85R10288 CBH-F

By: Shine H.B. No. 2925

A BILL TO BE ENTITLED

AN ACT

relating to the administration of gasoline and diesel fuel motor fuels taxes and the fee on the delivery of certain petroleum products.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 162.012(a), Tax Code, is amended to read as follows:

(a) A person licensed under this chapter or required to be licensed under this chapter, or other user, who fails to keep a record, issue an invoice, or file a return or 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 the license holder or other user. Motor fuel unaccounted for is presumed to have been sold or used for taxable purposes. If an exporter claims an exemption under Section 162.104(a)(4) [162.104(a)(4)(B)] or 162.204(a)(4) [162.204(a)(4)(B)] and fails to report subsequent tax-free sales in this state of the motor fuel for which the exemption was claimed as required by Section 162.1155 or 162.2165, or to produce proof of payment of tax to the destination state or proof that the transaction was exempt in the destination state, the exporter is presumed to have not paid the destination state's tax or this state's tax on the [exported] motor fuel and the comptroller shall assess the tax imposed by this chapter on the [exported] motor fuel against the exporter. The comptroller may fix or establish the amount of taxes, penalties, and interest due this state from the records of deliveries or from any records or information available. If a tax claim, as developed from this procedure, is not paid, after the opportunity to request a redetermination, the claim and any audit made by the comptroller or any report filed by the license holder or other user is evidence in any suit or judicial proceedings filed by the attorney general and is prima facie evidence of the correctness of the claim or audit. A prima facie presumption of the correctness of the claim may be overcome at the trial by evidence adduced by the license holder or other user.

SECTION 2. Section 162.101, Tax Code, is amended by adding Subsection (e-1) to read as follows:

(e-1) If gasoline exempt from taxation under Section 162.104(a)(4) or (7) is sold in this state to a person who does not hold a license under Section 162.105(1), (2), (3), (4), or (6):

(1) the gasoline loses its tax-exempt status and a tax is imposed on the gasoline at the time of sale; and

(2) the person selling the gasoline is liable for and shall collect the tax.

SECTION 3. Sections 162.104(a), (d), and (f), Tax Code, are amended to read as follows:

(a) The tax imposed by this subchapter does not apply to gasoline:

(1) sold to the United States for its exclusive use, provided that the exemption does not apply with respect to fuel sold or delivered to a person operating under a contract with the United States;

(2) sold to a public school district in this state for the district's exclusive use;

(3) sold to a commercial transportation company or a metropolitan rapid transit authority operating under Chapter 451, Transportation Code, that provides public school transportation services to a school district under Section 34.008, Education Code, and that uses the gasoline only to provide those services;

(4) exported by either a licensed supplier or a licensed exporter from this state to any other state, provided that[:

[(A) for gasoline 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 gasoline in a situation described by Subsection (e), the bill of lading indicates the destination state, the gasoline 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) moved by truck or railcar between licensed suppliers or licensed permissive suppliers and in which the gasoline 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) delivered or sold into a storage facility of a licensed aviation fuel dealer from which gasoline 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 aviation fuel exclusively into the fuel supply tanks of aircraft or aircraft servicing equipment;

(7) 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) sold to a volunteer fire department in this state for the department's exclusive use; or

(9) sold to a nonprofit entity that is organized for the sole purpose of and engages exclusively in providing emergency medical services and that uses the gasoline exclusively to provide emergency medical services, including rescue and ambulance services.

(d) Subsection (a)(4) [(a)(4)(A)] applies only if the destination state recognizes, by agreement with this state or by statute or rule, a supplier in this state as a valid taxpayer for the motor fuel being exported to that state from this state. The comptroller shall publish a list that specifies for each state, other than this state, whether that state does or does not qualify under this subsection.

(f) The exemption provided by Subsection (a)(4) [(a)(4)(A)] does not apply to a sale by a distributor.

SECTION 4. Section 162.115(d), Tax Code, is amended to read as follows:

(d) An exporter shall keep:

(1) a record showing the number of gallons of:

(A) all gasoline inventories on hand at the first of each month;

(B) all gasoline compounded or blended;

(C) all gasoline purchased or received, showing the name of the seller and the date of each purchase or receipt;

(D) all gasoline sold, distributed, or used, showing the name of the purchaser and the date of the sale or use; and

(E) all gasoline lost by fire, theft, or accident;

(2) an itemized statement showing by load the number of gallons of all gasoline:

(A) received during the preceding calendar month for export and the location of the loading; and

(B) exported from this state by destination state or country;

(3) proof of payment of tax to the destination state in a form acceptable to the comptroller; and

(4) if an exemption under Section 162.104(a)(4) [162.104(a)(4)(B)] is claimed, proof of payment of tax to the destination state or proof that the transaction was exempt in the destination state, in a form acceptable to the comptroller.

SECTION 5. Subchapter B, Chapter 162, Tax Code, is amended by adding Section 162.1155 to read as follows:

Sec. 162.1155. DUTY TO REPORT SUBSEQUENT SALES OF TAX-FREE GASOLINE PURCHASED FOR EXPORT. (a) A person who purchases or removes gasoline tax-free under Section 162.104(a)(4) or (7) and before export sells the gasoline in this state tax-free to a person who holds a license under Section 162.105(1), (2), (3), (4), or (6), shall report that transaction to the comptroller as required by this section. If the gasoline is subsequently sold one or more times in this state before export and tax-free to a person who holds a license under Section 162.105(1), (2), (3), (4), or (6), each seller shall report the transaction to the comptroller as required by this section.

(b) Each person who sells tax-free gasoline in this state in a transaction described by Subsection (a) must provide to the comptroller:

(1) the bill of lading number issued at the terminal;

(2) the terminal control number;

(3) the date the gasoline was removed from the terminal;

(4) the number of gallons invoiced; and

(5) any other information required by the comptroller.

(c) The sales invoice for each transaction described by Subsection (a) must include:

(1) the name of the seller and purchaser; and

(2) the original bill of lading number.

(d) A person required to report a transaction under Subsection (a) shall report the transaction on a form prescribed by the comptroller and with the return required by Section 162.114.

SECTION 6. Section 162.201, Tax Code, is amended by adding Subsection (e-1) to read as follows:

(e-1) If diesel fuel exempt from taxation under Section 162.204(a)(4) or (7) is sold in this state to a person who does not hold a license under Section 162.205(1), (2), (3), (4), or (6):

(1) the diesel fuel loses its tax-exempt status and a tax is imposed on the diesel fuel at the time of sale; and

(2) the person selling the diesel fuel is liable for and shall collect the tax.

SECTION 7. Sections 162.204(a), (d), and (f), Tax Code, are 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 or a metropolitan rapid transit authority operating under Chapter 451, Transportation Code, 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, renewable diesel, 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, renewable diesel, 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;

(13) 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;

(14) diesel fuel sold to a volunteer fire department in this state for the department's exclusive use; or

(15) diesel fuel sold to a nonprofit entity that is organized for the sole purpose of and engages exclusively in providing emergency medical services and that uses the diesel fuel exclusively to provide emergency medical services, including rescue and ambulance services.

(d) Subsection (a)(4) [(a)(4)(A)] applies only if the destination state recognizes, by agreement with this state or by statute or rule, a supplier in this state as a valid taxpayer for the motor fuel being exported to that state from this state. The comptroller shall publish a list that specifies for each state, other than this state, whether that state does or does not qualify under this subsection.

(f) The exemption provided by Subsection (a)(4) [(a)(4)(A)] does not apply to a sale by a distributor.

SECTION 8. Section 162.216(d), Tax Code, is amended to read as follows:

(d) An exporter shall keep:

(1) a record showing the number of gallons of:

(A) all diesel fuel inventories on hand at the first of each month;

(B) all diesel fuel compounded or blended;

(C) all diesel fuel purchased or received, showing the name of the seller and the date of each purchase or receipt;

(D) all diesel fuel sold, distributed, or used, showing the name of the purchaser and the date of the sale or use; and

(E) all diesel fuel lost by fire, theft, or accident;

(2) an itemized statement showing by load the number of gallons of all diesel fuel:

(A) received during the preceding calendar month for export and the location of the loading; and

(B) exported from this state, by destination state or country;

(3) proof of payment of tax to the destination state in a form acceptable to the comptroller; and

(4) if an exemption under Section 162.204(a)(4) [162.204(a)(4)(B)] is claimed, proof of payment of tax to the destination state or proof that the transaction was exempt in the destination state, in a form acceptable to the comptroller.

SECTION 9. Subchapter C, Chapter 162, Tax Code, is amended by adding Section 162.2165 to read as follows:

Sec. 162.2165. DUTY TO REPORT SUBSEQUENT SALES OF TAX-FREE DIESEL FUEL PURCHASED FOR EXPORT. (a) A person who purchases or removes diesel fuel tax-free under Section 162.204(a)(4) or (7) and before export sells the diesel fuel in this state tax-free to a person who holds a license under Section 162.205(1), (2), (3), (4), or (6), shall report that transaction to the comptroller as required by this section. If the diesel fuel is subsequently sold one or more times in this state before export and tax-free to a person who holds a license under Section 162.205(1), (2), (3), (4), or (6), each seller shall report the transaction to the comptroller as required by this section.

(b) Each person who sells tax-free diesel fuel in this state in a transaction described by Subsection (a) must provide to the comptroller:

(1) the bill of lading number issued at the terminal;

(2) the terminal control number;

(3) the date the diesel fuel was removed from the terminal;

(4) the number of gallons invoiced; and

(5) any other information required by the comptroller.

(c) The sales invoice for each transaction described by Subsection (a) must include:

(1) the name of the seller and purchaser; and

(2) the original bill of lading number.

(d) A person required to report a transaction under Subsection (a) shall report the transaction on a form prescribed by the comptroller and with the return required by Section 162.215.

SECTION 10. Section 162.401, Tax Code, is amended by adding Subsection (e) to read as follows:

(e) In addition to any other penalty authorized by this section, a person who fails to report a subsequent sale in this state of tax-free motor fuel purchased for export as required by Section 162.1155 or 162.2165 shall pay for each sale that is not reported a penalty equal to the greater of $2,000 or five times the amount of the tax due on the fuel. The penalty provided by this subsection in relation to a sale is not assessed if the taxpayer files an amended report that includes the sale not later than the 180th day after the due date of the original report of the sale.

SECTION 11. Section 26.3574(a), Water Code, is amended by amending Subdivision (1) and adding Subdivision (2-a) to read as follows:

(1) "Bulk facility" means a facility in this state, including pipeline terminals, refinery terminals, rail and barge terminals, and associated underground and aboveground tanks, connected or separate, from which petroleum products are withdrawn from bulk and delivered into a cargo tank or a barge used to transport those products. This term does not include petroleum products consumed at an electric generating facility.

(2-a) "Supplier" has the meaning assigned by Section 162.001, Tax Code.

SECTION 12. Sections 26.3574(b), (d), (e), (f), (g), (i), and (j), Water Code, are amended to read as follows:

(b) A fee is imposed on the delivery of a petroleum product on withdrawal from bulk of that product as provided by this subsection. Each supplier [operator of a bulk facility] on withdrawal from bulk of a petroleum product shall collect from the person who orders the withdrawal a fee in an amount determined as follows:

(1) not more than $3.75 for each delivery into a cargo tank having a capacity of less than 2,500 gallons;

(2) not more than $7.50 for each delivery into a cargo tank having a capacity of 2,500 gallons or more but less than 5,000 gallons;

(3) not more than $11.75 for each delivery into a cargo tank having a capacity of 5,000 gallons or more but less than 8,000 gallons;

(4) not more than $15.00 for each delivery into a cargo tank having a capacity of 8,000 gallons or more but less than 10,000 gallons; and

(5) not more than $7.50 for each increment of 5,000 gallons or any part thereof delivered into a cargo tank having a capacity of 10,000 gallons or more.

(d) A person who imports a petroleum product in a cargo tank or a barge destined for delivery into an underground or aboveground storage tank, regardless of whether or not the tank is exempt from regulation under Section 26.344 [of this code], other than a storage tank connected to or part of a bulk facility in this state, shall pay to the comptroller a fee on the number of gallons imported, computed as provided by Subsections (b) and (c) [of this section]. If a supplier [bulk facility operator] imports a petroleum product in a cargo tank or a barge, the supplier [bulk facility operator] is not required to pay the fee on that imported petroleum product if the petroleum product is delivered to a bulk facility from which the petroleum product will be withdrawn from bulk.

(e) A supplier [bulk facility operator] who receives petroleum products on which the fee has been paid may take credit for the fee paid on monthly reports.

(f) Subsection (b) [of this section] does not apply to a delivery of a petroleum product destined for export from this state if the petroleum product is in continuous movement to a destination outside this state. For purposes of this subsection, a petroleum product ceases to be in continuous movement to a destination outside this state if the product is delivered to a destination in this state. The person that directs the delivery of the product to a destination in this state shall pay the fee imposed by this section on that product.

(g) Each supplier [operator of a bulk facility] and each person covered by Subsection (d) [of this section] shall file an application with the comptroller for a permit to deliver a petroleum product into a cargo tank destined for delivery to an underground or aboveground storage tank, regardless of whether or not the tank is exempt from regulation under Section 26.344 [of this code]. A permit issued by the comptroller under this subsection is valid on and after the date of its issuance and until the permit is surrendered by the holder or canceled by the comptroller. An applicant for a permit issued under this subsection must use a form adopted or approved by the comptroller that contains:

(1) the name under which the applicant transacts or intends to transact business;

(2) the principal office, residence, or place of business in this state of the applicant;

(3) if the applicant is not an individual, the names of the principal officers of an applicant corporation, or the name of the member of an applicant partnership, and the office, street, or post office address of each; and

(4) any other information required by the comptroller.

(i) Each supplier [operator of a bulk facility] and each person covered by Subsection (d) [of this section] shall:

(1) list, as a separate line item on an invoice or cargo manifest required under this section, the amount of the delivery fee due under this section; and

(2) on or before the 25th day of the month following the end of each calendar month, file a report with the comptroller and remit the amount of fees required to be collected or paid during the preceding month.

(j) Each supplier [operator of a bulk facility] or the supplier's [his] representative and each person covered by Subsection (d) [of this section] shall prepare the report required under Subsection (i) [of this section] on a form provided or approved by the comptroller.

SECTION 13. The following provisions of the Tax Code are repealed:

(1) Sections 162.104(c) and (e); and

(2) Sections 162.204(c) and (e).

SECTION 14. The changes in law made by this Act do 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 that purpose.

SECTION 15. This Act takes effect January 1, 2018.