Part III. Administrative, Procedural, and Miscellaneous

1998 calendar year ($10.88) does not exceed $28 multiplied by the inflation adjustment factor for the 1999 calendar year, the enhanced oil recovery credit for qualified costs paid or incurred in 1999 is determined without regard to the phaseout for crude oil price increases.

Table 1 contains the GNP implicit price deflator used for the 1999 calendar year, as well as the previously published GNP implicit price deflators used for the 1991 through 1998 calendar years.

1999 Section 43 Inflation Adjustment

Notice 99–45

Section 43(b)(3)(B) of the Internal Revenue Code requires the Secretary to publish an inflation adjustment factor. The enhanced oil recovery credit under § 43 for any taxable year is reduced if the “reference price,” determined under § 29(d)(2)(C), for the calendar year pre

ceding the calendar year in which the taxable year begins is greater than $28 multiplied by the inflation adjustment factor for that year.

The term “inflation adjustment factor” means, with respect to any calendar year, a fraction the numerator of which is the GNP implicit price deflator for the preceding calendar year and the denominator of which is the GNP implicit price deflator for 1990.

Because the reference price for the

Notice 99–45 TABLE 1

GNP IMPLICIT PRICE DEFLATORS

Calendar Year GNP Implicit Price Deflator

1990 112.9 (used for 1991) 1991 117.0 (used for 1992) 1992 120.9 (used for 1993) 1993 124.1 (used for 1994) 1994 126.0 (used for 1995) 1995 107.5 (used for 1996)* 1996 109.7 (used for 1997) 1997 112.35 (used for 1998)** 1998 112.64 (used for 1999)

*Beginning in 1995, the GNP implicit price deflator was rebased relative to 1992. The 1990 GNP implicit price deflator used to compute the 1996 § 43 inflation adjustment factor is 93.6.

**Beginning in 1997, two digits follow the decimal point in the GNP implicit price deflator. The 1990 GNP price deflator used to compute the 1998 § 43 inflation adjustment factor is 93.63.

Table 2 contains the inflation adjustment factor and the phase-out amount for taxable years beginning in the 1999 calendar year as well as the previously published inflation adjustment factors and phase-out amounts for the 1991 through 1998 calendar years.

DRAFTING INFORMATION

The principal author of this notice is Brenda M. Stewart of the Office of Assistant Chief Counsel (Passthroughs and Special Industries). For further information regarding this notice contact Ms.

Stewart on (202) 622-3120 (not a toll-free call).

1999 Marginal Production Rates

Notice 99–46

Section 613A(c)(6)(C) of the Internal Revenue Code defines the term “applicable percentage” for purposes of determining percentage depletion for oil and gas produced from marginal properties. The applicable percentage is the percentage (not greater than 25 percent) equal to the sum of 15 percent, plus one percentage point for each whole dollar by which $20 exceeds the reference price (determined under § 29(d)(2)(C)) for crude oil for the calendar year preceding the calendar year in which the taxable year begins. The reference price determined under § 29(d)

Notice 9–45 TABLE 2

INFLATION ADJUSTMENT FACTORS AND PHASE-OUT AMOUNTS

Calendar Year Inflation Adjustment Factor Phase-out Amount

1991 1.0000 0 1992 1.0363 0 1993 1.0708 0 1994 1.0992 0 1995 1.1160 0 1996 1.1485 0 1997 1.1720 0 1998 1.1999 0 1999 1.2030 0

1999–37 I.R.B. 415 September 13, 1999

(2)(C) for the 1998 calendar year is $10.88.

Table 1 contains the applicable percentages for marginal production for taxable years beginning in calendar years 1991 through 1999.

The principal author of this notice is Brenda M. Stewart of the Office of Assistant Chief Counsel (Passthroughs and Special Industries). For further information regarding this notice contact Ms. Stewart at (202) 622-3120 (not a toll-free call).

Notice 99–46 TABLE 1

APPLICABLE PERCENTAGE FOR MARGINAL PRODUCTION

Calendar Applicable Year Percentage

1991 15 percent 1992 18 percent 1993 19 percent 1994 20 percent 1995 21 percent 1996 20 percent 1997 16 percent 1998 17 percent 1999 24 percent

September 13, 1999 416 1999–37 I.R.B.