Commonwealth Numbered Acts

PETROLEUM RESOURCE RENT LEGISLATION AMENDMENT ACT 1991 No. 80, 1991 - SCHEDULE

                     "SCHEDULE                          Section 2, 35A,35B

45A, 45B and 45D
PROVISIONS RELATING TO INCURRING AND TRANSFER OF EXPLORATION
EXPENDITURE ON OR AFTER 1 JULY 1990
TABLE OF CONTENTS
PART 1 - INTERPRETATION Clause
1. Defined terms
2. Holding an interest - petroleum project
3. Holding an interest - exploration right
4. Amounts to be worked out to nearest dollar
PART 2 - CLASS 2 AUGMENTED BOND RATE EXPLORATION EXPENDITURE
AND TRANSFERABLE EXPLORATION EXPENDITURE
5. Interpretation
6. Matters dealt with in this Part
7. What happens if there is no notional taxable profit
8. What happens if there is a notional taxable profit
PART 3 - CLASS 2 GDP FACTOR EXPENDITURE AND TRANSFERABLE
EXPLORATION EXPENDITURE
9. Interpretation
10. Matters dealt with in this Part
11. What happens if there is no notional taxable profit
12. What happens if there is a notional taxable profit
PART 4 - TRANSFERABLE EXPLORATION EXPENDITURE NOT INCURRED IN
RELATION TO A PROJECT
13. Matters dealt with in this Part
14. Assumptions on which amounts to be worked out
15. Non-transferable expenditure
16. Amounts to be worked out
17. What happens if the notional assessable receipts equal
or exceed the notional deductible expenditure
18. What happens if the notional deductible expenditure
exceeds the notional assessable receipts
PART 5 - GENERAL RULES RELATING TO TRANSFER OF EXPLORATION EXPENDITURE
19. Interpretation
20. Matters dealt with in this Part
21. Rule - must be a notional taxable profit in relation
to receiving project
22. Rule - person must have held interests in relation to
transferring entity and receiving project
23. Rule - transfer to project with most recent production
licence
24. Rule - restriction on transfer of ABR expenditure
25. Rule - restriction on transfer of GDP expenditure
26. Rule - total transferred not to exceed notional taxable profit
PART 6 - RULES RELATING TO TRANSFER OF EXPLORATION
EXPENDITURE BETWEEN GROUP COMPANIES
27. Interpretation
28. Situations to which this Part applies
29. Matters dealt with in this Part
30. Rule - must be a notional taxable profit in relation
to profit company and receiving project
31. Rule - loss company and profit company to have held
interests and been group companies
32. Rule - transfer to project with most recent production
licence
33. Rule - restriction on transfer of ABR expenditure
34. Rule - restriction on transfer of GDP expenditure
35. Rule - total transferred not to exceed notional taxable profit
PART 7 - COMPOUNDING OF TRANSFERRED AMOUNTS
36. Matters dealt with in this Part
37. What happens if expenditure was incurred in an ABR expenditure year
38. What happens if expenditure was incurred in a GDP expenditure
PART 1 - INTERPRETATION Defined terms
1. In this Schedule: `ABR expenditure year', in relation to a petroleum
project, means the financial year in which the relevant pre-commencement day
occurred or a later financial year; `augmented bond rate', in relation to a
financial year, means the long-term bond rate in relation to the financial
year plus 1.15; `exploration right' means an exploration permit or a retention
lease; `financial year' means the financial year starting on 1 July 1990 or a
later financial year; `GDP expenditure year', in relation to a petroleum
project, means a financial year that ended before the first ABR expenditure
year in relation to the project; `incurred exploration expenditure amount', in
relation to a petroleum project and a financial year, means:

   (a)  if the petroleum project is not a combined project - the sum of:

        (i)    the amounts of exploration expenditure actually incurred by the
               person in the financial year in relation to the project; and

        (ii)   any amount of exploration expenditure that the person is taken
               by section 48 to have incurred in the financial year in
               relation to the project; or

   (b)  if the petroleum project is a combined project - the sum of:

        (i)    the amounts of exploration expenditure actually incurred by the
               person in relation to the project in the financial year (not
               being amounts incurred before the project combination
               certificate in relation to the project came into force); and

        (ii)   any amount of exploration expenditure that the person is taken
               by section 48 to have incurred in the financial year in
               relation to the project; and

        (iii)  if the project combination certificate came into force during
               the financial year - the amounts of exploration expenditure
               actually incurred by the person in the financial year in
               relation to the pre-combination projects and the amounts (if
               any) of exploration expenditure that the person is taken by
               section 48 to have incurred in the financial year in relation
               to the pre-combination projects; Note: the effect of
               subsections 35A (2), 35B (2) and 45D (3) must be taken into
               account when working out an incurred exploration expenditure
               amount. `pre-licence area', in relation to a production
               licence, means:

   (a)  if the production licence was derived from an exploration permit - the
        exploration permit area of the exploration permit; or

   (b)  if the production licence was derived from a retention lease - either:

        (i)    the retention lease area of the retention lease; or

        (ii)   the exploration permit area of the exploration permit to which
               the retention lease is related; `relevant pre-commencement
               day', in relation to a petroleum project, means:

   (a)  if the petroleum project is not a combined project or the Bass Strait
        project - the day occurring 5 years before the issue of the production
        licence in relation to the project; or

   (b)  if the petroleum project is a combined project or the Bass Strait
        project - the day occurring 5 years before the issue of the oldest
        production licence to which the project relates; `starting day' means:

   (a)  in relation to a petroleum project other than a combined project or
        the Bass Strait project - the day on which the exploration permit to
        which the production licence comprising the project is related was
        granted; or

   (b)  in relation to a combined project - the earliest of the days that, but
        for the issue of the project combination certificate, would have been
        starting days in relation to such of the pre-combination projects as
        were not combined projects; or

   (c)  in relation to the Bass Strait project - the day on which the Bass
        Strait exploration permit was granted; or

   (d)  in relation to an exploration right that is an exploration permit -
        the day on which the exploration permit was granted; or

   (e)  in relation to an exploration right that is a retention lease - the
        day on which the exploration permit to which the retention lease is
        related was granted. Holding an interest - petroleum project
2. For the purposes of this Schedule, a person is taken to have held an
interest in relation to a petroleum project at a particular time if:

   (a)  where:

        (i)    the project is not a combined project or the Bass Strait
               project; and

        (ii)   the time is a time after the production licence in relation to
               the project came into force; the person was, at that time,
               entitled to receive receipts from the sale of petroleum, or
               marketable petroleum commodities produced from petroleum,
               recovered from the production licence area in relation to the
               project; or

   (b)  where:

        (i)    the project is not a combined project or the Bass Strait
               project; and

        (ii)   the time is a time before the production licence in relation to
               the project came into force; the person was, at that time,
               entitled to receive receipts from the sale of petroleum, or
               marketable petroleum commodities produced from petroleum,
               recovered from a pre-licence area in relation to the production
               licence; or

   (c)  where:

        (i)    the project is a combined project; and

        (ii)   the time is a time after the project combination certificate
               came into force; the person was, at that time, entitled to
               receive receipts from the sale of petroleum, or marketable
               petroleum commodities produced from petroleum, recovered from
               the production licence areas in relation to the project; or

   (d)  where:

        (i)    the project is a combined project; and

        (ii)   the time is a time:

                (A)  before the project combination certificate came into
                     force; and

                (B)  after the earliest of the production licences in relation
                     to the pre-combination projects came into force; the
                     person was, at that time, entitled to receive receipts
                     from the sale of petroleum, or marketable petroleum
                     commodities produced from petroleum, recovered from one
                     or more of the production licence areas in relation to
                     the pre-combination projects; or

   (e)  where:

        (i)    the project is a combined project; and

        (ii)   the time is a time before the earliest of the production
               licences in relation to the pre-combination projects came into
               force; the person was, at that time, entitled to receive
               receipts from the sale of petroleum, or marketable petroleum
               commodities produced from petroleum, recovered from a
               pre-licence area in relation to that earliest production
               licence;

   (f)  if the project is the Bass Strait project - the person was, at that
        time, entitled to receive receipts from the sale of petroleum, or
        marketable petroleum commodities produced from petroleum, recovered
        from the production licence areas in relation to the project. Holding
        an interest - exploration right
3. For the purposes of this Schedule, a person is taken to have held an
interest in relation to an exploration right at a particular time if:

   (a)  where the right is an exploration permit - the person was, at that
        time, entitled to receive receipts from the sale of petroleum, or
        marketable petroleum commodities produced from petroleum, recovered
        from the exploration permit area;

   (b)  where:

        (i)    the right is a retention lease; and

        (ii)   the time is a time after the retention lease was granted; the
               person was, at that time, entitled to receive receipts from the
               sale of petroleum, or marketable petroleum commodities produced
               from petroleum, recovered from the retention lease area; or

   (c)  where:

        (i)    the right is a retention lease; and

        (ii)   the time is a time before the retention lease was granted; the
               person was, at that time, entitled to receive receipts from the
               sale of petroleum, or marketable petroleum commodities produced
               from petroleum, recovered from the exploration permit area of
               the exploration permit to which the retention lease is related.
               Amounts to be worked out to nearest dollar
4. Amounts worked out under this Schedule are to be worked out to the nearest
dollar.
PART 2 - CLASS 2 AUGMENTED BOND RATE EXPLORATION EXPENDITURE
AND TRANSFERABLE EXPLORATION EXPENDITURE Interpretation
5. In this Part: 'notional taxable profit' in relation to a person, a
petroleum project and a financial year, means the amount (if any) that would
be the taxable profit in relation to the person, the project and the financial
year if:

   (a)  the person had not incurred any class 2 augmented bond rate
        exploration expenditure, class 2 GDP factor expenditure or
        closing-down expenditure in relation to the project and the financial
        year; and

   (b)  any expenditure transferred:

        (i)    to the project in relation to the financial year under section
               45A; or

        (ii)   to the person in relation to the project and the financial year
               under section 45B; had not been transferred. Matters dealt with
               in this Part
6. This Part deals with:

   (a)  the calculation of the amount of class 2 augmented bond rate
        exploration expenditure that a person is taken to have incurred in a
        financial year in relation to a petroleum project; and

   (b)  the calculation of the amount of expenditure incurred by the person in
        relation to the project in ABR expenditure years that is transferable
        from the project in relation to the financial year. In this Part, the
        financial year is called the `assessable year'. What happens if there
        is no notional taxable profit
7. If there is no notional taxable profit in relation to the person, the
petroleum project and the assessable year:

   (a)  the person is taken not to have incurred any class 2 augmented bond
        rate exploration expenditure in relation to the project and the
        assessable year; and

   (b)  all the expenditure included in the incurred exploration expenditure
        amounts for the ABR expenditure years is transferable by the person in
        relation to the assessable year. What happens if there is a notional
        taxable profit
8. (1) This clause applies if there is a notional taxable profit in relation
to the person, the petroleum project and the assessable year.

(2) For the purposes of this clause, the available exploration expenditure
amount for the assessable year equals the incurred exploration expenditure
amount in relation to the assessable year.

(3) For the purposes of this clause, the available exploration expenditure
amount for an ABR expenditure year before the assessable year is worked out as
follows:

   (a)  if the ABR expenditure year is the financial year immediately before
        the assessable year - multiply the incurred exploration expenditure
        amount in relation to the ABR expenditure year by the augmented bond
        rate for the ABR expenditure year;

   (b)  if the ABR expenditure year is an earlier financial year - work out,
        in relation to the ABR expenditure year and each later financial year
        ending before the assessable year, an amount in accordance with the
        formula:
Exploration expenditure amount x Augmented bond rate where: `Exploration
expenditure amount' means:

        (i)    in making the calculation in relation to the ABR expenditure
               year - the incurred exploration expenditure amount in relation
               to the ABR expenditure year; or

        (ii)   in making the calculation in relation to one of the later
               financial years - the amount calculated under this paragraph in
               relation to the immediately preceding financial year for the
               purpose of working out the available exploration expenditure
               amount for the ABR expenditure year; `Augmented bond rate'
               means the augmented bond rate in relation to the financial year
               in relation to which the calculation is being made;

   (c)  if paragraph (a) applies - the available exploration expenditure
        amount for the ABR expenditure year is the amount worked out under
        that paragraph;

   (d)  if paragraph (b) applies - the available exploration expenditure
        amount for the ABR expenditure year is the amount worked out under
        that paragraph in relation to the most recent of the later financial
        years referred to in paragraph (b).

(4) If the total of the available exploration expenditure amounts for the
assessable year and the previous ABR expenditure years is less than or equal
to the notional taxable profit:

   (a)  the person is taken to have incurred an amount of class 2 augmented
        bond rate exploration expenditure in the assessable year in relation
        to the project equal to the total of those available exploration
        expenditure amounts; and

   (b)  that class 2 augmented bond rate exploration expenditure is
        attributable to all the expenditure included in the incurred
        exploration expenditure amounts for the assessable year and the
        previous ABR expenditure years; and

   (c)  none of the expenditure included in the incurred exploration
        expenditure amounts for the assessable year and the previous ABR
        expenditure years is transferable by the person in relation to the
        assessable year.

(5) If the total of the available exploration expenditure amounts for the
assessable year and the previous ABR expenditure years exceeds the notional
taxable profit:

   (a)  the person is taken to have incurred an amount of class 2 augmented
        bond rate exploration expenditure in the assessable year in relation
        to the project equal to the notional taxable profit; and

   (b)  the expenditure to which that class 2 augmented bond rate exploration
        expenditure is attributable is to be worked out in accordance with
        whichever of subclauses (6) and (7) is applicable; and

   (c)  the expenditure included in the incurred exploration expenditure
        amounts for the assessable year and the previous ABR expenditure years
        that is not expenditure to which that class 2 augmented bond rate
        exploration expenditure is attributable is transferable by the person
        in relation to the assessable year.

(6) If:

   (a)  class 2 augmented bond rate exploration expenditure is taken to be
        incurred by subclause (5); and

   (b)  the available exploration expenditure amount for the earliest of the
        ABR expenditure years for which there is such an amount equals or
        exceeds the notional taxable profit; the class 2 augmented bond rate
        exploration expenditure is attributable to so much of the expenditure
        included in the incurred exploration expenditure amount for that ABR
        expenditure year as, if it had been the only expenditure included in
        that amount, would have made the available exploration expenditure
        amount for that ABR expenditure year equal the notional taxable
        profit.

(7) If:

   (a)  class 2 augmented bond rate exploration expenditure is taken to be
        incurred by subclause (5); and

   (b)  the notional taxable profit exceeds the available exploration
        expenditure amount for the earliest of the ABR expenditure years for
        which there is such an amount; the following provisions have effect:

   (c)  add amounts in accordance with the following rules:

        (i)    start with the available exploration expenditure amount for the
               earliest of the ABR expenditure years for which there is such
               an amount and add to that, in order starting with the next
               earliest ABR expenditure year, the available exploration
               expenditure amounts for the later ABR expenditure years;

        (ii)   if adding the available exploration expenditure amount for an
               ABR expenditure year would make the total exceed the notional
               taxable profit, add only so much of that amount as makes the
               total equal the notional taxable profit and do not add the
               available exploration expenditure amount for any later ABR
               expenditure year;

   (d)  the class 2 augmented bond rate expenditure is attributable to:

        (i)    all the expenditure included in the incurred exploration
               expenditure amounts for each ABR expenditure year in relation
               to which the whole available exploration expenditure amount was
               added in accordance with subparagraphs (c) (i) and (ii); and

        (ii)   if, under those subparagraphs, part only of the available
               exploration expenditure amount for an ABR expenditure year was
               added - so much of the expenditure included in the incurred
               exploration expenditure amount for that ABR expenditure year
               as, if it had been the only expenditure included in that
               amount, would have made the available exploration expenditure
               amount for that ABR expenditure year equal the added part.
PART 3 - CLASS 2 GDP FACTOR EXPENDITURE AND TRANSFERABLE
EXPLORATION EXPENDITURE Interpretation
9. In this Part: `notional taxable profit', in relation to a person, a
petroleum project and a financial year, means the amount (if any) that would
be the taxable profit in relation to the person, the project and the financial
year if:

   (a)  the person had not incurred any class 2 GDP factor expenditure or
        closing-down expenditure in relation to the project and the financial
        year; and

   (b)  any expenditure transferred:

        (i)    to the project in relation to the financial year under section
               45A; or

        (ii)   to the person in relation to the project and the financial year
               under section 45B; had not been transferred. Matters dealt with
               in this Part
10. This Part deals with:

   (a)  the calculation of the amount of class 2 GDP factor expenditure that a
        person is taken to have incurred in a financial year in relation to a
        petroleum project; and

   (b)  the calculation of the amount of expenditure incurred by the person in
        relation to the project in GDP expenditure years that is transferable
        from the project in relation to the financial year. In this Part, the
        financial year is called the `assessable year'. What happens if there
        is no notional taxable profit
11. If there is no notional taxable profit in relation to the person, the
petroleum project and the assessable year:

   (a)  the person is taken not to have incurred any class 2 GDP factor
        expenditure in relation to the assessable year and the project; and

   (b)  all the expenditure included in the incurred exploration expenditure
        amounts for the GDP expenditure years is transferable by the person in
        relation to the assessable year. What happens if there is a notional
        taxable profit
12. (1) This clause applies if there is a notional taxable profit in relation
to the person, the petroleum project and the assessable year.

(2) For the purposes of this clause, the available exploration expenditure
amount for a GDP expenditure year is worked out as follows:

   (a)  work out, in relation to the GDP expenditure year and each later
        financial year ending before the assessable year, an amount in
        accordance with the formula:
   Exploration expenditure amount   x   GDP factor
where: `Exploration expenditure amount' means:

        (i)    in making the calculation in relation to the GDP expenditure
               year - the incurred exploration expenditure amount in relation
               to the GDP expenditure year; or

        (ii)   in making the calculation in relation to one of the later
               financial years - the amount calculated under this paragraph in
               relation to the immediately preceding financial year for the
               purpose of working out the available exploration expenditure
               amount for the GDP expenditure year; `GDP factor' means the GDP
               factor in relation to the financial year in relation to which
               the calculation is being made;

   (b)  the available exploration expenditure amount for the GDP expenditure
        year is the amount worked out under paragraph (a) in relation to the
        most recent of the later financial years referred to in that
        paragraph.

(3) If the total of the available exploration expenditure amounts for the GDP
expenditure years is less than or equal to the notional taxable profit:

   (a)  the person is taken to have incurred an amount of class 2 GDP factor
        expenditure in the assessable year in relation to the project equal to
        the total of those available exploration expenditure amounts; and

   (b)  that class 2 GDP factor expenditure is attributable to all the
        expenditure included in the incurred exploration expenditure amounts
        for the GDP expenditure years; and

   (c)  none of the expenditure included in the incurred exploration
        expenditure amounts for the GDP expenditure years is transferable by
        the person in relation to the assessable year.

(4) If the total of the available exploration expenditure amounts for the GDP
expenditure years exceeds the notional taxable profit:

   (a)  the person is taken to have incurred an amount of class 2 GDP factor
        expenditure in the assessable year in relation to the project equal to
        the notional taxable profit; and

   (b)  the expenditure to which that class 2 GDP factor expenditure is
        attributable is to be worked out in accordance with whichever of
        subclauses (5) and (6) is applicable; and

   (c)  the expenditure included in the incurred exploration expenditure
        amounts for the GDP expenditure years that is not expenditure to which
        that class 2 GDP factor expenditure is attributable is transferable by
        the person in relation to the assessable year.

(5) If:

   (a)  class 2 GDP factor expenditure is taken to be incurred by subclause
        (4); and

   (b)  the available exploration expenditure amount for the earliest of the
        GDP expenditure years for which there is such an amount equals or
        exceeds the notional taxable profit; the class 2 GDP factor
        expenditure is attributable to so much of the expenditure included in
        the incurred exploration expenditure amount for that GDP expenditure
        year as, if it had been the only expenditure included in that amount,
        would have made the available exploration expenditure amount for that
        GDP expenditure year equal the notional taxable profit.

(6) If:

   (a)  class 2 GDP factor expenditure is taken to be incurred by subclause
        (4); and

   (b)  the notional taxable profit exceeds the available exploration
        expenditure amount for the earliest of the GDP expenditure years for
        which there is such an amount; the following provisions have effect:

   (c)  add amounts in accordance with the following rules:

        (i)    start with the available exploration expenditure amount for the
               earliest of the GDP expenditure years for which there is such
               an amount and add to that, in order starting with the next
               earliest GDP expenditure year, the available exploration
               expenditure amounts for the later GDP expenditure years;

        (ii)   if adding the available exploration expenditure amount for a
               GDP expenditure year would make the total exceed the notional
               taxable profit, add only so much of that amount as makes the
               total equal the notional taxable profit and do not add the
               available exploration expenditure amount for any later GDP
               expenditure year;

   (d)  the class 2 GDP factor expenditure is attributable to:

        (i)    all the expenditure included in the incurred exploration
               expenditure amounts for each GDP expenditure year for which the
               whole available exploration expenditure amount was added in
               accordance with subparagraphs (c) (i) and (ii); and

        (ii)   if, under those subparagraphs, part only of the available
               exploration expenditure amount for a GDP expenditure year was
               added - so much of the expenditure included in the incurred
               exploration expenditure amount for that GDP expenditure year
               as, if it had been the only expenditure included in that
               amount, would have made the available exploration expenditure
               amount for that GDP expenditure year equal the added part.
PART 4 - TRANSFERABLE EXPLORATION EXPENDITURE NOT INCURRED IN
RELATION TO A PROJECT Matters dealt with in this Part
13. (10 Subject to subclauses (2) and (3), this Part with the calculation of
the amount of expenditure incurred by a person in relation to an exploration
permit or retention lease that is transferable from the permit or lease in
relation to a financial year. In this Part, the financial year is called the
`assessable year'.

(2) This Part does not apply to an exploration permit or retention lease in
relation to a financial year if a production licence derived from the permit
or lease was actually in force at any time during the financial year.

(3) This Part does not apply to an exploration permit or retention lease if it
is, or is related to, one of the North West Shelf exploration permits.
Assumptions on which amounts to be worked out
14. Amounts worked out under this Part in relation to the exploration permit
or retention lease and a period (including a financial year) are to be worked
out on the assumptions that:

   (a)  a production licence derived from the permit or lease was in force at
        all times during the period; and

   (b)  the petroleum project to which that production licence was related
        consisted only of that production licence. In this Part, the petroleum
        project referred to in paragraph (b) is called the `notional project'.
        Non-transferable expenditure
15. (1) For the purposes of this Part, if:

   (a)  the person incurred exploration expenditure in relation to the
        notional project in a financial year; and

   (b)  the total amount of assessable receipts derived by the person in
        relation to the notional project in the financial year equals or
        exceeds the total amount of deductible expenditure actually incurred
        by the person in relation to the notional project in the financial
        year; all of the exploration expenditure is non-transferable
        expenditure incurred by the person in relation to the notional
        project.

(2) For the purposes of this Part, if:

   (a)  the total amount of deductible expenditure actually incurred by the
        person in relation to the notional project in a financial year exceeds
        the total amount of assessable receipts derived by the person in
        relation to the notional project and the financial year; and

   (b)  the total amount of exploration expenditure actually incurred by the
        person in relation to the notional project in the financial year
        exceeds the excess referred to in paragraph (a) by an amount (in this
        clause called the 'non-transferable amount'); so much of the
        exploration expenditure as equals the non-transferable amount is
        non-transferable expenditure incurred by the person in relation to the
        notional project.

(3) If:

   (a)  subclause (2) applies; and

   (b)  the oldest amount of the exploration expenditure incurredby the person
        in the financial year equals or exceeds the non-transferable amount;
        the non-transferable expenditure consists of so much of that oldest
        amount as equals the non-transferable amount.

(4) If:

   (a)  subclause (2) applies; but

   (b)  subclause (3) does not apply; the following provisions have effect:

   (c)  add amounts in accordance with the following rules:

        (i)    start with the oldest amount of the exploration expenditure
               incurred by the person in the financial year and add to that,
               in order starting with the next oldest amount, each of the
               other amounts of the exploration expenditure incurred by the
               person in the financial year;

        (ii)   if adding an amount of expenditure would make the total exceed
               the non-transferable amount, add only so much of the amount as
               makes the total equal the non-transferable amount and do not
               add any later incurred amount of expenditure;

   (d)  the non-transferable expenditure consists of the amounts of
        expenditure added together in accordance with subparagraphs (c) (i)
        and (ii). Amounts to be worked out
16. Work out, in relation to the person, the exploration permit or retention
lease and the assessable year, the following amounts:

   (a)  the total of the assessable receipts derived by the person in relation
        to the notional project during the period starting on 1 July 1990 and
        ending at the end of the assessable year;

   (b)  the total of the deductible expenditure actually incurred by the
        person in relation to the notional project during the period starting
        on 1 July 1990 and ending at the end of the assessable year;

   (c)  the total of the exploration expenditure actually incurred by the
        person in relation to the notional project during the period starting
        on 1 July 1990 and ending at the end of the assessable year;

   (d)  the amount worked out under paragraph (c), less the total of the
        amounts of non-transferable expenditure incurred by the person in
        relation to the notional project during the period starting on 1 July
        1990 and ending at the end of the assessable year. In this Part, the
        amount worked out under paragraph (a) is called the `notional
        assessable receipts', the amount worked out under paragraph (b) is
        called the `notional deductible expenditure', the amount worked out
        under paragraph (c) is called the `notional exploration expenditure'
        and the amount worked out under paragraph (d) is called the `reduced
        notional exploration expenditure'. Note: the effect of subsection 45D
        (3) must be taken into account when working out the notional
        deductible expenditure and the notional exploration expenditure. What
        happens if the notional assessable receipts equal or exceed the
        notional deductible expenditure
17. If, in relation to the person, the exploration permit or retention lease
and the assessable year, the notional assessable receipts equal or exceed the
notional deductible expenditure, none of the expenditure included in the
notional exploration expenditure is transferable by the person in relation to
the assessable year. What happens if the notional deductible expenditure
exceeds the notional assessable receipts
18. (1) If, in relation to the person, the exploration permit or retention
lease and the assessable year:

   (a)  the notional deductible expenditure exceeds the notional assessable
        receipts; and

   (b)  the excess equals or exceeds the notional exploration expenditure; all
        the expenditure included in the reduced notional exploration
        expenditure is transferable by the person in relation to the
        assessable year.

(2) If, in relation to the person, the exploration permit or retention lease
and the assessable year:

   (a)  the notional deductible expenditure exceeds the notional assessable
        receipts; and

   (b)  the excess (in this subclause called the `notional loss') is less than
        the notional exploration expenditure; and

   (c)  the oldest amount of expenditure included in the reduced notional
        exploration expenditure equals or exceeds the notional loss; so much
        of that oldest amount as equals the notional loss is transferable by
        the person in relation to the assessable year.

(3) If, in relation to the person, the exploration permit or retention lease
and the assessable year:

   (a)  the notional deductible expenditure exceeds the notional assessable
        receipts; and

   (b)  the excess (in this subclause called the `notional loss') is less than
        the notional exploration expenditure; and

   (c)  the notional loss exceeds the oldest amount of expenditure included in
        the reduced notional exploration expenditure; the following provisions
        have effect:

   (d)  add amounts in accordance with the following rules:

        (i)    start with the oldest amount of expenditure included in the
               reduced notional exploration expenditure and add to that, in
               order starting with the next oldest amount, each of the other
               amounts included in the reduced notional exploration
               expenditure;

        (ii)   if adding an amount of expenditure would make the total exceed
               the notional loss, add only so much of the amount as makes the
               total equal the notional loss and do not add any later incurred
               amount of expenditure;

   (e)  the expenditure added in accordance with subparagraphs (d) (i) and
        (ii) is transferable by the person in relation to the assessable year.
PART 5 - GENERAL RULES RELATING TO TRANSFER OF EXPLORATION
EXPENDITURE Interpretation
19. In this Part: `notional taxable profit', in relation to a person, a
petroleum project and a financial year, means the amount (if any) that would
be the taxable profit in relation to the person, the project and the financial
year if:

   (a)  all deductible expenditure in relation to the person, the project and
        the financial year were taken into account; and

   (b)  any expenditure transferred:

        (i)    to the project in relation to the financial year under section
               45A; or

        (ii)   to the person in relation to the project and the financial year
               under section 45B; had not been transferred. Matters dealt with
               in this Part
20. This Part sets out the rules relating to the transfer by a person of
transferable exploration expenditure from a petroleum project or an
exploration right to another petroleum project in relation to a financial
year. In this Part, the project or right from which the expenditure is
transferred is called the `transferring entity', the project to which the
expenditure is transferred is called the `receiving project' and the financial
year is called the `transfer year'. Rule - must be a notional taxable profit
in relation to receiving project
21. The person may only transfer the expenditure to the receiving project in
relation to the transfer year if there is a notional taxable profit in
relation to the person, the receiving project and the transfer year. Rule -
person must have held interests in relation to transferring entity and
receiving project
22. (1) Subject to subclauses (2), (3) and (4), the person may only transfer
the expenditure to the receiving project in relation to the transfer year if:

   (a)  the person held an interest in relation to the transferring entity at
        all times from the beginning of the financial year in which the
        expenditure was incurred to the end of the transfer year; and

   (b)  the person held an interest in relation to the receiving project at
        all times from the beginning of the financial year in which the
        expenditure was incurred to the end of the transfer year.

(2) Subclause (1) does not require the person to have held an interest in
relation to the transferring entity at a time before the starting day in
relation to the transferring entity.

(3) If the starting days in relation to the transferring entity and the
receiving project occurred in the same financial year, subclause (1) does not
require the person to have held an interest in relation to the receiving
project at a time before the starting day in relation to the receiving
project.

(4) If the starting day in relation to the receiving project occurred in a
later financial year than the financial year in which the starting day in
relation to the transferring entity occurred:

   (a)  paragraph (1) (b) does not apply in relation to the transfer of the
        expenditure; and

   (b)  the person may only transfer the expenditure if (in addition to the
        requirement in paragraph (1) (a)):

   (i)  the exploration permit by reference to which the starting day in
        relation to the receiving project is determined was granted to the
        person; and

   (ii) the person held an interest in relation to the receiving project at
        all times from the starting day in relation to the receiving project
        to the end of the transfer year. Rule - transfer to project with most
        recent production licence
23. If the expenditure was incurred before the transfer year, the person may
not transfer the expenditure to the receiving project in relation to the
transfer year if:

   (a)  there is another petroleum project to which the expenditure could be
        transferred in relation to the transfer year under section 45A; and

   (b)  the other project includes a production licence that was granted more
        recently than the production licence or licences included in the
        receiving project. Rule - restriction on transfer of ABR expenditure
24. The person may not transfer the expenditure to the receiving project in
relation to the transfer year if:

   (a)  the expenditure was incurred in an ABR expenditure year in relation to
        the receiving project; and

   (b)  there is other expenditure that the person could transfer to the
        receiving project in relation to the transfer year under section 45A;
        and

   (c)  that other expenditure was incurred in an earlier ABR expenditure year
        in relation to the receiving project. Rule - restriction on transfer
        of GDP expenditure
25. The person may not transfer the expenditure to the receiving project in
relation to the transfer year if:

   (a)  the expenditure was incurred in a GDP expenditure year in relation to
        the receiving project; and

   (b)  there is other expenditure that the person could transfer to the
        receiving project in relation to the transfer year under section 45A;
        and

   (c)  that other expenditure was incurred in:

   (i)  an ABR expenditure year in relation to the receiving project; or

   (ii) an earlier GDP expenditure year in relation to the receiving project.
        Rule - total transferred not to exceed notional taxable profit
26. The total amount of expenditure transferred by the person under section
45A to the receiving project in relation to the transfer year must not exceed
the notional taxable `notional taxable profit', in relation to a company, a
profit in relation to the person, the receiving project and the transfer year.
Note: because of subsection 45D (2), some transfers of expenditure are taken
to be transfers of amounts compounded in accordance with Part 7 of this
Schedule.
PART 6 - RULES RELATING TO TRANSFER OF EXPLORATION
EXPENDITURE BETWEEN GROUP COMPANIES Interpretation
27. In this Part: 'notional taxable profit', in relation to a company,
petroleum project and a financial year, means the amount (if any) that would
be the taxable profit in relation to the company, the project and the
financial year if:

   (a)  all deductible expenditure in relation to the company, the project and
        the financial year were taken into account; and

   (b)  all expenditure to be transferred by the company to the project in
        relation to the financial year under section 45A had been transferred;
        and

   (c)  any expenditure transferred to the company in relation to the project
        and the financial year under section 45B had not been transferred.
        Situations to which this Part applies
28. This Part applies if:

   (a)  a number of companies are group companies in relation to each other
        and a financial year; and

   (b)  there is unused transferable exploration expenditure, within the
        meaning of section 45B, in relation to some of the companies and the
        financial year. In this Part, each of the companies in relation to
        which there is unused transferable exploration expenditure is called a
        `loss company', each of the other companies is called a `profit
        company' and the financial year is called the `transfer year'. Matters
        dealt with in this Part
29. This Part sets out the rules relating to the transfer by a loss company of
transferable exploration expenditure from a petroleum project or an
exploration right to a profit company in relation to a petroleum project and
the transfer year. In this Part, the project or right from which the
expenditure is transferred is called the `transferring entity' and the project
in relation to which the expenditure is transferred is called the `receiving
project'. Rule - must be a notional taxable profit in relation to profit
company and receiving project
30. The loss company may only transfer the expenditure to the profit company
in relation to the receiving project and the transfer year if there is a
notional taxable profit in relation to the profit company, the receiving
project and the transfer year. Rule - loss company and profit company to have
held interests and been group companies
31. (1) Subject to subclauses (2), (3) and (4), the loss company may only
transfer the expenditure to the profit company in relation to the receiving
project and the transfer year if:

   (a)  the loss company held an interest in relation to the transferring
        entity at all times from the beginning of the financial year in which
        the expenditure was incurred to the end of the transfer year; and

   (b)  the profit company held an interest in relation to the receiving
        project at all times from the beginning of the financial year in which
        the expenditure was incurred to the end of the transfer year; and

   (c)  the profit company was a group company in relation to the loss company
        and the period starting at the beginning of the financial year in
        which the expenditure was incurred and ending at the end of the
        transfer year.

(2) Subclause (1) does not require the loss company to have held an interest
in relation to the transferring entity at a time before the starting day in
relation to the transferring entity.

(3) If the starting days in relation to the transferring entity and the
receiving project occurred in the same financial year, subclause (1) does not
require the profit company to have held an interest in relation to the
receiving project at a time before the starting day in relation to the
receiving project.

(4) If the starting day in relation to the receiving project occurred in a
later financial year than the financial year in which the starting day in
relation to the transferring entity occurred:

   (a)  paragraph (1) (b) does not apply in relation to the transfer of the
        expenditure; and

   (b)  the loss company may only transfer the expenditure if (in addition to
        the requirements in paragraphs (1) (a) and (c)):

        (i)    the exploration permit by reference to which the starting day
               in relation to the receiving project is determined was granted
               to the profit company; and

        (ii)   the profit company held an interest in relation to the
               receiving project at all times from the starting day in
               relation to the receiving project to the end of the transfer
               year. Rule - transfer to project with most recent production
               licence
32. If the expenditure was incurred before the transfer year, the loss company
may not transfer the expenditure to the profit company in relation to the
receiving project and the transfer year if:

   (a)  the expenditure could be transferred in relation to the transfer year
        under section 45B to:

        (i)    the profit company in relation to another petroleum project; or

        (ii)   another profit company in relation to another petroleum
               project; and

   (b)  the other project includes a production licence that was granted more
        recently than the production licence or licences included in the
        receiving project. Rule - restriction on transfer of ABR expenditure
33. The loss company may not transfer the expenditure to the profit company in
relation to the receiving project and the transfer year if:

   (a)  the expenditure was incurred in an ABR expenditure year in relation to
        the receiving project; and

   (b)  there is other expenditure that the loss company, or another loss
        company, could transfer to the profit company in relation to the
        receiving project and the transfer year under section 45B; and

   (c)  the other expenditure was incurred in an earlier ABR expenditure year
        in relation to the receiving project. Rule - restriction on transfer
        of GDP expenditure
34. The loss company may not transfer the expenditure to the profit company in
relation to the receiving project and the transfer year if:

   (a)  the expenditure was incurred in a GDP expenditure year in relation to
        the receiving project; and

   (b)  there is other expenditure that the loss company, or another loss
        company, could transfer to the profit company in relation to the
        receiving project and the transfer year under section 45B; and

   (c)  the other expenditure was incurred in:

        (i)    an ABR expenditure year in relation to the receiving project;
               or

        (ii)   an earlier GDP expenditure year in relation to the receiving
               project. Rule - total transferred not to exceed notional
               taxable profit
35. The total amount of transferable expenditure transferred under section 45B
to the profit company in relation to the receiving project and the transfer
year must not exceed the notional taxable profit in relation to the profit
company, the receiving project and the transfer year. Note: because of
subsection 45D (2), some transfers of expenditure are taken to be transfers of
amounts compounded in accordance with Part 7 of this Schedule.
PART 7-COMPOUNDING OF TRANSFERRED AMOUNTS Matters dealt with in this Part
36. This Part applies if:

   (a)  a person transfers an amount of expenditure:

        (i)    to a petroleum project in relation to a financial year under
               section 45A; or

        (ii)   to a company in relation to a petroleum project and a financial
               year under section 45B; and

   (b)  the expenditure was incurred in an earlier financial year; and
        provides for the compounding of the amount transferred. In this Part,
        the financial year in relation to which the amount is transferred is
        called the `transfer year'. What happens if expenditure was incurred
        in an ABR expenditure year
37. (1) If the financial year in which the expenditure was incurred:

   (a)  is an ABR expenditure year in relation to the petroleum project; and

   (b)  is the financial year immediately before the transfer year; then, for
        the purposes of subsection 45D (2), the transfer is taken to be of the
        amount worked out by multiplying the amount actually transferred by
        the augmented bond rate for the ABR expenditure year.

(2) If the financial year in which the expenditure was incurred:

   (a)  is an ABR expenditure year in relation to the project; but

   (b)  is not the financial year immediately before the transfer year; the
        following provisions apply:

   (c)  work out, in relation to the ABR expenditure year and each later
        financial year ending before the transfer year, an amount in
        accordance with the formula:
Transferred amount x Augmented bond rate where: `Transferred amount' means:

        (i)    in making the calculation in relation to the ABR expenditure
               year - the amount of expenditure actually transferred; and

        (ii)   in making the calculation in relation to a later financial year
               - the amount calculated under this paragraph in relation to the
               expenditure and the immediately preceding financial year;
               `Augmented bond rate' means the augmented bond rate in relation
               to the financial year in relation to which the calculation is
               being made;

   (d)  for the purposes of subsection 45D (2), the transfer is taken to be of
        the amount worked out under paragraph (c) in relation to the
        expenditure and the financial year immediately before the transfer
        year. What happens if expenditure was incurred in a GDP expenditure
        year
38. If the financial year in which the expenditure was incurred is a GDP
expenditure year the following provisions apply:

   (a)  work out, in relation to the GDP expenditure year and each later
        financial year ending before the transfer year, an amount in
        accordance with the formula:
Transferred amount x GDP factor where: `Transferred amount' means:

        (i)    in making the calculation in relation to the GDP expenditure
               year - the amount of expenditure actually transferred; and

        (ii)   in making the calculation in relation to a later financial year
               - the amount calculated under this paragraph in relation to the
               expenditure and the immediately preceding financial year; `GDP
               factor' means the GDP factor in relation to the financial year
               in relation to which the calculation is being made;

   (b)  for the purposes of subsection 45D (2), the transfer is taken to be of
        the amount worked out under paragraph (a) in relation to the
        expenditure and the financial year immediately before the transfer
        year.". 

23. In this Part, "Principal Act" means the Excise Act 1901.*2*

*2* No. 9, 1901, as amended. For previous amendments, see No. 26, 1918; No. 8,
1923; No. 44, 1934; No. 16, 1942; No. 88, 1947; No. 46, 1949; No. 55, 1952;
No. 10, 1957; No. 49, 1958; No. 37, 1962; No. 49, 1963; No. 139, 1965; No. 93,
1966; Nos. 15 and 105, 1968; No. 23, 1972; Nos. 24 and 145, 1973; No. 216,
1973 (as amended by No. 20, 1974); No. 29, 1974; No. 91, 1976; No. 110, 1978;
Nos. 11 and 50, 1979; No. 42, 1980; Nos. 61 and 65, 1981; Nos. 51, 80 and 108,
1982; No. 81, 1982 (as amended by No. 39, 1983); Nos. 39 and 101, 1983; Nos.
72 and 165, 1984; Nos. 39 and 175, 1985; No. 40, 1985 (as amended by No. 34,
1986); Nos. 10, 34 and 149, 1986; Nos. 81 and 104, 1987; No. 99, 1988; Nos.
23, 24 and 78 of 1989; and Nos. 5 and 111, 1990. 

24. Section 58 of the Principal Act is amended by omitting from subsection (3)
all the words from and including "produced" to and including "1967" and
substituting "produced from a Resource Rent Tax area as defined in the Excise 
Tariff Act 1921 ". 

25. Section 78B of the Principal Act is repealed. 

26. In this Part, "Principal Act" means the Excise Tariff Act 1921.*3*

*3* No. 26, 1921, as amended. For previous amendments, see No. 28, 1924; No.
28, 1926; No. 4, 1928; Nos. 20 and 21, 1933; No. 17, 1936; Nos. 24 and 70,
1938; Nos. 29, 54 and 65, 1939; Nos. 3, 4, 14 and 93, 1948; Nos. 77 and 82,
1949; Nos. 61, 62 and 80, 1950; No. 83, 1952; No. 78, 1953; Nos. 16, 59 and
87, 1956; No. 82, 1957; No. 19, 1958; Nos. 26, 65 and 66, 1959; Nos. 26 and
57, 1960; Nos. 21 and 55, 1961; No. 73, 1962; Nos. 41 and 91, 1963; No. 125,
1964; Nos. 83 and 140, 1965; Nos. 18 and 82, 1967; Nos. 74 and 75, 1968; Nos.
5 and 33, 1969; No. 81, 1970; No. 108, 1971; Nos. 22, 64 and 119, 1972; Nos.
20, 23, 146 and 216, 1973; No. 121, 1974; No. 104, 1975; Nos. 104 and 136,
1977; Nos. 48 and 184, 1978; Nos. 81, 83 and 164, 1979; Nos. 43 44, 45 and
122, 1980; No. 50, 1981; Nos. 45, 54 and 80, 1982; Nos. 27 and 99, 1983; Nos.
53, 72 and 131, 1984; Nos. 39, 41 and 189, 1985; Nos. 20 and 160, 1986; Nos.
53, 76, 104, 145 and 150, 1987; Nos. 29 and 149, 1988; Nos. 77 and 177, 1989;
and No. 112, 1990. 

27. Section 3 of the Principal Act is amended:

   (a)  by omitting from subsection (1) the definition of "excepted area";

   (b)  by inserting in subsection (1) the following definition: " `Resource
        Rent Tax area' means an area that, for the purposes of the
        Petroleum Resource Rent Tax Assessment Act 1987, is:

   (a)  the exploration permit area of an exploration permit other than one of
        the North West Shelf exploration permits; or

   (b)  the retention lease area of a retention lease that is related to an
        exploration permit other than one of the North West Shelf exploration
        permits; or

   (c)  the production licence area of a production licence that is related to
        an exploration permit other than one of the North West Shelf
        exploration permits;". 

28. Section 5B of the Principal Act is amended by omitting from subsection
(4A) "an excepted area" and substituting "a Resource Rent Tax area". 

29. The Schedule to the Principal Act is amended by omitting from sub-items 17
(A), (B) and (C) "an excepted area" (wherever occurring) and substituting "a
Resource Rent Tax area". 

30. In this Part, "Principal Act" means the Petroleum (Submerged Lands)
(Royalty) Act 1967.*4*

*4* No. 119, 1967, as amended. For previous amendments, see No. 37, 1976; No.
81, 1980; No. 81, 1985; and No. 145, 1987. 

31. Section 4A of the Principal Act is repealed and the following section is
substituted: Application of Act

"4A. (1) This Act only applies to:

   (a)  the North West Shelf exploration permits; and

   (b)  leases that are related to the North West Shelf exploration permits;
        and

   (c)  licences that are related to the North West Shelf exploration permits.

"(2) For the purposes of subsection (1):

   (a)  `North West Shelf exploration permits' has the same meaning as in the
        Petroleum Resource Rent Tax Assessment Act 1987; and

   (b)  a lease or licence is related to a permit if the lease or licence is
        related to the permit for the purposes of the
        Petroleum Resource Rent Tax  Assessment Act 1987 .". 

32. (1) In this Part: "Bass Strait area" means an area that, for the purposes
of the Petroleum  Resource Rent Tax Assessment Act 1987 as amended by this
Act, is:

   (a)  the exploration permit area of the Bass Strait exploration permit; or

   (b)  the retention lease area of a retention lease that is related to the
        Bass Strait exploration permit; or

   (c)  the production licence area of a production licence that is related to
        the Bass Strait exploration permit; "Bass Strait excise payment" means
        an amount paid by a person by way of excise duty under the
        Excise Act 1901 in respect of goods of a kind referred to in sub-item
        17 (A), (B) or (C) of the Schedule to the Excise Tariff Act 1921
        obtained from petroleum recovered from a Bass Strait area; "Bass
        Strait royalty payment" means an amount paid by a person by way of
        royalty under the Petroleum (Submerged Lands) (Royalty) Act 1967 in
        respect of petroleum recovered from a Bass Strait area; "creditable
        amount" means a Bass Strait excise payment or a Bass Strait royalty
        payment in respect of petroleum, or goods obtained from petroleum,
        recovered during the transitional year; "transitional year" means the
        financial year starting on 1 July 1990.

(2) If:

   (a)  a person has paid a Bass Strait excise payment in respect of goods
        obtained from petroleum recovered during the transitional year; and

   (b)  a refund has been paid to the person under the Excise Act 1901, or
        regulations under that Act, in relation to the Bass Strait excise
        payment; then, for the purposes of the definition of "creditable
        amount" in subsection (1), the amount of the Bass Strait excise
        payment is taken to be the actual amount of that payment reduced by
        the refund.

(3) If:

   (a)  a person has paid a Bass Strait royalty payment in respect of
        petroleum recovered during the transitional year; and

   (b)  the amount of a later payment of royalty under the Petroleum
        (Submerged Lands) (Royalty) Act 1967 has been reduced because the
        amount of the Bass Strait royalty payment exceeded the amount of
        royalty the person was liable to pay; then, for the purposes of the
        definition of "creditable amount" in subsection (1), the amount of the
        Bass Strait royalty payment is taken to be the actual amount of that
        payment reduced by the reduction referred to in paragraph (b).

(4) Other expressions used in this Part that are defined in the Petroleum 
Resource Rent Tax Assessment Act 1987 as amended by this Act have the same
meaning in this Part as they have in that Act as so amended. 

33. (1) Subject to this section, the amendments of the Petroleum Resource 
Rent Tax Assessment Act 1987 made by this Act apply to assessments under that
Act in relation to the transitional year and to all later financial years.

(2) The amendment of section 97 of the Petroleum Resource Rent Tax Assessment
Act 1987 applies in relation to the financial year starting on 1 July 1991 and
to all later financial years.

(3) For the purposes of the application of the Petroleum Resource Rent Tax 
Assessment Act 1987 as amended by this Act to the Bass Strait project, a
reference in the Petroleum Resource Rent Tax Assessment Act 1987 to petroleum
recovered is a reference to petroleum recovered on or after 1 July 1990.

(4) For the purposes of the application of the Petroleum Resource Rent Tax 
Assessment Act 1987 as amended by this Act to the Bass Strait project, any
consideration received by a person before 1 July 1990 in respect of petroleum
recovered on or after that day is taken to be received in the financial year
in which the petroleum is recovered. 

34. (1) A Bass Strait excise payment or a Bass Strait royalty payment is not
deductible expenditure for the purposes of the Petroleum Resource Rent Tax 
Assessment Act 1987 as amended by this Act.

(2) If a person has paid a Bass Strait excise payment or a Bass Strait royalty
payment and:

   (a)  in the case of an excise payment - a refund is paid to the person
        under the Excise Act 1901, or regulations under that Act, in relation
        to the excise payment; or

   (b)  in the case of a royalty payment - a refund is paid to the person
        under section 39 of this Act in relation to the royalty payment; the
        amount paid to the person is not an assessable receipt for the
        purposes of the Petroleum Resource Rent Tax Assessment Act 1987 as
        amended by this Act. 

35. Division 2 of Part VIII of the Petroleum Resource Rent Tax Assessment  Act
1987 does not apply in relation to the Bass Strait project and the
transitional year. 

36. If, before 1 July 1991, an instalment of tax was paid or became payable by
a person in respect of the transitional year, nothing in this Act requires the
amount of the instalment to be recalculated. 

37. The amendments of the Excise Act 1901 and the Excise Tariff Act 1921 made
by this Act apply to goods obtained from petroleum recovered on or after 1
July 1991. 

38. The amendments of the Petroleum (Submerged Lands) (Royalty) Act 1967 made
by this Act apply to petroleum recovered on or after 1 July 1991. 

39. If:

   (a)  a person has paid a Bass Strait royalty payment in respect of
        petroleum recovered before 1 July 1990; and

   (b)  the amount paid exceeds the amount of royalty that was actually
        payable in respect of that petroleum; and

   (c)  no adjustment has been made in which the amount of a later payment of
        royalty under the Petroleum (Submerged Lands) (Royalty) Act 1967 has
        been reduced by the excess; the Commonwealth must refund the excess to
        the person. 

40. (1) If:

   (a)  the Commonwealth has paid Victoria an amount by way of royalty share
        in respect of petroleum recovered during a month ending before 1 July
        1991; and

   (b)  the amount paid exceeds the amount of royalty share that was actually
        payable to Victoria in respect of that month; and

   (c)  no adjustment has been made in which the amount of a later payment to
        Victoria by way of royalty share has been reduced by the excess;
        Victoria must refund the excess to the Commonwealth.

(2) In this section: "royalty share" means an amount calculated in accordance
with paragraph 129 (1) (b) of the Petroleum (Submerged Lands) Act 1967 and
paid by the Commonwealth under section 129 of that Act. 

41. (1) This section applies where:

   (a)  a person has paid a creditable amount; and

   (b)  an assessment has been made of the amount of tax payable by the person
        in relation to the Bass Strait project and the transitional year.

(2) A soon as practicable after making the assessment, the Commissioner must
credit the creditable amount in payment successively of:

   (a)  any tax payable by the person in relation to the Bass Strait project
        and the transitional year, whether or not the tax is due for payment;
        and

   (b)  any other liability of the person to the Commonwealth arising under or
        because of this Act or any other Act of which the Commissioner has the
        general administration.

(3) The Commonwealth must refund to the person so much (if any) of the
creditable amount as is not credited under subsection (2). 

42. If, under section 41:

   (a)  the Commissioner credits a creditable amount in payment of tax that a
        person is liable to pay; or

   (b)  an amount is refunded to a person; the following provisions have
        effect:

   (c)  any amount payable by the person that would, when paid, be a
        creditable amount stops being payable by the person;

   (d)  no refund is payable by the Commonwealth under the Excise Act 1901, or
        regulations under that Act, in relation to any creditable amount paid
        by the person;

   (e)  no adjustment is to be made under which the amount of a later amount
        of royalty under the Petroleum (Submerged Lands) (Royalty) Act 1967
        payable by the person is reduced by reference to the creditable
        amount. 

43. (1) If:

   (a)  a person is liable to pay tax in relation to the Bass Strait project
        and the transitional year; and

   (b)  the total amount of tax the person is liable to pay in relation to the
        project and the transitional year equals or is less than the total of
        the creditable amounts paid by the person; no deduction under the
        Income Tax Assessment Act 1936 is allowable in respect of any payment
        of the tax referred to in paragraph (b).

(2) If:

   (a)  a person is liable to pay tax in relation to the Bass Strait project
        and the transitional year; and

   (b)  the total amount of tax the person is liable to pay in relation to the
        project and the transitional year exceeds the total of the creditable
        amounts paid by the person; the total deductions allowed under the
        Income Tax Assessment Act 1936 in respect of payments of the tax
        referred to in paragraph (b) must not exceed the excess referred to in
        that paragraph. 

44. (1) The Minister, by 30 November 1992, is to cause to be laid before each
House of the Parliament a report on the operation of the Act.

(2) The report prepared by the Minister shall include:

   (a)  whether the Act has been effective in achieving its objectives;

   (b)  the impact on prices and on industry; and

   (c)  the impact on the development of new off-shore petroleum projects.

(3) For the purposes of the report the Minister shall seek submissions on the
operation of the Act from persons in all States and Territories, and any such
submissions shall be made available to each House of Parliament.

(4) In this section: "Minister" means the Minister who administers the
Petroleum (Submerged Lands)  Act 1967 ; "the Act" means the
Petroleum Resource Rent Tax Assessment Act 1987.