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A BILL TO BE ENTITLED
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AN ACT
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relating to an exemption from motor fuel taxes for certain fuel used |
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by a rural transit district to provide public transportation. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Effective January 1, 2026, Section 162.104(a), |
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Tax Code, is amended to read 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 the foreign destination and the fuel |
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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; or |
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(10) sold to a rural transit district created under |
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Chapter 458, Transportation Code, that uses the gasoline |
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exclusively to provide public transportation. |
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SECTION 2. Effective January 1, 2026, Section 162.125(a), |
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Tax Code, is amended to read as follows: |
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(a) A license holder may take a credit on a return for the |
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period in which the sale occurred if the license holder paid tax on |
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the purchase of gasoline and subsequently resells the gasoline |
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without collecting the tax to: |
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(1) the United States government for its exclusive |
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use, provided that a credit is not allowed for gasoline used by a |
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person operating under contract with the United States; |
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(2) a public school district in this state for the |
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district's exclusive use; |
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(3) an exporter licensed under this subchapter if the |
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seller is a licensed supplier or distributor and the exporter |
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subsequently exports the gasoline to another state; |
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(4) a licensed aviation fuel dealer if the seller is a |
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licensed distributor; [or] |
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(5) 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 exclusively to provide those services; |
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or |
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(6) a rural transit district created under Chapter |
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458, Transportation Code, that uses the gasoline exclusively to |
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provide public transportation. |
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SECTION 3. Section 162.125(g), Tax Code, is amended to read |
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as follows: |
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(g) A transit company that paid tax on the purchase of |
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gasoline, and is not otherwise entitled to a refund of that tax |
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under this subchapter, may seek a refund with the comptroller in an |
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amount equal to one cent per gallon for gasoline used in transit |
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vehicles. |
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SECTION 4. Subchapter B, Chapter 162, Tax Code, is amended |
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by adding Section 162.1276 to read as follows: |
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Sec. 162.1276. REFUND FOR CERTAIN RURAL TRANSIT DISTRICTS. |
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(a) A rural transit district created under Chapter 458, |
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Transportation Code, is entitled to a refund in the amount provided |
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by this section of taxes paid under this subchapter for gasoline |
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used to provide public transportation and may file a refund claim |
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with the comptroller for that amount. |
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(b) The refund claim under Subsection (a) must contain |
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information regarding: |
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(1) vehicle mileage; |
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(2) hours of service provided; and |
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(3) fuel consumed. |
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(c) A rural transit district that requests a refund under |
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this section shall maintain all supporting documentation relating |
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to the refund until the sixth anniversary of the date of the |
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request. |
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(d) The amount of the refund under Subsection (a) is equal |
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to the amount of tax paid under this subchapter for gasoline that |
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qualifies for the refund and is purchased by the rural transit |
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district. |
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(e) Notwithstanding Subsection (d), the amount of the |
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refund under Subsection (a) is equal to: |
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(1) 50 percent of the amount of tax paid under this |
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subchapter for gasoline that qualifies for the refund and is |
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purchased by the rural transit district on or after January 1, 2024, |
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and before January 1, 2025; and |
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(2) 75 percent of the amount of tax paid under this |
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subchapter for gasoline that qualifies for the refund and is |
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purchased by the rural transit district on or after January 1, 2025, |
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and before January 1, 2026. |
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(f) Subsection (e) and this subsection expire September 1, |
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2026. |
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SECTION 5. Effective January 1, 2026, Section 162.204(a), |
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Tax Code, is amended to 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 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 the foreign |
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destination and the fuel is actually exported to the foreign |
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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; or |
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(16) diesel fuel sold to a rural transit district |
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created under Chapter 458, Transportation Code, that uses the |
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diesel fuel exclusively to provide public transportation. |
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SECTION 6. Effective January 1, 2026, Section 162.227(a), |
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Tax Code, is amended to read as follows: |
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|
(a) A license holder may take a credit on a return for the |
|
|
period in which the sale occurred if the license holder paid tax on |
|
|
the purchase of diesel fuel and subsequently resells the diesel |
|
|
fuel without collecting the tax to: |
|
|
(1) the United States government for its exclusive |
|
|
use, provided that a credit is not allowed for gasoline used by a |
|
|
person operating under a contract with the United States; |
|
|
(2) a public school district in this state for the |
|
|
district's exclusive use; |
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(3) an exporter licensed under this subchapter if the |
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seller is a licensed supplier or distributor and the exporter |
|
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subsequently exports the diesel fuel to another state; |
|
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(4) a licensed aviation fuel dealer if the seller is a |
|
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licensed distributor; [or] |
|
|
(5) 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 exclusively to provide those |
|
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services; or |
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(6) a rural transit district created under Chapter |
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458, Transportation Code, that uses the diesel fuel exclusively to |
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provide public transportation. |
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SECTION 7. Section 162.227(f), Tax Code, is amended to read |
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as follows: |
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(f) A transit company who paid tax on the purchase of diesel |
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fuel, and is not otherwise entitled to a refund of that tax under |
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this subchapter, may seek a refund with the comptroller of one-half |
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of one cent per gallon for diesel fuel used in transit vehicles. |
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SECTION 8. Subchapter C, Chapter 162, Tax Code, is amended |
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by adding Section 162.2276 to read as follows: |
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Sec. 162.2276. REFUND FOR CERTAIN RURAL TRANSIT DISTRICTS. |
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(a) A rural transit district created under Chapter 458, |
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Transportation Code, is entitled to a refund in the amount provided |
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by this section of taxes paid under this subchapter for diesel fuel |
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used to provide public transportation and may file a refund claim |
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with the comptroller for that amount. |
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(b) The refund claim under Subsection (a) must contain |
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information regarding: |
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(1) vehicle mileage; |
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(2) hours of service provided; and |
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(3) fuel consumed. |
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(c) A rural transit district that requests a refund under |
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this section shall maintain all supporting documentation relating |
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to the refund until the sixth anniversary of the date of the |
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request. |
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(d) The amount of the refund under Subsection (a) is equal |
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to the amount of tax paid under this subchapter for diesel fuel that |
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qualifies for the refund and is purchased by the rural transit |
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district. |
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(e) Notwithstanding Subsection (d), the amount of the |
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refund under Subsection (a) is equal to: |
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(1) 50 percent of the amount of tax paid under this |
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subchapter for diesel fuel that qualifies for the refund and is |
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purchased by the rural transit district on or after January 1, 2024, |
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and before January 1, 2025; and |
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(2) 75 percent of the amount of tax paid under this |
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subchapter for diesel fuel that qualifies for the refund and is |
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purchased by the rural transit district on or after January 1, 2025, |
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and before January 1, 2026. |
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(f) Subsection (e) and this subsection expire September 1, |
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2026. |
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SECTION 9. Effective January 1, 2026, Section 162.356(a), |
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Tax Code, is amended to read as follows: |
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(a) The tax imposed by this subchapter does not apply to |
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compressed natural gas or liquefied natural gas delivered into the |
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fuel supply tank of: |
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(1) a motor vehicle operated exclusively by the United |
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States, provided that the exemption does not apply with respect to |
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fuel delivered into the fuel supply tank of a motor vehicle of a |
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person operating under a contract with the United States; |
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(2) a motor vehicle operated exclusively by a public |
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school district in this state; |
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(3) a motor vehicle operated exclusively by a |
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commercial transportation company or a metropolitan rapid transit |
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authority operating under Chapter 451, Transportation Code, that |
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provides public school transportation services to a school district |
|
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under Section 34.008, Education Code, and that uses the fuel only to |
|
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provide those services; |
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(4) a motor vehicle operated exclusively by a |
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volunteer fire department in this state; |
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(5) a motor vehicle operated exclusively by a |
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municipality or county in this state; |
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(6) a motor vehicle operated exclusively by a |
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nonprofit electric cooperative corporation organized under Chapter |
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161, Utilities Code; |
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(7) a motor vehicle operated exclusively by a |
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nonprofit telephone cooperative corporation organized under |
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Chapter 162, Utilities Code; |
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(8) a motor vehicle that is not registered for use on |
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the public highways of this state and that is used exclusively |
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off-highway; |
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(9) a motor vehicle operated exclusively by a |
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nonprofit entity that is organized for the sole purpose of and |
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engages exclusively in providing emergency medical services and |
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that uses the fuel exclusively to provide emergency medical |
|
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services, including rescue and ambulance services; |
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(9-a) a motor vehicle operated exclusively by a rural |
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transit district created under Chapter 458, Transportation Code, |
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that uses the fuel exclusively to provide public transportation; |
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(10) off-highway equipment, a stationary engine, a |
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motorboat, an aircraft, equipment used solely for servicing |
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aircraft and used exclusively off-highway, a locomotive, or any |
|
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device other than a motor vehicle operated or intended to be |
|
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operated on the public highways; or |
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(11) except as provided by Subsection (b), a motor |
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vehicle: |
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(A) used to provide the services of a transit |
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company, including a metropolitan rapid transit authority under |
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Chapter 451, Transportation Code, or a regional transportation |
|
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authority under Chapter 452, Transportation Code; and |
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(B) operated by a person who on January 1, 2015, |
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paid tax on compressed natural gas or liquefied natural gas as |
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provided by Section 162.312, as that section existed on that date. |
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SECTION 10. Subchapter D-1, Chapter 162, Tax Code, is |
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amended by adding Section 162.3685 to read as follows: |
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Sec. 162.3685. REFUND FOR CERTAIN RURAL TRANSIT DISTRICTS. |
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(a) A rural transit district created under Chapter 458, |
|
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Transportation Code, is entitled to a refund in the amount provided |
|
|
by this section of taxes paid under this subchapter for compressed |
|
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natural gas or liquefied natural gas delivered into the fuel supply |
|
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tank of a motor vehicle used to provide public transportation and |
|
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may file a refund claim with the comptroller for that amount. |
|
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(b) The refund claim under Subsection (a) must contain |
|
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information regarding: |
|
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(1) vehicle mileage; |
|
|
(2) hours of service provided; and |
|
|
(3) fuel consumed. |
|
|
(c) A rural transit district that requests a refund under |
|
|
this section shall maintain all supporting documentation relating |
|
|
to the refund until the sixth anniversary of the date of the |
|
|
request. |
|
|
(d) The amount of the refund under Subsection (a) is equal |
|
|
to the amount of tax paid under this subchapter for compressed |
|
|
natural gas or liquefied natural gas that qualifies for the refund |
|
|
and is delivered into the fuel supply tank of a motor vehicle. |
|
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(e) Notwithstanding Subsection (d), the amount of the |
|
|
refund under Subsection (a) is equal to: |
|
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(1) 50 percent of the amount of tax paid under this |
|
|
subchapter for compressed natural gas or liquefied natural gas that |
|
|
qualifies for the refund and is delivered into the fuel supply tank |
|
|
of a motor vehicle on or after January 1, 2024, and before January |
|
|
1, 2025; and |
|
|
(2) 75 percent of the amount of tax paid under this |
|
|
subchapter for compressed natural gas or liquefied natural gas that |
|
|
qualifies for the refund and is delivered into the fuel supply tank |
|
|
of a motor vehicle on or after January 1, 2025, and before January |
|
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1, 2026. |
|
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(f) Subsection (e) and this subsection expire September 1, |
|
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2026. |
|
|
SECTION 11. A tax imposed by Chapter 162, Tax Code, does not |
|
|
apply to gasoline, diesel fuel, compressed natural gas, or |
|
|
liquefied natural gas to the extent a rural transit district is |
|
|
entitled to a refund of the tax under Section 162.1276(e)(1) or (2), |
|
|
Section 162.2276(e)(1) or (2), or Section 162.3685(e)(1) or (2), |
|
|
Tax Code, as added by this Act. However, the tax must be paid as |
|
|
otherwise required by law and a rural transit district may apply to |
|
|
the comptroller for the refund provided by that added law. |
|
|
SECTION 12. A change in law made by this Act does not affect |
|
|
tax liability accruing before the effective date of the change in |
|
|
law. That liability continues in effect as if this Act had not been |
|
|
enacted, and the former law is continued in effect for the |
|
|
collection of taxes due and for civil and criminal enforcement of |
|
|
the liability for those taxes. |
|
|
SECTION 13. Except as otherwise provided by this Act, this |
|
|
Act takes effect January 1, 2024. |