As Amended by Senate Committee
Session of 1999
By Committee on Energy and Natural Resources

10             AN  ACT relating to propane; creating the Kansas propane education and
11             research council; providing for the powers, duties and functions
12             thereof; providing for certain assessments.
14       Be it enacted by the Legislature of the State of Kansas:
15             Section  1. This act may be cited as the Kansas propane education
16       and research act.
17             Sec.  2. As used in this act:
18             (a) "Council" means the Kansas propane education and research
19       council established in section 3 and amendments thereto;
20             (b) "Education" means any action that provides information, instruc-
21       tion or safety guidelines about propane, propane equipment, mechanical
22       and technical practices and uses of propane to propane consumers or
23       industry employees.
24             (c) "Industry" means those persons involved in the production, trans-
25       portation and sale of propane gas and in the manufacture and distribution
26       of propane utilization equipment.
27             (d) "Industry trade association" means an organization that repre-
28       sents a segment of the industry and which is exempt from tax under
29       section 501(c)(3) or (6) of the federal internal revenue code of 1986.
30             (e) "Manufacturer and distributor of propane gas equipment" means
31       any person engaged in the manufacturing, assembling and marketing of
32       appliances, containers and products used in the propane gas industry and
33       any person in the wholesale marketing of appliances, containers and prod-
34       ucts used in the propane gas industry.
35             (f) "Marketing" means any action taken by the council to present
36       positive information about propane to the public, including paid promo-
37       tional advertising that promotes one energy source over another.
38             (g) "Odorized" propane" means propane to which odorant has been
39       added.
40             (h) "Person" means any individual, group of individuals, partnership,
41       association, cooperative, corporation or other legal entity.
42             (i) "Propane" means propane, butane, mixtures and liquefied petro-
43       leum gas as defined by the national fire protection association standard

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  1       58, liquefied petroleum gas code, the chemical composition of which is
  2       predominantly C3H8, whether recovered from natural gas or from crude
  3       oil.
  4             (j) "Public member" means a member of the council selected from
  5       among users of odorized propane, organizations representing users of
  6       odorized propane, public safety officials or state propane gas regulatory
  7       officials.
  8             (k) "Qualified industry organization" means any organization or in-
  9       dustry trade association the members of which are engaged in the sale or
10       distribution of odorized propane, or the sale of propane utilization equip-
11       ment, to the ultimate consumer.
12             (l) "Research" means any type of study, investigation or other activity
13       performed by a qualified public or private research group for the purpose
14       of advancing and improving the existing technology related to the propane
15       industry, including the development of increased efficiency of propane
16       use, enhancing the safety of propane and propane utilization equipment,
17       and furthering the development of such information and products.
18             (m) "Retail marketer" means any person engaged in the sale of odor-
19       ized propane to the ultimate consumer or to retail propane dispensers
20       within Kansas.
21             (n) "Transporter" means any person involved in the commercial
22       transportation of propane by pipeline, truck, rail or water.
23             (o) "Wholesaler, reseller, supplier or importer" means the owner of
24       the propane at the time it is first sold to a retail marketer in Kansas
25       regardless of the state where production occurs, with ownership of the
26       propane determined by the freight on board designation.
27             Sec.  3. (a) The Kansas propane education and research council shall
28       be appointed by the governor from a list of nominees submitted by qual-
29       ified industry organizations within 60 days after the effective date of this
30       act. The council shall consist of nine members, including four members
31       representing retail marketers of propane; two members representing
32       wholesalers, resellers, suppliers and importers of propane; two members
33       representing manufacturers and distributors of propane gas equipment
34       and transporters of propane; and one public member. All members of the
35       council shall be residents of this state.
36             (b) Members of the council shall serve terms of three years, except
37       that, of the initial members, three shall be appointed for terms of one
38       year and three shall be appointed for terms of two years, as designated
39       by the governor. Members filling unexpired terms shall be appointed in
40       a manner consistent with this section. Members may serve a maximum
41       of two consecutive full terms, except that members filling unexpired
42       terms may serve a maximum of eight consecutive years. Former members
43       may be reappointed if they have not been members for a period of two

SB 158--Am.


  1       years.
  2             (c) The council shall select from among its members a chairperson
  3       and other officers as necessary, establish committees and subcommittees
  4       of the council and adopt rules and bylaws for the conduct of business.
  5       The council may establish advisory committees of persons other than
  6       council members.
  7             (d) The council may employ an executive director to serve as chief
  8       executive officer and such other employees as it deems necessary. The
  9       council may enter into contracts with, use facilities and equipment of or
10       employ the personnel of a qualified industry organization in carrying out
11       the council's responsibilities under this act. The council shall determine
12       the compensation and duties of each and shall protect the handling of
13       council funds through fidelity bonds.
14             (e) The administrative costs of operating the council shall not exceed
15       25% of the funds collected in any fiscal year.
16             (f) At the beginning of each fiscal year, the council shall prepare a
17       budget plan that includes the estimated costs of all programs, projects
18       and contracts of the council. The council shall provide an opportunity for
19       public comment on the budget. The council shall prepare and make avail-
20       able to the public an annual report detailing the activities of the council
21       in the previous year, those planned for the coming year and costs related
22       to the activities.
23             (g) The council shall keep minutes, books and records that clearly
24       reflect all of the acts and transactions of the council. The books of the
25       council shall be audited by a certified public accountant at least once each
26       fiscal year and at such other times as the council may designate. Copies
27       of audits shall be provided to the executive director if one is appointed
28       by the council, to all members of the council and to any other member
29       of the industry upon request.
30             (h) The council shall issue notice of meetings and shall require re-
31       ports on the activities of the committees and subcommittees and on com-
32       pliance, violations and complaints regarding the implementation of the
33       Kansas propane education and research act.
34             (i) The council shall develop programs and projects and enter into
35       contracts or agreements for implementing the Kansas propane education
36       and research act, including but not limited to programs to enhance con-
37       sumer and employee safety and training, programs to provide research
38       and development to improve existing propane technology, programs to
39       increase efficiency of propane use and any other programs to educate the
40       public about the safety and environmental aspects of propane. Safety
41       issues shall receive first priority in the development of all programs and
42       projects funded by the council. The council shall provide for the payment
43       of the costs of the programs and projects with funds collected pursuant

SB 158--Am.


  1       to section 4 and amendments thereto and shall coordinate its activities
  2       with qualified industry organizations to provide efficient delivery of serv-
  3       ices and to avoid unnecessary costs of duplication of activities.
  4             Sec.  4. (a) An assessment to be set by the council at no greater than
  5       $.005 per gallon on odorized propane sold in the state shall be imposed
  6       on the wholesaler, reseller, supplier or importer who first sells, offers for
  7       sale or uses odorized propane in this state. The council shall not change
  8       the assessment rate more than once a year. The assessment shall be cal-
  9       culated by multiplying the assessment rate by the number of net gallons
10       of odorized propane on a bill of lading, an invoice or a shipping document.
11       If the quantity specified in the bill of lading, invoice or shipping document
12       is listed in units other than gallons, the wholesaler, reseller, supplier or
13       importer shall convert those units to gallons, using conversion tables ap-
14       proved by the council, prior to remitting the assessment to the council.
15       The council may establish an alternative means to collect the assessment
16       if another means is found to be more efficient and effective.
17             (b) Assessments shall be remitted to the council on a monthly basis
18       by the 25th day of the month following the month of the sale of the
19       propane. Nonodorized propane shall not be subject to the fee until odor-
20       ized. The council may establish a late payment charge and rate of interest
21       to be imposed on any person who fails to remit to the council any amount
22       due under this act.
23             (c) The price of propane shall be determined by market forces
24       consistent with antitrust laws and no provision of this act shall be
25       interpreted as allowing a pass through to consumers of the assess-
26       ment determined by the council pursuant to subsection (a).
27             (c) (d) Pending disbursement pursuant to a program, plan or project,
28       the council may invest funds collected through assessments and any other
29       funds received by the council, only in obligations of the United States or
30       any agency thereof, in general obligations of any state or any political
31       subdivision thereof, in any interest-bearing account or certificate of de-
32       posit of a bank that is a member of the federal reserve system, or in
33       obligations fully guaranteed as to principal and interest by the United
34       States.
35             (d) (e) Any rebate funds received from the national propane educa-
36       tion and research council from assessments collected on odorized pro-
37       pane distributed from Kansas shall be the property of the Kansas propane
38       education and research council and the use of such funds shall be deter-
39       mined by the Kansas propane education and research council for the
40       intended purposes of this act.
41             (e) (f) Moneys collected by the council shall be expended only for
42       the purposes of this act and shall not be used in any manner for mar-
43       keting or for influencing legislation or for political campaign contribu-

SB 158--Am.


  1       tions, except that the council may recommend to the legislature changes
  2       in this act or other statutes that would further the purposes of this act.
  3             (f) (g) The council may, on its own initiative, and shall, upon the
  4       petition of retail marketers representing at least 35%, as determined by
  5       the council, of the total volume of odorized propane sold at retail in the
  6       state of Kansas, hold a referendum to determine whether the industry
  7       favors termination or suspension of the assessment provided for by this
  8       section. The termination or suspension shall not take effect unless it is
  9       approved by retail marketers representing more than 50%, as determined
10       by the council, of the total volume of odorized propane sold at retail in
11       the state of Kansas.
12             Sec.  5. The Kansas propane education and research act does not pre-
13       empt or supersede any other program relating to propane safety or ed-
14       ucation which has been organized and is operating under state law.
15             Sec.  6. Any person who unreasonably fails or refuses to pay any as-
16       sessments due under the Kansas propane education and research act may
17       be subject to legal action by the council to recover the assessments due,
18       plus interest and costs.
19        Sec.  7. This act shall take effect and be in force from and after its
20       publication in the statute book.