least 85 percent of which consists of methanol, ethanol, or other alcohol produced from a substance other than petroleum or natural gas.

(C) TERMINATION.-On and after October 1, 1988, subparagraph (A) shall not apply.

(c) NONCOMMERCIAL AVIATION.—

(1) IN GENERAL.-There is hereby imposed a tax of 14 cents a gallon upon any liquid (other than any product taxable under section 4081)

(A) sold by any person to an owner, lessee, or other operator of an aircraft, for use as a fuel in such aircraft in noncommercial aviation; or

(B) used by any person as a fuel in an aircraft in noncommercial aviation, unless there was a taxable sale of such liquid under this section.

(2) Gasoline.—There is hereby imposed a tax (at the rate specified in paragraph (3)) upon any product taxable under section 4081

(A) sold by any person to an owner, lessee, or other operator of an aircraft, for use as a fuel in such aircraft in noncommercial aviation; or

(B) used by any person as a fuel in an aircraft in noncommercial aviation, unless there was a taxable sale of such product under subparagraph (A).

The tax imposed by this paragraph shall be in addition to any tax imposed under section 4081.

(3) RATE OF TAX.-The rate of tax imposed by paragraph (2) on any gasoline is the excess of 12 cents a gallon over the rate at which tax was imposed on such gasoline under section 4081.

(4) DEFINITION OF NONCOMMERCIAL AVIATION.-For purposes of this chapter, the term "noncommercial aviation" means any use of an aircraft, other than use in a business of transporting persons or property for compensation or hire by air. The term also includes any use of an aircraft, in a business described in the preceding sentence, which is properly allocable to any transportation exempt from the taxes imposed by sections 4261 and 4271 by reason of section 4281 or 4282.

(5) TERMINATION.-The taxes imposed by paragraphs (1) and (2) shall apply during the period beginning on September 1, 1982, and ending on December 31, 1987.

(d) ADDITIONAL TAX.-If a liquid on which tax was imposed on the sale thereof is taxable at a higher rate under subsection (c)(1) of this section on the use thereof, there is hereby imposed a tax equal to the difference between the tax so imposed and the tax payable at such higher rate.

(e) [Repealed.]

(f) EXEMPTION FOR FARM USE.—

(1) EXEMPTION.-Under regulations prescribed by the Secretary, no tax shall be imposed under this section on any liquid sold for use or used on a farm for farming purposes.

(2) Use on a farm for farminG PURPOSES.-For purposes of paragraph (1) of this subsection, use on a farm for farming pur

poses shall be determined in accordance with paragraphs (1), (2), and (3) of section 6420(c).

(3) TERMINATION.-On and after October 1, 1988, paragraph (1) shall not apply.

(g) OTHER EXEMPTIONS.-Under regulations prescribed by the Secretary, no tax shall be imposed under this section

(1) on any liquid sold for use or used as supplies for vessels or aircraft (within the meaning of section 4221(d)(3));

(2) with respect to the sale of any liquid for the exclusive use of any State, any political subdivision of a State, or the District of Columbia, or with respect to the use by any of the foregoing of any liquid as a fuel;

(3) upon the sale of any liquid for export; or for shipment to a possession of the United States, and in due course so exported or shipped; and

(4) with respect to the sale of any liquid to a nonprofit educational organization for its exclusive use, or with respect to the use by a nonprofit educational organization of any liquid as a fuel. For purposes of paragraph (4), the term "nonprofit educational organization" means an educational organization described in section 170(b)(1)(A)(ii) which is exempt from income tax under section 501(a). The term also includes a school operated as an activity of an organization described in section 501(c)(3) which is exempt from income tax under section 501(a), if such school normally maintains a regular faculty and curriculum and normally has a regularly enrolled body of pupils or students in attendance at the place where its educational activities are regularly carried on. Paragraphs (2) and (4) shall not apply on and after October 1, 1988.

(h) EXEMPTION FOR USE BY CERTAIN AIRCRAFT MUSEUMS.

(1) EXEMPTION.-Under regulations prescribed by the Secretary or his delegate, no tax shall be imposed under this section on any liquid sold for use or used by an aircraft museum in an aircraft or vehicle owned by such museum and used exclusively for purposes set forth in paragraph (2)(C).

(2) DEFINITION OF AIRCRAFT MUSEUM.-For purposes of this subsection, the term "aircraft museum" means an organization

(A) described in section 501(c)(3) which is exempt from income tax under section 501(a),

(B) operated as a museum under charter by a State or the District of Columbia, and

(C) operated exclusively for the procurement, care, and exhibition of aircraft of the type used for combat or transport in World War II.

(i) REGISTRATION.-If any liquid is sold by any person for use as a fuel in an aircraft, it shall be presumed for purposes of this section that a tax imposed by this section applies to the sale of such liquid unless the purchaser is registered in such manner (and furnishes such information in respect of the use of the liquid) as the Secretary shall by regulations provide.

(j) SALES BY UNITED STATES, ETC.-The taxes imposed by this section shall apply with respect to liquids sold at retail by the United

States, or by any agency or instrumentality of the United States, unless sales by such agency or instrumentality are by statute specifically exempted from such taxes.

(k) FUELS CONTAINING ALCOHOL.

(1) IN GENERAL.-Under regulations prescribed by the Secretary, in the case of the sale or use of any liquid at least 10 percent of which consists of alcohol (as defined in section 4081(c)(3))

(A) subsection (a)(1) shall be applied by substituting "9 cents" for "15 cents", and

(B) subsection (a)(2) shall be applied by substituting "3 cents" for "9 cents", and

(C) no tax shall be imposed by subsection (c).

(2) LATER SEPARATION.—If any person separates the liquid fuel from a mixure of the liquid fuel and alcohol to which paragraph (1) applied, such separation shall be treated as a sale of the liquid fuel. Any tax imposed on such sale shall be reduced by the amount (if any) of the tax imposed on the sale of such mixture.

(3) TERMINATION.-Paragraph (1) shall not apply to any sale or use after December 31, 1992.

(1) EXEMPTION FOR CERTAIN HELICOPTER USES.-No tax shall be imposed under this section on any liquid sold for use in, or used in, a helicopter for the purpose of

(1) transporting individuals, equipment, or supplies in

(A) the exploration for, or the development or removal of, hard minerals, or

(B) the exploration for oil or gas, or

(2) the planting, cultivation, cutting or transportation of, or caring for, trees (including logging operation),

but only if the helicopter does not take off from, or land at a facility eligible for assistance under the Airport and Airway Development Act of 1970, or otherwise use services provided pursuant to the Airport and Airway System Improvement Act of 1982 during such use.

(m) CERTAIN ALCOHOL FUELS.—

(1) IN GENERAL.-In the case of the sale or use of any partially exempt methanol or ethanol fuel

(A) subsection (a)(2) shall be applied by substituting "42 cents" for "9 cents", and

(B) no tax shall be imposed by subsection (c).

(2) PARTIALLY EXEMPT METHANOL OR ETHANOL FUEL.-The term "partially exempt methanol or ethanol fuel" means any liquid at least 85 percent of which consists of methanol, ethanol, or other alcohol produced from natural gas.

1 Section 4081(c)(3) of the Internal Revenue Code of 1954 reads as follows:

"(3) ALCOHOL DEFINED. For purposes of this subsection, the term "alcohol" includes methanol and ethanol but does not include alcohol produced from petroleum, natural gas, or coal (including peat). Such term does not include alcohol with a proof of less than 190 (determined without regard to any added denaturants)."

PART C-STUDY OF PIPELINE TRANSPORTATION OF METHANOL

See section 210(c) of the Hazardous Liquid Pipeline Safety Act of 1979 in part A of this volume for a mandated study by the Secretary of Energy of hazardous liquid pipeline facilities.

CLEAN COAL TECHNOLOGY RESERVE

Public Law 98-461 provided funding for conducting clean coal technology projects. The following language is found under the heading "Department of Energy, Energy Security Reserve, (Recession)":

"Of the funds appropriated to the Energy Security Reserve by the Department of the Interior and Related Agencies Appropriations Act, 1980 (Public Law 96-126) and subsequently made available to carry out title I, part B of the Energy Security Act (Public Law 96-294) by Public Laws 96-304 and 96-514, $5,375,000,000 are rescinded: Provided, That Provided further, That of the $5,375,000,000 rescinded from the Energy Security Reserve, $750,000,000 shall be deposited and retained in a separate account hereby established in the Treasury of the United States, entitled the "Clean Coal Technology Reserve," which account and the appropriations therefor, shall be available for the purpose of conducting cost-shared clean coal technology projects for the construction and operation of facilities to demonstrate the feasibility for future commercial application of such technology, including those identified in section 320 of the fiscal year 1985 Department of the Interior and Related Agencies Appropriations Act, as reported by the Senate Committee on Appropriations (H.R. 5973, Senate Report 98578), without fiscal year limitation, subject to subsequent annual appropriation in the Department of the Interior and Related Agencies Appropriations Act.'

Section 320 of H.R. 5973 (as reported by the Senate Committee on Appropriations) referred to in the quoted language above reads as follows:

"Sec. 320. The Secretary of Energy pursuant to the Federal Nonnuclear Energy Research and Development Act of 1974 (Public Law 93-577), shall

"(1) no later than sixty days after the date of the enactment of this Act, publish in the Federal Register a notice soliciting statements of interest in, and proposals for projects employing emerging clean coal technologies, which statements and proposals are to be submitted to the Secretary within ninety days after the publication of such notice; and

"(2) no later than April 15, 1985, submit to Congress a report that analyzes the information contained in such statements of interest and proposals, assesses the potential usefulness of each emerging clean coal technology for which a statement of interest or proposal has been received, and identifies the extent to which Federal incentives, including financial assistance, will accelerate the commercial availability of these technologies."