HLP C.S.H.B. 1958 75(R)BILL ANALYSIS ENERGY RESOURCES C.S.H.B. 1958 By: Hawley 4-18-97 Committee Report (Substituted) BACKGROUND In 1991, the Texas Legislature created the first propane "checkoff" program in the United States. The law established a dedicated fund in the state treasury to receive fees paid by the industry on first Texas sales of odorized propane in Texas. The Railroad Commission uses the money to operate propane research, public education, and marketing programs through its Alternative Fuels Research and Education Division (AFRED). In 1996, the United States Congress enacted the federal Propane Education and Research Act. Under the Act, the National Propane Gas Association and the Gas Processors Association will hold separate retailer and supplier referendums. If both referendums pass, a Propane Education and Research Council (PERC) will be formed. The federal Act mandates a joint fee collection process with existing state programs and allows states to keep up to 20 percent of the federal money collected for use on programs approved by PERC. Texas' share of the national checkoff is estimated at $80,000 annually. PURPOSE As proposed, C.S.H.B. 1958 simplifies Texas' checkoff system and makes it consistent with the federal system; authorizes the Railroad Commission to enter into an agreement with the national Propane Education and Research Council to collect the national assessment on all liquified petroleum gas odorized in Texas and receive a rebate of 20 percent of collections; and authorizes the Railroad Commission to enter into agreements with counterpoint organizations in other states to collect and transfer state assessments on liquified petroleum gas that is odorized in one state and delivered in another. RULEMAKING AUTHORITY This bill expressly grants rulemaking authority to the Railroad Commission of Texas in SECTION 6 (Section 113.246(d), Natural Resources Code) and SECTION 7 (Section 113.246(d), Natural Resources Code). SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 113.243 (b), Natural Resources Code, to authorize money collected under interstate propane research and education fee agreements to be deposited in the Alternative Fuels Research and Education Fund. SECTION 2. Amends Section 113.243 (b), Natural Resources Code, to authorize money collected under interstate propane research and education fee agreements and under the federal propane research and education program authorized by the federal Propane Education and Research Act of 1996 to be deposited in the Alternative Fuels Research and Education Fund. SECTION 3. Amends Section 113.243(c), Natural Resources Code to raise the cap on spending for rebates from 25 percent of available funds to 50 percent of available funds. SECTION 4. Amends Section 113.244, Natural Resources Code as follows: (a) Provides that a fee is imposed on odorized LPG, rather than on the first sale of odorized LPG, delivered into any means of conveyance to be sold and placed into commerce. Makes an exception for agreements between the commission and another state's propane education and research program. Requires the fee to be in an amount determined be a certain schedule. Makes conforming changes. (b) States that the fee is paid by owner of LPG at the time of import or odorization. Fee is collected and remitted by odorizer or by importer of odorized LPG; (c) Defines "time of import" to mean The time of entry into this state from another state or from outside the United States. (d) Exempts from the fee deliveries of odorized LPG destined for export from the United States. Allows a delivery fee to be charged on LPG exported from this state if required by the implementation of the Federal Propane Education and Research Act of 1996. (e) States that if the commission is in agreement with another state's propane education and research program the LPG destination fee shall be the fee assessed in that state. (f) Allows the commission to transfer fees collected to the agency or organization that is party to the commission's agreement with a state. SECTION 5. Amends Section 113.245, Natural Resources Code, to require each person responsible for collecting and remitting a fee on a delivery of LG, rather than each operator of a loading rack, to file a report with RRC and remit the amount of fees required to be collected or paid during the preceding month, on or before the 25th day of the month following the end of each calendar month. Makes conforming changes. SECTION 6. Amends Section 113.246, Natural Resources Code, to authorize the RRC to coordinate fee collections with counterpart propane research and education programs in other states and to adopt these agreements as rules. States that 50 percent of the delivery fees will fund the rebate program and the remainder may be expended by the Alternative Fuels Research and Education Division of the commission. SECTION 7. Amends Section 113.246, Natural Resources Code to require RRC to adopt rules necessary for the administration, collection, reporting, and payment of the fees payable or collected under the Propane Education and Research Act of 1996 or other applicable federal law. Authorizes RRC to enter into an agreement with an agency or organization in another state and with the national Propane Education and Research Council regarding fees. Sets forth items that may be contained in the agreements. SECTION 8 . Effective date. September 1, 1997. Sections 1 and 6 have no effect if Sections 2 and 7 take effect on that date. Sections 2 and 7 take effect on the later date of September 1, 1997, or the date the commission receives in writing that the industry referenda required by the Propane Education and Research Act of 1996 have been approved by producers and retail marketers. SECTION 9. Emergency Clause COMPARISON OF ORIGINAL TO SUBSTITUTE SECTION 1. Changes the word "funds" to "amounts". SECTION 2. (5) Changes the word "funds" to "amounts". (6) Changes the word " funds" to "money". SECTION 4. (a) Adds that there is an exception to the fee provided by subsection (e). (c) Replaces definition of "import" with definition of "time of import". (d) Undeletes "this state". Adds that a delivery fee may be charged on LPG exported from this state if required by the implementation of the Federal Propane Education and Research Act of 1996. SECTION 6. Adds to the title, "AGREEMENTS WITH OTHER STATES." Adds that this section is effective according to the terms of the effective date. Adds the provision that the rebate program be funded by 50 percent of the delivery fees collected and that the remainder of the delivery fees go toward the Alternative Fuels Research and Education Division of the commission. SECTION 7. Adds to the title, "AGREEMENTS WITH OTHER STATES." Adds that this section is effective according to the terms of the effective date. Assigns part of subsection (a) to its own subsection. Makes conforming changes. SECTION 8. Combined with Sections 8 and 9 from introduced version. Adds that if Sections 2 and 7 of this Act take effect on the effective date, Sections 1 and 6 have no effect.