To amend the Internal Revenue Code of 1986 to encourage the re-refining of used oil.

Summary: Used Oil Re-Refining Tax Credit Act of 2010 - Amends the Internal Revenue Code to allow a tax credit for 30% of the investment in a project to process qualifying re-refined lubricating oil from used oil. Defines "qualifying re-refined lubricating oil" as a base oil which meets the American Society of Testing and Materials standard for hydrocarbon lubricating base oil (ASTM D6074) and which is manufactured from used lubricating oil.

Directs the Secretary of the Treasury, in consultation with the Secretary of Energy, to establish a qualifying used oil re-refining project program for the deployment of used oil re-refining technologies.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Used Oil Re-Refining Tax Credit Act 
of 2010''.

SEC. 2. 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:

``SEC. 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).