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A BILL TO BE ENTITLED
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AN ACT
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relating to the production and taxation of renewable diesel fuel. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. The heading to Chapter 16, Agriculture Code, is |
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amended to read as follows: |
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CHAPTER 16. FUEL ETHANOL, [AND] BIODIESEL, AND RENEWABLE |
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DIESEL PRODUCTION INCENTIVE PROGRAM |
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SECTION 2. Section 16.001, Agriculture Code, is amended by |
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amending Subdivisions (1) and (6) and adding Subdivision (7) to |
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read as follows: |
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(1) "Account" means the fuel ethanol, [and] biodiesel, |
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and renewable diesel production account. |
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(6) "Producer" means a person who operates a fuel |
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ethanol, [or] biodiesel, or renewable diesel plant in this state. |
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(7) "Renewable diesel" means a hydrocarbon that: |
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(A) is derived from vegetable oils, rendered |
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animal fats, renewable lipids, other biomass, or a combination of |
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those ingredients; and |
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(B) as produced, or when blended with other |
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diesel fuel components, meets the requirements of: |
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(i) ASTM D-975; or |
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(ii) Texas Low Emission Diesel. |
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SECTION 3. Sections 16.002(a) and (b), Agriculture Code, |
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are amended to read as follows: |
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(a) To be eligible for a grant for fuel ethanol, [or] |
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biodiesel, or renewable diesel produced in a plant, a producer must |
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apply to the office for the registration of the plant. A producer |
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may apply for the registration of more than one plant. |
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(b) An application for the registration of a plant must show |
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to the satisfaction of the office that: |
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(1) the plant is capable of producing fuel ethanol, |
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[or] biodiesel, or renewable diesel; |
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(2) the producer has made a substantial investment of |
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resources in this state in connection with the plant; and |
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(3) the plant constitutes a permanent fixture in this |
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state. |
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SECTION 4. Section 16.003(a), Agriculture Code, is amended |
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to read as follows: |
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(a) On or before the fifth day of each month, a producer |
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shall report to the office on: |
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(1) the number of gallons of fuel ethanol, [or] |
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biodiesel, or renewable diesel produced at each registered plant |
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operated by the producer during the preceding month; |
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(2) the number of gallons of fuel ethanol, [or] |
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biodiesel, or renewable diesel imported into this state by the |
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producer during the preceding month; |
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(3) the number of gallons of fuel ethanol, [or] |
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biodiesel, or renewable diesel sold or blended with motor fuels by |
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the producer during the preceding month; and |
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(4) the total value of agricultural products consumed |
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in each registered plant operated by the producer during the |
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preceding month. |
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SECTION 5. The heading to Section 16.004, Agriculture Code, |
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is amended to read as follows: |
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Sec. 16.004. FUEL ETHANOL, [AND] BIODIESEL, AND RENEWABLE |
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DIESEL PRODUCTION ACCOUNT. |
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SECTION 6. Section 16.004(a), Agriculture Code, is amended |
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to read as follows: |
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(a) The [fuel ethanol and biodiesel production] account is |
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an account in the general revenue fund that may be appropriated only |
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to the office for the purposes of this chapter, including the making |
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of grants under this chapter. |
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SECTION 7. The heading to Section 16.005, Agriculture Code, |
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is amended to read as follows: |
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Sec. 16.005. FEE ON FUEL ETHANOL, [AND] BIODIESEL, AND |
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RENEWABLE DIESEL PRODUCTION. |
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SECTION 8. Sections 16.005(a), (b), and (d), Agriculture |
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Code, are amended to read as follows: |
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(a) The office shall impose a fee on each producer in an |
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amount equal to 3.2 cents for each gallon of fuel ethanol, [or] |
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biodiesel, or renewable diesel produced in each registered plant |
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operated by the producer. |
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(b) For each fiscal year, the office may not impose fees on a |
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producer for more than 18 million gallons of fuel ethanol, [or] |
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biodiesel, or renewable diesel produced at any one registered |
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plant. |
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(d) The office may not impose fees on a producer for fuel |
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ethanol, [or] biodiesel, or renewable diesel produced at a |
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registered plant after the 10th anniversary of the date production |
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from the plant begins. |
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SECTION 9. Section 16.006, Agriculture Code, is amended to |
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read as follows: |
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Sec. 16.006. FUEL ETHANOL, [AND] BIODIESEL, AND RENEWABLE |
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DIESEL GRANTS. (a) The office, after consultation with the |
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department, shall make grants to producers as an incentive for the |
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development of the fuel ethanol, [and] biodiesel, and renewable |
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diesel industry and agricultural production in this state. |
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(b) A producer is entitled to receive from the account 20 |
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cents for each gallon of fuel ethanol, [or] biodiesel, or renewable |
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diesel produced in each registered plant operated by the producer |
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until the 10th anniversary of the date production from the plant |
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begins. |
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(c) For each fiscal year a producer may not receive grants |
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for more than 18 million gallons of fuel ethanol, [or] biodiesel, or |
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renewable diesel produced at any one registered plant. |
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(d) The office by rule shall provide for the distribution of |
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grant funds under this chapter to producers. The office shall make |
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grants not less often than quarterly. |
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(e) If the office determines that the amount of money |
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credited to the account is not sufficient to distribute the full |
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amount of grant funds to eligible producers as provided by this |
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chapter for a fiscal year, the office shall proportionately reduce |
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the amount of each grant for each gallon of fuel ethanol, [or] |
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biodiesel, or renewable diesel produced as necessary to continue |
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the incentive program during the remainder of the fiscal year. |
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SECTION 10. Section 162.001, Tax Code, is amended by |
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amending Subdivision (19) and adding Subdivision (53-a) to read as |
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follows: |
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(19) "Diesel fuel" means kerosene or another liquid, |
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or a combination of liquids blended together, that is suitable for |
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or used for the propulsion of diesel-powered motor vehicles. The |
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term includes products commonly referred to as kerosene, light |
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cycle oil, #1 diesel fuel, #2 diesel fuel, dyed or undyed diesel |
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fuel, aviation jet fuel, renewable diesel, biodiesel, distillate |
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fuel, cutter stock, or heating oil, but does not include gasoline, |
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aviation gasoline, or liquefied gas. |
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(53-a) "Renewable diesel" means a motor fuel or |
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mixture of motor fuels that is comprised of hydrocarbons and that |
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is: |
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(A) derived wholly or partly from agricultural |
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products, vegetable oils, recycled greases, biomass, or animal |
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fats, or the wastes of those products or fats; and |
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(B) advertised, offered for sale, suitable for |
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use, or used as a motor fuel in an internal combustion engine. |
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SECTION 11. Section 162.204(a), Tax Code, is amended to |
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read as follows: |
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(a) The tax imposed by this subchapter does not apply to: |
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(1) diesel fuel sold to the United States for its |
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exclusive use, provided that the exemption does not apply to diesel |
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fuel sold or delivered to a person operating under a contract with |
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the United States; |
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(2) diesel fuel sold to a public school district in |
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this state for the district's exclusive use; |
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(3) diesel fuel sold to a commercial transportation |
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company that provides public school transportation services to a |
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school district under Section 34.008, Education Code, and that uses |
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the diesel fuel only to provide those services; |
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(4) diesel fuel exported by either a licensed supplier |
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or a licensed exporter from this state to any other state, provided |
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that: |
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(A) for diesel fuel in a situation described by |
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Subsection (d), the bill of lading indicates the destination state |
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and the supplier collects the destination state tax; or |
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(B) for diesel fuel in a situation described by |
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Subsection (e), the bill of lading indicates the destination state, |
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the diesel fuel is subsequently exported, and the exporter is |
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licensed in the destination state to pay that state's tax and has an |
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exporter's license issued under this subchapter; |
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(5) diesel fuel moved by truck or railcar between |
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licensed suppliers or licensed permissive suppliers and in which |
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the diesel fuel removed from the first terminal comes to rest in the |
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second terminal, provided that the removal from the second terminal |
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rack is subject to the tax imposed by this subchapter; |
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(6) diesel fuel delivered or sold into a storage |
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facility of a licensed aviation fuel dealer from which the diesel |
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fuel will be delivered solely into the fuel supply tanks of aircraft |
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or aircraft servicing equipment, or sold from one licensed aviation |
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fuel dealer to another licensed aviation fuel dealer who will |
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deliver the diesel fuel exclusively into the fuel supply tanks of |
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aircraft or aircraft servicing equipment; |
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(7) diesel fuel exported to a foreign country if the |
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bill of lading indicates the foreign destination and the fuel is |
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actually exported to the foreign country; |
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(8) dyed diesel fuel sold or delivered by a supplier to |
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another supplier and dyed diesel fuel sold or delivered by a |
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supplier or distributor into the bulk storage facility of a dyed |
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diesel fuel bonded user or to a purchaser who provides a signed |
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statement as provided by Section 162.206; |
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(9) the volume of water, fuel ethanol, renewable |
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diesel, biodiesel, or mixtures thereof that are blended together |
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with taxable diesel fuel when the finished product sold or used is |
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clearly identified on the retail pump, storage tank, and sales |
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invoice as a combination of diesel fuel and water, fuel ethanol, |
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renewable diesel, biodiesel, or mixtures thereof; |
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(10) dyed diesel fuel sold by a supplier or permissive |
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supplier to a distributor, or by a distributor to another |
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distributor; |
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(11) dyed diesel fuel delivered by a license holder |
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into the fuel supply tanks of railway engines, motorboats, or |
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refrigeration units or other stationary equipment powered by a |
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separate motor from a separate fuel supply tank; |
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(12) dyed kerosene when delivered by a supplier, |
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distributor, or importer into a storage facility at a retail |
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business from which all deliveries are exclusively for heating, |
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cooking, lighting, or similar nonhighway use; or |
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(13) diesel fuel used by a person, other than a |
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political subdivision, who owns, controls, operates, or manages a |
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commercial motor vehicle as defined by Section 548.001, |
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Transportation Code, if the fuel: |
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(A) is delivered exclusively into the fuel supply |
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tank of the commercial motor vehicle; and |
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(B) is used exclusively to transport passengers |
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for compensation or hire between points in this state on a fixed |
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route or schedule. |
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SECTION 12. The change in law made by this Act does not |
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affect tax liability accruing before the effective date of this |
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Act. That liability continues in effect as if this Act had not been |
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enacted, and the former law is continued in effect for the |
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collection of taxes due and for civil and criminal enforcement of |
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the liability for those taxes. |
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SECTION 13. This Act takes effect September 1, 2007. |