Assessment FAQs

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Frequently Asked Questions

Q1. Does a marketer who buys unodorized propane have to pay when he/she causes it to be odorized?

A. Yes. The law places an obligation for payment of the assessment on the owner of the product at the time it is odorized. Thus, if you now own unodorized propane and you have it odorized, either by yourself or by storage cavern, terminal operator or loading rack, either for your own use or for resale to another, then you must pay the assessment to KYPERC.

Q2. Does a storage cavern, terminal or loading rack operator have to pay?

A. Unless a storage cavern, terminal or loading rack operator takes legal title to the product being stored, transported or loaded, he/she has no obligation to collect or pay the assessment. Storage cavern, terminal or loading rack operators are asked by KYPERC to report the volumes of product which are odorized at their facility in order to assist KYPERC in its collection process.

Q3. Does a chemical company or other end-user of unodorized propane have to pay if he sells odorized propane to someone else?

A. Yes. Anyone who owns unodorized propane and then sells odorized propane to another is responsible for reporting and remitting the assessment on the volume of that propane at the time it is odorized.

Q4. What are the obligations of a marketer who never owns odorized propane?

A. If you always purchase odorized propane from your supplier, regardless of whether that supplier is a producer, broker, wholesaler or another marketer, then you have no obligation under the KYPERC law. Marketers will likely see the KYPERC fee added as a separate line item on their purchase invoice.

Q5. What do I do if I make a mistake and overpay or underpay?

A. You should immediately contact the KYPERC staff and report the mistake. If the underpayment was unintentional, you will be asked to correct the report and pay the proper assessment. Underpayments are subject to penalty and interest. However, they may be waived on a case by case basis. If you overpaid, you will be asked for an explanation upon verification of the overpayment, the amount will either be refunded or credited against future remittance payments.

Q6. What are the penalties for failing to pay the assessment?

A. The Council will bring suit in state court to compel compliance with an assessment levied by the Council under KRS 234.270 to 234.302. A successful action for compliance under the law may also require payment by the defendant of the costs incurred by the Council in bringing action.

Q7. What are the penalties for late payment?

A. A penalty of 5% of the amount due is assessed on all payments postmarked after the due date (25th of the month following the assessment). If payment is not made within 30 days after the due date, interest will accrue at the rate of 1 1/2% per month.

Q8. May I wait to pay the assessment until after I have collected the money from my customer?

A. No. The assessment is to be made on all propane odorized in Kentucky. The assessment must be paid to the Council postmarked by the 25th of the month following its odorization or import. Whether you are a producer, marketer or supplier, if you own propane at the time it is odorized in Kentucky, you are obligated by law to pay the assessment by the due date.

Q9. As a marketer, may I pass the cost of the assessment onto my customers?

A. The state legislature has expressly forbidden the Council from taking any action which may be interpreted as establishing an agreement to pass along the assessment cost to consumers. The law also stipulates that no provision of the law may be interpreted as establishing such an agreement. Each marketer or retail propane dispenser must set its own price based on its own competitive situation.

If your questions haven't been answered, please contact the KYPERC staff. The Kentucky Propane Education and Research Council is intent on making sure this program benefits the propane industry and propane consumers. Please let us know how we can make it better.
John T. (Tom) Underwood, Executive Director
5932 Timber Ridge Drive, Suite 101
Prospect, KY  40059