I 

111TH CONGRESS 

1ST SESSION H. R. 4242 

To amend the Internal Revenue Code of 1986 to provide incentives for 

used oil re-refining, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

DECEMBER 8, 2009 

Mr. MORAN of Kansas introduced the following bill; which was referred to the 

Committee on Ways and Means 

A BILL 

To amend the Internal Revenue Code of 1986 to provide 

incentives for used oil re-refining, and for other purposes. 

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

3 SECTION 1. EXTENSION AND MODIFICATION OF ELECTION 

4 TO EXPENSE CERTAIN REFINERIES. 

5 (a) IN GENERAL.— 

6 (1) DEFINITION OF QUALIFIED REFINERY.— 

7 Subsection (d) of section 179C of the Internal Rev8 enue Code of 1986 (relating to qualified refinery) is 

9 amended to read as follows: 


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1 ‘‘(d) QUALIFIED REFINERY.—For purposes of this 

2 section, the term ‘qualified refinery’ means any refinery 

3 located in the United States which is designed to serve 

4 the primary purpose of— 

5 ‘‘(1) processing liquid fuel— 

6 ‘‘(A) from crude oil or qualified fuels (as 

7 defined in section 45K(c)), or 

8 ‘‘(B) directly from shale or tar sands, or 

9 ‘‘(2) processing non-virgin lube oil from used, 

10 refined products (including used lube oil originally 

11 derived from crude oil or qualified fuels).’’. 

12 (2) DEFINITION OF QUALIFIED REFINERY

13 PROPERTY.—Subsection (c) of section 179C of such 

14 Code is amended by adding at the end the following 

15 new paragraph: 

16 ‘‘(4) SPECIAL RULE FOR QUALIFIED REFIN17 ERIES PRODUCING RE-REFINED LUBRICATING OIL.— 

18 In the case of a refinery described in subsection 

19 (d)(2)— 

20 ‘‘(A) paragraph (1)(B) shall be applied by 

21 substituting ‘January 1, 2017’ for ‘January 1, 

22 2014’, and 

23 ‘‘(B) paragraph (1)(F) shall be applied by 

24 substituting ‘January 1, 2013’ for ‘January 1, 

25 2010’ each place it appears.’’. 


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1 (b) CONFORMING AMENDMENTS.— 

2 (1) Subsection (e) of section 179C of the Inter3 nal Revenue Code of 1986 is amended— 

4 (A) by inserting ‘‘virgin’’ before ‘‘lube oil’’ 

5 in paragraph (1), and 

6 (B) by inserting ‘‘or other products from 

7 used refined products’’ after ‘‘(as defined in 

8 section 45K(c))’’ in paragraph (2). 

9 (2) Subsection (f) of section 179C of such Code 

10 is amended by inserting ‘‘virgin’’ before ‘‘lube oil fa11 cility’’. 

12 (c) EFFECTIVE DATE.—The amendments made by 

13 this section shall apply to property placed in service after 

14 the date of the enactment of this Act. 

15 SEC. 2. CREDIT FOR PRODUCTION OF RE-REFINED LUBRI16 CATING OIL. 

17 (a) IN GENERAL.—Subpart D of part IV of sub18 chapter A of chapter 1 of the Internal Revenue Code of 

19 1986 (relating to business related credits) is amended by 

20 adding at the end the following: 

21 ‘‘SEC. 45R. CREDIT FOR PRODUCTION OF RE-REFINED LU22 BRICATING OIL. 

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

24 the re-refined lubricating oil production credit determined 

25 under this section for any taxable year is equal to 20 cents 


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1 per gallon of qualified re-refined lubricating oil which is 

2 produced by the taxpayer during the taxable year. 

3 ‘‘(b) QUALIFIED RE-REFINED LUBRICATING OIL4 FOR PURPOSES OF THIS SECTION.— 

5 ‘‘(1) IN GENERAL.—The term ‘qualified re-re6 fined lubricating oil’ means a base oil which— 

7 ‘‘(A) meets the American Society of Test8 ing and Materials standard for hydrocarbon lu9 bricant base oils (ASTM D6074), and 

10 ‘‘(B) which is manufactured— 

11 ‘‘(i) at a qualified facility, and 

12 ‘‘(ii) from at least 95 percent used oil 

13 by a re-refining process which effectively 

14 removes physical and chemical impurities 

15 and spent and unspent additives. 

16 ‘‘(2) QUALIFIED FACILITY.—The term ‘quali17 fied facility’ means a qualified refinery (as defined 

18 in section 179C(d)). 

19 ‘‘(3) NONCOMPLIANCE WITH POLLUTION CON20 TROL LAWS.—For purposes of paragraph (2), a fa21 cility that is not in material compliance with all ap22 plicable State and Federal pollution prevention, con23 trol, and permit requirements for any period of time 

24 during a taxable year shall not be a qualified facility 

25 during such period. 


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1 ‘‘(c) ADJUSTMENT FOR INFLATION.—In the case of 

2 a taxable year beginning in a calendar year after 2009, 

3 the 20 cents amount in subsection (a) shall be increased 

4 by an amount equal to— 

5 ‘‘(1) such amount, multiplied by 

6 ‘‘(2) the cost-of-living adjustment determined 

7 under section 1(f)(3) for such calendar year by sub8 stituting ‘calendar year 2008’ for ‘calendar year 

9 1992’ in subparagraph (B) thereof.’’. 

10 (b) CREDIT MADE PART OF GENERAL BUSINESS

11 CREDIT.—Section 38(b) of the Internal Revenue Code of 

12 1986 is amended— 

13 (1) by striking ‘‘plus’’ at the end of paragraph 

14 (34), 

15 (2) by striking the period at the end of para16 graph (35) and inserting ‘‘, plus’’, and 

17 (3) by adding at the end the following new 

18 paragraph: 

19 ‘‘(36) the re-refined lubricating oil production 

20 credit determined under section 45R(a).’’. 

21 (c) CLERICAL AMENDMENT.—The table of sections 

22 for subpart D of part IV of subchapter A of chapter 1 

23 of the Internal Revenue Code of 1986 is amended by add24 ing at the end the following: 

‘‘Sec. 45R. Credit for production of re-refined lubricating oil.’’. 


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

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

3 the enactment of this Act. 

Æ 


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