H.B. No. 2582
AN ACT
relating to the production and taxation of renewable diesel fuel.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 162.001, Tax Code, is amended by
amending Subdivisions (7) and (19) and adding Subdivision (53-a) to
read as follows:
(7) "Biodiesel fuel" has the meaning assigned to
"biodiesel" by Section 16.001, Agriculture Code [means any motor
fuel or mixture of motor fuels that is:
[(A) derived wholly or partly from agricultural
products, vegetable oils, recycled greases, or animal fats, or the
wastes of those products or fats; and
[(B) advertised, offered for sale, suitable for
use, or used as a motor fuel in an internal combustion engine].
(19) "Diesel fuel" means kerosene or another liquid,
or a combination of liquids blended together, that is suitable for
or used for the propulsion of diesel-powered motor vehicles. The
term includes products commonly referred to as kerosene, light
cycle oil, #1 diesel fuel, #2 diesel fuel, dyed or undyed diesel
fuel, aviation jet fuel, renewable diesel, biodiesel, distillate
fuel, cutter stock, or heating oil, but does not include gasoline,
aviation gasoline, or liquefied gas.
(53-a) "Renewable diesel" has the meaning assigned by
Section 16.001, Agriculture Code.
SECTION 2. 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:
(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; or
(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.
SECTION 3. The heading to Chapter 16, Agriculture Code, is
amended to read as follows:
CHAPTER 16. FUEL ETHANOL, [AND] BIODIESEL, AND RENEWABLE DIESEL
PRODUCTION INCENTIVE PROGRAM
SECTION 4. Section 16.001, Agriculture Code, is amended by
amending Subdivisions (1), (3), and (6) and adding Subdivision (7)
to read as follows:
(1) "Account" means the fuel ethanol, [and] biodiesel,
and renewable diesel production account.
(3) "Biodiesel" means a motor fuel that:
(A) meets the registration requirements for
fuels and fuel additives established by the United States
Environmental Protection Agency under Section 211 of the federal
Clean Air Act (42 U.S.C. Section 7545);
(B) is mono-alkyl esters of long chain fatty
acids derived from vegetable oils and animal fats;
(C) meets the requirements of ASTM specification
D-6751;
(D) is intended for use in engines that are
designed to run on conventional, petroleum-derived diesel fuel; and
(E) is derived from agricultural products,
vegetable oils, recycled greases, biomass, or animal fats or the
wastes of those products or fats [a monoalkyl ester that:
[(A) is derived from vegetable oils, rendered
animal fats, or renewable lipids or a combination of those
ingredients; and
[(B) meets the requirements of ASTM PS 121, the
provisional specification for biodiesel].
(6) "Producer" means a person who operates a fuel
ethanol, [or] biodiesel, or renewable diesel plant in this state.
(7) "Renewable diesel" means a motor fuel that:
(A) meets the registration requirements for
fuels and fuel additives established by the United States
Environmental Protection Agency under Section 211 of the federal
Clean Air Act (42 U.S.C. Section 7545);
(B) is a hydrocarbon;
(C) meets the requirements of ASTM specification
D-975;
(D) is intended for use in engines that are
designed to run on conventional, petroleum-derived diesel fuel; and
(E) is derived from agricultural products,
vegetable oils, recycled greases, biomass, or animal fats or the
wastes of those products or fats.
SECTION 5. Sections 16.002(a) and (b), Agriculture Code,
are amended to read as follows:
(a) To be eligible for a grant for fuel ethanol, [or]
biodiesel, or renewable diesel produced in a plant, a producer must
apply to the office for the registration of the plant. A producer
may apply for the registration of more than one plant.
(b) An application for the registration of a plant must show
to the satisfaction of the office that:
(1) the plant is capable of producing fuel ethanol,
[or] biodiesel, or renewable diesel;
(2) the producer has made a substantial investment of
resources in this state in connection with the plant; and
(3) the plant constitutes a permanent fixture in this
state.
SECTION 6. Section 16.003(a), Agriculture Code, is amended
to read as follows:
(a) On or before the fifth day of each month, a producer
shall report to the office on:
(1) the number of gallons of fuel ethanol, [or]
biodiesel, or renewable diesel produced at each registered plant
operated by the producer during the preceding month;
(2) the number of gallons of fuel ethanol, [or]
biodiesel, or renewable diesel imported into this state by the
producer during the preceding month;
(3) the number of gallons of fuel ethanol, [or]
biodiesel, or renewable diesel sold or blended with motor fuels by
the producer during the preceding month; and
(4) the total value of agricultural products consumed
in each registered plant operated by the producer during the
preceding month.
SECTION 7. The heading to Section 16.004, Agriculture Code,
is amended to read as follows:
Sec. 16.004. FUEL ETHANOL, [AND] BIODIESEL, AND RENEWABLE
DIESEL PRODUCTION ACCOUNT.
SECTION 8. Section 16.004(a), Agriculture Code, is amended
to read as follows:
(a) The fuel ethanol, [and] biodiesel, and renewable diesel
production account is an account in the general revenue fund that
may be appropriated only to the office for the purposes of this
chapter, including the making of grants under this chapter.
SECTION 9. The heading to Section 16.005, Agriculture Code,
is amended to read as follows:
Sec. 16.005. FEE ON FUEL ETHANOL, [AND] BIODIESEL, AND
RENEWABLE DIESEL PRODUCTION.
SECTION 10. Sections 16.005(a), (b), and (d), Agriculture
Code, are amended to read as follows:
(a) The office shall impose a fee on each producer in an
amount equal to 3.2 cents for each gallon of fuel ethanol, [or]
biodiesel, or renewable diesel produced in each registered plant
operated by the producer.
(b) For each fiscal year, the office may not impose fees on a
producer for more than 18 million gallons of fuel ethanol, [or]
biodiesel, or renewable diesel produced at any one registered
plant.
(d) The office may not impose fees on a producer for fuel
ethanol, [or] biodiesel, or renewable diesel produced at a
registered plant after the 10th anniversary of the date production
from the plant begins.
SECTION 11. The heading to Section 16.006, Agriculture
Code, is amended to read as follows:
Sec. 16.006. FUEL ETHANOL, [AND] BIODIESEL, AND RENEWABLE
DIESEL GRANTS.
SECTION 12. Sections 16.006(a), (b), (c), and (e),
Agriculture Code, are amended to read as follows:
(a) The office, after consultation with the department,
shall make grants to producers as an incentive for the development
of the fuel ethanol, [and] biodiesel, and renewable diesel industry
and agricultural production in this state.
(b) A producer is entitled to receive from the account 20
cents for each gallon of fuel ethanol, [or] biodiesel, or renewable
diesel produced in each registered plant operated by the producer
until the 10th anniversary of the date production from the plant
begins. The incentive under this subsection is payable only on that
part of each gallon of fuel produced from renewable resources.
(c) For each fiscal year a producer may not receive grants
for more than 18 million gallons of fuel ethanol, [or] biodiesel, or
renewable diesel produced at any one registered plant.
(e) If the office determines that the amount of money
credited to the account is not sufficient to distribute the full
amount of grant funds to eligible producers as provided by this
chapter for a fiscal year, the office shall proportionately reduce
the amount of each grant for each gallon of fuel ethanol, [or]
biodiesel, or renewable diesel produced as necessary to continue
the incentive program during the remainder of the fiscal year.
SECTION 13. The change in law made by Section 2 of this Act
does 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 the
collection of taxes due and for civil and criminal enforcement of
the liability for those taxes.
SECTION 14. The change in law made by this Act to Chapter
16, Agriculture Code, applies only to a fee that is imposed on or
after the effective date of this Act. A fee that is imposed before
the effective date of this Act is governed by the law in effect when
the fee was imposed, and that law is continued in effect for that
purpose.
SECTION 15. This Act takes effect immediately if it
receives a vote of two-thirds of all the members elected to each
house, as provided by Section 39, Article III, Texas Constitution.
If this Act does not receive the vote necessary for immediate
effect, this Act takes effect September 1, 2009.
______________________________ ______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 2582 was passed by the House on May 5,
2009, by the following vote: Yeas 141, Nays 0, 1 present, not
voting; that the House refused to concur in Senate amendments to
H.B. No. 2582 on May 29, 2009, and requested the appointment of a
conference committee to consider the differences between the two
houses; and that the House adopted the conference committee report
on H.B. No. 2582 on May 31, 2009, by the following vote: Yeas 140,
Nays 0, 1 present, not voting.
______________________________
Chief Clerk of the House
I certify that H.B. No. 2582 was passed by the Senate, with
amendments, on May 26, 2009, by the following vote: Yeas 31, Nays
0; at the request of the House, the Senate appointed a conference
committee to consider the differences between the two houses; and
that the Senate adopted the conference committee report on H.B. No.
2582 on May 31, 2009, by the following vote: Yeas 31, Nays 0.
______________________________
Secretary of the Senate
APPROVED: __________________
Date
__________________
Governor