AN ACT Relating to retail heating oil dealers; adding a new chapter to Title 43 RCW; providing an effective date; and declaring an emergency.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. This act may be known and cited as the Washington state oil heat commission act.

NEW SECTION. Sec. 2. For the purpose of this chapter:

(1) "Commission" means the Washington state oil heat commission.

(2) "Director" means the director of the Washington state energy office or his duly-appointed representative.

(3) "Energy office" means the Washington state energy office.

(4) "Person" includes any individual, firm, corporation, trust, association, partnership, society, or any other organization of individuals.

(5) "Heating oil" means number two heating oil for use in oil-fired furnaces and boilers for space heating. It does not include kerosene, gasoline, propane, or diesel.

(6) "Oil dealer" means any person who handles, ships, buys, or sells heating oil.

(7) "Commercial quantity" means twenty thousand gallons or more of heating oil sold in any calendar year by any oil dealer.

(8) "Affected dealer" means any person who sells heating oil in commercial quantity in the state of Washington.

(9) "Affected unit" means one gallon of heating oil.

(10) "Fiscal year" means the twelve-month period beginning with July 1 of any year and ending with the last day of June following, both dates being inclusive.

NEW SECTION. Sec. 3. The purpose of this commission is to provide for economic development of the state, promote the health, safety, and welfare of the people of this state, and to stabilize and protect the oil heat industry of the state. To carry out these purposes, the commission may:

(1) Provide for research to develop and discover technologically advanced and more efficient oil heat equipment, and disseminate reliable information founded upon that and otherwise available research;

(2) Provide for programs to encourage energy conservation among oil heat users through home weatherization, and through developing and disseminating educational materials regarding energy conservation. The development of such programs may be approved by and delivered in cooperation with the energy office;

(3) Provide for programs to offer financial assistance to low-income oil heat users to help defray the cost of fuel, modern equipment installation, and weatherization expenses;

(4) Provide programs for oil dealers' drivers, delivery personnel, and inventory staff, for the safe, efficient transfer of oil products from a point of wholesale to the end user to avoid waste and contamination, in the event of a spill or a leak to properly contain and clean up the affected environment and address any claim against an oil heat customer for a spill or leak from a customer tank;

(5) Provide programs for qualified educational training of oil heat industry employees with regard to the maintenance of oil heating equipment to ensure proper installation for safe and efficient operation, and disseminate information regarding the safe and efficient operation and maintenance of oil heat equipment;

(6) Provide for programs to encourage energy conservation among oil heat users through the use of energy efficient oil heat equipment.

NEW SECTION. Sec. 4. (1) For the purposes of this chapter, the state of Washington is initially divided into five districts as follows:

(a) "District number one" includes the counties of San Juan, Clallam, Jefferson, Grays Harbor, Mason, Kitsap, Island, Pacific, Whatcom, and Skagit;

(b) "District number two" includes the counties of King and Snohomish;

(c) "District number three" includes the counties of Pierce, Thurston, Wahkiakum, Lewis, Cowlitz, Clark, Skamania, and Klickitat;

(d) "District number four" includes the counties of Okanogan, Chelan, Douglas, Kittitas, Grant, Yakima, Benton, Franklin, Walla Walla, and Columbia; and

(e) "District number five" includes the counties of Ferry, Stevens, Pend Oreille, Lincoln, Spokane, Adams, Whitman, Garfield, and Asotin.

(2) The commission shall delete, combine, revise, amend, or modify in any manner commission districts and boundaries by regulation as required and in accordance with the intent and provisions of this section. The boundaries of the commission districts shall be maintained in a manner that assures each producer representation in the commission which is reasonably equal with the representation afforded all other oil dealers by their commission members.

NEW SECTION. Sec. 5. (1) An oil heat commission is established to administer this chapter and shall be composed of eight members who shall be affected oil dealers selected as provided in this section, and two members who shall be appointed by the elected oil dealer members to represent the public. In addition, the director shall be an ex officio member without a vote.

(2) The state shall initially be divided into five districts and each district shall have the designated number of commission members set forth below. Each district shall nominate as many nominees as there are designated members for that district, or more, but elect only the designated number of commission members.

(a) District number one shall have one representative;

(b) District number two shall have three representatives;

(d) District number four shall have one representative; and

(e) District number five shall have one representative.

(3) Commission members shall be citizens and residents of this state, over the age of twenty-five years. Oil dealer members of the commission shall sell oil in the district in and for which they are nominated and elected, each of whom is and has been actually engaged in selling heating oil within the state of Washington for a period of five years and has during that time, derived a substantial portion of his or her income therefrom. The qualifications of oil dealer members of the commission as herein set forth must continue during their term of office.

(4) The term of office of commission members shall be three years from the date of their election and until their successors are elected and qualified. One-third of the membership, or as nearly as possible, shall be elected each year. No elected individual member of the board may serve more than two full consecutive three-year terms. The terms of office for the initial commission members shall be as follows:

!tp1,1,2,1 !tlOne year:!tlDistrict number two

!tlTwo years:!tlDistrict numbers three and four

!tlThree years:!tlDistrict numbers one and five,

!tj1!tland first appointed member and

!tj1!tlsecond appointed member

The appointed members of the initial commission shall be elected by a majority of the elected commissioners on or before the adjournment of its third meeting.

(5) For the purpose of providing the notices required in subsections (6) through (11) of this section, the director shall establish and maintain a list of affected oil dealers for each district set forth in section 4 of this act. To identify affected dealers for this list, the director shall consult the Oil Heat Institute of Washington, the Inland Empire Oil Heat Institute, and Oil Fuel Dealers' Credit Association, Inc., other trade associations for their membership lists, the yellow pages, other directories, and such other sources as the director deems prudent.

(6) Each year the director shall call for a nomination meeting. Such meeting shall be held at least thirty days in advance of the date set by the director for the election of board members. Notice of every such meeting shall be published in a newspaper of general circulation within the five districts not less than ten days in advance of the date of such meeting and in addition, written notice of every such meeting shall be given to all affected oil dealers.

(7) Members of the board shall be elected by secret mail ballot under supervision of the director. Affected oil dealer members of the board shall be elected by a majority of the votes cast by the affected oil dealers. Each affected oil dealer shall be entitled to one vote.

If a nominee does not receive a majority of the votes on the first ballot, a run-off election shall be held by mail in a similar manner between the two candidates for such position receiving the largest number of votes.

Notice of every election for board membership shall be published in a newspaper of general circulation within each district not less than ten days in advance of the date of such election. Not less than ten days prior to every election for board membership, the director shall mail a ballot of the candidates to each affected oil dealer entitled to vote whose name appears upon the list of such affected oil dealers maintained by the director. Any other affected oil dealer entitled to vote may obtain a ballot by application to the director upon establishing his or her qualifications. Nonreceipt of a ballot by any affected oil dealer shall not invalidate the election of any board members.

(8) In the event of a vacancy on the board, the remaining elected members shall select a qualified person from within the vacated district to fill the unexpired term.

(9) A majority of the members shall constitute a quorum for the transaction of all business and the carrying out of all duties of the board.

(10) No member of the board shall receive any salary or other compensation, but each member shall be reimbursed for actual subsistence and traveling expenses incurred through attendance at meetings or other board activities: PROVIDED, That such expenses shall be authorized by resolution by unanimous approval of the board at a regular meeting.

(11) The board shall hold regular meetings, at least quarterly, with the time and date to be fixed by resolution of the board. The board shall hold an annual meeting, at which time an annual report will be presented. The proposed budget shall be presented for discussion at the meeting. Notice of the annual meeting shall be given by written notice to each affected dealer and by regular wire news services and radio-television press. The board shall establish by resolution, the time, place, and manner of calling special meetings of the board with reasonable notice to the members: PROVIDED, That the notice of any special meeting may be waived by a waiver thereof by each member of the board.

(12) The board shall have the responsibility to carry out the purposes of this chapter in compliance with all laws and regulations governing their activities and to adopt rules prescribing oil heat industry practices to accomplish their stated goals and objectives on behalf of the oil heat industry.

NEW SECTION. Sec. 6. The powers and duties of the commission shall include the following:

(1) Administering and enforcing the provisions of this chapter, and doing all things reasonably necessary to effectuate the purposes of this chapter;

(2) Electing a chairman and such other officers as the board deems advisable;

(3) Employing and discharging at its discretion a manager, secretary, and such other personnel, including attorneys engaged in the private practice of law subject to the approval and supervision of the attorney general, as the board determines are necessary and proper to carry out the purposes of this chapter, and to prescribe their duties and powers and fix their compensation;

(4) Establishing by resolution, a headquarters which shall continue as such unless and until so changed by the board. All records, books, and minutes of board meetings shall be kept at such headquarters;

(5) Paying only from moneys collected as assessments or advances thereon the costs arising in connection with the formulation, issuance, administration, and enforcement of activities directly arising from this chapter. Such expenses and costs may be paid by check, draft, or voucher in such form and in such manner and upon the signature of the person as the board may prescribe;

(6) Requiring a bond of all board members and employees of the board in a position of trust in the amount the board shall deem necessary. The premium for such bond or bonds shall be paid by the board from assessments collected. Such bond shall not be necessary if any such board member or employee is covered by any blanket bond covering officials or employees of the state of Washington;

(7) Adopting rules of a technical or administrative nature, subject to the provisions of chapter 34.05 RCW;

(8) Establishing "oil heat commission funds," such funds to be deposited in a bank or banks or financial institution or institutions, approved for the deposit of state funds in which all money received by the commission, except an amount of petty cash for each day's needs, shall be deposited each day or as often during the day as advisable; none of the provisions of RCW 43.01.050, as now or hereafter amended, shall apply to money collected under this chapter;

(9) Preparing a budget or budgets covering anticipated income and expenses to be incurred in carrying out of the provision of this chapter during each fiscal year, provided, not less than fifteen percent of the commission budget shall be expended to accomplish the purposes set forth in section 3(2) and (3) of this act;

(10) Keeping or causing to be kept in accordance with accepted standards of good accounting practice, accurate records of all assessments, collections, receipts, deposits, withdrawals, disbursements, paid outs, moneys, and other financial transactions made and done pursuant to this chapter. Such records, books, and accounts shall be audited at least annually subject to procedures and methods lawfully prescribed by the state auditor. Such books and accounts shall be closed as of the first day of each fiscal year. A copy of such audit shall be delivered within thirty days after completion thereof to the governor, the director, the state auditor, and the board. On such years and in such event the state auditor is unable to audit the records, books, and accounts within six months following the close of the audit period it shall be mandatory that the commission employ a private auditor to make such audit;

(11) Accepting contribution of, or match the private, state, or federal funds available for any purpose consistent with the provision of this chapter;

(12) Cooperating with or entering into a contract with the energy office to develop and administer energy conservation programs and to publish and distribute energy conservation information as necessary to carry out the purposes of this chapter;

(13) Contracting or cooperating with any other local, state, or national commission, organization, or agency, whether voluntary or established by state or federal law, including recognized oil heat groups, engaged in work or activities similar to the work and activities of the commission created by this chapter and make contracts and agreements with such organizations or agencies for carrying on joint programs beneficial to the oil heat industry.

NEW SECTION. Sec. 7. The commission may issue orders for any one or more of the following purposes:

(1) To provide for programs to encourage energy conservation among oil heat users through home weatherization, installation of more efficient equipment, and developing and disseminating educational materials regarding energy conservation, and establish programs of financial assistance to low-income oil heat users to help defray the cost of fuel, modern equipment installation, and weatherization expenses;

(2) To provide for carrying on research studies, to discover and develop technologically advanced and more efficient oil heat equipment;

(3) To provide programs for: Oil dealers and their employees in the proper maintenance of oil heating equipment; the safe and efficient transfer of oil products, and the containment and cleanup of oil products in the event of a spillage or leak from a customer's tank; and the addressing of claims against an oil heat customer in the event of a leak from an oil heat tank;

(4) To investigate and take necessary action to prevent unfair trade practices.

NEW SECTION. Sec. 8. Every rule or order adopted or issued by the commission shall be filed with the director and shall be published in a legal newspaper of general circulation in each of the five districts. All such rules or orders shall become effective pursuant to the provisions of RCW 34.05.380.

NEW SECTION. Sec. 9. The director shall attend each meeting of the commission, and shall retain the right to comment on every rule or order issued by the commission or any action taken by it.

NEW SECTION. Sec. 10. (1) The assessment on heating oil shall be set by the commission and shall not exceed one cent per gallon of affected units sold.

(2) The commission may change the assessment rate only by adopting a rule for each such change following publication of notice and conducting a hearing as required by chapter 34.05 RCW.

(3) Before levying or adjusting an assessment, the director shall determine by a referendum whether the affected dealers assent to the proposed action or not. The director shall conduct the referendum among the affected dealers based upon the list provided in section 5(5) of this act, and the affected dealers shall be deemed to have assented to the proposed assessment or change of assessment if fifty-one percent or more by number reply to the referendum within the time specified by the director, and if, of those replying, fifty-one percent or more by number or sixty percent or more by volume assent to the proposed order. The determination by volume shall be made on the basis of volumes of affected units sold by dealers on the list of affected dealers created under section 5(5) of this act. No assessment or change of assessment shall be effective unless the affected dealers have assented as provided in this subsection.

NEW SECTION. Sec. 11. The following procedure is established for the reporting and paying of assessments:

(1) All assessments shall be paid by the oil dealer at the time of retail sale to residential or commercial oil heat users and all moneys so collected shall be paid to the treasurer of the commission on or before the twentieth day of the succeeding month for the previous month's collections.

(2) The commission shall, by rule, prescribe the method of collection and oil dealer recordkeeping and reporting requirements for the purposes of this chapter.

(3) For the purpose of assuring compliance with the recordkeeping requirements and verifying reports filed by oil dealers, every oil dealer shall, at such times as the commission may by rule require, file with the commission a return under oath on forms to be prescribed and furnished by the commission, stating the quantity of heating oil sold by him or her during the period or periods of time prescribed by the commission. Such return shall contain such further information as may be necessary to carry out the objects and purposes of this chapter.

NEW SECTION. Sec. 12. A due and payable assessment levied in such specified amount as determined by the commission under section 10 of this act constitutes a personal debt of every person so assessed or who otherwise owes the assessment, and the assessment is due and payable to the commission when payment is called for by the commission. If a person fails to pay the commission the full amount of the assessment by the date due, the commission may add to the unpaid assessment an amount not exceeding ten percent of the assessment to defray the cost of enforcing its collection. If the person fails to pay any such due and payable assessment or other such sum, the commission may bring a civil action for collection against the person or persons in a court of competent jurisdiction. The action shall be tried and judgment rendered as in any other cause of action for a debt due and payable.

NEW SECTION. Sec. 13. Nothing contained in this chapter shall permit fixing of prices not otherwise permitted by law or any limitation on production and no marketing order or agreement or any rule thereunder shall contain any such provisions.

NEW SECTION. Sec. 14. Nothing contained in this chapter shall authorize any commercial conduct which is prohibited by RCW 19.86.020 through 19.86.060, inclusive, and no section of this chapter shall be deemed to be an implied repeal of any of those sections of the Revised Code of Washington.

NEW SECTION. Sec. 15. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION. Sec. 16. This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and shall take effect July 1, 1989.

NEW SECTION. Sec. 17. Sections 1 through 14 of this act shall constitute a new chapter in Title 43 RCW.