Page:United States Statutes at Large Volume 95.djvu/363

 PUBLIC LAW 97-34—AUG. 13, 1981

95 STAT. 337

(2) EXEMPT ROYALTY OIL.—Section 4994 is amended by adding 94 Stat. 241. at the end thereof the following new subsection: "(£) EXEMPT ROYALTY OIL.—

"(1) IN GENERAL.—For purposes of this chapter, the term 'exempt royalty oil' means that portion of the qualified royalty owner s qualified royalty production for the quarter which does not exceed the royalty limit for such quarter. "(2) ROYALTY LIMIT.—For purposes of this subsection— "(A) IN GENERAL.—A qualified royalty owner's royalty limit for any quarter is the product of— "(i) the number of days in such quarter, multiplied by "(ii) the limitation in barrels determined under the following table: "In the case of qualified royalty production during: 1982 1983 1984 1985 and thereafter

The limitation in barrels is: 2 2 2 3.

"(B) PRODUCTION EXCEEDS LIMITATION.—If a qualified royalty owner's qualified royalty production for any quarter exceeds the royalty limitation for such quarter, such royalty owner may allocate such limit to any qualified royalty production which he selects. "(3) DEFINITIONS.—

"(A) IN GENERAL.—The terms 'qualified royalty owner* and 'qualified royalty production' have the meanings given to such terms by section 6429; except that the reference to qualified taxable crude oil in section 6429(d) shall be treated as a reference to oil which would have been taxable crude oil but for this section. "(B) ALLOCATION.—Rules similar to the rules of paragraphs (2), (3), and (4) of section 6429(c) shall apply to the limitation determined under subsection (b)(1)." (3) ADJUSTMENTS TO WITHHOLDING.—Subsection (a) of section

4995 is amended by adding at the end thereof the following new 94 Stat. 244. paragraph: "(9) ADJUSTMENTS TO TAKE INTO ACCOUNT ROYALTY EXEMP-

TION.—The Secretary shall prescribe such regulations as may be necessary so that the withholding required under this subsection shall be reduced to take into account the exemption provided by section 4991(b)(5) (relating to exempt royalty oil), and he may Ante, p. 336. prescribe such other regulations as may be necessary to administer such exemption." (c) EFFECTIVE DATES.—

(1) Except as provided in paragraph (2), subsection (a) shall take effect on January 1, 1981. (2) The amendments made by paragraph (6) of subsection (a) shall take effect on January 1, 1980. (3) The amendments made by subsection (b) shall apply to oil removed after December 31, 1981.

26 USC 6429 ^°^^26 USC 4991 ^°^-

SEC. 602. REDUCTION IN TAX IMPOSED ON NEWLY DISCOVERED OIL.

(a) IN GENERAL.—Paragraph (3) of section 4987(b) (relating to 94 Stat. 230. applicable percentage) is amended to read as follows: "(3) TIER SOIL.—

"(A) IN GENERAL.—The applicable percentage for tier 3 oil which is not newly discovered oil is 30 percent.

�