Honorable Jane Nelson, Chair, Senate Committee on Finance
FROM:
John McGeady, Assistant Director Sarah Keyton, Assistant Director Legislative Budget Board
IN RE:
HB791 by Huberty (Relating to the definition of volunteer fire department for purposes of certain motor fuel tax exemptions.), As Engrossed
No significant fiscal implication to the State is anticipated.
The bill would amend Chapter 162 of the Tax Code, regarding motor fuel taxes.
The bill would add a new subdivision to Section 162.001 to define what a volunteer fire department is for the purposes of obtaining motor fuel tax exemptions.
The bill would take effect immediately upon enactment, assuming it received the requisite two-thirds majority votes in both houses of the Legislature. Otherwise, it would take effect September 1, 2019.
Under current statute, volunteer fire departments are exempt from paying motor fuel taxes on purchases for their exclusive use. This bill provides a definition of volunteer fire department (VFD). Current policy, with respect to existing statute, is that the definition includes only all-volunteer fire departments.
Data from the Texas Forest Service's directory of fire departments indicate there are 1,858 fire departments in the state. Approximately 73 percent (1,348) of these fire departments are VFDs staffed entirely by volunteers. The inclusion of part-paid fire departments staffed by at least 50 percent volunteer firefighters in the definition of VFD would add another 190 fire departments eligible for this motor fuel tax exemption.
Exempt status is confirmed by determining if the VFD is staffed by non-paid firefighters. Passage of this bill would expand the number of exempted fire departments to include part-paid fire departments that have at least 50 percent of its firefighters as volunteers.
Local Government Impact
No fiscal implication to units of local government is anticipated.