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‘‘(A) IN
GENERAL.—Paragraph (1) shall
not apply to diesel fuel or kerosene used by a
State or local government.’’.
(b) CONFORMING AMENDMENT.—The heading of para-
graph (6) of section 6427(l), as so redesignated, is amended
by striking ‘‘FARMERS AND’’.
(c) EFFECTIVE DATE.—The amendments made by this
section shall apply to sales after September 30, 2005.
SEC. 5613. REFUNDS OF EXCISE TAXES ON EXEMPT SALES
OF FUEL BY CREDIT CARD.
(a) GASOLINE.—
(1) IN
GENERAL.—Paragraph (4) of section
6416(a) (relating to condition to allowance) is
amended—
(A) by inserting ‘‘except as provided in sub-
paragraph (B),’’ after ‘‘For purposes of this sub-
section,’’ in subparagraph (A),
(B) by redesignating subparagraph (B) as
subparagraph (C) and by inserting after sub-
paragraph (A) the following new subparagraph:
‘‘(B) CREDIT CARD ISSUER.—For purposes
of this subsection, if the sale of gasoline described
in subparagraph (A) (determined without regard
to the registration status of the ultimate vendor)
is made by means of a credit card issued to the
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ultimate purchaser, paragraph (1) shall not
apply and the person extending the credit to the
ultimate purchaser shall be treated as the person
(and the only person) who paid the tax, but only
if such person—
‘‘(i) is registered under section 4101,
and
‘‘(ii) has established, under regulations
prescribed by the Secretary, that such
person—
‘‘(I) has not collected the amount
of the tax from the person who pur-
chased such article, or
‘‘(II) has obtained the written
consent from the ultimate purchaser to
the allowance of the credit or refund,
and
‘‘(iii) has so established that such
person—
‘‘(I) has repaid or agreed to repay
the amount of the tax to the ultimate
vendor,
‘‘(II) has obtained the written
consent of the ultimate vendor to the
allowance of the credit or refund, or
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‘‘(III) has otherwise made ar-
rangements which directly or indi-
rectly assure the ultimate vendor of re-
imbursement of such tax.’’,
(C) by striking ‘‘subparagraph (A)’’ in sub-
paragraph (C), as redesignated by paragraph
(2), and inserting ‘‘subparagraph (A) or (B)’’,
(D) by inserting ‘‘or credit card issuer’’
after ‘‘vendor’’ in subparagraph (C), as so redes-
ignated, and
(E) by inserting ‘‘OR CREDIT CARD ISSUER’’
after ‘‘VENDOR’’ in the heading thereof.
(2) 
CONFORMING
AMENDMENT.—Section
6416(b)(2) is amended by adding at the end the fol-
lowing new sentence: ‘‘Subparagraphs (C) and (D)
shall not apply in the case of any tax imposed on
gasoline under section 4081 if the requirements of
subsection (a)(4) are not met.’’
(b) DIESEL FUEL OR KEROSENE.—Paragraph (6) of
section 6427(l) (relating to nontaxable uses of diesel fuel
and kerosene), as redesignated by section 5611, is
amended—
(1) by striking ‘‘The amount’’ in subparagraph
(C) and inserting ‘‘Except as provided in subpara-
graph (D), the amount’’, and
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(2) by adding at the end the following new sub-
paragraph:
‘‘(D) CREDIT CARD ISSUER.—For purposes
of this paragraph, if the sale of any fuel de-
scribed in subparagraph (A) (determined without
regard to the registration status of the ultimate
vendor) is made by means of a credit card issued
to the ultimate purchaser, the Secretary shall
pay to the person extending the credit to the ulti-
mate purchaser the amount which would have
been paid under paragraph (1) (but for subpara-
graph (A) or (B)), but only if such person meets
the requirements of clauses (i), (ii), and (iii) of
section 6416(a)(4)(B).’’.
(c) CONFORMING PENALTY AMENDMENTS.—
(1) Section 6206 (relating to special rules appli-
cable to excessive claims under sections 6420, 6421,
and 6427) is amended—
(A) by striking ‘‘Any portion’’ in the first
sentence and inserting ‘‘Any portion of a refund
made under section 6416(a)(4) and any por-
tion’’,
(B) by striking ‘‘payments under sections
6420’’ in the first sentence and inserting ‘‘re-
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funds under section 6416(a)(4) and payments
under sections 6420’’,
(C) by striking ‘‘section 6420’’ in the second
sentence and inserting ‘‘section 6416(a)(4),
6420’’, and
(D) by striking ‘‘SECTIONS
6420, 6421,
AND 6427’’ in the heading thereof and inserting
‘‘CERTAIN SECTIONS’’.
(2) Section 6675(a) is amended by inserting
‘‘section 6416(a)(4) (relating to certain sales of gaso-
line),’’ after ‘‘made under’’.
(3) Section 6675(b)(1) is amended by inserting
‘‘6416(a)(4),’’ after ‘‘under section’’.
(4) The item relating to section 6206 in the table
of sections for subchapter A of chapter 63 is amended
by striking ‘‘sections 6420, 6421, and 6427’’ and in-
serting ‘‘certain sections’’.
(d) EFFECTIVE DATE.—The amendments made by this
section shall apply to sales after December 31, 2005.
SEC. 5614. ADDITIONAL REQUIREMENT FOR EXEMPT PUR-
CHASES.
(a) STATE AND LOCAL GOVERNMENTS.—
(1) Subparagraph (C) of section 6416(b)(2) (re-
lating to specified uses and resales) is amended to
read as follows: