To amend the Internal Revenue Code of 1986 to encourage businesses to establish hazardous waste remediation reserves, and for other purposes.

Summary: Brownfield Redevelopment Reserve Act - Amends the Internal Revenue Code to allow an income tax deduction for payments made to a tax-exempt Hazardous Waste Remediation Reserve (Reserve). Limits such deduction for any taxable year to the lesser of $1,000,000 or the excess (if any) of $1,000,000 over the amount paid into the Reserve for all prior taxable years. Includes in taxpayer gross income any amount distributed from the Reserve and any penalties for self dealing or failure to distribute funds for Reserve purposes. Imposes a penalty of ten percent additional tax for any amount distributed from a Reserve that is not used exclusively to pay qualified hazardous waste costs.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Brownfield Redevelopment Reserve 
Act''.

SEC. 2. BROWNFIELDS IRA.

    (a) In General.--Subpart C of part II of subchapter E of chapter 1 
of the Internal Revenue Code of 1986 is amended by inserting after 
section 468B the following new section:

``SEC. 468C. SPECIAL RULES FOR HAZARDOUS WASTE REMEDIATION RESERVES.

    ``(a) In General.--There shall be allowed as a deduction for any 
taxable year the amount of payments made by the taxpayer to a Hazardous 
Waste Remediation Reserve (hereinafter referred to as the `Reserve') 
during such taxable year.
    ``(b) Limitation on Amounts Paid Into Reserve.--The amount which a 
taxpayer may pay into the Reserve for any taxable year shall not exceed 
the lesser of--
            ``(1) $1,000,000, or
            ``(2) the excess (if any) of $1,000,000 over the amount 
        paid into the Reserve for all prior taxable years.
    ``(c) Income and Deductions of the Taxpayer.--
            ``(1) Inclusion of amounts distributed.--There shall be 
        includible in the gross income of the taxpayer for any taxable 
        year--
                    ``(A) any amount distributed from the Reserve 
                during such taxable year, and
                    ``(B) any deemed distribution under subsection (e).
            ``(2) Deduction when economic performance occurs.--In 
        addition to any deduction under subsection (a), there shall be 
        allowable as a deduction for any taxable year the amount of the 
        qualified hazardous waste costs with respect to which economic 
        performance (within the meaning of section 461(h)(2)) occurs 
        during such taxable year.
    ``(d) Hazardous Waste Remediation Reserve.--
            ``(1) In general.--For purposes of this section, the term 
        `Hazardous Waste Remediation Reserve' means a reserve 
        established by the taxpayer for purposes of this section.
            ``(2) Reserve exempt from taxation.--Any Hazardous Waste 
        Remediation Reserve is exempt from taxation under this subtitle 
        unless such Reserve has ceased to be a Hazardous Waste 
        Remediation Reserve by reason of subsection (e). 
        Notwithstanding the preceding sentence, any such Reserve shall 
        be subject to the taxes imposed by section 511 (relating to 
        imposition of tax on unrelated business income of charitable, 
        etc. organizations).
            ``(3) Contributions to reserve.--The Reserve shall not 
        accept any payments (or other amounts) other than payments with 
        respect to which a deduction is allowable under subsection (a).
            ``(4) Use of reserve.--The Reserve shall be used 
        exclusively to pay the qualified hazardous waste costs of the 
        taxpayer.
            ``(5) Prohibitions against self-dealing.--Under regulations 
        prescribed by the Secretary, for purposes of section 4951 (and 
        so much of this title as relates to such section), the Reserve 
        shall be treated in the same manner as a trust described in 
        section 501(c)(21).
    ``(e) Deemed Distributions.--
            ``(1) Disqualification of reserve for self-dealing.--In any 
        case in which a Reserve violates any provision of this section 
        or section 4951, the Secretary may disqualify such Reserve from 
        the application of this section. In any case to which this 
        paragraph applies, the Reserve shall be treated as having 
        distributed all of its funds on the date such determination 
        takes effect.
            ``(2) Failure to spend funds.--A Reserve shall be treated 
        as having distributed all of its funds--
                    ``(A) on the date which is 10 years after the date 
                such Reserve was established unless, as of such date--
                            ``(i) it has been determined that some 
                        property of the taxpayer is contaminated with 
                        hazardous waste, and
                            ``(ii) a remediation plan has been prepared 
                        for such site, and
                    ``(B) except as otherwise provided by the 
                Secretary, on the date which is 10 years after the date 
                such Reserve was established unless, as of such date, 
                it is reasonably anticipated that the remaining funds 
                in the Reserve will be distributed before the date 
                which is 15 years after the date such Reserve was 
                established.
    ``(f) Penalty for Distributions not Used for Qualified Hazardous 
Waste Costs.--The tax imposed by this chapter for any taxable year in 
which any amount distributed from a Reserve is not used exclusively to 
pay qualified hazardous waste costs shall be increased by 10 percent of 
such amount.
    ``(g) Qualified Hazardous Waste Costs.--For purposes of this 
section, the term `qualified hazardous waste costs' means--
            ``(1) the costs paid or incurred by the taxpayer in 
        connection with the assessment of--
                    ``(A) the extent of the environmental contamination 
                of a site which is owned by the taxpayer, and
                    ``(B) the expected cost of environmental 
                remediation required for such site, and
            ``(2) the costs paid or incurred by the taxpayer to 
        remediate such contamination.
    ``(h) Controlled Groups.--All persons treated as a single employer 
under subsection (a) or (b) of section 52 shall be treated as one 
person for purposes of subsection (b), and the dollar amount contained 
in such subsection shall be allocated among such persons in such manner 
as the Secretary shall prescribe.
    ``(i) Time When Payments Deemed Made.--For purposes of this 
section, a taxpayer shall be deemed to have made a payment to the 
Reserve on the last day of a taxable year if such payment is made on 
account of such taxable year and is made within 2\1/2\ months after the 
close of such taxable year.''.
    (b) Clerical Amendment.--The table of sections for subpart C of 
part II of subchapter E of chapter 1 of such Code is amended by 
inserting after the item relating to section 468B the following new 
item:

``468C. Special rules for hazardous waste remediation reserves.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.