Page:United States Statutes at Large Volume 94 Part 1.djvu/281

 PUBLIC LAW 96-223—APR. 2, 1980

94 STAT. 231

"Tierl 70 "Tier 2 60 "(2) INDEPENDENT PRODUCER OIL.—The applicable percentage

for independent producer oil which is tier 1 oil or tier 2 oil is— "Tierl 50 "Tier 2 30 "(3) TIER 3 OIL.—The applicable percentage for tier 3 oil is 30

percent. "(c) FRACTIONAL PART OF BARREL.—In the case of a fraction of a barrel, the tax imposed by section 4986 shall be the same fraction of the amount of such tax imposed on the whole barrel. "SEC. 4988. WINDFALL PROFIT; REMOVAL PRICE.

26 USC 4988.

"(a) GENERAL RULE.—For purposes of this chapter, the term 'windfall profit' means the excess of the removal price of the barrel of crude oil over the sum of^ "(1) the adjusted base price of such barrel, and "(2) the amount of the severance tax adjustment with respect to such barrel provided by section 4996(c). "(b) N E T INCOME LIMITATION ON WINDFALL PROFIT.—

"(1) IN GENERAL.—The windfall profit on any barrel of crude oil shall not exceed 90 percent of the net income attributable to such barrel. "(2) DETERMINATION OF NET INCOME.—For purposes of paragraph (1), the net income attributable to a barrel shall be determined by dividing— "(A) the taxable income from the property for the taxable year attributable to taxable crude oil, by "(B) the number of barrels of taxable crude oil from such property taken into account for such taxable year. "(3) TAXABLE INCOME FROM THE PROPERTY.—For purposes of

paragraph (2)— "(A) IN GENERAL.—Except as otherwise provided in this paragraph, the taxable income from the property shall be determined under section 613(a). 26 USC 613. "(B) CERTAIN DEDUCTIONS NOT ALLOWED.—No deduction

shall be allowed for— "(i) depletion, "(ii) the tax imposed by section 4986, "(iii) section 263(c) costs, or 26 USC 263. "(iv) qualified tertiary injectant expenses to which an election under subparagraph (E) applies. "(C) TAXABLE INCOME REDUCED BY COST DEPLETION.—Tax-

able income shall be reduced by the cost depletion which would have been allowable for the taxable year with respect to the property if— "(pall"(l) section 263(c) costs, and "(II) qualified tertiary injectant expenses to which an election under subparagraph (E) applies, incurred by the taxpayer had been capitalized and taken into account in computing cost depletion, and "(ii) cost depletion had been used by the taxpayer with respect to such property for all taxable periods. "(D) SECTION 263(C) COSTS.—For purposes of this paragraph, the term 'section 263(c) costs' means intangible drilling and development costs incurred by the taxpayer which (by reason of an election under section 263(c)) may be

�