‘‘(I) which are paid or incurred
in connection with a qualified ad-
vanced secondary recovery project,
and
‘‘(II) with respect to which the
taxpayer may make an election under
section 263(c) for the taxable year.
‘‘(iii) Any qualified secondary ad-
vanced injectant expenses which are paid
or incurred in connection with a qualified
advanced secondary recovery project.
‘‘(B) QUALIFIED
ADVANCED
SECONDARY
RECOVERY PROJECT.—The term ‘qualified ad-
vanced secondary recovery project’ means any
project which meets the requirements of sub-
paragraph (C) and which involves 1 of the fol-
lowing advanced secondary recovery methods:
‘‘(i) A method which is used to
produce unrecovered oil which remains in a
reservoir after conventional production be-
cause of heterogeneity and mobility dif-
ferences between oil and water.
‘‘(ii) A reservoir characterization tech-
nique which pinpoints the location of new
well sites without regard to traditional
spacing requirements (including advanced
well logging, advanced geophysical detec-
tion technologies, advanced geocellular res-
ervoir computer modeling, and precision
drilling).
‘‘(iii) A drilling method in which the
wellbore is deviated from the vertical by a
short- or long-range radius technique at a
direction parallel to the bedding plane.
‘‘(iv) Any other advanced secondary
recovery method approved by the Secretary
for purposes of this section.
‘‘(C) REQUIREMENTS FOR QUALIFIED AD-
VANCED SECONDARY RECOVERY PROJECT.—
‘‘(i) IN
GENERAL.—A project meets
the requirements of a qualified advanced
secondary recovery project if—
‘‘(I) such project involves the ap-
plication (in accordance with sound
engineering principles) of 1 or more
advanced secondary recovery methods
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) such project is located with-
in the United States (within the
meaning of section 638(1)), and
‘‘(III) such project commences
after December 31, 1992.
‘‘(ii) CERTIFICATION.—A project shall
not be treated as a qualified advanced sec-
ondary recovery project unless the operator
submits to the Secretary (at such times
and in such manner as the Secretary pro-
vides) a certification from a petroleum
engineer that the project meets (and con-
tinues to meet) the requirements of clause
(i).’’.
(c) NO DOUBLE CERTIFICATION.—Section 43(c), as
amended by subsection (b), is amended by adding at the
end thereof the following new paragraph:
‘‘(6) ONLY 1 CERTIFICATION ALLOWED.—For
purposes of this section, the term ‘qualified en-
hanced oil recovery project’ shall not include any
project which is certified as a qualified advanced sec-
ondary recovery project under paragraph (3) and the
term ‘qualified advanced secondary recovery project’
shall not include any project which is certified as an
enhanced oil recovery project under paragraph (2).’’.
(d) CONFORMING AMENDMENTS.—
(1) Paragraph (4) of section 43(c), as redesig-
nated, is amended by inserting ‘‘and qualified ad-
vanced secondary recovery costs’’ after ‘‘qualified en-
hanced oil recovery costs’’.
(2) The heading for subsection (c) of section 43
is amended by inserting ‘‘AND QUALIFIED AD-
VANCED
SECONDARY
RECOVERY
COSTS’’ after
‘‘COSTS’’.
(e) EFFECTIVE DATE.—
(1) IN GENERAL.—The amendments made by
this section shall apply in the case of amounts paid
or incurred in taxable years beginning after Decem-
ber 31, 1992.
(2) EXPANSION OF PROJECTS.—For purposes
of section 43(c)(3)(C)(i)(III) of the Internal Reve-
nue Code of 1986 (as added by subsection (b)), any
significant expansion after December 31, 1992, of a
project begun before January 1, 1993, shall be
treated as a project which commences after Decem-
ber 31, 1992.
SEC. 206. EXPANSION OF STRIPPER WELL DEFINITION.
(a) 
IN
GENERAL.—Clause 
(i) 
of 
section
613A(c)(6)(E) (defining stripper well property) is
amended by striking ‘‘15’’ and inserting ‘‘25’’.
(b) EFFECTIVE DATE.—The amendment made by
this section shall apply to expenditures paid or incurred
after the date of enactment of this Act in taxable years
ending after such date.
TITLE III—INVESTMENT
INCENTIVES
SEC. 301. AMORTIZATI0N OF GEOLOGICAL AND GEO-
PHYSICAL COSTS.
(a) IN GENERAL.—Section 263 (relating to capital
expenditures) is amended by adding at the end the follow-
ing new subsection:
‘‘(j) SPECIAL RULE FOR CERTAIN GEOLOGICAL AND
GEOPHYSICAL COSTS.—Geological and geophysical costs
for the purpose of ascertaining the existence, location, ex-
tent, or quality of any deposit of oil or gas within the Unit-
ed States (within the meaning of section 638(1)) or a pos-
session of the United States (within the meaning of sec-
tion 638(2)) shall be allowed as a deduction ratably over
the 5-year period beginning with the taxable year in which
such costs were paid or incurred.’’.
(b) EFFECTIVE DATE.—The amendment made by
this section shall apply to costs paid or incurred after the
date of the enactment of this Act in taxable years ending
after such date.
SEC. 302. DEPRECIATION ADJUSTMENTS NOT TO APPLY TO
ENVIRONMENTAL PROPERTY.
(a) IN GENERAL.—Subparagraph (B) of section
56(a)(1) (relating to depreciation adjustments) is
amended to read as follows:
‘‘(B) EXCEPTION.—With respect to any oil
or gas producer, this paragraph shall not apply
to—
‘‘(i) property described in paragraph
(1), (2), (3), or (4) of section 168(f), or
‘‘(ii) environmental improvement as-
sets (as defined in section 59(k)).’’.
(b) ENVIRONMENTAL IMPROVEMENT ASSETS.—Sec-
tion 59 (relating to definition and special rules) is
amended by adding at the end the following new sub-
section:
‘‘(k) ENVIRONMENTAL IMPROVEMENT ASSETS.—
‘‘(1) IN
GENERAL.—For purposes of section
56(a)(1)(B)(ii), the term ‘environmental improve-
ment asset’ means tangible property which is—
‘‘(A) of a character subject to the allow-
ance for depreciation provided in section 167 or
is nondepreciable real property;
‘‘(B) used for, or is functionally related to
property used for, one or more of the following
purposes—
‘‘(i) source reduction,
‘‘(ii) solid waste minimization,
‘‘(iii) waste conversion or recycling,
‘‘(iv) reduction of environmental haz-
ards,
‘‘(v) compliance with environmental
permits, rules, and similar requirements,
‘‘(vi) prevention, containment or con-
trol of unplanned releases, or
‘‘(vii) the manufacture, distribution
and sale of alternate fuels and blending
stocks or fuel additives for reformulated
fuels, and
‘‘(C) located and used exclusively in the
United States during the taxable year.
If only a portion of property described in subpara-
graphs (A) and (C) is described in subparagraph
(B), such portion shall be treated as an environ-
mental improvement asset.
‘‘(2) OTHER
DEFINITIONS.—For purposes of
this subsection—
‘‘(A) SOURCE
REDUCTION.—The term
‘source reduction’ means reduction of the
amount of regulated substances or other pollut-
ants from fixed or mobile sources released into
the environment if such reduction reduces haz-
ards to public health or environment.
‘‘(B) WASTE
MINIMIZATION.—The term
‘waste minimization’ means the reduction in the
generation of, or the recovery of commercially
usable products from, residual materials which
are classified as, or which if disposed would be
classified as, solid wastes (within the meaning
of the Resource Conservation and Recovery
Act).
‘‘(C) 
WASTE
CONVERSION
OR
RECY-
CLING.—The term ‘waste conversion or recy-
cling’ means the processing or conversion of liq-
uid, solid, or gaseous wastes into fuel, energy,
or other commercially usable products, and the
production of such products if production oc-
curs at the same facility as the conversion.
‘‘(D) ABATEMENT
OF
ENVIRONMENTAL
HAZARDS.—The term ‘abatement of environ-
mental hazards’ includes the abatement, reduc-
tion, monitoring, or stabilization of potential
human exposure to toxic chemicals, hazardous
or extremely hazardous substances, or harmful
radiation.
‘‘(E) UNPLANNED RELEASES.—The term
‘unplanned releases’ means any release of regu-
lated substances (except federally permitted re-
leases), including indoor releases.
‘‘(F) REGULATED SUBSTANCE.—The term
‘regulated substance’ includes any substance
the release or emission of which is prohibited,
limited, or regulated by Federal or State law or
by Federal regulations (as determined without
regard to whether a particular release would
have been prohibited or limited).
‘‘(G) RELEASE.—The term ‘release’ means
any spilling, leaking, pouring, discharging, es-
caping, dumping, or disposing into the environ-
ment, including the abandonment or discarding
of barrels or other closed receptacles.’’.
(c) CONFORMING AMENDMENT.—Subparagraph (A)
of section 56(g)(4) is amended by adding at the end the
following new clause:
‘‘(vi) This subparagraph shall not
apply to environmental improvement assets
(as defined in section 59(k)).’’.
(d) EFFECTIVE DATE.—The amendments made by
this section shall apply to property placed in service in
taxable years beginning after December 31, 1992.
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