H.B. No. 1905
 
 
 
 
AN ACT
  relating to certain state and local taxes, including ad valorem
  taxes, and to the repeal of certain of those taxes.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 34.04, Alcoholic Beverage Code, is
  amended to read as follows:
         Sec. 34.04.  EXEMPTION FROM TAXES. [(a) The taxes imposed by
  this code shall be paid on all alcoholic beverages on a commercial
  passenger aircraft departing from an airport in this state, in
  accordance with rules and regulations prescribed by the commission.
         [(b)]  The preparation and service of alcoholic beverages by
  the holder of an airline beverage permit is exempt from a tax
  imposed by this code and from the tax imposed by Chapter 151, Tax
  Code [the Limited Sales, Excise and Use Tax Act]. [An airline
  beverage service fee of five cents is imposed on each individual
  serving of an alcoholic beverage served by the permittee inside the
  state. The fee accrues at the time the container containing an
  alcoholic beverage is delivered to the passenger. The permittee
  may absorb the cost of the fee or may collect it from the passenger.
  The permittee shall remit the fees to the commission each month
  under a reporting system prescribed by the commission.]
         SECTION 2.  Section 48.04, Alcoholic Beverage Code, is
  amended to read as follows:
         Sec. 48.04.  EXEMPTION FROM TAXES. [(a) The taxes imposed by
  this code shall be paid on all alcoholic beverages on a commercial
  passenger train departing from a depot in this state in accordance
  with the rules prescribed by the commission.
         [(b)]  The preparation and service of alcoholic beverages by
  the holder of a passenger train beverage permit is exempt from a tax
  imposed by this chapter and from the tax imposed by Chapter 151, Tax
  Code [the Limited Sales, Excise, and Use Tax Act (Section 151.001 et
  seq., Tax Code)]. [A passenger train service fee of five cents is
  imposed on each individual serving of an alcoholic beverage served
  by the permittee inside the state. The fee accrues at the time the
  container containing an alcoholic beverage is delivered to the
  passenger. The permittee shall remit the fees to the commission
  each month under a reporting system prescribed by the commission.]
         SECTION 3.  Section 2001.103(d), Occupations Code, is
  amended to read as follows:
         (d)  An organization operating under a temporary license is
  subject to:
               (1)  the [taxes and] fees authorized or imposed by this
  chapter; and
               (2)  the other provisions of this chapter to the extent
  they can be made applicable.
         SECTION 4.  Section 2001.312, Occupations Code, is amended
  to read as follows:
         Sec. 2001.312.  FAILURE TO FILE [TAX OR] FEE REPORTS. A
  person is not eligible for a license or a license renewal unless all
  required reports [, tax returns,] and requested information have
  been filed under this chapter.
         SECTION 5.  Section 2001.355(b), Occupations Code, is
  amended to read as follows:
         (b)  Before temporarily suspending a license, the director
  of bingo operations must follow any prehearing rules adopted by the
  commission to determine if the license holder's continued operation
  may constitute:
               (1)  an immediate threat to the health, safety, morals,
  or welfare of the public; or
               (2)  a financial loss to this state, which includes a
  license holder's failure to remit [taxes under Section 2001.501 or]
  prize fee payments under Section 2001.502 to the commission as
  required by that section [those sections].
         SECTION 6.  Section 2001.437(a), Occupations Code, is
  amended to read as follows:
         (a)  If the unit accounting agreement of a unit states that a
  unit manager is responsible for compliance with commission rules
  and this chapter, the unit manager is responsible for:
               (1)  the filing of one quarterly report for the unit on
  a form prescribed by the commission; and
               (2)  the payment of [taxes and] fees and the
  maintenance of the bingo inventory and financial records of the
  unit.
         SECTION 7.  Section 2001.438(f), Occupations Code, is
  amended to read as follows:
         (f)  Each licensed authorized organization that is a member
  of the unit shall be jointly and severally liable for:
               (1)  compliance with the requirements of this
  subchapter and the rules of the commission relating to the filing of
  required reports;
               (2)  the maintenance of bingo inventory and financial
  records; and
               (3)  the payment of [taxes,] fees [,] and any penalties
  imposed for a violation of this subchapter or commission rules
  related to the operations of the unit.
         SECTION 8.  The heading to Subchapter K, Chapter 2001,
  Occupations Code, is amended to read as follows:
  SUBCHAPTER K.  [TAXES AND] PRIZE FEES
         SECTION 9.  Section 2001.504, Occupations Code, is amended
  to read as follows:
         Sec. 2001.504.  PAYMENT AND REPORTING OF [TAX OR] FEE. (a)
  A [tax or] fee on prizes authorized or imposed under this subchapter
  is due and is payable by the license holder or a person conducting
  bingo without a license to the commission quarterly on or before the
  25th day of the month succeeding each calendar quarter.
         (b)  The report of the [a tax or] fee on prizes must be filed
  under oath on forms prescribed by the commission.
         (c)  The commission shall adopt rules for the payment of the
  fee on prizes [taxes and fees].
         (d)  A license holder required to file a report of the fee on
  prizes [tax return] shall deliver the quarterly report [return]
  with the net amount of the fee [tax] due to the commission.
         [(e)     The commission shall deposit the revenue collected
  under this section to the credit of the general revenue fund.]
         SECTION 10.  Section 2001.508, Occupations Code, is amended
  to read as follows:
         Sec. 2001.508.  PENALTIES FOR FAILURE TO PAY OR REPORT. (a)
  If a person fails to file a report of the fee on prizes [return] as
  required by this chapter or fails to pay to the commission the fee
  on prizes [taxes] imposed under this chapter when the report
  [return] or payment is due, the person forfeits five percent of the
  amount due as a penalty, and after the first 30 days, the person
  forfeits an additional five percent.
         (b)  A delinquent payment of the fee on prizes [tax] accrues
  interest at the rate provided by Section 111.060, Tax Code,
  beginning on the 60th day after the due date.
         SECTION 11.  Section 2001.509, Occupations Code, is amended
  to read as follows:
         Sec. 2001.509.  RECOMPUTATION OF PRIZE FEE [TAX]. If the
  commission is not satisfied with a report of the fee on prizes [tax
  return] or the amount of the fee on prizes [tax] required to be
  remitted under this chapter to the state by a person, the commission
  may compute and determine the amount required to be paid on the
  basis of:
               (1)  the facts contained in the report of the fee on
  prizes [return] or report of receipts and expenses; or
               (2)  any information possessed by the commission or
  that may come into the possession of the commission, without regard
  to the period covered by the information.
         SECTION 12.  The heading to Section 2001.510, Occupations
  Code, is amended to read as follows:
         Sec. 2001.510.  DETERMINATION IF NO REPORT [RETURN] MADE.
         SECTION 13.  Sections 2001.510(a) and (c), Occupations Code,
  are amended to read as follows:
         (a)  If a license holder fails to make a required report of
  the fee on prizes [return], or if a person conducts bingo without a
  license, the commission shall make an estimate of the prizes
  awarded at a bingo occasion [or of the gross rentals received by a
  license holder for the rental of premises]. The commission shall
  make the estimate for the period in respect to which the license
  holder or other person failed to make a report [return].
         (c)  On the basis of the commission's estimate, the
  commission shall compute and determine the amount of the fee on
  prizes [taxes or fees] required to be paid to the state and shall
  add to that amount a penalty of 10 percent of the amount.
         SECTION 14.  Sections 2001.511(a) and (c), Occupations Code,
  are amended to read as follows:
         (a)  If the commission believes that the collection of the [a
  gross rental tax or] fee on prizes, an amount of the [tax or] fee on
  prizes required to be remitted to the state, or the amount of a
  determination will be jeopardized by delay, the commission shall
  make a determination of the [tax or] fee on prizes or amount of the
  [tax or] fee required to be collected, noting the finding of
  jeopardy on the determination. The determined amount is due and
  payable immediately.
         (c)  A delinquency penalty of 10 percent of the [tax or] fee
  on prizes or amount of the [tax or] fee on prizes and interest at the
  rate of 10 percent a year attaches to the amount of the [tax or] fee
  on prizes or the amount of the [tax or] fee on prizes required to be
  collected.
         SECTION 15.  Section 2001.512, Occupations Code, is amended
  to read as follows:
         Sec. 2001.512.  APPLICATION OF TAX LAWS. (a) Subtitle B,
  Title 2, Tax Code, applies to the administration, collection, and
  enforcement of [the gross rentals tax imposed under Section
  2001.501 and] the fee on prizes imposed under Section 2001.502
  except as modified by this chapter.
         (b)  In applying the provisions of Subtitle B, Title 2, Tax
  Code, to [the gross rentals tax imposed under Section 2001.501 and]
  the fee on prizes imposed under Section 2001.502 only, the fee on
  prizes is treated as if it were a tax and the powers and duties
  assigned to the comptroller under that subtitle are assigned to the
  commission.
         SECTION 16.  Section 2001.513(a), Occupations Code, is
  amended to read as follows:
         (a)  At any time within three years after a person is
  delinquent in the payment of an amount of the [gross rentals tax or]
  fee on prizes, the commission may collect the amount under this
  section.
         SECTION 17.  Sections 2001.514(a), (c), and (d), Occupations
  Code, are amended to read as follows:
         (a)  To secure payment of [the tax on gross rentals or] the
  fee on prizes imposed under this subchapter, each license holder
  shall furnish to the commission:
               (1)  a cash bond;
               (2)  a bond from a surety company chartered or
  authorized to do business in this state;
               (3)  certificates of deposit;
               (4)  certificates of savings;
               (5)  United States treasury bonds;
               (6)  subject to the approval of the commission, an
  assignment of negotiable stocks or bonds; or
               (7)  other security as the commission considers
  sufficient.
         (c)  On a license holder's failure to pay [the gross rentals
  tax or] the fee on prizes imposed under this subchapter, the
  commission may notify the license holder and any surety of the
  delinquency by jeopardy or deficiency determination. If payment is
  not made when due, the commission may forfeit all or part of the
  bond or security.
         (d)  If the license holder ceases to conduct bingo and
  relinquishes the license holder's license, the commission shall
  authorize the release of all bonds and other security on a
  determination that no amounts of [the gross rentals tax or] the fee
  on prizes remain due and payable under this subchapter.
         SECTION 18.  Section 2001.515, Occupations Code, is amended
  to read as follows:
         Sec. 2001.515.  COMMISSION'S [TAX] DUTIES. The commission
  shall perform all functions incident to the administration,
  collection, enforcement, and operation of the fee on prizes [a tax]
  imposed under this subchapter.
         SECTION 19.  (a)  Subchapter B, Chapter 11, Tax Code, is
  amended by adding Section 11.211 to read as follows:
         Sec. 11.211.  REAL PROPERTY LEASED TO CERTAIN SCHOOLS. A
  person is entitled to an exemption from taxation of the real
  property that the person owns and leases to a school that is
  qualified as provided by Section 11.21(d) if:
               (1)  the real property is used exclusively by the
  school for educational functions;
               (2)  the real property is reasonably necessary for the
  operation of the school;
               (3)  the owner certifies by affidavit to the school
  that the rent for the lease of the real property will be reduced by
  an amount equal to the amount by which the taxes on the property are
  reduced as a result of the exemption;
               (4)  the owner provides the school with a disclosure
  document stating the amount by which the taxes on the real property
  are reduced as a result of the exemption and the method the owner
  will implement to ensure that the rent charged for the lease of the
  property fully reflects that reduction; and
               (5)  the rent charged for the lease of the real property
  reflects the reduction in the amount of taxes on the property
  resulting from the exemption through a monthly or annual credit
  against the rent.
         (b)  This section applies only to ad valorem taxes imposed
  for a tax year beginning on or after the effective date of this
  section.
         SECTION 20.  (a)  Section 11.231, Tax Code, is amended by
  adding Subsection (a-1) to read as follows:
         (a-1)  In addition to an organization described by
  Subsection (a), in this section, "nonprofit community business
  organization" also means a Type A corporation governed by Chapter
  504, Local Government Code, and a Type B corporation governed by
  Chapter 505, Local Government Code.
         (b)  This section applies only to ad valorem taxes imposed
  for a tax year that begins on or after the effective date of this
  section.
         SECTION 21.  Section 151.314, Tax Code, is amended by
  amending Subsections (b-1), (c-2), and (h) and adding Subsection
  (c-4) to read as follows:
         (b-1)  For purposes of this section, "snack items" means
  [includes]:
               (1)  breakfast bars, granola bars, nutrition bars,
  sports bars, protein bars, or yogurt bars, unless labeled and
  marketed as candy;
               (2)  snack mix or trail mix;
               (3)  nuts, but not including pine nuts or [unless]
  candy-coated nuts;
               (4)  popcorn; [and]
               (5)  chips, crackers, [or] hard pretzels, pork rinds,
  or corn nuts;
               (6)  sunflower seeds or pumpkin seeds;
               (7)  ice cream, sherbet, or frozen yogurt; and
               (8)  ice pops, juice pops, sorbet, or other frozen
  fruit items containing not more than 50 percent fruit juice by
  volume.
         (c-2)  The exemption provided by Subsection (a) does not
  include the following prepared food:
               (1)  food, food products, and drinks, including meals,
  milk and milk products, fruit and fruit products, sandwiches,
  salads, processed meats and seafoods, vegetable juice, and ice
  cream in cones or small cups, served, prepared, or sold ready for
  immediate consumption [in or] by restaurants, lunch counters,
  cafeterias, delis, vending machines, hotels, or like places of
  business or sold ready for immediate consumption from pushcarts,
  motor vehicles, or any other form of vehicle;
               (2)  food sold in a heated state or heated by the
  seller; or
               (3)  two or more food ingredients mixed or combined by
  the seller for sale as a single item, including items that are sold
  in an unheated state by weight or volume as a single item, but not
  including food that is only cut, repackaged, or pasteurized by the
  seller.
         (c-4)  For purposes of Subdivision (c-2)(1), if a grocery
  store or convenience store contains a type of location listed in
  that subdivision, the store is considered a like place of business
  for purposes of that subdivision, but only in relation to items sold
  at that location.
         (h)  The exemption provided by Subsection (a) does not apply
  to a snack item if the item is sold through a vending machine or is
  sold in individual-sized portions.  For purposes of this
  subsection, an individual-sized portion is a portion that:
               (1)  is labeled as having not more than one serving; or
               (2)  contains less than 2.5 ounces[, if the package
  does not specify the number of servings].
         SECTION 22.  (a)  Section 156.001, Tax Code, is amended to
  read as follows:
         Sec. 156.001.  DEFINITIONS [DEFINITION].  (a)  In this
  chapter, "hotel" means a building in which members of the public
  obtain sleeping accommodations for consideration.  The term
  includes a hotel, motel, tourist home, tourist house, tourist
  court, lodging house, inn, rooming house, or bed and breakfast.  The
  term does not include:
               (1)  a hospital, sanitarium, or nursing home;
               (2)  a dormitory or other housing facility owned or
  leased and operated by an institution of higher education or a
  private or independent institution of higher education as those
  terms are defined by Section 61.003, Education Code, used by the
  institution for the purpose of providing sleeping accommodations
  for persons engaged in an educational program or activity at the
  institution; or
               (3)  an oilfield portable unit, as defined by Section
  152.001.
         (b)  For purposes of the imposition of a hotel occupancy tax
  under this chapter, Chapter 351 or 352, or other law, "hotel" 
  includes a short-term rental.  In this subsection, "short-term
  rental" means the rental of all or part of a residential property to
  a person who is not a permanent resident under Section 156.101.
         (b)  The heading to Section 351.005, Tax Code, is amended to
  read as follows:
         Sec. 351.005.  REIMBURSEMENT FOR [TAX COLLECTION] EXPENSES
  OF TAX COLLECTION AND USE OF ELECTRONIC TAX ADMINISTRATION SYSTEM.
         (c)  Section 351.005(a), Tax Code, is amended to read as
  follows:
         (a)  A municipality may permit a person who is required to
  collect and pay over to the municipality the tax authorized by this
  chapter not more than one percent of the amount collected and
  required to be reported as reimbursement to the person for the costs
  in collecting the tax and, if applicable, the use of an electronic
  tax administration system described by Section 351.1012.
         (d)  Subchapter B, Chapter 351, Tax Code, is amended by
  adding Section 351.1012 to read as follows:
         Sec. 351.1012.  ELECTRONIC TAX ADMINISTRATION SYSTEM. (a)
  Notwithstanding any other provision of this chapter, a municipality
  may spend not more than one percent of the revenue derived from the
  tax authorized by this chapter for the creation, maintenance,
  operation, and administration of an electronic tax administration
  system.
         (b)  A municipality may contract with a third party to assist
  in the creation, maintenance, operation, or administration of the
  electronic tax administration system.
         (e)  The amendments made by this section to Section 156.001,
  Tax Code, are a clarification of existing law and do not imply that
  existing law may be construed as inconsistent with the law as
  amended by this section.
         (f)  This section takes effect immediately if this Act
  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 this section to
  have immediate effect, this section takes effect September 1, 2015.
         SECTION 23.  Sections 162.001(38), (39), and (42), Tax Code,
  are amended to read as follows:
               (38)  "License holder" means a person licensed by the
  comptroller under Section 162.105, 162.205, [162.304, 162.305,
  162.306,] 162.357, or 162.358.
               (39)  "Liquefied gas" means all combustible gases that
  exist in the gaseous state at 60 degrees Fahrenheit and at a
  pressure of 14.7 pounds per square inch absolute, but does not
  include compressed natural gas, liquefied natural gas, gasoline, or
  diesel fuel.  Liquefied gas is considered a special fuel for
  purposes of Section 151.308.
               (42)  "Motor fuel" means gasoline, diesel fuel,
  [liquefied gas,] gasoline blended fuel, compressed natural gas,
  liquefied natural gas, and other products that are offered for
  sale, sold, used, or capable of use as fuel for a gasoline-powered
  engine or a diesel-powered engine.
         SECTION 24.  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:
                     (A)  for gasoline 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 gasoline in a situation described by
  Subsection (e), the bill of lading indicates the destination state,
  the gasoline 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)  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
  indicates the foreign destination and the fuel is actually exported
  to the foreign country; [or]
               (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 25.  Section 162.125, Tax Code, is amended by adding
  Subsection (g-2) to read as follows:
         (g-2)  A nonprofit entity exempted under Section
  162.104(a)(9) from the tax imposed under this subchapter that paid
  tax on the purchase of gasoline is entitled to a refund of the tax
  paid, and the entity may file a refund claim with the comptroller
  for that amount.
         SECTION 26.  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;
               (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; [or]
               (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 27.  Section 162.227, Tax Code, is amended by adding
  Subsection (f-2) to read as follows:
         (f-2)  A nonprofit entity exempted under Section
  162.204(a)(15) from the tax imposed under this subchapter that paid
  tax on the purchase of diesel fuel is entitled to a refund of the tax
  paid, and the entity may file a refund claim with the comptroller
  for that amount.
         SECTION 28.  Section 162.356, Tax Code, is amended to read as
  follows:
         Sec. 162.356.  EXEMPTIONS.  (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; [or]
               (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;
               (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.
         (b)  The exemption provided by Subsection (a)(11) does not
  apply to compressed natural gas or liquefied natural gas delivered
  into the fuel supply tank of a motor vehicle from a refueling
  facility accessible to motor vehicles other than those described by
  Subsection (a)(11)(A).
         SECTION 29.  Section 162.365(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 purchase occurred, and a person who does not
  hold a license under this subchapter may file a refund claim with
  the comptroller if the license holder or person paid tax on
  compressed natural gas or liquefied natural gas and the license
  holder or person:
               (1)  is the United States government and the fuel was
  delivered into the fuel supply tank of a motor vehicle operated
  exclusively by the United States, provided that a credit or refund
  is not allowed for fuel delivered into the fuel supply tank of a
  motor vehicle operated by a person operating under a contract with
  the United States;
               (2)  is a public school district in this state and the
  fuel was delivered into the fuel supply tank of a motor vehicle
  operated exclusively by the district;
               (3)  is a commercial transportation company that
  provides public school transportation services to a school district
  under Section 34.008, Education Code, and the fuel was delivered
  into the fuel supply tank of a motor vehicle used to provide those
  services;
               (4)  is a volunteer fire department in this state and
  the fuel was delivered into the fuel supply tank of a motor vehicle
  operated exclusively by the department;
               (5)  is a municipality or county in this state and the
  fuel was delivered into the fuel supply tank of a motor vehicle
  operated exclusively by the municipality or county;
               (6)  is a nonprofit electric cooperative corporation
  organized under Chapter 161, Utilities Code, and the fuel was
  delivered into the fuel supply tank of a motor vehicle operated
  exclusively by the electric cooperative;
               (7)  is a nonprofit telephone cooperative corporation
  organized under Chapter 162, Utilities Code, and the fuel was
  delivered into the fuel supply tank of a motor vehicle operated
  exclusively by the telephone cooperative;
               (8)  uses the fuel in off-highway equipment, in a
  stationary engine, in a motorboat, in an aircraft, in equipment
  used solely for servicing aircraft and used exclusively
  off-highway, in a locomotive, or for other nonhighway purposes and
  not in a motor vehicle operated or intended to be operated on the
  public highways; [or]
               (9)  uses the fuel in a motor vehicle that is operated
  exclusively off-highway, except for incidental travel on the public
  highways as determined by the comptroller, provided that a credit
  or refund may not be allowed for the portion used in the incidental
  highway travel; or
               (10)  is a nonprofit entity that is organized for the
  sole purpose of and engages exclusively in providing emergency
  medical services and the fuel was delivered into the fuel supply
  tank of a motor vehicle operated exclusively by the nonprofit
  entity to provide emergency medical services, including rescue and
  ambulance services.
         SECTION 30.  Section 162.402(a), Tax Code, is amended to
  read as follows:
         (a)  A person forfeits to the state a civil penalty of not
  less than $25 and not more than $200 if the person:
               (1)  refuses to stop and permit the inspection and
  examination of a motor vehicle transporting or using motor fuel on
  demand of a peace officer or the comptroller;
               (2)  operates a motor vehicle in this state without a
  valid interstate trucker's license or a trip permit when the person
  is required to hold one of those licenses or permits;
               (3)  [operates a liquefied gas-propelled motor vehicle
  that is required to be licensed in this state, including motor
  vehicles equipped with dual carburetion, and does not display a
  current liquefied gas tax decal or multistate fuels tax agreement
  decal;
               [(4)     makes a tax-free sale or delivery of liquefied
  gas into the fuel supply tank of a motor vehicle that does not
  display a current Texas liquefied gas tax decal;
               [(5)     makes a taxable sale or delivery of liquefied gas
  without holding a valid dealer's license;
               [(6)     makes a tax-free sale or delivery of liquefied
  gas into the fuel supply tank of a motor vehicle bearing
  out-of-state license plates;
               [(7)     makes a delivery of liquefied gas into the fuel
  supply tank of a motor vehicle bearing Texas license plates and no
  Texas liquefied gas tax decal, unless licensed under a multistate
  fuels tax agreement;
               [(8)]  transports gasoline or diesel fuel in any cargo
  tank that has a connection by pipe, tube, valve, or otherwise with
  the fuel injector or carburetor of, or with the fuel supply tank
  feeding the fuel injector or carburetor of, the motor vehicle
  transporting the product;
               (4) [(9)]  sells or delivers gasoline or diesel fuel
  from any fuel supply tank connected with the fuel injector or
  carburetor of a motor vehicle;
               (5) [(10)]  owns or operates a motor vehicle for which
  reports or mileage records are required by this chapter without an
  operating odometer or other device in good working condition to
  record accurately the miles traveled;
               (6) [(11)]  furnishes to a licensed supplier or
  distributor a signed statement for purchasing diesel fuel tax-free
  and then uses the tax-free diesel fuel to operate a diesel-powered
  motor vehicle on a public highway;
               (7) [(12)]  fails or refuses to comply with or violates
  a provision of this chapter;
               (8) [(13)]  fails or refuses to comply with or violates
  a comptroller's rule for administering or enforcing this chapter;
               (9) [(14)]  is an importer who does not obtain an
  import verification number when required by this chapter;
               (10) [(15)]  purchases motor fuel for export, on which
  the tax imposed by this chapter has not been paid, and subsequently
  diverts or causes the motor fuel to be diverted to a destination in
  this state or any other state or country other than the originally
  designated state or country without first obtaining a diversion
  number;
               (11) [(16)]  delivers compressed natural gas or
  liquefied natural gas into the fuel supply tank of a motor vehicle
  and the person does not hold a valid compressed natural gas and
  liquefied natural gas dealer's license; or
               (12) [(17)]  makes a tax-free delivery of compressed
  natural gas or liquefied natural gas into the fuel supply tank of a
  motor vehicle, unless the delivery is exempt from tax under Section
  162.356.
         SECTION 31.  Section 162.403, Tax Code, is amended to read as
  follows:
         Sec. 162.403.  CRIMINAL OFFENSES.  Except as provided by
  Section 162.404, a person commits an offense if the person:
               (1)  refuses to stop and permit the inspection and
  examination of a motor vehicle transporting or using motor fuel on
  the demand of a peace officer or the comptroller;
               (2)  is required to hold a valid trip permit or
  interstate trucker's license, but operates a motor vehicle in this
  state without a valid trip permit or interstate trucker's license;
               (3)  [operates a liquefied gas-propelled motor vehicle
  that is required to be licensed in this state, including a motor
  vehicle equipped with dual carburetion, and does not display a
  current liquefied gas tax decal or multistate fuels tax agreement
  decal;
               [(4)]  transports gasoline or diesel fuel in any cargo
  tank that has a connection by pipe, tube, valve, or otherwise with
  the fuel injector or carburetor or with the fuel supply tank feeding
  the fuel injector or carburetor of the motor vehicle transporting
  the product;
               (4) [(5)]  sells or delivers gasoline or diesel fuel
  from a fuel supply tank that is connected with the fuel injector or
  carburetor of a motor vehicle;
               (5) [(6)]  owns or operates a motor vehicle for which
  reports or mileage records are required by this chapter without an
  operating odometer or other device in good working condition to
  record accurately the miles traveled;
               (6) [(7)]  sells or delivers dyed diesel fuel for the
  operation of a motor vehicle on a public highway;
               (7) [(8)]  uses dyed diesel fuel for the operation of a
  motor vehicle on a public highway except as allowed under Section
  162.235;
               (8) [(9)     makes a tax-free sale or delivery of
  liquefied gas into the fuel supply tank of a motor vehicle that does
  not display a current Texas liquefied gas tax decal;
               [(10)     makes a sale or delivery of liquefied gas on
  which the person knows the tax is required to be collected, if at
  the time the sale is made the person does not hold a valid dealer's
  license;
               [(11)     makes a tax-free sale or delivery of liquefied
  gas into the fuel supply tank of a motor vehicle bearing
  out-of-state license plates;
               [(12)     makes a delivery of liquefied gas into the fuel
  supply tank of a motor vehicle bearing Texas license plates and no
  Texas liquefied gas tax decal, unless licensed under a multistate
  fuels tax agreement;
               [(13)]  refuses to permit the comptroller or the
  attorney general to inspect, examine, or audit a book or record
  required to be kept by a license holder, other user, or any person
  required to hold a license under this chapter;
               (9) [(14)]  refuses to permit the comptroller or the
  attorney general to inspect or examine any plant, equipment,
  materials, or premises where motor fuel is produced, processed,
  blended, stored, sold, delivered, or used;
               (10) [(15)]  refuses to permit the comptroller, the
  attorney general, an employee of either of those officials, a peace
  officer, an employee of the Texas Commission on Environmental
  Quality, or an employee of the Department of Agriculture to measure
  or gauge the contents of or take samples from a storage tank or
  container on premises where motor fuel is produced, processed,
  blended, stored, sold, delivered, or used;
               (11) [(16)]  is a license holder, a person required to
  be licensed, or another user and fails or refuses to make or deliver
  to the comptroller a report required by this chapter to be made and
  delivered to the comptroller;
               (12) [(17)]  is an importer who does not obtain an
  import verification number when required by this chapter;
               (13) [(18)]  purchases motor fuel for export, on which
  the tax imposed by this chapter has not been paid, and subsequently
  diverts or causes the motor fuel to be diverted to a destination in
  this state or any other state or country other than the originally
  designated state or country without first obtaining a diversion
  number;
               (14) [(19)]  conceals motor fuel with the intent of
  engaging in any conduct proscribed by this chapter or refuses to
  make sales of motor fuel on the volume-corrected basis prescribed
  by this chapter;
               (15) [(20)]  refuses, while transporting motor fuel,
  to stop the motor vehicle the person is operating when called on to
  do so by a person authorized to stop the motor vehicle;
               (16) [(21)]  refuses to surrender a motor vehicle and
  cargo for impoundment after being ordered to do so by a person
  authorized to impound the motor vehicle and cargo;
               (17) [(22)]  mutilates, destroys, or secretes a book or
  record required by this chapter to be kept by a license holder,
  other user, or person required to hold a license under this chapter;
               (18) [(23)]  is a license holder, other user, or other
  person required to hold a license under this chapter, or the agent
  or employee of one of those persons, and makes a false entry or
  fails to make an entry in the books and records required under this
  chapter to be made by the person or fails to retain a document as
  required by this chapter;
               (19) [(24)]  transports in any manner motor fuel under
  a false cargo manifest or shipping document, or transports in any
  manner motor fuel to a location without delivering at the same time
  a shipping document relating to that shipment;
               (20) [(25)]  engages in a motor fuel transaction that
  requires that the person have a license under this chapter without
  then and there holding the required license;
               (21) [(26)]  makes and delivers to the comptroller a
  report required under this chapter to be made and delivered to the
  comptroller, if the report contains false information;
               (22) [(27)]  forges, falsifies, or alters an invoice or
  shipping document prescribed by law;
               (23) [(28)]  makes any statement, knowing said
  statement to be false, in a claim for a tax refund filed with the
  comptroller;
               (24) [(29)]  furnishes to a licensed supplier or
  distributor a signed statement for purchasing diesel fuel tax-free
  and then uses the tax-free diesel fuel to operate a diesel-powered
  motor vehicle on a public highway;
               (25) [(30)]  holds an aviation fuel dealer's license
  and makes a taxable sale or use of any gasoline or diesel fuel;
               (26) [(31)]  fails to remit any tax funds collected or
  required to be collected by a license holder, another user, or any
  other person required to hold a license under this chapter;
               (27) [(32)]  makes a sale of dyed diesel fuel tax-free
  into a storage facility of a person who:
                     (A)  is not licensed as a distributor, as an
  aviation fuel dealer, or as a dyed diesel fuel bonded user; or
                     (B)  does not furnish to the licensed supplier or
  distributor a signed statement prescribed in Section 162.206;
               (28) [(33)]  makes a sale of gasoline tax-free to any
  person who is not licensed as an aviation fuel dealer;
               (29) [(34)]  purchases any motor fuel tax-free when not
  authorized to make a tax-free purchase under this chapter;
               (30) [(35)]  purchases motor fuel with the intent to
  evade any tax imposed by this chapter or accepts a delivery of motor
  fuel by any means and does not at the same time accept or receive a
  shipping document relating to the delivery;
               (31) [(36)]  transports motor fuel for which a cargo
  manifest or shipping document is required to be carried without
  possessing or exhibiting on demand by an officer authorized to make
  the demand a cargo manifest or shipping document containing the
  information required to be shown on the manifest or shipping
  document;
               (32) [(37)]  imports, sells, uses, blends,
  distributes, or stores motor fuel within this state on which the
  taxes imposed by this chapter are owed but have not been first paid
  to or reported by a license holder, another user, or any other
  person required to hold a license under this chapter;
               (33) [(38)]  blends products together to produce a
  blended fuel that is offered for sale, sold, or used and that
  expands the volume of the original product to evade paying
  applicable motor fuel taxes;
               (34) [(39)]  evades or attempts to evade in any manner
  a tax imposed on motor fuel by this chapter;
               (35) [(40)]  delivers compressed natural gas or
  liquefied natural gas into the fuel supply tank of a motor vehicle
  and the person does not hold a valid compressed natural gas and
  liquefied natural gas dealer's license; or
               (36) [(41)]  makes a tax-free delivery of compressed
  natural gas or liquefied natural gas into the fuel supply tank of a
  motor vehicle, unless the delivery is exempt from tax under Section
  162.356.
         SECTION 32.  Section 162.404, Tax Code, is amended to read as
  follows:
         Sec. 162.404.  CRIMINAL OFFENSES: SPECIAL PROVISIONS AND
  EXCEPTIONS. (a) A person does not commit an offense under Section
  162.403 unless the person intentionally or knowingly engaged in
  conduct as the definition of the offense requires, except that no
  culpable mental state is required for an offense under Section
  162.403(5) [162.403(6)].
         (b)  Each day that a refusal prohibited under Section
  162.403(8), (9), or (10) [162.403(13), (14), or (15)] continues is
  a separate offense.
         (c)  The prohibition under Section 162.403(27) [162.403(32)]
  does not apply to the tax-free sale or distribution of diesel fuel
  authorized by Section 162.204(a)(1) [162.204(1)], (2), or (3).
         (d)  The prohibition under Section 162.403(28) [162.403(33)]
  does not apply to the tax-free sale or distribution of gasoline
  under Section 162.104(a)(1) [162.104(1)], (2), or (3).
         SECTION 33.  Section 162.405, Tax Code, is amended to read as
  follows:
         Sec. 162.405.  CRIMINAL PENALTIES. (a) An offense under
  Section 162.403(1), (2), (3), (4), (5), [(6),] or (7) [(8)] is a
  Class C misdemeanor.
         (b)  An offense under Section 162.403(8), (9) [162.403(9)],
  (10), (11), (12), (13), (35), or (36) [(14), (15), (16), (17), (18),
  (40), or (41)] is a Class B misdemeanor.
         (c)  An offense under Section 162.403(14), (15), or (16)
  [162.403(19), (20), or (21)] is a Class A misdemeanor.
         (d)  An offense under Section 162.403(6), (17), (18), (19),
  (20), (21) [162.403(7)], (22), (23), or (24) [, (25), (26), (27),
  (28), or (29)] is a felony of the third degree.
         (e)  An offense under Section 162.403(25), (26), (27), (28),
  (29), (30) [162.403(30)], (31), (32), (33), or (34)[, (35), (36),
  (37), (38), or (39)] is a felony of the second degree.
         (f)  Violations of three or more separate offenses under the
  following sections committed pursuant to one scheme or continuous
  course of conduct may be considered as one offense and punished as a
  felony of the second degree:
               (1)  Section 162.403(6) [162.403(7)];
               (2)  Sections 162.403(8) [162.403(13)] through (11)
  [(16)]; or
               (3)  Sections 162.403(17) [162.403(22)] through (24)
  [(29)].
         SECTION 34.  Section 548.051(a), Transportation Code, is
  amended to read as follows:
         (a)  A motor vehicle, trailer, semitrailer, pole trailer, or
  mobile home, registered in this state, must have the following
  items inspected at an inspection station or by an inspector:
               (1)  tires;
               (2)  wheel assembly;
               (3)  safety guards or flaps, if required by Section
  547.606;
               (4)  brake system, including power brake unit;
               (5)  steering system, including power steering;
               (6)  lighting equipment;
               (7)  horns and warning devices;
               (8)  mirrors;
               (9)  windshield wipers;
               (10)  sunscreening devices, unless the vehicle is
  exempt from sunscreen device restrictions under Section 547.613;
               (11)  front seat belts in vehicles on which seat belt
  anchorages were part of the manufacturer's original equipment;
               (12)  [tax decal, if required by Section 548.104(d)(1);
               [(13)]  exhaust system;
               (13) [(14)]  exhaust emission system;
               (14) [(15)]  fuel tank cap, using pressurized testing
  equipment approved by department rule; and
               (15) [(16)]  emissions control equipment as designated
  by department rule.
         SECTION 35.  Section 548.104(d), Transportation Code, is
  amended to read as follows:
         (d)  An inspection station or inspector may not issue a
  passing vehicle inspection report for a vehicle equipped with:
               (1)  [a carburetion device permitting the use of
  liquefied gas alone or interchangeably with another fuel, unless a
  valid liquefied gas tax decal issued by the comptroller is attached
  to the lower right-hand corner of the front windshield of the
  vehicle on the passenger side;
               [(2)]  a sunscreening device prohibited by Section
  547.613, except that the department by rule shall provide
  procedures for issuance of a passing vehicle inspection report for
  a vehicle exempt under Section 547.613(c); or
               (2) [(3)]  a compressed natural gas container unless
  the owner demonstrates in accordance with department rules proof:
                     (A)  that:
                           (i)  the container has met the inspection
  requirements under 49 C.F.R. Section 571.304; and
                           (ii)  the manufacturer's recommended service
  life for the container, as stated on the container label required by
  49 C.F.R. Section 571.304, has not expired; or
                     (B)  that the vehicle is a fleet vehicle for which
  the fleet operator employs a technician certified to inspect the
  container.
         SECTION 36.  The following are repealed:
               (1)  Section 411.109(c), Government Code;
               (2)  Section 2001.501, Occupations Code;
               (3)  Section 111.021(j), Tax Code;
               (4)  Chapter 159, Tax Code;
               (5)  Section 162.001(40), Tax Code;
               (6)  Subchapter D, Chapter 162, Tax Code; and
               (7)  Section 162.505, Tax Code.
         SECTION 37.  (a)  The change in law made by this Act to
  Section 162.402(a), Tax Code, applies only to a violation that
  occurs on or after the effective date of this Act. A violation that
  occurred before the effective date of this Act is governed by the
  law in effect on the date the violation occurred, and the former law
  is continued in effect for that purpose.
         (b)  The changes in law made by this Act to Sections 162.403,
  162.404, and 162.405, Tax Code, apply only to an offense committed
  on or after the effective date of this Act.  An offense committed
  before the effective date of this Act is governed by the law in
  effect on the date the offense was committed, and the former law is
  continued in effect for that purpose.  For purposes of this section,
  an offense was committed before the effective date of this Act if
  any element of the offense occurred before that date.
         (c)  The comptroller of public accounts shall issue to a
  person who holds a liquefied gas tax decal license under Section
  162.305, Tax Code, that is valid on or after the effective date of
  this Act a pro rata refund of the unused portion of the advanced
  taxes paid for the period after the effective date of this Act.
         SECTION 38.  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 39.  (a)  Except as otherwise provided by this Act,
  this Act takes effect September 1, 2015.
         (b)  Section 19 of this Act takes effect January 1, 2016, but
  only if a constitutional amendment authorizing the legislature to
  exempt from ad valorem taxation real property leased to certain
  schools organized and operated primarily for the purpose of
  engaging in educational functions is approved by the voters. If
  that amendment is not approved by the voters, Section 19 of this Act
  has no effect.
         (c)  Section 20 of this Act takes effect January 1, 2016.
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
 
         I certify that H.B. No. 1905 was passed by the House on May 7,
  2015, by the following vote:  Yeas 133, Nays 10, 2 present, not
  voting; that the House refused to concur in Senate amendments to
  H.B. No. 1905 on May 28, 2015, 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. 1905 on May 31, 2015, by the following vote:  Yeas 132,
  Nays 9, 2 present, not voting.
 
  ______________________________
  Chief Clerk of the House   
 
         I certify that H.B. No. 1905 was passed by the Senate, with
  amendments, on May 26, 2015, 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.
  1905 on May 31, 2015, by the following vote:  Yeas 19, Nays 12.
 
  ______________________________
  Secretary of the Senate   
  APPROVED: __________________
                  Date       
   
           __________________
                Governor