terim reports under this paragraph as the Administrator
considers necessary.
‘‘(4) For purposes of paragraph (1), a producer or
importer shall be treated as recycling 2 units of used oil
for each unit of re-refined oil or re-refined lubricant base
stock purchased as provided in paragraph (2)(B).
‘‘(5) Nothing in this section shall prohibit a producer
or importer from entering into an agreement with a sub-
sidiary or division of such producer or importer—
‘‘(A) for purposes of treating oil recycled by
such subsidiary or division as being recycled by the
producer or importer for purposes of meeting the re-
cycling requirement of this section; or
‘‘(B) for purposes of obtaining recycling credits
created by such subsidiary or division.
‘‘(6) For purposes of paragraph (2)(A), the amount
of used oil that is recycled as provided in that paragraph
shall be determined on the basis of the records of the
amount of used oil received by the producer or importer.
‘‘(b) RECYCLING PERCENTAGE.—The Administrator
each year shall establish a recycling percentage for use
under subsection (a). The percentage applicable during
the first year that the requirement established by sub-
section (a) is in effect shall be a percentage that is 2 per-
centage points higher than the recycling rate for lubricat-
ing oil that exists on the date of the enactment of this
section. Such recycling rate shall be determined by using
data for 1990 or the most recent year for which data are
available. For each of the 10 years thereafter, the recy-
cling percentage shall be an additional 2 percentage points
higher than the recycling percentage of the previous year.
Such recycling percentage shall go into effect automati-
cally and shall be published in the Federal Register.
‘‘(c) CREDIT SYSTEM FOR RECYCLING USED OIL.—
(1) Not later than 18 months after the date of the enact-
ment of the Oil Recycling Incentives Act, the Adminis-
trator shall promulgate regulations to establish a system
under which (A) recyclers may create credits for used oil
recycling, and (B) producers or importers of lubricating
oil may purchase such recycling credits from such recy-
clers, for purposes of complying with subsection (a). No
person may create such credits, and no producer or im-
porter of lubricating oil may purchase such credits, except
in accordance with this subsection and the regulations pro-
mulgated under this subsection. In developing the regula-
tions, the Administrator shall, to the maximum extent fea-
sible, allow for the use of records kept in the ordinary
course of business or other approaches that facilitate the
simple, rapid generation and exchange of credits without
a case-by-case approval.
‘‘(2) At a minimum, the regulations under paragraph
(1) shall include the following requirements:
‘‘(A) The following records shall be kept by a
recycler for at least 3 years:
‘‘(i) A record of the quantities of used oil
received for recycling, together with the prices
paid to transporters or owners or operators of
collection centers.
‘‘(ii) A record of the quantities of recycled
oil sold or otherwise distributed in commerce,
and the destinations of such recycled oil. Part
of such record shall be a record of the quan-
tities and price of re-refined oil sold to produc-
ers or importers of lubricating oil for the pur-
pose of complying with subsection (a).
‘‘(iii) A record of the sale or other disposi-
tion of recycling credits, including the name
and address of the producers and importers the
credits were sold to, the price charged, and the
amount of credits sold.
‘‘(B) The recycler shall sell or otherwise distrib-
ute in commerce the recycled oil as specification
used oil, off-specification or industrial specification
used oil, or re-refined oil (as defined by the Adminis-
trator). The recycler shall maintain records of the
tests certifying that the oil meets the standards for
one of those categories of oil or fuel, along with
records of the destination of the oil or fuel by cat-
egory.
‘‘(C) Each year a producer or importer of lubri-
cating oil shall keep records of the quantity of lubri-
cating oil produced or imported, the recycling of
used oil carried out to comply with subsection (a),
the amount of re-refined oil or lubricant base stock
purchased to comply with subsection (a), the amount
of recycling credits purchased (including the names
of recyclers from whom the credits were purchased
and the dates of the purchases), the price paid for
the credits, and the amount (if any) of recycling
credits sold or carried over from previous years. The
regulations shall allow for a 2-year carryover of
credits.
‘‘(3) The Administrator may include such other re-
quirements in the regulations under paragraph (1) with
respect to qualifications for recyclers, importers, and pro-
ducers; methods for auditing compliance with the system;
and enforcement of the system; as the Administrator con-
siders necessary or appropriate for administering the recy-
cling credit system established under this subsection.
‘‘(4) The Administrator shall include in the regula-
tions under paragraph (1) a procedure by which an inter-
ested party may petition the Administrator for credits to
be created under the credit system for recycling of used
oil using new technology. The Administrator shall deter-
mine, after public notice and opportunity for comment, the
amount of credit that may be created by new technologies
for which petitions are granted under this paragraph.
‘‘(d) REPORTS.—(1) Not later than 6 years after the
date of the enactment of the Oil Recycling Incentives Act,
the Administrator shall submit to Congress an interim re-
port on the implementation of this section. The report
shall include, at a minimum—
‘‘(A) a discussion of the effects of the require-
ments of this section on the lubricating oil industry,
the used oil recycling industry, and on the environ-
ment; and
‘‘(B) an evaluation of the level of the recycling
percentage under subsection (b) and recommenda-
tions on whether, and at what rate, the percentage
should be increased in future years above the per-
centage applicable under subsection (b).
‘‘(2) Not later than 10 years after such date, the Ad-
ministrator shall submit to Congress a final report on the
implementation of this section. The report shall include
an updated version of the discussion and evaluation re-
quired in the interim report, as well as such other findings
and recommendations with respect to the implementation
of this section as the Administrator considers appropriate.
‘‘(e) DEFINITIONS.—For purposes of this section:
‘‘(1) The term ‘producer’ with respect to lubri-
cating oil means any person who produces a lubri-
cant base stock from crude oil. Such production does
not include the re-refining of used oil.
‘‘(2) The term ‘importer’ with respect to lubri-
cating oil means any person who imports a lubricant
base stock.
‘‘(3) The term ‘lubricant base stock’ means oil
from which lubricating oil is made after introduction
of additives.
‘‘(4) The terms ‘used oil collection center’, ‘col-
lection center’, and ‘generator’ mean any facility or
entity that collects, stores, accumulates, or otherwise
generates used oil, including a service station dealer
(as defined in section 101(37) of the Comprehensive
Environmental Response, Compensation, and Liabil-
ity Act of 1980 (42 U.S.C. 9601(37)), an auto parts
retailer, or municipality. Such term does not include
an individual who generates used oil by removing
such oil from the engine of a light duty motor vehi-
cle or household appliance owned or operated by
such individual and used only for personal purposes.
‘‘(5) The term ‘recycler’ means an owner or op-
erator of a used oil recycling facility.
‘‘(6) The term ‘recycling credit’ means a legal
record of a recycling activity undertaken in accord-
ance with subsection (c) that represents an amount
of used oil recycled for purposes of complying with
subsection (a).
‘‘(7) The terms ‘used oil recycling facility’ and
‘recycling facility’ mean a facility with a permit
under section 3005 that re-refines or reprocesses
used oil.
‘‘(f) APPLICABILITY.—This section applies to any
person who produces or imports more than 100,000 gal-
lons of lubricating oil a year.
‘‘(g) REGULATIONS.—The Administrator shall pro-
mulgate regulations to implement this section not later
than 18 months after the date of the enactment of the
Oil Recycling Incentives Act. If the Administrator fails to
promulgate such regulations by that date, the recycling
percentage under subsection (b) shall be 40 percent until
such time as the regulations are promulgated.’’.