FUELS NOT USED FOR TAXABLE PURPOSES.

“SEC. 6427. FUELS NOT USED FOR TAXABLE PURPOSES. “(a) Nontaxable Uses.—Except as provided in subsection (f), if tax has been imposed under section 4041 (a), (b), or (c) on the sale of any fuel and, after June 30, 1970, the purchaser uses such fuel other than for the use for which sold, or resells such fuel, the Secretary or his delegate shall pay (without interest) to him an amount equal to— “(1) the amount of tax imposed on the sale of the fuel to him, reduced by “(2) if he uses the fuel, the amount of tax which would have been imposed under section 4041 on such use if no tax under section 4041 had been imposed on the sale of the fuel. “(b) Local Transit Systems.— “(1) Allowance.— Except as provided in subsection (f) if any fuel on the sale of which tax was imposed under section 4041 (a) or (b) is, after June 30, 1970, used by the purchaser during any calendar quarter in vehicles while engaged in furnishing scheduled common carrier public passenger land transportation service a(ong regular routes, the Secretary or his delegate shall, subject to the provisions of paragraph (2), pay (without interest) to the purchaser the amount determined bv multiplying— “(A) 2 cents for each gallon of fuel so used on which tax was imposed at the rate of 4 cents a gallon, by “(B) the percentage which the purchaser’s commuter fare revenue (as defined in section 6421(d)(2)) derived from such scheduled service during the quarter was of his total passenger fare revenue derived from such scheduled service during the quarter. “(2) Limitation.—Paragraph (1) shall apply in respect of fuel used during any ca’endar quarter only if at least 60 percent of the total passenger fare revenue derived during the quarter 84 Stat. 247from scheduled service described in paragraph (1) by the purchaser was attributable to commuter fare revenue derived during the quarter by the purchaser from such scheduled service. “(c) Use for Farming Purposes.—Except as provided in subsection (f), if any fuel on the sale of which tax was imposed under section 4041 (a), (b), or (c) is, after June 30, 1970, used on a farm for farming purposes (within the meaning of section 6420(c)), the Secretary or his delegate shall pay (without interest) to the purchaser an amount equal to the amount of the tax imposed on the sale of the fuel. For purposes of this subsection, if fuel is used on a farm by any person other than the owner, tenant, or operator of such farm, such owner, tenant, or operator shall be treated as the user and purchaser of such fuel. “(d) Time for Filing Claims; Period Covered.— “(1) General rule.—Except as provided in paragraph (2), not more than one claim may Be filed under subsection (a), (b), or (c), by any person with respect to fuel used during his taxable year; and no claim shall be allowed under this paragraph with respect to fuel used during any taxable year unless filed by the purchaser not later than the time prescribed by law for filing a claim for credit or refund of overpayment of income tax for such taxable year. For purposes of this paragraph, a person’s taxable year shall be his taxable year for purposes of subtitle A. “(2) Exception.—If $1,000 or more is payable under subsections (a) and (b) to any person with respect to fuel used during any of the first three quarters of his taxable year, a claim may be filed under this section by the purchaser with respect to fuel used during such quarter. No claim filed under this paragraph shall be allowed unless filed on or lie fore the last day of the first quarter following the quarter for which the claim is filed. “(e) Applicable Laws.— “(1) In general.—All provisions of law, including penalties, applicable in respect of the taxes imposed by section 4041 shall, insofar as applicable and not inconsistent with this section, apply in respect of the payments provided for in this section to the same extent, as if such payments constituted refunds of overpayments of the tax so imposed. “(2) Examination of books and witnesses.—For the purpose of ascertaining the correctness of any claim made under this section, or the correctness of any payment made in respect of any such claim, the Secretary or his delegate shall have the authority granted by paragraphs (1), (2), and (3) of section 7602 (relating to examination of books and witnesses) as if the claimant were the person liable for tax. “(f) Income Tax Credit in Lieu of Payment.— “(1) Persons not subject to income tax.— Payment shall be made under this section only to— “(A) the United States or an agency or instrumentality thereof, a State, a political subdivision of a State, or any agency or instrumentality of one or more States or political subdivisions, or “(B) an organization exempt from tax under section 501 (a) (other than an organization required to make a return of the tax imposed under subtitle A for its taxable year). “(2) Exception.—Paragraph (1) shall not apply to a payment of a claim filed under subsection (d) (2). 84 Stat. 248 “(3) Allowance of credit against income tax.— “For allowances of credit against the income tax imposed by subtitle A for fuel used or resold by the purchaser, see section 39. “(g) Regulations.—The Secretary or his delegate may by regulations prescribe the conditions, not inconsistent with the provisions of this section, under which payments may be made under this section. “(h) Cross References,— “(1) For civil penalty for excessive claims under this section, see section 6675, “(2) For fraud penalties, etc., see chapter 75 (section 7201 and following, relating to crimes, other offenses, and forfeitures).” (b) Time for Filing Claims.—Section 6420(b)(2) (B) (relating to gasoline used on farms), section 6421(c) (3) (A) (ii) (relating to gasoline used for certain nonhighway purposes or by local transit systems), and section 6424(b) (1) (relating to lubricating oil not used in highway vehicles) are each amended by striking out “time prescribed by law for filing an income tax return for such taxable year” and inserting in lieu thereof “time prescribed by law for filing a claim for credit or refund of overpayment of income tax for such taxable year”. (c) Credit Against Income Tax—Section 39 (relating to certain uses of gasoline and lubrication oil) is amended— (1) by inserting “, SPECIAL FUELS,” after “GASOLINE” in the heading of such section; (2) by striking out “and” at the end of subsection (a) (2), by striking out the period at the end of subsection (a)(3) and inserting in lieu thereof “, and”, and by adding at the end of subsection (a) the following new paragraph: “(4) under section 6427 with respect to fuels used for non-tax able purposes or resold during the taxable year (determined without regard to section 6427(f) ).”; (3) by striking out “6421 or 6424” in subsection (c) and inserting in lieu thereof “6421, 6424, or 6427”; and (4) by striking out “6421 (i) or 6424(g)” in subsection (c) and inserting in lieu thereof “6421 (i), 6424(g), or 6427(f)”. (d) Technical and Conforming Amendments.— (1) Sections 874(a), 6201(a)(4), and 6401(b) are each amended by striking out “uses of gasoline and lubricating oil” and inserting in lieu thereof “uses of gasoline, special fuels, and lubricating oil”. (2) The heading of section 6201(a) (4) is amended by striking out “for use of gasoline” and inserting in lieu thereof “under section 3 a”. (3) Section 6206 is amended— (A) by striking out “AND 6424” in the heading of such section and inserting in lieu thereof “6424, AND 6427”; (B) by striking out “or 6424” each place it appears in the text of such section and inserting in lieu thereof “6424, or 6427”; and (C) by striking out “by section 4081 (or, in the case of lubricating oil, by section 4091)” and inserting in lieu thereof “by section. 4081 (with respect to payments under sections 6420 and 6421), 4091 (with respect to payments under section 6424), or 4041 (with respect to payments under section 6427)”. (4) Section 6416(b)(2)(G) is amended by inserting “before July 1, 1970” after “if”. 84 Stat. 249 (5) Section 6416(b)(2)(H) is amended by inserting “beginning before July 1, 1970,” after “during any calendar quarter”. (6) Section 6416(b) (2) (I) is amended by inserting “before July 1, 1970,” after “used or resold for use”. (7) Section 6416(b) (2) (J) is amended by inserting “before July 1, 1970,” after “used or resold for use”. (8) Section 6675 is amended— (A) by striking out “GASOLINE” in the heading of such section and inserting in lieu thereof “FUELS”; (B) by striking out “or” before “6424” in subsection (a), and by inserting after “motor vehicles)” in such subsection “, or 6427 (relating to fuels not used for taxable purposes)”; and . (C) by striking out “or 6424” in subsection (b)(1) and inserting in lieu thereof “6424, or 6427”. (9) Sections 7210, 7603, and 7604, and the first sentence of section 7605(a) are each amended by inserting “6427(e) (2),” after “6424(d) (2),”, The second sentence of section 7605(a) is amended by striking out “or 6424(d)(2)” and inserting in lieu thereof “6424(d) (2), or 6427(e) (2)”. (10) The table of sections for subpart A of part IV of subchapter A of chapter 1 is amended by inserting “. special fuels,” after “gasoline” in the item relating to section 39. (11) The table of sections for subchapter A of chapter 63 is amended by striking out “and 6424” in the item relating to section 6206 and inserting in lieu thereof “6424, and 6427”. (12) The table of sections for subchapter B of chapter 65 is amended by adding at the end thereof the following new item: “6427. Fuels not used for taxable purposes.”. (13) The table of sections for subchapter B of chapter 68 is amended by striking out “gasoline” in the item relating to section 6675 and inserting in lieu thereof “fuels”. (e) Highway Trust Fund Amendments.—Subsection (f) of section 209 of the Highway Revenue Act of 1956 (23 U.S.C., sec. 120 note) is amended— (1) by inserting at the end of paragraph (3) the following new sentence: “This paragraph shall not apply to amounts estimated by the Secretary of the Treasury as paid under sections 6420 and 6421 of such Code with respect to gasoline used after June 30, 1970, in aircraft.”; (2) by striking out “gasoline and lubricating oil” in the heading of paragraph (6) and inserting in lien thereof “gasoline, special fuels, and lubricating oil”; (3) by striking out “(relating to credit for certain uses of gasoline and lubricating oil) with respect to gasoline and lubricating oil” in the first sentence of paragraph (6) and inserting in lieu thereof “ (relating to credit for certain uses of gasoline, special fuels, and lubricating oil) with respect to gasoline, special fuels, and lubricating oil”; (4) by adding at the end of paragraph (6) the following new sentence: “This paragraph shall not apply to amounts estimated by the Secretary of the Treasury as attributable to the use after June 30, 1970, of gasoline and special fuels in aircrafts.”; and (5) by adding after paragraph (6) the following new paragraph: “(7) Transfers from trust fund for nontaxable uses of fuels.—The Secretary of the Treasury shall pay from time to time from the Trust Fund into the general fund of the Treasury amounts equivalent to the amounts paid before July 1, 1973, under 84 Stat. 250section 6427 of the Internal Revenue Code of 1954 (relating to fuels not used for taxable purposes) on the basis of claims filed for fuels used before October 1, 1972. This paragraph shall not apply to amounts estimated by the Secretary of the Treasury as paid under such section 6427 with respect to fuels used in aircraft.”