[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 2783 Introduced in Senate (IS)]

111th CONGRESS
  1st Session
                                S. 2783

 To amend the Internal Revenue Code of 1986 to provide incentives for 
             used oil re-refining, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           November 17, 2009

  Mr. Bayh (for himself, Mr. Lugar, and Ms. Cantwell) introduced the 
 following bill; which was read twice and referred to the Committee on 
                                Finance

_______________________________________________________________________

                                 A BILL


 
 To amend the Internal Revenue Code of 1986 to provide incentives for 
             used oil re-refining, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. EXTENSION AND MODIFICATION OF ELECTION TO EXPENSE CERTAIN 
              REFINERIES.

    (a) In General.--
            (1) Definition of qualified refinery.--Subsection (d) of 
        section 179C of the Internal Revenue Code of 1986 (relating to 
        qualified refinery) is amended to read as follows:
    ``(d) Qualified Refinery.--For purposes of this section, the term 
`qualified refinery' means any refinery located in the United States 
which is designed to serve the primary purpose of--
            ``(1) processing liquid fuel--
                    ``(A) from crude oil or qualified fuels (as defined 
                in section 45K(c)), or
                    ``(B) directly from shale or tar sands, or
            ``(2) processing non-virgin lube oil from used, refined 
        products (including used lube oil originally derived from crude 
        oil or qualified fuels).''.
            (2) Definition of qualified refinery property.--Subsection 
        (c) of section 179C of such Code is amended by adding at the 
        end the following new paragraph:
            ``(4) Special rule for qualified refineries producing re-
        refined lubricating oil.--In the case of a refinery described 
        in subsection (d)(2)--
                    ``(A) paragraph (1)(B) shall be applied by 
                substituting `January 1, 2017' for `January 1, 2014', 
                and
                    ``(B) paragraph (1)(F) shall be applied by 
                substituting `January 1, 2013' for `January 1, 2010' 
                each place it appears.''.
    (b) Conforming Amendments.--
            (1) Subsection (e) of section 179C of the Internal Revenue 
        Code of 1986 is amended--
                    (A) by inserting ``virgin'' before ``lube oil'' in 
                paragraph (1), and
                    (B) by inserting ``or other products from used 
                refined products'' after ``(as defined in section 
                45K(c))'' in paragraph (2).
            (2) Subsection (f) of section 179C of such Code is amended 
        by inserting ``virgin'' before ``lube oil facility''.
    (c) Effective Date.--The amendments made by this section shall 
apply to property placed in service after the date of the enactment of 
this Act.

SEC. 2. CREDIT FOR PRODUCTION OF RE-REFINED LUBRICATING OIL.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to business related 
credits) is amended by adding at the end the following:

``SEC. 45R. CREDIT FOR PRODUCTION OF RE-REFINED LUBRICATING OIL.

    ``(a) General Rule.--For purposes of section 38, the re-refined 
lubricating oil production credit determined under this section for any 
taxable year is equal to 20 cents per gallon of qualified re-refined 
lubricating oil which is produced by the taxpayer during the taxable 
year.
    ``(b) Qualified Re-Refined Lubricating Oil.--For purposes of this 
section--
            ``(1) In general.--The term `qualified re-refined 
        lubricating oil' means a base oil which--
                    ``(A) meets the American Society of Testing and 
                Materials standard for hydrocarbon lubricant base oils 
                (ASTM D6074), and
                    ``(B) which is manufactured--
                            ``(i) at a qualified facility, and
                            ``(ii) from at least 95 percent used oil by 
                        a re-refining process which effectively removes 
                        physical and chemical impurities and spent and 
                        unspent additives.
            ``(2) Qualified facility.--The term `qualified facility' 
        means a qualified refinery (as defined in section 179C(d)).
            ``(3) Noncompliance with pollution control laws.--For 
        purposes of paragraph (2), a facility that is not in material 
        compliance with all applicable State and Federal pollution 
        prevention, control, and permit requirements for any period of 
        time during a taxable year shall not be a qualified facility 
        during such period.
    ``(c) Adjustment for Inflation.--In the case of a taxable year 
beginning in a calendar year after 2009, the 20 cents amount in 
subsection (a) shall be increased by an amount equal to--
            ``(1) such amount, multiplied by
            ``(2) the cost-of-living adjustment determined under 
        section 1(f)(3) for such calendar year by substituting 
        `calendar year 2008' for `calendar year 1992' in subparagraph 
        (B) thereof.''.
    (b) Credit Made Part of General Business Credit.--Section 38(b) of 
the Internal Revenue Code of 1986 is amended--
            (1) by striking ``plus'' at the end of paragraph (34),
            (2) by striking the period at the end of paragraph (35) and 
        inserting ``, plus'', and
            (3) by adding at the end the following new paragraph:
            ``(36) the re-refined lubricating oil production credit 
        determined under section 45R(a).''.
    (c) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by adding at the end the following:

``Sec. 45R. Credit for production of re-refined lubricating oil.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to oil produced after the date of the enactment of this Act.
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