Page:United States Statutes at Large Volume 94 Part 1.djvu/292

 94 STAT. 242

PUBLIC LAW 96-223—APR. 2, 1980 "(B) under the applicable State or local law, all of the net income received pursuant to such interest is dedicated to a public purpose. "(2) NET INCOME.—For purposes of this paragraph, the term 'net income' means gross income reduced by production costs, and severance taxes of general application, allocable to the interest. "(3) AMOUNTS PLACED IN CERTAIN PERMANENT FUNDS TREATED AS DEDICATED TO PUBLIC PURPOSE.—The requirements of para-

26 USC 170.

graph (1)(B) shall be treated as met with respect to any net income which, under the applicable State or local law, is placed in a permanent fund the earnings on which are dedicated to a public purpose. "(b) QUALIFIED CHARITABLE INTEREST.—For purposes of section 4991(b)— "(1) IN GENERAL.—The term 'qualified charitable interest' means an economic interest in crude oil if— "(A) such interest is— "(i) held by an organization described in clause (ii), (iii)^ or (iv) of section 170(b)(1)(A) which is also described in section 170(c)(2), or "(ipheld— "(I) by an organization described in clause (i) of section 170(b)(1)(A) which is also described in section 170(c)(2), and "(II) for the benefit of an organization described in clause (i) of this subparagraph, and "(B) such interest was held by the organization described in clause (i) or subclause (I) of clause (ii) of subparagraph (A) on January 21, 1980, and at all times thereafter before the last day of the taxable period. "(2) SPECIAL RULE.—For purposes of paragraph (l)(A)(ii), an interest shall be treated as held for the benefit of an organization described in paragraph (l)(A)(i) only if all the proceeds from such interest were dedicated on January 21, 1980, and at all times thereafter before the last day of the taxable period, to the organization described in paragraph (l)(A)(i). "(c) FRONT-END TERTIARY OIL.— "(1) EXEMPTION FOR TERTIARY PROJECTS OF INDEPENDENTS.—For

purposes of this chapter, the term 'exempt front-end oil' means any domestic crude oil— "(A) which is removed from the premises before October 1, 1981, and "(B) which is treated as front-end oil by reason of a frontend tertiary project on one or more properties each of which is a qualified property. "(2) REFUNDS FOR TERTIARY PROJECTS OF INTEGRATED PRODUCERS.—

"(A) IN GENERAL,—In the case of any front-end tertiary project which does not meet the requirements of paragraph (1)(B), the excess of— "(i) the allowed expenses of the taxpayer with respect to such project, over "(ii) the tertiary incentive revenue, shall be treated as a payment by the taxpayer with respect to the tax imposed by this chapter made on September 30, 1981. "(B) LIMITATION BASED ON AMOUNT OF TAX.—The amount

of the payment determined under subparagraph (A) with

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