88R7770 SRA-D
 
  By: Guillen H.B. No. 2763
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to an exemption from motor fuel taxes for certain fuel used
  by a rural transit district to provide public transportation.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Effective January 1, 2026, Section 162.104(a),
  Tax Code, is 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
  the bill of lading indicates the destination state and the supplier
  collects the destination state tax;
               (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
  or shipping documents indicate 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; or
               (10)  sold to a rural transit district created under
  Chapter 458, Transportation Code, that uses the gasoline
  exclusively to provide public transportation.
         SECTION 2.  Effective January 1, 2026, Section 162.125(a),
  Tax Code, is amended to read as follows:
         (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 gasoline and subsequently resells the gasoline
  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 contract with the United States;
               (2)  a public school district in this state for the
  district's exclusive use;
               (3)  an exporter licensed under this subchapter if the
  seller is a licensed supplier or distributor and the exporter
  subsequently exports the gasoline to another state;
               (4)  a licensed aviation fuel dealer if the seller is a
  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 gasoline exclusively to provide those services;
  or
               (6)  a rural transit district created under Chapter
  458, Transportation Code, that uses the gasoline exclusively to
  provide public transportation.
         SECTION 3.  Section 162.125(g), Tax Code, is amended to read
  as follows:
         (g)  A transit company that paid tax on the purchase of
  gasoline, and is not otherwise entitled to a refund of that tax
  under this subchapter, may seek a refund with the comptroller in an
  amount equal to one cent per gallon for gasoline used in transit
  vehicles.
         SECTION 4.  Subchapter B, Chapter 162, Tax Code, is amended
  by adding Section 162.1276 to read as follows:
         Sec. 162.1276.  REFUND FOR CERTAIN RURAL TRANSIT DISTRICTS.
  (a) A rural transit district created under Chapter 458,
  Transportation Code, is entitled to a refund in the amount provided
  by this section of taxes paid under this subchapter for gasoline
  used to provide public transportation and may file a refund claim
  with the comptroller for that amount.
         (b)  The refund claim under Subsection (a) must contain
  information regarding:
               (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 gasoline that
  qualifies for the refund and is purchased by the rural transit
  district.
         (e)  Notwithstanding Subsection (d), the amount of the
  refund under Subsection (a) is equal to:
               (1)  50 percent of the amount of tax paid under this
  subchapter for gasoline that qualifies for the refund and is
  purchased by the rural transit district 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 gasoline that qualifies for the refund and is
  purchased by the rural transit district on or after January 1, 2025,
  and before January 1, 2026.
         (f)  Subsection (e) and this subsection expire September 1,
  2026.
         SECTION 5.  Effective January 1, 2026, Section 162.204(a),
  Tax Code, is 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 the bill of lading indicates the destination state and the
  supplier collects the destination state tax;
               (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 or shipping documents indicate 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; or
               (16)  diesel fuel sold to a rural transit district
  created under Chapter 458, Transportation Code, that uses the
  diesel fuel exclusively to provide public transportation.
         SECTION 6.  Effective January 1, 2026, Section 162.227(a),
  Tax Code, is amended to read as follows:
         (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;
               (3)  an exporter licensed under this subchapter if the
  seller is a licensed supplier or distributor and the exporter
  subsequently exports the diesel fuel to another state;
               (4)  a licensed aviation fuel dealer if the seller is a
  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
  services; or
               (6)  a rural transit district created under Chapter
  458, Transportation Code, that uses the diesel fuel exclusively to
  provide public transportation.
         SECTION 7.  Section 162.227(f), Tax Code, is amended to read
  as follows:
         (f)  A transit company who paid tax on the purchase of diesel
  fuel, and is not otherwise entitled to a refund of that tax under
  this subchapter, may seek a refund with the comptroller of one-half
  of one cent per gallon for diesel fuel used in transit vehicles.
         SECTION 8.  Subchapter C, Chapter 162, Tax Code, is amended
  by adding Section 162.2276 to read as follows:
         Sec. 162.2276.  REFUND FOR CERTAIN RURAL TRANSIT DISTRICTS.
  (a) A rural transit district created under Chapter 458,
  Transportation Code, is entitled to a refund in the amount provided
  by this section of taxes paid under this subchapter for diesel fuel
  used to provide public transportation and may file a refund claim
  with the comptroller for that amount.
         (b)  The refund claim under Subsection (a) must contain
  information regarding:
               (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 diesel fuel that
  qualifies for the refund and is purchased by the rural transit
  district.
         (e)  Notwithstanding Subsection (d), the amount of the
  refund under Subsection (a) is equal to:
               (1)  50 percent of the amount of tax paid under this
  subchapter for diesel fuel that qualifies for the refund and is
  purchased by the rural transit district 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 diesel fuel that qualifies for the refund and is
  purchased by the rural transit district on or after January 1, 2025,
  and before January 1, 2026.
         (f)  Subsection (e) and this subsection expire September 1,
  2026.
         SECTION 9.  Effective January 1, 2026, Section 162.356(a),
  Tax Code, is amended to read as follows:
         (a)  The tax imposed by this subchapter does not apply to
  compressed natural gas or liquefied natural gas delivered into the
  fuel supply tank of:
               (1)  a motor vehicle operated exclusively by the United
  States, provided that the exemption does not apply with respect to
  fuel delivered into the fuel supply tank of a motor vehicle of a
  person operating under a contract with the United States;
               (2)  a motor vehicle operated exclusively by a public
  school district in this state;
               (3)  a motor vehicle operated exclusively by 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 fuel only to
  provide those services;
               (4)  a motor vehicle operated exclusively by a
  volunteer fire department in this state;
               (5)  a motor vehicle operated exclusively by a
  municipality or county in this state;
               (6)  a motor vehicle operated exclusively by a
  nonprofit electric cooperative corporation organized under Chapter
  161, Utilities Code;
               (7)  a motor vehicle operated exclusively by a
  nonprofit telephone cooperative corporation organized under
  Chapter 162, Utilities Code;
               (8)  a motor vehicle that is not registered for use on
  the public highways of this state and that is used exclusively
  off-highway;
               (9)  a motor vehicle operated exclusively by a
  nonprofit entity that is organized for the sole purpose of and
  engages exclusively in providing emergency medical services and
  that uses the fuel exclusively to provide emergency medical
  services, including rescue and ambulance services;
               (9-a)  a motor vehicle operated exclusively by a rural
  transit district created under Chapter 458, Transportation Code,
  that uses the fuel exclusively to provide public transportation;
               (10)  off-highway equipment, a stationary engine, a
  motorboat, an aircraft, equipment used solely for servicing
  aircraft and used exclusively off-highway, a locomotive, or any
  device other than a motor vehicle operated or intended to be
  operated on the public highways; or
               (11)  except as provided by Subsection (b), a motor
  vehicle:
                     (A)  used to provide the services of a transit
  company, including a metropolitan rapid transit authority under
  Chapter 451, Transportation Code, or a regional transportation
  authority under Chapter 452, Transportation Code; and
                     (B)  operated by a person who on January 1, 2015,
  paid tax on compressed natural gas or liquefied natural gas as
  provided by Section 162.312, as that section existed on that date.
         SECTION 10.  Subchapter D-1, Chapter 162, Tax Code, is
  amended by adding Section 162.3685 to read as follows:
         Sec. 162.3685.  REFUND FOR CERTAIN RURAL TRANSIT DISTRICTS.
  (a)  A rural transit district created under Chapter 458,
  Transportation Code, is entitled to a refund in the amount provided
  by this section of taxes paid under this subchapter for compressed
  natural gas or liquefied natural gas delivered into the fuel supply
  tank of a motor vehicle used to provide public transportation and
  may file a refund claim with the comptroller for that amount.
         (b)  The refund claim under Subsection (a) must contain
  information regarding:
               (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.
         (e)  Notwithstanding Subsection (d), the amount of the
  refund under Subsection (a) is equal to:
               (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
  1, 2026.
         (f)  Subsection (e) and this subsection expire September 1,
  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.