Section 5. CLAIMS FOR PAYMENTS

THAT EXCEED THE ALLOWABLE CREDIT

(a) Background . Section 6426 generally allows a biodiesel mixture credit against any tax imposed by § 4081, including those taxes unrelated to biodiesel mixtures or alcohol mixtures. The § 6426 credit is claimed on a Form 720, Quar- terly Federal Excise Tax Return, which is filed at the end of each quarter. Section 6427(e)(1) generally allows a payment relating to a person’s production of a biodiesel mixture. The § 6427(e)(1) payment may be claimed before Form 720 is due and as often as once a week if certain conditions are met. However, § 6427(e)(2) provides that no amount is payable under § 6427(e)(1) for any mixture with respect to which an amount is allowed as a credit under § 6426. If a claim is made under § 6427(e) for an amount that is allowable as a credit under § 6426, section 2(d)(2) of Notice 2005–4 provides that payment under § 6427(e) is treated as an excessive amount under § 6206. Unless this excessive amount is repaid with interest before the due date of the Form 720 on which the

2005–35 I.R.B. 447 August 29, 2005

For further information regarding this notice, please contact Ms. Athy (regarding biodiesel) or Ms. Karet (regarding aviation-grade kerosene) at (202) 622–3130 (not a toll-free call).

Weighted Average Interest Rates Update

Notice 2005–63

This notice provides guidance as to the corporate bond weighted average interest rate and the permissible range of interest rates specified under § 412(b)(5)(B)(ii)(II) of the Internal Revenue Code. In addition, it provides guidance as to the interest rate on 30-year Treasury securities under § 417(e)(3)(A)(ii)(II), and the weighted average interest rate and permissible ranges of interest rates based on the 30-year Treasury securities rate.

CORPORATE BOND WEIGHTED AVERAGE INTEREST RATE

Sections 412(b)(5)(B)(ii) and 412(l)(7)(C)(i), as amended by the Pension Funding Equity Act of 2004, provide that the interest rates used to calculate current liability and to determine the required contribution under § 412(l) for plan years beginning in 2004 or 2005 must be within a permissible range based on the weighted average of the rates of interest on amounts invested conservatively in long term investment grade corporate bonds during the 4-year period ending on the last day before the beginning of the plan year.

Notice 2004–34, 2004–1 C.B. 848, provides guidelines for determining the corporate bond weighted average interest rate and the resulting permissible range of interest rates used to calculate current liability. That notice establishes that the corporate bond weighted average is based on the monthly composite corporate bond rate derived from designated corporate bond indices.

The composite corporate bond rate for July 2005 is 5.37 percent. Pursuant to Notice 2004–34, the Service has determined this rate as the average of the monthly yields for the included corporate bond indices for that month.

The following corporate bond weighted average interest rate was determined for

operator of the aircraft into which the aviation-grade kerosene is delivered. This certificate, described in section 4(g), is signed by the aircraft operator and includes the name of the position holder.

(2) In a so-called “flash title transaction,” the position holder sells (as defined in § 48.0–2(a)(5)) the aviation-grade kerosene to a wholesale distributor (reseller) that in turn sells the kerosene to the aircraft operator as the kerosene is being removed from a terminal into the fuel tank of an aircraft.

(3) For purposes of determining whether the conditions of sections 4(d)(1)(ii) and 4(e)(2) of Notice 2005–4 are met in a case described in paragraph (a)(2) of this section, the position holder will be treated as having a certificate (in the form described in section 4(g)) from the operator of the aircraft if: (i) the aircraft operator puts the reseller’s name, address, and employer identification number on the certificate in place of the position holder’s name, address, and employer identification number; and (ii) the reseller provides the position holder with a statement of aviation-grade kerosene reseller. The reseller statement is a statement that is signed under penalties of perjury by a person with authority to bind the reseller; is provided at the bottom or on the back of the certificate (or in an attached document); and contains the reseller’s name, address, and employer identification number, the position holder’s name, address, and employer identification number, and a statement that the reseller has no reason to believe that any information in the accompanying aircraft operator’s certificate is false.

(b) Effective date . This section is applicable August 29, 2005.