Used oil re-refining investment tax credit

(a)

Qualifying used oil re-Refining tax credit

Subpart E of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 986 is amended by inserting after section 48D the following new section:

48E.

Qualifying used oil re-refining project credit

(a)

In general

For purposes of section 46, the qualifying used oil re-refining project credit for any taxable year is an amount equal to 30 percent of the qualified investment for such taxable year with respect to any qualifying used oil re-refining project. (b)

Qualified investment

(1)

In general

For purposes of subsection (a), the qualified investment for any taxable year is the basis of eligible property placed in service by the taxpayer during such taxable year which is part of a qualifying used oil re-refining project. (2)

Special rule for certain subsidized property

Rules similar to section 48(a)(4) (other than subparagraph (D) thereof) shall apply for purposes of this section. (3)

Certain qualified progress expenditures rules made applicable

Rules similar to the rules of subsections (c)(4) and (d) of section 46 (as in effect on the day before the enactment of the Revenue Reconciliation Act of 1990) shall apply for purposes of this section. (4)

Limitation

The amount which is treated as qualified investment for all taxable years with respect to any qualifying used oil re-refining project shall not exceed the amount certified by the Secretary as eligible for the credit under this section. (c)

Definitions

For purposes of this section— (1)

Qualifying used oil re-refining project

The term qualifying used oil re-refining project means any project— (A)which is designed to serve the primary purpose of processing qualifying re-refined lubricating oil from used oil (including used lube oil derived from crude oil, synthetic oils, and qualified fuels), (B)which uses a series of mechanical or chemical methods, or both, including, at a minimum, vacuum distillation followed by solvent refining or hydrotreating, (C)the feedstock input for which is used lubricating oil, (D)with respect to which the applicant provides evidence that the output of the project is base oil which meets the American Society of Testing and Materials standard for hydrocarbon lubricating base oil (ASTM D6074), (E)with respect to which the applicant provides evidence that the of ownership or control of a site of sufficient size to allow the proposed project to be constructed or to operate on a long-term basis, and (F)which will be located in the United States. (2)

Qualifying re-refined lubricating oil

The term qualifying re-refined lubricating oil means a base oil— (A)which meets the American Society of Testing and Materials standard for hydrocarbon lubricating base oil (ASTM D6074), and (B)which is manufactured from used lubricating oil. (3)

Eligible property

The term eligible property means any property— (A)(i)the construction, reconstruction, expansion or erection of which is completed by the taxpayer, or (ii)which is acquired by the taxpayer if the original use of such property commences with the taxpayer, and (B)with respect to which depreciation (or amortization in lieu of depreciation) is allowable. (d)

Qualifying used oil re-Refinery project program

(1)

Establishment

Not later than 180 days after the date of enactment of this section, the Secretary, in consultation with the Secretary of Energy, shall establish a qualifying used oil re-refining project program for the deployment of used oil re-refining technologies. (2)

Certification

(A)

Application period

Each applicant for certification under this paragraph shall submit an application meeting the requirements of subparagraph (B). An applicant may only submit an application during the 5-year period beginning on the date the Secretary establishes the program under paragraph (1). (B)

Requirements for applications for certification

An application under subparagraph (A) shall contain such information as the Secretary may require. Any information contained in the application shall be protected as provided in section 552(b)(4) of title 5, United States Code. (C)

Time to act upon applications for certification

The Secretary shall issue a determination as to whether an applicant has met the requirements of this section within 60 days following the date of submittal of the application for certification. (D)

Federal and State environmental authorization required

The Secretary shall not certify a project under this section unless the Secretary determines that the applicant for certification has received all Federal and State environmental authorizations or reviews necessary to commence construction of the project. (E)

Period of issuance

An applicant which receives a certification shall have 5 years from the date of issuance of the certification in order to place the project in service, and if such project is not placed in service by that time period, then the certification shall no longer be valid. (3)

Limitation

The aggregate credits that may be allocated under the program shall not exceed $150,000,000. (4)

Reallocation

If the Secretary determines that credits under this section are available for reallocation pursuant to the requirements set forth in paragraph (2), the Secretary is authorized to conduct an additional program for applications for certification.

(b)

Credit treated as investment tax credit

Section 46 of such Code is amended by striking and at the end of paragraph (5), by striking the period at the end of paragraph (6) and inserting , plus, and by adding at the end the following new paragraph:

(7)the qualifying used oil re-refining project credit determined under section 48E(a).

(c)

Clerical amendment

The table of sections for subpart E of part IV of subchapter A of chapter 1 of such Code is amended by inserting after the item relating to section 48D the following new item:

Sec. 48E. Qualifying used oil re-refining project credit.

(d)

Effective date

The amendments made by this section shall apply to periods after the date of the enactment of this Act, under rules similar to the rules of section 48(m) of the Internal Revenue Code of 1986 (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990).