HB 326

relating to authorizing the increase or decrease of the rates of the
gasoline and diesel fuel taxes based on the cost of certain highway
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1.  (a)  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
(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
(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
(b)  Notwithstanding Section 162.102, on January 1 of each
year, the rate of the gasoline tax imposed under this subchapter in
the preceding year is increased or decreased by a percentage equal
to the highway cost index percentage change for the preceding state
(c)  Not later than December 1 of each year, the comptroller
(1)  compute the new tax rate as provided by this
(2)  provide the new tax rate to the secretary of state
for publication in the Texas Register; and
(3)  notify each license holder under this subchapter
(b)  The comptroller shall compute the initial adjusted tax
rate as required by Section 162.1021(c), Tax Code, as added by this
section, not later than December 1, 2025.  The initial adjusted rate
SECTION 2.  Effective January 1, 2026, 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
(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;
(4)  a person, other than a person exempted under
Section 162.104, who acquires gasoline on which tax has not been
(A)  in an original or subsequent sale; or
(B)  from any source in this state; and
(5)  a person who acquires gasoline by any unlawful
means, including by purchase through the unauthorized use of a
credit card, a debit card, or other money, regardless of whether tax
was previously paid on the gasoline or was added to the selling
SECTION 3.  (a)  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
(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
(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
(b)  Notwithstanding Section 162.202, on January 1 of each
year, the rate of the diesel fuel tax imposed under this subchapter
in the preceding year is increased or decreased by a percentage
equal to the highway cost index percentage change for the preceding
(c)  Not later than December 1 of each year, the comptroller
(1)  compute the new tax rate as provided by this
(2)  provide the new tax rate to the secretary of state
for publication in the Texas Register; and
(3)  notify each license holder under this subchapter
(b)  The comptroller shall compute the initial adjusted tax
rate as required by Section 162.2021(c), Tax Code, as added by this
section, not later than December 1, 2025.  The initial adjusted rate
SECTION 4.  Effective January 1, 2026, 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
(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;
(4)  a person, other than a person exempted under
Section 162.204, who acquires diesel fuel on which tax has not been
(A)  in an original or subsequent sale; or
(B)  from any source in this state; and
(5)  a person who acquires diesel fuel by any unlawful
means, including by purchase through the unauthorized use of a
credit card, a debit card, or other money, regardless of whether tax
was previously paid on the diesel fuel or was added to the selling
SECTION 5.  Effective January 1, 2026, Section 20.002(d),
Transportation Code, is amended to read as follows:
(d)  The fee imposed by this section is equal to 25 percent of
the diesel fuel tax rate prescribed by [imposed under] Section
SECTION 6.  Except as otherwise provided by this Act, this
Act takes effect September 1, 2025.