Page:United States Statutes at Large Volume 94 Part 1.djvu/318

 94 STAT. 268

PUBLIC LAW 96-223—APR. 2, 1980 PART III—PRODUCTION OF FUEL FROM NONCONVENTIONAL SOURCES; ALCOHOL FUELS SEC. 231. PRODUCTION TAX CREDIT.

26 USC 440.

(a) IN GENERAL.—Subpart A of part IV of subchapter A of chapter 1 (relating to credits against tax) is amended by inserting after section 44C the following new section: "SEC. 44D. CREDIT FOR PRODUCING FUEL FROM A NONCONVENTIONAL SOURCE. "(a) ALLOWANCE OP CREDIT.—There shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to— "(1) $3, multiplied by "(2) the barrel-of-oil equivalent of qualified fuels— "(A) sold by the taxpayer to an unrelated person during the taxable year, and "(B) the production of which is attributable to the taxpayer. "(b) LIMITATIONS AND ADJUSTMENTS.— "(1) PHASEOUT OF CREDIT.—The amount

of the credit allowable under subsection (a) shall be reduced by an amount which bears the same ratio to the amount of the credit (determined without regard to this paragraph) as— "(A) the amount by which the reference price for the calendar year in which the taxable year begins exceeds $23.50, bears to "(B) $6. "(2) CREDIT AND PHASEOUT ADJUSTMENT BASED ON INFLATION.—

The $3 amount in subsection (a) and the $23.50 and $6 amounts in paragraph (1) shall each be adjusted by multiplying such amount by the inflation adjustment factor for the calendar year in which a taxable year begins. In the case of gas from a tight formation, the $3 amount in subsection (a) shall not be adjusted. "(3) CREDIT REDUCED FOR GRANTS, TAX-EXEMPT BONDS, AND SUBSIDIZED ENERGY FINANCTNG.—

26 USC 103. Ante, p. 266.

"(A) IN GENERAL.—The amount of the credit allowable under subsection (a) with respect to any project for any taxable year (determined after the application of paragraphs (1) and (2)) shall be reduced by the amount which is the product of the amount so determined for such year and a fraction— "(i) the numerator of which is the sum, for the taxable year and all prior taxable years, of— "(I) grants provided by the United States, a State, or a political subdivision of a State for use in connection with the project, "(II) proceeds of any issue of State or local government obligations used to provide financing for the project the interest on which is exempt from tax under section 103, and "(III) the aggregate amount of subsidized energy financing (within the meaning of section 48(1)(11)(C)) provided in connection with the project, and "(ii) the denominator of which is the aggregate amount of additions to the capital account for the project for the taxable year and all prior taxable years.

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