118 STAT. 1485 PUBLIC LAW 108–357—OCT. 22, 2004 (f) EFFECTIVE DATE.—The amendments made by this section shall apply to expenses paid or incurred after December 31, 2002, in taxable years ending after such date. SEC. 340. EXPANSION OF QUALIFIED SMALL ISSUE BOND PROGRAM. (a) IN GENERAL.—Section 144(a)(4) (relating to $10,000,000 limit in certain cases) is amended by adding at the end the following new subparagraph: ‘‘(G) ADDITIONAL CAPITAL EXPENDITURES NOT TAKEN INTO ACCOUNT.—With respect to bonds issued after Sep tember 30, 2009, in addition to any capital expenditure described in subparagraph (C), capital expenditures of not to exceed $10,000,000 shall not be taken into account for purposes of applying subparagraph (A)(ii).’’. (b) CONFORMING AMENDMENT.—Subparagraph (F) of section 144(a)(4) is amended by adding at the end the following new sen tence: ‘‘This subparagraph shall not apply to bonds issued after September 30, 2009.’’. SEC. 341. OIL AND GAS FROM MARGINAL WELLS. (a) IN GENERAL.—Subpart D of part IV of subchapter A of chapter 1 (relating to business credits), 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. ‘‘(a) GENERAL RULE.—For purposes of section 38, the marginal well production credit for any taxable year is an amount equal to the product of— ‘‘(1) the credit amount, and ‘‘(2) the qualified credit oil production and the qualified natural gas production which is attributable to the taxpayer. ‘‘(b) CREDIT AMOUNT.—For purposes of this section— ‘‘(1) IN GENERAL.—The credit amount is— ‘‘(A) $3 per barrel of qualified crude oil production, and ‘‘(B) 50 cents per 1,000 cubic feet of qualified natural gas production. ‘‘(2) REDUCTION AS OIL AND GAS PRICES INCREASE.— ‘‘(A) IN GENERAL.—The $3 and 50 cents amounts under paragraph (1) shall each be reduced (but not below zero) by an amount which bears the same ratio to such amount (determined without regard to this paragraph) as— ‘‘(i) the excess (if any) of the applicable reference price over $15 ($1.67 for qualified natural gas produc tion), bears to ‘‘(ii) $3 ($0.33 for qualified natural gas production). The applicable reference price for a taxable year is the reference price of the calendar year preceding the calendar year in which the taxable year begins. ‘‘(B) INFLATION ADJUSTMENT.—In the case of any tax able year beginning in a calendar year after 2005, each of the dollar amounts contained in subparagraph (A) shall be increased to an amount equal to such dollar amount multiplied by the inflation adjustment factor for such cal endar year (determined under section 43(b)(3)(B) by sub stituting ‘2004’ for ‘1990’). 26 USC 38 note.
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