For each taxable year beginning on or after January 1, 1996, there shall be allowed as a credit against the “tax” (as defined by Section 23036) an amount determined as follows:
(a) (1) (A) The amount of the credit shall be equal to one-third of the federal credit computed in accordance with Section 43 of the Internal Revenue Code.
(B) If a taxpayer elects, under Section 43(e) of the Internal Revenue Code, not to apply Section 43 for federal tax purposes, this election is binding and irrevocable for state purposes, and for purposes of subparagraph (A), the federal credit shall be zero.
(2) “Qualified enhanced oil recovery project” shall include only projects located within California.
(3) The credit allowed under this subdivision shall not be allowed to any taxpayer for whom a depletion allowance is not permitted to be computed under Section 613 of the Internal Revenue Code by reason of paragraphs (2), (3), or (4) of subsection (d) of Section 613A of the Internal Revenue Code.
(b) Section 43(d) of the Internal Revenue Code shall apply.
(c) In the case where the credit allowed by this section exceeds the “tax,” the excess may be carried over to reduce the “tax” for the succeeding 15 years.
(d) In the case where property which qualifies as part of the taxpayer’s “qualified enhanced oil recovery costs” also qualifies for a credit under any other section in this part, the taxpayer shall make an election on its original return as to which section applies to all costs allocable to that item of qualified property. Any election made under this section, and any specification contained in that election, may not be revoked except with the consent of the Franchise Tax Board.
(e) No deduction shall be allowed as otherwise provided in this part for that portion of any costs paid or incurred for the taxable year which is equal to the amount of the credit allowed under this section attributable to those costs.
(f) The basis of any property for which a credit is allowed under this section shall be reduced by the amount of the credit attributable to the property. The basis adjustment shall be made for the taxable year for which the credit is allowed.
(g) No credit may be claimed under this section with respect to any amount for which any other credit has been claimed under this part.
(Amended by Stats. 2000, Ch. 862, Sec. 67. Effective January 1, 2001.)