Groundwater and surface water must be protected from contamination caused by leaks of hazardous, toxic, and other harmful substances. The Groundwater Protection Act provides an "insurance policy" for the cleanup of leakage and spillage.
The Texas Commission on Environmental Quality (TCEQ) is responsible for administration of the fund and the groundwater cleanup program, registration and regulation of tanks containing hazardous materials, and the enforcement of environmental cleanup. The Commission collects fees for the registration of underground and above ground storage tanks.
The Comptroller is responsible for the collection of fees on deliveries of petroleum products. The fees are deposited in the Petroleum Storage Tank Remediation Fund, which is used for the administration, investigation and cleanup of the environment when contamination occurs due to leakage or spillage.
The law became effective September 1, 1989. Initially there was confusion as to the title of the statute. Consequently, the following are some of the terms used by the industry on their billing invoices and transporting documents:
Definitions applicable to the groundwater protection are:
|A.||made of non-earthen materials;|
|B.||located on or above the surface of the ground or on or above the surface of the floor of a structure below ground such as a mineworking, basement, or vault; and|
|C.||designed to contain an accumulation of petroleum.|
Petroleum Products Delivery Fee is included in the fee system - tax code 64. The following are the most frequently used inquiries. To check other inquiries, check the Fee System listings.
|XIDATA||Return data inquiry information
|XICOLL||Collection balance information.
There is not a history for tax code 64 on XIRPTS. The auditor should print all data per the XIDATA screens for the audit period in lieu of the history.
Refer to the Quick Reference Manual for other inquiries for Petroleum Product Delivery Fee accounts.
Exemptions from Regulation Fee Only
An underground or aboveground storage tank is exempt from the tank registration fee but not from the petroleum products delivery fee if the tank is:
An above ground storage tank that is located at or is part of a petrochemical plant, a petroleum refinery, an electric generating facility, or a bulk facility is exempt from regulation but not exempt from the fee imposed by this subChapter.
Exemptions from Both Fees
A storage tank is exempt from regulation under this subChapter if the sole or principal substance in the tank is a hazardous substance and the tank is located:
An interstate pipeline facility, including gathering lines or an above ground storage tank connected to such a facility is exempt from regulation under the Groundwater Protection Act if the pipeline facility is regulated under the Natural Gas Pipeline Safety Act of 1968 or the Hazardous Liquid Pipeline Safety Act of 1979.
An intrastate pipeline facility or an aboveground storage tank connected to such a facility is exempt from regulation of the Groundwater Protection Act if the pipeline facility is regulated under the Natural Resources Code or Articles 6053-1 and 6053-2, Revised Statutes.
In-ground hydraulic lifts that use a compressed air/hydraulic fluid system and hold less than 100 gallons of hydraulic oil, if exempt by the federal Environmental Protection Agency, are exempt from regulation and fees under this subChapter.
The Petroleum Product Delivery Fee is imposed on the delivery of a petroleum product upon withdrawal from bulk of that product.
Each operator of a bulk facility, upon withdrawal from bulk of a petroleum product, shall collect from the person who orders the withdrawal a fee based on the net gallons of the product.
A person who imports a petroleum product in a cargo tank or a barge destined for delivery into an underground or above ground storage tank, regardless of whether or not the tank is exempt from regulation, shall pay the fee to the Comptroller.
The fee amount is determined as follows:
|Load Size||Effective Date|
|0 - 2,499 gallons||25.00||18.75||12.50||10.00|
|2,500 - 4,999||50.00||37.50||25.00||20.00|
|5,000 - 7,999||75.00||56.25||37.50||30.00|
|8,000 - 9,999||100.00||75.00||50.00||40.00|
|10,000 + @5,000||50.00||37.50||25.00||20.00|
|Gasoline less than 7,000||75.00||56.25||37.50||30.00|
|Gasoline 7,000 - 9,999||100.00||75.00||50.00||40.00|
The amount of the fee will be reduced by 20% for fiscal years 2004 and 2005, by 50% for fiscal year 2006 and by 60% for fiscal year 2007, after which time the fee will no longer be collected.
A bulk facility operator who receives petroleum products on which the fee has been paid may take credit for the fee paid on monthly reports.
Exceptions to the fee are as follows:
Imported petroleum product that is delivered to a tank connected to or part of a bulk facility in this state from which the imported petroleum product will be withdrawn from bulk is exempt from the fee requirement.
The fee does not apply to delivery of a petroleum product destined for export from this state if the petroleum product is in continuous movement to a destination outside this state. Petroleum products taken to an intermediate storage facility prior to export are not exempt from the fee.
The fee does not apply to a petroleum product withdrawn from bulk for delivery to an electric generating facility.
The fee does not apply to a petroleum product withdrawn from bulk for delivery to a common carrier railroad for exclusive use by the common carrier railroad.
Common carrier railroads are exempt from the fees imposed by the Groundwater Protection Act and are not reimbursed for costs incurred as a result of a release from a storage tank system, operated, or maintained by the common carrier railroad.
Deliveries into the fuel supply tanks of boats and vessels are exempt when each of the following conditions is met:
Persons exempt from the fee cannot request a refund directly from the Comptroller. The refund must be obtained from the bulk facility operator who collected the fee.
The exporter, electric generating facility or common carrier railroad must furnish the bulk facility with a copy of an exception letter issued by the Comptroller.
The following persons must obtain a Petroleum Product Delivery Fee Permit:
The permit entitles that person to deliver a petroleum product into a cargo tank destined for delivery to an underground or above ground storage tank, regardless of whether or not the tank is exempt from regulation.
A permit issued by the Comptroller is valid on the date of its issuance and is permanent until it is surrendered by the holder or canceled by the Comptroller.
The permit must be posted in a conspicuous place or kept available for inspection at the principal place of business of the owner. A copy of the permit must be kept at each place of business or other place of storage from which petroleum products are delivered into cargo tanks and in each motor vehicle used by the permit holder to transport petroleum products by the holder for delivery into petroleum storage tanks in this state.
Persons required to obtain a permit must post a security. The security may be waived if any motor fuels bonds have been released and the taxpayer's account is current in all other taxes.
Acceptable securities are:
The amount of security required is equal to two times the highest fees expected to accrue during a reporting period. The minimum bond is $30,000 and the maximum bond is $600,000.
Each operator of a bulk facility and each importer shall list, as a separate line item on an invoice or cargo manifest required to be carried with the petroleum product, the amount of the delivery fee due. Only persons who hold a petroleum products delivery fee permit may charge and collect the fee. No other person selling fuel may list the fee as a separate item on an invoice or manifest unless the amount is clearly identified as reimbursement. An amount listed as a reimbursement may not exceed the amount of fee actually collected.
The owner or lessee of a cargo tank or a common or contract carrier transporting a petroleum product shall possess a cargo manifest or an invoice showing the point of origin, the delivery point of the product, the amount of the required fee, and other information as required by the rules of the Comptroller.
Originals or copies of the cargo manifests or invoices and any other records required under this section or rules of the Comptroller must be maintained for a period of four years after the date on which the document or other record is prepared and be open for inspection by the Comptroller at all reasonable times.
The audit procedure would consist of verifying:
A "Total Fuel to Account For" type of cross-check using the distributor and supplier reports is recommended.
Each operator of a bulk facility and each importer shall file a report with the Comptroller on or before the 25th day of each month and remit the amount of fees required to be collected or paid during the preceding month.
Failure to file the report and/or pay the fee results in the addition of a 5% penalty for the first 30 days and an additional 5% penalty that accrues on the 31st day after the due date. A fraud penalty of 75% of the fee plus penalty and interest may be assessed.