TITLE: Relating to taxes wholly or partly deposited to the credit of the state highway fund; increasing the rates of the gasoline and diesel fuel taxes and authorizing the increase or decrease of those rates in subsequent years.

SUMMARY: Relating to taxes wholly or partly deposited to the credit of the state highway fund; increasing the rates of the gasoline and diesel fuel taxes and authorizing the increase or decrease of those rates in subsequent years.

FULL TEXT:
AN ACT relating to taxes wholly or partly deposited to the credit of the state highway fund; increasing the rates of the gasoline and diesel fuel taxes and authorizing the increase or decrease of those rates in subsequent years. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: SECTION 1. (a) Section 152.122, Tax Code, is amended to read as follows: Sec. 152.122. ALLOCATION OF TAX. Subject to Section 152.1222, the [The] comptroller shall deposit the funds received under Section 152.121 [of this code] as follows: (1) in the state fiscal year beginning September 1, 2016, 25 percent to the credit of the state highway fund and 75 percent [1/4 to the credit of the foundation school fund; and [(2) the remaining funds] to the credit of the general revenue fund;(2) in the state fiscal year beginning September 1, 2017, 30 percent to the credit of the state highway fund and 70 percent to the credit of the general revenue fund; (3) in the state fiscal year beginning September 1, 2018, 35 percent to the credit of the state highway fund and 65 percent to the credit of the general revenue fund; (4) in the state fiscal year beginning September 1, 2019, 40 percent to the credit of the state highway fund and 60 percent to the credit of the general revenue fund; (5) in the state fiscal year beginning September 1, 2020, 45 percent to the credit of the state highway fund and 55 percent to the credit of the general revenue fund; and (6) in state fiscal years beginning on or after September 1, 2021, 50 percent to the credit of the state highway fund and 50 percent to the credit of the general revenue fund.(b) In addition to the substantive changes made by this section, this section conforms Section 152.122, Tax Code, to the method of allocating motor vehicle sales and use taxes in effect before the effective date of this section. Section 11.04, Chapter 4 (S.B. 3), Acts of the 72nd Legislature, 1st Called Session, 1991, enacted former Section 403.094(h), Government Code, which abolished certain state fund dedications and resulted in the abolition of the allocation to the foundation school fund effective August 31, 1995. SECTION 2. (a) Section 162.102, Tax Code, is amended to read as follows: Sec. 162.102. TAX RATE. The gasoline tax rate is 25 [20] cents for each net gallon or fractional part on which the tax is imposed under Section 162.101. (b) Effective January 1, 2018, Section 162.102, Tax Code, is amended to read as follows: Sec. 162.102. TAX RATE. The gasoline tax rate is 30 [20] cents for each net gallon or fractional part on which the tax is imposed under Section 162.101. SECTION 3. (a) Effective September 1, 2018, Subchapter B, Chapter 162, Tax Code, is amended by adding Section 162.1021 to read as follows: Sec. 162.1021. ANNUAL RATE CHANGE ACCORDING TO HIGHWAY COST INDEX. (a) In this section: (1) "Highway cost index" means the 12-month moving average of the price of materials and labor compiled by the Texas Department of Transportation and incorporated into state highway projects. (2) "Highway cost index percentage change" means the percentage increase or decrease in the highway cost index of a given state fiscal year from the highway cost index of the preceding state fiscal year. (b) Notwithstanding Section 162.102, on January 1 of each year, the rate of the gasoline tax imposed under this subchapter is increased or decreased by a percentage equal to the highway cost index percentage change for the preceding state fiscal year. (c) Notwithstanding Subsection (b), the percentage increase or decrease may not result in an increase or decrease in the rate that exceeds one cent for each net gallon or fractional gallon of gasoline on which the tax is imposed under Section 162.101. (d) Not later than December 1 of each year, the comptroller shall: (1) compute the new tax rate as provided by this section; (2) give the new tax rate to the secretary of state for publication in the Texas Register; and (3) notify each license holder under this subchapter of the applicable new tax rate. (b) The comptroller shall compute the initial adjusted tax rate as required by Section 162.1021(d), Tax Code, as added by this section, not later than December 1, 2018. The initial adjusted rate takes effect January 1, 2019. SECTION 4. Effective January 1, 2019, Section 162.103(a), Tax Code, is amended to read as follows: (a) A backup tax is imposed at the rate prescribed by Section 162.102 or 162.1021 on: (1) a person who obtains a refund of tax on gasoline by claiming the gasoline was used for an off-highway purpose, but actually uses the gasoline to operate a motor vehicle on a public highway; (2) a person who operates a motor vehicle on a public highway using gasoline on which tax has not been paid; (3) a person who sells to the ultimate consumer gasoline on which tax has not been paid and who knew or had reason to know that the gasoline would be used for a taxable purpose; and (4) a person, other than a person exempted under Section 162.104, who acquires gasoline on which tax has not been paid from any source in this state. SECTION 5. (a) Section 162.202, Tax Code, is amended to read as follows: Sec. 162.202. TAX RATE. The diesel fuel tax rate is 25 [20] cents for each net gallon or fractional part on which the tax is imposed under Section 162.201. (b) Effective January 1, 2018, Section 162.202, Tax Code, is amended to read as follows: Sec. 162.202. TAX RATE. The diesel fuel tax rate is 30 [20] cents for each net gallon or fractional part on which the tax is imposed under Section 162.201. SECTION 6. (a) Effective September 1, 2018, Subchapter C, Chapter 162, Tax Code, is amended by adding Section 162.2021 to read as follows: Sec. 162.2021. ANNUAL RATE CHANGE ACCORDING TO HIGHWAY COST INDEX. (a) In this section: (1) "Highway cost index" means the 12-month moving average of the price of materials and labor compiled by the Texas Department of Transportation and incorporated into state highway projects. (2) "Highway cost index percentage change" means the percentage increase or decrease in the highway cost index of a given state fiscal year from the highway cost index of the preceding state fiscal year. (b) Notwithstanding Section 162.202, on January 1 of each year, the rate of the diesel fuel tax imposed under this subchapter is increased or decreased by a percentage equal to the highway cost index percentage change for the preceding state fiscal year. (c) Notwithstanding Subsection (b), the percentage increase or decrease may not result in an increase or decrease in the rate that exceeds one cent for each net gallon or fractional gallon of diesel fuel on which the tax is imposed under Section 162.201. (d) Not later than December 1 of each year, the comptroller shall: (1) compute the new tax rate as provided by this section; (2) give the new tax rate to the secretary of state for publication in the Texas Register; and (3) notify each license holder under this subchapter of the applicable new tax rate. (b) The comptroller shall compute the initial adjusted tax rate as required by Section 162.2021(d), Tax Code, as added by this section, not later than December 1, 2018. The initial adjusted rate takes effect January 1, 2019. SECTION 7. Effective January 1, 2019, Section 162.203(a), Tax Code, is amended to read as follows: (a) A backup tax is imposed at the rate prescribed by Section 162.202 or 162.2021 on: (1) a person who obtains a refund of tax on diesel fuel by claiming the diesel fuel was used for an off-highway purpose, but actually uses the diesel fuel to operate a motor vehicle on a public highway; (2) a person who operates a motor vehicle on a public highway using diesel fuel on which tax has not been paid; (3) a person who sells to the ultimate consumer diesel fuel on which a tax has not been paid and who knew or had reason to know that the diesel fuel would be used for a taxable purpose; and (4) a person, other than a person exempted under Section 162.204, who acquires diesel fuel on which tax has not been paid from any source in this state. SECTION 8. Subchapter A, Chapter 222, Transportation Code, is amended by adding Section 222.0015 to read as follows: Sec. 222.0015. USE OF CERTAIN MONEY IN STATE HIGHWAY FUND. (a) This section applies only to the following money deposited to the credit of the state highway fund: (1) all money deposited under Section 152.122, Tax Code; (2) all proceeds from the collection of taxes imposed by Subchapter B, Chapter 162, Tax Code, attributable to the portion of the tax rate in excess of 20 cents for each net gallon or fractional part of gasoline on which the tax is imposed under Section 162.101, Tax Code; and (3) all proceeds from the collection of taxes imposed by Subchapter C, Chapter 162, Tax Code, attributable to the portion of the tax rate in excess of 20 cents for each net gallon or fractional part of diesel fuel on which the tax is imposed under Section 162.201, Tax Code. (b) Notwithstanding other law, including Sections 201.115, 222.001, and 222.003, money described by Subsection (a): (1) may not be pledged for the repayment of bonds; and (2) may be used only for acquiring rights-of-way and planning, designing, constructing, and maintaining nontolled public roadways. SECTION 9. This Act takes effect January 1, 2016, but only if the constitutional amendment proposed by the 84th Legislature, Regular Session, 2015, limiting the permissible uses of the state highway fund, including further limiting the use of additional tax and fee revenue attributable to changes to certain state taxes and fees, to increase revenue for nontolled public highway purposes is approved by the voters.