About the Referendum
In 1998, the Kentucky General Assembly enacted legislation (SB 136) creating the Kentucky Propane Education and Research Council (KYPERC), authorizing the Council to conduct consumer safety and education programs, employee safety and training programs, and research and development efforts for the benefit of the propane industry and its customers. The statute allows the industry, by way of a referendum among its producers, suppliers, and retail marketers, to levy upon itself an assessment to finance the programs and activities directed by the Council for the benefit of the industry.
Through the KYPERC, the propane industry has committed itself to promotion of the safe, efficient use of propane as a preferred energy source.
During the fall of 1998, the industry conducted the initial referendum among producers and marketers, who overwhelmingly approved the formation of the Council. Accordingly, the referendum shall be conducted five years after the date of the initial referendum and each subsequent five-year period.
In 2003, The Kentucky Propane Education and Research Council conducted its second statewide referendum on the question of whether there shall be levied an annual assessment of two-tenths of one cent ($0.002) per gallon of odorized propane produced or sold in the Commonwealth. The referendum was held statewide among producers, suppliers and retail marketers. Voting rights in the referendum are based on the volume of propane produced or odorized propane sold in Kentucky in the previous calendar year and shall be proportional to the gallons sold. Producers and supplier vote as one class and retail marketers vote as a separate class. Approval of the an assessment required votes representing two-thirds (2/3) of the total volume voted in each class.
Assessment established by the Council will be made on the owner of odorized propane at the time of odorization or at the time of import of odorized propane into the state. Assessments are based on the volume of odorized propane sold for final use in Kentucky and will be payable to the Council on a monthly basis. Funds collected and any donations are used for the purpose of promoting and encouraging, by research, market development, and education, the increased use and sale of propane and increased consumer and employee safety. An 11-member board comprised of five producers/suppliers, five retail marketers, and one public member govern the Council and are appointed by the Kentucky State Commissioner of the Department of Housing, Buildings and Construction.
Qualifications to Vote
Owners of propane sold in Kentucky at the time it is recovered, at the time of odorization, or at the time odorized propane is imported into the Commonwealth are eligible to vote in the producer/supplier class in the upcoming referendum. For the purpose of the referendum, producers and suppliers are considered a single class. Retail marketers are defined as those engaged primarily in the sale of odorized propane to the final user of the product or to retail propane dispensers; and are eligible to vote in the retail marketer class. Voting rights are based on the volume of propane produced, supplied, or sold in the previous calendar year and are proportional to the gallons sold. Two-thirds of the total gallons voted in each class must be cast in favor of the assessment in order for it to be authorized. Membership in any industry trade association is not a factor in determining voter eligibility.
The voting representative for your company is listed as:
Bill Maloof
Level Propane Gases, Inc.
P.O. Box 45271
West Lake, OH 44145
The referendum ballot will be mailed to the individual named above. Any changes in the voting representative or address corrections must be received in writing by the independent accounting firm by Monday, October 20, 2003.
Referendum Oversight
The independent accounting firm will be engaged to conduct the actual referendum. The firm will be responsible for ballot distribution, ballot tabulation, verification of gallons voted; and certification of referendum results.
Further Information
Information regarding the administration of the referendum will be available at a later date.
The following Statutes are from KRS Chapter 234:
234.278 Referendum to permit assessment Purpose of assessments.
Producers, suppliers, and retail marketers of propane shall be permitted by referendum, subject to the provisions of KRS 234.270 to 234.302, to levy upon themselves an assessment for the purpose of financing or contributing toward the financing of a program of research, market development, and education to increase the consumption, use, sale, and markets for propane and toward the financing of programs to enhance consumer and employee education and safety.
Effective July 15, 1998.
234.280 Application to conduct referendum Content of application form Publication of form.
(1) Any existing industry trade organization which is fairly representative of the propane industry in Kentucky, such as the Kentucky Propane Gas Association, may at any time after July 15, 1998, make application to the commissioner on forms prescribed by the department for certification and approval for the purpose of conducting a referendum among producers, suppliers, and retail marketers upon the question of levying an assessment under the provisions of KRS 234.270 to 234.302 and collecting and utilizing the assessment for the purpose stated in the referendum. The application forms shall include, but not be limited to, the following:
(a) Applicants name;
(b)Applicants address;
(c) Date;
(d)Program to be undertaken;
(e) Brief statement of how the program is to be implemented;
(f) Referendum to be conducted on a statewide basis;
(g) Proposed effective date of the program; and
(h)Signature of the applicant.
(2) Upon receipt of the application, the commissioner shall publish the application through the medium of the public press in the state within ten (10) days of receipt.
Effective: July 15, 1998
234.282 Association authorized to hold referendum.
Upon being certified by the commissioner, the association in KRS 234.280(1) shall be fully authorized and empowered to hold a referendum among producers, suppliers, and retail marketers on the question of whether the industry shall levy upon itself an assessment for the purpose stated in KRS 234.270 to 234.302.
Effective: July 15, 1998
234.284 Referendum to be statewide Basing voting rights Question for voters.
Any referendum conducted under the provisions of KRS 234.270 to 234.302 shall be held on a statewide basis. Voting rights in the referendum shall be based on the volume of propane produced or odorized propane sold in the Commonwealth in the previous calendar year and shall be proportional to the gallons sold. In the referendum, persons eligible for participation shall vote upon the question of whether there shall be levied an annual assessment in the amount set forth in the call for the referendum.
Effective: July 15, 1998
234.286 Commissioner to supervise referendum Expenses Conducting referendum Voter to certify volume of propane represented by vote Mechanism for notification of eligible voters.
(1) The manner, conduct, and management of any referendum held under the provisions of KRS 234.270 to 234.302 shall be under the supervision and direction of the commissioner. Any and all expenses in connection with the initial referendum shall be borne by the association conducting the referendum. Any and all expenses in connection with subsequent referenda shall be borne by the council.
(2) With respect to any referendum conducted under the provisions of KRS 234.270 to 234.302, the association or council responsible for the referendum shall select an independent auditing firm, subject to the approval of the commissioner, to conduct the referendum.
(3) All persons voting in the referendum shall certify to the independent auditing firm the volume of propane represented by their vote. The information provided under this subsection shall be considered proprietary and shall remain confidential.
(4) The association or council responsible for the referendum shall develop a mechanism for notifying those persons eligible to vote in the referendum. Notice of the referendum, at a minimum, shall be given to all retail marketers in Kentucky holding a Class A license from the department and notice shall be published in existing industry publications with significant circulation within the Commonwealth.
Effective: July 15, 1998
234.288 Referendum results Issuance of order Initial and annual assessments.
(1) The results of the referendum, as certified by the independent auditing firm, shall be submitted to the commissioner, within thirty(30) days of certification.
(2) For the purpose of the referendum, producers and suppliers shall be considered a single class. Upon approval of those persons representing two-thirds (2/3) of the total volume of odorized propane voted in the retail marketer class and approval of those persons representing two-thirds (2/3) of the total volume of propane voted in the producer and supplier class, the commissioner shall issue an order authorizing the assessment.
(3) The initial assessment proposed shall be no greater than one-tenth of one cent ($0.001) per gallon of odorized propane. Thereafter, the annual assessment shall be set by the council in an amount adequate to cover the cost of plans and programs developed by the council. In no event shall the annual assessment levied under the provisions of the referendum exceed one-half of one cent ($0.005) per gallon of odorized propane unless approved by the majority of those voting in both the retail marketer class and the producer and supplier class in a separate referendum. The increase in the annual assessment as provided for in this subsection is limited to one-tenth of one cent ($0.001) per year.
Effective July 15, 1998
