I 

111TH CONGRESS 

1ST SESSION H. R. 3592 

To amend the Internal Revenue Code of 1986 to allow a tax credit for 

producing oil from recycled waste. 

IN THE HOUSE OF REPRESENTATIVES 

SEPTEMBER 17, 2009 

Mr. PASCRELL (for himself, Mr. REICHERT, Mrs. CHRISTENSEN, and Ms. 

JACKSON-LEE of Texas) introduced the following bill; which was referred 

to the Committee on Ways and Means, and in addition to the Committee 

on Energy and Commerce, for a period to be subsequently determined by 

the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To amend the Internal Revenue Code of 1986 to allow a 

tax credit for producing oil from recycled waste. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Plastics Recycling Act 

5 of 2009’’. 


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1 SEC. 2. PRODUCTION TAX CREDIT FOR CERTAIN RECY2 CLING ACTIVITIES. 

3 (a) IN GENERAL.—Subpart D of part IV of sub4 chapter A of chapter 1 of the Internal Revenue Code of 

5 1986 (relating to business related credits) is amended by 

6 adding at the end the following new section: 

7 ‘‘SEC. 45R. OIL PRODUCED FROM CERTAIN RECYCLING AC8 TIVITIES. 

9 ‘‘(a) GENERAL RULE.—For purposes of section 38, 

10 the waste plastic recycling credit for any taxable year is 

11 an amount equal to the product of— 

12 ‘‘(1) 60 cents, multiplied by 

13 ‘‘(2) the number of gallons of qualified syn14 thetic oil— 

15 ‘‘(A) produced by the taxpayer from quali16 fied feedstock at a qualified small conversion 

17 process recycling facility during the 10-year pe18 riod beginning on the date the facility was 

19 originally placed in service, and 

20 ‘‘(B) used or sold by the taxpayer in a 

21 trade or business to an unrelated person during 

22 the taxable year. 

23 ‘‘(b) EXCEPTION FOR DE MINIMIS PERCENTAGE OF

24 NON-QUALIFYING FEEDSTOCK.—In the case that a pro25 ducer uses non-qualified feedstock to produce a gallon (or 

26 part thereof) of qualified synthetic oil, the amount of the 


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1 credit determined under subsection (a) with respect to 

2 such gallon— 

3 ‘‘(1) shall be reduced by an amount equal to 

4 the amount of the credit (determined without regard 

5 to this subsection) multiplied by the percentage of 

6 non-qualifying feedstock used in the production of 

7 such gallon, and 

8 ‘‘(2) if the percentage of non-qualifying feed9 stock so used is greater than 15 percent, the credit 

10 determined under subsection (a) with respect to such 

11 gallon shall be zero. 

12 ‘‘(c) DEFINITIONS.—For purposes of this section— 

13 ‘‘(1) QUALIFIED SYNTHETIC OIL.—The term 

14 ‘qualified synthetic oil’ means oil derived from eligi15 ble feedstocks and which has a minimum market 

16 value of 90 percent of crude oil, represented by the 

17 New York Mercantile Exchange front-month con18 tract quoted at the time of sale. 

19 ‘‘(2) QUALIFIED SMALL CONVERSION PROCESS

20 RECYCLING FACILITY.—The term ‘qualified small 

21 conversion process recycling facility’ means any facil22 ity which— 

23 ‘‘(A) is owned by the taxpayer, 


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1 ‘‘(B) is originally placed in service after 

2 the date of the enactment of this section and 

3 before January 1, 2015, and 

4 ‘‘(C) has a maximum daily production ca5 pacity of not more than 2,000 barrels of quali6 fied synthetic oil. 

7 ‘‘(3) ELIGIBLE FEEDSTOCK.—The term ‘eligible 

8 feedstock’ means post-consumer and post-industrial 

9 waste plastics. 

10 ‘‘(4) PLASTIC.—The term ‘plastic’ means any 

11 material that is derived from one or more of the cat12 egories of materials in the resin identification system 

13 developed by the Society of the Plastics Industry 

14 (SPI) in 1988. 

15 ‘‘(d) APPLICABLE RULES.—For purposes of this sec16 tion, rules similar to the rules of paragraphs (1), (3), (4), 

17 and (5) of section 45(e) shall apply. 

18 ‘‘(e) DENIAL OF DOUBLE BENEFIT.—A credit shall 

19 not be allowed under section 40, 40A, or 6426 with respect 

20 to any fuel for which a credit is allowed under this section. 

21 ‘‘(f) COORDINATION WITH DEPARTMENT OF TREAS22 URY GRANTS.—In the case of any taxpayer with respect 

23 to whom the Secretary makes a grant under section 3 of 

24 the Plastics Recycling Act of 2009 with respect to any 

25 oil— 


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1 ‘‘(1) DENIAL OF CREDITS.—No credit with re2 spect to such oil shall be determined under this sec3 tion or section 40, 40A, or 6426 for the taxable year 

4 in which such grant is made or any subsequent tax5 able year. 

6 ‘‘(2) RECAPTURE OF CREDITS MADE BEFORE

7 GRANT.—If a credit was determined under this sec8 tion with respect to such oil for any taxable year 

9 ending before such grant is made— 

10 ‘‘(A) the tax imposed under subtitle A on 

11 the taxpayer for the taxable year in which such 

12 grant is made shall be increased by so much of 

13 such credit as was allowed under section 38, 

14 ‘‘(B) the general business carryforwards 

15 under section 39 shall be adjusted so as to re16 capture the portion of such credit which was 

17 not so allowed, and 

18 ‘‘(C) the amount of such grant shall be de19 termined without regard to any reduction in the 

20 basis of such property by reason of such credit. 

21 ‘‘(3) TREATMENT OF GRANTS.—Any such grant 

22 shall not be includible in the gross income of the 

23 taxpayer.’’. 

24 (b) CREDIT ALLOWED AS PART OF GENERAL BUSI25 NESS CREDIT.—Section 38(b) of such Code (defining curVerDate Nov 24 2008 00:39 Sep 18, 2009 Jkt 079200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H3592.IH H3592

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1 rent year business credit) is amended by striking ‘‘plus’’ 

2 at the end of paragraph (34), by striking the period at 

3 the end of paragraph (35) and inserting ‘‘, plus’’, and by 

4 adding at the end the following new paragraph: 

5 ‘‘(36) the waste plastic recycling credit deter6 mined under section 45R(a).’’. 

7 (c) CONFORMING AMENDMENT.—The table of sec8 tions for subpart D of part IV of subchapter A of chapter 

9 1 of such Code is amended by adding at the end the fol10 lowing new item: 

‘‘Sec. 45R. Oil produced from certain recycling activities.’’. 

11 (d) EFFECTIVE DATE.—The amendments made by 

12 this section shall apply to oil produced after the date of 

13 enactment of this Act. 

14 SEC. 3. GRANTS FOR OIL PRODUCED FROM CERTAIN RECY15 CLING ACTIVITIES IN LIEU OF TAX CREDITS. 

16 (a) IN GENERAL.—Upon application, the Secretary 

17 of the Treasury (or the Secretary’s delegate) shall make 

18 a grant to each person to whom the waste plastic recycling 

19 credit determined under section 45R of the Internal Rev20 enue Code of 1986 is allowable for the taxable year in 

21 which the grant is made. 

22 (b) GRANT DETERMINATION.—The grant under sub23 section (a) shall be determined in the same manner as the 

24 credit is determined under section 45R of the Internal 

25 Revenue Code of 1986 (determined without regard to secVerDate Nov 24 2008 00:39 Sep 18, 2009 Jkt 079200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H3592.IH H3592

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1 tion 38(c) of such Code) for the taxable year in which the 

2 grant is made. 

3 (c) EXCEPTION FOR CERTAIN NON-TAXPAYERS.— 

4 The Secretary of the Treasury shall not make any grant 

5 under this section to— 

6 (1) any Federal, State, or local government (or 

7 any political subdivision, agency, or instrumentality 

8 thereof), 

9 (2) any organization described in section 501(c) 

10 of the Internal Revenue Code of 1986 and exempt 

11 from tax under section 501(a) of such Code, 

12 (3) any entity referred to in paragraph (4) of 

13 section 54(j) of such Code, or 

14 (4) any partnership or other pass-thru entity 

15 any partner (or other holder of an equity or profits 

16 interest) of which is described in paragraph (1), (2) 

17 or (3). 

18 (d) APPROPRIATIONS.—For purposes of section 

19 1324(b) of title 31, United States Code, a grant under 

20 this section shall be treated as a credit provision described 

21 in paragraph (2) of such section. 

Æ 


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