HBA-JRA H.B. 3659 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 3659
By: Oliveira
Ways & Means
4/1/1999
Introduced



BACKGROUND AND PURPOSE 

Currently, Texas law requires state motor fuel tax to be paid on the first
sale or use of the fuel, with exemptions for off-road uses.  The tax is
collected and remitted monthly to the Comptroller of Public Accounts.
Federal motor fuel tax is paid at the terminal loading rack.  Differences
in the federal and state tax systems and complicated tax law may facilitate
the illegal use of tax-exempt fuels. Conforming to the federal tax system
may allow Texas to simplify its tax collection process, increase voluntary
tax compliance, strengthen enforcement, and cooperate with national efforts
for motor fuel tax uniformity.  H.B. 3659 repeals the motor fuels tax law
and replaces it with new law that taxes motor fuel at the terminal loading
rack and implements strategies for increased compliance. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that rulemaking
authority is expressly delegated to Department of Agriculture in SECTION 1
(Section 161.007, Tax Code) and the Comptroller of Public Accounts in
SECTION 1 (Sections 161.009, 161.017, 161.064, 161.163, 161.165, 161.251,
161.301, 161.322, and 161.403, Tax Code) of this bill. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Subtitle E, Title 2, Tax Code, by adding Chapter 161, as
follows: 

CHAPTER 161.  MOTOR FUEL TAXES

SUBCHAPTER A.  GENERAL PROVISIONS

Sec. 161.001.  DEFINITIONS.  Defines "aviation fuel dealer," "blended
fuel,"  "blending," "bulk end user," "bulk plant," "bulk transfer," "bulk
transfer system," "dealer," "destination state," "diesel fuel," "diversion
number," "dyed diesel fuel," "eligible purchaser," "end user," "export,"
"exporter," "fractionator," "fuel transportation vehicle," "gasohol,"
"gasoline," "gross gallons," "heating oil," "import," "import verification
number," "importer," "interstate trucker," "invoiced gallons," "kerosene,"
"lessor," "liquefied gas," "liquefied gas tax decal user," "motor fuel,"
"motor fuel transporter," "motor vehicle," "motorboat," "net gallons,"
"permissive supplier," "pipeline," "point of delivery," "position holder,"
"public highway," "qualified terminal," "rack," "refiner," "refinery,"
"removal," "sale," "supplier," "tank wagon," "taxable motor fuel,"
"terminal," "terminal bulk transfers," "terminal operator," "terminal
transfer system," "transit company," "transmix," "transport truck,"
"transporter," "two-party exchange," "vehicle supply tank," "vendor," and
"wholesaler." 

Sec. 161.002.  AUDITS AND INSPECTIONS.  (a)  Authorizes the Comptroller of
Public Accounts (comptroller), or an authorized deputy, employee, or agent,
in determining the amount of tax collected and payable to this state, the
amount of tax accruing and due, and whether a tax liability has been
incurred under this chapter, to audit and examine the records, books,
invoices, papers, shipping papers, and equipment of a supplier, importer,
wholesaler, bulk purchaser, terminal operator, fuel vendor, or private or
common carrier of motor fuel,  to verify the completeness and accuracy of
any statement or report. 

(b)  Authorizes the comptroller or the comptroller's representative,
including a federal government employee or a person contracting with the
state, to inspect the premises of a fuel vendor, motor fuel transporter, or
bulk purchaser and to require the immediate disclosure of any shipping
paper required by this chapter to be maintained at the physical location. 

(c)  Authorizes the comptroller to inspect all records of a person doing
business in this state to determine information relating to the sale,
transportation, or possession of motor fuels.  Provides that a person must
keep legible records, including shipping papers and invoices recording each
transaction of fuel, at the point of origin or at a reasonable approved
proximity for auditing purposes. 

Sec. 161.003.  INSPECTION OF FUEL AND SHIPPING PAPERS.  (a)  Authorizes the
comptroller or the comptroller's representative, including a federal
government employee or a person contracting with the state, to conduct
inspections and remove samples of fuel to determine coloration of diesel
fuel or to identify shipping paper violations at any place at which taxable
fuel is or may be produced, stored, or loaded into transport vehicles.
Sets forth the specific activities in which an inspector is authorized to
engage. 

(b)  Sets forth the facilities which are subject to inspection.

(c)  Authorizes an officer of the Department of Public Safety (DPS), a
motor carrier inspector in this state, and other law enforcement officers
and agents of the comptroller to conduct inspections to determine
violations under this chapter using procedures established by the
comptroller.  Provides that agents of the comptroller have the same power
and authority provided to the comptroller to carry out inspections under
this chapter. 

(d)  Authorizes an inspector to detain a person or equipment transporting
fuel in or through this state long enough to determine compliance with this
chapter and any rules adopted under this chapter. 

Sec. 161.004.  OPERATION OF PERMANENT OR PORTABLE WEIGH STATIONS.
Authorizes the comptroller to assign qualified persons who are not state
peace officers to supervise or operate permanent or portable weigh stations
and to stop, inspect, and issue citations for violations of this chapter to
operators of trucks, trailers, barges, or vessels having a declared gross
weight of 11,000 pounds or more, and buses at a permanent weigh station or
other inspection point or while operating a clearly marked state police
vehicle. 

Sec. 161.005.  ANALYSTS, CHEMISTS, AND INSPECTORS APPOINTED.  Requires the
comptroller to appoint analysts, chemists, and inspectors to examine all
barrels, tanks, or other vessels containing motor fuels to determine if
they are tagged properly; collect and test samples of motor fuels offered
for sale in this state; and collect and send samples to the Texas
Department of Agriculture for examination. 

Sec. 161.006.  LAW ENFORCEMENT ASSISTANCE.  Authorizes DPS or another law
enforcement agency, on request of the comptroller, to assist in enforcing
all laws relating to the inspection of motor fuels. 

Sec. 161.007.  STANDARDS FOR MOTOR FUELS; TESTING.  Authorizes the Texas
Department of Agriculture to adopt rules prescribing standards for motor
fuel and methods for testing the fuel, including any requirements relating
to the chain of custody. 
 
Sec. 161.008.  RECORDS OF RECEIPT AND SHIPMENT OF MOTOR FUELS.  Requires a
person who sells motor fuel or offers motor fuel for sale in this state to
keep an accurate record of each lot of shipment of motor fuels received by
the person and of the motor fuels shipped by the person including the
actual origin and destination of motor fuel by federal employer
identification number or other acceptable identifier before the load leaves
the terminal or location of origination. 

Sec. 161.009.  COMPTROLLER TO ADOPT RULES AND PRESCRIBE FORMS. Requires the
comptroller to adopt rules and prescribe forms in conformance with approved
Federation of Tax Administrators uniformity standards as necessary to carry
out this chapter. 

Sec. 161.010.  AGREEMENTS WITH POLITICAL SUBDIVISIONS OR INDIAN TRIBES.
Defines "Indian tribe" in this section.  Requires the comptroller to enter
into agreements on behalf of this state with political subdivisions or
Indian tribes necessary to improve motor fuel tax collection and to
facilitate the recording of transactions.  Authorizes the comptroller to
enter into agreements with Indian tribes to provide a method or formula to
refund taxes paid on tax-exempt motor fuel purchases or uses under this
chapter. 

Sec. 161.011.  AGREEMENTS WITH OTHER STATES.  (a)  Authorizes the
comptroller to enter into a cooperative agreement with another state for
the exchange of information and to audit end users of motor fuel in fleets
of motor vehicles that are operated or intended to operate interstate.
Provides that an agreement or amendment of an agreement takes effect
according to its terms, but not until it is published in the Texas
Register.  Sets forth the procedures and requirements an agreement is
authorized to prescribe. 

(b)  Authorizes the comptroller to forward to an officer of another state
any information in the comptroller's possession relating to the
manufacture, receipt, sale, use, transportation or shipment of motor fuel
by any person, or the location of officers, motor vehicles, and other real
and personal property of end users of motor fuel. 

(c)  Authorizes an agreement with another state to require each state to
audit the records of a person based in the state to determine if the motor
fuel taxes due each state that is a party to the agreement are properly
reported and paid and forward the findings of such an audit performed on a
person based in the state to each other state in which the person has
taxable use of motor fuel.  Authorizes the comptroller to use an audit
performed by another state to make an assessment of motor fuel taxes
against a person not based in this state who has taxable use of motor fuel
in this state. 

(d)  Provides that any agreement entered into under this section does not
affect the authority of the comptroller to audit any person under any other
law. 

(e)  Provides that an agreement entered into under this section prevails
over an inconsistent rule of the comptroller.  Provides that, except as
otherwise provided by this section, a statute of this state prevails over
an inconsistent provision of an agreement entered into under this section. 

(f)  Authorizes the comptroller to segregate in a separate fund or account
the amount of motor fuel taxes, other than penalties, estimated to be due
to other jurisdictions, motor fuel taxes subject to refund during the
fiscal year, licensing fees, and other costs collected under the agreement.
Authorizes the comptroller to issue a warrant or make an electronic
transfer of the amount held that is due to be remitted to another
jurisdiction.  Authorizes an auditing cost, membership fee, and other cost
associated with the agreement to be paid from interest earned on these
segregated funds.  Requires any interest earnings in excess  of the costs
associated with the agreement to be credited to the general revenue fund. 

(g)  Authorizes the comptroller to enter into motor fuel tax agreements
with other jurisdictions that may provide for the temporary remittal of
amounts due other jurisdictions that exceed the amounts collected.
Requires the comptroller to ensure that reasonable measures are developed
to recover motor fuel taxes and other amounts due this state during each
biennium. 

Sec. 161.012.  TAX ON CONSUMER.  Provides that the motor fuel tax imposed
is a levy and assessment on the consumer, and a person required to remit a
tax under this chapter acts as an agent of this state for the collection of
the tax.  Provides that this section does not affect the method of
collecting the tax prescribed by this chapter.  Provides that the tax
imposed by this chapter must be collected and paid at the times, in the
manner, and by the persons prescribed by this chapter. 

Sec. 161.013.  OTHER MOTOR VEHICLE TAXES PROHIBITED.  Provides that the
motor fuel taxes imposed by this chapter are in lieu of any other
occupation or sales, use, or other excise tax imposed by a municipality,
county, or other political subdivision of this state on the sale, use, or
distribution of gasoline, diesel fuel, or liquefied gas. 

Sec. 161.014.  FOREIGN ENTITIES.  Provides that a person with a business
based outside the political boundaries of the United States can be liable
for state motor fuel taxes due. 

Sec. 161.015.  PRESUMPTIONS RELATING TO USE OF FUEL.  Provides that, except
as provided by Section 161.161, there is a rebuttable presumption that all
taxable motor fuel delivered into a motor vehicle fuel supply tank in this
state, removed from a terminal in this state, imported into this state by
other than a bulk transfer within the bulk transfer system or terminal
transfer system, or delivered into an end user's storage tank is to be used
or consumed to produce or generate power for propelling the motor vehicle
on the public highways of this state. 

Sec. 161.016.  PRESUMPTION OF TAX DUE.  (a)  Provides that a person who
fails to keep a record, issue an invoice, or file a report required by this
chapter is presumed to have sold or used for taxable purposes all motor
fuel shown by an audit by the comptroller to have been sold to the person.
Authorizes the comptroller to set or establish the amount of taxes,
penalties, and interest due this state from any records or information
available to the comptroller.  Provides that if a tax claim developed under
this section is not paid after the opportunity to request a
redetermination, the claim and any audit made by the comptroller, or any
report filed by the person, are evidence in any suit or judicial
proceedings filed by the attorney general and are prima facie evidence of
the correctness of the claim or audit. Authorizes a prima facie presumption
of the correctness of the claim to be overcome at trial by evidence
produced by the person. 

(b)  Provides that, in the absence of records showing the number of miles
actually operated per gallon of motor fuel consumed, it is presumed that at
least one gallon of motor fuel was consumed for every four miles traveled.
Authorizes an importer or transporter to produce evidence of motor fuel
consumption to establish another mileage factor. Provides that if an
examination or audit made by the comptroller of the records of an importer
or transporter shows that a greater amount of motor fuel was consumed than
was reported by the importer or transporter for tax purposes, the importer
or transporter is liable for the tax, penalties, and interest on the
additional amount shown.  Entitles an importer or transporter to a credit
or refund on overpayments of tax established by the audit. 

 Sec. 161.017.  FUTURE INCREASES IN MOTOR FUEL TAX RATES.  (a)  Requires a
dealer or other person who possesses for the purpose of sale 2,000 or more
gallons of gasoline or diesel fuel at each business location on which the
motor fuel taxes at a previous rate have been paid, to report to the
comptroller the volume of that gasoline and diesel fuel on the effective
date of an increase in the rate of a tax imposed by this chapter, and, at
the time of the report, to pay a tax on that gasoline and diesel fuel at a
rate equal to the rate of the tax increase. 

(b)  Entitles a dealer who possesses for the purpose of sale 2,000 or more
gallons of gasoline or diesel fuel at each business location on which the
motor fuel taxes at the previous rate have been paid to a refund, on the
effective date of a reduction in the rate of a tax imposed by this chapter,
in an amount equal to the difference in the amount of taxes paid on that
gasoline or diesel fuel at the previous rate and at the rate in effect on
the effective date of the reduction in the tax rate.  Requires the
comptroller to adopt rules prescribing the method for claiming a refund
under this section and authorizes the comptroller to require that the
refund be paid through the person from whom the dealer received the fuel. 

SUBCHAPTER B.  TAXES IMPOSED ON GASOLINE AND DIESEL FUEL

Sec. 161.051.  TAX ON GASOLINE.  Imposes a tax on all gasoline used or
consumed in this state in producing or generating power for propelling a
motor vehicle on the public highways of this state.  Sets the gasoline tax
rate at 20 cents a gallon, except for gasoline sold to a transit company
for exclusive use in its transit carrier vehicles under an exemption
certificate granted by the comptroller, in which case the rate is 19 cents
a gallon. 

Sec. 161.052.  TAX ON DIESEL FUEL.  Imposes a tax on all diesel fuel used
or consumed in this state in producing or generating power for propelling a
motor vehicle on the public highways of this state.  Sets the diesel fuel
tax rate at 20 cents a gallon, except for diesel fuel sold to a transit
company for exclusive use in its transit carrier vehicles under an
exemption certificate granted by the comptroller, in which case the rate is
19.5 cents a gallon. 

Sec. 161.053.  TAX ON IMPORTED MOTOR FUEL.  Requires the motor fuel tax on
the use of taxable gasoline or diesel fuel imported into this state by a
licensed importer for delivery to a destination in this state, other than
by a bulk transfer, to arise at the time the product enters this state and
be measured by invoiced gallons received outside this state at a refinery,
terminal, or bulk plant. 
 
Sec. 161.054.  MEASUREMENT OF TAX ON MOTOR FUEL.  Provides that, except as
provided by  Section 161.053, the tax imposed by this chapter on the use of
taxable gasoline or diesel fuel is measured by invoiced gallons of taxable
gasoline or diesel fuel removed from a qualified terminal or refinery
within this state, other than by a bulk transfer, by a licensed supplier;
and from a qualified terminal or refinery outside this state for delivery
to a location in this state as represented on the shipping papers, if the
supplier imports the taxable motor fuel for the supplier's own account or
the supplier has made a tax precollection election under Section 161.062.
Requires the tax on motor fuel to be otherwise determined in the same
manner as the tax imposed by Section 4081, Internal Revenue Code of 1986,
as amended, and applicable regulations in the Code of Federal Regulations,
as amended. 

Sec. 161.055.  PAYMENT OF TAX ON MOTOR FUEL IMPORTED FROM ANOTHER STATE.
(a)  Provides that, except as otherwise provided by this chapter, a motor
fuel tax on taxable motor fuel imported by a licensed occasional importer
from another state must be paid by licensed occasional importer within
three days of the time the nonexempt taxable motor fuel entered the state
or the date a valid import verification number required by  Section 161.207
was assigned by the comptroller. 

(b)  Provides that, except as otherwise provided by this section, a tax
imposed by this chapter on taxable motor fuel imported by a licensed bonded
importer from another state must be paid by the licensed bonded importer
who imported the nonexempt taxable motor fuel during the month. Sets forth
the due dates for such taxes. 

(c)  Provides that, if the date the taxes are due and payable is on a
weekend or  on a state or banking holiday, the tax is due and payable on
the next succeeding business day. 

(d)  Provides that a supplier who has made a blanket election to precollect
tax under Section 161.056 is jointly liable with the importer for the tax
and is required to remit the tax to the comptroller on behalf of the
importer under the same terms as a supplier payment is made under Section
161.057, except that an import verification number is not required and the
supplier is authorized to retain the net percentage of the tax collected
that a supplier may retain under Section 161.066. 

Sec. 161.056.  BLANKET ELECTION TO TREAT ALL REMOVALS FROM OUT-OFSTATE
TERMINALS AS REMOVALS FROM IN-STATE TERMINALS.  Authorizes a licensed
supplier or licensed permissive supplier to make a blanket election to
treat all removals from the supplier's out-of-state terminals with a
destination in this state as if the removals were removed across the rack
by the supplier from a terminal in this state. Provides that such an
election must be made by filing a notice of election with the comptroller.
Requires the comptroller to release a list of electing suppliers on request
of any person.  Requires a supplier who makes such an election to
precollect the motor fuel tax on all removals from a qualified terminal on
the supplier's account as a position holder or as a person receiving fuel
from a position holder under a two-party exchange agreement, without regard
to the license status of the person acquiring the fuel from the supplier,
the point or terms of sale, or the character of delivery. 

Sec. 161.057.  TAX COLLECTED AND REMITTED BY SUPPLIER OR PERMISSIVE
SUPPLIER; DUE DATE; LATE TAXES.  Provides that the motor fuel tax on
gasoline or diesel fuel removed by a licensed supplier from a terminal or
refinery in this state, other than by a bulk transfer, must be collected
and remitted to the state by the supplier who removes the taxable gallons,
as shown in the terminal operator's records.  Sets forth the procedures for
paying such taxes. 

Sec. 161.058.  LIABILITY OF TERMINAL OPERATOR FOR MOTOR FUEL TAXES. (a)
Provides that the terminal operator of a terminal in this state is jointly
and severally liable for the motor fuel tax on gasoline and diesel fuel and
is required to remit payment to this state if the supplier of the taxable
motor fuel is a person other than the terminal operator and is not a
licensed supplier or if, in connection with the removal of diesel fuel that
is not dyed and marked in accordance with Internal Revenue Service
requirements, the terminal operator provides a person with a bill of
lading, shipping paper, or similar document indicating that the diesel fuel
is dyed and marked in accordance with Internal Revenue Service
requirements. 

(b)  Provides that a terminal operator is relieved of liability in the
first situation described by Subsection (a) if the operator establishes
that the terminal operator has a terminal operator's license issued for the
facility from which the motor fuel is withdrawn, has an unexpired
notification certificate from the supplier as required by the comptroller
or the Internal Revenue Service, and does not have a reason to believe that
any information on the certificate is false. 

 (c)  Provides that the terminal operator is jointly and severally liable
for the motor fuel tax that is not allocable to a licensed supplier.
Requires the terminal operator to remit the tax due with the annual report
required by  Section 161.256(d).  Prohibits the operator from taking a
collection credit or deduction with respect to payment of a tax on lost
gallons. Requires the terminal operator to pay a penalty equal to 100
percent of the tax if the number of gallons lost or unaccounted for exceeds
an amount equal to five percent of the gallons removed from that terminal
across the rack. 

(d)  Provides that tax is not due if the terminal operator can establish
that the gallons lost were diesel fuel that was dyed before receipt by that
terminal operator. 

Sec. 161.059.  PAYMENT OF TAX BY LICENSED TANK WAGON OPERATORIMPORTER.
Provides that a licensed tank wagon operator-importer is liable for the tax
imposed by this chapter on nonexempt gasoline and diesel fuel imported by a
tank wagon if the tax has not previously been paid to a supplier.  Requires
the person to remit the tax for the preceding month's import activities
with the person's monthly report of activities. Authorizes a licensed tank
wagon operator-importer to retain a percentage of the tax as an
administrative credit in accordance with Section 161.067(b). 

Sec. 161.060.  PAYMENT OF TAX BY LICENSED EXPORTER.  Requires a licensed
exporter carrying in a transport truck, tank wagon, or similar vehicle
nonexempt gasoline or diesel fuel for which tax has not previously been
paid to a supplier to remit the motor fuel tax for the destination state to
the comptroller with the exporter's monthly report of activities.  Requires
the tax to be collected at the applicable rate and refunded when the
licensed exporter provides proof that the destination state taxes have been
paid if the comptroller does not have an agreement with the destination
state for collection of state motor fuel taxes. 
 
Sec. 161.061.  COLLECTION OF TAX FROM ELIGIBLE PURCHASER;  ELECTION TO
DEFER TAX PAYMENT.  (a)  Requires a supplier or bonded importer who sells
taxable gasoline or diesel fuel to collect motor fuel tax from the
purchaser. 
 
(b)  Prohibits the seller from requiring an eligible purchaser to pay the
tax on transport truckloads of gasoline or diesel fuel before payment for
the fuel is due or before one business day before the date the tax is
required to be remitted by the supplier or bonded importer. 
 
(c)  Authorizes suspension or revocation of failure of a supplier or bonded
importer's license for failure to comply with this section. 

(d)  Authorizes an eligible purchaser to deduct from the amount of tax
otherwise payable to a supplier or bonded importer an amount equal to the
difference between the tax rate prescribed by Sections 161.051(b) and (c)
on gasoline that the eligible purchaser received from the supplier or
bonded importer and resold to a transit company under an authorization
letter issued by the comptroller, and the difference between the tax rate
prescribed by Sections 161.052(b) and (c) on diesel fuel that the eligible
purchaser received from the supplier or bonded importer and resold to a
transit company under an authorization letter issued by the comptroller.  

Sec. 161.062.  ELECTION OF PURCHASER.  (a)  Requires a person who elects to
be an eligible purchaser and to defer payment of taxes to present evidence
to the comptroller that the applicant was a permittee in good standing
under Chapter 153 (Motor Fuel Taxes) as it existed on December 31, 2000,
under which the person properly remitted tax to the comptroller or meets
the financial responsibility and bonding requirements imposed by this
chapter. 

(b)  Provides that the election is subject to a requirement that the
eligible purchaser's remittances of all amounts of tax due the seller must
be paid by electronic funds transfer. Authorizes the eligible purchaser's
election under this section to be terminated by the seller if the eligible
purchaser does not make timely payments to the seller.  

(c)  Authorizes the comptroller to require an eligible purchaser who pays
the tax to a supplier to file with the comptroller a surety bond payable to
the state on which the eligible purchaser is the obligor or to file other
financial security in an amount satisfactory to the comptroller. Authorizes
the comptroller to require that the bond indemnify the comptroller against
uncollectible tax credits claimed by the supplier under Section 161.064.  

Sec. 161.063.  RESCISSION OF ELIGIBLE PURCHASER'S ELECTION TO DEFER PAYMENT
OF TAX.  Authorizes the comptroller to rescind an eligible purchaser's
election to defer remitting motor fuel taxes to a supplier or bonded
importer after a hearing and on a showing of good cause such as failure to
make timely tax-deferred payments to a supplier or bonded importer. Sets
forth notice requirements for recission.  Authorizes the comptroller,
instead of rescinding an election, to require further assurance of the
purchaser's financial responsibility, increase the bond requirement under
Section 161.217 for that purchaser, or take other action to ensure
remittance of the taxable motor fuel tax.  Requires the comptroller to
follow the revocation procedures prescribed by this chapter in rescinding
an eligible purchaser's election. 

Sec. 161.064.  CREDITS FOR LICENSED SUPPLIERS, PERMISSIVE SUPPLIERS, AND
BONDED IMPORTERS.  (a)  Entitles a supplier or bonded importer to a credit
against the tax payable in an amount equal to the  amount of tax paid by
the supplier or bonded importer that is uncollectible from an eligible
purchaser.  

(b)  Requires the supplier or bonded importer to provide notice to the
comptroller of a failure to collect tax not later than the 10th day after
the  earliest date the supplier or bonded importer was entitled to collect
the tax from the eligible purchaser.  

(c)  Requires the comptroller, by rule, to establish the evidence a
supplier or bonded importer must provide to receive the credit.  

(d)  Provides that a supplier or bonded importer must claim the credit on
the first return after the date the eligible purchaser fails to pay the tax
if the payment remains unpaid as of the filing date of that return.  

(e)  Provides that the claim for the credit must identify the defaulting
eligible purchaser and any tax liability that remains unpaid.  

(f)  Limits the supplier's or bonded importer's credit to the amount due
from the eligible purchaser, plus any tax due from that purchaser for the
period ending on the date the supplier or bonded importer receives notice
from the comptroller that the eligible purchaser's election has been
rescinded.  

(g)  Prohibits a supplier or bonded importer from receiving an additional
credit in relation to a particular purchaser after the purchaser's election
is rescinded unless the comptroller authorizes the purchaser to make a new
election. 
 
Sec. 161.065.  PAYMENT OF TAX BY ELECTRONIC FUNDS TRANSFER. Requires a
supplier or bonded importer to remit any motor fuel taxes due by electronic
funds transfer in the manner required by the comptroller by the due date.  

Sec. 161.066.  RETENTION FOR ADMINISTRATIVE COSTS.  Authorizes a supplier
or permissive supplier who properly remits taxes under this chapter to
retain each month three-fourths of one percent of the taxes collected and
remitted by that supplier to cover administrative costs.  Authorizes a
licensed bonded importer who properly remits taxes under this chapter to
retain one-half of one percent of the taxes collected and remitted by that
importer to cover administrative costs, provided that the importer does not
retain more than $2,000 each month. 

Sec. 161.067.  ELIGIBLE PURCHASERS AND SUPPLIERS TO SHARE ADMINISTRATIVE
CREDITS.  Requires an eligible purchaser who lawfully engages in the
distribution of tax-paid motor fuel within this state to receive, on
removal of the taxable motor fuel from the terminal, a credit from the
terminal of one-half of one percent of the tax due to offset the cost of
recordkeeping and electronic transmission of those records.  Provides that
the credit is not applicable more than once to any taxable motor fuel.
Authorizes the supplier or a supplier who makes a sale of tax-paid motor
fuel to a person who is not an eligible purchaser to choose not to transfer
the credit to an eligible purchaser that is also a company store.  Requires
that the supplier receive the allowance through a credit against tax
remittances due to this state and payable by the person.  

Sec. 161.068.  TAX COLLECTED ON MOTOR FUEL BELONGS TO STATE AND IS HELD IN
TRUST BY COLLECTOR.  Provides that the tax that a person collects on the
sale of taxable motor fuel belongs to this state and that the person holds
the money in trust for this state and for payment to the comptroller.
Provides that each officer, employee, or agent of a corporation or
partnership has a duty to collect the tax and is personally liable for the
tax, penalty, and interest.  

Sec. 161.069.  DIVERSION OF TAXABLE MOTOR FUEL.  (a)  Requires an exporter
who diverts taxable motor fuel removed from a terminal in this state from
an intended destination outside this state, as shown on the terminal-issued
shipping papers, to a destination within this state to notify this state of
the diversion and obtain a diversion or import verification number required
by Subsection (g) and pay the motor fuel tax to this state, if the tax has
not been paid, on the same terms as if the exporter were an occasional
importer licensed under Section 161.207, without deducting the allowances
provided by Section 161.066.  

(b)  Authorizes an exporter who removes from a bulk plant in this state
taxable motor fuel on which the motor fuel tax has previously been paid to
apply for a refund of the tax. Requires the comptroller to issue a refund
of that tax, without including the allowance provided by Section 161.066,
on a showing of proof of export that satisfies the comptroller.  

(c)  Requires an unlicensed importer who diverts taxable motor fuel from a
destination outside this state to a destination inside this state after
having removed the product from a terminal outside this state to notify
this state of the diversion and obtain a diversion or import verification
number under Subsection (g) and pay the tax imposed by this chapter to this
state, on the same terms and conditions as if the unlicensed importer were
a licensed occasional importer subject to Section 161.207, without
deducting the allowances provided by Section 161.066.  

(d)  Requires a licensed importer to report and pay tax on diversions into
this state of imported taxable motor fuel in accordance with the rules that
apply to that license class. Prohibits a licensed importer from taking an
allowance under Section 161.066 for diverted  shipments.  

(e)  Authorizes an importer who purchases the product from a licensed
supplier, by mutual agreement with the supplier, to permit the supplier to
assume the importer's liability and adjust the importer's taxes payable to
the supplier.  

(f)  Requires the tax remitter, if a monthly report is filed or the amount
due is remitted after the date required by this chapter, to pay to the
comptroller all of the motor fuel tax the remitter collected from the sale
of taxable motor fuel during the taxable period in addition to penalties
and interest.  

(g)  Provides that, under all circumstances, diverted loads and imported
loads must obtain a diversion or import verification number from the
comptroller before leaving this state, entering this state, or being
delivered.  

Sec. 161.070.  PERSONS BLENDING OR FRACTIONATING UNTAXED MATERIALS; PAYMENT
OF TAX.  Requires a person blending untaxed materials, including
blendstocks and additives, with taxable motor fuels to pay and remit any
unpaid motor fuel tax.  Requires a person fractionating fuels to comply
with the requirements of Section 161.316 relating to correct fuel
formulation and pay and remit any unpaid motor fuel tax.  Requires a fuel
vendor required to pay a tax on blended untaxed materials to remit the tax
with the report required by Section 161.261(b) or otherwise required from a
person who is a miscellaneous fuel tax license holder.  Requires a person,
other than such a fuel vendor to remit the tax directly to the comptroller
by the 30th day after the blending event.  

Sec. 161.071.  BACK-UP TAX COLLECTION.  Imposes the motor fuel tax
collected on tax-exempt motor fuel that is used in a taxable or illegal
manner and on a tax-exempt end user who uses tax-exempt fuel in a taxable
or illegal manner and on an ultimate vendor who knows or has reason to know
that the tax-exempt motor fuel is or will be used in a manner that will
make the fuel subject to taxation under this section.  

SUBCHAPTER C. TAXES IMPOSED ON LIQUEFIED GAS

Sec. 161.101.  LIQUEFIED GAS.  Imposes a tax on all liquefied gas used or
consumed in this state in producing or generating power for propelling a
motor vehicle on the public highways of this state.  Sets the liquefied gas
tax rate at 15 cents a gallon.  

Sec. 161.102.  PAYMENT OF TAX.  Requires a person using a liquefied
gas-propelled motor vehicle that is required to be licensed in this state
for use on the public highways of this state to prepay the liquefied gas
tax to the comptroller on an annual basis.  Requires a person who holds a
motor vehicle dealer's liquefied gas tax decal or an interstate trucker
whose vehicle is registered in this state but who is authorized to operate
in other states under a multistate fuels tax agreement to pay the tax to a
permitted dealer at the time the fuel is delivered into the fuel supply
tank of the motor vehicle.  Requires an interstate trucker operating a
motor vehicle licensed in a base state other than this state and any other
out-of-state user to pay the tax on delivery of the liquefied gas into the
fuel supply tanks of a motor vehicle.  

Sec. 161.103.  LICENSES; APPLICATION; DISPLAY.  (a)  Requires a dealer who
sells taxable liquefied gas, an interstate trucker, a liquefied gas tax
decal user, or a motor vehicle dealer's liquefied gas tax decal license
holder to file an application with the comptroller for the appropriate kind
and class of a nonassignable license.  Sets forth the requirements for
filing an application and posting a license.  
 
 Sec. 161.104.  DEALER'S LICENSE.  Provides that a dealer's license
authorizes a dealer to collect and remit taxes on liquefied gas delivered
into the fuel supply tank of a motor vehicle displaying an out-of-state
license plate, the motor vehicle of an interstate trucker licensed under an
agreement entered into under Section 161.011, or a motor vehicle displaying
a motor vehicle dealer's liquefied gas tax decal.  

Sec. 161.105.  LIQUEFIED GAS TAX DECAL LICENSE.  (a)  Requires a person who
uses liquefied gas in producing or generating power for propelling a motor
vehicle on the public highways of this state to pay in advance annually, on
each motor vehicle owned, operated, and registered in this state by that
person, a tax based on the registered gross weight and mileage driven the
previous year.  Sets forth the tax schedule. 

(b)  Requires the first issuance of a liquefied gas tax decal for a Class A
through Class F motor vehicle to be issued on the basis of the number of
miles estimated to be driven during the first year.  

(c)  Requires a special use liquefied gas tax decal and tax of $444 to be
required in accordance with this subsection for Class T transit carrier
vehicles operated by a transit company. 

(d)  Authorizes an entity holding a registration under Chapter 503
(Dealer's and Manufacturer's Vehicle License Plates), Transportation Code,
to obtain a decal for each liquefied-gas-powered motor vehicle held for
sale or resale and pay the tax on each gallon to a licensed dealer on each
delivery of liquefied gas into the fuel supply tank of the motor vehicle.
Provides that an interstate trucker is not required to prepay the tax under
Subchapter (a) for a motor vehicle operated for commercial purposes.  

Sec. 161.106.  LICENSES:  PERIODS OF VALIDITY.  (a)  Provides that a
dealer's license is permanent and valid as long as the license holder
provides timely reports to the comptroller as required, or until the
license is surrendered by the holder or canceled by the comptroller.  

(b)  Provides that a liquefied gas tax decal license is valid from the date
of its initial issuance through the last day of the same month of the year
following the year it was issued, unless the motor vehicle for which the
tax is prepaid is sold or no longer used on a public highway.  Requires a
liquefied gas tax decal license to be issued annually, after its initial
issuance, and provides that it is valid until the first anniversary of the
date of its issuance, unless the motor vehicle for which the tax is prepaid
is sold or no longer used on a public highway.  Provides that a liquefied
gas tax decal license holder must apply for a new license each year.
Provides that the ending odometer reading must be provided on the renewal
application.  Requires the previous year's mileage to be presumed to be at
least 15,000 miles in the absence of an ending odometer reading,.  

(c)  Requires a motor vehicle dealer's liquefied gas tax decal license to
be issued annually and be valid from the date of its issuance through
December 31 of each calendar year unless the motor vehicle is sold, at
which time it should be removed by the dealer. Provides that a motor
vehicle dealer's liquefied gas tax decal license holder must make
application for a new license each year.  Sets the fee for a dealer's
license at $50.  

Sec. 161.107.  COMPUTATION OF TAXES; ALLOWANCES.  (a)  Provides that a
licensed dealer who makes a sale or delivery of liquefied gas into a fuel
supply tank of a motor vehicle on which the tax is required to be collected
is liable to this state for the tax imposed and is required to report and
pay the tax in the manner required by this subchapter.  

 (b)  Requires a licensed dealer to deduct from its payment the tax on
one-half of one percent of the taxable gallons of liquefied gas sold in
this state by a licensed dealer to be allocated to the licensed dealer for
the expense of collecting, accounting for, reporting, and remitting the
taxes collected and keeping the records. 

(c)  Requires the tax on one-half of one percent of the taxable gallons of
liquefied gas sold in this state to a person licensed as an interstate
trucker to be allocated to the interstate trucker making the use of the
liquefied gas for the expense of accounting for, reporting, and remitting
the taxes due.  

Sec. 161.108.  RECORDS.  Provides that each taxable sale or delivery of
liquefied gas into the fuel supply tank of a motor vehicle, including
deliveries by interstate truckers from bulk storage, must be covered by a
printed invoice containing certain information.  Provides that the invoice
must be carried with the vehicle and that the invoice serves as a trip
permit. Authorizes a liquefied gas tax decal license holder required to
report beginning and ending odometer readings to deduct the miles traveled
outside this state from the total miles traveled.  Provides that a record
of miles traveled by the vehicle in states other than this state must be
maintained and submitted with the renewal each year.  Prohibits a decal
from being renewed for an amount less than the rate for 4,999 miles
annually.  

Sec. 161.109.  REPORTS AND PAYMENTS.  Requires a licensed dealer, by the
25th day of the month following the end of each calendar quarter, to file a
report and remit the amount of tax due.  Requires a licensed dealer who has
not made taxable sales during the reporting period to file with the
comptroller a report that includes the facts or information.  

Sec. 161.110.  REFUNDS; TRANSFER OF DECALS.  Requires the seller and
purchaser of a motor vehicle with a liquefied gas tax decal that is sold or
transferred to promptly notify the comptroller of the sale or transfer, who
is required to issue a new decal in the new purchaser's name.  Entitles the
owner to a refund of the unused portion of the advance taxes paid for that
year, if a motor vehicle with a liquefied gas tax decal is destroyed or the
liquefied gas carburetor system is removed.  Sets forth the procedures for
obtaining such a refund. 

SUBCHAPTER D.  INTERNATIONAL FUEL TAX AGREEMENT

Sec. 161.131.  INTERNATIONAL FUEL TAX AGREEMENT LICENSE REQUIREMENT.
Requires an interstate trucker who imports motor fuel into this state in
the fuel supply tanks of a motor vehicle described in the definition of
"interstate trucker" in Section 161.001 that is operated for commercial
purposes to obtain a license as an interstate trucker to report and pay the
tax due on motor fuel that is imported and used on the public highways in
this state or claim a credit or refund of the tax paid on motor fuel
purchased in this state and used in other states.  Sets forth the validity,
renewal procedure and requirements for an interstate trucker's license. 


Sec. 161.132.  TRIP PERMIT.  Authorizes an interstate trucker to obtain a
trip permit instead of obtaining an annual interstate trucker's license.
Provides that the trip permit must be obtained before or at the time of
entry into this state.  Prohibits the comptroller from issuing more than
five trip permits for a person during a calendar year.  Requires the
comptroller to collect a fee for each trip permit in the amount of $50 for
each vehicle for each trip.  Provides that a report is not required with
respect to that vehicle.  Provides that a trip permit is not transferable.  

Sec. 161.133.  OPERATING WITHOUT LICENSE OR PERMIT.  Subjects an interstate
trucker who operates a motor vehicle without an interstate trucker's
license or trip permit to  a penalty under Subchapter I. 

Sec. 161.134.  RECORD REQUIREMENT.  Requires an interstate trucker to keep
a record of the total miles traveled in all states by all vehicles
traveling into or from this state and the total quantity of motor fuel
consumed in those vehicles and the total miles traveled in this state and
the total quantity of motor fuel purchased in this state, showing both
tax-paid fuel delivered into the fuel supply tanks of motor vehicles and
tax-free fuel delivered into storage facilities in this state for four
years.  Provides that the records are open to inspection at all times by
the comptroller and the attorney general.  

Sec. 161.135.  REPORTS. Requires an  interstate trucker to file a report
including complete and detailed information required by the comptroller,
including the number of miles traveled in this state and the number of
miles traveled outside this state, on forms provided by the comptroller by
the 25th day of the month following the end of each calendar quarter.
Requires an interstate trucker who has not used any motor fuel during the
reporting period to file with the comptroller a report stating that fact.
Provides that the failure of an interstate trucker to obtain forms from the
comptroller is not an excuse for the failure to file a report containing
the required information.  Authorizes the comptroller to waive a report
required by this section if substantially similar data is available from
federal government sources.  

Sec. 161.136.  PAYMENT OF TAX.  Prohibits an interstate trucker from making
tax-free purchases of motor fuel.  Requires an interstate trucker to remit
the amount of tax due with the report required by Section 161.135 based on
the applicable tax rate for each gallon of motor fuel consumed in this
state at the time the report is filed.  Entitles a licensed interstate
trucker to deduct one-half of one percent of the taxable gallons of motor
fuel on payment of taxes to this state for the expense of recordkeeping,
reporting, and remitting the tax.  

Sec. 161.137.  CREDIT FOR MOTOR FUEL CONSUMED OUTSIDE STATE.  (a) Entitles
a licensed interstate trucker to a credit equal to the tax rate for each
gallon on all tax-paid motor fuel that is consumed in a vehicle outside
this state.  

(b)  Authorizes an interstate trucker to accumulate credits for four
successive calendar quarters.  

(c)  Authorizes the comptroller to allow the trucker to claim an excess as
a credit or refund on a timely filed quarterly report against tax for which
the interstate trucker would be otherwise liable for any of the next three
quarters if the amount of a credit to which the interstate trucker is
entitled for a calendar quarter exceeds the amount of tax for which the
interstate trucker is liable for motor fuel consumed in the person's
vehicles during the reporting period.  

(d)  Provides that an interstate trucker claiming a tax refund or credit
must provide evidence of the mileage traveled and gallons consumed and the
payment of the tax on a form required by or satisfactory to the
comptroller.  

(e)  Provides that an interstate trucker must file a claim for a credit or
refund within a year of the first day of the calendar month following the
purchase or use.  

Sec. 161.138.  INTERSTATE TRUCKERS AND LESSORS; PAYMENT OF TAX. (a)
Provides that, unless a lessor is  liable under Subsection (b), an
interstate trucker is liable for the tax on motor fuel imported into this
state in the fuel supply tanks of motor vehicles leased to the trucker and
used on the public highways of this state to the same extent and in the
same manner as the trucker is liable for the tax on motor fuel imported in
the trucker's own motor vehicles and used on the public highways of this
state.  
 
(b)  Authorizes a lessor who regularly engages in the business of leasing
motor vehicles and equipment for compensation to carriers or other lessees
for interstate  operation to be considered to be the end user or interstate
trucker if the lessor supplies or pays for the motor fuel consumed in those
vehicles.  Authorizes a lessor to be issued a license as an interstate
trucker if an application is properly filed with and approved by the
comptroller.  

(c)  Authorizes a lessee to exclude a motor vehicle that the person leases
from the person's reports and liabilities under this chapter only if the
motor vehicle has been leased from a lessor who holds a license as a bonded
interstate trucker for the calendar year.  

(d)  Authorizes a lessor described by Subsection (b) to file with the
person's application for an interstate trucker license one copy of the form
lease or service contract the person enters into with the lessees of the
person's motor vehicles.  Authorizes the lessor, on approval of the
license, to make and assign to each motor vehicle the person leases for
interstate operation a photocopy of the license to be carried in the cab
compartment of the motor vehicle.  Sets forth the requirements for the
license. 

SUBCHAPTER E. EXEMPTIONS, REFUNDS, AND CREDITS

Sec. 161.161.  EXEMPTIONS FROM TAX ON MOTOR FUEL.  Exempts certain types of
fuel from the motor fuel tax imposed by this chapter, subject to the
conditions and prohibitions imposed by this chapter.  Requires motor fuel
delivered to a farm or ranch for agricultural purposes to be delivered
tax-free if the fuel is delivered in quantities of 3,000 gallons or less
per delivery, with a maximum of 10,000 gallons in any month.   Requires the
ultimate vendor to pay the tax on behalf of the farm or ranch and
authorizes the ultimate vendor to request a refund under Section 161.162.  

Sec. 161.162.  REFUNDS OF MOTOR FUEL TAX PAID.  (a)  Authorizes a person
who has paid tax on motor fuel that is used for certain nontaxable purposes
to apply to the comptroller for a refund.  Requires the comptroller to make
the refund for taxes paid on such motor fuel on receipt of the application
and proof the comptroller considers acceptable. 

(b)  Provides that a person who files a claim for a tax refund forfeits the
person's right to the entire amount of the claim if the claim is filed for
motor fuel used for an unauthorized purpose or the person files a false or
altered invoice supporting a refund claim.  

(c)  Authorizes the comptroller to grant all or part of a refund under
Subsection (b) if the person provides proof satisfactory to the comptroller
that the incorrect refund claim was filed because of  a clerical or
mathematical computation error.  

(d)  Requires the comptroller to credit or pay a refund directly to the
person who paid the tax.  Provides that a credit or refund is not
assignable or transferable.  

Sec. 161.163.  CLAIM FOR REFUND ON TAXES PAID ON EXEMPT SALES TO
GOVERNMENTAL ENTITIES.  (a)  Makes this section applicable to a sale of
taxable motor fuel for use by the federal government or a public school
district; taxable motor fuel sold to a commercial transportation company
that provides public school transportation to a school district under
Section 34.008, Education Code, and used by the company exclusively to
provide those services; and liquefied gas sold to a county for its
exclusive use.  

(b)  Authorizes the licensed fuel vendor that made a sale described by
Subsection (a)  as an ultimate vendor to an exempt government end user to
apply for a refund on behalf of the exempt end user.  
 
(c)  Requires the licensed fuel vendor to apply directly with the
comptroller in accordance with the rules and forms prescribed by the
comptroller.  

(d)  Authorizes an ultimate vendor to apply for a government exempt bulk
sales permit that entitles the vendor to make purchases of gasoline
tax-free for resale to an exempt government end user.  Provides that the
ultimate vendor must apply on a form acceptable to the comptroller and
include certain information. 

(e)  Requires the comptroller to issue a permit to the applicant that
authorizes the applicant to make tax-exempt sales of motor fuel during the
year in an amount not to exceed the estimate included on the application if
the comptroller determines that tax collections would not be jeopardized by
issuance of a government exempt bulk sales permit.  Requires the
comptroller to provide a copy of the permit to each supplier named by the
applicant.  

(f)  Prohibits a governmental entity from qualifying as a purchaser
eligible for tax-exempt sales under this section unless the ultimate vendor
obtains a properly completed federal Form 1094, its state equivalent, or a
successor form from the governmental entity, sends a copy of the form to
the comptroller, and includes with the copy an estimate of the annual
quantity of taxable motor fuel to be supplied to that purchaser.  

(g)  Requires the comptroller to assign an approval number for the
governmental entity and ultimate vendor location described by Subsection
(f).  

(h)  Prohibits the comptroller from requiring that the identical gallons
purchased by the ultimate vendor under the permit be delivered to the
eligible entity under this section. Authorizes the comptroller to require
that the total gallons purchased tax-exempt under the permit equal the
total gallons delivered to all eligible entities.  

(i)  Provides that if the ultimate vendor fails to deliver purchased
tax-exempt motor fuel to an eligible entity under this section, the
ultimate vendor is liable for the tax on that motor fuel.  Authorizes the
comptroller to levy a penalty of 10 percent of the tax due if the number of
tax-exempt gallons purchased tax-free exceeds the number of gallons sold
for tax-exempt use by 10 percent or more.  

(j)   Requires the vendor to notify the comptroller if the ultimate vendor
needs to purchase more gallons than the amount the vendor included in the
estimate prescribed by Subsection (d) to fulfill the vendor's commitments.
Requires the comptroller to increase the quantity authorized on the permit
and notify each supplier of the increase if the comptroller is satisfied
with the reports previously submitted by the vendor that account for the
tax-exempt fuel.  

(k)  Authorizes an ultimate vendor who makes a sale of taxable motor fuel
to an eligible entity under this section at a fixed retail pump available
to the general public without including the tax to apply to the comptroller
for a refund in accordance with Subsections (b) and (c) or apply to the
comptroller for a refund or a credit against its liabilities otherwise
arising under this chapter if the purchase is charged to a credit card
issued to the eligible entity and the issuer of the card elects to be the
ultimate vendor.  

(l)   Authorizes an entity to apply for a refund from the comptroller if an
ultimate vendor makes a sale of taxable motor fuel to an eligible entity
under this section at a fixed retail pump available to the general public
and includes the tax.  Provides that the entity must submit any supporting
documentation the comptroller prescribes, by rule, with the  application.  

Sec. 161.164.  REFUND OF MOTOR FUEL TAX ERRONEOUSLY PAID.  Requires the
comptroller, if any taxes, interest, or penalties imposed by this chapter
have been erroneously paid or illegally collected, to permit the person who
paid the tax to take a credit against a subsequent tax report for the
amount erroneously or illegally paid or apply for a refund. Provides that
an election to take a credit must be made by the first anniversary of the
date of the erroneous collection or payment.  

Sec. 161.165.  REFUND CLAIMS.  Sets forth the procedures for filing a claim
for a refund under Sections 161.162-161.164.  Requires the comptroller to
investigate a claim as necessary before issuing a refund.  Authorizes the
comptroller to also investigate a refund after the refund has been issued
and within the period for making adjustments to the tax under this chapter.
Authorizes the supplier to claim a credit instead of the refund if a refund
is payable to a supplier.  Authorizes the comptroller, by rule, to provide
an alternative election by the applicant for a refund by allowing a credit
against state tax liability to facilitate efficient administration and
instead of an individual refund procedure.  Requires the comptroller to
deduct from a refund the amount  originally deducted under Subchapter B by
the licensed entity making the sale.  

Sec. 161.166.  INTEREST ON REFUND.  Requires the comptroller to pay
interest on a claim for refund at the rate and in the manner provided by
comptroller rules.  

SUBCHAPTER F. LICENSING

Sec. 161.201.  REQUIREMENT FOR LICENSE.  Provides that a person who wants
to engage in any form of fuel storage, transportation, purchase, sale, or
delivery in this state must notify the comptroller of that intent and
obtain an appropriate license.  

Sec. 161.202.  SUPPLIER'S LICENSE; FEE.  Provides that a person who wants
to be engaged in business in this state as a supplier must obtain a
supplier's license.  Sets the fee for a supplier's license at $2,000.  

Sec. 161.203.  PERMISSIVE SUPPLIER'S LICENSE; FEE.  Authorizes a person who
wants to collect the motor fuel tax as a supplier and who meets the
definition of a permissive supplier to obtain a permissive supplier's
license.  Provides that an application for or possession of a permissive
supplier's license does not by itself subject the applicant or license
holder to the jurisdiction of this state for a purpose other than
administration and enforcement of this chapter.  Sets the fee for a
permissive supplier's license at $250.  

Sec. 161.204.  TERMINAL OPERATOR'S LICENSE; FEE.  Provides that a  person,
other than a supplier licensed under Section 161.202, who wants to be
engaged in business in this state as a terminal operator must obtain a
terminal operator's license for each terminal site. Sets the fee for a
terminal operator's license at $100.  

Sec. 161.205.   EXPORTER'S LICENSE; FEE.  Authorizes the comptroller to
require a person to obtain an exporter's license if the person  exports
products to another state without first paying that destination state's
motor fuel tax to the supplier.  Sets the fee for an exporter's license at
$250.  

Sec. 161.206.  TRANSPORTER'S LICENSE; FEE.  Provides that a person who is
not licensed as a supplier or as an aviation fuel dealer must obtain a
transporter's license before transporting taxable motor fuel, whether from
a point outside this state to a point inside this state or from a point
inside this state to a point outside this state, regardless of whether the
person is engaged for hire in interstate or intrastate commerce.  Provides
that leased vehicles must be registered to transport motor fuel within the
state in the same manner as owned vehicles.  Set the fee for a
transporter's license at $100.  

Sec. 161.207.  OCCASIONAL IMPORTER'S LICENSE (TRIP LICENSE) OR BONDED
IMPORTER'S LICENSE; FEES.  (a)  Requires a person to apply for and obtain
an occasional importer's license or a bonded importer's license, at the
discretion of the applicant, if the person wants to cause taxable motor
fuel to be delivered into this state on the persons behalf, for the
person's own account, or for resale to a purchaser in this state; the motor
fuel is delivered from another state in a fuel transport truck or in a
pipeline or barge shipment into storage facilities that are not a qualified
terminal; and the person has not entered into an agreement to prepay this
state's taxable motor fuel tax to the supplier or permissive supplier with
respect to the imports.  

(b)  Provides that this section does not apply to a person who exclusively
imports taxable motor fuel that is exempted because it has been dyed or
imports nonexempt taxable motor fuel that is subject to one or more tax
precollection agreements with suppliers under Section 161.056 and for which
the prior collection of the motor fuel tax by the supplier is expressly
evidenced on the terminal-issued shipping paper provided under Section
161.301.  

(c)  Requires a person described by Subsection (a) to obtain an occasional
importer's license for the fee of $500 that allows for a maximum of 10
trips each year or a bonded importer's license for the fee of $2,000,
subject to the bonding requirements of Section 161.216(b).  

(d)  Requires a person required to obtain a license under this section to
obtain, not later than 24 hours before entering this state, an import
verification number from the comptroller for each separate import into this
state and display the import verification number on the terminal-issued
shipping papers required by Section 161.301.  

(e)  Provides that an importers license issued under this section must be
specific to each state that is the source of supply.  

Sec. 161.208.  TANK WAGON OPERATOR-IMPORTER LICENSE; FEE.  Provides that a
person must obtain a tank wagon operator-importer license from the
comptroller before the person imports motor fuel by tank wagon if the
destination of that tank wagon is within 25 miles of a border of this
state.  Provides that registration as a tank wagon operator-importer does
not constitute authorization to acquire nonexempt motor fuel free of the
motor fuel tax at a terminal either in or outside this state for direct
delivery to a location in this state. Authorizes a person who possesses a
valid importer's license to act as a tank wagon operator-importer without
issuance of a separate license if the importer also operates one or more
bulk plants outside this state. Provides that a person who operates a tank
wagon that delivers products into this state must also obtain an importer's
license under Section 161.207.  Sets the fee for a tank wagon
operator-importer license at $150.  

Sec. 161.209.  FUEL VENDOR'S LICENSE; FEE.  Provides that a person who
wants to engage in the business of selling taxable motor fuel at wholesale
or retail or in storing or distributing taxable motor fuel for resale
within this state must obtain a fuel vendor's license, unless the person
possesses a valid supplier's, terminal operator's, transporter's,
importer's, tank wagon operator-importer, or exporter's license.  Requires
a fuel vendor to maintain detailed records of all purchases and sales at
all locations in this state for three years after the transaction.
Provides that all fuel vendor records must be maintained in English and
Arabic numerals or in a manner acceptable to electronic formats.  Requires
a fuel vendor to make  an annual report of taxable gallons sold at retail
in accordance with Section 161.261.  Sets the fee for a fuel vendor's
license at $50.  

Sec. 161.210.  AVIATION FUEL DEALER'S LICENSE; FEE.  Requires a person who
wants to engage in business in this state as a dealer, wholesaler, vendor,
or transporter of aviation fuels or who stores those fuels to obtain an
aviation fuel dealer's license for each business site.  Provides that an
aviation fuel dealer's license authorizes a person to deliver gasoline or
diesel fuel exclusively into the fuel supply tanks of aircraft or aircraft
servicing equipment.  Authorizes the holder of an aviation fuel dealer's
license to sell or deliver diesel fuel to another aviation fuel dealer who
will deliver the diesel fuel exclusively into the fuel supply tanks of
aircraft or aircraft servicing equipment.  Prohibits the holder of an
aviation fuel dealer's license from acting as a supplier of gasoline or
diesel fuel other than as allowed by this section.  Sets the fee for an
aviation fuel dealer's license at $50.  

Sec. 161.211.  MISCELLANEOUS FUEL TAX LICENSE; FEE.  Requires each person
who is liable for the tax imposed by this chapter but is not licensed under
Sections 161.202-161.210 to obtain a miscellaneous fuel tax license.
Provides that there is no fee for this license.  

Sec. 161.212.  APPLICATION FOR LICENSE.  (a)  Sets forth the information
required in an application for a license. 

(b)  Prohibits a person from applying for a license as a refiner, supplier,
terminal operator, importer, exporter, blender, or transporter unless the
person is incorporated in this state or authorized to transact business in
this state, if the person is a corporation; is organized in this state or
authorized to transact business in this state, if the person is a limited
liability company; is formed in this state or authorized to transact
business in this state, if the person is a limited partnership; or
designates an agent for service of process and gives the agent's name and
address, if the person is an individual or general partnership.  

(c)  Prohibits a person from applying for a license as a refiner, supplier,
permissive supplier, or terminal operator  unless the person has a federal
certificate of registry that is issued under Section 4101, Internal Revenue
Code of 1986, as amended, that authorizes the person to enter into federal
tax-free transactions in taxable motor fuel in the terminal transfer
system.  Provides that the applicant must include the registration number
of the certificate on the license application.  

(d)  Provides that a person applying for a license as an importer who has a
federal certificate of registry that is issued under Section 4101, Internal
Revenue Code of 1986, as amended, must include the registration number of
the certificate on the license application.  

(e)  Provides that a person applying for a license as an importer must
include on the application a list of each state from which the applicant
intends to import motor fuel and be licensed in each of the states that
requires a license. 

(f)  Provides that a person applying for a license as an exporter must
include on the application a list of each state to which the applicant
intends to export motor fuel that is received in this state by a transfer
outside the terminal transfer system and be licensed in each of the states
that requires a license. 

Sec. 161.213.  INVESTIGATION OF APPLICANT FOR LICENSE.  Requires the
comptroller to investigate each applicant for a license under this chapter.
Prohibits the comptroller from issuing a license to a person if the
comptroller determines that the applicant  is not the real party in
interest; the license of the real party in interest has been canceled for
cause; the applicant has a prior conviction for motor fuel tax evasion;
with respect to an exporter's license the applicant is not licensed in the
intended specific state of destination; or there is another reasonable
cause for not issuing the license.  

Sec. 161.214.  REQUIREMENT FOR FINANCIAL STATEMENTS.  Authorizes the
comptroller to require a license holder or an applicant for a license to
provide current financial statements that have been verified by a certified
public accountant.  Authorizes the comptroller to make an independent
inquiry into the financial condition of the applicant and provides that the
comptroller is not required to accept as accurate financial statements that
have not been certified or independently audited.  Authorizes the
comptroller to require the license holder to provide the increased bond or
cash deposit if the comptroller determines that a license holder's
financial condition warrants such an increase.  

Sec. 161.215.  FINGERPRINTING REQUIREMENT; EXEMPTIONS.  Authorizes the
comptroller to require an applicant for a license, including a corporate
officer, partner, or individual, to submit the person's fingerprints to the
comptroller when applying for the license, with certain exceptions.
Authorizes the comptroller to forward all fingerprints submitted by license
applicants to the Federal Bureau of Investigation or any other agency for
processing.  Requires the receiving agency to issue the agency's findings
to the comptroller.  Requires the comptroller to use the license
application fee to pay the cost of the investigation. Authorizes the
comptroller or another state agency to maintain a file of fingerprints.  

Sec. 161.216.  APPLICATION MUST BE FILED WITH SURETY BOND OR CASH DEPOSIT.
(a)  Requires the comptroller to require the applicant to file,
concurrently with the filing of an application for a license under this
chapter, a surety bond or cash deposit that is in an amount determined by
the comptroller of not less than $2,000, or not more than a three-month tax
liability for the applicant, as estimated by the comptroller; and  is
conditioned on the keeping of records and the making of full and complete
reports and payments as required by this chapter.  

(b)  Requires a supplier or bonded importer to post a bond of not less than
$2 million. Authorizes the comptroller to reduce the bond to not less than
$1 million for certain persons.  Authorizes a  person to show proof of
financial responsibility instead of posting a bond.  Provides that proof of
a net worth of at least $5 million constitutes evidence of financial
responsibility in the absence of circumstances indicating to the
comptroller that collection of the taxes from the applicant is at risk.  

(c)  Provides that, if the applicant files a bond, the bond must name the
applicant as the principal and this state as the obliged; be with a surety
company approved by the comptroller, which may be an affiliate in the
business of assuring the obligations; and be in the form prescribed by the
comptroller.  

(d)  Exempts a person from the bonding requirements of this section if the
person is a fuel vendor licensed under Section 161.209 who is not  required
to be licensed under another section or a person who holds a miscellaneous
fuel tax license under Section 161.211.  

Sec. 161.217.  REQUIREMENT FOR LICENSE HOLDER TO FILE NEW BOND OR
ADDITIONAL DEPOSIT.  Authorizes the comptroller to require a license holder
to file a new bond with a satisfactory surety in the same form and amount
if the liability on the previous bond is discharged or reduced by a
judgment rendered or payment made or the amount of the bond otherwise
becomes unsatisfactory or in the opinion of the comptroller, a surety on
the previous bond becomes insufficient.  Requires the comptroller to cancel
the  person's license if the new bond is unsatisfactory.  Requires the
comptroller to release in writing the surety on the previous bond from
liability accruing after the effective date of the new bond if the new bond
is satisfactory.  Authorizes the comptroller to require the license holder
to make a new deposit equal to the amount of the insufficiency if a license
holder has a cash deposit with the comptroller and the deposit is reduced
by a judgment rendered or payment made or the amount otherwise becomes
insufficient.  

Sec. 161.218.  AMOUNT OF BOND OR DEPOSIT; CANCELLATION OF LICENSE. Requires
a license holder to file a new bond or increase a cash deposit if the
comptroller determines that the amount of the existing bond or cash deposit
is insufficient to ensure payment to this state of the tax and of any
penalty and interest for which the license holder is or may become liable
and makes a written demand for the new bond or increased deposit. Requires
the comptroller to allow the license holder at least 15 days to secure the
increased bond or cash deposit and to cancel the person's license if the
new bond or cash deposit is unsatisfactory.  

Sec. 161.219.  ISSUANCE OF LICENSE.   Requires the comptroller to issue a
license for the applicant and a number of copies equal to the number of
places of business that the person has for which a license is required if
the applicant and bond are approved.  

Sec. 161.220.  RECORDS OF LICENSE HOLDERS IN THIS STATE.  Requires the
comptroller to update the list of all motor fuel license holders in this
state by category, indicating changes from the previous month and each
purchaser who is eligible to share the terminal administrative credit under
Section 161.067, by the 20th day of each month. Requires the comptroller to
make the list available by mail if requested.  Provides that a current and
effective license or the list provided by the comptroller is evidence of
the validity of the license until the comptroller notifies suppliers and
bonded importers of a change in the status of a license holder.  

Sec. 161.221.  LICENSE IS NONTRANSFERABLE.  Prohibits a license from being
transferred to another person or to another place of business.  Provides
that, for purposes of this section, a transfer means the transfer of a
majority interest in a business association, other than a publicly held
association, including a corporation, partnership, trust, joint venture,
and any other business association, to another person.  

Sec. 161.222.  LICENSE MUST BE DISPLAYED AT PLACE OF BUSINESS.  Provides
that each license must be preserved and conspicuously displayed at the
place of business for which it is issued. Authorizes the comptroller to
waive this requirement for any class of license holder.  

Sec. 161.223.  SURRENDER OF LICENSE ON DISCONTINUANCE OR RELOCATION.
Requires a license holder who discontinues conducting business at a
location or changes a business location to immediately surrender the
license issued for the location to the comptroller.  

Sec. 161.224.  NOTICE THAT LICENSE HOLDER HAS DISCONTINUED, SOLD, OR
TRANSFERRED BUSINESS.  Requires a person to immediately notify the
comptroller in writing of any discontinuance, sale, or transfer of the
person's business and file a final report as required by Section 161.263
giving the date of discontinuance, sale, or transfer, and, for the sale or
transfer of the business, the name and address of the purchaser or
transferee. Provides that the license holder is liable for all taxes,
interest, and penalties that accrue or may be owing and for any criminal
liability for misuse of the license that occurs before issuance of the
notice.  

 Sec. 161.225.  CANCELLATION OR REFUSAL OF LICENSE.  (a)  Authorizes the
comptroller to cancel or refuse to issue or reissue a motor fuel license to
a person who has violated or has failed to comply with this chapter or a
rule of the comptroller.  

(b)  Requires the comptroller, before a license may be canceled or the
issuance or reissuance refused, to give the license holder or license
applicant at least 10 days notice of a hearing granting the license holder
or applicant an opportunity to show cause before the comptroller why the
proposed action should not be taken.  Provides that if a license is in
effect, the license remains in force pending the determination of the
show-cause hearing.  Sets forth the notice requirements. 

(c)  Authorizes the comptroller to prescribe rules of procedure and
evidence for the hearings in accordance with Chapter 2001, Government Code.

(d)  Requires all taxes that have been collected or that have accrued to
become due and payable concurrently with the notice of cancellation of the
license if, after the hearing or the opportunity to be heard, the license
is canceled or the issuance or reissuance refused by the comptroller.
Requires the license holder to make a report covering the period not
covered by a preceding report filed by the license holder and ending with
the date of cancellation and remit and pay to the comptroller all taxes
that have been collected and that have accrued from the sale, use, or
distribution of motor fuel in this state within five days.  

Sec. 161.226.  SUMMARY SUSPENSION OF LICENSE.  (a)  Authorizes the
comptroller to suspend a person's license without notice or a hearing if
the person fails to comply with this chapter or a rule adopted under this
chapter or the person's continued operation constitutes an immediate and
substantial threat to the collection of taxes imposed by this chapter.  

(b)  Provides that, if the comptroller summarily suspends a person's
license, proceedings for a preliminary hearing before the comptroller or
the comptroller's representative must be initiated simultaneously with the
summary suspension.  Requires the preliminary hearing to be set for a date
within 10 days of the date of the summary suspension, unless the parties
agree to a later date.  

(c)  Provides that the license holder must show cause why the license
should not remain suspended pending a final hearing on suspension or
revocation at the preliminary hearing.  

(d)  Requires the comptroller to serve notice on the license holder
informing that person of the right to a preliminary hearing before the
comptroller or the comptroller's representative and of the time and place
of the preliminary hearing to initiate a proceeding to summarily suspend a
person's license.  Sets forth the requirements for notice. 

(e)  Provides that Chapter 2001 (Administrative Procedure Act), Government
Code, does not apply to a summary suspension under this section.  

Sec. 161.227.  ENFORCEMENT OF LICENSE CANCELLATION, SUSPENSION, OR REFUSAL.
(a)  Authorizes the comptroller to examine any business books and records
of a person whose license has been canceled or suspended on the person's
failure to file a report required by this chapter or to remit all taxes
due.  Requires the comptroller to issue an audit deficiency determination
of the amount of delinquent taxes, penalties, and interest, containing a
demand for payment and providing that if neither a payment is made nor a
request for a redetermination is filed within 30 days of the date of the
notice of the deficiency, the amount of the determination becomes due and
payable.  Provides that if the  amount is not paid within 45 days of the
date of service of the notice of deficiency determination, the bond or
other security required under this chapter is forfeited.  Requires the
demand for payment to be addressed to the person who owes the delinquency
and to any surety of that person.  

(b)  Requires the comptroller, if the forfeiture of the bond or other
security does not satisfy the delinquency, to certify the taxes, penalty,
and interest delinquent to the attorney general, who may file suit against
the person, the person's surety, or both, to collect the amount due.
Provides that, after being given notice of an order of cancellation or
summary suspension, it is unlawful for any person to continue to operate
the person's business under a canceled or suspended license.  Authorizes
the attorney general to file suit to enjoin the person from continuing to
operate under the person's license until the comptroller reissues the
license.  

(c)  Sets forth the procedure for appealing an order of the comptroller
canceling, suspending, or refusing the issuance or reissuance of a license. 

SUBCHAPTER G. REPORTS

Sec. 161.251.  CONTENT AND FORMAT OF REQUIRED INFORMATION.  (a)  Provides
that a report required by this chapter must conform to the content approved
by the Federation of Tax Administrators and must specifically indicate the
federal employer identification number of each handler of a load of fuel,
including a common or private carrier, broker, or contractor.  

(b)  Authorizes the comptroller to adopt rules prescribing reporting
requirements for a person engaged in more than one activity for which a
license is required.  Requires the comptroller to ensure that each report
is as simple and standardized as possible and requires the minimum amount
of information necessary for the comptroller's compliance and enforcement
activities.  

(c)  Requires each person who holds a license under this chapter to file a
monthly report with the comptroller by the 25th day of each month that
covers the tax liabilities that accrued during the preceding calendar
month, except as otherwise provided by this chapter.  

(d)  Requires each person who holds a license under this chapter to file an
annual report with the comptroller by January 25 that covers the tax
liabilities that accrued in the preceding calendar year in addition to the
monthly report.  

(e)  Provides that a person who holds a license as a supplier, permissive
supplier, or bonded importer must submit each report required by this
chapter in an electronic format that conforms to the standards approved by
the Federation of Tax Administrators for electronic data interchange.  

(f)  Authorizes the comptroller, on or after January 1, 2004, to require
other license holders to submit records electronically or by electronic
data interchange.  Requires the comptroller to allow a person who is
required to file in accordance with this subsection to take a suitable tax
credit to accommodate the costs of installing equipment necessary to
comply.  

(g)  Authorizes the comptroller to waive a reporting requirement if
substantially similar data is readily available to this state from an
electronic federal excise tax report.  

 Sec. 161.252.  INVENTORY RECORDS.  Requires a license holder to maintain
inventory records as required by the comptroller for purposes of reporting
and determining tax liability under this chapter.  

Sec. 161.253.  VERIFIED STATEMENT BY SUPPLIER; REPORTING OF INFORMATION.
(a)  Requires a supplier to include in a monthly report required by this
subchapter certain information relating to billed gallons of taxable motor
fuel. 

(b)  Provides that the supplier must report the information required by
Subsection (a) in the aggregate and must identify whether the billed
gallons are net or gross.  

(c)  Requires a licensed supplier or permissive supplier to separately
include  as part of the report required by this section information that
discloses and identifies any removal and sale, as shown by the
terminal-issued shipping paper, from the bulk transfer system or terminal
system in another state by that supplier to a person other than a licensed
supplier, permissive supplier, or importer, of gallons of taxable motor
fuel destined for this state on which the tax imposed by this chapter has
not been collected or accrued by the supplier on removal.  Provides that
this subsection does not apply to  diesel fuel dyed in accordance with
Internal Revenue Service and United States Environmental Protection Agency
dyeing standards.  

(d)  Requires a supplier to separately identify each tax-free sale of K-1
kerosene, other than dyed diesel fuel, in accordance with reporting
requirements established by the comptroller.  

Sec. 161.254.  VERIFIED STATEMENT OF LICENSED OCCASIONAL IMPORTER.  (a)
Requires a licensed occasional importer to include in a monthly report
required under this subchapter information relating to taxable gallons tax
prepaid to a supplier on removal from an out-of-state terminal; taxable
gallons subject to the three-day payment rule prescribed by Section
161.055, sorted by source state, by supplier, by terminal, or by bulk plant
location; and other information relating to the source and means of
transportation of nonexempt taxable motor fuel as the comptroller may
require on forms prescribed by the comptroller.  

(b)  Authorizes the comptroller to waive the reporting requirement
prescribed by this section if the comptroller determines that one or more
states bordering this state have adopted and implemented reciprocal
terminal report requirements adequate to assure the comptroller that the
comptroller receives complete information.  

Sec. 161.255.  VERIFIED STATEMENT OF LICENSED BONDED IMPORTER.  (a)
Requires a licensed bonded importer to include in a monthly report required
under this subchapter information relating to taxable gallons tax prepaid
to a supplier on removal from an out-of-state terminal and taxable gallons
subject to tax remittance by the bonded importer under Section 161.055,
sorted by source state, by supplier, by terminal, or by bulk plant
location.  

(b)  Authorizes the comptroller to waive a reporting requirement prescribed
by this section if the comptroller determines that one or more states
bordering this state have adopted and implemented reciprocal terminal
report requirements adequate to assure the comptroller that the comptroller
receives complete information.  

Sec. 161.256.  TERMINAL OPERATOR STATEMENT OF OPERATIONS; ANNUAL REPORT.
(a)  Requires a person operating a terminal in this state to include in a
monthly report required under this subchapter certain information for each
terminal location in this state. 
 
(b)  Provides that the information must be transferred to this state
electronically. Authorizes the comptroller to waive requiring a separate
electronic submission to this state if sufficient and reliable information
can be obtained from Internal Revenue Service databases. 

(c)   Requires the operator to provide the appropriate codes instead of
carrier names if the Internal Revenue Service provides a common system of
assigning carriers alphanumeric codes instead of names.  

(d)  Requires a person operating a terminal in this state to include in an
annual report required under this subchapter information relating to the
net amount of monthly temperature adjusted, net gallons, gains or losses;
total net gallons removed from the terminal in bulk and across the rack
during the calendar year; total net gallons removed across the terminal
rack during the calendar year and other information as the comptroller
considers necessary to determine the tax liability of the terminal operator
under this chapter; and the amount of tax due.  

Sec. 161.257.  TERMINAL REPORTS REGARDING SOURCE STATE.  Requires a
terminal operator subject to the jurisdiction of this state who operates a
terminal outside this state to provide to the comptroller a report that
includes information relating to gallons removed from the source state as
to which the operator issued a shipping paper indicating this state as the
destination state if a source state does not require a terminal report that
provides information substantially similar to the information required by
Section 161.256. Provides that the report must include the information
required by Section 161.256.  Provides that this section does not apply if
substantially similar information is readily available to this state from a
federal terminal report or from the source state.  

Sec. 161.258.  AVIATION FUEL DEALER MONTHLY REPORTS.  Requires an aviation
fuel dealer to keep a record showing the number of gallons of  all aviation
fuel inventories on hand at the first of each month; all aviation fuel
purchased or received, showing the name of the seller and date of each
purchase or receipt; all aviation fuel for use in aircraft or aircraft
servicing equipment; and all aviation fuel lost by fire or other accident.
Sets forth the information which must be shown in the records.  Provides
that the records must be kept for at least four years.  

Sec. 161.259.  LICENSED EXPORTER REPORTS.  Requires a person licensed as an
exporter to include in a monthly report required under this subchapter
certain information relating to  the amount of taxable motor fuel exported
from this state, other than diesel fuel dyed in accordance with the
Internal Revenue Code of 1986, as amended.  Authorizes the comptroller to
waive the reporting requirement prescribed by this section if the
comptroller determines that the report is not necessary to administer this
chapter.  

Sec. 161.260.  PERSONS PURCHASING GALLONS TAX-EXEMPT FOR RESALE TO
GOVERNMENTAL ENTITIES MUST FILE REPORT.  Requires a person who purchases
gallons tax-exempt under Section 161.163 for resale to governmental
entities exempted under Section 161.161 to include certain specified
information in a monthly report required under this subchapter. 

Sec. 161.261.  REPORTS BY FUEL VENDORS.  (a)  Requires a fuel vendor to
file a quarterly report that lists total gallons of motor fuel by fuel type
sold by the vendor through a retail outlet accessible to the general public
by the 25th day of the first month after the end of a calendar quarter.  

 (b)  Requires a person who makes a sale of, or otherwise causes the
transfer of ownership of, kerosene, blendstocks, or transmix to file with
the comptroller a report in accordance with Section 161.251 and remit any
tax payable each month.  

(c)  Requires a person described by Subsection (b) to keep a record of
those sales or transfers for at least three months in accordance with
comptroller rules in addition to the monthly report.  

(d)  Requires a person who makes a sale as a vendor and is not required to
report under this subchapter to maintain on the premises for three months
invoices and shipping papers indicating the amount and source of each load
of fuel sold or transferred to the vendor. Provides that each invoice must
clearly state from whom the fuel was purchased or transferred; the vendor's
federal employer identification number, name, and address; the amount and
type of fuel; and the agent who is responsible for payment of taxes.  

(e)  Requires the vendor to make the records required by Subsection (d)
available to the comptroller or to the comptroller's agent during normal
business hours without prior notification.  

(f)  Requires a person who makes a sale as a vendor to retain for four
years purchase invoices for taxable motor fuels.  Provides that the
invoices must clearly designate the amount of tax paid to this state as a
separate line item that is described generally as a "Texas Motor Fuel Tax."
Provides that if the vendor does not retain the invoices that relate to
these disclosures, the fuel vendor is jointly liable for the tax imposed by
this chapter and the comptroller is authorized to proceed against the fuel
vendor to collect the tax.  

(g)  Requires a person who makes a sale as a vendor to retain for four
years all terminal-issued shipping papers received from the transporter for
every shipment of taxable motor fuel that is delivered to that vendor's
retail outlets at any location prescribed by comptroller rules.  

Sec. 161.262.  RECORDS.  Requires a person who sells or transfers motor
fuel to keep for four years a complete record of all motor fuel sold or
delivered for taxable purposes. Provides that the record is open to
inspection at all times by the comptroller and the attorney general.
Provides that the record must include shipping papers and invoices from all
transactions completed either  directly or through a broker or contractor.
Requires each taxable sale or delivery of motor fuel, including a delivery
by an interstate trucker from bulk storage, to be covered by an invoice.
Sets forth the information which the invoice must contain.  Provides that
the invoice serves as a trip permit and must be carried with the vehicle.  

Sec. 161.263.  FINAL REPORT AND PAYMENT BY LICENSE HOLDER.   Requires a
license holder who discontinues, sells, or transfers the person's business
or who has the person's license canceled, revoked, or terminated by law
under this chapter to file a report as required by this chapter by the 30th
day after the event, mark the report as a  "Final Report," and pay all
motor fuel taxes and penalties that may be due the state except as
otherwise provided by law.  

SUBCHAPTER H. SHIPPING REQUIREMENTS

Sec. 161.301.  MACHINE-PRINTED SHIPPING PAPERS; EXEMPTIONS.  (a)  Requires
a person operating a refinery, terminal, or bulk plant in this state to
prepare and provide to the driver of every fuel transportation vehicle that
receives taxable motor fuel into the vehicle  storage tank at the facility
an automated machine-printed shipping paper that includes certain
information on its face. 

(b)  Authorizes a terminal operator to manually prepare shipping papers if
the terminal operator is temporarily unable to issue automated
machine-generated shipping papers, but requires the terminal operator to
provide notice to the comptroller by telephone and obtain a service
interruption authorization number first.  Requires the operator to add this
number to the manually prepared papers before removal of an affected
transport load from the terminal. Provides that the service interruption
authorization number is valid for use by the terminal operator for not more
than 24 hours.  Requires the operator, if the interruption is not solved
within the 24-hour period, to provide additional notices to the comptroller
and authorizes the comptroller to issue additional interruption
authorization numbers on explanation by the terminal operator that is
satisfactory to the comptroller.  

(c)  Provides that this section does not apply to an operator of a bulk
plant in this state that delivers taxable motor fuel into a tank wagon for
subsequent delivery to an end user in this state.  

(d)  Authorizes a terminal operator to load split loads of motor fuel in
which a portion is destined for sale or use in this state and a portion is
destined for sale or use in another state.  Requires the terminal operator
to document the split loads removed by issuing shipping papers designating
the destination state for each portion of the fuel.  

(e)  Requires each terminal operator to post a conspicuous notice,
proximally located to the point of receipt of shipping papers by transport
truck operators, that describes the duties of the transport operator and
retail dealer under Section 161.302.  Authorizes the comptroller, by rule,
to establish the format of the notice.  

(f)  Provides that a person who violates this section commits a felony of
the third degree. 

Sec. 161.302.  REQUIREMENTS RELATING TO SHIPPING PAPERS.  (a)  Prohibits a
person from transporting taxable motor fuel in a fuel transportation
vehicle on the public highways of this state unless the person carries on
board the vehicle the shipping paper issued by the terminal operator or the
bulk plant operator of the facility at which the taxable motor fuel was
obtained, regardless of whether the facility is inside or outside this
state. Provides that the shipping paper must state on its face the
destination state  of the taxable motor fuel transported in the vehicle, as
represented to the terminal operator when the fuel transportation vehicle
was loaded or as otherwise prescribed by Subsection (c).  

(b)  Requires such a person to produce and allow inspection and duplication
of the shipping paper on request of a law enforcement officer or
representative of the comptroller at any time while transporting, holding,
or off-loading the motor fuel described in the shipping paper.  

(c)  Authorizes such a person to deliver taxable motor fuel described in
the shipping paper only to a point in the destination state shown on the
face of the document, unless the person or the person's agent notifies the
comptroller, before the earlier of the time of removal from the state in
which the shipment originated or the time of initiation of delivery, that
the person received instructions after the shipping paper was issued to
deliver the motor fuel to a different destination state; receives from the
comptroller or the comptroller's agent a diversion number authorizing the
diversion; and writes on the shipping paper the change in destination state
and the diversion number for the diversion.  

(d)  Requires such a person to provide a copy of the shipping paper to the
person who  controls the facility to which the motor fuel is delivered and
comply with any other requirement or  condition the comptroller may require
to enforce this chapter.  

Sec. 161.303.  TERMINAL-ISSUED SHIPPING PAPER PROVIDED ON DELIVERY OF
SHIPMENT.  Requires a person who transports taxable motor fuel in a motor
vehicle on the public highways of this state to provide the original or a
copy of the terminal-issued shipping paper accompanying the shipment to the
operator of the retail outlet, bulk plant, or end user bulk storage
facility to which delivery of the shipment is made.  

Sec. 161.304.  INSPECTION AND RETENTION OF TERMINAL-ISSUED SHIPPING PAPER
BY RECEIVER OF TAXABLE MOTOR FUEL.  Requires an operator of a taxable motor
fuel retail outlet, bulk plant, or end user's bulk storage facility to
receive and examine the terminal-issued shipping paper received from the
transporter for every shipment of taxable motor fuel that is delivered to
that location.  Requires the person to retain the shipping paper for at
least 90 days after the date of delivery at the delivery location and,
after 90 days, at any location allowed by comptroller rules until the
fourth anniversary of the date of delivery.  

Sec. 161.305.  ACCEPTANCE OF DELIVERY WITHOUT PROPER SHIPPING PAPER
PROHIBITED.  Prohibits a retail dealer, bulk plant operator, wholesaler, or
bulk end user from accepting delivery of taxable motor fuel into bulk
storage facilities in this state if the delivery is not accompanied by a
shipping paper issued by the terminal operator or bulk plant operator that
includes on its face a statement that this state is the destination state
of the taxable motor fuel or a diversion verification number under Section
161.306 and any other information required by Sections 161.309 and 161.310.

Sec. 161.306.  RELIEF IN CASE OF IMPROPERLY COMPLETED SHIPPING PAPER;
NOTIFICATION OF DIVERSION OR CORRECTION; VERIFICATION NUMBER.  (a) Requires
the comptroller to provide for relief in a situation in which a shipment of
taxable motor fuel is legitimately diverted from the represented
destination state after the shipping paper has been issued by the terminal
operator or in which the terminal operator failed to cause proper
information to be printed on the shipping paper.  

(b)  Provides that the relief provisions must include a provision requiring
that the shipper, the transporter, or an agent of either person to notify
the comptroller of the intended diversion or correction before the
diversion or correction occurs and that a diversion number be assigned and
manually added to the face of the terminal-issued shipping paper.  
(c)  Provides that the relief provisions must establish a protest procedure
that a person found to be in violation of Section 161.301 or 161.304 may
use to establish a defense to a civil penalty imposed under this chapter
for violation of one or both of those sections.  

(d)  Requires the comptroller to make reasonable efforts to coordinate with
neighboring states and the Federation of Tax Administrators for the
operation of a common telephonic diversion or verification number
assignment system, including its shared burdens.  

Sec. 161.307.  RELIANCE ON REPRESENTATIONS REGARDING DESTINATION,
TAX-EXEMPT USE, OR SUPPLIER'S OBLIGATION TO COLLECT TAX.  (a) Authorizes
the supplier and the terminal operator to rely on the representation by the
transporter, the shipper, or the shipper's agent as to the shipper's
intended destination state and whether the use of the motor fuel is
tax-exempt.  

(b)  Provides that the shipper, the importer, the transporter, the
shipper's agent, and a purchaser are jointly liable for any tax otherwise
due to this state as a result of a diversion  of the taxable motor fuel
from the represented destination state.  Provides that the supplier and
terminal operator are not liable.  

(c)  Authorizes a terminal operator to rely on the representation of a
licensed supplier with respect to the supplier's obligation to collect tax
and the related shipping paper representation to be shown on the shipping
paper as provided by Section 161.309(a). Provides that the terminal
operator or supplier must report any improbable or patently false
destination state information to the comptroller.  

Sec. 161.308.  UNLAWFUL SALE, USE, DELIVERY, OR STORAGE OF TAXABLE MOTOR
FUEL PROHIBITED; EXCEPTIONS.  (a)  Prohibits a person, except as expressly
provided by Subsection (b), from selling, using, delivering, or storing in
this state, or importing for sale, use, delivery, or storage in this state,
taxable motor fuel on which the motor fuel tax has not previously been paid
to or accrued by a licensed supplier or permissive supplier at the time of
removal from a terminal or from a licensed importer.  

(b)  Provides that Subsection (a) does not apply to a supplier with respect
to taxable motor fuel that was manufactured in this state or imported into
this state in a bulk transfer and that is held within the bulk transfer
system or terminal system in this state; an end user with respect to
taxable motor fuel placed in that person's vehicle supply tank outside this
state; any person with respect to dyed diesel fuel; taxable motor fuel in
the process of exportation by a licensed exporter in accordance with the
shipping papers required by Section 161.302, and as to which the
destination state tax has been paid or accrued to the supplier, if a
statement complying with Section 161.309(a)(2) is shown on the shipping
papers; gasoline used in aircraft; fuel in the possession of an end user to
whom a refund has been issued; federal government exempt fuel under Section
161.161; or a licensed importer who complies with Section 161.310.  

Sec. 161.309.  REQUIRED NOTATIONS ON TERMINAL-ISSUED SHIPPING PAPER;
EXCEPTIONS.  (a)  Prohibits a person from operating a transport truck that
is engaged in the shipment of taxable motor fuel on the public highways of
this state without having on board a terminal-issued shipping paper that
has, in addition to the information otherwise required by this subchapter,
a notation indicating, with respect to  diesel fuel acquired under a claim
of exempt use, a statement indicating the fuel is "DYED DIESEL FUEL,
NONTAXABLE USE ONLY, PENALTY FOR TAXABLE USE" for the load or the
appropriate portion of the load; or any other taxable motor fuel, a
notation indicating "(supplier name) responsible (state name) motor fuel
tax," or any other annotation acceptable to the comptroller that otherwise
indicates that the motor fuel tax imposed by this chapter, or by the
destination state, has been paid to the supplier with respect to the entire
load or the appropriate portion of it.  

(b)  Provides that a person violates Subsection (a)  if the person boards
the vehicle with a shipping paper that does not meet the requirements
prescribed by this section.  

(c)  Exempts a licensed importer or a transporter acting on the
transporter's behalf from the application of Subsection (a)(2) if the
person is otherwise required to comply with Section 161.310.  Provides that
the person is not exempt from the application of this section with respect
to shipments sourced to a state that has adopted reciprocal legislation
that has been recognized by the comptroller.  

(d)  Authorizes the comptroller to provide an advance notification
procedure with respect to documentation for imported motor fuel for which
the importer is unable to obtain terminal-issued shipping papers that
comply with this section.  

 Sec. 161.310.  REQUIREMENTS FOR LICENSED IMPORTER REGARDING FUEL THAT HAS
NOT BEEN DYED AND ON WHICH TAX HAS NOT BEEN PAID OR ACCRUED BY THE
SUPPLIER.  (a)  Makes this section applicable to taxable motor fuel
destined for this state that has not been dyed in accordance with the
Internal Revenue Code of 1986, as amended, and the regulations issued under
the code or on which the tax has not been paid to or accrued by the
supplier at the time of removal from the out-of-state terminal.  

(b)  Prohibits a licensed importer who acquires motor fuel described by
Subsection (a) or the transporter operating on the importers  behalf from
entering the motor fuel onto the public highways of this state by loaded
transport truck unless the importer or the transporter obtains an import
verification number from the comptroller at least 24 hours before entering
this state; the import verification number is stated prominently and
indelibly on the face of each copy of the terminal-issued shipping paper
carried on board the transport truck; the terminal origin and the
importer's name and address are also stated prominently on the face of each
copy of the terminal-issued shipping paper; the terminal-issued shipping
paper information otherwise required by this chapter is present; and all
taxes imposed by this chapter with respect to previously requested import
verification number activity on the account of the importer or the
transporter have been remitted in a timely manner.  

(c)  Provides that a person who violates this section commits a felony of
the third degree. 

Sec. 161.311.  REQUIREMENTS FOR EXPORTING FUEL.  Prohibits a person from
exporting motor fuel from this state without first paying the applicable
destination state or this state's motor fuel tax to the supplier unless the
motor fuel complies with the export exempt criteria prescribed by Section
161.161.  Provides that the person must also demonstrate proof of exporting
in the form of a destination state bill of lading.  Provides that a person
who violates this section commits a felony of the third degree.  Provide
that this section does not apply to an end user who exports fuel in a
vehicle fuel supply tank incident to interstate transportation.  

Sec. 161.312.  NOTICE REGARDING DYED DIESEL FUEL.  Provides that a notice
stating: "DYED DIESEL FUEL, NONTAXABLE USE ONLY, PENALTY FOR TAXABLE USE"
must be provided by the terminal operator to a person who receives dyed
diesel fuel at a terminal rack of that terminal operator;  provided by a
seller of dyed diesel fuel to a buyer if the diesel fuel is located outside
the bulk transfer system or terminal system and is not sold from a retail
pump or bulk plant that has the notice posted; and posted by a seller on a
retail pump or bulk plant at which the person sells dyed diesel fuel for
use by the person's buyer.  


Sec. 161.313.  DYED DIESEL FUEL NOTICE REQUIRED ON SHIPPING PAPERS, BILLS
OF LADING, AND INVOICES.  Provides that the form of notice required by
Sections 161.312(1) and (2) must be provided by the time of the removal or
sale and must appear on shipping papers, bills of lading, and invoices
accompanying the sale or removal of the dyed diesel fuel.  

Sec. 161.314.  UNAUTHORIZED SALE OR USE OF DYED DIESEL FUEL PROHIBITED.
Prohibits a person from selling or holding for sale dyed diesel fuel for
any use that the person knows or has reason to know is not a tax-exempt use
of the diesel fuel. Prohibits a person from using or holding for use dyed
diesel fuel for a use other than a tax-exempt use if the person knows or
has reason to know that the diesel fuel is dyed.  

Sec. 161.315.  ALTERATION OF DYE OR MARKER IN DYED DIESEL FUEL PROHIBITED.
Prohibits a person, with intent to evade tax, from altering or attempting
to  alter the strength or composition of a dye or marker in dyed diesel
fuel.  

Sec. 161.316.  FUEL MUST MEET AMERICAN SOCIETY OF TESTING AND MATERIALS
STANDARDS.  Prohibits a person from selling or purchasing a product for
general public highway use in the supply tank of a motor vehicle that does
not meet the standards of the American Society of Testing and Materials as
published in the annual Book of Standards and its supplements, unless the
standards are amended or modified by the comptroller.  Provides that the
transporter and the transporter's agent and customer have the exclusive
duty to dispose in the manner provided by federal and state law of any
product that does not meet the standards prescribed by this section.
Provides that a person who violates this section commits a felony of third
degree.  

Sec. 161.317.  USE OF DYED DIESEL FUEL PROHIBITED; EXCEPTIONS; PENALTIES.
Prohibits a person from operating a motor vehicle on a public highway in
this state with diesel fuel in the fuel supply tank of the motor vehicle
that contains dye.  Provides that this section does not apply to a person
operating a motor vehicle who received fuel into the vehicle's fuel supply
tank in a jurisdiction outside of this state that permits the introduction
of dyed taxable diesel fuel of that color and type into the fuel supply
tanks of vehicles operated on public highways or a use of dyed fuel that is
legal under the Internal Revenue Code of 1986, as amended, and any
implementing regulations, including uses in state and local government
vehicles and buses, unless that use is otherwise prohibited by this
chapter.  Provides that a person who violates this section commits a felony
of the third degree. 

Sec. 161.318.  DOING BUSINESS WITHOUT LICENSE; PENALTIES.  Prohibits a
person from engaging in a business activity in this state for which a
license is required by Subchapter F unless the person first obtains the
license.  Provides that a person who violates this section commits a Class
B misdemeanor.  

Sec. 161.319.  INVOICED SALES.  Provides that a person who sells or
transfers a load of motor fuel must issue an invoice to the retail outlet
that states the federal employer identification number, name, and address
of the seller or transferor; and clearly indicates the amount of tax paid,
who paid the tax, and on what product the tax was paid.  Prohibits a retail
outlet from accepting a load of motor fuel unless the outlet acquires an
appropriate invoice.  

Sec. 161.320.  FALSE STATEMENT ON SHIPPING PAPER REGARDING LIABILITY FOR
TAX; PENALTIES.  Prohibits a terminal operator from  imprinting, and a
supplier from permitting a terminal operator to imprint on the supplier's
behalf, a statement on a shipping paper relating to motor fuel to be
delivered to this state or to a state having substantially the same
shipping paper legending requirements with respect to a supplier's
responsibility or liability for payment of the motor fuel tax or the
tax-paid or tax-collected status of a taxable motor fuel unless the
supplier or supplier's representative first provides the terminal operator
with a representation or direction to make the statement on behalf of the
supplier.  Provides that a terminal operator who imprints a statement in
violation of this section is subject to a penalty in an amount prescribed
by the comptroller, in addition to any other tax, fine, penalty, or
sanction that may be imposed and is jointly liable with the terminal
operator.  

Sec. 161.321.  METERING DEVICE REQUIRED FOR FUEL DISPENSER ACCESSIBLE BY
PUBLIC; TAMPERING PROHIBITED.  Requires a person operating taxable motor
fuel dispenser equipment accessible by the general public to provide
metering devices for each dispenser and maintain records sufficient to
enable the comptroller to determine the volumes dispensed through that
equipment with reasonable accuracy.  Prohibits a person from  exchanging,
replacing, rolling back, or otherwise tampering with the metering equipment
in a manner that does not comply with comptroller rules relating to
legitimate maintenance, repairs, and replacement purposes.  Provides that a
person who violates this section commits a felony of the third degree. 

Sec. 161.322.  TAMPER-RESISTANT SHIPPING PAPERS REQUIRED.  Requires a
terminal operator in this state, and every supplier licensed by this state
for the collection of tax on taxable motor fuel, to ensure that
terminal-issued shipping papers meet tamper resistance standards the
comptroller, by rule, may require, including messages that identify whether
shipping papers have been photocopied, numbering systems, nonreproducible
coding, and other devices.  

Sec. 161.323.  TANK WAGONS MUST HAVE INTERNATIONAL FUEL TAX AGREEMENT
REGISTRATION; EXCEPTION.  Prohibits a person from operating a tank wagon in
this state unless the tank wagon is registered under the International Fuel
Tax Agreement for use on the public highways of this state and has
displayed on the vehicle an International Fuel Tax Agreement sticker
designating the vehicle for use in this state. Provides that this section
does not apply to a  vehicle registered in this state that is exempt from
the International Fuel Tax Agreement regulations.  

SUBCHAPTER I.   PENALTIES

Sec. 161.351.  LIABILITY OF BUSINESS ENTITIES, PARTICIPATING OFFICERS,
EMPLOYEES, AND AGENTS.  Provides that a business entity and its officers,
employees, and agents who wilfully participate in an activity that violates
Section 161.314 or 161.315 are jointly and severally liable for the penalty
imposed by Section 6715, Internal Revenue Code of 1986, as amended, for a
violation of those sections.  
 
Sec. 161.352.  LIABILITY FOR UNCOLLECTED AND UNPAID TAX; PENALTIES.
Provides that a supplier, permissive supplier, or importer who fails to
collect and timely remit tax otherwise required to be paid to the
comptroller as required by Section 161.055 or 161.057, or  as required by a
tax precollection agreement under Section 161.056, is liable for the
uncollected tax plus the penalties as imposed by the comptroller.  

Sec. 161.353.  PENALTIES.  (a)  Provides that a person liable for the tax
who files a false or fraudulent return must pay in addition to the tax a
penalty in an amount equal to 75 percent of the taxes, other penalties, and
interest due.  

(b)  Requires the comptroller to impose a civil penalty of $1,000 for a
person's first violation relating to transporting taxable motor fuel
without adequate shipping papers that are annotated as required by  Section
161.302 or 161.309.  

(c)  Requires the comptroller to impose a civil penalty of $2,000 on the
operator of a vehicle for the first violation in a calendar year of the
prohibition on use of dyed diesel fuel on the public highways of this
state.  Provides that each subsequent offense in a calendar year is subject
to a civil penalty of $5,000.  

(d)  Provides that a supplier who makes a sale of taxable motor fuel for
export to a person who does not have an appropriate export license, or
without collecting the destination state's tax on taxable motor fuel
nonexempt in the destination state, is subject to a civil penalty equal to
the amount of the destination state's motor fuel tax in addition to the tax
due to this state.  

(e)  Authorizes the comptroller to impose a penalty against a terminal
operator who  wilfully fails to comply with the shipping paper issuance
requirements prescribed by Sections 161.058, 161.301, and 161.312 in an
amount prescribed by the comptroller.  

(f)  Requires the comptroller to impose a penalty in an amount equal to the
penalty prescribed by Section 6715, Internal Revenue Code of 1986, as
amended, on the operator of a vehicle who violates the prohibition on the
sale or use of dyed diesel fuel on the public highways of this state.  

(g)  Provides that an importer or transporter who imports undyed taxable
motor fuel in a transport truck without a valid importer license or
supplier license and an import verification number or a shipping paper
showing on its face, as required by this chapter, that this state's motor
fuel tax is not due is subject to a penalty of $10,000 for each occurrence.
Provides that this subsection does not apply to a person who transports
taxable motor fuel through this state in interstate commerce.  

Sec. 161.354.  IMPOUNDMENT AND SEIZURE OF VEHICLE AND CARGO FOR VIOLATION
OF SHIPPING PAPER REQUIREMENTS.  (a)  Provides that a motor vehicle and the
vehicle's cargo are subject to impoundment, seizure, and subsequent sale
and forfeiture in accordance with the general laws of this state relating
to seizure and forfeiture if a person is found operating the motor vehicle
in violation of the shipping paper requirements prescribed by Sections
161.302, 161.309, 161.310, and 161.312.  Provides that the failure of the
operator of a motor vehicle to have on board when loaded a terminal-issued
bill of lading that has the destination state machine-printed on the face
of the bill of lading as required by Section 161.302, or that fails to meet
the descriptive annotation requirements prescribed by  Sections 161.309,
161.310, and 161.312, if applicable, is presumptive evidence of a violation
sufficient to warrant impoundment and seizure of the vehicle and its cargo.

(b)  Authorizes the comptroller or any peace officer to impound the fuel,
the motor vehicle, cargo tanks, storage tanks, equipment, paraphernalia, or
other tangible personal property used for or incident to the storage, sale,
or transportation of that motor fuel if after examination or other
investigation the comptroller believes that the owner or operator of a
motor vehicle or cargo tank, or a person receiving, possessing, delivering,
or selling gasoline or diesel fuel, has not paid all motor fuel taxes due
or does not have a valid license entitling that person to possess or
transport tax-free motor fuel.  

(c)  Authorizes the comptroller to demand payment of all taxes, penalties,
interest due to this state, and all costs of impoundment unless the
comptroller receives proof not later than the third working day after the
beginning of impoundment that the owner, operator, or other person has paid
the taxes established to be due on the gasoline or diesel fuel stored,
sold, used, or transported and any other taxes due to this state; or the
owner, operator, or other person holds a  license to possess or transport
tax-free motor fuel.  

(d)  Authorizes the comptroller to seize the impounded property to satisfy
the tax liability if the owner or operator does not produce the required
documentation or required license or does not pay the taxes, penalties,
interest, and costs due not later than the third working day after the
beginning of the impoundment.  

(e)  Authorizes the comptroller to seize all motor fuel on which taxes are
imposed by this chapter that is found in the possession, custody, or
control of a person for the purpose of being sold, transported, removed, or
used by the person in violation of this chapter; all motor fuel that is
removed from, or deposited, stored, or concealed in, any place with the
intent to avoid payment of taxes; any automobile, truck, tank truck, boat,
trailer conveyance, or other vehicle used to  remove or transport the motor
fuel to avoid payment  of taxes; and all equipment, paraphernalia, storage
tanks, or tangible personal property incident to and used to avoid payment
of taxes and found in the place, building, or vehicle in which the motor
fuel is found.  

Sec. 161.355.  SALE OF SEIZED PROPERTY.  (a)  Authorizes the comptroller to
sell property seized under Section 161.354. 

(b)  Requires notice to be given to the delinquent person in writing by
certified mail, not later than the 20th day before the date set for the
sale.  Sets forth the required contents and procedures for serving the
notice.  

(c)  Requires the comptroller to sell the property and deliver to the
purchaser a bill of sale for personal property or a deed for real property
sold, which vests the interest or title of the person liable for the amount
in the purchaser.  Authorizes the unsold portion of any property seized to
be left at the place of sale at the risk of the person liable for the
amount.  
(d)  Requires the proceeds of a sale to be allocated to, first, the payment
of expenses of seizure, appraisal, custody, advertising, auction, and any
other expenses incident to the seizure and sale; second, the payment of the
tax, penalty, and interest; and third, the repayment of the remaining
balance to the person liable for the amount, unless a claim is presented
before the sale by any other person who has an ownership interest in the
property, as evidenced by a financing statement or lien, in which case the
comptroller shall withhold the remaining balance pending a determination of
the rights of the respective parties.  

Sec. 161.356.  FAILURE TO PAY TAX OR REPORT.  Requires a person who holds a
license under this chapter, is required to pay tax under this chapter, and
fails to file a report as required by this chapter or fails to pay a tax
imposed by this chapter when due, to forfeit an amount equal to five
percent of the amount due as a penalty.  Provides that, if the person fails
to file the report or pay the tax not later than the 30th day after the day
the tax or report is due, the person forfeits an additional five percent.
Authorizes the comptroller to add a penalty in an amount equal to 75
percent of the amount of taxes, other penalties, and interest due if
failure to file the report or pay the tax when it becomes due is
attributable to fraud or an intent to evade the application of this chapter
or a rule adopted under this chapter or Chapter 111.  

Sec. 161.357.  PROHIBITED ACTS; CIVIL PENALTIES.  Provides that a person
forfeits to the state a civil penalty of not less than $25 nor more than
$250 if the person violates this chapter in certain ways. 

Sec. 161.358.  CRIMINAL OFFENSES.  Sets forth the violations of this
chapter which constitute an offense. 

Sec. 161.359.  CRIMINAL OFFENSES: SPECIAL PROVISIONS AND EXCEPTIONS.
Provides that a person does not commit an offense under Section 161.358
unless the person intentionally or knowingly engages in conduct that is
prohibited under Section 161.358, except that a  culpable mental state is
not required for an offense described by  Section 161.358(6).   Provides
that each day that a refusal prohibited under Section 161.358(11), (12), or
(13) continues is a separate offense.  Provides that the prohibition
prescribed by Section 161.358(31) does not apply to the tax-free sale or
distribution of diesel fuel authorized by Section 161.161.  Provides that
the prohibition under Section 161.358(32) does not apply to the tax-free
sale or distribution of gasoline authorized by  Section 161.161.  

Sec. 161.360.  CRIMINAL PENALTIES.  Sets forth the offenses under Section
161.358  which constitute a Class C misdemeanor, a Class B misdemeanor, a
Class A misdemeanor, a felony of the third degree, and a felony of the
second degree.  Provides that violations of three or more certain separate
offenses committed under one scheme or continuous course of conduct may be
considered as one offense and punished as a felony of the second degree.  

Sec. 161.361.  CRIMINAL PENALTIES: CORPORATIONS AND ASSOCIATIONS. Provides
that Subchapter E (Corporations and Associations), Chapter 12
(Punishments), Penal Code, applies to an offense under this chapter
committed by a corporation or association. Prohibits the court from fining
a corporation or association under Section 12.51(c), Penal Code, unless the
amount of the fine under that subsection is greater than the amount that
could be assessed by the court under Section 12.51(b), Penal Code.
Requires the court, in addition to a sentence imposed on a corporation, to
give notice of the conviction to the attorney general as required by
Article 17A.09, Code of Criminal Procedure.  

Sec. 161.362.  VENUE OF TAX COLLECTION SUITS.  Provides that the venue of a
suit, injunction, or other proceeding at law available for the
establishment or collection of a claim for delinquent taxes, penalties, or
interest accruing under this chapter and the enforcement of the terms and
provisions of this chapter is in Travis County or in any other county
having venue under applicable venue statutes.  

Sec. 161.363.  ASSESSED PENALTIES ARE NOT ASSIGNABLE.  Provides that
penalties assessed as a result of this subchapter are not assignable or
transferable.  

Sec. 161.364.  NEGATION OF EXCEPTION: INFORMATION, COMPLAINT, OR
INDICTMENT.  Provides that an information, complaint, or indictment
charging a violation of this chapter need not negate an exception to an act
prohibited by this chapter, but authorizes the exception to be urged by the
defendant as a defense to the offense charged.  

Sec. 161.365.  ISSUANCE OF BAD CHECK TO LICENSED SUPPLIER OR BONDED
IMPORTER.  (a)  Provides that a person commits an offense if the person
issues or passes a check or similar sight  order for the payment of money
knowing that the issuer does not have sufficient funds in or on deposit
with the bank or other drawee for the payment in full of the check or order
as well as all other checks or orders outstanding at the time of issuance;
the payee on the check or order is a licensed supplier or bonded importer;
and the payment is for an obligation or debt that includes a tax under this
chapter to be collected by the licensed supplier or bonded importer.  

(b)  Provides that Sections 32.41(b), (c), (d), (e), and (g), Penal Code,
apply to an offense under this section in the same manner as those
provisions are applicable to the offense under Section 32.41(a), Penal
Code.  

(c)  Provides that an offense under this section is a Class C misdemeanor. 

(d)  Authorizes a person who makes payment on an obligation or debt that
includes a tax under this chapter and pays with an insufficient funds check
issued to a licensed supplier or bonded importer to be held liable for a
penalty equal to the total amount of tax not paid to the licensed supplier
or bonded importer.  

SUBCHAPTER J.  DEPOSITS AND DISTRIBUTIONS

Sec. 161.401.  TAX ADMINISTRATION FUND.  Requires that, before any other
allocation of the taxes collected under this chapter is made, one percent
of the gross amount of the taxes be deposited in the state treasury in a
special fund, subject to the use of the comptroller in the administration
and enforcement of this chapter.  Requires the unexpended portion of the
special fund to revert, at the end of the fiscal year, to the other funds
to which revenue is allocated by this subchapter in proportion to the
amounts originally derived from the respective sources.  

Sec. 161.402.  ALLOCATION OF UNCLAIMED REFUNDABLE GASOLINE TAXES. Requires
the comptroller, on or before the fifth workday after the end of each month
after making the deductions for refund purposes, to determine as accurately
as possible, for the period since the latest determination under this
subsection, the number of gallons of fuel used in motorboats on which the
gasoline tax has been paid to this state, and on which refund of the tax
has not been made and against which limitation has run for filing claim for
refund of the tax.  Requires the comptroller to compute the amount of taxes
that would have been refunded under the law had refund claims been filed in
accordance with the law.  Requires the comptroller to allocate and deposit
25 percent of the revenue based on unclaimed refunds of taxes paid on motor
fuel used in motorboats to the credit of the available school fund; and the
remaining 75 percent of the revenue to the credit of the general revenue
fund to be appropriated only to the Parks and Wildlife Department for any
lawful purpose.  

Sec. 161.403.  ALLOCATION OF OTHER UNCLAIMED REFUNDABLE NONDEDICATED TAXES.
Requires the comptroller, by rule, to devise a method of determining as
accurately as possible the number of gallons of fuel that is not used to
propel a motor vehicle on the public highways and amount of taxes collected
under this chapter from fuel that is not used to propel a motor vehicle on
the public highways that would have been refunded under this chapter if
refund claims had been filed in accordance with this chapter and that is
not subject to allocation under Section 161.402.  Requires the comptroller
to allocate to the general revenue fund the amount determined under
Subsection (a)(2). Requires the determination and allocation to be made
periodically as prescribed by rule.  

Sec. 161.404.  ALLOCATION OF GASOLINE TAX.  Requires the comptroller, on or
before the fifth workday after the end of each month, after making all
deductions for refund purposes and for the amounts allocated under Sections
161.402 and 161.403, to allocate 25 percent of the tax to the credit of the
available school fund; 50 percent of the tax to the credit of the state
highway fund for the construction and maintenance of the state road system
under existing law; and, from the remaining 25 percent of the tax, to the
credit of the county and road district highway fund all the remaining tax
receipts until a total of $7,300,000 has been credited to the fund each
fiscal year; and after the amount required to be deposited to the county
and road district highway fund has been deposited, deposit to the credit of
the state highway fund the remainder of the 25 percent of the tax, the
amount to be provided on the basis of allocations made each month of the
fiscal year, which sum shall be used by the Texas Department of
Transportation for the construction, improvement, and maintenance of
farm-to-market roads.  

Sec. 161.405.  ALLOCATION OF DIESEL FUEL TAX.  Requires the comptroller, on
or before the fifth workday after the end of each month, after making
deductions for refund purposes, for the administration and enforcement of
this chapter, and for the amounts allocated under Section 161.403, to
allocate 25 percent of the taxes to be deposited to the credit of the
available school fund and 75 percent of the taxes to the credit of the
state highway fund.  

Sec. 161.406.  ALLOCATION OF LIQUEFIED GAS TAX.  Requires the comptroller,
on or before the fifth workday after the end of each month, after making
deductions for refund purposes and for the administration and enforcement
of this chapter, to allocate 25 percent of the taxes to be deposited to the
credit of the available school fund and 75 percent of the taxes to the
credit of the state highway fund.  

 SECTION 2.  (a)  Repealer:  Chapter 153 (Motor Fuel Taxes), Tax Code, is
repealed.  

(b)  Provides that a reference in law to Chapter 153, Tax Code, or to a
motor fuel tax imposed under Chapter 153, Tax Code, means Chapter 161, Tax
Code, as added by this Act, and the motor fuels tax imposed under Chapter
161, Tax Code.  

SECTION 3.  (a)  Effective date:  January 1, 2001. 

(b)  Requires each person who possessed a permit as a distributor to sell
taxable motor fuel at wholesale or had a permit requiring the remittance of
taxes to this state under Chapter 153, Tax Code, as it existed immediately
before the effective date of this Act, to file a report with the
comptroller in accordance with the final report requirements prescribed by
Section 161.263, Tax Code, as added by this Act by January 25, 2001.
Requires the person to compute any remaining taxes due and remit the taxes
with the report.  

(c)  Requires the person making the report, as part of the final report
required under Subsection (b) of this section, to compute the tax on all
inventory held outside of the bulk transfer system, as that term is defined
by Section 161.001, Tax Code, as added by this Act, on the effective date
of this Act and subject to reporting under Subsection (a) of this section.
Provides that the person is not required to pay the tax on the inventory
but is required to list the computation of the tax as a separate line item
on the report.  

(d)  Requires a vendor, as that term is defined by Section 161.001, Tax
Code, as added by this Act,  who possessed a permit to sell taxable motor
fuel at wholesale or at retail under Chapter 153, Tax Code, as it existed
immediately before the effective date of this Act, to compute all remaining
taxes due as provided by Subsection (a) of this section. Requires the
vendor to pay the tax in not more than 24 equal monthly installments by
January 25, 2001. 

SECTION 4.  (a)  Requires each person, beginning on the effective date of
this Act, and ending on December 31, 2002, who possessed a  permit as a
distributor to sell taxable motor fuel at wholesale under Chapter 153, Tax
Code, as it existed immediately before the effective date of this Act, to
receive a credit from the supplier for a terminal transfer under Section
161.067, Tax Code, as added by this Act, of two percent instead of one-half
of one percent if the person obtains a license before January 1, 2001, to
operate under Chapter 161, Tax Code, as added by this Act, as an eligible
purchaser and submits the final report required by Section 3(b) of this Act
not later than January 10, 2001. 
(b)  Requires a supplier who pays a credit under Subsection (a)  of this
section to receive a credit for remitting taxes under Section 161.066, Tax
Code, as added by this Act, of 2.25 percent, instead of three-fourths of
one percent.  

SECTION 5.  Requires the comptroller to immediately allow a person who held
a permit under Chapter 153, Tax Code, as it existed immediately before the
effective date of this Act, to apply for eligible purchaser status under
Sections 161.061 and 161.062, Tax Code, as added by this Act. Authorizes
the comptroller to allow a person to act as an eligible purchaser until the
date the person receives approval of that status or is rejected.  

SECTION 6.  Emergency clause.