Enrolled Bill Summary

            House Bill 2458 repeals the chapter in the Tax Code relating to motor fuel taxes and creates a new chapter to provide for the collection of motor fuel taxes. The bill moves the point where motor fuel taxes are collected from the distributor level, which is the point of first sale or use, to the point where motor fuels are first removed at the terminal. Among other provisions, the bill requires the licensing of terminal operators and suppliers--the collectors of tax at the terminal--and importers and exporters of motor fuel. It allows a distributor or importer to retain 1.75 percent of the total taxes to be paid to the supplier to cover administrative expenses. House Bill 2458 adds regulations for the import and export of motor fuels, exempts dyed diesel fuel from taxation, and removes the tax exemption for undyed diesel fuel, except for school districts and the federal government. The bill also adds requirements for recordkeeping, shipping documentation, and reporting for handlers of motor fuel.

            House Bill 2458 imposes a backup tax on a person who obtains a refund on gasoline or diesel fuel based on a claim that the use of the gasoline or diesel fuel is tax exempt, but then uses the fuel for taxable purposes, and a person who sells fuel for which a tax has not been paid. The bill allows the comptroller to enter into cooperative agreements with other states to collect motor fuel taxes and audit importers and exporters. It requires the comptroller to determine the taxes paid on undyed diesel fuel that is used for purposes other than to propel a motor vehicle on highways, and to deposit that amount in the general revenue fund. In October of each even-numbered year, the comptroller must report to the legislature on the use of the one percent of the gross motor vehicle taxes deposited in the special fund to administer and enforce the provisions for motor fuel taxes. House Bill 2458 takes effect January 1, 2004, except for provisions relating to cooperative agreements with other states, which take effect September 1, 2003.