Page:United States Statutes at Large Volume 92 Part 3.djvu/257

 PUBLIC LAW 95-600—NOV. 6, 1978

92 STAT. 2889

nating section 126 as 127 and by inserting immediately after section 26 USC 127. 125 the following new section; "SEC. 126. CERTAIN COST-SHARING PAYMENTS.

26 USC 126.

"(a) GENERAL RULE.—Gross income does not include the excludable portion of payments received under— "(1) The rural clean water program authorized by section 208(j) of the Federal Water Pollution Control Act (33 U.S.C. 1288(j)). "(2) The rural abandoned mine program authorized by section 406 of the Surface Mining Control and Reclamation Act of 1977 (30 U.S.C. 1236). "(3) The water bank program authorized by the Water Bank Act (16 U.S.C. 1301 etseq.). "(4) The emergency conservation measures program authorized by title IV of the Agricultural Credit Act of 1978. Ante, p. 433. "(5) The agricultural conservation program authorized by the Soil Conservation and Domestic Allotment Act (16 U.S.C. 590a). "(6) The great plains conservation program authorized by section 16 of the Soil Conservation and Domestic Policy Act (16 U.S.C. 590p(b)). "(7) The resource conservation and development program authorized by the Bankhead-Jones Farm Tenant Act and by the Soil Conservation and Domestic Allotment Act (7 U.S.C. 1010; 16 U.S.C. 590a etseq.). "(8) The forestry incentives program authorized by section 4 of the Cooperative Forestry Assistance Act of 1978 (16 U.S.C. 2103). Ante, p. 367. "(9) Any small watershed program administered by the Secretary of Agriculture which is determined by the Secretary of the Treasury to be substantially similar to the type of programs described in paragraphs (1) through (8). "(10) Any State program under which payments are made to individuals primarily for the purpose of conserving soil, protecting or restoring the environment, improving forests, or providing a habitat for wildlife. "(b) EXCLUDABLE PORTION.—For purposes of this section, the term 'excludable portion'means that portion (or all) of a payment made to any person under any program described in subsection (a) which— "(1) is determined by the Secretary of Agriculture to be made primarily for the purpose of conserving soil and water resources, protecting or restoring the environment, improving forests, or providing a habitat for wildlife, and "(2) is determined by the Secretary of the Treasury as not increasing substantially the annual income derived from the property. "(c) APPLICATION WITH OTHER SECTIONS.—No deduction or credit

allowable under any other provision of this chapter shall be allowed with respect to any expenditure made with the use of payments described in subsection (a) or with respect to any property acquired with any payment described in subsection (a) (to the extent that the basis is allocable to the use of such payments). Notwithstanding any provision of section 1016 to the contrary, no adjustment to basis shall 26 USC 1016. be made with respect to property acquired through the use of such payments, to the extent that such adjustment would reflect the amount of such payment." i (b) CLERICAL AMENDMENT.—The table of sections for such part is amended by striking out the last item and inserting in lieu thereof the following:

39-194 O—80—pt. 3

17: QL3

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