§ 15-72-804 - Establishment of state emergency petroleum set-aside -- General provisions. - Arkansas Statutes

15-72-804. Establishment of state emergency petroleum set-aside -- General provisions.

(a) (1) The Director of the Arkansas Energy Office shall promulgate rules in accordance with the Arkansas Administrative Procedure Act, as amended, 25-15-201 et seq., establishing a set-aside system for petroleum products and reporting requirements for prime suppliers and brokers.

(2) The rules shall direct prime suppliers and brokers to set aside a percentage of petroleum products that are delivered to suppliers in the state for the Arkansas Energy Office to distribute to meet emergency and hardship needs.

(b) The set-aside system established pursuant to this section shall not be implemented unless:

(1) The federal government terminates, suspends, or fails to implement a national set-aside program;

(2) The Governor finds that a set-aside system is necessary to manage an energy shortage within the state which threatens the continuation of services by emergency vehicles, essential industry, and agricultural end-users; and

(3) The Governor directs the office to implement all or a portion of the set-aside program necessary to prevent and alleviate any energy hardships or shortages.

(c) Upon adoption of the rules authorized under subsection (a) of this section, the director shall notify each prime supplier and broker of the set-aside percentage applicable to each product subject to the set-aside program.

(d) (1) The director shall establish as part of the rules adopted under subsection (a) of this section procedures governing applications for assignment and assignments by the office under the state set-aside system.

(2) The procedures shall:

(A) Include criteria for approving and disapproving applications and identifying priority users and an appeals process; and

(B) Require the director to take into account whether any assignment under the state set-aside program is likely to create an undue economic burden or other hardship for the prime supplier or broker involved.

(e) Each prime supplier and broker shall designate a representative to act for and in behalf of the prime supplier or broker with respect to the state set-aside program. Each prime supplier and broker shall notify in writing the office of that designation.

(f) The release of the set-aside shall be as follows:

(1) On or before the fifteenth day of the month, the director may order the release of part or all of the prime supplier's or broker's set-aside volume through the prime supplier's or broker's normal distribution system in the state;

(2) From time to time, the director may designate certain geographical areas within the state as suffering from an intrastate supply imbalance. At any time during the month, the director may order some or all of the prime suppliers and brokers with purchasers within these geographical areas to release part or all of their set-aside volume through their normal distribution systems to increase the allocations of all the supplier's and broker's purchasers located within these areas; and

(3) Orders issued pursuant to this section shall be in writing and effective immediately upon presentation to the prime supplier's or broker's designated regional manager or equivalent person. The orders shall represent a call on the prime supplier's or broker's set-aside volumes for the month of issuance irrespective of the fact that delivery cannot be made until the following month.

(g) The set-aside program shall remain in effect no longer than a one hundred twenty-day period. The Governor may extend the program an additional thirty (30) days if necessary to manage an energy shortage. In the event that the Governor finds that the set-aside system is no longer necessary to manage an energy shortage, the Governor shall terminate the program.