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A BILL TO BE ENTITLED
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AN ACT
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relating to motor fuel taxes applicable to gasoline and diesel fuel |
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within the bulk transfer system. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 162.001, Tax Code, is amended by |
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amending Subdivisions (11), (12), and (57) and adding Subdivisions |
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(40-b) and (42-a) to read as follows: |
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(11) "Bulk transfer" means a transfer of motor fuel |
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from one location to another within the United States by pipeline or |
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marine movement within a bulk transfer/terminal system, including: |
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(A) a marine vessel movement of motor fuel owned |
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by a licensed supplier or permissive supplier [from a refinery or
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terminal to a terminal]; |
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(B) a pipeline movement of motor fuel from a |
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refinery, motor fuel storage facility, or terminal to a terminal or |
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motor fuel storage facility; |
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(C) a book transfer or in-tank transfer of motor |
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fuel within a terminal or motor fuel storage facility between |
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licensed suppliers before completion of removal across the rack; |
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and |
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(D) a two-party exchange between licensed |
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suppliers or between licensed suppliers and permissive suppliers. |
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(12) "Bulk transfer/terminal system" means the motor |
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fuel distribution system consisting of refineries, pipelines, |
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marine vessels, motor fuel storage facilities, and IRS-approved |
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terminals. Motor fuel is in the bulk transfer/terminal system if |
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the motor fuel is in a refinery, a pipeline, a motor fuel storage |
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facility, a terminal, or a marine vessel transporting motor fuel |
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owned by a licensed supplier or permissive supplier [to a refinery
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or terminal]. Motor fuel is not in the bulk transfer/terminal |
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system if the motor fuel is in [a motor fuel storage facility,
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including]: |
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(A) a bulk plant that is not part of a refinery or |
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terminal; |
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(B) the motor fuel supply tank of an engine or a |
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motor vehicle; or |
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(C) [a marine vessel transporting motor fuel to a
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motor fuel storage facility that is not in the bulk
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transfer/terminal system; or
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[(D)] a tank car, railcar, trailer, truck, or |
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other equipment suitable for ground transportation. |
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(40-b) "Marine vessel" includes a marine barge. |
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(42-a) "Motor fuel storage facility" means a storage |
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facility supplied by pipeline or marine vessel that does not have a |
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rack for removal of motor fuel by truck, railcar, or any other means |
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of conveyance that is outside the bulk transfer/terminal system. |
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(57) "Supplier" means a person that: |
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(A) is subject to the general taxing jurisdiction |
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of this state; |
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(B) is registered under Section 4101, Internal |
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Revenue Code, for transactions in motor fuel in the bulk |
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transfer/terminal distribution system, and is: |
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(i) a position holder in motor fuel in a |
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terminal or refinery in this state and may concurrently also be a |
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position holder in motor fuel in another state; [or] |
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(ii) a person who receives motor fuel in |
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this state under a two-party exchange; or |
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(iii) a person who owns motor fuel in a |
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marine vessel in this state; and |
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(C) may also be a terminal operator, provided |
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that a terminal operator is not considered to also be a "supplier" |
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based solely on the fact that the terminal operator handles motor |
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fuel consigned to it within a terminal. |
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SECTION 2. Section 162.101, Tax Code, is amended by |
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amending Subsection (e-1) and adding Subsection (e-3) to read as |
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follows: |
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(e-1) A tax is imposed on gasoline that is otherwise exempt |
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from taxation under Section 162.104(a)(4) or (7) if the gasoline is |
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sold into a truck or railcar in this state to a person who does not |
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hold a license under Section 162.105(1), (2), (3), (4), or (6). The |
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person who [that] sold the gasoline is liable for and shall collect |
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and remit the tax. |
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(e-3) A tax is imposed on gasoline that is otherwise exempt |
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from taxation under Section 162.104(a)(7) if the gasoline is sold |
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into a marine vessel in this state to a person who does not hold a |
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license under Section 162.105(1), (2), (3), (4), or (6) unless the |
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exporter of record is licensed under Section 162.105(1), (2), (3), |
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(4), or (6). The person who sold the gasoline is liable for and |
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shall collect and remit the tax. |
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SECTION 3. Section 162.104(a), Tax Code, is amended to read |
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as follows: |
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(a) The tax imposed by this subchapter does not apply to |
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gasoline: |
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(1) sold to the United States for its exclusive use, |
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provided that the exemption does not apply with respect to fuel sold |
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or delivered to a person operating under a contract with the United |
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States; |
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(2) sold to a public school district in this state for |
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the district's exclusive use; |
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(3) sold to a commercial transportation company or a |
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metropolitan rapid transit authority operating under Chapter 451, |
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Transportation Code, that provides public school transportation |
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services to a school district under Section 34.008, Education Code, |
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and that uses the gasoline only to provide those services; |
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(4) exported by either a licensed supplier or a |
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licensed exporter from this state to any other state, provided that |
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the bill of lading indicates the destination state and the supplier |
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collects the destination state tax; |
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(5) moved by truck or railcar between licensed |
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suppliers or licensed permissive suppliers and in which the |
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gasoline removed from the first terminal comes to rest in the second |
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terminal, provided that the removal from the second terminal rack |
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is subject to the tax imposed by this subchapter; |
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(6) delivered or sold into a storage facility of a |
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licensed aviation fuel dealer from which gasoline will be delivered |
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solely into the fuel supply tanks of aircraft or aircraft servicing |
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equipment, or sold from one licensed aviation fuel dealer to |
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another licensed aviation fuel dealer who will deliver the aviation |
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fuel exclusively into the fuel supply tanks of aircraft or aircraft |
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servicing equipment; |
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(7) exported to a foreign country if the bill of lading |
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or shipping documents indicate [indicates] the foreign destination |
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and the fuel is actually exported to the foreign country; |
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(8) sold to a volunteer fire department in this state |
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for the department's exclusive use; or |
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(9) sold to a nonprofit entity that is organized for |
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the sole purpose of and engages exclusively in providing emergency |
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medical services and that uses the gasoline exclusively to provide |
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emergency medical services, including rescue and ambulance |
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services. |
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SECTION 4. Section 162.201, Tax Code, is amended by |
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amending Subsection (e-1) and adding Subsection (e-3) to read as |
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follows: |
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(e-1) A tax is imposed on diesel fuel that is otherwise |
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exempt from taxation under Section 162.204(a)(4) or (7) if the |
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diesel fuel is sold into a truck or railcar in this state to a person |
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who does not hold a license under Section 162.205(a)(1), (2), (3), |
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(4), or (6). The person who [that] sold the diesel fuel is liable |
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for and shall collect and remit the tax. |
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(e-3) A tax is imposed on diesel fuel that is otherwise |
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exempt from taxation under Section 162.204(a)(7) if the diesel fuel |
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is sold into a marine vessel in this state to a person who does not |
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hold a license under Section 162.205(a)(1), (2), (3), (4), or (6), |
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unless the exporter of record is licensed under Section |
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162.205(a)(1), (2), (3), (4), or (6). The person who sold the diesel |
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fuel is liable for and shall collect and remit the tax. |
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SECTION 5. Section 162.204(a), Tax Code, is amended to read |
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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 or a metropolitan rapid transit authority operating under |
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Chapter 451, Transportation Code, that provides public school |
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transportation services to a school district under Section 34.008, |
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Education Code, and that uses the diesel fuel only to provide those |
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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 the bill of lading indicates the destination state and the |
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supplier collects the destination state tax; |
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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 or shipping documents indicate [indicates] the |
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foreign destination and the fuel is actually exported to the |
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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; |
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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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(14) diesel fuel sold to a volunteer fire department |
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in this state for the department's exclusive use; or |
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(15) diesel fuel sold to a nonprofit entity that is |
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organized for the sole purpose of and engages exclusively in |
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providing emergency medical services and that uses the diesel fuel |
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exclusively to provide emergency medical services, including |
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rescue and ambulance services. |
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SECTION 6. The changes in law made by this Act do not affect |
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tax liability accruing before the effective date of this Act. That |
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liability continues in effect as if this Act had not been enacted, |
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and the former law is continued in effect for the collection of |
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taxes due and for civil and criminal enforcement of the liability |
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for those taxes. |
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SECTION 7. This Act takes effect September 1, 2019. |
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