Page:United States Statutes at Large Volume 100 Part 3.djvu/419

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PUBLIC LAW 99-000—MMMM. DD, 1986

PUBLIC LAW 99-514—OCT. 22, 1986 } '.* • i • '

'

100 STAT. 2227

(ii) Subparagraph (B) of section 29103)(1) is amended by striking out "617" and inserting in lieu thereof "617(a)". (iii) Paragraph (10) of section 381(c) is amended by striking out the last sentence thereof. (iv) Subparagraph (C) of section 243(b)(3) is amended— (I) by adding "and" at the end of clause (i), (II) by striking out clause (ii), and (III) by redesignating clause (iii) as clause (ii).

(c) EFFECTIVE DATE.—

(1) IN GENERAL.—The amendments made by this section shall apply to costs paid or incurred after December 31, 1986, in taxable years ending after such date. (2) TRANSITION RULE.—The amendments made by this section shall not apply with respect to intangible drilling and development costs incurred,by United States companies pursuant to a minority interest in a license for Netherlands or United Kingdom North Sea development if such interest was acquired on or before December 31, 1985. SEC. 412. MODIFICATION OF PERCENTAGE DEPLETION RULES. (a) PERCENTAGE DEPLETION NOT ALLOWED FOR LEASE BONUSES, ETC.—

(1) IN GENERAL.—Subsection (d) of section 613A (relating to limitations on application of subsection (c)) is amended by adding at the end thereof the following new paragraph: "(5) PERCENTAGE DEPLETION NOT ALLOWED FOR LEASE BONUSES,

ETC.—In the case of any oil or gas property to which subsection (c) applies, for purposes of section 613, the term 'gross income from the property' shall not include any lease bonus, advance royalty, or other amount payable without regard to production from property." (2) GEOTHERMAL DEPOSITS.—Section 613(e) is amended by adding at the end thereof the following new paragraph: "(4) PERCENTAGE DEPLETION NOT TO INCLUDE LEASE BONUSES,

ETC.—In the case of any geothermal deposit, the term 'gross income from the property' shall, for purposes of this section, not include any amount described in section 613A(d)(5)." (3) EFFECTIVE DATE.—The amendment made by this subsection shall apply to amounts received or accrued after August 16, 1986, in taxable years ending after such date. (b) TREATMENT UNDER SECTION 291 OF COAL AND IRON ORE.—

(1) IN GENERAL.—Paragraph (2) of section 291(a) (relating to reductions in percentage depletion) is amended by striking out "15 percent" and inserting in lieu thereof "20 percent". (2) EFFECTIVE DATE.—The amendment made by paragraph (1) shall apply to taxable years beginning after December 31, 1986. SEC. 413. GAIN FROM DISPOSITION OF INTERESTS IN OIL. GAS. GEOTHERMAL. OR OTHER MINERAL PROPERTIES.

(a) GENERAL RULE.—Section 1254 is amended to read as follows: "SEC. 1254. GAIN FROM DISPOSITION OF INTEREST IN OIL. GAS. GEOTHERMAL. OR OTHER MINERAL PROPERTIES. "(a) GENERAL RULE.—