[Federal Register Volume 64, Number 171 (Friday, September 3, 1999)]
[Notices]
[Pages 48339-48340]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-23063]
========================================================================
Notices
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains documents other than rules
or proposed rules that are applicable to the public. Notices of hearings
and investigations, committee meetings, agency decisions and rulings,
delegations of authority, filing of petitions and applications and agency
statements of organization and functions are examples of documents
appearing in this section.
========================================================================
Federal Register / Vol. 64, No. 171 / Friday, September 3, 1999 /
Notices
[[Page 48339]]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF AGRICULTURE
Office of the Secretary
South Dakota Petroleum Release Compensation Fund Program;
Determination of Primary Purpose of Program Payments for Consideration
as Excludable From Income Under Section 126 of the Internal Revenue
Code of 1954
AGENCY: Office of the Secretary, USDA.
ACTION: Notice of Determination.
-----------------------------------------------------------------------
SUMMARY: The Secretary of Agriculture has determined that all grant
payments made under the South Dakota Petroleum Release Compensation
Fund program are made primarily for the purpose of conserving soil and
water resources and protecting or restoring the environment. This
determination is made in accordance with Section 126 of the Internal
Revenue Code of 1954, as amended. The determination permits recipients
of these payments to exclude them from gross income to the extent
allowed by the Internal Revenue Service.
FOR FURTHER INFORMATION CONTACT: Dennis D. Rounds, Executive Director,
South Dakota Petroleum Release Compensation Fund, 124 E. Dakota,
Pierre, South Dakota 57501; or Director, Conservation Operations
Division, Natural Resources Conservation Service, USDA, P.O. Box 2890,
Washington, D.C. 20013, (202) 720-1845.
SUPPLEMENTARY INFORMATION: Section 126 of the Internal Revenue Code of
1954, as amended, 26 U.S.C. 126, provides that certain payments made to
persons under state conservation programs may be excluded from the
recipient's gross income for federal income tax purposes if the
Secretary of Agriculture determines that the payments are made
``primarily for the purpose of conserving soil and water resources,
protecting or restoring the environment, improving forests, or
providing a habitat for wildlife.'' The Secretary of Agriculture
evaluates these conservation programs on the basis of criteria set
forth in 7 CFR part 14, and makes a ``primary purpose'' determination
for payments made under each program. Before there may be an exclusion,
the Secretary of the Treasury must determine that payments made under
these conservation programs do not substantially increase the annual
income derived from the property benefited by the payments.
The South Dakota petroleum Release Compensation Fund (PRCF) was
enacted through HB 1253 in the 1988 South Dakota state legislature.
From 1988 to 1995, the PRCF was attached to the Department of Commerce
and Regulation and was administered by a five-member citizen's board
appointed by the Governor. In 1995, through executive reorganization
(Executive Order 95-5), the PRCF was attached to the Department of
Transportation and the board's role was changed to advisory. Although
attached to the Department of Transportation, the PRCF is temporarily
administered by the Department of Commerce and Regulation through a
joint-powers agreement. The program is funded by a petroleum release
compensation and tank inspection fee of $20.00/1,000 gallons on
products introduced and sold within the state. The fee is imposed on
the first state licensed distributor who transfers title of a petroleum
product to another within the state. The PRCF receives 58% of the
revenues generated by the fee.
The purpose of the program is to prevent and clean up petroleum
spills through the establishment of a fund which financially assists
owners or operators of storage tanks with necessary and reasonable
expenses incurred in order to clean up pollution caused by the release
of petroleum into the environment. The objectives of this program are
achieved by reimbursing owners or operators of storage tanks for
expenses incurred for the cleanup of petroleum released into the
environment, thereby protecting the public from contamination of
drinking water.
Only expenses directly related to the cleanup are eligible for
reimbursement under the PRCF. The following expenses are reimbursable
if the director determines them to qualify under the criteria
established in statute:
(1) labor;
(2) testing;
(3) use of machinery;
(4) materials and supplies;
(5)professional services authorized by the director;
(6) costs incurred by order of federal, state or local government;
and
(7) any other expenses that the board finds to be reasonable and
necessary to remediate a petroleum spill or release
Costs are eligible for reimbursement only if they are for
activities that have been described in a site assessment plan or a
corrective action plan and have received prior approval from the
director.
Procedural Matters
The authorizing legislation, regulations, and operating procedures
for the South Dakota PETROLEUM RELEASE COMPENSATION FUND have been
examined using criteria set forth in 7 CFR part 14. The U.S. Department
of Agriculture has concluded that the grant payments made under this
program are made to provide financial assistance to eligible persons
primarily for the purpose of conserving soil and water resources and
protecting or restoring the environment.
A ``Record of Decision, South Dakota PETROLEUM RELEASE COMPENSATION
FUND: Primary Purpose Determination for Federal Tax Purposes'' has been
prepared and is available upon request from the Director, Conservation
Operations Division, Natural Resources Conservation Service, P.O. Box
2890, Washington, D.C. 20013, or Director, South Dakota Petroleum
Release Compensation Fund, 124 E. Dakota, Pierre, S.D. 57501.
Determination
As required by Section 126(b) of the Internal Revenue Code of 1954,
as amended, I have examined the authorizing legislation, regulations,
and operating procedures regarding the South Dakota PETROLEUM RELEASE
COMPENSATION FUND. In accordance with the criteria set out in 7 CFR
Part 14, I have determined that all grant payments for cleanup of
petroleum releases associated with petroleum storage tanks made under
this program are primarily for the purpose of conserving soil and water
resources and
[[Page 48340]]
protecting or restoring the environment. Subject to further
determination by the Secretary of the Treasury, this determination
permits grant payment recipients to exclude from gross income, for
Federal income tax purposes, all or part of such payments made under
the South Dakota Petroleum Release Compensation Fund.
Signed at Washington, DC, on April 2, 1998.
Dan Glickman,
Secretary of Agriculture.
[FR Doc. 99-23063 Filed 9-2-99; 8:45 am]
BILLING CODE 3410-16-P
