Page:United States Statutes at Large Volume 104 Part 2.djvu/892

 104 STAT. 1388-484 PUBLIC LAW 101-508 —NOV. 5, 1990 "(A) Any amount paid or incurred during the taxable year for tangible property— "(i) which is an integral part of a qualified enhanced oil recovery project, and "(ii) with respect to which depreciation (or amortization in lieu of depreciation) is allowable under this chapter. "(B) Any intangible drilling and development costs— "(i) which are paid or incurred in connection with a qualified enhanced oil recovery project, and "(ii) with respect to which the taxpayer may make an election under section 263(c) for the taxable year. "(C) Any qualified tertiary injectant expenses which are paid or incurred in connection with a qualified enhanced oil recovery project and for which a deduction is allowable under section 193 for the taxable year. "(2) QUALIFIED ENHANCED OIL RECOVERY PROJECT. —For purposes of this subsection— "(A) IN GENERAL.— The term 'qualified enhanced oil recovery project' means any project— with sound engineering principles) of 1 or more tertiary recovery methods (as defined in section 193(b)(3)) which can reasonably be expected to result in more than an insignificant increase in the amount of crude oil which will ultimately be recovered, "(ii) which is located within the United States (within the meaning of section 638(1)), and "(iii) with respect to which the first injection of liquids, gases, or other matter commences after December 31, 1990. "(B) CERTIFICATION. — A project shall not be treated as a qualified enhanced oil recovery project unless the operator submits to the Secretary (at such times and in such manner as the Secretary provides) a certification from a petroleum engineer that the project meets (and continues to meet) the requirements of subparagraph (A). "(3) AT-RISK LIMITATION, —For purposes of determining qualified enhanced oil recovery costs, rules similar to the rules of section 49(a)(l), section 49(a)(2)»_and section 49(b) shall apply. "(4) SPECIAL RULE FOR CERTAIN GAS DISPLACEMENT PROJECTS. — For purposes of this section, immiscible non-hydrocarbon gas displacement shall be treated as a tertiary recovery method under section 193(b)(3). "(d) OTHER RULES.— "(1) DISALLOWANCE OF DEDUCTION. — Any deduction allowable under this chapter for any costs taken into account in computing the amount of the credit determined under subsection (a) shall be reduced by the amount of such credit attributable to such costs. "(2) BASIS ADJUSTMENTS. — For purposes of this subtitle, if a credit is determined under this section for any expenditure with respect to any property, the increase in the basis of such property which would (but for this subsection) result from such expenditure shall be reduced by the amount of the credit so allowed. "(e) ELECTION TO HAVE CREDIT NOT APPLY. —
 * (i) which involves the application (in accordance

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