BILL ANALYSIS
By: Villarreal
Committee Report (Substituted)
BACKGROUND AND PURPOSE
Texas school districts are allowed to contract with a metropolitan rapid transit authority or a commercial transportation company for all or any part of a district’s public school transportation services. However, when providing this public school transportation service, a commercial transportation company receives an exemption from state fuel taxes, while a metropolitan rapid transit authority providing the same services pays the state fuel tax.
Committee Substitute House Bill 1620 would provide a metropolitan rapid transit authority with the same fuel tax exemption for public school transportation services as the exemption provided to a private transportation company providing the same services. In addition, CSHB 1620 develops a mechanism for determining the appropriate refund permissible to such metropolitan rapid transit authority for the purchase of gasoline, diesel fuel, and liquefied gas.
RULEMAKING AUTHORITY
It is the committee's opinion that rulemaking authority is expressly granted to the comptroller in SECTION 8 of this bill.
ANALYSIS
SECTION 1. Amends Section 162.104 (a), Tax Code, to establish that the gasoline tax does not apply to a metropolitan rapid transit authority that provides public school transportation services subject to Section 34.008, Education Code, and that uses the gasoline only to provide those services.
SECTION 2. Amends Chapter 162.125 (a), Tax Code, to include a metropolitan rapid transit authority in the list of entities for which a license holder can take a credit on taxes paid for the purchase of gasoline if it does not collect the tax from a repurchasing entity. It provides that such a return on the sale of gasoline can only be justified for that gasoline specifically used to furnish services to public schools.
SECTION 3. Refers to a tax credit for the purchase of gasoline. It establishes the mechanism for determining the appropriate gasoline tax refund for a metropolitan rapid transit authority that contracts directly with a school district to transport its students. If any month of the year the non-student ridership of a specific route exceeds 5%, the metropolitan rapid transit authority will not be eligible for a gasoline tax refund for that route on that particular month. A metropolitan rapid transit authority must submit a refund claim to the comptroller and maintain all supporting documentation for 6 years. The refund request must include:
(1) vehicle mileage;
(2) hours of services provided;
(3) fuel consumed;
(4) the total number of student passengers per route; and
(5) the total number of non-student passengers per route.
SECTION 4. Amends Chapter 162.204(a), Tax Code, to establish that the diesel fuel tax does not apply to a metropolitan rapid transit authority that provides public school transportation services subject to Section 34.008, Education Code, and that uses the diesel fuel only to provide those services.
SECTION 5. Amends Chapter 162.227 (a), Tax Code, to include a metropolitan rapid transit authority in the list of entities for which a license holder can take a credit on taxes paid for the purchase of diesel if it does not collect the tax from a repurchasing entity. It provides that such a return on the sale of diesel can only be justified for that fuel specifically used to furnish services to public schools.
SECTION 6. Refers to a tax credit for the purchase of diesel. It establishes the mechanism for determining the appropriate diesel tax refund under this Act. The mechanism is the same as established by SECTION 3.
SECTION 7. Amends Chapter 162.3021 (b), Tax Code, to establish that, subject to Section 162.3022, the liquefied petroleum gas tax does not apply to a metropolitan rapid transit authority that uses the gas exclusively to provide public school transportation services subject to Section 34.008, Education Code, or the use of liquefied petroleum gas by that authority for that purpose. Furthermore, it establishes that a motor vehicle owned by such an authority and used exclusively for such purpose is not required to have a liquefied petroleum gas tax decal or a special use liquefied gas tax decal.
SECTION 8. Refers to a tax credit for the purchase of liquefied petroleum gas. It establishes the mechanism for determining the appropriate fuel tax refund under this Act. The mechanism is the same as established by SECTION 3.
SECTION 9. Makes application of this Act prospective.
SECTION 10. Effective date.
EFFECTIVE DATE
This Act takes effect July 1, 2007, if it receives a vote of two-thirds of all the members elected to each house, as provided by Section 39, Article III, Texas Constitution. If this Act does not receive the vote necessary for effect on that date, this Act takes effect October 1, 2007.
COMPARISON OF ORIGINAL TO SUBSTITUTE
CSHB 1620 strikes language from HB 1620 that amends 162.25 (c) by adding metropolitan rapid transit authorities to the list of non-license holding entities that may request a refund from the Comptroller.
Instead, CSHB 1620 provides that a metropolitan rapid transit authority that contracts directly with a school district to transport students may receive a refund for the fuel purchased and consumed exclusively for this service provided it files a refund claim with the comptroller. The refund claim must list information pertaining to the mileage, gas consumed, hours of operation, the number of student passengers, and the number of non-student passengers. The metropolitan rapid transit authority must maintain these records for 6 years after the date of the refund request. If during any month of the year, a route reports non-student ridership exceeding 5%, then the metropolitan rapid transit authority will not be eligible for a fuel tax refund for that route on that particular month.