78 STAT. ]
PUBLIC LAW 88-272-FEB. 26, 1964
"(1) I N GENERAI..—Except as otherwise provided in this subsection— " (A) all of the taxpayers operating mineral interests in a separate tract or parcel of land shall be combined and treated as one property, and " (B) the taxpayer may not combine an operating mineral interest in one tract or parcel of land with an operating mineral interest in another tract or parcel of land. "(2)
ELECTION TO TREAT ()PI:RATING MINERAL INTERESTS AS SEPA-
itATK PROPERTIES.—If the taxpayer has more than one operating mineral interest in a single tract or parcel of land, he may elect to treat one or more of such operating mineral interests as separate properties. The taxpayer may not have more than one combination of operating mineral interests in a single tract or parcel of land. If the taxpayer makes the election provided in this paragraph with respect to any interest in a tract or parcel of land, each operating mineral interest which is discovered or acquired by the taxpayer in such tract or parcel of land after the taxable year for which the election is made shall be treated— " (A) if there is no combination of interests in such tract or parcel, as a separate property unless the taxpayer elects to combine it with another interest, or " (B) if there is a combination of interests in such tract or parcel, as part of such combination unless the taxpayer elects to treat it as a separate property. "(3)
CERTAIN UNITIZATION OR IHIOLING ARR.\NGEMENI^.—
" (A) IN GENERAL.—Under regulations prescribed by the Secretary or his delegate, if one or more of the taxpayer's operating mineral interests participate, under a voluntary or compulsory unitization or pooling agreement, in a single cooperative or unit plan of operation, then for the period of such participation— " (i) they shall be treated for all purposes of this subtitle as one property, and "(ii) the application of paragraphs (1), (2), and (4) in respect of such interests shall be suspended. " (B) LIMITATION.—Subparagraph (A) shall apply to a voluntary agreement only if all the operating mineral interests covered by such agreement— " (i) are in the same deposit, or are in 2 or more deposits the joint development or production of which is logical from the standpoint of geology, convenience, economy, or conservation, and "(ii) are in tracts or parcels of land which are contiguous or in close proximity. " (C) S P E C I A L RULE I N THE CASE OF ARRAN(JKMENTS ENTEUEn INTO I N TAXABLE YEARS BEGINNIN(i BEFORE J A N U A R Y 1. 1 J) « 4. —
If— "(i) two or more of the taxpayer's operating mineral interests participate under a voluntary or compulsory unitization or pooling agreement entered into in any taxable year beghming before January 1, 1964, in a single cooperative or unit plan of operation, "(ii) the taxpayer, for the last taxable year begiiining before January 1, 1964, tieated such "interests as two or more separate properties, and "(iii) it is determined that such ti-eatment was proper under the law applicable to such taxable year, such taxpayer may continue to treat such interests in a consistent manner for the period of such participation.
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