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(c) EFFECTIVE DATE.—The amendments made by
this section shall take effect on January 1, 2006.
SEC. 1314. AMORTIZATION OF DELAY RENTAL PAYMENTS.
(a) IN GENERAL.—Section 167 (relating to deprecia-
tion) is amended by redesignating subsection (h) as sub-
section (i) and by inserting after subsection (g) the fol-
lowing new subsection:
‘‘(h) AMORTIZATION OF DELAY RENTAL PAYMENTS
FOR DOMESTIC OIL AND GAS WELLS.—
‘‘(1) IN GENERAL.—Any delay rental payment
paid or incurred in connection with the development
of oil or gas wells within the United States (as de-
fined in section 638) shall be allowed as a deduction
ratably over the 24-month period beginning on the
date that such payment was paid or incurred.
‘‘(2) HALF-YEAR CONVENTION.—For purposes
of paragraph (1), any payment paid or incurred dur-
ing the taxable year shall be treated as paid or in-
curred on the mid-point of such taxable year.
‘‘(3) EXCLUSIVE METHOD.—Except as provided
in this subsection, no depreciation or amortization
deduction shall be allowed with respect to such pay-
ments.
‘‘(4) TREATMENT
UPON
ABANDONMENT.—If
any property to which a delay rental payment relates
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is retired or abandoned during the 24-month period
described in paragraph (1), no deduction shall be al-
lowed on account of such retirement or abandon-
ment and the amortization deduction under this sub-
section shall continue with respect to such payment.
‘‘(5) DELAY RENTAL PAYMENTS.—For purposes
of this subsection, the term ‘delay rental payment’
means an amount paid for the privilege of deferring
development of an oil or gas well under an oil or gas
lease.’’.
(b) EFFECTIVE DATE.—The amendments made by
this section shall apply to amounts paid or incurred in tax-
able years beginning after the date of the enactment of
this Act.
SEC. 1315. AMORTIZATION OF GEOLOGICAL AND GEO-
PHYSICAL EXPENDITURES.
(a) IN GENERAL.—Section 167 (relating to deprecia-
tion), as amended by section 1314 of this title, is amended
by redesignating subsection (i) as subsection (j) and by
inserting after subsection (h) the following new subsection:
‘‘(i) AMORTIZATION
OF GEOLOGICAL
AND GEO-
PHYSICAL EXPENDITURES.—
‘‘(1) IN
GENERAL.—Any geological and geo-
physical expenses paid or incurred in connection
with the exploration for, or development of, oil or
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gas within the United States (as defined in section
638) shall be allowed as a deduction ratably over the
24-month period beginning on the date that such ex-
pense was paid or incurred.
‘‘(2) SPECIAL
RULES.—For purposes of this
subsection, rules similar to the rules of paragraphs
(2), (3), and (4) of subsection (h) shall apply.’’.
(b) CONFORMING AMENDMENT.—Section 263A(c)(3)
is amended by inserting ‘‘167(h), 167(i),’’ after ‘‘under
section’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to amounts paid or incurred in tax-
able years beginning after the date of the enactment of
this Act.
SEC. 1316. ADVANCED LEAN BURN TECHNOLOGY MOTOR
VEHICLE CREDIT.
(a) IN GENERAL.—Subpart B of part IV of sub-
chapter A of chapter 1 (relating to other credits) is
amended by adding at the end the following:
‘‘SEC. 30B. ADVANCED LEAN BURN TECHNOLOGY MOTOR
VEHICLE CREDIT.
‘‘(a) ALLOWANCE OF CREDIT.—There shall be al-
lowed as a credit against the tax imposed by this chapter
for the taxable year an amount equal to the sum of the
credit amounts determined under subsection (b) with re-
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spect to each qualified advanced lean burn technology
motor vehicle placed in service by the taxpayer during the
taxable year.
‘‘(b) CREDIT AMOUNT.—For purposes of subsection
(a)—
‘‘(1) FUEL
EFFICIENCY.—The credit amount
with respect to any vehicle shall be—
‘‘(A) $500, if the city fuel economy of such
vehicle is at least 125 percent but less than 150
percent of the 2000 model year city fuel econ-
omy for a vehicle in the same inertia weight
class,
‘‘(B) $1,000, if the city fuel economy of
such vehicle is at least 150 percent but less
than 175 percent of the 2000 model year city
fuel economy for a vehicle in the same inertia
weight class,
‘‘(C) $1,500, if the city fuel economy of
such vehicle is at least 175 percent but less
than 200 percent of the 2000 model year city
fuel economy for a vehicle in the same inertia
weight class,
‘‘(D) $2,000, if the city fuel economy of
such vehicle is at least 200 percent but less
than 225 percent of the 2000 model year city