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TITLE 26-INTERNAL REVENUE CODE (5) Treatment processes not considered as mining Unless such processes are otherwise pro- vided for in paragraph (4) (or are necessary or incidental to processes so provided for), the following treatment processes shall not be considered as "mining": electrolytic deposi- tion, roasting, calcining, thermal or electric smelting, refining, polishing, fine pulveriza tion, blending with other materials, treat- ment effecting a chemical change, thermal action, and molding or shaping. (d) Denial of percentage depletion in case of oil and gas wells Except as provided in section 613A, in the case of any oil or gas well, the allowance for de- pletion shall be computed without reference to this section. (Aug. 16, 1954, ch. 736, 68A Stat. 208; Sept. 2, 1958, Pub. L. 85-866, title I, § 36(a), 72 Stat. 1633; June 30, 1960, Pub. L. 86-564, title III, § 302(a), (b), 74 Stat. 291; Oct. 16, 1962, Pub. L. 87-834, § 13(e), 76 Stat. 1034; Sept. 2, 1964, Pub. L. 88-571, § 6(a), 78 Stat. 860; Nov. 13, 1966, Pub. L. 89-809, title II, §§ 207(a), 208(a), 209(a), (b), 80 Stat. 1579, 1580; Dec. 30, 1969, Pub. L. 91-172, title V, §§501(a), 502(a), 83 Stat. 629, 630; Oct. 29, 1974, Pub. L. 93-499, § 2(a), 88 Stat. 1550; Mar. 29, 1975, Pub. L. 94-12, title V, § 501(b)(1), (2), 89 Stat 53; Oct. 4, 1976, Pub. L. 94-455, title :XF , §§ 1901(b)(3)(K), 1906(b)(13)(A), 90 Stat. 1793, 1834.) APLNDME'rms 1976-Subsec. (a). Pub. L. 94-455, § 1901(b)(3)(K), substituted "ordinary income" for "gain Irom the sale or exchange of property which is neither a capital asset nor property described in section 1231". Subsec. (c)(2), (41(I). Pub. L. 94-455, § 1906(b)(13)(A). struck out "or his delegate" following "Secretary". 1975-Subsec. (b)(1). Pub. L. 94-12, § 501(b)(2)(A), struck out subpar. (A) "oil and gas wells" and redesig- nated former subpars. (B) and (C) as (A) and (B), re- spectively. Subsec. (b)(3), (4). Pub. L. 04-12, § 501(b)(2)(B), sub- stituted "(1)(B)" for "(1)(C)" wherever appearing. Subsec. (b)(7). Pub. L. 94-12, § 501(b)(2) (B), (C), sub- stituted "(1)(B) ' for "(1)(C)" in the provisions preced- ing subpar. (A) and added subpar. (C). Subsec. d). Pub. L. 94-12, §501(b)(1), substituted provisions denying the percentage depletion allowance in the case of oil and gas wells except as provided in section 613A for provisions governing the application of percentage depletion rates to certain taxable years ending in 1954. 1974-Subsec. (c)(4)(E). Pub. L. 93-499 added refer- ence to the decarbonation of trona. 1969-Subsec. (b). Pub. L. 91-172, § 501(a), reduced the percentage depletion rate on oil and gas wells from 27 percent to 22 percent, reduced to 22 percent other minerals formerly receiving percentage deple- tion at a rate of 23 percent, added molybdenum in the category of minerals subject to the 22 percent deple- tion rate, reduced to 14 percent the rate on minerals formerly receiving depletion at a 15 percent rate except in the case of domestic gold, silver, oil shale, copper, and Iron ore, and added provision that for per- centage depletion purposes, minerals other than sodium chloride, extracted from brine pumped from a saline perennial lake within the United States are not to be considered minerals from an inexhaustible source. Subsec. (c)(4). Pub. L. 91-172, § 502(a), added subpar. (H). Former subpar. (H) was redesignated as subpar. (I). 1966-Subsec. (b)(2)(B). Pub. L. 89-809, § 207(a)(1), inserted "clay, laterite, and nephelite syenite" follow- Ing "anorthosite". Subsec. (b)(3)(B). Pub. L. 89-809, §§ 207(a)(2), 209(a)(2), substituted "if neither paragraph (2)(B), (5), or (6)(B) applies" for "if paragraph (5)(B) does not apply". Subsec. (b)(5). Pub. L. 89-809, § 209(a)(1), added par. (5). Former par. (5) redesignated as par. (6). Subsec. (b)(6). Pub. L. 89-809. §§ 208(a)(1), 209(a)(1), (3), (4). redesignated former par. (5) as par. (6) and, in par. (6) as so redesignated, struck out "mollusk shells (including clam shells and oyster shells)," and substi- tuted "shale (except shale described in paragraph (5)), and stone (except stone described in paragraph (7))" for "shale, and stone, except stone described in para- graph (6)" in subpar. (A). and struck out "building or paving brick," and "sewer pipe," in subpar. (B). Former par. (6) redesignated as par. (7). Subsec. (b)(7). Pub. L. 89-809, §§ 208(a)(2). 209(a)(1), (5), redesignated former par. (6) as par. (7), and, in par. (7) as so redesignated, inserted "mollusk shells (including clam shells and oyster shells)," after "marble," and "(other than slate to which paragraph (5) applies)" following "any other such mineral". Subsec. (c)(4)(G). Pub. L. 89-809, § 209(b), substitut- ed "paragraph (5) or (6)(B)" for "paragraph (5)(B)". 1964-Subsec. (b)(2)(B), (6). Pub. L. 88-571 inserted "beryllium" following "antimony" in subpar. (2)(B), and deleted "beryl" following "bauxite" in both sub- pars. (2)(B) and (6). 1962-Subsec. (a). Fub. L. 87-834 inserted provisions requiring the allowable deductions taken into account with respect to expenses of mining in computing the taxable income from the property to be decreased by an amount equal to so much of any gain which is treated under section 1245 as gain from the sale or ex- change of property which is neither a capital asset nor property described in section 1231, and is properly al- locable to the property. 1960-Subsec. (b)(3). Pub. L. 86-564, § 302(a)(1), limited the 15 percent allowance for ball clay, benton- ite, china clay, and sagger clay to cases where para- graph (5)(B) does not apply, and authorized a 15 per- cent allowance, if paragraph (5)(B) does not apply, for clay used or sold for use for purposes dependent on its refractory properties. Subsec. (b)(5). Pub. L. 86-564, § 302(a)(2), substituted provisions authorizing a 5 percent allowance for clay used, or sold for use, in the manufacture of building or paving brick, drainage and roofing tile, sewer pipe, flower pots, and kindred products for provisions which authorized a 5 percent allowance for brick and tile clay. Subsec. (b)(6). Pub. L. 86-564, § 302(a)(3). eliminated provisions which authorized a 15 percent allowance for refractory and fire clay. See subsec. (b)(3) of this section. Subsec. (c)(2). Pub. L. 86-564, § 302(b)(1). substituted "the treatment processes considered as mining de- scribed in paragraph (4) (and the treatment processes necessary or incidental thereto)" for "the ordinary treatment processes normally applied by mine owners or operators in order to obtain the commercially mar- ketable mineral product or products", and "such treat- ment processes" for "the ordinary treatment process- es". Subsec. (c)(4). Pub. L. 86-564, § 302(b)(2), substituted "The following treatment processes where applied by the mine owner or operator shall be considered as mining to the extent they are applied to the ore or mineral in respect of which he is entitled to a deduc- tion for depletion under section 611" for "The term 'ordinary treatment processes' includes the following" in the opening provisions, included cleaning in cl. (B), substituted "ores or minerals which" for "minerals which" and included substantially equivalent process- es in cl. (C), included uranium and minerals which are not customarily sold in the form of the crude mineral product and substituted "from the ore or the mineral or minerals from other material from the mine or Page 442 § 613