75(R) HB 1958 House committee report

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.