The text of the bill below is as of Nov 9, 1978 (Passed Congress).
You are reading a bill enacted 16,211 days ago. In the intervening time subsequent legislation may have amended or repealed the provisions below.
92 STAT. 3174 PUBLIC LAW 95-618—NOV. 9, 1978
Public Law 95-618
95th Congress
An Act
—^ov- "•> iy78 ipQ provide tax incentives for the production and conservation of energy, and for
[H.R. 5263] other purposes.
Be it enacted hy the Senate and House of Representatives of the
Energy Tax Act United States of America in Congress assembled^ T h a t ( a ) item 912.05
of 1978 of t h e A p p e n d i x to t h e Tarijff Schedules of t h e U n i t e d States (19
Bicycle parts, U.S.C. 1202) is amended—
19*UScT2oT°" (^) ^y inserting ", a n d p a r t s thereof" immediately after "Gen-
erator lighting sets for bicycles"; a n d
(2) by striking out " 1 2 / 3 1 / 7 6 " a n d inserting in lieu thereof
"6/30/80".
26 u s e 1 note. SECTION 1. SHORT TITLE; ETC.
( a ) SHORT T I T L E . — T h i s A c t m a y be cited as the " E n e r g y T a x A c t
of 1978".
(b) AMENDMENT OF 1954 CODE.—Except as otherwise expressly pro-
vided, whenever i n this A c t a n amendment or repeal is expressed i n
terms of a n amendment to, or repeal of, a section or other provision,
the reference shall be considered to be made to a section or other pro-
26 u s e 1. vision of the I n t e r n a l Revenue Code of 1954.
(c) TABLE OF C O N T E N T S . —
Sec. 1. Short title; etc.
TITLE I—RESIDENTIAL ENERGY CREDIT
Sec. 101. Residential energy credit.
TITLE II—TRANSPORTATION c/ ;! ^
PAST I—GAS GUZZLEB TAX
Sec. 201. Gas guzzler tax.
PABT II—MoTOB FUELS
Sec. 221. Exemption from motor fuels excise taxes for certain alcohol fuels.
Sec. 222. Denial of credit or refund for nonbusiness nonhighway use of gasoline,
special motor fuels, and lubricating oil.
PART III—PROVISIONS RBXATED TO BUSES
Sec. 231. Removal of excise tax on buses.
Sec. 232. Removal of excise tax on bus parts.
Sec. 233. Removal of excise tax on fuel, oil, and tires used in connection with
intercity, local, and school buses.
PART IV—INCENTIVES FOE VAN POOLING
Sec. 241. Full investment credit for certain commuter vehicles.
Sec. 242. Exclusion from gross income of value of qualified transportation pro-
vided by employer.
TITLE III—CHANGES IN BUSINESS INVESTMENT CREDIT TO ENCOUR-
AGE CONSERVATION OF, OR CONVERSION FROM, OIL AND GAS OR TO
ENCOURAGE NEW ENERGY TECHNOLOGY
Sec. 301. Changes in business investment credit.
PUBLIC LAW 95-618—NOV. 9, 1978 92 STAT. 3175
TITLE IV—MISCELLANEOUS PROVISIONS
Sec. 401. Treatment of intangible drilling costs for purposes of the minimum tax.
Sec. 402. Option to deduct intangible drilling costs in the case of geothermal
deposits.
Sec. 403. Depletion for geothermal deposits and natural gas from geopressurized
brine.
Sec. 404. Rerefined lubricating oil.
TITLE I—RESIDENTIAL ENERGY CREDIT
SEC. 101. RESIDENTIAL ENERGY CREDIT.
(a) GENERAL R U L E . — S u b p a r t A of p a r t I V of subchapter A of ,
chapter 1 (relating to credits allowable) is amended by inserting after '
section 44B the following new section:
"SEC. 44C. RESIDENTIAL ENERGY CREDIT. 26 USC 44C.
" ( a ) GENERAL R U L E . — I n the case of an individual, there shall be
allowed as a credit against the t a x imposed by this chapter for the
taxable year a n amount equal to the sum of—
" (1) the qualified energy conservation expenditures, plus
" (2) the qualified renewable energy source expenditures.
" ( b ) QUALIFIED E X P E N D I T U R E S . — F o r purposes of subsection (a)—•
" ( 1 ) ENERGY CONSERVATION.—In t h e case of a n y dwelling u n i t ,
the qualified energy conservation expenditures are 15 percent of
so much of the energy conservation expenditures made by the tax-
payer d u r i n g t h e taxable year with respect t o such unit as does
not exceed $2,000.
" ( 2 ) RENEWABLE ENERGY SOURCE.—In the case of any dwelling
unit, the qualified renewable energy source expenditures are t h e
following percentages of the renewable energy source expendi-
tures made by the taxpayer d u r i n g the taxable year with respect t o
such u n i t :
" ( A ) 30 percent of so much of such expenditures as does
not exceed $2,000, plus
" ( B ) 20 percent of so much of such expenditures as exceeds
$2,000 but does not exceed $10,000.
"(3) PRIOR EXPENDITURES BY TAXPAYER ON SAME RESIDENCE
TAKEN INTO ACCOUNT.—If for any prior year a credit was allowed
to the taxpayer under this section with respect to a n y dwelling
unit by reason of e n e r ^ conservation expenditures or renewable
energy source expenditures, p a r a g r a p h (1) or (2) (whichever
is appropriate) shall be applied for the taxable year with respect
to such dwelling unit by reducing each dollar amount contained
in such p a r a g r a p h by the prior year expenditures taken into
account under such p a r a g r a p h .
" ( 4 ) M I N I M U M DOLLAR AMOUNT.—No credit shall be allowed
under this section with respect to any return for any taxable year
if t h e amount which would ( b u t for this p a r a g r a p h ) be allowed
with respect to such r e t u r n is less t h a n $10.
" ( 5 ) APPLICATION W I T H OTHER CREDITS.—The credit allowed by
subsection ( a ) shall not exceed the t a x imposed by this chapter
for t h e taxable year, reduced by t h e sum of t h e credits allowable
under a section of this subpart h a v i n g a lower number or letter
designation t h a n this section, other t h a n credits allowable by
sections 31,39, and 43. 26 USC 31, 39,
43.
92 STAT. 3176 PUBLIC LAW 95-618—NOV. 9, 1 9 7 8
" ( 6 ) CARRYOVER OF UNUSED CREDIT.—
" ( A ) I N GENERAL.—If the credit allowable under subsec-
tion ( a ) for any taxable year exceeds the limitation imposed
by p a r a g r a p h (5) for such taxable year, such excess shall be
: carried to the succeeding taxable year and added to the credit
^ allowable under subsection ( a ) for such succeeding taxable
year.
"(B) N o CARRYOVER TO TAXABLE YEARS BEGINNING AFTER
DECEMBER 31, 198 7.—No amount may be carried under sub-
^ p a r a g r a p h ( A ) t o any taxable year beginning after Decem-
ber 31, 1987.
" ( c ) D E F I N I T I O N S AND SPECIAL RULES.—For purposes of this
section—
" ( 1 ) E N E R G Y CONSERVATION EXPENDITURES.—The t e r m 'energy
conservation expenditure' means an expenditure made on or after
A p r i l 20,1977, by the taxpayer for insulation or any other energy-
conserving component (or for the original installation of such
insulation or other component) installed in or on a dwelling
unit—
" ( A ) which is located in the United States,
" ( B ) which is used by t h e taxpayer as his principal
residence, a n d
" ( C ) the construction of which was substantially completed
before A p r i l 20, 1977.
" ( 2 ) RENEWABLE ENERGY SOURCE EXPENDITURE.—
" ( A ) I N GENERAL.—The term 'renewable energy source
expenditure' means an expenditure made on or after A p r i l 20,
1977, by t h e taxpayer for renewable energy source property
installed in connection with a dwelling unit—
" ( i ) which is located in t h e United States, a n d
" ( i i ) which is used by the taxpayer as his principal
residence.
"(B) CERTAIN LABOR COSTS INCLUDED.—^The t e r m 'renew-
able energy source expenditure' includes expenditures for
^' labor costs properly allocable to the onsite preparation,
assembly, or original installation of renewable energy source
property.
" ( C ) S W I M M I N G POOL, ETC., USED AS STORAGE MEDIUM.—The
t e r m 'renewable energy source expenditure' does not include
any expenditure properly allocable t o a swimming pool used
as an energy storage medium or t o any other energy storage
medium which has a p r i m a r y function other than the function
of such storage.
" ( 3 ) INSULATION.—The term 'insulation' means a n y item—
" ( A ) which is specifically and primarily designed to reduce
when installed in or on a dwelling (or water heater) the heat
loss or gain of such dwelling (or water h e a t e r ) ,
" ( B ) t h e original use of which begins with t h e taxpayer,
" ( C ) which can reasonably be expected t o remain in opera-
tion for a t least 3 years, and
" ( D ) which meets the performance a n d quality standards
(if any) which—
" ( i ) have been prescribed by t h e Secretary by regu-
lations, a n d
" ( i i ) are in effect a t the time of the acquisition of t h e
item.
PUBLIC LAW 95-618—NOV. 9, 1978 92 STAT. 3177
"(4) OTHER ENERGY-CONSERVING COMPONENT.—The term 'other
energy-conserving component' means any item (other than insu-
lation)—
"(A) which is—
"(i) a furnace replacement burner designed to achieve
a reduction in the amount of fuel consumed as a result of
increased combustion efficiency,
" (ii) a device for modifying flue openings designed to
increase the efficiency of operation of the heating system,
"(iii) an electrical or mechanical furnace ignition sys-
tem, which replaces a gas pilot light,
"(iv) a storm or thermal window or door for the
exterior of the dwelling,
"(v) an automatic energy-saving setback thermostat,
" (vi) caulking or weatherstripping of an exterior door
or window,
"(vii) a meter which displays the cost of energy usage,
or
"(viii) an item of the kind which the Secretary speci-
fies by regulations as increasing the energy efficiency of
the dwelling,
"(B) the original use of which begins with the taxpayer,
"(C) which can reasonably be expected to remain in opera-
tion for at least 3 years, and
"(D) which meets the performance and quality standards
(if any) which—
"(i) have been prescribed by the Secretary by regula-
tions, and
" (ii) are in effect at the time of the acquisition of the
item.
"(5) KENEWABLE ENERGY SOURCE PROPERTY.—The term 'renew-
able energy source property' means property—
"(A) which, when installed in connection with a dwelling, >
transmits or uses—
"(i) solar energy, energy derived from the geothermal
deposits (as defined in section 613(e) (3)), or any other Post, p. 3203.
form of renewable energy which the Secretary specifies
by regulations, for the purpose of heating or cooling such
dwelling or providing hot water for use within such
dwelling, or
" (ii) wind energy for nonbusiness residential purposes,
"nfB) the original use of which begins with the taxpayer,
"0^C) which can reasonably be expected to remain in
operation for at least 5 years, and
"(D) which meets the performance and quality standards
(if any) which—
"(i) have been prescribed by the Secretary by regula-
tions, and
"(ii) are in effect at the time of the acquisition of the
property.
"(6) REGULATIONS.—
"(A) CRITERIA; CERTIFICATION PROCEDURES.—The Secre-
tary shall by regulations—
"(i) establish the criteria which are to be used in (I)
prescribing performance and quality standards under
paragraphs (3), (4), and (5), or ( t l ) specifying any
item under paragraph (4) (A) (viii) or any form of
renewable energy under paragraph (5) (A) (i), and
39-194 O—80—pt. 3 35 : QL3
92 STAT. 3178 PUBLIC LAW 95-618—NOV. 9, 1978
" ( i i ) establish a procedure under which a manufac-
' '•'' t u r e r of an item may request the Secretary t o certify t h a t
the item will be treated, for purposes of this section, as
insulation, a n energy-conserving component, o r renew-
able energy source property.
" ( B ) CONSULTATION.—Performance and quality standards
regulations a n d other regulations shall be prescribed by t h e
Secretary under p a r a g r a p h s ( 3 ) , ( 4 ) , and (5) and under this
p a r a g r a p h only after consultation with t h e Secretary of
E n e r g y , t h e Secretary of H o u s i n g a n d U r b a n Development,
and other appropriate Federal officers.
" ( 7 ) W H E N EXPENDITURES MADE; AMOUNT OF EXPENDITURES.—
" ( A ) I N GENERAL.—Except as provided in subparagraph
' ( B ) , an expenditure with respect t o an item shall be treated
as made when original installation of the item is completed.
"(B) RENEWABLE ENERGY SOURCE EXPENDITURES.—In t h e
case of renewable energy source expenditures in connection
with the construction or reconstruction of a dwelling, such
expenditures shall be treated as made when the original use
' of t h e constructed o r reconstructed dwelling by the taxpayer
begins.
" ( C ) A M O U N T . — T h e amount of any expenditure shall be
the cost thereof.
" ( D ) ALLOCATION I N CERTAIN CASES.—If less t h a n 80 per-
*• • cent of the use of a n item is for nonbusiness residential pur-
poses, only t h a t portion of the expenditures for such item
•^ which is properly allocable t o use for nonbusiness residential
purposes shall be taken into account. F o r purposes of this
- subparagraph, use for a swimming pool shall be treated as
use which is not for residential purposes.
" ( 8 ) P R I N C I P A L RESIDENCE.—The determination of w h e t h e r or
not a dwelling unit is a taxpayer's princiDal residence shall be
26 u s e 1034. made under principles similar t o those applicable t o section 1034,
except that—
" ( A ) n o ownership requirement shall be imposed, a n d
• " ( B ) the period for which a dwelling is treated as the
principal residence of the taxpayer shall include the 30-day
period ending on t h e first d a y on which it would ( b u t for
this s u b p a r a g r a p h ) be treated as his principal residence.
'* ( d ) SPECIAL R U L E S . — F o r purposes of t h i s section—
" (1) DOLLAR AMOUNTS I N CASE o r J O I N T OCCUPANCY.—In the case
of any dwelling unit which is jointly occupied a n d used during
any calendar year as a principal residence by 2 or more indi-
viduals—
" ( A ) t h e amount of the credit allowable under subsection
(a) by reason of energy conservation expenditures or by
reason of renewable energy source expenditures (as t h e case
may be) made d u r i n g such calendar year by a n y of such
individuals with respect t o such dwelling unit shall be deter-
mined by treating all of such individuals as one taxpayer
whose taxable year is such calendar y e a r ; a n d
,* ' . " ( B ) there shall be allowable with respect t o such expendi-
tures to each of such individuals a credit under subsection ( a )
for t h e taxable year in which such calendar year ends in an
amount which bears the same ratio to the amoimt determined
under s u b p a r a g r a p h ( A ) as the amount of such expenditures
^ made by such individual during such calendar year bears t o
PUBLIC LAW 95-618—NOV. 9, 1978 92 STAT. 3179
the aggregate of such expenditures made by all of such indi- ';
viduals d u r i n g such calendar year.
"(2) TENANT-STOCKHOLDER I N COOPERATIVE HOUSING CORPORA-
TION.—In the case of an individual who is a tenant-stockholder
(as defined in section 216) in a cooperative housing corporation 26 USC 216.
(as defined in such section), such individual shall be treated as
having made his tenant-stockholder's proportionate share (as
defined in section 2 1 6 ( b ) ( 3 ) ) of any expenditures of such
corporation.
"(3) CONDOMINIUMS.—
" ( A ) I N GENERAL.—In the case of an individual who is a
member of a condominium management association with
respect to a condominium which ho owns, such individual
^ shall be treated as having made his proportionate share of
any expenditures of such association.
"(B) CONDOMINIUM MANAGEMENT ASSOCIATION.—For p u r -
poses of this p a r a g r a p h , t h e term 'condominium management ='
association' means an organization which meets the require-
ments of p a r a g r a p h (1) of section 528(c) (other t h a n sub- 26 USC 528.
p a r a g r a p h ( E ) thereof) with respect to a condominium
project substantially all of the units of which are used as
residences.
" ( 4 ) 1977 EXPENDITURES ALLOWED FOR 197 8.—
" ( A ) N o CREDIT FOR TAXABLE TEARS BEGINNING BEFORE
1978.—No credit shall be allowed under this section for any
taxable year beginning before J a n u a r y 1,1978.
" ( B ) 1977 EXPENDITURES ALLOWED FOR 1978.—In the case of
the taxpayer's first taxable year beginning after December 31,
1977, this section shall be applied by taking into account t h e
period beginning A p r i l 20,1977, and ending on t h e last day of
such first taxable year.
" ( e ) BASIS ADJUSTMENTS.—For purposes of this subtitle, if a credit
is allowed under this section for any expenditure with respect to any
property, the increase in the basis of such property which would (but
for this subsection) result from such expenditure shall be reduced by
the amount of the credit so allowed.
" ( f ) TERMINATION.—This section shall not apply to expenditures
made after December 31,1985."
(b) T E C H N I C A L AND CLERICAL A M E N D M E N T S . —
(1) T h e table of sections for subpart A of part I V of subchap-
ter A of chapter 1 is amended by inserting after the item relating
to section 44B the following new i t e m :
"Sec. 44C. Residential energy credit."
(2) Subsection (c) of section 56 (defining regular t a x deduc- 26 USC 56.
tion) is amended by striking out "credits allowable under—" and
all t h a t follows and inserting in lieu thereof "credits allowable
under subpart A of p a r t I V other than under sections 31, 39, and
43." 26 USC 31, 39,
(3) Subsection (a) of section 1016 (relating to adjustments to ^^•
basis) is amended by inserting after p a r a g r a p h (20) the follow- 26 USC 1016.
ing new p a r a g r a p h :
" ( 2 1 ) t o the extent provided in section 4 4 C ( e ) , in t h e case of Ante, p. 3175.
property with respect to which a credit h a s been allowed under
section 44C;".
92 STAT. 3180 PUBLIC LAW 95-618—NOV. 9, 1978
26 u s e 6096. (4) Subsection (b) of section 6096 (relating to designation of
income t a x payments to Presidential Election C a m p a i g n F u n d )
is amended by striking out "and 4 4 B " and inserting in lieu thereof
"44B,and44C".
26 u s e 44C (c) EFFECTIVE D A T E . — T h e amendments made by this section shall
note apply to taxable years ending on or after April 20,1977.
TITLE II—TRANSPORTATION
PART I—GAS GUZZLER TAX
SEC. 201. GAS GUZZLER TAX.
(a) GENERAL R U L E . — P a r t I of subchapter A of chapter 32 (relat-
ing to motor vehicle excise taxes) is amended by adding at the end
thereof the following new section:
26 u s e 4064. "SEC. 4064. GAS GUZZLER TAX.
" ( a ) IMPOSITION OF TAX.—There is hereby imposed on the sale by
the manufacturer of each automobile a tax determined in accordance
with the following tables:
" (1) I n the case of a 1980 model year automobile :
"If the fuel economy of the model
t3i)e in which the automobile falls is: / The tax is:
At least 15 0
At least 14 but less than 15 $200
At least 13 but less than 14 300
Less than 13 550
" (2) I n t h e case of a 1981 model year automobile:
"If the fuel economy of the model
type in which the automobile falls is: The tax is:
At least 17 0
At least 16 but less than 17 $200
At least 15 but less than 16 350
At least 14 but less than 15 450
At least 13 but less than 14 550
Less than 13 650
" (3) I n the case of a 1982 model year automobile:
"If the fuel economy of the model
type in which the automobile falls is: The tax is:
At least 18.5 0
At least 17.5 but less than 18.5 $200
At least 16.5 but less than 17.5 350
At least 15.5 but less than 16.5 450
At least 14.5 but less than 15.5 600
At least 13.5 but less than 14.5 750
, At least 12.5 but less than 13.5 950
- ' ' '" Less than 12.5 1,200
" (4) I n the case of a 1983 model year automobile:
"If the fuel economy of the model : *; »
,,? -X'. type in which the automobile falls is: The tax is:
At least 19 - - - - - 0
At least 18 but less than 19 $350
At least 17 but less than 18 500
At least 16 but less than 17 650
••' ? At least 15 but less than 16 800
At least 14 but less than 15 1, 000
At least 13 but less than 14 1,250
> Less than 13 1,550
PUBLIC LAW 95-618—NOV. 9, 1978 92 STAT. 3 1 8 1
" (5) I n the case of a 1984 model year automobile:
"If the fuel economy of the model
type in which the automobile falls is: The tax i s :
At least 19.5 0
At least 18.5 but less than 19.5 $450
At least 17.5 but less than 18.5 600
At least 16.5 but less than 17.5 750
At least 15.5 but less than 16.5 950
At least 14.5 but less than 15.5 1,150
At least 13.5 but less than 14.5 1,450
At least 12.5 but less than 13,5 1, 750
Less than 12.5 2,150
" (6) I n the case of a 1985 model year automobile:
"If the fuel economy of the model
type in which the automobile falls is: The tax i s :
At least 21 - 0
At least 20 but less than 21 $500
At least 19 but less than 20 600
; At least 18 but less than 19 800
At least 17 but less than 18 1, 000
At least 16 but less than 17 1, 200
At least 15 but less than 16 1,500
At least 14 but less than 15 1, 800
At least 13 but less than 14 2, 200
Less than 13 2, 650
" (7) I n the case of a 1986 or later model year automobile:
"If the fuel economy of the model
type in which the automobile falls is: The tax i s :
At least 22.5 - 0
At least 21.5 but less than 22.5 $500
At least 20.5 but less than 21.5 650
At least 19.5 but less than 20.5 850
At least 18.5 but less than 19.5 1,050
At least 17.5 but less than 18.5 1, 300
At least 16.5 but less than 17.5 1, 500
At least 15.5 but less than 16.5 1, 850
At least 14.5 but less than 15,5 2, 250
At least 13.5 but less than 14.5 2, 700
At least 12.5 but less than 13.5 3,200
Less than 12.5 3, 850
" ( b ) D E F I N I T I O N S . — F o r purposes of this section—
" ( 1 ) AUTOMOBILE.—
" ( A ) I N GENERAL.—The term 'automobile' means any
4-wheeled vehicle propelled by fuel—
" ( i ) which is manufactured primarily for use on
public streets, roads, a n d hig^hways (except any vehicle
operated exclusively on a rail or rails), and
" ( i i ) which is rated a t 6,000 pounds gross vehicle
weiffht or less.
" ( B ) EXCEPTION FOR CERTAIN VEHICLES.—The t e r m 'automo-
bile' does not include a n y vehicle which is treated as a non-
passenger automobile under t h e rules which were prescribed
by t h e Secretary of Transportation for purposes of section
501 of t h e Motor Vehicle Information and Cost Savings Act
(15 IT.S.C. 2001) and which were in efFect on t h e date of t h e
enactment of this section.
"(C) EXCEPTION FOR EMERGENCY VEHICLES.—The term
'automobile' does not include any vehicle sold for use and
used—
" ( i ) as an ambulance or combination ambulance-
hearse,
" (ii) by the United States or by a State or local govern-
ment for police or other law enforcement purposes, or
9 2 STAT. 3182 PUBLIC LAW 95-618—NOV. 9, 1 9 7 8
" ( i i i ) for other emergency uses prescribed b y t h e
Secretary b y regulations.
" ( 2 ) F U E L ECONOMY.—The term 'fuel economy' means t h e
average number of miles traveled by a n automobile p e r gallon of
gasoline ( o r equivalent amount of other fuel) consumed, as deter-
mined by t h e E P A A d m i n i s t r a t o r i n accordance with procedures
established under subsection ( c ) .
" ( 3 ) MODEL TYPE.—The term 'model t y p e ' means a particular
class of automobile as determined by regulation b y t h e E P A
Administrator.
" ( 4 ) MODEL YEAR.—The t e r m 'model year', with reference t o
any specific calendar year, means a manufacturer's annual pro-
duction period (as determined by the E P A A d m i n i s t r a t o r ) which
includes J a n u a r y 1 of such calendar year. I f a manufacturer h a s
no annual production period, t h e t e r m 'model year' means t h e
calendar year.
" (5) MANUFACTURER.—The term 'manufacturer' includes a pro-
ducer or importer.
" ( 6 ) E P A ADMINISTRATOR.—The t e r m ' E P A Administrator'
means t h e A d m i n i s t r a t o r of t h e E n v i r o n m e n t a l Protection
Agency.
" ( 7 ) FUEL.—^The t e r m 'fuel' means gasoline a n d diesel fuel.
T h e Secretary (after consultation with t h e Secretary of Trans-
portation) may, by regulation, include any product of petroleum
•^* or n a t u r a l g a s within the meaning of such term if he determines
t h a t such inclusion is consistent with t h e need of t h e Nation t o
conserve energy.
"(c) DETERMINATION o r F U E L E C O N O M Y . — F o r purposes of this
section—
" ( 1 ) I N GENERAL.—Fuel economy for a n y model t y p e shall be
measured in accordance with testing a n d calculation procedures
established by t h e E P A A d m i n i s t r a t o r by regulation. Procedures
so established shall be t h e procedures utilized by t h e E P A
A d m i n i s t r a t o r for model year 1975 (weighted 55 percent urban
cycle, a n d 45 percent highway cycle), or procedures which yield
comparable results. Procedures under this subsection, t o the extent
practicable, shall require t h a t fuel economy tests be conducted i n
conjunction with emissions tests conducted under section 206 of
42 u s e 7540. t h e Clean A i r Act. T h e E P A A d m i n i s t r a t o r shall report a n y
measurements of fuel economy t o t h e Secretary.
" ( 2 ) SPECIAL RULE FOR FUELS OTHER T H A N GASOLINE.—The E P A
A d m i n i s t r a t o r shall by regulation determine t h a t quantity of a n y
other fuel which is the equivalent of one gallon of gasoline.
" (3) T I M E BY W H I C H REGULATIONS MUST BE ISSUED.—Testing a n d
calculation procedures applicable t o a model year, and any amend-
ment to such procedures (other t h a n a technical or clerical amend-
m e n t ) , shall be pronmlgated not less t h a n 12 months before t h e
model year to which such procedures apply.
" ( d ) SPECIAL R U L E S FOR SMALL MANUFACTURERS.—
" ( 1 ) I N GENERAL,—If, on the application of a small manufac-
turer, t h e Secretary determines t h a t it is n o t feasible for such
manufacturer to meet t h e tax-free fuel economy level for t h e
model year with respect to all automobiles produced by such
manufacturer or with respect t o a model type produced by such
manufacturer, t h e Secretary m a y by regulation prescribe an
alternate rate schedule for such model year for all automobiles
produced by such manufacturer or for such model type, as t h e
PUBLIC LAW 9 5 - 6 1 8 — N O V . 9, 1978 92 STAT. 3 1 8 3
case may be. T h e alternate rate schedule shall be based on the
m a x i m u m feasible fuel economy level which such manufacturer
can meet for such model year with respect to all automobiles or
with respect to such model type, as the case may be.
"(2) APPLICATION TO INCLUDE NECESSARY INFORMATION.—^An
application under this subsection for any model year shall contain
such information as t h e Secretary may by regulations prescribe.
"(3) DETERMINATIONS TO BE MADE ONLY AFTER CONSULTATION.—
Determinations under p a r a g r a p h (1) shall be made by the Secre-
t a r y only after consultation with the Secretary of E n e r g y , the
Secretary of Transportation, and other appropriate Federal
officers.
" (4) S M A L L MANUFACTURER DEFINED.—
" ( A ) I N GENERAL.—For purposes of this subsection, the
t e r m ' s m a l l m a n u f a c t u r e r ' m e a n s any manufacturer—
" ( i ) who manufactured (whether or not in the U n i t e d
States) fewer t h a n 10,000 automobiles in the second
model year preceding the model year for which the deter-
mination under p a r a g r a p h (1) is being made, and
" ( i i ) who can reasonably be expected to manufacture
(whether or not in the United States) fewer t h a n 10,000
automobiles in the model year for which the determina-
tion under p a r a g r a p h (1) is being made.
" ( B ) SPECIAL RULES.—For purposes of s u b p a r a g r a p h
(A)-
" ( i ) M A N U F A C T U R E R OF AUTOMOBILES PRODUCED ABROAD
D E T E R M I N E D WITHOUT REGARD TO IMPORTATION. The
meaning of the term 'manufacturer' shall be determined
without regard to subsection (b) ( 5 ) .
" ( i i ) CONTROLLED GROUPS.—Persons who are members
of the same controlled g r o u p of corporations shall be
treated as one manufacturer. F o r purposes of the pre-
ceding sentence, the term 'controlled group of corpora-
tions' has the meaning given to such t e r m by section
1 5 6 3 ( a ) ; except t h a t 'more t h a n 50 percent' shall be sub- 26 USC 1563.
stituted for 'at least 80 percent' each place it appears in
section 1563(a)."
(b) REDUCTION I N B A S I S OF AUTOMOBILE ON W H I C H G A S GUZZLER
T A X W A S IMPOSED.—Section 1016 (relating to adjustments to basis) is 26 USC 1016.
amended by redesignating subsection (d) as subsection (e) and by
inserting after subsection (c) the following new subsection:
" ( d ) REDUCTION I N BASIS OF AUTOMOBILE ON W H I C H G A S GUZZLER
T A X W A S IMPOSED.—If—
" ( 1 ) the t a x p a y e r acquires any automobile with respect to
which a tax was imposed by section 4064, and ^nte, p. 3180.
" (2) the use of such automobile by the taxpayer begins not more
t h a n 1 year after the date of the Jfirst sale for ultimate use of such
automobile,
the basis of such automobile shall be reduced by the amount of the tax
imposed by section 4064 with respect to such automobile. I n the case
of importation, if the date of entry or withdrawal from warehouse for
consumption is later t h a n the date of the first sale for ultimate use,
such later date shall be substituted for the date of such first sale in the
preceding sentence."
(c) D E N I A L OF CERTAIN EXEMPTIONS AND R E F U N D S . —
(1) TAX-FREE SALES.—Subsection (a) of section 4221 (relating 26 USC 4221.
to certain tax-free sales) is amended by adding at the end thereof
t h e following new sentence:
92 STAT. 3184 PUBLIC LAW 95-618—NOV. 9, 1978
"Paragraphs (4) and (5) shall not apply to the tax imposed by section
Ante, p. 3180. 4064."
26 use 4293. (2) UNITED STATES AXD POSSESSIONS.—Section 4293 (relating to
exemption for United States and possessions) is amended by
striking out "tax imposed by section 4121" and inserting in lieu
thereof "taxes imposed by sections 4064 and 4121".
(3) DENIAL OF REFUNDS FOR CERTAIN USES.—Paragraph (2) of
26 use 6416. section 6416(b) (relating to tax payments considered overpay-
ments in the case of specified uses and resales) is amended by add-
ing at the end thereof the following new sentence:
"Subparagraphs (C) and (D) shall not apply in the case of any
tax paid under section 4064".
(d) PAYMENT OF TAX IN CASE OF LEASED AUTOMOBILES.—Section
26 use 4217. 4217 (relating to leases) is amended by adding at the end thereof the
following new subsection:
"(e) LEASES OF AUTOMOBILES SUBJECT TO GAS GUZZLER TAX.—
(1) I N GENERAL.—In the case of the lease of an automobile the
sale of which by the manufacturer would be taxable under section
4064, the foregoing provisions of this section shall not apply, but,
for purposes of this chapter—
"(A) the first lease of such automobile by the manufac-
turer shall be considered to be a sale, and
"(B) any lease of such automobile by the manufacturer
after the first lease of such automobile shall not be considered
to be a sale.
" (2) PAYMENT OF TAX.—In the case of a lease described in para-
graph (1) ( A ) -
"(A) there shall be paid by the manufacturer on each lease
payment that portion of the total gas guzzler tax which bears
the same ratio to such total gas guzzler tax as such payment
bears to the total amount to be paid under such lease,
"(B) if such lease is canceled, or the automobile is sold or
otherwise disposed of, before the total gas guzzler tax is pay-
able, there shall be paid by the manufacturer on such cancel-
lation, sale, or disposition the difference between the tax
imposed under subparagraph (A) on the lease payments and
the total gas guzzler tax, and
"(C) if the automobile is sold or otherwise disposed of
after the total gas guzzler tax is payable, no tax shall be
imposed under section 4064 on such sale or disposition.
"(3) DEFINITIONS.—For purposes of this subsection—
" (A) MANUFACTURER.—The term 'manufacturer' includes a
producer or importer.
"(B) TOTAL GAS GUZZLER TAX.—The term 'total gas guzzler
Ante, p. 3180. tax' means the tax imposed by section 4064, computed at the
rate in effect on the date of the first lease."
(e) AUTHORITY TO EXTEND REGISTRATION SYSTEM TO EXEMPTION OF
26 use 4222. EMERGENCY VEHICLES.—Subsection (d) of section 4222 (relating to
registration in the case of certain other exemptions) is amended by
inserting "4064(b) (1) (C)," after "4063(b),".
(f) CLERICAL AMENDMENT.—The table of sections for part I of sub-
chapter A of chapter 32 is amended by adding at the end thereof the
following new item:
"Sec. 4064. Gas guzzler tax."
26 use 4064 (g) EFFECTIVE DATE.—The amendments made by this section shall
note. apply with respect to 1980 and later model year automobiles (as
26 use 4064. defined in section 4064 (b) of the Internal Revenue Code of 1954).
PUBLIC LAW 9 5 - 6 1 8 - - N 0 V . 9, 1978 92 STAT. 3185
P A R T II—MOTOR F U E L S
SEC. 221. EXEMPTION FROM MOTOR FUELS EXCISE TAXES FOR CER-
TAIN ALCOHOL FUELS.
( a ) GASOLINE M I X E D W I T H A L C O H O L . —
(1) I N GENERAL.—Section 4081 (relating t o imposition of t a x 26 u s e 4081.
on gasoline) is amended by adding a t the end thereof the follow-
ing new subsection:
" ( c ) GASOLINE M I X E D W I T H A L C O H O L . —
" ( 1 ) I N GENERAL.—Under regulations prescribed by t h e Secre-
tary, no t a x shall be imposed by this section on the sale of a n y
gasoline—
" ( A ) in a mixture with alcohol, if at least 10 percent of the
mixture is alcohol, or
" ( B ) for use in producing a mixture at least 10 percent of
which is alcohol.
" (2) LATER SEPARATION OF GASOLINE.—If any person separates
the gasoline from a mixture of gasoline and alcohol on which t a x
was not imposed by reason of this subsection, such person shall b e
treated as the producer of such gasoline. •< ^>£
" ( 3 ) ALCOHOL DEFINED.—For purposes of t h i s subsection, t h e
term 'alcohol' includes methanol and ethanol b u t does not include
alcohol produced from petroleum, natural gas, or coal."
(2) EFFECTIVE DATE.—The a m e n d m e n t made by p a r a g r a p h (1) 26 u s e 4081
shall apply to sales after December 31,1978, and before October 1, note.
1984.
(b) ALCOHOL M I X E D W I T H SPECIAL F U E L . —
(1) I N GENERAL.—Section 4041 (relating t o imposition of t a x 26 u s e 4041.
on special fuels) is amended by a d d i n g at the end thereof the fol-
lowing new subsection:
" ( k ) F U E L S CONTAINING A L C O H O L . —
" ( 1 ) I N GENERAL.—^Under regulations prescribed by t h e Secre-
t a r y , n o t a x shall be imposed b y this section on t h e sale o r use of
any liquid fuel a t least 10 percent of which consists of alcohol
(as denned by section 4081 (c) ( 3 ) ) .
" (2) LATER SEPARATION.—If any person separates the liquid fuel
from a mixture of t h e liquid fuel a n d alcohol on which t a x was
not imposed by reason of this subsection, such separation shall be
treated as a sale of the liquid fuel."
(2) EFFECTIVE DATE.—The a m e n d m e n t m a d e by p a r a g r a p h (1) 26 u s e 4041
shall apply to sales or use after December 31, 1978, a n d before note.
October 1,1984.
(c) REPORTS.— 26 u s e 4041
(1) A N N U A L REPORT.—On A p r i l 1 of each year, beginning with note.
A p r i l 1, 1980, a n d ending on A p r i l 1, 1984, t h e Secretary of Report to
E n e r g y , in consultation with the Secretary of t h e Treasury a n d Congress.
t h e Secretary of Transportation, shall submit t o t h e Congress a
report on the use of alcohol in fuel. The report shall include—
( A ) a description of the firms engaged in the alcohol fuel
industry,
( B ) t h e amount of alcohol fuels sold in each State, a n d
the amount of gasoline saved in each State by reason of t h e
use of alcohol fuels,
(C) t h e revenue loss resulting from t h e exemptions from
js,, ^. t a x for alcohol fuels under sections 4041 (k) and 4081(c) of
the I n t e r n a l Revenue Code of 1954, and 26 u s e 4041,
4081.
92 STAT. 3186 PUBLIC LAW 95-618—NOV. 9, 1 9 7 8
( D ) the cost of production a n d the retail cost of alcohol
fuels as compared to gasoline a n d special fuels before the
imposition of any Federal excise taxes.
Report to (2) REPORT.—The report submitted t o the Congress on A p r i l 1,
1984, shall contain, in addition to the information required under
p a r a g r a p h ( 1 ) , a n analysis of t h e effect on the alcohol fuel
industry of t h e termination of t h e exemption from excise taxes
provided under sections 4041 (k) and 4081 (c) of the I n t e r n a l Rev-
26 u s e 4041, enue Code of 1954.
4081. ( d ) EXPEDITION OP CERTAIN E T H A N O L PRODUCTION A P P L I C A T I O N S . —
26 u s e 4081 T h e Secretary of the Treasury shall expedite, to the maximum extent
note. possible, action on t h e application of any person with respect to the
production of ethanol for use in producing gasoline described in sec-
tion 4081 (c) (or in producing liquid fuel described in section 4041 ( k ) )
Legislative of the Internal Revenue Code of 1954. W i t h i n 6 months after the date
recommendations of t h e enactment of this A c t , the Secretary shall furnish t o the
to congressional Committee on Finance, United States Senate, and to t h e Commit-
committees. tee on W a y s and Means, United States House of Representatives, rec-
ommendations for legislation necessary to provide for changes in the
26 u s e 5001 provisions of chapter 51 of the I n t e r n a l Revenue Code of 1954 to pro-
et seq. vide a simple, expeditious procedure for processing such applications
and t o simplify t h e regulation of such persons for purposes of such
chapter consistent with adequate safeguards against t h e use of such
applications t o avoid or evade compliance with the provisions of such
chapter relating to distilled spirits procured, dealt in, or used for other
purposes.
SEC. 222. DENIAL OF CREDIT OR REFUND FOR NONBUSINESS NON-
HIGHWAY USE OF GASOLINE, SPECIAL MOTOR FUELS,
AND LUBRICATING OIL.
(a) I N GENERAL.—
(1) G A S O L I N E . —
26 u s e 6421. ( A ) So much of the first sentence of section 6421(a) (relat-
ing t o nonhighway uses) as precedes " t h e Secretary" is
amended t o read as follows: " E x c e p t as provided i n subsec-
tion ( i ) , if gasoline is used in a qualified business use,".
( B ) Subsection ( d ) of section 6421 (relating t o definitions)
is amended by adding a t t h e end thereof t h e following new
paragraph:
" ( 3 ) Q U A L I F I E D BUSINESS USE.—
" ( A ) I N GENERAL.—The term'qualified business use'mcaus
any use by a person in a t r a d e or business of such person o r
26 u s e 212. i n a n activity of such person described in section 212 (relat-
ing t o production of income) otherwise t h a n as a fuel in a
highway vehicle—
" ( i ) which ( a t t h e time of such use), is registered, or
is required to be registered, for highway use under t h e
laws of any State or foreign country, or
" ( i i ) which, i n the case of a highway vehicle owned by
the United States, is used on the highway.
" ( B ) EXCEPTION FOR USE I N MOTORBOATS.—The t e r m 'quali-
fied business use' does not include any use in a motorboat.
"(C) COMMERCIAL FISHING VESSELS.—For provisions
exempting from t a x gasoline, special motor fuels, a n d lubri-
cating oil used for commercial fishing vessels, see—
26 u s e 4221. " ( i ) subsections ( a ) ( 3 ) a n d ( d ) ( 3 ) of section 4221
,; (relating to certain tax-free sales),
PUBLIC LAW 95-618—NOV. 9, 1978 92 STAT. 3187
"(ii) section 6416(b) (2) (B) (relating to refund or 26USC6416.
;•! credit in case of certain uses), and
"(iii) section 4041(g)(1) (relating to exemptions 26USC4041.
from tax on special fuels)."
(2) SPECIAL MOTOR FUELS.—Subsection (b) of section 4041
(relating to special motor fuels) is amended by striking out the '
second and third sentences and inserting in lieu thereof the
following:
"In the case of a liquid taxable under this subsection sold for use, or
used, in a qualified business use, the tax imposed by paragraph (1) or
by paragraph (2) shall be 2 cents a gallon. If a liquid on which tax
was imposed by paragraph (1) at the rate of 2 cents a gallon by reason
of the preceding sentence is used otherwise than in a qualified busi-
ness use, a tax of 2 cents a gallon shall be imposed under paragraph
(2). For purposes of this subsection, the term 'qualified business use'
has the meamng given to such term bj/^ section 6421 (d) (3)." 26 USC 6421.
(3) LUBRICATING OIL.—^Subsection (a) of section 6424 (relating 26 USC 6424.
to lubricating oil not used in highway motor vehicles) is amended
by striking out "is used otherwise than in a highway motor vehi-
cle" and inserting in lieu thereof "is used in a qualified business
use (within the meaning of section 6421(d) (3))".
(b) ETTECTIVE DATE.—The amendments made by subsection (a) 26 USC 4041
shall apply with respect to uses after December 31,1978. °°*®-
PART III—PROVISIONS RELATED TO BUSES
SEC. 231. REMOVAL OF EXCISE TAX ON BUSES.
(a) GENERAL EuLE.—Paragraph (6) of section 4063(a) (relating 26 USC 4063.
to exemption for local transit buses) is amended to read as follows:
" (6) BUSES.—The tax imposed under section 4061 (a) shall not 26 USC 4061.
apply in the case of any automobile bus chassis or automobile bus
body."
(b) FLOOR STOCKS REruNDS.— 26 USC 4063
(1) I N GENERAL.—Where, before the day after the date of the note.
enactment of this Act, any tax-repealed article (as defined in sub-
section (e)) has been sold by the manufacturer, producer, or
importer and on such day is held by a dealer and has not been used
and is intended for sale, there shall be credited or refunded (with-
out interest) to the manufacturer, producer, or importer an
, amount equal to the tax paid by such manufacturer, producer, or
importer on his sale of the article, if—
(A) claim for such credit or refund is filed with the Secre-
tary of the Treasury before the first day of the 10th calendar
month beginning after the day after the date of the enactment
of this Act based upon a request submitted to the manufac-
turer, producer, or importer before the first day of the 7th
. .,, calendar month beginning after the day after the date of the
enactment of this Act by the dealer who held the article in
respect of which the credit or refunds is claimed; and
(B) on or before the first day of such 10th calendar month
reimbursement has been made to the dealer by the manufac-
turer, producer, or importer in an amount equal to the tax
paid on the article or written consent has been obtained from
the dealer to allowance of the credit or refund.
(2) LIMITATION ON ELIGIBILITT FOR CREDIT OR REFUND.—No man-
ufacturer, producer, or importer shall be entitled to credit or
refund under paragraph (1) unless he has in his possession such
92 STAT. 3188 PUBLIC LAW 95-618—NOV. 9, 1978
dfJt; •-•''..• '-> evidence of the inventories with respect to which the credit or
refund is claimed as may be required by regulations prescribed b}'
14 #r >c J •/ J the Secretary of the Treasury under this subsection.
(3) O T H E R LAWS APPLICABLE.—All provisions of law, including
penalties, applicable with respect to the taxes imposed by section
26 u s e 4061. 4061(a) of t h e I n t e r n a l Eevenue Code of 1954 shall, insofar as
applicable a n d not inconsistent with p a r a g r a p h s (1) and (2) of
this subsection, apply in respect of t h e credits a n d refunds pro-
i vided for i n p a r a g r a p h (1) t o the same extent as if the credits or
refunds constituted overpayments of the tax.
(c) R E F U N D S W I T H EESPECT TO CERTAIN CONSUMER P U R C H A S E S . —
(1) I N GENERAL.—Except as otherwise provided i n p a r a g r a p h
( 2 ) , where on or after April 20, 1977, a n d on or before the date
of the enactment of this Act, a tax-repealed article (as defined in
subsection ( e ) ) has been sold t o an ultimate purchaser, there shall
• •'"••''. ' be credited or refunded (without interest) t o t h e manufacturer,
' i • i producer, or importer of such article a n amount equal t o t h e t a x
paid by such manufacturer, producer, or importer on his sale of
the article.
', (2) L I M I T A T I O N ON ELIGIBILITY FOR CREDIT OR REFUND.—No man-
ufacturer, producer, or importer shall be entitled to a credit or
! '• refund under p a r a g r a p h (1) with respect t o an article unless—
'•'- ( A ) he h a s in his possession such evidence of t h e sale of
the article to an ultimate purchaser, and of the reimbursement
of the tax to such purchaser, as m a y be required by regulations
prescribed by t h e Secretary of t h e Treasury under this
subsection;
.Kc. * J d% - ( B ) claim for such credit or refund is filed with the Sec-
retary of t h e Treasury before t h e first d a y of t h e 10th cal-
.1 c. >'!*" ;:: endar month beginning after t h e d a y after t h e date of t h e
enactment of this A c t based upon information submitted t o
the manufacturer, producer, or importer before t h e first d a y
rS.:)w w .;; of the 7th calendar month beginning after t h e d a y after the
' . date of the enactment of this Act by the person who sold the
article ( i n respect of which t h e credit or refund is claimed)
to the ultimate purchaser; a n d
t ( C ) on or before the first day of such 10th calendar month
reimbursement h a s been made t o t h e ultimate purchaser in
J an amount equal to the tax paid on the article.
(3) O T H E R LAWS APPLICABIJE.—All provisions of laws, i n c l u d i n g
penalties, applicable with respect to t h e taxes imposed by section
4061(a) of such Code shall, insofar as applicable a n d n o t incon-
sistent with p a r a g r a p h (1) or (2) of this subsection, apply with
respect t o the credits and refunds provided for in p a r a g r a p h (1)
to the same extent as if t h e credits or refunds constituted over-
payment of the tax.
( d ) CERTAIN U S E S BY MANUFACTURER, E T C . — A n y t a x p a i d by leason
26 u s e 4218. of section 4218(a) of such Code (relating to use by manufacturer or
importer considered sale) on any tax-repealed article shall be deemed
an overpayment of such t a x if the t a x was imposed on such article
by reason of such section 4218(a) on or after A p r i l 20, 1977.
(e) D E F I N I T I O N S . — F o r purposes of this section—
; (1) T h e term "dealer" includes a wholesaler, jobber, distributor,
or retailer.
(2) A n article shall be considered as "held b y a dealer" if title
thereto h a s passed t o such dealer (whether or n o t delivery to
, him has been made) a n d if, for purposes of consumption, title t o
PUBLIC LAW 95-618—NOV. 9, 1978 92 STAT. 3189
such article or possession thereof has not at any time been trans-
ferred to any person other than a dealer. ^'
(3) The term "tax-repealed article" means an article on which
a tax was imposed by section 4061 (a) of such Code (as in effect on 26 USC 4061.
the day before the date of the enactment of this Act) and which
is exempted from such tax by paragraph (6) of section 4063(a)
of such Code (as amended by subsection (a) of this section). 26 USC 4063.
(f) TECHNICAL AND CONFORMING AMENDMENTS.—
(1) The heading for paragraph (1) of section 6412(a) (relat- 26 USC 6412.
ing to floor stocks refunds) is amended by striking out "AND
BUSES".
(2) Subsection (d) of section 4222 (relating to registration in 26 USC 4222.
case of certain other exemptions) is amended by striking out
"4063(a) (6) or (7)" and inserting in lieu thereof "4063(a) (7)".
(g) EFFECTIVE DATE.— 26 USC 4063
(1) The amendments made by subsections (a) and (f) shall "o*®-
apply with respect to articles sold after the date of the enactment
of this Act. , ^ >P : <y
(2) For purposes of paragraph (1), an article shall not be con-
sidered sold on or before the date of the enactment of this Act
unless possession or right to possession passes to the purchaser on
or before such date.
(3) In the case of— ' ,. '--
(A) a lease,
(B) a contract for the sale of an article providing that the
price shall be paid by installments and title to the article sold
does not pass until a future date notwithstanding partial
payment by installments,
(C) a conditional sale, or
(D) a chattel mortgage arrangement providing that the •, .. > i .c
sale price shall be paid in installments,
entered into on or before the date of the enactment of this Act,
payments made after such date with respect to the article leased
or sold shall, for purposes of this subsection, be considered as pay-
ments made with respect to an article sold after such date, if the ^.y j : f';
lessor or vendor establishes that the amount of payments payable
after such date with respect to such article has been reduced by an
amount equal to that portion of the tax applicable with respect to
the lease or sale of such article which is due and payable after such
date. If the lessor or vendor does not establish that the payments
have been so reduced, they shall be treated as payments made in
respect of an article sold on or before the date of the enactment of
this Act.
SEC. 232. REMOVAL OF EXCISE TAX ON BUS PARTS.
(a) EXEMPT SALES.—Subsection (e) of section 4221 (relating to 26 USC 4221.
special rules for certain tax-free sales) is amended by adding at the
end thereof the following new paragraph:
" (6) Bus PARTS AND ACCESSORIES.—Under regulations prescribed
by the Secretary, the tax imposed by section 4061(b) shall not
apply to any part or accessory which is sold for use by the pur-
chaser on or in connection with an automobile bus."
(b) REFUND FOR CERTAIN SALES OF BUS PARTS.—Subparagraph (I)
of section 6416(b)(2) (relating to refund for specified uses and 26 USC 6416.
resales) is amended to read as follows:
" ( I ) in the case of any article taxable under section 4061
(b), sold for use by the purchaser on or in connection with an
automobile bus;".
92 STAT. 3190 PUBLIC LAW 95-618—NOV. 9, 1978
26 u s e 4221 ( c ) EFrECTiVE D A T E . — T h e a m e n d m e n t s m a d e b y t h i s section shall
°°*®- apply to sales on or after the first day of the first calendar month begin-
n i n g more t h a n 10 days after the date of the enactment of t h i s Act.
SEC. 233. REMOVAL OF EXCISE TAX ON FUEL, OIL, AND TIRES USED
IN CONNECTION WITH INTERCITY, LOCAL, AND SCHOOL
BUSES.
(a) R E P A Y M E N T OF T A X ON GASOLINE AND O T H E R MOTOR FUEI^S USED
BY INTERCITY, LOCAL, OR SCHOOL B U S E S . —
26 u s e 6421. (1) GASOLINE.—Subsection (b) of section 6421 (relating to
local transit systems) is amended to read as follows:
,. ^ " (b) INTERCITY, LOCAL, OR SCHOOL B U S E S . —
" ( 1 ) ALLOWANCE.—Except as provided in p a r a g r a p h (2) and
subsection ( i ) , if gasoline is used in an automobile bus while
engaged in—
'^ " ( A ) furnishing (for compensation) passenger land trans-
portation available to the general public, or
" ( B ) the transportation of students and employees of
26 u s e 4221. schools (as defined in t h e last sentence of section 4221 ( d ) (7)
t h e Secretary shall pay (without interest) to the ultimate pur-
chaser of such gasoline an amount equal to the product of t h e
number of gallons of gasoline so used multiplied by the rate at
26 u s e 4081. which tax was imposed on such gasoline by section 4081.
"(2) L I M I T A T I O N I N CASE or NONSCHEDULED INTERCITY OR LOCAL
BUSES.—Paragraph (1) ( A ) shall not apply in respect of gasoline
used in any automobile bus while engaged in furnishing trans-
portation which is not scheduled and not along regular routes
unless the seating capacity of such bus is at least 20 adults (not
including the d r i v e r ) . "
26 u s e 6427. (2) OTHER FUELS.—Subsection (b) of section 6427 (relating to
local transit systems) is amended to read as follows:
"(b) INTERCITY, LOCAL, OR SCHOOL B U S E S . —
" ( 1 ) ALLOWANCE.—Except as provided in p a r a g r a p h (2) and
subsection ( g ) , if any fuel on t h e sale of which tax was imposed
26 u s e 4041. by subsection (a) or (b) of section 4041 is used in an automobile
bus while engaged in—
" ( A ) furnishing (for compensation) passenger land trans-
portation available to the general public, or
" ( B ) the transportation of students and employees of
schools (as defined in the last sentence of section 4221(d)
(T)(C)),
t h e Secretary shall pay (without interest) to the ultimate pur-
chaser of such fuel an amount equal to the product of the number
of gallons of such fuel so used multiplied by the rate at which tax
was imposed on such fuel by subsection (a) or (b) of section 4041.
" ( 2 ) L I M I T A T I O N IN CASE OF N O N S C H E D U L E D I N T E R C I T Y OR LOCAL
BUSES.—Paragraph (1) ( A ) shall not apply in respect of fuel used
} in any automobile bus while engaged in furnishing transportation
which is not scheduled and not along regular routes unless the
seating capacity of such bus is at least 20 adults (not including the
driver)."
( 3 ) T E C H N I C A L AMENDMENTS.—
26 u s e 6421. ( A ) Subsection (d) of section 6421 is amended—
(i) by strikin/^ out p a r a g r a p h ( 2 ) , and
. (ii) by redesignating p a r a g r a p h (3) (as added by
Ante, p. 3186. section 222(a) (1) ( B ) ) as p a r a g r a p h ( 2 ) .
PUBLIC LAW 95-618—NOV. 9, 1978 92 STAT. 3191
(B) The last sentence of section 4041(b) (as added by 26USC4041.
section 222(a)(2)) is amended by striking out "6421(d)
(3)" and inserting in lieu thereof "6421(d) (2)-'.
(C) Subsection (c) of section 4483 is amended by inserting 26 USC 4483.
"(as m effect on the day before the date of the enactment of
the Energy Tax Act of 1978)" after "section 6421(b) (2)".
(b) REPAYMENT OF TAX ON LUBRICATING O I L USED IN INTERCITY,
LOCAL, OR SCHOOL BUSES.—
(1) I N GENERAL.—Subsection (a) of section 6424 (relating to 26 USC 6424.
lubricating oil not used in highway motor vehicles) is amended
to read as follows:
"(a) PAYMENTS.—Except as provided in subsection (f), if lubricat-
ing oil (other than cutting oils, as defined in section 4092(b), and 26 USC 4092.
other than oil which has previously been used) is used—
(1) in a qualified business use (as defined in section 6421(d) 26 USC 6421.
(2)), or
" (2) in a qualified bus (as defined in section 4221 (d) (7)), 26 USC 4221.
the Secretary shall pay (without interest) to the ultimate purchaser
of such lubricating oil an amount equal to 6 cents for each gallon of
lubricating oil so used."
(2) TECHNICAL AND CONFORMING AMENDMENTS.—
(A) The section heading for section 6424 is amended by 26 USC 6424.
striking out "NOT USED IN HIGHWAY MOTOR VEHICLES" and
inserting in lieu thereof "USED FOR CERTAIN NONTAXABLE
PURPOSES".
(B) The table of sections for subchapter B of chapter 65 26 USC 6411.
(relating to rules of special application) is amended by strik-
ing out "not used in highway motor vehicles" in the item relating
to section 6424 and inserting in lieu thereof "used for certain
nontaxable purposes",
(C) Paragraph (3) of section 39(a) (relating to certain 26 USC 39.
uses of gasoline, special fuels, and lubricating oil) is amended
by striking out "otherwise than in a highway motor vehicle"
and inserting in lieu thereof "for certain nontaxable
purposes".
(D) Sections 6504(9) and 6675(a) are each amended by 26 USC 65(H,
striking out "not used in highway motor vehicles" and 6675.
inserting in lieu thereof "used for certain nontaxable pur- c
poses".
(E) Paragraph (3) of section 209(f) of the Highway Kev- 23USC 120note.
enue Act of 1956 is amended by striking out "lubricating oil
not used in highway motor vehicles" and inserting in lieu
thereof "lubricating oil used for certain nontaxable pur-
poses".
(c) TIRES, TUBES, AND TREAD RUBBER.—
(1) I N GENERAL.—Paragraph (5) of section 4221(e) (relating 26 USC 4221.
to school buses) is amended to read as follows:
"(5) TIRES, TUBES, ANDTOEADRUBBER USED ON INTERCITY, LOCAL,
AND SCHOOL BUSES.—Under regulations prescribed by the
Secretary—
"(A) the taxes imposed by paragraphs (1) and (3) of
section 4071(a) shall not apply in the case of tires or inner 26 USC 4071,
tubes for tires sold for use by the purchaser on or in connec-
tion with a qualified bus, and
"(B) the tax imposed by paragraph (4) of section 4071
(a) shall not apply in the case of tread rubber sold for use
by the purchaser in the recapping or retreading of any tire to
92 STAT. 3192 PUBLIC LAW 95-618—NOV. 9, 1978
•> be used by t h e purchaser on or in connection with a qualified
bus."
26 u s e 4221. (2) QUALIFIED BUS DEFINED.—Subsection ( d ) of section 4221
(relating to definitions) is amended b y a d d i n g a t t h e end thereof
the following new p a r a g r a p h :
"(7) QUALIFIED BUS.—
" ( A ) I N GENERAL.—The term'qualified b u s ' l u e a u s —
" ( i ) an intercity or local bus, a n d
••'' • " ( i i ) a school bus.
" ( B ) INTERCITY OR LOCAL BUS.—The term 'intercity or local
bus' means any automobile bus which is used predominantly
in furnishing (for compensation) passenger land transporta-
'-'''•"• ^ tion available to t h e general public if—
" ( i ) such transportation is scheduled a n d along reg-
u l a r routes, or
" ( i i ) the seating capacity of such bus is a t least 20
adults (not including t h e d r i v e r ) .
" ( C ) SCHOOL BUS.—The term 'school bus' means a n y auto-
mobile bus substantially all t h e use of which is in transport-
i n g students a n d employees of schools. F o r purposes of the
preceding sentence, the t e r m 'school' means an educational
* ' organization which normally maintains a regular faculty
and curriculum a n d normally has a regularly enrolled body
of pupils or students in attendance a t t h e place where its
educational activities are carried on."
26 u s e 6416. (3) TECHNICAL A M E N D M E N T . — P a r a g r a p h (2) of section 6416
( b ) (relating t o specified uses a n d resales) is amended by striking
out t h e period at t h e end of s u b p a r a g r a p h ( K ) a n d inserting in
lieu thereof a semicolon a n d by inserting after s u b p a r a g r a p h ( K )
the following new s u b p a r a g r a p h s :
" ( L ) in the case of any tire or inner tube taxable under
26 u s e 4071. p a r a g r a p h (1) or (3) of section 4 0 7 1 ( a ) , sold t o a n y person
for use as described in section 4221 ( e ) ( 5 ) ( A ) ; or
" ( M ) in the case of tread rubber taxable u n d e r p a r a g r a p h
(4) of section 4 0 7 1 ( a ) , used in the recapping or retreading
of a tire sold to a n y person for use on or in connection with
a qualified bus (as defined in section 4221(d) ( 7 ) ) . "
26 u s e 39 note. ( d ) EFFECTIVE D A T E . — T h e amendments made by this section shall
take effect on t h e first d a y of the first calendar month which begins
more t h a n 10 days after the date of the enactment of this Act,
PART IV—INCENTIVES FOR VAN POOLING
SEC. 241. FULL INVESTMENT CREDIT FOR CERTAIN COMMUTER
VEHICLES.
26 u s e 46. (a) I N GENERAL.—Subsection (c) of section 46 (relating to qualified
investment) is amended by a d d i n g at the end thereof the following new
paragraph :
" ( 6 ) SPECIAL RULE FOR COMMUTER HIGHWAY VEHICLES.—
" ( A ) I N GENERAL.—ISTotwithstanding p a r a g r a p h ( 2 ) , in
the case of a commuter highway vehicle the useful life of
- •"* ' ' which is 3 years or more, the applicable percentage for p u r -
'K -i poses of p a r a g r a p h (1) shall be 100 percent.
"(B) D E F I N I T I O N OF COMMUTER HIGHWAY VEHICLE.—For
• purposes of subparagraph ( A ) , t h e term 'commuter highway
• -; vehicle'means a highway vehicle—
PUBLIC LAW 95-618—NOV. 9, 1978 92 STAT. 3193
"(i) the seating capacity of which is at least 8 adults
(not including the driver),
" (ii) at least 80 percent of the mileage use of which can
reasonably be expected to be ( I ) for purposes of trans-
porting the taxpayer's employees between their resi-
dences and their place of employment, and ( I I ) on trips
during which the number of employees transported for
such purposes is at least one-half of the adult seating
capacity of such vehicle (not including the driver),
"(iii) which is acquired by the taxpayer on or after
the date of the enactment of the Energy Tax Act of
1978, and placed in service by the taxpayer before Ante, p. 3174.
January 1,1986, and
"(iv) with respect to which the taxpayer makes an
election under this paragraph on his return for the tax-
able year in which such vehicle is placed in service."
(b) AMENDMENTS OF THE RECAPTURE RULES.—
(1) Subsection (a) of section 47 (relating to recapture in case 26 USC 47.
of certain dispositions, etc., of section 38 property) is amended by
redesignating paragraph (4) as paragraph (5) and by inserting
after paragraph (3) the following new paragraph:
" ( 4 ) S P E C I A L RULES FOR C O M M U T E R HIGHWAY VEHICLES.—
" (A) USEFUL LIFE.—For purposes of this subsection, 3 years
shall be treated as the useful life which was taken into
account in computing the credit under section 38 with respect 26 USC 38.
to any commuter highway vehicle (as defined in section 46
(c)(6)(B)). Ante, p. 3192.
"(B) CHANGE IN USE.—If less than 80 percent of the mile-
age use of any commuter highway vehicle by the taxpayer
during that portion of any taxable year which is within the
first 36 months of the operation of such vehicle by the tax-
payer meets the requirements of section 46(c) (6) (B), then
the tax under this chapter for such taxable year shall be
increased by an amount equal to the aggregate decrease in the
credits allowed under section 38 for all prior taxable years
which would have resulted solely from treating such vehicle,
for purposes of determining qualified investment, as not
being a commuter highway vehicle. If the application of this
subparagraph to any property is followed by the application
of paragraph (1) to such property, proper adjustment shall
be made in applying paragraph (1)."
(2) Paragraph (5) of section 47(a) (as redesignated by sub-
paragraph (A)) is amended by striking out "paragraph (2)" and
inserting in lieu thereof "paragraph (2) or (4)".
(3) Subparagraph (B) of section 47(a) (6) is amended by strik-
ing out "paragraph (4)" and inserting in lieu thereof "paragraph
(5)".
SEC. 242. EXCLUSION FROM GROSS INCOME OF VALUE OF QUALI-
FIED TRANSPORTATION PROVIDED BY EMPLOYER.
(a) I N GENERAL.—Part I I I of subchapter B of chapter 1 (relating 26 USC 101.
to items specifically excluded from gross income) is amended by
redesignating section 124 as 125, and by inserting after section 123 the 26 USC 124,
following new section: 125.
«SEC. 124. QUALIFIED TRANSPORTATION PROVIDED BY EMPLOYER. 26 USC 124.
" (a) GENERAL RULE.—Gross income of an employee does not include
the value of qualified transportation provided by the employer between
the employee's residence and place of employment.
39-194 O—80—pt. 3 36 : QL3
92 STAT. 3194 PUBLIC LAW 95-618—NOV. 9, 1978
" ( b ) QUALIFIED TRANSPORTATION.—For purposes of this section, the
term 'qualified transportation' means transportation in a commuter
Ante, p. 3192. highway vehicle (as defined in section 46(c) (6) ( B ) but without regard
to clause (iii) or (iv) thereof).
" ( c ) ADDITIONAL REQtjiREMP:NTS.—Subsection (a) does not apply
to the value of transportation provided by an employer unless—
" ( 1 ) such transportation is provided under a separate Avritten
plan of the employer which does not discriminate in favor of
employees who are officers, shareholders, or highly compensated
employees, and
" ( 2 ) the plan provides t h a t the value of such transportation is
; . provided in addition to (and not in lieu of) any compensation
otherwise payable to the employee.
" ( d ) D E F I N I T I O N S . — F o r purposes of this section—
" ( 1 ) PROVIDED BY THE EMPLOYER.—Transportation shall bo con-
sidered to be provided by an employer if the ti-ansportation is
furnished in a commuter highway vehicle (described in subsection
( b ) ) operated by or for the employer.
" ( 2 ) EMPLOYEE.—The term 'employee' does not include an indi-
26 u s e 401. vidual who is an employee (within the meaning of section 401
" (e) EFFECTIVE DATE.—Subsection (a) applies with respect to quali-
fied transportation provided in taxable years beginnin*!; after Decem-
bei- 31,1978, and before J a n u a r y 1,1986".
(b) CLERICAL A M E N D M E N T . — T h e table of sections for such part is
amended by striking out the last item and inserting in lieu thereof the
, , following:
"Sec. 124. Qualified transportation provided by employer.
"Sec. 125. Cross references to other Acts."
26 u s e 124note. (c) TRANSITION R U L E . — T h e plan requirements of section 124(c) of
Supra. the Intei-nal Revenue Code of 1954 shall be considered to be met with
respect to transportation provided before J u l y 1, 1979, if there is a
plan meeting such requirements of the employer in effect on t h a t date.
TITLE III—CHANGES IN BUSINESS IN-
VESTMENT CREDIT TO ENCOURAGE
CONSERVATION OF, OR CONVERSION
FROM, OIL AND GAS OR TO ENCOURAGE
NEW ENERGY TECHNOLOGY
SEC. 301. CHANGES IN BUSINESS INVESTMENT CREDIT.
(a) A M O U N T OF CREDIT; ALLOWANCE OF ENERGY PERCENTAGE.—
26 u s e 46. (1) I N GENERAL.—Paragraph (2) of section 4 6 ( a ) (relating to
amount of credit for current taxable year) is amended to read
as follows:
" ( 2 ) A M O U N T OF CREDIT.—
" ( A ) I N GENERAL.—The amount of the credit determined
under this p a r a g r a p h for the taxable year shall be an amount
equal to the sum of the following percentages of the qualified
investment (as determined under subsections (c) and ( d ) ) :
" (i) the regular percentage,
" ( i i ) in the case of energy property, t h e energy per-
centage, and
"(iii) t h e E S O P p e r c e n t a g e . =
PUBLIC LAW 95-618—NOV. 9, 1978 92 STAT. 3195
"(B) KEGULAR PERCENTAGE.—^For purposes of this para-
graph, the regular percentage is—
"(i) 10 percent with respect to the period beginning
on January 21,1975, and ending on December 31,1980, or
" (ii) 7 percent with respect to the period beginning on
January 1,1981.
"(C) ENERGY PERCENTAGE.—For purposes of this para-
graph, the energy percentage is—
" (i) 10 percent with respect to the period beginning on
October 1, 1978, and ending on December 31, 1982, or
" (ii) zero with respect to any other period.
"(D) SPECIAL RULE FOR CERTAIN ENERGY PROPERTY.—For
purposes of this paragraph, the regular percentage shall not
apply to any energy property which, but for section 48 (1) (1), Infra.
would not be section 38 property. 26 USC 38.
" ( E ) E S O P PERCENTAGE.—For purposes of this para-
graph, the E S O P percentage is—
"(i) with respect to the period beginning on Janu-
ary 21,1975, and ending on December 31,1980,1 percent,
and
"(ii) with respect to the period beginning on Janu-
aiy 1, 1977, and ending on December 31, 1980, an addi-
tional percentage (not in excess of ^ of 1 percent) which
results in an amount equal to the amount determined
under section 301(e) of the Tax Reduction Act of 1975. 26 USC 46 note.
This subparagraph shall a^ply to a corporation only if it
' meets the requirements of sdbtion 301(d) of the Tax Reduc-
tion Act of 1975 and only if it elects (at such time, in such 26 USC 46 note,
form, and in such manner as the Secretary prescribes) to have
this subparagraph apply."
(2) CONFORMING AMENDMENTS.—
(A) Subparagraph (A) of section 46(c) (3) (relating to 26 USC 46.
public utility property) is amended to read as follows:
"(A) For the period beginning on January 1, 1981, in the
case of any property which is public utility property, the
amount of the qualified investment shall be % of the amount
determined under paragraph (1). The preceding sentence
shall not apply for purposes of applying the energy
percentage."
(B) The first sentence of section 46(f)(8) (relating to
prohibition of immediate flow through) is amended by
striking out "and the Tax Reform Act of 1976" and insert- 26 USC 1 note,
ing in lieu thereof ", the Tax Reform Act of 1976, and the
Energy Tax Act of 1978". Ante, p. 3174.
(b^ DEFINITIONS AND TRANSITIONAL RULES.—Section 48 (relating to 26 USC 48.
definitions and special rules) is amended by redesignating subsection
(1) as subsection (n) and by inserting after subsection (k) the follow-
ing new subsections:
"(1) ENERGY PROPERTY.—For purposes of this subpart—
" (1) TREATMENT AS SECTION 3 8 PROPERTY.—For the period begin-
ning on October 1,1978, and ending on December 31, 1982—
" (A) any energy property shall be treated as meeting the
requirements of paragraph (1) of subsection (a), and
"(B) paragraph (3) of subsection (a) shall not apply to ;^
any energy property.
92 STAT. 3196 PUBLIC LAW 95-618—NOV. 9, 1978
"(2) ENERGY PKOPKRTY DEFINED.—The term 'enerj2;y pioperty'
means property—
"(A) which is—
" (i) alternative energy property, :-n
, . "(ii) solar wind energy property,
" (iii) specially defined energy property,
ffif!fT ^i;* ir "(iv) recycling equipment,
" (V) shale oil equipment, or
"(vi) equipment for producing natural gas from geo-
pressured brine,
"(B) (i) the construction, reconstruction, or erection of
-. : which is completed by the taxpayer after September .SO, ir*78.
or
c . "(ii) which is acquired after September 80. 1978, if the
• .-, ; ; original use of such property commences with the taxpayer
and commences after such date, and
"(C) with respect to which depreciation (or amortization
in lieu of depreciation) is allowable, and which has a useful
life (determined as of the time such property is placed in
service) of 3 years or more.
" ( 3 ) A L T E R N A T I V E ENERGY PROPERTY.—
"(A) I N GFNERAL.—The term 'alternative energy property'
means—
"(i) a boiler the primary fuel for which will be an
-., , :^,s t'A alternate substance,
"(ii) a burner (including necessary on-site equipment
to bring the alternate substance to the burner) for a com-
.. ,, bustor other than a boiler if the primary fuel for such
burner will be an alternate substance,
"(iii) equipment for converting an alternate substance
into a synthetic liquid, gaseous, or solid fuel (other than
coke or coke gas),
"(iv) equipment designed to modify existing equip-
ment which uses oil or natural gas as a fuel or as feed-
stock so that such equipment will use either a substance
other than oil and natural gas, or oil mixed with a sub-
stance other than oil and natural gas (where such other
substance will provide not less than 25 percent of the
fuel or feedstock),
"(v) equipment which uses coal (including lignite) as
a feedstock for the manufacture of chemicals or other
products (other than coke or coke gas),
"(vi) pollution control equipment required (by Fed-
eral, State, or local regulations) to be installed on or in
^ , connection with equipment described in clause (i), (ii).
(iii), (iv), or (v),
"(vii) equipment used for the unloading, transfer,
storage, reclaiming from storage, and preparation
(including, but not limited to, washing, crushing, drying,
and weighing) at the point of use of an alternate sub-
stance for use in equipment described in clause (i), (ii),
(iii), (iv), (v), or (vi), and
"(viii) equipment used to produce, distribute, or use
energy derived from a geothermal deposit (within the
Post, p. 3203. ^' meaning of section 613 (e) (3)), but only, in the case of
electricity generated by geothermal power, up to (but
not including) the electrical transmission stage.
PUBLIC LAW 95-618—NOV. 9, 1978 92 STAT. 3197
" ( B ) EXCLUSION FOR PUBLIC UTILITY PROPERTY.—The terms
'alternative energy property', 'solar or wind energy property',
and 'recycling equipment' do not include property which is
public utility property (within t h e meaning of section
46(f)(5)). 26 u s e 46.
"(C) ALTERNATE SUBSTANCE.—The t e r m 'alternate sub-
stance' means a n y substance other than—
" ( i ) oil and natural gas, and
" ( i i ) any product of oil and n a t u r a l gas.
" ( D ) SPECIAL RULE FOR CERTAIN POLLUTION CONTROL EQUIP-
MENT.—The term 'pollution control equipment' does not
include any equipment which—
" ( i ) is installed on or in connection with property
which, as of October 1, 1978, was using coal (including
lignite), a n d
" ( i i ) was required t o be installed by Federal, State, o r
local regulations in effect on such date.
" ( 4 ) SOLAR OR WIND ENERGY PROPERTY.—The t e r m 'solar o r '
wind energy property' means any equipment which uses solar
or wind energy—
" ( A ) to generate electricity, or
" ( B ) t o heat or cool (or provide hot water for use in)
a structure.
"(5) SPECIALLY DEFINED ENERGY PROPERTY.—The term
'specially defined energy property' means—
" ( A ) a recuperator,
" ( B ) a heat wheel,
" ( C ) a regenerator,
" ( D ) a heat exchanger,
" ( E ) a waste heat boiler,
" ( F ) a heat pipe,
" ( G ) an automatic energy control system,
^CH) a turbulator,
" ( I ) a preheater,
" ( J ) a combustible gas recovery system,
" ( K ) a n economizer, or
" ( L ) a n y other property of a kind specified by the
Secretary by regulations,
the principal purpose of which is reducing t h e amount of .* ,
energy consumed i n any existing industrial or commercial
process a n d which is installed in connection with an existing
industrial or commercial facility.
"(6) R E C Y C L I N G EQUIPMENT.—
" ( A ) I N GENERAL.—The term 'recycling equipment'
means any equipment which is used exclusively—
" ( i ) t o sort and prepare solid waste for recycling, r,
or
" (ii) in the recycling of solid waste.
"(B) CERTAIN EQUIPMENT NOT INCLUDED.—The t e r m
'recycling equipment' does not include—
" (i) any equipment used in a process after the first
marketable product is produced, or
" ( i i ) in t h e case of recycling iron or steel, any
equipment used to reduce the waste t o a molten state
and in any process thereafter.
"(C) 10 PERCENT VIRGIN MATERIAL ALLOWED.—Any
equipment used in t h e recycling of material which
92 STAT. 3198 PUBLIC LAW 95-618—NOV. 9, 1978
includes some virgin materials shall not be treated as
failing to meet the exclusive use requirements of sub-
paragraph (A) if the amount of such virgin materials is
i ' 10 percent or less.
<)*• "(I)) CERTAIN EQUIPMENT INCLUDED.—The term
'recycling equipment' includes any equipment which is
used in the conversion of solid waste into a fuel or into
useful energy such as steam, electricity, or hot water.
"(7) SHALE OIL EQUIPMENT.—The term 'shale oil equip-
ment' means equipment for producing or extracting oil from
oil-bearing shale rock but does not include equipment for
hydrogenation, refining, or other process subsequent to
retorting.
"(8) EQUIPMENT FOR PRODUCING NATURAL GAS FROM GEOPRES-
suRED BRINE.—The term 'equipment for producing natural gas
from geopressured brine' means equipment which is used exclu-
sively to extract natural gas described in section 613A(b)(3)
26USC613A. (C)(i).
"(9) EQUIPMENT MUST MEET CERTAIN STANDARDS TO QUALIFY.—
Equipment qualifies under paragraph (3), (4), (5), (6), (T),or
(8) only if it meets the performance and quality standards (if
any) which—
" (A) have been prescribed by the Secretary by regulations
(after consultation with the Secretary of Energy), and
"(B) are in effect at the time of the acquisition of the
property.
"(10) EXISTING.—For purposes of this subsection, the term
'existing'means—
"(A) when used in connection with a facility, 50 percent
or more of the basis of such facility is attributable to con-
struction, reconstruction, or erection before October 1, 1978,
or
" ( B ) when used in connection with an industrial or com-
mercial process, such process was carried on in the facility as
of October 1,1978.
"(11) SPECIAL RULE FOR PROPERTY FINANCED BY INDUSTRIAL
DEVELOPMENT BONDS.—In the case of property which is financed
in whole or in part by the proceeds of an industrial development
26 use 103. bond (within the meaning of section 103(b) (2)) the interest on
which is exempt from tax under section 103, the energy percent-
age shall be 5 percent.
"(12) INDUSTRIAL INCLUDES AGRICULTURAL.—^The term 'indus-
trial' includes agricultural,
"(m) APPLICATION OF CERTAIN TRANSITIONAL RULES.—^Where the
application of any provision of subsection (1) of this section or
Ante, p. 3194; subsection (a) (2) or (c) (3) of section 46 is expressed in terms of a
26 use 46. period, such provision shall apply only to—
"(1) property to which section 46(d) does not apply, the con-
struction, reconstruction, or erection of which is completed by the
taxpayer on or after the first day of such period, but only to the
extent of the basis thereof attributable to the construction, recon-
struction, or erection during such period,
"(2) property to which section 46(d) does not apply, acquired
by the taxpayer during such period and placed in service by the
taxpayer during such period, and
"(3) property to which section 46(d) applies, but only to the
extent of the qualified investment (as determined under subsec-
PUBLIC LAW 95-618—NOV. 9, 1978 92 STAT. 31!?9
tions (c) a n d ( d ) of section 46) with respect to qualified progress 26 USC 46.
expenditures made d u r i n g such period."
(c) SPECIAL RULES FOR A P P L Y I N G LIMITATION BASED ON T A X
LIABILITY—
(1) Subsection ( a ) of section 46 is amended by adding at t h e
end thereof the following new p a r a g r a p h :
" ( 1 0 ) SPECIAL RULES I N T H E CASE o r ENERGY PROPERTY.—Under Regulations,
regulations prescribed by the Secretary—
" ( A ) I N GENERAL.—This subsection a n d subsection (b)
shall be applied separately—
" ( i ) first with respect t o so much of t h e credit
allowed by section 38 as is not attributable to t h e energy 26 USC 38.
percentage,
" ( i i ) second with resjpect to so much of t h e credit
allowed by section 38 as ^ attributable to the application
of the energy percentage'to energy property (other t h a n
solar or wind energy p r o p e r t y ) , and
" ( i i i ) then with respect t o so much of t h e credit
allowed by section 38 as is attributable t o t h e applica-
tion of t h e energy percentage t o solar or wind energy
property.
" ( B ) R U L E S OF APPLICATION FOR ENERGY PROPERTY OTHER
T H A N SOLAR OR WIND ENERGY PROPERTY.—In a p p l y i n g this sub-
section a n d subsection (b) for taxable years ending after
September 30, 1978, with respect t o so much of t h e credit
allowed by section 38 as is described in subparagraph ( A )
(ii)-
" ( i ) p a r a g r a p h (3) (C) shall be applied by substitut-
i n g '100 percent' for '50 percent',
" ( i i ) p a r a g r a p h s ( 7 ) , ( 8 ) , a n d (9) shall not apply,
and
" ( i i i ) the liability for t a x shall be t h e amount deter-
mined under p a r a g r a p h (4) reduced b y so much of t h e
credit allowed by section 38 as is described in subpara-
graph (A) (i).
"(C) REFUNDABLE CREDIT FOR SOLAR OR WIND ENERGY
PROPERTY.—In t h e case of so much of t h e credit allowed b y
section 38 as is described in s u b p a r a g r a p h (A) (iii) —
" ( i ) p a r a g r a p h (3) shall not apply, and
" ( i i ) for purposes of this title (other t h a n section 38,
this subpart, and chapter 63), such credit shall be treated 26 USC 31,
as if it were allowed by section 39 a n d not by sec- 6201.
tion38." 26 USC 39.
(2) Section 6401 (relating t o amounts treated as overpay- 26 USC 6401.
ments) is amended by a d d i n g a t the end thereof the following new
subsection:
" ( d ) CROSS R E F E R E N C E . —
T o r rule allowing refund for excess investment credit attribut-
able to solar or wind energy property, see section 46(a) (10) (€)."
( d ) D E N I A L OF INVESTMENT T A X CREDIT FOR CERTAIN PROPERTY.—
(1) A I R CONDITIONING, SPACE HEATERS, E T C . — S u b p a r a g r a p h
( A ) of section 48 (a) (1) (defining section 38 property) is amended 26 USC 48.
to read as follows:
" ( A ) tangible personal property (other t h a n an a i r condi-
tioning or heating u n i t ) , or".
92 STAT. 3200 PUBLIC LAW 95-618—NOV. 9, 1978
(2) BOILERS FUELED BY OIL OR GAS.—Subsection (a) of section
26 u s e 48. 48 (defining section 38 property) is amended by adding at the end
thereof the following new p a r a g r a p h :
" (10) BOILERS FUELED BY OIL OR GAS.—
" ( A ) I N GENERAL.—The term 'section 38 p r o p e r t y ' does
not include any boiler primarily fueled by petroleum or petro-
^ . . • . , leum products (including n a t u r a l gas) unless the use of coal
is precluded by Federal air pollution regulations (or by State
* air pollution regulations in effect on October 1,1978) or unless
the use of such boiler will be an exempt use within the meaning
of subparagraph ( B ) .
" ( B ) E X E M P T USE DEFINED.—For purposes of s u b p a r a g r a p h
( A ) , the term 'exempt use' means—
" (i) use in an apartment, hotel, motel, or other residen-
tial facility,
" (ii) use in a vehicle, aircraft, or vessel, or in transpor-
tation by pipeline,
" (iii) use on a farm for farming purposes (within the
26 u s e 6420. meaning of section 6420 ( c ) ) ,
" ( i v ) use in—
" ( I ) a shopping center,
" ( I I ) an office building,
" ( I I I ) a wholesale or retail establishment,
" ( I V ) any other facility which is not an integral
p a r t of manufacturing, processing, or mining, or
" ( V ) any facility for the production of electric
power having a heat rate of less t h a n 9,500 Btu's per
J , .. kilowatt hour and which is capable of converting to
synthetic fuels (as certified by the S e c r e t a r y ) ,
j " ( v ) use in the exploration for, or the development,
extraction, transmission, or storage of, crude oil, natural
:,v* ,^ gas, or n a t u r a l gas liquids, and
" ( v i ) use in H a w a i i .
E x c e p t as provided in clauses (iv) (V) and (vi) of the preced-
ing sentence, the t e r m 'exempt use' does not include use of a
boiler which is public utility property (within the meaning
26 u s e 46. / : of section 46 (f) ( 5 1 ) ) . "
(3) D E N I A L OF RAPID DEPRECIATION FOR BOILERS FUELED BY OIL
26 u s e 167. OR GAS.—Section 167 (relating to depreciation) is amended by
redesignating subsection ( p ) as subsection ( r ) and by inserting
after subsection (o) the following new subsection:
"(p) STRAIGHT L I N E METHOD FOR BOILERS F U E L E D BY O I L OR GAS.-—
26 u s e 48. I n the case of any boiler which, by reason of section 48 (a) (10), is not
section 38 property—
" ( 1 ) subsections ( b ) , ( j ) , and (1) shall not apply, and
" ( 2 ) the term 'reasonable allowance' as used in subsection (a)
shall mean only an allowance computed under the straight line
method using a useful life equal to the class life prescribed by the
Secretary under subsection (m) which is applicable to such prop-
erty (determined without regard to the last sentence of subsec-
tion ( m ) ( l ) ) . "
26 u s e 48 note. (4) EFFECTIVE DATE.—
(A) I N GENERAL.—The amendments made by this subsec-
tion shall apply to property which is placed in service after
September 30, 1978.
PUBLIC LAW 95-618—NOV. 9, 1978 92 STAT. 3201
( B ) BINDING coNTRd^cTs.—The amendments made by this
subsection shall not apply to property which is constructed,
reconstructed, erected, or acquired pui-suant to a conti-act
which, on October 1, 1978, and at all times thereafter, was
binding on the taxpayer,
(e) DEI'KECIATION ALLOWANCE I N CASE OF RETIREMENT OR REPLACE-
MENT OF CERTAIN O I L AND GAS BOILERS, E T C . —
(1) I N GENERAL.—Section 167 is amended by insertino; after 26 USC 167. -•':-.
subsection (p) the following new subsection:
" ( q ) R E T I R E M E N T OR REPLACEMENT OF CERTAIN BOILERS, ETC.,
F U E L E D BY O I L OR G A S . —
" (1) I N GENERAL.—If—
" ( A ) a boiler or other combustor was in use on October 1,
1978, and as of such date the principal fuel for such combustor
was petroleum or petroleum products (includingnatural g a s ) ,
and
" ( B ) the taxpayer establishes to the satisfaction of the
Secretary t h a t such combustor will be retired or replaced on
or before the date specified by the taxpayer,
then for the period beginning with the taxable year in which sub-
p a r a g r a p h ( B ) is satisfied, the term 'reasonable allowance' as
used in subsection (a) includes an allowance under the straight
line method using a useful life equal to the period ending with the
date established under s u b p a r a g r a p h ( B ) . •• '
" ( 2 ) INTEREST.—If the retirement or replacement of any com-
bustor does not occur on or before the date referred to in para- -' '*
graph ( 1 ) ( B ) -
" ( A ) this subsection shall cease to apply with respect to
^ such combustor as of such date, and
" ( B ) interest at the rate determined under section 6621 on 26 USC 6621.
the amount of the tax benefit arising from the application of
this subsection with respect to such combustor shall be due
and payable for t h e period d u r i n g which such tax benefit was
' available to the taxpayer and ending on the date referred to
in p a r a g r a p h (1) ( B ) . "
(2) EFFECTIVE DATE.—The amendment made by p a r a g r a p h 26 USC 167 note.
(1) shall apply to taxable years ending after the date of the
enactment of this Act.
TITLE IV—MISCELLANEOUS PROVISIONS
SEC. 401. TREATMENT OF INTANGIBLE DRILLING COSTS FOR PUR-
POSES OF THE MINIMUM TAX.
Subsection (b) of section 308 of the T a x Reduction and Simplifica-
tion Act of 1977 is amended by striking out ", and before J a n u a r y 1, 26 USC 57 note.
1978".
SEC. 402. OPTION TO DEDUCT INTANGIBLE DRILLING COSTS IN THE
CASE OF GEOTHERMAL DEPOSITS.
(a) I N GENERAL.—Subsection (c) of section 263 (relating to 26 USC 263.
intangible drilling and and development costs in the case of oil and
gas wells) is amended—
(1) by adding at the end thereof the following new sentence:
"Such regulations shall also g r a n t the option to deduct as expenses
intangible drilling and development costs in the case of wells
drilled for any geothermal deposit (as defined in section 613(e) Post, p. 3203.
92 STAT. 3202 PUBLIC LAW 95-618—NOV. 9, 1978
( 3 ) ) to the same extent and in the same manner as such expenses
are deductible in the case of oil and ^as wells.", and
(2) by amending the subsection heading to read as follows:
" (c) INTANGIBLE D R I L L I N G AND DEVKLOPMENT COSTS I N T H E CASE OF
O I L AND GAS W E L L S AND GEOTIHERMAL W E L L S . — " .
(b) M I N I M U M T A X ON INTANGIBLE D R I L I J N G ('OSTS I N T H E CASE OF
GEOTHERMAL W E L L S . —
26 u s e 57. (1) P a r a g r a p h (11) of section o7(a) (relating to intangible
drilling costs) is amended by striking out "oil and gas properties"
each place it appears (including in the heading of subparagraph
( C ) ) and inserting in lieu thereof "oil, gas, and geothermal
properties".
(2) Clause (i) of section 57(a) (11) ( B ) is amended by striking
out "oil and gas wells" and inserting in lieu thereof "oil, gas, and
geothermal wells".
(3) P a r a g r a p h (11) of section 57(a) is amended by adding at
the end thereof the following new s u b p a r a g r a p h :
s "(D) PARAGRAPH APPLIED SEPARATELY W I T H RESPECT TO
GEOTHERMAL PROPERTIES AND OIL AND GAS PROPERTIES.—This
p a r a g r a p h shall be applied separately with respect to—
" ( i ) all oil and gas properties which are not described
in clause ( i i ) , a n d
" ( i i ) all properties which are geothermal deposits (as
Post, p. 3203. defined in section 613 (e) ( 3 ) ) . "
(c) G A I N F R O M DISPOSITION OF INTERESTS I N GEOTHERMAL W E L L S . —
26 u s e 1254. (1) P a r a g r a p h s (1) and (2) of section 1254(a) (relating to gain
from disposition of interest in oil or gas property) are each
amended by striking out "oil or gas p r o p e r t y " each place it appears
and inserting in lieu thereof "oil, gas, or geothermal property".
i i\ (2) P a r a g r a p h (3) of section 1254(a) (defining oil or gas prop-
erty) is amended to read as follows:
"(3) O I L , GAS, OR GEOTHERMAL PROPERTY.—The t e r m 'oil, gas, or
geothermal property' means any property (within the meaning
26 u s e 614. of section 614) with respect to which any expenditures described
in p a r a g r a p h (1) ( A ) are properly chargeable."
? ; (3) The section heading of section 1254 is amended by striking
out "OIL OR GAS" and inserting in lieu thereof "OIL, GAS, OR
GEOTHERMAL",
(4) T h e table of sections for part I V of subchapter P of chapter
26 u s e 1231. 1 is amended by striking out "oil or gas" in the item relating to
section 1254 and inserting in lieu thereof "oil, gas, or geothermal".
26 u s e 751. (5) Subsection (c) of section 751 (relating to unrealized receiv-
ables) is amended by striking out "oil and gas p r o p e r t y " and
inserting in lieu thereof "oil, gas, or geothermal property".
(d) APPLICATION OF AT R I S K R U L E S TO GEOTHERMAL DEPOSITS.—
26 u s e 465. (1) P a r a g r a p h (1) of section 465(c) (defining activities to
which at risk rules apply) is amended by striking out " o r " at the
end of s u b p a r a g r a p h (C), by adding ", or" at the end of subpara-
^ a p h ( D ) , and by inserting after s u b p a r a g r a p h ( D ) the follow-
y> m g new s u b p a r a g r a p h :
" ( E ) exploring for, or exploiting, geothermal deposits (as
defined in section 613 (e) ( 3 ) ) " .
(2) P a r a g r a p h (2) of section 465(c) is amended by striking
out " o r " at the end of subparagraph ( C ) , by a d d i n g " o r " at the
end of s u b p a r a g r a p h ( D ) , and by inserting after subparagraph
ju> ; ; 51^ ( D ) the following new s u b p a r a g r a p h :
PUBLIC LAW 95-618—NOV. 9, 1978 9 2 STAT. 3 2 0 3
" ( E ) geothermal property (as determined under section
Ql^\» ^ 26 u s e 614.
(e) EFFECTIVE D A T E . — 26 USC 263 note.
(1) I N GENERAL.—The amendments made by this section shall
apply with respect to wells commenced on or after October 1,1978,
in taxable years ending on or after such date. • n
(2) ELECTION.—The taxpayer may elect t o capitalize or deduct
any costs to which section 263 (c) of the I n t e r n a l Eevenue Code of
1954 applies by reason of t h e amendments made by this section. 26 USC 263.
A n y such election shall be made before the expiration of the time
for filing claim for credit o r refund of a n y overpayment of t a x
imposed by chapter 1 of such Code with respect to the taxpayer's
first taxable year t o which t h e amendments made by this section
apply and for which he pays o r incurs costs t o which such section
263(c) applies by reason o i the amendments made by this section.
A n y election under this p a r a g r a p h m a y be changed o r revoked
at a n y time before t h e expiration of t h e time referred t o in t h e
preceding sentence, but after t h e expiration of such time such
election may not be changed or revoked.
SEC. 403. DEPLETION FOR GEOTHERMAL DEPOSITS AND NATURAL
GAS FROM GEOPRESSURED BRINE.
( a ) GEOTHERMAL DEPOSITS.—
(1) I N GENERAL.—Section 613 (relating t o percentage deple- 26 USC 613.
tion) is amended by a d d i n g at t h e end thereof t h e following
new subsection:
" ( e ) PERCENTAGE DEPLETION FOR GEOTHERMAL D E P O S I T S . —
" (1) I N GENERAL.—In the case of geothermal deposits located in
the United States or in a possession of t h e United States, for
purposes of subsection ( a ) —
" ( A ) such deposits shall be treated as listed in subsection
(b),and
" ( B ) t h e applicable percentage (determined under t h e
table contained in p a r a g r a p h ( 2 ) ) shall be deemed to be t h e
percentage specified in subsection ( b ) .
"(2) APPLICABLE PERCENTAGE.—For purposes of paragraph
"In the case of taxable years The applicable
beginning in calendar year— percentage is—
1978, 1979, or 1980 22
1981 20
1982 18
1983 16
1984 and thereafter 15
"(3) GEOTHERMAL DEPOSIT DEFINED.—For purposes of para-
g r a p h ( 1 ) , t h e t e r m 'geothermal deposit' means a geothermal
reservoir consisting of natural heat which is stored in rocks or
in a n aqueous liquid or vapor (whether or not under pressure).
Such a deposit shall i n no case be treated as a gas well for pur-
poses of this section or section 613A, a n d this section shall n o t 26 USC 613A.
a p p l y to a geothermal deposit which is located outside the United
States or its possessions."
( 2 ) T E C H N I C A L AMENDMENTS.—
( A ) P a r a g r a p h (1) of section 613(c) (defining gross
income from t h e property) is amended b y inserting " a n d
other t h a n a geothermal deposit" after "oil or gas well".
9 2 STAT. 3204 PUBLIC LAW 9 5 - 6 1 8 — N O V . 9, 1 9 7 8
26 u s e 613A. ( B ) P a r a g r a p h (1) of section 613A(b) is amended—
(i) by inserting " a n d " at t h e end of subparagraph
(A),
, , (ii) by striking out " a n d " at the end of subparagraph
(B),and
(iii) by st riking out s u b p a r a g r a p h ( C ) .
26 u s e 614. (C) Subsection (b) of section 614 (relating to special
rules as to operating mineral interest in oil and gas wells) is
amended—
(i) by inserting "OR GEOTHERMAL DEPOSITS" after " G A S
W E L L S " in the subsection heading, a n d
(ii) by inserting " o r geothermal deposits" after " g a s
wells" in so much of t h e text as precedes p a r a g r a p h (1)
thereof.
( D ) Subsection (c) of section 614 is amended by striking
out "oil a n d gas wells" each place it appears and inserting
in lieu thereof "oil a n d gas wells a n d geothermal deposits".
( b ) NATURAL G A S F R O M GEOPRESSURED B R I N E . —
26 u s e 613A. (1) I N GENERAL.—Subsection (b) of section 613A (relating to
exemption for certain domestic gas wells) is amended by redesig-
n a t i n g p a r a g r a p h (2) as p a r a g r a p h (3) a n d by inserting after
p a r a g r a p h (1) the following new p a r a g r a p h :
" ( 2 ) NATURAL GAS FROM GEOPRESSURED BRINE.—The allowance
26 u s e 611. for depletion under section 611 shall be computed in accordance
with section 613 with respect t o a n y qualified n a t u r a l gas from
geopressured brine, a n d 10 percent shall be deemed t o be specified
26 u s e 613. in subsection (b) of section 613 for purposes of subsection ( a ) of
such section."
(2) QUALIFIED NATURAL GAS FROM GEOPRESSURED B R I N E . — P a r a -
Supra. g r a p h (3) of section 613A(b) (as redesignated by p a r a g r a p h ( 1 ) )
is amended by adding at the end thereof the following new
subparagraph:
" ( C ) QUALIFIED NATURAL GAS FROM GEOPRESSURED BRINE.—
T h e t e r m 'qualified n a t u r a l g a s from geopressured brine'
means any natural gas—
;*'• " ( i ) which is determined in accordance with section
Post, p. 3397. 503 of the N a t u r a l Gas Policy A c t of 1978 to be produced
,fj from geopressured brine, a n d
" ( i i ) which is produced from any well t h e drilling of
which began after September 30, 1978, and before J a n -
uary 1, 1984."
26 u s e 613 note. (c) EFFECTIVE D A T E . — T h e amendments made by this section shall
take effect on October 1,1978, a n d shall apply to taxable years ending
on or after such date.
26 u s e 613A ( d ) COORDINATION W I T H O T H E R PROVISION.—Any allowance for
note. depletion allowed by reason of the amendments made by subsection ( b )
shall not be treated as a credit, exemption, deduction, or comparable
adjustment applicable t o t h e computation of a n y Federal t a x which is
specifically allowable with respect to a n y high-cost n a t u r a l gas (or
category thereof) for purposes of section 107(d) of the N a t u r a l Gas
Post, p. 3366. Policy A c t of 1978.
SEC. 404. REREFINED LUBRICATING OIL.
26 u s e 4093. (a) I N GENERAL.—Section 4093 (relating t o exemption of sales to
producers) is amended to read as follows:
PUBLIC LAW 95-618—NOV. 9, 1978 92 STAT. 3205
"SEC. 4093. EXEMPTIONS.
" ( a ) SALES TO MANUFACTURERS OR PRODUCERS FOR R E S A L E . — U n d e r
regulations prescribed by t h e Secretary, n o t a x shall be imposed b y
section 4091 on lubricating oils sold t o a manufacturer or producer 26 USC 4091.
of lubricating oils for resale by him.
" ( b ) U S E IN PRODUCING REREFINED O I L . —
" ( 1 ) SALES TO REREFINERS.—Under regulations prescribed by
the Secretary, no t a x shall be imposed by section 4091 on lubricat-
ing oil sold for use in mixing w i t h used or waste lubricating oil <
which h a s been cleaned, renovated, or rerefined. A n y person t o
whom lubricating oil is sold tax-free under this p a r a g r a p h shall
be treated as the producer of such lubricating oil.
" ( 2 ) U S E IN PRODUCING REREFINED OIL.—Under regulations pre-
scribed by t h e Secretary, no t a x shall be imposed by section 4091 '• >;
on lubricating oil used in producing rerefined oil t o the extent t h a t '
the amount of such lubricating oil does not exceed 55 percent of
such rerefined oil.
" ( 3 ) REREFINED OIL DEFINED.—For purposes of t h i s subsection,
t h e t e r m 'rerefined oil' means oil 25 percent or more of which is
used or waste lubricating oil which h a s been cleaned, renovated,
or rerefiined."
(b) CONFORMING A M E N D M E N T . — S e c t i o n 4092(a) is amended by 26 USC 4092.
striking out "4093" and inserting in lieu thereof "4093 ( a ) " .
(c) CLERICAL A M E N D M E N T . — T h e t a b l e of sections for s u b p a r t B of
p a r t I I I of subchapter A of chapter 32 is amended by striking out t h e 26 USC 4091.
item relating to section 4093 and inserting in lieu thereof the f (Slowing:
"Sec. 4093. Exemptions."
( d ) EFFECTIVE D A T E . — T h e amendments made by this section shall 26 USC 4093
a p p l y t o sales on or after t h e first d a y of the first calendar month "^o*®-
beginning more t h a n 10 days after t h e date of t h e enactment of this
Act.
Approved November 9, 1978.
LEGISLATIVE HISTORY:
HOUSE REPORTS: No. 95-435 (Comm. on Ways and Means) and No. 95-1773 (Comm.
of Conference).
SENATE REPORTS: No. 95-529 (Comm. on Finance) and No. 95-1324 (Comm. of
Conference).
CONGRESSIONAL RECORD:
Vol. 123 (1977): July 18, considered and passed House.
Oct. 25-29, 31, considered and passed Senate, amended.
Vol. 124 (1978): Oct. 15, Senate and House agreed to conference report.
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS:
Vol. 14, No. 45 (1978): Nov. 9, Presidential statement.
