Section 613(c) provides:
'(3). Extraction of the ores or minerals from the ground. -- The term 'extraction of the ores or minerals from the ground' includes the extraction by mine owners or operators of ores or minerals from the waste or residue of prior mining. The preceding sentence shall not apply to any such extraction of the mineral or ore by a purchaser of such waste or residue or of the rights to extract ores or minerals therefrom.'
By these provisions the 1954 Code simply restated what was quite uniformly the previous case law, namely, that mine owners are entitled to a depletion allowance, but that no depletion is allowed when a person merely acquires a right to extract coal from silt deposited on the ground, many miles from and many years after the mining operation which originally produced the silt, especially where the taxpayers cannot show that the land on which the coal-bearing silt is deposited is owned by the original miner whose operations produced this silt. Not only does Section 613(c)(3) of the 1954 Code demonstrate this, but also the legislative history of the 1954 Code clearly points it out. The House of Representatives committee report on Section 613 states:
'The term 'extraction of the ores or minerals from the ground' * * * includes the extraction by mine owners or operators of ores or minerals from the waste or residue of their prior mining. Thus, a depletion allowance may be permitted when based on the extraction of minerals or ores from waste or residue of mining, such as a tailings dump or a culm bank, if performed by the mine owner or operator.'1(emphasis supplied)
The Senate committee report states:
'The House and your committee's bill extends percentage depletion * * * to mine owners for minerals recovered from the residue that had accumulated from their mine. The provision does no apply in the case of a purchaser of such waste or residue or to a purchaser of rights thereto.'2(emphasis supplied)
It seems clear from the decisions prior to the 1954 Code, from the wording of the 1954 Code itself and its legislative history, that plaintiffs, who are not the original mine owners or operators, but merely the purchasers of the right to extract coal from silt deposited on the land of another person who likewise perhaps was not the original mine owner or operator, are not entitled to a depletion allowance.
Plaintiffs contend that because the coal-bearing silt was in the ground for many years, and over the years a great amount of overburden had settled over it, their extraction of it made them miners of natural coal in place for depletion purposes. Depletion allowance is entirely a matter of legislative grace. Parsons v. Smith, 359 U.S. 215, 219, 79 S. Ct. 656, 3 L. Ed. 2d 747 (1959). There is no legislation nor decision to support plaintiffs' contention. Clearly it must be rejected.
The statements herein shall constitute the findings of fact and conclusions of law in the case.
And now, this 14th day of July, 1964, the Clerk of the District Court is directed to enter judgment in favor of the United States and against the plaintiffs in this consolidated cause.