H.B. No. 3954
AN ACT
relating to motor fuel taxes applicable to gasoline and diesel fuel
within the bulk transfer system.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 162.001, Tax Code, is amended by
amending Subdivisions (11), (12), and (57) and adding Subdivisions
(40-b) and (42-a) to read as follows:
(11) "Bulk transfer" means a transfer of motor fuel
from one location to another within the United States by pipeline or
marine movement within a bulk transfer/terminal system, including:
(A) a marine vessel movement of motor fuel owned
by a licensed supplier or permissive supplier [from a refinery or
terminal to a terminal];
(B) a pipeline movement of motor fuel from a
refinery, motor fuel storage facility, or terminal to a terminal or
motor fuel storage facility;
(C) a book transfer or in-tank transfer of motor
fuel within a terminal or motor fuel storage facility between
licensed suppliers before completion of removal across the rack;
and
(D) a two-party exchange between licensed
suppliers or between licensed suppliers and permissive suppliers.
(12) "Bulk transfer/terminal system" means the motor
fuel distribution system consisting of refineries, pipelines,
marine vessels, motor fuel storage facilities, and IRS-approved
terminals. Motor fuel is in the bulk transfer/terminal system if
the motor fuel is in a refinery, a pipeline, a motor fuel storage
facility, a terminal, or a marine vessel transporting motor fuel
owned by a licensed supplier or permissive supplier [to a refinery
or terminal]. Motor fuel is not in the bulk transfer/terminal
system if the motor fuel is in [a motor fuel storage facility,
including]:
(A) a bulk plant that is not part of a refinery or
terminal;
(B) the motor fuel supply tank of an engine or a
motor vehicle; or
(C) [a marine vessel transporting motor fuel to a
motor fuel storage facility that is not in the bulk
transfer/terminal system; or
[(D)] a tank car, railcar, trailer, truck, or
other equipment suitable for ground transportation.
(40-b) "Marine vessel" includes a marine barge.
(42-a) "Motor fuel storage facility" means a storage
facility supplied by pipeline or marine vessel that does not have a
rack for removal of motor fuel by truck, railcar, or any other means
of conveyance that is outside the bulk transfer/terminal system.
(57) "Supplier" means a person that:
(A) is subject to the general taxing jurisdiction
of this state;
(B) is registered under Section 4101, Internal
Revenue Code, for transactions in motor fuel in the bulk
transfer/terminal distribution system, and is:
(i) a position holder in motor fuel in a
terminal or refinery in this state and may concurrently also be a
position holder in motor fuel in another state; [or]
(ii) a person who receives motor fuel in
this state under a two-party exchange; or
(iii) a person who owns motor fuel in a
marine vessel in this state; and
(C) may also be a terminal operator, provided
that a terminal operator is not considered to also be a "supplier"
based solely on the fact that the terminal operator handles motor
fuel consigned to it within a terminal.
SECTION 2. Section 162.101, Tax Code, is amended by
amending Subsection (e-1) and adding Subsection (e-3) to read as
follows:
(e-1) A tax is imposed on gasoline that is otherwise exempt
from taxation under Section 162.104(a)(4) or (7) if the gasoline is
sold into a truck or railcar in this state to a person who does not
hold a license under Section 162.105(1), (2), (3), (4), or (6). The
person who [that] sold the gasoline is liable for and shall collect
and remit the tax.
(e-3) A tax is imposed on gasoline that is otherwise exempt
from taxation under Section 162.104(a)(7) if the gasoline is sold
into a marine vessel in this state to a person who does not hold a
license under Section 162.105(1), (2), (3), (4), or (6) unless the
exporter of record is licensed under Section 162.105(1), (2), (3),
(4), or (6). The person who sold the gasoline is liable for and
shall collect and remit the tax.
SECTION 3. 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 [indicates] 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.
SECTION 4. Section 162.201, Tax Code, is amended by
amending Subsection (e-1) and adding Subsection (e-3) to read as
follows:
(e-1) A tax is imposed on diesel fuel that is otherwise
exempt from taxation under Section 162.204(a)(4) or (7) if the
diesel fuel is sold into a truck or railcar in this state to a person
who does not hold a license under Section 162.205(a)(1), (2), (3),
(4), or (6). The person who [that] sold the diesel fuel is liable
for and shall collect and remit the tax.
(e-3) A tax is imposed on diesel fuel that is otherwise
exempt from taxation under Section 162.204(a)(7) if the diesel fuel
is sold into a marine vessel in this state to a person who does not
hold a license under Section 162.205(a)(1), (2), (3), (4), or (6),
unless the exporter of record is licensed under Section
162.205(a)(1), (2), (3), (4), or (6). The person who sold the diesel
fuel is liable for and shall collect and remit the tax.
SECTION 5. 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 [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;
(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.
SECTION 6. The changes in law made by this Act do 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 7. This Act takes effect September 1, 2019.
______________________________ ______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 3954 was passed by the House on April
18, 2019, by the following vote: Yeas 133, Nays 2, 1 present, not
voting.
______________________________
Chief Clerk of the House
I certify that H.B. No. 3954 was passed by the Senate on May
15, 2019, by the following vote: Yeas 31, Nays 0.
______________________________
Secretary of the Senate
APPROVED: _____________________
Date
_____________________
Governor