An Act creating the New Jersey Task Force on Heating Oil and Propane Reserves.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. The Legislature finds and declares that:

a. The distribution and sale of heating oil and propane, during periods of high prices due to tight supplies and heavy demand, has had a negative affect on the general public to a point where the situation is affecting the health, safety, and general economic welfare of the people of this State;

b. These conditions are of such concern that it is in the public interest to examine whether heating oil and propane reserves should be established by this State for use during periods of high prices, due to tight supply and heavy demand; and

c. It is in the public interest to establish a New Jersey Task Force on Heating Oil and Propane Reserves to develop and submit recommendations to the Governor and the Legislature as to whether heating oil and propane reserves should be established by this State for use during periods of high prices due to tight supplies and heavy demand.

2. a. There is established in the Department of Law and Public Safety the New Jersey Task Force on Heating Oil and Propane Reserves (task force). The purpose of the task force shall be to study and evaluate, and develop recommendations relating to, whether heating oil and propane reserves should be established by this State for use during periods of high prices due to tight supplies and heavy demand.

b. The task force shall consist of 13 members as follows:

(1) the Attorney General, the Commissioner of Environmental Protection, the President of the Board of Public Utilities, and the Director of the Division of Rate Counsel in the Department of the Treasury, or their designees, who shall serve ex-officio;

(2) five public members who shall be appointed by the Governor, including one representative of the New Jersey Propane Gas Association, one representative of the Fuel Merchants Association of New Jersey, one representative of the business community, one representative of organized labor, and one representative of a consumer advocacy organization;

(3) one member appointed by the Governor upon the recommendation of the President of the Senate;

(4) one member appointed by the Governor upon the recommendation of the Speaker of the General Assembly;

(5) one member appointed by the Governor upon the recommendation of the Senate Minority Leader; and

(6) one member appointed by the Governor upon the recommendation of the Assembly Minority Leader.

c. Within 90 days after the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), a majority of the task force's authorized membership shall be appointed and the task force shall hold its initial meeting. The task force shall organize upon the appointment of a majority of its authorized membership and shall elect a chair from among the members. The members of the task force, other than those serving ex-officio, shall serve for the duration of the existence of the task force. Any vacancy shall be filled in the same manner as the original appointment. The task force members shall serve without compensation, but shall be reimbursed for necessary expenses incurred in the performance of their duties.

d. The task force shall consider issues and concerns relating to the establishment by this State of heating oil and propane reserves, including, but not limited to, the following:

(1) whether heating oil and propane reserves should be established by this State, and the most effective means of the creation, location, maintenance, and source or sources of funding of those reserves, including whether the State should enter into a public-private partnership through an agreement with heating oil and propane suppliers and refiners to create, locate, and maintain the reserves; and

(2) if established, whether the heating oil reserves should be maintained in partnership with the Northeast Home Heating Oil Reserve component of the Strategic Petroleum Reserve established by the United States Department of Energy, and whether that department should be urged to increase the amount of heating oil in the Northeast Home Heating Oil Reserve.

e. Not later than 90 days after the initial meeting of the task force, the task force shall issue a report to the Governor and, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), to the Legislature, which shall include, but not be limited to, recommendations as to whether heating oil and propane reserves should be established in this State for use during periods of high prices due to tight supplies and heavy demand, any other information relevant to the subject of the report, and any draft legislation the task force deems appropriate to require that those reserves be established.

f. The task force shall be entitled to the assistance and services of the employees of any State board, bureau, commission, or agency as it may require and as may be available to the task force for these purposes, and to employ stenographic and clerical assistants and incur traveling and other miscellaneous expenses as necessary, to perform its duties.

g. The Department of Law and Public Safety, the Department of Environmental Protection, the Department of the Public Advocate, Division of Rate Counsel, and the Board of Public Utilities shall assist the task force in the performance of its duties and provide the task force with studies, data, or other materials in the possession of those entities.

3. This act shall take effect immediately and shall expire upon the issuance of the task force's report pursuant to section 2 of this act.

STATEMENT

According to the United States Department of Energy, of the 7.7 million households in the United States that use heating oil to heat their homes, 5.3 million households or nearly 70 percent reside in the Northeast, making this area especially vulnerable to heating oil disruptions. Average national residential heating oil prices hit an all-time high of about $3.85 a gallon in the winter of 2007-2008, up 55 percent from the previous year, due to surging crude oil prices and a big decline in inventories in the Northeast, and record increases in gasoline and heating oil futures.

A home heating oil component of the Strategic Petroleum Reserve in the Northeast (the "Northeast Home Heating Oil Reserve") was established by the United States Department of Energy in 2000, with the intent of developing a reserve large enough to compensate for interruptions in supply during severe winter weather, not to stabilize prices during periods of high prices due to tight supplies and heavy demand.

This bill establishes in the Department of Law and Public Safety the "New Jersey Task Force on Heating Oil and Propane Reserves" ("task force"). The purpose of the task force is to study and evaluate, and develop recommendations relating to, whether heating oil and propane reserves should be established in this State for use during periods of high prices, due to tight supplies and heavy demand, and the most effective means of the creation and maintenance of those reserves.

The task force is to be composed of 13 members as follows:

(2) five public members who are to be appointed by the Governor, including one representative of the New Jersey Propane Gas Association, one representative of the Fuel Merchants Association of New Jersey, one representative of the business community, one representative of organized labor, and one representative of a consumer advocacy organization;

(3) one member to be appointed by the Governor upon the recommendation of the President of the Senate;

(4) one member to be appointed by the Governor upon the recommendation of the Speaker of the General Assembly;

(5) one member to be appointed by the Governor upon the recommendation of the Senate Minority Leader; and

(6) one member to be appointed by the Governor upon the recommendation of the Assembly Minority Leader.

The bill requires that, not later than 90 days after the initial meeting of the task force, the task force is to issue a report to the Governor and the Legislature which is to include, but not be limited to, recommendations as to whether heating oil and propane reserves should be established in this State for use during periods of high prices due to tight supplies and heavy demand, any other information relevant to the subject of the report, and any draft legislation the task force deems appropriate to require that those reserves be established.