118 STAT. 1487 PUBLIC LAW 108–357—OCT. 22, 2004 oil or natural gas production exceeds the limitation under sub section (c)(2), qualifying crude oil production or qualifying nat ural gas production attributable to the taxpayer shall be deter mined on the basis of the ratio which taxpayer’s revenue interest in the production bears to the aggregate of the revenue interests of all operating interest owners in the production. ‘‘(2) OPERATING INTEREST REQUIRED.—Any credit under this section may be claimed only on production which is attributable to the holder of an operating interest. ‘‘(3) PRODUCTION FROM NONCONVENTIONAL SOURCES EXCLUDED.—In the case of production from a qualified marginal well which is eligible for the credit allowed under section 29 for the taxable year, no credit shall be allowable under this section unless the taxpayer elects not to claim the credit under section 29 with respect to the well.’’. (b) CREDIT TREATED AS BUSINESS CREDIT.—Section 38(b), as amended by this Act, is amended by striking ‘‘plus’’ at the end of paragraph (17), by striking the period at the end of paragraph (18) and inserting ‘‘, plus’’, and by inserting after paragraph (18) the following: ‘‘(19) the marginal oil and gas well production credit deter mined under section 45I(a).’’. (c) CARRYBACK.—Subsection (a) of section 39 (relating to carryback and carryforward of unused credits generally) is amended by adding at the end the following: ‘‘(3) 5 YEAR CARRYBACK FOR MARGINAL OIL AND GAS WELL PRODUCTION CREDIT.—Notwithstanding subsection (d), in the case of the marginal oil and gas well production credit— ‘‘(A) this section shall be applied separately from the business credit (other than the marginal oil and gas well production credit), ‘‘(B) paragraph (1) shall be applied by substituting ‘5 taxable years’ for ‘1 taxable years’ in subparagraph (A) thereof, and ‘‘(C) paragraph (2) shall be applied— ‘‘(i) by substituting ‘25 taxable years’ for ‘21 taxable years’ in subparagraph (A) thereof, and ‘‘(ii) by substituting ‘24 taxable years’ for ‘20 tax able years’ in subparagraph (B) thereof.’’. (d) CLERICAL AMENDMENT.—The table of sections for subpart D of part IV of subchapter A of chapter 1, as amended by this Act, is amended by inserting after section 45H the following: ‘‘Sec. 45I. Credit for producing oil and gas from marginal wells.’’. (e) EFFECTIVE DATE.—The amendments made by this section shall apply to production in taxable years beginning after December 31, 2004. 26 USC 38 note. Applicability.
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