SRC-DBM C.S.S.B. 1547 76(R) BILL ANALYSIS
Senate Research CenterC.S.S.B. 1547
By: Bivins
Finance
4/20/1999
Committee Report (Substituted)
DIGEST
Currently, Texas' objective is to increase the annual motor fuel tax
compliance, resulting in increased state revenues of $50 million and
increased federal appropriations of $48 million by taking the following
actions: moving fuel tax collection to the highest feasible point in the
marketing chain, the loading terminal rack; shifting system demands to
decrease taxpayer audits and allowing increased field enforcement and
compliance investigations; facilitating enforcement; automating the motor
fuel tacking system, including implementing a new federal motor fuel
tracking system; reducing border fraud opportunities; and furthering
national efforts to simplify and coordinate systems among the states.
C.S.S.B. 1547 would set forth provisions regarding the collection of the
motor fuels tax and provides penalties.
PURPOSE
As proposed, C.S.S.B. 1547 sets forth provisions regarding the collection
of the motor fuels tax and provides penalties.
RULEMAKING AUTHORITY
Rulemaking authority is granted to the comptroller of public accounts in
SECTION 2 (Section 153.003(b), Tax Code) of this bill.
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Section 153.001, Tax Code, by amending Sudivisions (8)
and (19) and adding Sudivisions (28) - (36), to redefine "diesel tax
prepaid user," and "motor fuel." Defines "blended fuel," "blending,"
"diversion number," "dyed diesel fuel," "export," "import," "import
verification number," "shipping document," and "undyed diesel fuel."
SECTION 2. Amends Section 153.003(a), Tax Code, to require the records of
each intrastate and interstate transportation of motor fuel required under
Subsection (b) to be compiled into a report and supplements in a form or
manner determined by the comptroller. Requires, on or before the 25th day
of the month following the end of each calendar quarter, a common or
contract carrier to file a report showing complete and detailed information
on the transportation of motor fuel during the preceding quarter. Requires
the report to be executed by the common or contract carrier or a
representative of the carrier, and the penalties provided by this chapter
apply to any violation relating to the report. Requires the comptroller of
public accounts (comptroller), by rule, to determine the registration
requirements for common or contract carriers transporting motor fuel.
SECTION 3. Amends Section 153.004(d), Tax Code, to require each person,
other than a common carrier transporting motor fuel, to also carry a copy
of the supplier, distributor, jobber, dyed diesel fuel bonded user, or
agricultural bonded user permit.
SECTION 4. Amends Section 153.006, Tax Code, by adding Subsection (e), to
authorize the comptroller to revoke a distributor's or supplier's permit if
the distributor or supplier purchases, for export, motor fuel in this state
on which the tax imposed by this chapter has not been paid and subsequently
diverts or causes the fuel to be diverted to a destination in this state or
to a destination in another state or country other than the originally
designated state or country without first obtaining a diversion number.
SECTION 5. Amends Section 153.010, Tax Code, to authorize the
comptroller or a peace officer, in order to enforce the provisions of this
chapter, to stop a motor vehicle that appears to operating with or
transporting fuel in order to examine the shipping document, cargo
manifest, or invoices required to be carried and make any other
investigation that could reasonably be make to determine whether the taxes
have been paid or accounted for by a distributor, supplier, dealer, dyed
diesel fuel bonded user, agricultural bonded user, jobber, or any person
required to be so permitted. Authorizes the certain persons to take
samples of motor fuel from any storage tank or container to draw certain
conclusions.
SECTION 6. Amends Section 153.013(a), Tax Code, to provide that a
distributor, supplier, dealer, interstate trucker, jobber, dyed diesel fuel
bonded user, or agricultural bonded user 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 certain entities. Makes conforming
changes.
SECTION 7. Amends Chapter 153A, Tax Code, by adding Section 153.018, to
prohibit a person from importing fuel to a destination in this state or
export motor fuel to a destination outside of this state by any means
unless the person possesses a shipping document for that fuel created by
the terminal or bulk plant at which the fuel was received. Sets forth the
information required to be included in the shipping document. Requires the
terminal or bulk plant to provide shipping documents to the importer or
exporter. Requires the terminal to document the split loads by issuing
shipping documents that list the destination state of each portion of the
motor fuel, if motor fuel is to be delivered to more than one state. Sets
forth required actions to be taken by a terminal, a bulk plant, the
carrier, the permitted distributor or supplier, and the person that
received the motor fuel. Requires an importer or exporter to keep in the
person's possession, the shipping document issued by the terminal or bulk
plant when transporting motor fuel imported into this state or for export
from this state. Requires the importer or exporter to show the document to
the comptroller or a peace officer on request. Authorizes the comptroller
to delegate authority to inspect the document to other governmental
agencies. Requires the importer or exporter to provide a copy of the
shipping document to the person that receives the fuel when it is
delivered. Authorizes the importer or exporter to deliver motor fuel only
to the destination state or states indicated on the shipping document.
Requires an importer or exporter who wants to divert the delivery of a
single cargo tank of motor fuel form the destination state printed on the
shipping document to obtain a diversion number from the comptroller before
diverting the delivery. Requires the importer, exporter, or common carrier
to write the diversion number on the shipping document issued for the fuel.
Requires a diversion number for each diverted delivery. Authorizes the
comptroller to appoint a person to assign diversion numbers or may
delegate that authority to another person. Requires an importer that
acquires motor fuel for import by cargo tank to obtain an import
verification number from the comptroller before importing the motor fuel.
Requires the importer to write the import verification number on the
shipping document issued for the fuel. Requires the importer to obtain a
separate import confirmation number for each cargo tank delivery of motor
fuel into this state. Authorizes the comptroller to appoint a person to
assign import verification numbers or may delegate that authority to
another person. Requires each terminal post to post a notice in a
conspicuous location proximate to the point of receipt of shipping papers
that describes the duties of importers and exporters. Authorizes the
comptroller to prescribe the language, type, style, and format of the
notice.
SECTION 8. Amends Section 153.112(a), Tax Code, to require, rather than
authorize, the comptroller to cancel a distributor's permit if no purchase,
sale, or use of gasoline has been reported by the distributor for the prior
9 months, rather than 12 months.
SECTION 9. Amends Section 153.117(a), Tax Code, to require a distributor
to keep a record showing the number of gallons of an itemized statement
showing by load, a certain number of gallons of all gasoline.
SECTION 10. Amends Section 153.118(a), Tax Code, to require, on or before
the 25th day of each month, a distributor or other person liable to this
state for payment of the tax imposed under this chapter to file all reports
and supplements. Requires the report to be executed by the distributor,
the distributor's representative, or any other person required to report
and shall be filed with the comptroller in a manner or on a form provided
or approved by the comptroller. Provides that the failure of a distributor
or other person to obtain forms or software form the comptroller is no
excuse for the failure to file a report containing all the information
required to be reported.
SECTION 11. Amends Section 153.203, Tax Code, to provide that the tax
imposed by this subchapter does not apply to diesel fuel sold or delivered
by a permitted supplier to another permitted supplier or to the bulk
storage facility of an agricultural bonded user, or dyed diesel fuel sold
or delivered by a permitted supplier to the bulk storage facility of a dyed
diesel fuel bonded user.
SECTION 12. Amends Section 153.205, Tax Code, by amending Subsections (a),
(b), (c), (e), (i), and (j), and by adding Subsection (k), as follows:
(a) Provides that the first sale or use of diesel fuel in this state is
taxable, except that sales of dyed diesel fuel, or of undyed diesel fuel if
the fuel will be used for an agricultural purpose, may be made without
collecting the tax if the purchaser furnishes to a permitted supplier a
signed statement, including an end user number or agricultural user
exemption number issued by the comptroller that includes certain
stipulations. Deletes text providing that the first sale or use of diesel
fuel in this state is taxable, except that the sale of diesel fuel, may be
made without collecting the tax if the purchaser furnishes to a permitted
supplier a signed statement.
(b) Prohibits a person from making a tax-free purchase of any diesel fuel
under this section using a signed statement for the purchase of more than
3,000 gallons of dyed or undyed diesel fuel in a single transaction. Makes
a conforming change.
(c) Provides that the signed statement and end user number or agricultural
user exemption number from the purchaser relieves the permitted supplier
from the burden of proof that the sale of diesel fuel was not taxable to
the purchaser and remains in effect unless certain conditions are met.
(e) Authorizes a person, however, to claim a refund of the tax paid on any
undyed diesel fuel used for nonhighway purposes under Section 153.222.
Makes conforming changes.
(i) Prohibits a supplier from making a tax-free sale of dyed diesel fuel,
or undyed diesel fuel for agricultural purposes, to a purchaser using a
signed statement. Makes conforming changes.
(j) Authorizes the sale of dyed diesel fuel, or undyed diesel fuel for
agricultural purposes, to be made without collecting tax from a purchaser,
rather than to a purchaser, who operates one or more motor vehicles on the
public highway and who furnishes to a permitted supplier a signed statement
and end user number or agricultural user exemption number only as provided
in this subsection. Makes conforming changes.
(k) Requires a person who wants to use a signed statement to purchase dyed
diesel fuel to apply to the comptroller for an end user number to be used
in conjunction with a signed statement. Requires a person who wants to use
a signed statement to purchase dyed or undyed diesel fuel for agricultural
purposes to apply to the comptroller for an agricultural user exemption
number to be used in conjunction with a signed statement. Prohibits a
person from making a tax-free sale of any diesel fuel to a purchaser using
a signed statement unless the purchaser has an end user number or
agricultural user exemption number issued by the comptroller under this
subsection.
SECTION 13. Amends Section 153.206(i), Tax Code, to provide that a dyed
diesel fuel bonded user, an agricultural bonded user, or a permitted
interstate trucker is entitled to deduct one-half of one percent of the
taxable gallons of diesel fuel on payment of the taxes to this state for
the expense of recordkeeping, reporting, and remitting the tax.
SECTION 14. Amends Section 153.207(a), Tax Code, to make a conforming
change.
SECTION 15. Amends Section 153.208(b), Tax Code, to make a conforming
change.
SECTION 16. Amends Section 153.209, Tax Code, as follows:
Sec. 153.209. New heading: DYED DIESEL FUEL BONDED USER AND AGRICULTURAL
BONDED USER PERMITS. Provides that a dyed diesel fuel bonded user permit
authorizes a user to purchase more than 10,000 gallons a month of dyed
diesel fuel for the user's own use. Provides that an agricultural bonded
user permit authorizes a user to purchase more than 10,000 gallons of dyed
and undyed diesel fuel for the user's own use for agricultural purposes
only.
SECTION 17. Amends Section 153.210, Tax Code, to provide that a diesel tax
prepaid user permit authorizes a person whose use of diesel fuel is
predominantly for agricultural nonhighway use, but owns or operates one or
more passenger cars or light trucks only in the weight class shown in this
section to elect to prepay an annual tax on the fuel delivered form his own
tax-free storage rather than obtain an agricultural bonded user permit.
SECTION 18. Amends Section 153.214, Tax Code, to authorize a supplier to
operate under the supplier's permit as a dyed diesel fuel bonded user,
agricultural bonded user, dealer, or aviation fuel dealer.
SECTION 19. Amends Section 153.215, Tax Code, to provide that a
supplier's permit, a dyed diesel fuel bonded user permit, and an
agricultural bonded user permit are permanent and valid as long as the
permittee has in force and effect the required bond or security and
furnishes timely reports and supplements as required. Requires the
comptroller to cancel a permit if no purchase, sale, or use of diesel fuel
has been reported by the permittee for 9 months. Deletes text authorizing
the comptroller to cancel a supplier's or bonded user's permit if no
purchase, sale, or use of diesel fuel has been reported by the supplier or
bonded user for 12 months.
SECTION 20. Amends Section 153.217(a), Tax Code, to provide that a diesel
fuel bonded user on the list is qualified to purchase dyed diesel fuel tax
free during the following calendar year. Makes conforming changes.
SECTION 21. Amends Section 153.217(a), Tax Code, to require the
comptroller to notify immediately the issuer of a letter of credit of a
final determination of the supplier's, dyed diesel fuel bonded user's, or
agricultural bonded user's delinquent liability or a judgment secured in
any action. Makes conforming changes.
SECTION 22. Amends Section 153.219, Tax Code, by amending Subsections (a)
and (c), and adding Subsection (j), as follows:
(a) Requires a supplier to keep a record showing the number of gallons of
all diesel fuel sold, distributed, or used no which the tax was paid,
showing the name of each purchaser and the date of sale, distribution, or
use.
(b) Makes conforming changes.
(c) Sets forth the information a supplier is required to keep in itemized
statements.
SECTION 23. Amends Section 153.219, Tax Code, to make conforming changes.
SECTION 24. Amends Section 153.221(a) and (b), Tax Code, to require, on or
before the 25th day of each month, a supplier, a dealer required to collect
the tax under Section 153.206(b), or a user required to pay the tax under
Section 153.206(c) to file a report of diesel fuel transactions or of
diesel fuel delivered by a user into the fuel tank of a motor vehicle owned
or operated by the user and such supplements as the comptroller may require
and remit the amount of tax required to be collected or to be paid during
the preceding month. Requires a report to be filed on a form or in a
manner provided by the comptroller and to contain information required by
the comptroller, showing complete and detailed information of diesel fuel
transactions or use during the preceding month. Provides that the failure
of a supplier, dealer, or user to obtain forms or software from the
comptroller is no excuse for the failure to file a report. Requires, on or
before the 25th day of each month following the end of each calendar
quarter, a dyed diesel fuel bonded user, an agricultural bonded user, or an
interstate trucker to file a report and remit the amount of tax due.
Deletes text requiring, on or before the 25th day of each month following
the end of each calendar quarter, a bonded user or interstate trucker to
file a report and remit the amount of tax due. Makes conforming changes.
SECTION 25. Amends Section 153.222(d), Tax Code, to make conforming
changes.
SECTION 26. Amends Section 153.223(a), Tax Code, to prohibit a permitted
supplier from filing a claim for refund of taxes paid by a purchaser of
undyed diesel fuel.
SECTION 27. Amends Section 153.224(d), Tax Code, to make conforming
changes.
SECTION 28. Amends Chapter 153C, Tax Code, by adding Sections
1653.226-153.230, as follows:
Sec. 153.226. NOTICE REGARDING DYED DIESEL FUEL. Sets forth the required
uses of a notice stating "DYED DIESEL FUEL, NONTAXABLE USE ONLY, PENALTY
FOR TAXABLE USE."
Sec. 153.227. DYED DIESEL FUEL NOTICE REQUIRED ON SHIPPING DOCUMENTS,
BILLS OF LADING, AND INVOICES. Requires the form of notice required by
Sections 153.226(1) and (2) to be provided when the dyed diesel fuel is
removed or sold and must appear on each shipping document, bill of lading,
cargo manifest, and invoice accompanying the sale or removal of the dyed
diesel fuel.
Sec. 153.228. UNAUTHORIZED SALE OR USE OF DYED DIESEL FUEL. 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 a taxable use of the diesel fuel.
Prohibits a person from using or holding for use dyed diesel fuel for a use
other than a nontaxable use if the person knows or has reason to know that
the diesel fuel is dyed diesel fuel.
Sec. 153.229. ALTERATION OF DYE OR MARKER IN DYED DIESEL FUEL PROHIBITED.
Prohibits a person, with the intent to evade payment of tax, from altering
or attempting to alter the strength or composition of a dye or marker in
dyed diesel fuel.
Sec. 153.230. USE OF DYED FUEL PROHIBITED. Prohibits a person from
operating a motor vehicle on a public highway in this state with taxable
motor fuel that contains dye in the fuel supply tank of the motor vehicle.
Provides that this section does not apply to a use of dyed fuel that is
lawful under the Internal Revenue Code and implementing regulations.
SECTION 29. Amends Section 153.401(a), Tax Code, to make a conforming
change.
SECTION 30. Amends Section 153.402, Tax Code, to provide that a person
forfeits to the state a civil penalty of not less than $25 nor more than
$200, if the person is an importer who does not obtain an import
verification number when required by this chapter or purchases motor fuel
for export, on which the tax imposed by this chapter has not been paid, and
subsequently diverts or causes to motor fuel to be diverted to a
destination in this state or any other state or country other than the
originally designated state or country without first obtaining a diversion
number. Provides that an importer or exporter that violates a requirement
of Section 153.018 is liable to this state for a civil penalty of $2,000 or
five times the amount of the unpaid tax, whichever is greater, for each
violation. Provides that a person receiving motor fuel who accepts a
shipping document that does not conform with the requirements of Section
153.018(a) is liable to this state for a civil penalty of $2,000 or five
times the amount of the unpaid tax, whichever is greater, for each
occurrence. Provides that a person operating a bulk plant or terminal who
issues a shipping document that does not conform with the requirements of
Section 153.018(a) is liable to this state for a civil penalty of $2,000 or
five times the amount of the unpaid tax, whichever is greater, for each
occurrence. Provides that a person operating a terminal or bulk plant who
does not post notice as required by Section 153.018(i) is liable to this
state for a civil penalty of $100 for each day the notice is not posted as
required by Section 153.018(i).
SECTION 31. Amends Section 153.403, Tax Code, to provide that, except a
provided by Section 153.404 of this code, a person commits an offense if
the person uses dyed diesel fuel, on which a tax is required to be paid,
for the operation of a motor vehicle on a public highway; is an importer
who does not obtain an import verification number when required by this
chapter; purchases motor fuel for export, on which the tax imposed by this
chapter has not been paid, and subsequently diverts or causes to be
diverted to a destination in this state or any other state or country other
than the originally designated state or country without first obtaining a
diversion number; is a distributor, supplier, dyed diesel fuel bonded user,
agricultural bonded user, dealer, interstate trucker, aviation fuel dealer,
jobber, or other person required to hold a permit under this chapter who
fails to retain a document as required by this chapter; transports in any
manner motor fuel under a false cargo manifest or shipping document, or
transports in any manner motor fuel to a location without delivering at the
same time a shipping document relating to that shipment; is a dealer who
purchases motor fuel with the intent to evade any tax imposed by this
chapter, or who accepts delivery of motor fuel by any means and does not at
the same time accept or receive a shipping document relating to the
delivery; transports motor fuel for which a cargo manifest or shipping
document is required to be carried without possessing or exhibiting on
demand by an officer authorized to make the demand, a cargo manifest or
shipping document containing the information required to be shown on the
manifest or shipping document; imports, sells, uses, distributes, or store
motor fuel within this state on which the taxes imposed by this chapter are
owed but have not been first paid to or reported by the holder of a
distributor, supplier, liquefied gas dealer, interstate trucker, diesel tax
prepaid user, dyed diesel fuel bonded user, or agricultural bonded user
permit; blends products together to produce a blended fuel that is offered
for sale, sold, or used that expands the volume of the original product to
evade paying applicable motor fuel taxes; or evades or attempts to evade in
any manner, a tax imposed on motor fuel by this chapter. Deletes text
providing that, except as provided by Section 153.404 of this code, a
person commits an offense, if the person transports motor fuel for which a
cargo manifest is required to carried. Makes conforming changes.
SECTION 32. Amends Sections 153.404(b), (c), and (d), Tax Code, as follows:
(b) Provides that each day a refusal prohibited under Sections
153.403(13), (14), or (15) continues is a separate offense. Deletes text
providing that each day a refusal prohibited under Sections 153.403(12) or
(13) of this code continues is a separate offense.
(c) Provides that the prohibition under Section 153.403(32) does not apply
to the tax-free sale or distribution of diesel fuel authorized by Sections
153.203(1), (2), or (5). Deletes text providing that the prohibition under
Section 153.403(30) of this code does not apply to the taxfree sale or
distribution of diesel fuel authorized by Sections 153.203(1), (2), or (5)
of this code.
(d) Provides that the prohibition under Section 153.403(33) does not apply
to the tax-free sale or distribution of gasoline under Sections 153.104(2)
or (4). Deletes text providing that the prohibition under Section
153.403(31) of this code does not apply to the tax-free sale or
distribution of gasoline under Sections 153.104(2) or (4) of this code.
SECTION 33. Amends Section 153.405, Tax Code, as follows:
(a) Provides that an offense under Section 153.403(8), is a Class C
misdemeanor.
(b) Provides that an offense under Sections 153.403(9), (16), (17), or
(18) is a Class B misdemeanor. Deletes text providing that an offense
under Section 153.403(8), or (9) of this code is a Class B misdemeanor.
(c) Provides that an offense under Sections 153.403(19), (20) or (21) is a
Class A misdemeanor. Deletes text providing that an offense under Section
153.403(16), (17), (18), or (19) of this code is a Class A misdemeanor.
(d) Provides that an offense under Sections 153.403(22), (23), (28) or
(29) is a felony of the third degree. Deletes text providing that an
offense under Sections 153.403(20), (21), or (22) of this code is a felony
of the third degree.
(e) Provides that an offense under Sections 153.403(30), (34), (35), (36),
(37), (38), or (39) is a felony of the third degree. Deletes text
providing that an offense under Sections 153.403(28), (29) or (30) of this
code is a felony of the third degree.
(f) Provides that violations of three or more separate offenses under
Sections 153.403(22) through (2), rather than Sections 153.403(20) through
(27) of this code, committed pursuant to one scheme or continuous course of
conduct may be considered as one offense and punished as a felony of the
second degree.
SECTION 34. Effective date: September 1, 1999.
Makes application of this Act prospective.
SECTION 35.Emergency clause.
SUMMARY OF COMMITTEE CHANGES
SECTION 1.
Deletes proposed Chapter 161A, Title 2E, Tax Code, regarding motor fuel
taxes and general provisions and all corresponding sections. Redefines
"blended fuel," "blending," "diversion number," "dyed diesel fuel,"
"export," "import," "import verification number." Adds definitions for
"shipping document," and "undyed diesel fuel."