These proposed rule changes increase the Marketing Order assessment rate collected on each gallon of odorized propane gas sold and consumed in Florida to implement results of an industry referendum and clarify the assessment payment procedure.

 

DEPARTMENT OF AGRICULTURE AND CONSUMER SERVICES

Division of Standards

RULE NOS.:RULE TITLES:

5F-11.071Rate of Assessments; Effective Date

5F-11.072Payment of Assessments; Penalties

PURPOSE AND EFFECT: These proposed rule changes increase the Marketing Order assessment rate collected on each gallon of odorized propane gas sold and consumed in Florida to implement results of an industry referendum and clarify the assessment payment procedure.

SUMMARY: Proposed changes revise the Marketing Order assessment collected on sales of odorized propane by increasing the assessment by an additional one-tenth of one cent. This increase was approved by referendum conducted by the Department on behalf of the liquefied petroleum gas industry pursuant to Section 527.23, Florida Statutes. Assessment dollars are utilized to pay for all plans and programs approved by the Florida Propane Gas Education, Safety, and Research Council on the industry's behalf. These programs are established in order to maintain present propane markets or create new or larger markets for propane gas produced or marketed within Florida. Additional rule changes clarify that assessment payments are based on total "volume" of propane sold during each quarter as opposed to "amount" and correct the name of the form that must be submitted in order to timely report gallons-sold subject to the assessment. Other changes establish when the assessment increase shall take effect.

SUMMARY OF STATEMENT OF ESTIMATED REGULATORY COSTS AND LEGISLATIVE RATIFICATION:

The Agency has determined that this will have an adverse impact on small business or likely increase directly or indirectly regulatory costs in excess of $200,000 in the aggregate within one year after the implementation of the rule. A SERC has been prepared by the agency.

The Marketing Order assessment rate is determined by the LP gas industry pursuant to referendum conducted under Section 527.23, Florida Statutes. All assessment payments collected by the Department are utilized solely for the purpose of paying for propane marketing and safety plans and programs that benefit the industry. The Department administers these programs on behalf of the Florida Propane Education, Safety, and Research Council which approves the expenditure of all assessment dollars. The Department is not reimbursed for any regulatory activities related to collection or processing of assessment payments, and is only reimbursed for advertising, tradeshow, and marketing services provided on the Council's and industry's behalves. It is debatable, therefore, whether the assessment is a "regulatory cost" to the industry.

The total dollar amount of the assessment is dependent upon sales of propane within Florida and payments are submitted quarterly. Based upon historical data, the annual assessment amount collected has steadily decreased over the past three years from approximately $241,500 in FY 2009-10 to $235,400 in FY 2010-11 (2.53% reduction from prior year) with an even larger decrease to $222,400 in FY 2011-12 (5.53% reduction from prior year). For the current fiscal year, the amount collected is approximately $209,000. (Payments for the last quarter of the fiscal year are not due until August 14th.) As the current assessment rate is one-tenth of a penny and the recently approved increase is double that amount, it is anticipated that during the first year of rule implementation, costs related to the assessment will be less than $220,000. This is expected to further decrease as natural gas production continues to surpass that of propane and propane is replaced as an energy source. In addition, if warmer winters continue to be experienced in Florida, propane sales will further decline and correspondingly, the amount of assessment dollars paid-in will, as well. It is not anticipated, therefore, that the increase in the assessment amount collected during each of the next five fiscal years will remain over $200,000 per fiscal year.

The Agency has determined that the proposed rule is not expected to require legislative ratification based on the statement of estimated regulatory costs or if no SERC is required, the information expressly relied upon and described herein:

Any person who wishes to provide information regarding a statement of estimated regulatory costs, or provide a proposal for a lower cost regulatory alternative must do so in writing within 21 days of this notice.

RULEMAKING AUTHORITY: 527.23 FS.

LAW IMPLEMENTED: 527.23 FS.

IF REQUESTED WITHIN 21 DAYS OF THE DATE OF THIS NOTICE, A HEARING WILL BE SCHEDULED AND ANNOUNCED IN THE FAR.

THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULE IS: Lisa M. Bassett, Chief  Bureau of Liquefied Petroleum Gas Inspection, Department of Agriculture and Consumer Services, 3125 Conner Boulevard, Suite E, Tallahassee, Florida 32399-1650; Telephone Number: [phone]

 

THE FULL TEXT OF THE PROPOSED RULE IS:

 

5F-11.071 Rate of Assessments; Effective Date.

(1) There is hereby assessed to every producer or retail marketer engaged in the production or sale of propane gas in this state the amount of $.002 $.001 per gallon of odorized gas sold in Florida for consumption in Florida; and $.002 $.001 per gallon of odorized gas imported into the state for consumption in the state.

(2) The rate set forth above, shall take effect at the beginning of the first full quarter immediately following adoption of the rule fixing this amount and shall apply to all odorized propane gas subject to the assessment sold during that quarter and thereafter until changed. Assessments shall be paid to the department at the end of each quarter and shall be based on the gallonage sold or imported during that quarter. This assessment is effective with the quarter beginning July 1, 1998.

Rulemaking Authority 527.23(13) FS. Law Implemented 527.23(9), (11), (12) FS. History–New 7-8-98, Amended ___________.

 

5F-11.072 Payment of Assessments; Penalties.

(1) Payment of the quarterly assessment shall be based on the odorized gallonage sold or imported into Florida during the quarter. Each producer or marketer shall certify to the department the volume amount of each load of propane gas sold or imported at the end of each quarter. The volume Any load of propane gas sold for export outside the state shall also be certified to the department for audit purposes only. The amount Payment of the quarterly assessment to be paid and shall be remitted at the end of the quarter along with this certification of load volume shall be provided on form FDACS-03524 (11/12)(7/98), Odorizers/Importers entitled Odorizer’s or Importer’s Quarterly Remittance Report, as which is incorporated herein by reference in Rule 5F-11.004, F.A.C. Copies of this form may be obtained through the Department of Agriculture and Consumer Services, Bureau of Liquefied Petroleum Gas Inspection, 3125 Conner Boulevard, Suite N, Tallahassee, Florida 32399-1650.

(2) Assessments payments and the completed Odorizers/Importers Quarterly Remittance Report must be received by shall be submitted to the department and postmarked no later than 45 calendar days after the end of each quarter. If When the 45th day falls on a Saturday, Sunday or legal holiday, the payments received made on the first following business day shall not be considered late.

(3) Failure to submit payment within the 45-day period will result in a 5% late penalty based on the original amount due. Payments withheld for more than 60 days will result in a 10% late penalty based on the original amount due. The department shall notify the payor of any payments not received at the end of the 60-day period. The late penalty and original amount of the assessment shall be due and payable within 15 days of the department's departments notification to the payor.

(4) No change.

Rulemaking Authority 527.23(13) FS. Law Implemented 527.12, 527.13, 527.23(9), (12) FS. History–New 7-8-98, Amended _________.

 

NAME OF PERSON ORIGINATING PROPOSED RULE: Tom A. Steckler, Division Director

NAME OF AGENCY HEAD WHO APPROVED THE PROPOSED RULE: Commissioner of Agriculture Adam H. Putnam

DATE PROPOSED RULE APPROVED BY AGENCY HEAD: August 9, 2013

DATE NOTICE OF PROPOSED RULE DEVELOPMENT PUBLISHED IN FAR: March 7, 2013