Session Law

Identifying Information:L. 2003 ch. 102
Other Identifying Information:2003 House Bill 2038*
Tax Type:Other
Brief Description:An Act creating the Kansas propane education and research council; providing for the powers, duties and functions thereof; providing for certain assessments.



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, 2002.


Date Composed: 10/29/2003 Date Modified: 10/29/2003