SECTION 1. EXPENSING AND RAPID AMORTIZATION FOR CERTAIN ENVIRONMENTAL 
              REMEDIATION EXPENDITURES.

    (a) In General.--Part VI of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 (relating to itemized deductions for 
individuals and corporations) is amended by adding at the end the 
following new section:

``SEC. 198. EXPENSING AND RAPID AMORTIZATION FOR CERTAIN ENVIRONMENTAL 
              REMEDIATION EXPENDITURES.

    ``(a) Treatment As Expenses.--
            ``(1) In general.--At the election of the taxpayer, 
        qualified environmental remediation expenditures which are paid 
        or incurred by the taxpayer during the taxable year in 
        connection with a trade or business shall be treated as 
        expenses which are not chargeable to capital account. The 
        expenditures so treated shall be allowed as a deduction.
            ``(2) Limitation.--The amount treated under paragraph (1) 
        as an expense with respect to any qualified contaminated site 
        shall not exceed $500,000 for all taxable years.
            ``(3) Controlled groups.--Rules similar to the rules of 
        paragraphs (6), (7), and (8) of section 179(d) shall apply for 
        purposes of this subsection.
    ``(b) 60-Month Amortization of Remaining Environmental Remediation 
Expenditures.--
            ``(1) In general.--At the election of the taxpayer, 
        qualified environmental remediation expenditures--
                    ``(A) which are paid or incurred by the taxpayer in 
                connection with his trade or business, and
                    ``(B) which are not treated as expenses under 
                subsection (a),
        may be treated as deferred expenses.
            ``(2) Amortization of deferred expenses.--In computing 
        taxable income, such deferred expenses shall be allowed as a 
        deduction ratably over such period of not less than 60 months 
        as may be selected by the taxpayer (beginning with the month in 
        which the taxpayer pays or incurs such expenditures). Such 
        deferred expenses shall be treated as expenditures which are 
        properly chargeable to capital account for purposes of section 
        1016(a)(1) (relating to adjustments to basis of property).
    ``(c) Certain Persons Not Eligible.--A taxpayer shall not be 
eligible for the treatment under this section with respect to any 
qualified contaminated site if--
            ``(1) at any time on or before the date of the enactment of 
        this section such taxpayer was the owner or operator of any 
        business on such site,
            ``(2) at any time before, on, or after such date of 
        enactment such taxpayer--
                    ``(A) had (by contract, agreement, or otherwise) 
                arranged for the disposal or treatment of any hazardous 
                materials at such site or arranged with a transporter 
                for transport for disposal or treatment of any 
                hazardous materials at such site, or
                    ``(B) had accepted any hazardous materials for 
                transport to such site, or
            ``(3) the taxpayer is related to any taxpayer referred to 
        in paragraph (1) or (2).
    ``(d) Qualified Environmental Remediation Expenditures.--For 
purposes of this section, the term `qualified environmental remediation 
expenditure' means any amount (otherwise chargeable to capital account) 
which is paid or incurred by the taxpayer for environmental remediation 
with respect to any qualified contaminated site which is owned by the 
taxpayer.
    ``(e) Other Definitions.--For purposes of this section--
            ``(1) Qualified contaminated site.--
                    ``(A) In general.--For purposes of this subsection, 
                the term `qualified contaminated site' means any site 
                if the appropriate agency certifies that at least 1 of 
                the following environmental conditions is present on 
                such site:
                            ``(i) A release or threatened release of 
                        any hazardous, toxic, or dangerous substance.
                            ``(ii) Any storage tanks which contain any 
                        hazardous, toxic, or dangerous substance.
                            ``(iii) Any illegal disposal of solid 
                        waste.
                Such term shall not include any site listed on the 
                National Priorities List under the Comprehensive 
                Environmental Response, Compensation, and Liability Act 
                of 1980.
                    ``(B) Appropriate agency.--For purposes of 
                subparagraph (A), the appropriate agency is--
                            ``(i) the agency of the State in which the 
                        site is located which is designated by the 
                        Administrator of the Environmental Protection 
                        Agency for purposes of this paragraph, or
                            ``(ii) if the agency described in clause 
                        (i) designates an agency of the local 
                        government in which the site is located for 
                        purposes of this paragraph, such local 
                        government agency.
            ``(2) Hazardous, toxic, or dangerous substance.--Any 
        substance, waste, or material shall be treated as a hazardous, 
        toxic, or dangerous substance if it is so treated under--
                    ``(A) the Comprehensive Environmental Response, 
                Compensation, and Liability Act of 1980 (42 U.S.C. 9601 
                et seq.),
                    ``(B) the Resource Conservation and Recovery Act 
                (42 U.S.C. 6901 et seq.), or
                    ``(C) any State or local environmental law or 
                ordinance.
        The following materials shall in any event be treated as such a 
        substance: petroleum or crude oil or any derivative thereof, 
        friable asbestos or any asbestos containing material, 
        polychlorinated biphenyls, or urea formaldehyde foam 
        insulation.
            ``(3) Environmental remediation.--The term `environmental 
        remediation' means--
                    ``(A) removal or remediation activity, including 
                soil and ground water remediation,
                    ``(B) restoration of natural, historic or cultural 
                resources at the site, or the mitigation of unavoidable 
                losses of such resources incurred in connection with 
                the remediation or response activity,
                    ``(C) health assessments or health effects studies,
                    ``(D) environmental investigations,
                    ``(E) remediation of off-site contamination caused 
                by activity on the site, and
                    ``(F) any other costs reasonably required by reason 
                of the environmental conditions of the site, including 
                demolition of existing contaminated structures, site 
                security, and permit fees necessary for remediation.
            ``(4) Related person.--Persons shall be treated as related 
        to each other if such persons are treated as a single employer 
        under the regulations prescribed under section 52(b) or such 
        persons bear a relationship to each other specified in section 
        267(b) or 707(b).
    ``(f) Land and Other Property.--This section shall not apply to any 
expenditure for--
            ``(1) the acquisition or improvement of land, or
            ``(2) the acquisition or improvement of property of a 
        character which is subject to the allowance under section 167 
        (relating to allowance for depreciation, etc.) or section 611 
        (relating to allowance for depletion); except that, for 
        purposes of this section, allowances under section 167, and 
        allowances under section 611, shall be treated as 
        expenditures.''
    (b) Conforming Amendments.--
            (1) Paragraph (14) of section 1016(a) of such Code is 
        amended by inserting ``, or under section 198(b) (relating to 
        qualified environmental remediation expenditures),'' after 
        ``expenditures)''.
            (2) Subparagraph (C) of section 1245(a)(2) of such Code is 
        amended by striking ``or 193'' and inserting ``193, or 198''.
            (3) Subparagraph (C) of section 1245(a)(3) of such Code is 
        amended by striking ``or 194'' and inserting ``194, or 198''.
            (4) The table of sections for part VII of subchapter B of 
        chapter 1 of such Code is amended by adding at the end the 
        following new item:

                              ``Sec. 198. Expensing and rapid 
                                        amortization for certain 
                                        environmental remediation 
                                        expenditures.''
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.
Amends the Internal Revenue Code to permit the expensing (of up to $500,000) and amortization (of the remaining amount over a 60-month period) of qualified environmental remediation expenses.
To amend the Internal Revenue Code of 1986 to allow expensing and rapid amortization of certain environmental remediation expenditures.