PUBLIC LAW 91-172-DEC. 30, 1969
630
[33 ST^T
not apply) bauxite, flake gTaphite, fluorspar, lepidolite, mien spodumene, and talc (including pyrophyllite), except that' unles' sold on bid in direct competition with a bona fide bid to sell mineral listed in paragraph (3), the percentage shall be 5 pgr, cent for any such other mineral (other than slate to which para graph (5) applies) when used, or sold for use, by the mine owner or operator as rip rap, ballast, road material, rubble, concrete
- s*j? i; ^ifaggregates, or for similar purposes. For purposes of this para;•'
graph, the term 'all other minerals' does not include— " (A) soil, sod, dirt, turf, water, or mosses; or . ' " (B) minerals from sea water, the air, or similar inexhaustible sources. For the purposes of this subsection, minerals (other than sodium chloride) extracted from brines pumped from a saline perennial lake within the United States shall not be considered minerals from an inexhaustible source." (b) EFFECTIVE DATE.—The amendment made by subsection (a) shall apply to taxable years beginning after October 9, 1969. SEC. 502. TREATMENT PROCESSES IN THE CASE OF OIL SHALE. 26 USC 61"." (^) IN GENERAL.—Section 613(c)(4) (relating to treatment processes considered as mining) is amended by striking out "and" at the end of subparagraph (G), by redesignating subparagraph (H) as subparagraph (I), and by inserting after subparagraph (G) the following new subparagraph: " (H) in the case of oil shale—extraction from the ground, crushing, loading into the retort, and retorting, but not hydrogenation, refining, or any other process subsequent to retorting; and", (b) EFFECTIVE DATE.—The amendments made by subsection (a) shall apply to taxable years beginning after the date of the enactment of this Act. 26 USC^*6n-^' 632.
SEC. 503. MINERAL PRODUCTION PAYMENTS. (^) -"-^ GENERAL.—Subchapter I of chapter 1 (relating to natural resources) is amended by adding at the end thereof the following new part: "PART IV—MINERAL PRODUCTION PAYMENTS "Sec. 636. Income tax treatment of mineral production payments. "SEC. 636. INCOME TAX TREATMENT OF MINERAL PRODUCTION PAYMENTS. " (a) CARVED-OUT PRODUCTION PAYMENT.—A production payment
Ante, p. 629.
carved out of mineral property shall be treated, for purposes of this subtitle, as if it were a mortgage loan on the property, and shall not qualify as an economic interest in the mineral property. I n the case of a production payment carved out for exploration or development 01 a mineral property, the preceding sentence shall apply only if and to the extent gross income from the property (for purposes of section g^g) would be realized, in the absence of the application of such sentence, by the person creating the production payment. "(b)
RETAINED PRODUCTION PAYMENT ON SALE OF MINERAL PEOP-
ERTY.—A production payment retained on the sale of a mineral property shall be treated, for purposes of this subtitle, as if it were a purchase money mortgage loan and shall not qualify as an economic interest in the mineral property. "(c)
RETAINED PRODUCTION PAYMENT ON LEASE OF MINERAL PROP-
ERTY.—A production payment retained in a mineral property by the
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