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(2) The State Government shall, [out of the proceeds of tax recovered]-
(a) continue to pay annually to each local authority, a sum equal to the amount which was being paid to such local authority immediately before the commencement of this Act under the provisions of the Bombay Motor Vehicles Tax Act, 1935 (Bom. XXXIV of 1935) or as the case may be, the Central Provinces and Berar Motor Vehicles Taxation Act, 1947 (C.P. & Berar Act VI of 1947) ;
(b) pay annually to each local board which at the commencement of this Act was levying tolls on vehicles or animals or persons and to any other local authority which at such commencement was levying or collecting tolls of motor vehicles and trailers a sum determined by the State Government, after consulting the local board or local authority concerned, as representing the net average annual income of such local board or local authority from such tolls, after deducting the cost of collection, during the three years ending on the 31 day of March 1958 plus 10 per centum of such sum ;
(c) pay annually to each of the local authorities specified in the [Fourth Schedule] as contribution, the sum mentioned against them in that Schedule.
[(d) pay annually to a local authority which continued to levy and collect any tax on motor vehicles after the commencement of this Act, by virtue of the provisions of clause (a) of the proviso to sub-section (2) of section 20, and has any time thereafter discontinued such levy and collection of that tax, such sum as road grant from the date of the discontinuance as may, from time to time, be determined by the State Government :]
[Provided that, the amount of contribution under this sub-section which was immediately before the 1 day of May 1962, paid to an existing local board shall be paid after that date to the successor Zilla Parishad.]
(3) The contribution to the local authorities made under sub-section (2) shall be paid in such instalments, in such manner, and on such dates, as the State Government may, after consulting the local authorities concerned, prescribe.
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[(4) The State Government shall use the proceeds of the environment tax for the following purposes,-
(a) to establish and develop vehicle inspection centres,
(b) to establish and develop network of pollution checking centres,
(c) to establish and develop air quality testing centres,
(d) to encourage use clean fuel,
(e) to encourage the use of vehicles running on solar energy or hybrid technology,
(f) to strengthen the public transport system,
(g) to train the drivers of the public transport system and enhance their awareness about preservation of environment,
(h) to establish advanced vehicle testing stations to issue or renew certificates of fitness,
(i) to undertake a research to suggest various methods and mechanisms to reduce pollution and to improve environment.]
[(5) The Cess levied and collected under section 3B shall be utilized for the purposes related to road safety programmes as specified in sub-section (4) of section 215 of the Motor Vehicle Act, 1988 (59 of 1988).]