Revision: March 27, 2014, midnight
HB 1282-FN – AS AMENDED BY THE HOUSE
12Mar2014… 0698h
2014 SESSION
05/01
HOUSE BILL 1282-FN
AN ACT relative to prepaid contracts for home heating fuel.
SPONSORS: Rep. Ford, Graf 3; Rep. Shurtleff, Merr 11; Rep. Spratt, Hills 4
COMMITTEE: Commerce and Consumer Affairs
This bill:
I. Establishes minimum inventory, registration, reporting requirements for home heating oil, kerosene, or liquefied petroleum gas dealers who offer prepaid contracts.
II. Makes the failure to deliver home heating fuel in accordance with a prepaid contract a violation of the consumer protection act.
III. Establishes a committee to study propane service contracts.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
12Mar2014… 0698h
14-2375
05/01
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Fourteen
AN ACT relative to prepaid contracts for home heating fuel.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Definition of Heating Fuel and Heating Fuel Season. Amend RSA 339:78, II to read as follows:
II. “Heating fuel” means heating oil, kerosene, or liquefied petroleum gas.
III. "Heating [oil] fuel season'' means a period of 12 months beginning no earlier than May 1.
2 Requirements for Guaranteed Price Plans and Prepaid Contracts for Home Heating Fuel. Amend RSA?339:79, III to read as follows:
III. A contract that requires prepayment by the consumer or caps the price of heating [oil] fuel shall comply with paragraphs I and II of this section. Such contract also:
(a) Shall not [require] allow residential consumers to commit for a term of more than one heating [oil] fuel season. Such contracts shall [be offered no earlier than January 1] not be advertised, solicited, or signed earlier than May 1 or later than October 31 of the year in which the heating [oil] fuel season begins.
(b) Shall require dealers to reimburse consumers at the contract price for any undelivered pre-purchased [oil] fuel, within 30 days after the contract ends, unless the dealer and consumer agree to different terms.
(c) Shall include a clear explanation of the means by which the dealer will meet the obligations of the contract for the entire contract period, including supplier agreements, futures contracts, bonding, [or] a line of credit or liquid product inventory.
(d) Shall not falsely claim coverage. Any dealer who falsely claims coverage or fails to maintain coverage until the completion of the contract shall be guilty of a class A misdemeanor, in addition to other penalties as provided in paragraph VI.
3 Guaranteed Price Plans and Prepaid Contracts; Inventory Requirement. Amend RSA 339:79, IV(b) and (c) to read as follows:
(b) A surety bond, made payable to the attorney general, in an amount not less than 50 percent of the total amount of funds paid to the dealer by consumers pursuant to prepaid heating oil, kerosene, or liquefied petroleum gas contracts; [or]
(c) A letter of credit, made payable to the attorney general, from an FDIC-insured institution in an amount that represents 100 percent of the cost to the dealer of the maximum number of gallons that the dealer is committed to deliver pursuant to all prepaid contracts entered into by the dealer. The cost shall be calculated at the time the contracts are entered into[.]; or
(d) A liquid product inventory of home heating oil, kerosene, or liquefied petroleum gas in an amount equal to 75 percent of the outstanding volume in gallons that the dealer is obligated to deliver under the terms of prepaid contracts in force.
4 New Paragraphs; Registration and Reporting Requirement; Dedicated Fund. Amend RSA?339:79 by inserting after paragraph V the following new paragraphs:
V-a. A home heating oil, kerosene, or liquefied petroleum gas dealer who offers prepaid contracts under this section shall register the dealer’s intent to offer such contracts with the secretary of state by May 1 of each year. Registration shall be on a form provided by the secretary of state, shall be accompanied by a fee of $100, and shall indicate which securitization method or combination of methods listed in paragraph IV are used to secure the contracts. Fees received under this paragraph shall be deposited in the petroleum sales contract fund, a nonlapsing fund established in the office of the treasurer and continually appropriated to the secretary of state. The fund shall be kept distinct and separate from all other funds and shall be used by the secretary of state to administer this section.
V-b. A home heating oil, kerosene, or liquefied petroleum gas dealer who offers prepaid contracts under this section shall file an annual report with the secretary of state by December 1 of each year demonstrating how the dealer has satisfied the requirements of this section, including how the prepaid contracts are secured. The report shall be made on a form provided by the secretary of state. The form shall conspicuously bear the warning that making a false statement on the form shall constitute an unfair or deceptive act or practice in violation of RSA 358-A. The report shall be signed by the dealer. If the dealer is a corporation, the report shall be signed by either the president or an officer of the corporation and shall include a list of all of the members of the board of directors of the corporation. The secretary of state may not charge a fee for the form or for filing the report.
5 New Subparagraph; Application of Receipts; Petroleum Sales Contract Fund. Amend RSA?6:12, I(b) by inserting after subparagraph (316) the following new subparagraph:
(317) Moneys deposited in the petroleum sales contract fund established in RSA 339:79, V-a.
6 New Paragraph; Acts Prohibited Under the Consumer Protection Act; Failure to Provide Timely Delivery of Home Heating Fuel. Amend RSA 358-A:2 by inserting after paragraph XIV the following new paragraph:
XV. Failing to deliver home heating fuel in accordance with a prepaid contract.
7 Committee to Study Propane Service Contracts Established. There is established a committee to study propane service contracts.
I. The committee shall be comprised of 3 members of the house of representatives, appointed by the speaker of the house of representatives.
II. Members of the committee shall receive mileage at the legislative rate when attending to the duties of the committee.
III. The committee shall:
(a) Study the statutory requirements for propane contracts in other states and consider whether these laws have had a negative effect on consumers by, for example, raising the cost of propane.
(b) Identify the specific areas, if any, in which consumers are financially or otherwise harmed by current contract requirements. Areas to consider shall include:
(1) Payment and delivery practices.
(2) Charges for services outside of regularly scheduled deliveries.
(3) Minimum orders or deliveries.
(4) Tank ownership or transfer practices and agreements.
(5) Termination of services by the consumer or the propane provider.
(c) Recommend appropriate consumer protection measures intended to remedy harmful practices.
(d) Propose minimum requirements for propane service contracts in New Hampshire.
IV. The members of the study committee shall elect a chairperson from among the members. The first meeting of the committee shall be called by the first-named member. The first meeting of the committee shall be held within 45 days of the effective date of this section. Two members of the committee shall constitute a quorum.
V. The committee shall report its findings and any recommendations for proposed legislation to the speaker of the house of representatives, the president of the senate, the house clerk, the senate clerk, the governor, and the state library on or before November 1, 2014.
8 Effective Date.
I. Sections 1-6 of this act shall take effect January 1, 2015.
II. The remainder of this act shall take effect upon its passage.
LBAO
14-2375
11/26/13
HB 1282-FN - FISCAL NOTE
AN ACT relative to consumer protection for propane fuel users.
FISCAL IMPACT:
The Judicial Branch, Department of Justice and New Hampshire Association of Counties state this bill, as introduced, may increase state and county expenditures by an indeterminable amount in FY 2015 and each year thereafter. There is no impact on state, county or local revenue, or local expenditures.
METHODOLOGY:
The Judicial Branch states this bill would add RSA 339:80 through 83 to regulate contracts for propane services. A violation of this would constitute an unfair and deceptive act under the Consumer Protection Act. The Branch has no information on which to estimate the potential volume of cases that could result from this bill. Any Consumer Protection Act case has the potential to increase state expenditures as these cases are typically hard fought because they carry with them the potential for enforcement actions by the attorney general (RSA 358-A:4), criminal prosecution (RSA 358-A:6), and private actions with the potential of treble damages (RSA 358-A:10).
The Department of Justice states it is responsible for administering and enforcing the Consumer Protection Act. In 2012, the Department received 30 consumer complaints against propane dealers and as of 10/25/13, has received 18 consumer complaints. The Department states this bill will result in the need for new resources to develop the required rules, provide closer scrutiny of consumer complaints to ensure there are no violations of this new section, and handle the potential increase of enforcement actions. Initially the Department estimates it will need to add one attorney and one paralegal (LG 19) to write and enact the required rules associated with this bill. The personnel costs are as follows:
FY 2015 |
FY 2016 |
FY 2017 |
FY 2018 | |
Attorney position |
$34,480 |
$68,959 |
$71,027 |
$73,158 |
Paralegal position (LG 19) |
18,493 |
37,739 |
39,329 |
40,979 |
Benefits |
27,872 |
58,153 |
61,282 |
64,590 |
Current Expenses |
1,000 |
1,000 |
1,000 |
1,000 |
Equipment |
5,000 |
0 |
0 |
0 |
Computer software |
2,400 |
0 |
0 |
0 |
Total |
$89,244 |
$165,851 |
$172,638 |
$179,727 |
This bill does not contain an appropriation or authorization for new positions.
The New Hampshire Association of Counties states to the extent more individuals are charged, convicted, and sentenced to incarceration in a county correctional facility, the counties will have increased expenditures. The Association is unable to determine the number of individuals who may be charged, convicted or incarcerated as a result of this bill to determine an exact fiscal impact. The average annual cost to incarcerate an individual in a county correctional facility is approximately $35,000. There is no impact on county revenue.
The Judicial Council states this bill have no impact on the indigent defense system. The Council states the offense for a violation is classified as an unspecified misdemeanor, which is deemed a class B misdemeanor unless prosecution files notice in advance of the trial to seek a class A misdemeanor. Class B misdemeanors do not carry a potential for incarceration, therefore no right to counsel for the indigent accused. If the charge is treated as a class A misdemeanor with the potential for incarceration, the Council does not believe that a person charged with violation of this bill would require or receive counsel through the indigent defense system.