Page:United States Statutes at Large Volume 89.djvu/108

 89 STAT. 4 8

PUBLIC LAW 94-12—MAR. 29, 1975 " (2) DEFINITIONS. — For purposes of this subsection— ''(A)

NATURAL GAS SOLD UNDER A FIXED CONTRACT.—The

term 'natural gas sold under a fixed contract' means domestic natural gas sold by the producer under a contract, in effect on February 1, 1975, and a t all times thereafter before such sale, under which the price for such gas cannot be adjusted to reflect to any extent the increase in liabilities of the seller for tax under this chapter by reason of the repeal of percentage depletion for gas. Price increases after February 1, 1975, shall be presumed to take increases in tax liabilities into account unless the taxpayer demonstrates to the contrary by clear and convincing evidence. " (B) KEGULATED NATURAL GAS.—The term ' r e g u l a t e d n a t u -

ral g a s ' means domestic natural gas produced and sold by the producer, before July 1, 1976, subject to the jurisdiction of the Federal Power Commission, the price for which has not been adjusted to reflect to any extent the increase in liability of the seller for tax under this chapter by reason of the repeal of percentage depletion for gas. Price increases after February 1, 1975, shall be presumed to take increases in tax liabilities into account unless the tax p a y e r demonstrates the contrary by clear and convincing evidence. "(c) EXEMPTION OWNERS.—

26 USC 611. 26 USC 613.

FOR INDEPENDENT

PRODUCERS

AND ROYALTY

" (1) IN GENERAL.—Except as provided in subsection (d), the allowance for depletion under section 611 shall be computed i n accordance with section 613 with respect to— " (A) so much of the taxpayer's average daily production of domestic crude oil as does not exceed the taxpayer's depletable oil quantity; and " (B) so much of the taxpayer's average daily production of domestic n a t u r a l gas as does not exceed the taxpayer's depletable n a t u r a l gas quantity; and the applicable percentage (determined in accordance with the table contained in paragraph (5)) shall be deemed to be specified i n subsection (b) of section 613 for purposes of subsection (a) of that section. " (2) AVERAGE DAILY PRODUCTION.—For purposes of paragraph

" (A) the taxpayer's average daily production of domestic crude oil or n a t u r a l gas for any taxable year, shall be determined by dividing his aggregate production of domestic crude oil or n a t u r a l gas, as the case may be, during the taxable year by the number of days i n such taxable year, and " (B) in the case of a taxpayer holding a partial interest in the production from any property (including a n interest held in a partnership) such taxpayer's production shall be considered to be that amount of such production determined by multiplying the total production of such property by the tax p a y e r s percentage participation in the revenues from such property. I n applying this paragraph, there shall not be taken into account any production of crude oil or n a t u r a l gas resulting from seconda r y or tertiary processes (as defined i n regulations prescribed by the Secretary o r his delegate). " (3) DEPLETABLE OIL QUANTITY.—

" (A) IN GENERAL.—For purposes of paragraph (1), the taxpayer's depletable oil quantity shall be equal to —

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