HBA-EDN H.B. 1241 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 1241 By: Counts Ways & Means 3/19/2001 Introduced BACKGROUND AND PURPOSE Current law prohibits a tax-free purchase or sale of any diesel fuel of more than 3,000 gallons in a single transaction or in a calendar month in which the person has purchased more than 10,000 gallons of diesel fuel unless the person holds a bonded user permit. The regulations associated with the purchase or sale of diesel fuel, such as requiring a bonded user permit, are becoming increasingly burdensome to both purchasers and suppliers while doing little to control the illegal use of diesel fuel by the consumer. House Bill 1241 changes the minimum bonding requirement for the purchase of red dyed tax exempt diesel fuel for certain agricultural and oil and gas users. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. ANALYSIS House Bill 1241 amends the Tax Code to increase, from up to 3,000 to up to 7,400, the number of gallons of dyed or undyed diesel fuel that a person may purchase tax-free in a single transaction. This increase also applies to the number of gallons of dyed diesel fuel, or undyed diesel fuel for agricultural purposes, that a permitted supplier may sell tax-free in a single transaction. The bill prohibits the above transactions from occurring in a calendar month in which the person has previously purchased or the supplier has previously sold 25,000 gallons of dyed diesel fuel if the purchaser stipulates in a signed statement that all of the fuel will be consumed by the purchaser in oil or gas production. The bill provides that the requirement for a bonded user permit does not affect the right of a purchaser, using a signed statement, to purchase not more than 25,000 gallons of dyed diesel fuel for the purchaser's own use in oil or gas production. EFFECTIVE DATE September 1, 2001.