Brownfields Remediation and Economic Development Act of 1996

Summary: Brownfields Remediation and Economic Development Act of 1996 - Directs the Administrator of the Environmental Protection Agency to certify any State program for brownfields (abandoned industrial sites in need of hazardous waste remediation before they may be returned to productive use) if the program:  (1) covers only sites that have been contaminated prior to enactment of this Act and are not listed on the National Priorities List; (2) provides for public participation prior to a landowner's release from liability upon completion of site remediation (carried out under a certified program) under State law and under abatement and response provisions of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA); (3) provides for a reopening of a cleanup proposal under specified conditions; (4) contains standards for the sites that protect public health and the environment; and (5) includes coordination among State agencies for environmental protection and economic development. 
Provides (in addition to the release of landowners from liability described above) for the release from liability under State law and under CERCLA, upon completion of remediation, of lenders and developers (except with respect to pollution directly caused by them), prospective purchasers, and local governments not involved in the management of a site. 
Allows the Administrator to waive Federal permit requirements if the State program includes a waiver of State permit requirements. 
Amends the Internal Revenue Code to allow an income tax deduction for payments into a tax-exempt Hazardous Waste Remediation Reserve to be used exclusively to pay costs of the taxpayer to:  (1) assess the extent of a site's environmental contamination and its expected remediation cost; and (2) remediate the contamination.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Brownfields Remediation and Economic 
Development Act of 1996''.

SEC. 2. FINDINGS AND PURPOSES.

    (a) Findings.--The Congress finds that:
            (1) The General Accounting Office has estimated that 
        between 130,000 and 425,000 abandoned industrial sites will 
        need cleanup action to become economically viable once again.
            (2) The cleanup costs to remediate these ``brownfield'' 
        sites to productive use could reach hundreds of billions of 
        dollars.
            (3) ``Brownfields'' remediation is the number one economic 
        priority in many American cities.
            (4) Encouraging private investment for these remediation 
        efforts presents an opportunity to create jobs and promote 
        economic development in localities and the States.
    (b) Purpose.--The purpose of this Act is to establish a program 
under which the Federal Government, in cooperation with appropriate 
State and local entities, shall remediate ``brownfields'' in order to 
return them to productive use while conserving prime open space, or 
``greenfields''.

SEC. 3. FOR EPA CERTIFICATION OF STATE BROWNFIELD PROGRAMS.

    (a) Certification.--The Administrator of the Environmental 
Protection Agency (hereinafter in this Act referred to as the 
``Administrator'') shall certify any State brownfield program submitted 
to the Administrator under this Act that satisfies the criteria of 
section 4. Certification of State programs shall be granted only for 
programs which have jurisdiction over brownfield sites which have been 
contaminated prior to enactment of this Act.
    (b) Review.--The Administrator shall review certified State 
brownfield programs every 2 years after certification to assure 
compliance with certification criteria, and to provide to the States, 
where appropriate, technical assistance and expertise.

SEC. 4. EVALUATION CRITERIA FOR STATE BROWNFIELDS PROGRAMS.

    A State brownfields program may be certified under this Act if the 
program--
            (1) covers only contaminated sites that are not listed on 
        the National Priorities List;
            (2) provides for public participation, in good faith prior 
        to the granting of a release from liability under sections 4 
        and 5;
            (3) provides for the reopening of a brownfields cleanup 
        proposal:
                    (A) if any person has undertaken any aspect of the 
                site assessment or remediation in a fraudulent manner, 
                including misrepresentation of such person's 
                relationship to the site;
                    (B) if a State changes remediation standards by an 
                order of magnitude;
                    (C) if a landowner or prospective purchaser of a 
                brownfield site wishes to change the proposed use of a 
                site to one that demands a higher cleanup standard; or
                    (D) if the proposed remediation fails or the remedy 
                is not properly maintained or operated; and
            (4) contains cleanup standards for brownfield sites that 
        are protective of public health and the environment; and
            (5) includes coordination among State agencies for 
        environmental protection and business/economic development.

SEC. 5. LANDOWNER LIABILITY.

    In the case of any brownfield site remediation carried out pursuant 
to a State program certified under this Act, upon completion of 
remediation pursuant to such program and release from State liability 
under any applicable State provisions regarding liability for 
contaminated sites, the Administrator shall release the owner of the 
brownfield site or the facility operator at such site, or both, from 
liability under sections 106 and 107 of the Comprehensive Environmental 
Response, Compensation, and Liability Act of 1980 for the contamination 
described in the site assessment and evaluation carried out under the 
State program at the site concerned.

SEC. 6. OTHER LIABILITY RELEASES.

    In the case of any brownfield site remediation carried out pursuant 
to a State program certified under this Act, upon completion of 
remediation pursuant to such program and release from State liability 
under any applicable State provisions regarding liability for 
contaminated sites, the Administrator shall release the following 
persons from liability under sections 106 and 107 of the Comprehensive 
Environmental Response, Compensation, and Liability Act of 1980 for the 
contamination described in the site assessment and evaluation carried 
out under the State program at the site concerned:
            (1) Lenders and developers.--Lenders and economic 
        developers, except that no lender or developer shall be 
        released from liability under sections 106 and 107 for 
        pollution directly caused by their actions.
            (2) Prospective purchasers.--Prospective purchasers of a 
        brownfields site.
            (3) Local governments.--Local governments who have not been 
        involved with the management of a brownfields site.

SEC. 7. FEDERAL WAIVER.

    If the State brownfield cleanup program includes a waiver from 
State permitting requirements, the Administrator may waive relevant 
Federal permit requirements to facilitate the site cleanup.

SEC. 8. 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) $5,000,000, or
            ``(2) the excess (if any) of $5,000,000 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:

                              ``Sec. 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.