79R3064 CBH-D

By:  Wong                                                         H.B. No. 1070



A BILL TO BE ENTITLED

AN ACT

relating to an exemption from the motor fuels tax for certain 
kerosene.     
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Section 162.204(a), Tax Code, is amended to read 
as follows:     
	(a)  The tax imposed by this subchapter does not apply to:                     
		(1)  diesel fuel sold to the United States for its 
exclusive use, provided that the exemption does not apply to diesel 
fuel sold or delivered to a person operating under a contract with 
the United States;
		(2)  diesel fuel sold to a public school district in 
this state for the district's exclusive use;
		(3)  diesel fuel sold to a commercial transportation 
company that provides public school transportation services to a 
school district under Section 34.008, Education Code, and that uses 
the diesel fuel only to provide those services;
		(4)  diesel fuel exported by either a licensed supplier 
or a licensed exporter from this state to any other state, provided 
that:
			(A)  for diesel fuel in a situation described by 
Subsection (d), the bill of lading indicates the destination state 
and the supplier collects the destination state tax;  or
			(B)  for diesel fuel in a situation described by 
Subsection (e), the bill of lading indicates the destination state, 
the diesel fuel is subsequently exported, and the exporter is 
licensed in the destination state to pay that state's tax and has an 
exporter's license issued under this subchapter;
		(5)  diesel fuel moved by truck or railcar between 
licensed suppliers or licensed permissive suppliers and in which 
the diesel fuel removed from the first terminal comes to rest in the 
second terminal, provided that the removal from the second terminal 
rack is subject to the tax imposed by this subchapter;
		(6)  diesel fuel delivered or sold into a storage 
facility of a licensed aviation fuel dealer from which the diesel 
fuel will be delivered solely into the fuel supply tanks of aircraft 
or aircraft servicing equipment, or sold from one licensed aviation 
fuel dealer to another licensed aviation fuel dealer who will 
deliver the diesel fuel exclusively into the fuel supply tanks of 
aircraft or aircraft servicing equipment;
		(7)  diesel fuel exported to a foreign country if the 
bill of lading indicates the foreign destination and the fuel is 
actually exported to the foreign country;
		(8)  dyed diesel fuel sold or delivered by a supplier to 
another supplier and dyed diesel fuel sold or delivered by a 
supplier or distributor into the bulk storage facility of a dyed 
diesel fuel bonded user or to a purchaser who provides a signed 
statement as provided by Section 162.206;
		(9)  the volume of water, fuel ethanol, biodiesel, or 
mixtures thereof that are blended together with taxable diesel fuel 
when the finished product sold or used is clearly identified on the 
retail pump, storage tank, and sales invoice as a combination of 
diesel fuel and water, fuel ethanol, biodiesel, or mixtures 
thereof;
		(10)  dyed diesel fuel sold by a supplier or permissive 
supplier to a distributor, or by a distributor to another 
distributor;
		(11)  dyed diesel fuel delivered by a license holder 
into the fuel supply tanks of railway engines, motorboats, or 
refrigeration units or other stationary equipment powered by a 
separate motor from a separate fuel supply tank;
		(12)  dyed kerosene when delivered by a supplier, 
distributor, or importer into a storage facility at a retail 
business from which all deliveries are exclusively for heating, 
cooking, lighting, or similar nonhighway use; [or]
		(13)  dyed or undyed kerosene that is used or consumed 
in manufacturing or that is a component part of a product that is 
not a motor fuel; or
		(14) diesel fuel used by a person, other than a 
political subdivision, who owns, controls, operates, or manages a 
commercial motor vehicle as defined by Section 548.001, 
Transportation Code, if the fuel:
			(A)  is delivered exclusively into the fuel supply 
tank of the commercial motor vehicle; and
			(B)  is used exclusively to transport passengers 
for compensation or hire between points in this state on a fixed 
route or schedule.
	SECTION 2.  Section 162.227, Tax Code, is amended by adding 
Subsection (j) to read as follows:
	(j)  A license holder may take a credit on a return for the 
period in which the purchase occurred, and a person who does not 
hold a license under this subchapter may file a refund claim with 
the comptroller, if the license holder or person paid tax on 
kerosene and the license holder or person uses the kerosene for a 
purpose exempted under Section 162.204(a)(13).
	SECTION 3.  The change in law made by this Act does not 
affect tax liability accruing before the effective date of this 
Act.  That liability continues in effect as if this Act had not been 
enacted, and the former law is continued in effect for the 
collection of taxes due and for civil and criminal enforcement of 
the liability for those taxes.
	SECTION 4.  This Act takes effect September 1, 2005.