SOUTH PORTLAND — A new fire code amendment proposed by municipal staff would effectively ban most companies from developing liquefied petroleum gas distribution facilities in the city, the City Council said Monday night.

The new proposal is significantly different from a citizen-drafted fire code amendment that was submitted late last year and it would be more defensible against a likely court or regulatory challenge, the city’s lawyers said.

The new proposal would block NGL Supply Terminal Co. from going further with its year-old proposal to build a $3 million propane depot at Rigby Yard, which was the goal of the citizen-drafted ordinance.

But it wouldn’t prevent Pan Am Railways from establishing a propane depot at Rigby Yard under federal laws that allow railroads to operate without regard for local ordinances, councilors said.

The new proposal pleased some city councilors but not others.

“I can get behind this proposal,” Councilor Claude Morgan said. “The citizens’ proposal is just too flawed.”

Councilors Brad Fox and Eben Rose pleaded for the citizen-drafted proposal, saying that it was drafted to be able to fight Pan Am if it tried to establish a propane facility at Rigby Yard. Specifically, the councilors said they want to challenge often-upheld railroad pre-emption laws before the federal Surface Transportation Board.

“I think we have a chance,” Rose said.

When Mayor Tom Blake said he wasn’t “afraid of fighting the railroad,” Morgan said taxpayers might not support spending an estimated $500,000 or more in legal fees to take on that battle.

The council voted to postpone consideration of the proposed fire code to March 7 to give city staff additional time to work on the amendment and a separate challenge to railroad pre-emption.

The proposed code change would require the largest storage tank in a propane storage and distribution facility to be at least 1,056 feet (two-tenths of a mile) to 3,168 feet (six-tenths of a mile) from homes, schools, hospitals, businesses or recreational areas, depending on the size of the facility.

Drafted largely by Sally Daggett, the city’s corporation counsel, the proposed code change is based on “worst-case scenarios” outlined in chemical accident prevention regulations and propane risk management guidelines from the federal Environmental Protection Agency.

The proposed buffers would limit human injury and property damage in the event of a fire or blast related to an accidental propane release or vapor cloud explosion, City Manager Jim Gailey wrote in a position paper.

According to a fire safety analysis prepared for NGL, the radius of a vapor cloud explosion at the depot would be 2,112 feet, but the potential for an explosion would be low because of safety features in the facility’s design. The nearest commercial building is 390 feet from the storage facility and the nearest home is 700 feet away.

Foley Hoag, the Boston law firm that’s defending the city’s Clear Skies ordinance in federal court, found the new fire code proposal to be precise and “comprehensibly” drafted with a “logical connection” to the city’s authority to protect residents’ health, safety and welfare.

Even so, it’s likely that the proposed fire code change would be challenged in court or before an administrative agency such as the federal Surface Transportation Board or Department of Transportation, Foley Hoag advised.

In contrast, Foley Hoag found the citizen-drafted ordinance to be overwritten, unclear and based on unsubstantiated newspaper accounts and other questionable sources that would be difficult to explain, let alone defend, in court.

The citizen-drafted version called for propane storage and distribution facilities to be developed at least 1,257 feet from anything considered “critical infrastructure,” including schools, hospitals, medical clinics, public utilities, telecommunications and government buildings such as the Cash Corner Fire Station near Rigby Yard.

NGL has submitted a revised proposal for Rigby Yard that would greatly reduce its fuel capacity and tighten its safety features.

NGL is a subsidiary of NGL Energy Partners of Tulsa, Oklahoma, which includes Brunswick-based Downeast Energy. The company wants to build a depot at Rigby Yard because it must leave its leased site on Commercial Street in Portland by this spring to make way for the planned expansion of the International Marine Terminal.

Opponents of NGL’s proposal say it poses a public safety threat to commercial and residential properties near the 245-acre rail yard off Route 1, between the Thornton Heights and Cash Corner neighborhoods. Local fire officials have vouched for the safety of the project, noting that as many as 100 rail cars loaded with propane pass through Rigby Yard daily with little local security or oversight.