Page:United States Statutes at Large Volume 92 Part 3.djvu/569

 PUBLIC LAW 95-618—NOV. 9, 1978

92 STAT. 3201

(B) BINDING coNTRd^cTs.—The amendments made by this subsection shall not apply to property which is constructed, reconstructed, erected, or acquired pursuant to a contract which, on October 1, 1978, and at all times thereafter, was binding on the taxpayer, (e) DEI'KECIATION ALLOWANCE I N CASE OF RETIREMENT OR REPLACEMENT OF CERTAIN O I L AND GAS BOILERS, E T C. —

(1) IN GENERAL.—Section 167 is amended by insertino; after subsection (p) the following new subsection: " (q) RETIREMENT OR REPLACEMENT OF CERTAIN BOILERS, F U E L E D BY O I L OR G A S. — " (1) IN GENERAL.—If—

26 USC 167.

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ETC.,

" (A) a boiler or other combustor was in use on October 1, 1978, and as of such date the principal fuel for such combustor was petroleum or petroleum products (includingnatural g a s), and " (B) the taxpayer establishes to the satisfaction of the Secretary that such combustor will be retired or replaced on or before the date specified by the taxpayer, then for the period beginning with the taxable year in which subparagraph (B) is satisfied, the term 'reasonable allowance' as used in subsection (a) includes an allowance under the straight line method using a useful life equal to the period ending with the date established under subparagraph (B). •• ' " (2) INTEREST.—If the retirement or replacement of any combustor does not occur on or before the date referred to in para-' '* graph (1)(B) " (A) this subsection shall cease to apply with respect to ^ such combustor as of such date, and " (B) interest at the rate determined under section 6621 on 26 USC 6621. the amount of the tax benefit arising from the application of this subsection with respect to such combustor shall be due and payable for the period during which such tax benefit was ' available to the taxpayer and ending on the date referred to in paragraph (1)(B). " (2) EFFECTIVE DATE.—The amendment made by paragraph 26 USC 167 note. (1) shall apply to taxable years ending after the date of the enactment of this Act.

TITLE IV—MISCELLANEOUS PROVISIONS SEC. 401. TREATMENT OF INTANGIBLE DRILLING COSTS FOR PURPOSES OF THE MINIMUM TAX. Subsection (b) of section 308 of the T a x Reduction and Simplification Act of 1977 is amended by striking out ", and before January 1, 26 USC 57 note. 1978". SEC. 402. OPTION TO DEDUCT INTANGIBLE DRILLING COSTS IN THE CASE OF GEOTHERMAL DEPOSITS. (a) IN GENERAL.—Subsection (c) of section 263 (relating to 26 USC 263. intangible drilling and and development costs in the case of oil and gas wells) is amended— (1) by adding at the end thereof the following new sentence: "Such regulations shall also g r a n t the option to deduct as expenses intangible drilling and development costs in the case of wells drilled for any geothermal deposit (as defined in section 613(e) Post, p. 3203.

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