RATE OF TAX ON CERTAIN SPECIAL FUELS DETERMINED ON BASIS OF BTU EQUIVALENCY WITH GASOLINE.

SEC. 907. RATE OF TAX ON CERTAIN SPECIAL FUELS DETERMINED ON BASIS OF BTU EQUIVALENCY WITH GASOLINE. (a) Special Motor Fuels.— (1) In general.—Paragraph (2) of section 4041(a) (relating to special motor fuels) is amended to read as follows: “(2) Special motor fuels.— “(A) In general.—There is hereby imposed a tax on any liquid (other than kerosene, gas oil, fuel oil, or any product taxable under section 4081)— “(i) sold by any person to an owner, lessee, or other operator of a motor vehicle or motorboat for use as a fuel in such motor vehicle or motorboat, or “(ii) used by any person as a fuel in a motor vehicle or motorboat unless there was a taxable sale of such liquid under clause (i). “(B) Rate of tax.—The rate of the tax imposed by this paragraph shall be— “(i) except as otherwise provided in this subparagraph, the rate of tax specified in section 4081(a)(2)(A)(i) which is in effect at the time of such sale or use, “(ii) 13.6 cents per gallon in the case of liquefied petroleum gas, and “(iii) 11.9 cents per gallon in the case of liquefied natural gas. In the case of any sale or use after September 30, 1999, clause (ii) shall be applied by substituting ‘3.2 cents’ for ‘13.6 cents’, and clause (iii) shall be applied by substituting ‘2.8 cents’ for ‘11.9 cents’.”. (2) Conforming amendment.—Paragraph (1) of section 4041(d) is amended by inserting “and other than liquefied natural gas” after “liquefied petroleum gas”. (b) Methanol Fuel Produced From Natural Gas.—Subparagraph (A) of section 4041(m)(1) is amended to read as follows: “(A) the rate of the tax imposed by subsection (a)(2) shall be— “(i) after September 30, 1997, and before October 1, 1999—111 STAT. 876 “(I) in the case of fuel none of the alcohol in which consists of ethanol, 9.15 cents per gallon, and “(II) in any other case, 11.3 cents per gallon, and “(ii) after September 30, 1999— “(I) in the case of fuel none of the alcohol in which consists of ethanol, 2.15 cents per gallon, and “(II) in any other case, 4.3 cents per gallon, and”. (c) Effective Date.—The amendments made by this section shall take effect on October 1, 1997.