87R14697 SRA-D
	By: Guillen, Morales of Maverick, et al.	H.B. No. 1294
	Substitute the following for H.B. No. 1294:
	By:  Guerra	C.S.H.B. No. 1294

	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, 2024, 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, 2024, 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, 2022,
	and before January 1, 2023; 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, 2023,
	and before January 1, 2024.
	(f)  Subsection (e) and this subsection expire September 1,
	2024.
	SECTION 5.  Effective January 1, 2024, 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, 2024, 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, 2022,
	and before January 1, 2023; 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, 2023,
	and before January 1, 2024.
	(f)  Subsection (e) and this subsection expire September 1,
	2024.
	SECTION 9.  Effective January 1, 2024, 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, 2022, and before January
	1, 2023; 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, 2023, and before January
	1, 2024.
	(f)  Subsection (e) and this subsection expire September 1,
	2024.
	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, 2022.