HOUSE BILL No. 2038*
An Act creating the Kansas propane education and research council; providing for the
powers, duties and functions thereof; providing for certain assessments.
Be it enacted by the Legislature of the State of Kansas:

      Section  1. This act shall be known and may be cited as the Kansas
propane education and research act.

      Sec.  2. As used in this act: (a) ``Council'' means the Kansas propane
education and research council established in section 3, and amendments

      (b) ``education'' means any action that provides information, instruc-
tion or safety guidelines about propane, propane equipment, mechanical
and technical practices and uses of propane to propane consumers or
industry employees;

      (c) ``awareness'' means any action that provides information or safety
guidelines about propane, propane equipment, mechanical and technical
practices and uses of propane to propane consumers or industry employ-

      (d) ``industry'' means those persons involved in the production, trans-
portation and sale of propane gas and in the manufacture and distribution
of propane utilization equipment;

      (e) ``industry trade association'' means an organization that represents
a segment of the industry and which is exempt from tax under section
501 (c)  (3) or (c)  (6) of the federal internal revenue code of 1986, as in
effect on July 1, 2002;

      (f) ``manufacturer and distributor of propane gas equipment'' means
any person engaged in the manufacturing, assembling and marketing of
appliances, containers and products used in the propane gas industry and
any person in the wholesale marketing of appliances, containers and prod-
ucts used in the propane gas industry;

      (g) ``odorized propane'' means propane to which odorant has been

      (h) ``person'' means any individual, group of individuals, partnership,
association, cooperative, corporation or other legal entity;

      (i) ``placed into commerce'' means delivered, transported for storage
or sold within the state of Kansas;

      (j) ``propane'' means propane, butane, mixtures and liquefied petro-
leum gas as defined by the national fire protection association standard,
liquefied petroleum gas code, the chemical composition of which is pre-
dominantly C;i3H;i8, whether recovered from natural gas or from crude oil;

      (k) ``public member'' means a member of the council selected from
among users of odorized propane, organizations representing users of
odorized propane, public safety officials or state propane gas regulatory

      (l) ``qualified industry organization'' means the propane marketers as-
sociation of Kansas, a successor association or any other propane industry
organization or industry trade association the members of which are en-
gaged in the sale or distribution of odorized propane, or the sale of pro-
pane utilization equipment, to the ultimate consumer;

      (m) ``research'' means any type of study, investigation or other activity
performed by a qualified public or private research group for the purpose
of advancing and improving the existing technology related to the propane
industry, including the development of increased efficiency of propane
use, enhancing the safety of propane and propane utilization equipment
and furthering the development of such information and products;

      (n) ``retail marketer'' means any person engaged in the sale of odor-
ized propane to the ultimate consumer or to retail propane dispensers
within Kansas;

      (o) ``transporter'' means any person involved in the commercial trans-
portation of propane by pipeline, truck, rail or water; and

      (p) ``wholesaler, reseller, supplier or importer'' means the owner of
the propane at the time it is first sold to a retail marketer in Kansas
regardless of the state where production occurs, with ownership of the
propane determined by the freight on board designation.

      Sec.  3. (a) The Kansas propane education and research council is
hereby created. Members of the council shall be appointed by the gov-
ernor from a list of nominees submitted by qualified industry organiza-
tions within 60 days after the effective date of this act. The council shall
consist of 10 members, including four members representing retail mar-
keters of propane; two members representing wholesalers, resellers, sup-
pliers and importers of propane; two members representing manufactur-
ers and distributors of propane gas equipment and transporters of
propane; one public member; and the state fire marshal or the state fire
marshal's designee who shall serve as an ex officio member.

      (b) Members of the council shall serve terms of three years, except
that, of the initial members, three shall be appointed for terms of one
year and three shall be appointed for terms of two years, as designated
by the governor. Members filling unexpired terms shall be appointed in
a manner consistent with this section. Members may serve a maximum
of two consecutive full terms, except that members filling unexpired
terms may serve a maximum of eight consecutive years. Former members
may be reappointed if they have not been members for a period of two

      (c) The council shall select from among the council's members a
chairperson and other officers as necessary, establish committees and
subcommittees of the council and adopt rules and regulations and bylaws
for the conduct of business. The council may establish advisory commit-
tees of persons other than council members.

      (d) The council may employ an executive director to serve as chief
executive officer and such other employees as it deems necessary. The
council shall determine the compensation and duties of each and shall
protect the handling of council funds through fidelity bonds.

      (e) The administrative costs of operating the council shall not exceed
10% of the funds collected in any fiscal year.

      (f) At the beginning of each fiscal year, the council shall prepare a
budget plan that includes the estimated costs of all programs, projects
and contracts of the council. The council shall provide an opportunity for
public comment on the budget. The council shall prepare and make avail-
able to the public an annual report detailing the activities of the council
in the previous year, those planned for the coming year and costs related
to the activities.

      (g) The council shall keep minutes, books and records that clearly
reflect all of the acts and transactions of the council. 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 audits shall be provided to the executive director, to all members of
the council and to any other member of the industry upon request.

      (h) The council shall be subject to the Kansas open meetings act and
shall require reports on the activities of the committees and subcommit-
tees and on compliance, violations and complaints regarding the imple-
mentation of this act.

      (i) 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, programs to provide
research and development to improve existing propane technology, pro-
grams to increase efficiency of propane use and any other programs to
educate the public about the safety and environmental aspects of propane.
Safety issues shall receive first priority in the development of all programs
and projects funded by the council. The funds collected for the council
shall not be used to promote one energy source over another. In devel-
oping programs and projects and entering into contracts or agreements
for implementing the provisions of this act, the council shall not use any
funds collected by the council to provide for or assist the purchase of
equipment related to such programs and projects by or for a private, for
profit corporation or other business association or entity. The council shall
not use any funds collected by the council to purchase propane products
and equipment or replace propane products and equipment for Kansas
consumers, including through cost-share programs, except that the coun-
cil may use such funds for the purchase of propane products and equip-
ment for displays in such programs or projects. The council shall provide
for the payment of the costs of the programs and projects with funds
collected pursuant to section 4, and amendments thereto, and shall co-
ordinate the council's activities with qualified industry organizations to
provide efficient delivery of services and to avoid unnecessary costs of
duplication of activities.

      (j) The council shall report annually to the house and senate com-
mittees on agriculture. Such report shall include details of council pro-
grams, projects and activities as provided pursuant to this act. The report
provided in 2004 shall include a review of propane safety policies, statutes,
rules and regulations in Kansas and adjoining states and shall include
recommendations the council deems appropriate for policy, statutory or
regulatory changes in Kansas to improve propane safety.

      Sec.  4. (a) Except as otherwise provided by law, there shall be an
assessment as provided in this section on odorized propane. The council
shall set the initial assessment at no greater than 2/10 of one cent per gallon
of odorized propane. Thereafter, annual assessments shall be sufficient
to cover the costs of plans and programs developed by the council. The
assessment shall not be greater than 3/10 of one cent per gallon of odorized
propane. In no case may the assessment be raised by more than 1/10 of
one cent per gallon of odorized propane annually.

      (b) The owner of 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. The assess-
ment, when made, shall be listed as a separate line item on the bill labeled
``Kansas propane education and research assessment'' or ``KanPERC.''
Assessments collected from purchasers of propane are payable to the
council on a monthly basis by the 25th of the month following the month
of collection. If payment is not made to the council by the due date under
this subsection, an interest penalty of 1% of any amount unpaid shall be
added for each month or fraction of a month after the due date, until
final payment is made. 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.

      (c) Pending disbursement pursuant to a program, plan or project, the
council shall 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 political subdi-
vision 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.

      (d) The price of propane shall be determined by market forces con-
sistent with antitrust laws and no provision of this act shall be interpreted
as allowing a pass through to consumers of the assessment determined
by the council pursuant to subsection (a).

      (e) Any rebate funds received from the national propane education
and research council from assessments collected on odorized propane
distributed from Kansas shall be the property of the Kansas propane ed-
ucation and research council and the use of such funds shall be deter-
mined by the Kansas council for the intended purposes of this act.

      (f) Any person who unreasonably fails or refuses to pay any assess-
ments due under this act may be subject to legal action by the council to
recover the assessments due, plus interest and costs.

      Sec.  5. Except as provided in subsection (j) of section 3, moneys col-
lected by the council shall be expended only for the purposes of this act
and shall not be used in any manner for influencing legislation or for
political campaign contributions.

      Sec.  6. The provisions of this act do not preempt or supersede any
other program relating to propane safety or education which has been
organized and is operating under the laws of this state.

 Sec.  7. This act shall take effect and be in force from and after its
publication in the statute book.

Approved April 21, 2003.