SRC-CTC H.B. 1241 77(R)   BILL ANALYSIS


Senate Research Center   H.B. 1241
By: Counts (Duncan)
Business & Commerce
5/9/2001
Engrossed


DIGEST AND PURPOSE 

Current law prohibits a tax-free purchase or sale of any diesel fuel of
more than 3,000 gallons in a single transaction or in a calendar month in
which the person has purchased more than 10,000 gallons of diesel fuel
unless the person holds a bonded user permit.  The regulations associated
with the purchase or sale of diesel fuel, such as requiring a bonded user
permit, are becoming increasingly burdensome to both purchasers and
suppliers while doing little to control the illegal use of diesel fuel by
the consumer.  H.B. 1241 changes the minimum bonding requirement for the
purchase of red dyed tax exempt diesel fuel for certain agricultural and
oil and gas users.  

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to a
state officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Sections 153.205(a), (b), and (i), Tax Code, to provide
that a purchaser of dyed diesel fuel may make the purchase without a tax
being placed on it if all of the diesel fuel will be consumed by the
purchaser in oil or gas production, as applicable. 

(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 7,400, rather than 3,000, gallons of dyed or
undyed diesel fuel in a single transaction; or 

_in a calendar month in which the person has previously purchased certain
quantities of dyed or undyed diesel fuel from all sources. 

 (i) Makes conforming changes.

SECTION 2. Amends Section 153.209, Tax Code, to provide that this section
does not affect the right of a purchaser to purchase not more than 25,000
gallons of dyed diesel fuel for the purchaser's own use in oil or gas
production, or of dyed or undyed diesel fuel for the purchaser's own use
for agricultural purposes only, using a signed statement under Section
153.205. 

SECTION 3.  Effective date: September 1, 2001.
  Makes application of this Act prospective.