1. (a) Definitions. The following words and terms, when used in this section, shall have the following meaning, unless the context clearly indicates otherwise.

   1. (1) Motor vehicle subject to surcharge--A motor vehicle that is:

      1. (A) diesel powered;
      2. (B) registered with a gross vehicle weight in excess of 14,000 pounds; and
      3. (C) a 1996 model year or earlier.
   2. (2) Lease--an agreement, other than a rental, whereby an owner of a motor vehicle gives exclusive use of the vehicle to another for consideration for a period that is more than 180 days.

   3. (3) Rental--an agreement whereby:

      1. (A) the owner of a motor vehicle gives exclusive use of the vehicle to another for consideration for a period that is 180 days or less;
      2. (B) the original manufacturer of a motor vehicle gives exclusive use of the motor vehicle to another for consideration; or
      3. (C) the owner of a motor vehicle gives exclusive use of the vehicle to another for re-rental purposes.
   4. (4) Surcharge--A fee of 2.5% of the total consideration paid on a Texas retail sale of a motor vehicle described in paragraph (1) of this subsection. The surcharge is imposed by Tax Code, §152.0215, for the benefit of the Texas Emission Reduction Plan Fund as provided in Health and Safety Code, §386.251.
2. (b) Payment, calculation, collection and remittance. Except as provided in subsection (c) of this section, the surcharge is paid, calculated, collected, and remitted in the same manner as the tax imposed on a Texas sale as provided in Tax Code, Chapter 152, and §3.74 of this title (relating to Seller Responsibility).

3. (c) Motor vehicles purchased for rental or lease.

   1. (1) Rental. A person who purchases in Texas a motor vehicle for rental must pay the surcharge at the time of registration and titling. Payment of the surcharge cannot be deferred even if the purchaser is allowed to defer the motor vehicle sales and use tax. The surcharge is not due on the rental receipts paid to the motor vehicle owner.
   2. (2) Lease. A person who purchases a motor vehicle in Texas for lease must pay the surcharge at the time of registration and titling. The surcharge is not due on the lease receipts paid to the motor vehicle owner.
4. (d) Exemptions. The exemptions provided in Tax Code, Subchapter E, Chapter152, apply to the surcharge.
5. (e) Expiration. The surcharge expires September 30, 2008. Texas retail sales after that date are not subject to the surcharge.

Source Note:The provisions of this §3.96 adopted to be effective January 3, 2002, 26 TexReg 11034.