (1) shall be 
     conducted at the expense of the qualified industry 
     organizations.
       (3) Reimbursement.--The Council, if established, shall 
     reimburse the qualified industry organizations for the cost 
     of the referendum accounting and documentation.
       (4) Independent auditing firm.--The referendum shall be 
     conducted by an independent auditing firm agreed to by the 
     qualified industry organizations.
       (5) Voting rights.--Voting rights in the referendum shall 
     be based on the volume of propane produced or odorized 
     propane sold in the calendar year previous to the year in 
     which the referendum is conducted, or other representative 
     period agreed to by the qualified industry organizations.
       (6) Certification of volume of propane.--All persons voting 
     in the referendum shall certify to the independent auditing 
     firm the volume of propane the person represents.
       (7) Approval.--On the approval of persons representing \2/
     3\ of the total volume of propane voted in the retail 
     marketer class and \2/3\ of all propane voted in the producer 
     class, the Council shall be established.
       (b) Termination or Suspension.--
       (1) Referendum.--On the Council's initiative, or on 
     petition to the Council by producers and retail marketers 
     representing 35 percent of the volume of propane produced and 
     sold, respectively, in the United States, the Council shall 
     conduct a referendum to determine whether the industry favors 
     termination or suspension of the Council.
       (2) Expense.--A referendum under paragraph (1) shall be 
     conducted at the expense of the Council.
       (3) Independent auditing firm.--The referendum shall be 
     conducted by an independent auditing firm selected by the 
     Council.
       (4) Termination or suspension.--Termination or suspension 
     shall take effect if approved by--
       (A) persons representing more than \1/2\ of the total 
     volume of odorized propane in the producer class and more 
     than \1/2\ of the total volume of propane in the retail 
     marketer class; or
       (B) persons representing more than \2/3\ of the total 
     volume of propane in produced or sold in the United States.

     SEC. 5. PROPANE EDUCATION AND RESEARCH COUNCIL.

       (a) Selection of Members.--
       (1) Selection by qualified industry organizations.--The 
     qualified industry organizations shall select all retail 
     marketer, public, and producer members of the Council.
       (2) Allocation.--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 select the public 
     members.
       (3) Vacancies.--Vacancies in unfinished terms of Council 
     members shall be filled in the same manner as 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) all geographic regions of the country.
       (c) Membership.--
       (1) In general.--The Council shall consist of 21 members, 
     including--
       (A) 9 members representing retail marketers;
       (B) 9 members representing producers; and
       (C) 3 public members.
       (2) Qualifications.--Each Council member representing 
     retail marketers or producers shall be a full-time employee 
     or owner of a business in the industry that the member 
     represents or a representative of an agricultural 
     cooperative.
       (3) Disqualification.--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.
       (4) Limited company representation.--Not more than 1 person 
     from any company (or affiliate of the company) may serve on 
     the Council at any given time.
       (d) Compensation.--
       (1) In general.--Subject to paragraph (2), Council members 
     shall receive no compensation for services performed or 
     reimbursement for expenses relating to services performed.
       (2) Exception for public members.--A public member may, on 
     request, be reimbursed for reasonable expenses directly 
     related to participation by the member in Council meetings.
       (e) Terms.--
       (1) Length of terms.--A Council member shall serve a term 
     of 3 years.
       (2) Number of terms.--A Council member may not serve more 
     than 2 full consecutive terms.
       (3) Maximum consecutive years.--A member filling an 
     unexpired term may serve not more than 7 consecutive years.
       (4) Return of former members.--A former member of the 
     Council may return to the Council only if the member has not 
     been a member for a period of 2 years.
       (5) Initial appointments.--Initial appointments to the 
     Council shall be for terms of 1, 2, and 3 years, and shall be 
     staggered to provide for the selection of 7 members each 
     year.
       (f) Functions.--
       (1) In general.--The Council shall develop programs and 
     projects and enter into contracts or agreements for 
     implementing this Act, including programs to--
       (A) enhance consumer and employee safety and training;
       (B) provide for research and development of clean and 
     efficient propane utilization equipment;
       (C) inform and educate the public about safety and other 
     issues associated with the use of propane; and
       (D) provide for the payment of the costs of implementing 
     subparagraphs (A) through (C) with funds collected under this 
     Act.
       (2) Coordination.--The Council shall coordinate activities 
     with industry trade associations and others as appropriate to 
     provide efficient delivery of services and to avoid 
     unnecessary duplication of activities.
       (g) Use of Funds.--
       (1) United states agriculture industry.--Not less than 5 
     percent of the funds collected through assessments under this 
     Act shall be used for programs and projects intended to 
     benefit the agriculture industry in the United States.
       (2) Coordination.--The Council shall coordinate the use of 
     funds under paragraph (1) with agriculture industry trade 
     associations and other organizations representing the 
     agriculture industry.
       (3) Use of propane as an over-the-road motor fuel.--The 
     percentage of funds collected through assessments under this 
     Act to be used in any year 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 an over-the-road motor fuel, based on an 
     historical average of the use of propane as an over-the-road 
     motor fuel during the 3-year period preceding the year in 
     which the funds are used.
       (h) Priorities.--Issues related to research and 
     development, safety, education, and training shall be given 
     priority by the Council in the development of programs and 
     projects.
       (i) Administration.--
       (1) Chairman.--The Council shall select a Chairman from 
     among the members of the Council.
       (2) Officers.--The Council shall select from among the 
     members of the Council such officers as the Council considers 
     necessary.
       (3) Committees.--The Council may establish committees and 
     subcommittees of the Council.
       (4) Rules and bylaws.--The Council shall adopt rules and 
     bylaws for the conduct of business and the implementation of 
     this Act.
       (5) Industry comment and recommendations.--The Council 
     shall establish procedures for the solicitation of industry 
     comment and recommendations on any significant plan, program, 
     or project to be funded by the Council.
       (6) Advisory committees.--The Council may establish 
     advisory committees of persons other than Council members.
       (j) Administrative Expenses.--

[[Page S3021]]

       (1) Limitation on expenses.--The administrative expenses of 
     operating the Council (not including costs incurred in the 
     collection of the assessment under section 6) plus amounts 
     paid under paragraph (2) shall not exceed 10 percent of the 
     funds collected by the Council in any fiscal year.
       (2) Reimbursement.--The Council shall annually reimburse 
     the Secretary for costs incurred by the United States 
     relating to the Council.
       (3) Limitation on reimbursement.--A reimbursement under 
     paragraph (2) for any fiscal year shall not exceed the amount 
     that the Secretary determines is the average annual salary of 
     employees of the Department of Energy.
       (k) Budget.--
       (1) Review and comment.--Prior to August 1 of 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 the costs.
       (2) Submission.--Following review and comment under 
     paragraph (1), the Council shall submit the proposed budget 
     to the Secretary and to Congress.
       (3) Recommendations by secretary.--The Secretary may 
     recommend any program or activity that the Secretary 
     considers appropriate.
       (l) Records.--
       (1) In general.--The Council shall keep minutes, books, and 
     records that clearly reflect all of the actions of the 
     Council.
       (2) Public availability.--The Council shall make the 
     minutes, books, and records available to the public.
       (3) Audit.--The Council shall have the books audited by a 
     certified public accountant at least once each fiscal year 
     and at such other times as the Council may determine.
       (4) Copies.--Copies of an audit under paragraph (3) shall 
     be provided to all members of the Council, all qualified 
     industry organizations, and any other member of the industry 
     on request.
       (5) Notice.--The Council shall provide the Secretary with 
     notice of meetings.
       (6) Additional reports.--The Secretary may require the 
     Council to provide reports on the activities of the Council 
     and on compliance, violations, and complaints regarding the 
     implementation of this Act.
       (m) Public Access to Council Proceedings.--
       (1) In general.--All meetings of the Council shall be open 
     to the public.
       (2) Notice.--The Council shall provide the public at least 
     30 days' notice of Council meetings.
       (3) Minutes.--The minutes of all meetings of the Council 
     shall be made readily available to the public.
       (n) Annual Report.--
       (1) In general.--Each year the Council shall prepare and 
     make publicly available a report that includes an 
     identification and description of all programs and projects 
     undertaken by the Council during the previous year and those 
     planned for the upcoming year.
       (2) Resources.--The report shall detail the allocation and 
     planned allocation of Council resources for each program and 
     project.

     SEC. 6. ASSESSMENTS.

       (a) In General.--The Council may levy an assessment on 
     odorized propane in accordance with this section.
       (b) Amount.--
       (1) Initial assessment.--The Council shall set the initial 
     assessment at no greater than \1/10\ cent per gallon of 
     odorized propane sold and placed into commerce.
       (2) Subsequent assessments.--Subsequent to the initial 
     assessment, annual assessments shall be sufficient to cover 
     the costs of the plans and programs developed by the Council.
       (3) Assessment maximum.--An assessment shall not be greater 
     than \1/2\ cent per gallon of odorized propane, unless 
     approved by a majority of those voting in a referendum in the 
     producer class and the retail marketer class.
       (4) Maximum increase.--An assessment may not be raised by 
     more than \1/10\ cent per gallon of odorized propane 
     annually.
       (5) Ownership.--The owner of odorized propane at the time 
     of odorization, or at the time of import of odorized propane, 
     shall make the assessment based on the volume of odorized 
     propane sold and placed into commerce.
       (6) Due date.--Assessments shall be payable to the Council 
     on a monthly basis not later than the 25th of the month 
     following the month of in which the assessment is made.
       (7) Exported propane.--Propane exported from the United 
     States is not subject to the assessment.
       (8) Late fee.--The Council may establish a late payment 
     charge and rate of interest to be imposed on a person that 
     fails to remit or pay to the Council any amount due under 
     this Act.
       (c) Alternative Collection Rules.--The Council may 
     establish an alternative means of collecting the assessment 
     if the Council determines that the alternative means is more 
     efficient and effective.
       (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--
       (1) obligations of the United States or an agency of the 
     United States;
       (2) general obligations of a State or political subdivision 
     of a State;
       (3) an interest-bearing account or certificate of deposit 
     of a bank that is a member of the Federal Reserve System; or
       (4) obligations fully guaranteed as to principal and 
     interest by the United States.
       (e) State Programs.--
       (1) In general.--The Council shall establish a program 
     coordinating the operation of the Council with the programs 
     of any State propane education and research council created 
     by State law, or any similar entity.
       (2) Coordination.--The coordination shall include a joint 
     or coordinated assessment collection process, a reduced 
     assessment, or an assessment rebate.
       (3) Reduced assessment or rebate.--A reduced assessment or 
     rebate shall be 20 percent of the regular assessment 
     collected in a State under this section.
       (4) Payment of assessment rebates.--An assessment rebate 
     may be paid only to--
       (A) 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
       (B) a similar entity, such as a foundation established by 
     the retail propane gas industry in a State that meets 
     requirements established by the Council for specific programs 
     approved by the Council.

     SEC. 7. COMPLIANCE.

       (a) In General.--The Council may bring a civil action in a 
     United States district court to compel compliance with an 
     assessment levied by the Council under this Act.
       (b) Costs.--A successful action for compliance under this 
     section may require payment by the defendant of the costs 
     incurred by the Council in bringing the compliance action.

     SEC. 8. LOBBYING RESTRICTIONS.

       No funds collected by the Council shall be used in any 
     manner to influence legislation or an election, but 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.--
       (1) In general.--Not later than 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, and the public 
     an analysis of changes in the price of propane relative to 
     other energy sources.
       (2) Methodology.--
       (A) In general.--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 number 2 fuel oil on an annual national average 
     basis.
       (B) Rolling average price.--For purposes of indexing 
     changes in consumer grade propane, residential electricity, 
     residential natural gas, and end-user number 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.--
       (1) In general.--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 number 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.
       (2) Notification.--The Council shall inform Congress and 
     the Secretary of Energy of any restriction of activities 
     under this subsection.
       (3) Reanalysis.--On the expiration of each 180-day period 
     beginning on the date on which activities are restricted 
     under paragraph (1), the Secretary of Commerce shall conduct 
     a new propane price analysis described in subsection (a).
       (4) End of restriction.--Activities of the Council shall 
     continue to be restricted under this subsection until the 
     percentage described in paragraph (1) is 10.1 percent or 
     less.

     SEC. 10. PRICING.

       Notwithstanding any other provision of this Act, the price 
     of propane shall be determined by market forces. The Council 
     shall take no action, and no provision of this Act shall 
     establish 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 shall 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.

       (a) In General.--Not later than 2 years after the date of 
     enactment of this Act, and not less than once every 2 years 
     thereafter, the Secretary of Commerce shall prepare and 
     submit to 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.
       (b) Consideration by the Secretary of Commerce.--The 
     Secretary of Commerce shall--

[[Page S3022]]

       (1) consider and, to the extent practicable, include in the 
     report submissions by propane consumers;
       (2) consider whether there have been long-term and short-
     term effects on propane prices as a result of Council 
     activities and Federal programs; and
       (3) consider whether there have been changes in the 
     proportion of propane demand attributable to various market 
     segments.
       (c) Recommendations.--To the extent that the report 
     demonstrates that there has been an adverse effect on propane 
     prices, the Secretary of Commerce shall include 
     recommendations for reversing or mitigating the effect.
       (d) Frequent reports.--On petition by an affected party or 
     on 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.
                                 ______