SRC-SLL S.B. 925 75(R)   BILL ANALYSIS


Senate Research Center   S.B. 925
By: Ogden
Natural Resources
3-20-97
As Filed


DIGEST 

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.  This bill will simplify Texas' checkoff system and make
it consistent with the federal system; authorize 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 authorize 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. 

PURPOSE

As proposed, S.B. 925 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

Rulemaking authority is granted to the Railroad Commission in SECTION 7
(Section 113.246(a), Natural Resources Code) of this bill. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 113.243(b), Natural Resources Code, to provide
that the Alternative Fuels Research and Education Fund (fund) consists of
money from funds collected by the Railroad Commission (RRC) under
agreements with other states pursuant to Subsection (c) of Section 113.246
of this chapter. 

SECTION 2. Amends Section 113.243(b), Natural Resources Code, to provide
that the fund consists of money from assessments, rebates on assessments,
and other funds collected by RRC under the federal Propane Education and
Research Act (P.L. 104-284 (1996)) or other applicable federal law.  Makes
a conforming change. 

SECTION 3. Amends Section 113.243(c), Natural Resources Code, to require
rules adopted and promulgated by RRC under this section to specify a
limitation on the proportion of the fund usable  for the rebate program
that limits the proportion usable to not more than 50 percent, rather than
25 percent, of the funds available. 

SECTION 4. Amends Section 113.244, Natural Resources Code, to provide that
a fee is imposed on odorized liquified petroleum gas (LPG), rather than on
the first sale of odorized LPG, delivered into any means of conveyance to
be sold and placed into commerce.  Deletes a provision regarding
collection of the fee.  Requires the fee to be in an amount determined by
a certain schedule.  Deletes references to cargo tanks.  Requires the
owner of LPG at the time of odorization, or the time of import of odorized
LPG, to pay the fee based on the net amount of odorized LPG sold and
placed into commerce.  Requires the fee to be collected and remitted to
RRC pursuant to Section 113.245 of this chapter by the person who odorizes
the LPG or imports odorized LPG.  Deletes a provision regarding the
computation of the fee.  Defines "import."  Provides that the fee does not
apply to a delivery of odorized LPG  destined for export from the United
States, rather than from this state, if the LPG is in continuous movement
to a destination outside the United States, rather than this state.
Requires the fee on LPG destined for export to another state and in
continuous movement to a destination on that state to be assessed at the
rate in effect in that state, if RRC is party to an agreement with that
state's propane education and research program.  Authorizes RRC to
transfer fees collected under Subsection (e) of this section to the agency
or organization that is party to RRC's agreement with that 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
LPG, 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
RRC to enter into agreements with agencies of or organizations in other
states to coordinate the administration, collection, reporting, and
payment of the fees payable or collected under this subchapter and other
states' propane education and research programs created by state law or
regulation.  Sets forth items that may be contained in the agreements. 

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 certain agreements with other states and federal entities
regarding fees.  Sets forth items that may be contained in the agreements. 

SECTION 8. Effective date for SECTIONS 1, 3, 4, 5, 6, 8, 9, and 10:
September 1, 1997. 

SECTION 9. Effective date for SECTIONS 2 and 7: upon the later of either
September 1, 1997, or RRC's receipt and acceptance of a written report by
an independent auditing firm confirming that the industry referendums
required under Section 4 of the Propane Education and Research Act of 1996
have been approved by producers representing two-third of the total volume
of propane voted in the retail marketer class. 

SECTION 10. Emergency clause.