I 

109TH CONGRESS 

1ST SESSION H. R. 3451

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

redevelopment bonds for environmental remediation. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 27, 2005

Ms. HART 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 

for the use of redevelopment bonds for environmental 

remediation.

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

3 SECTION 1. USE OF REDEVELOPMENT BONDS FOR ENVI4 RONMENTAL REMEDIATION. 

5 (a) ENVIRONMENTAL REMEDIATION INCLUDED AS

6 REDEVELOPMENT PURPOSE.—Subparagraph (A) of sec7 tion 144(c)(3) of the Internal Revenue Code of 1986 (re8 lating to redevelopment purposes) is amended by striking 

9 ‘‘and’’ at the end of clause (iii), by striking the period 
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1 at the end of clause (iv) and inserting ‘‘, and’’, and by 

2 adding at the end the following new clause: 

3 ‘‘(v) the costs of environmental reme4 diation (as defined in paragraph (9)(B)) 

5 with respect to a qualified contaminated 

6 site (as defined in paragraph (9)(C)) if 

7 such costs are incurred pursuant to an en8 vironmental remediation plan which was 

9 approved by the Administrator of the Envi10 ronmental Protection Agency or by the 

11 head of any State or local government 

12 agency designated by the Administrator to 

13 carry out the Administrator’s functions 

14 under this clause.’’. 

15 (b) CERTAIN REQUIREMENTS NOT TO APPLY TO RE16 DEVELOPMENT BONDS FOR ENVIRONMENTAL REMEDI17 ATION.—Subsection (c) of section 144 of such Code is 

18 amended by adding at the end the following new para19 graph: 

20 ‘‘(9) REDEVELOPMENT BONDS FOR ENVIRON21 MENTAL REMEDIATION.—For purposes of clause (v) 

22 of paragraph (3)(A)—

23 ‘‘(A) CERTAIN REQUIREMENTS NOT TO

24 APPLY.—In the case of any bond issued as part 

25 of an issue 95 percent or more of the proceeds 
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1 of which are to finance costs referred to in 

2 paragraph (3)(A)(v)—

3 ‘‘(i) paragraph (2)(A)(i) shall not 

4 apply, 

5 ‘‘(ii) paragraph (2)(A)(ii) shall not 

6 apply to any issue issued by the governing 

7 body described in paragraph (4)(A) with 

8 respect to the area which includes the site, 

9 ‘‘(iii) the requirement of paragraph 

10 (2)(B)(ii) shall be treated as met if—

11 ‘‘(I) the payment of the principal 

12 and interest on such issue is secured 

13 by taxes imposed by a governmental 

14 unit, or 

15 ‘‘(II) such issue is approved by 

16 the applicable elected representative 

17 (as defined in section 147(f)(2)(E)) of 

18 the governmental unit which issued 

19 such issue (or on behalf of which such 

20 issue was issued), 

21 ‘‘(iv) subparagraphs (C) and (D) of 

22 paragraph (2) shall not apply, 

23 ‘‘(v) subparagraphs (C) and (D) of 

24 paragraph (4) shall not apply, and 
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1 ‘‘(vi) if the real property referred to in 

2 clause (iii) of paragraph (3)(A) is 1 or 

3 more dwelling units, such clause shall 

4 apply only if the requirements of section 

5 142(d) or 143 (as the case may be) are 

6 met with respect to such units. 

7 ‘‘(B) ENVIRONMENTAL REMEDIATION.—

8 The term ‘environmental remediation’ means—

9 ‘‘(i) abatement or control of haz10 ardous substances (as defined by section 

11 101 of the Comprehensive Environmental 

12 Response, Compensation, and Liability Act 

13 of 1980 (42 U.S.C. 9601)), 

14 ‘‘(ii) demolition of existing contami15 nated structures, permit fees necessary for 

16 remediation, and environmental audits, 

17 ‘‘(iii) health assessments or health ef18 fects studies related to the site, and 

19 ‘‘(iv) remediation of off-site contami20 nation caused by activity on the site (other 

21 than remediation activities of a type per22 mitted for the site). 

23 ‘‘(C) QUALIFIED CONTAMINATED SITE.—

24 The term ‘qualified contaminated site’ means 

25 any contaminated site if—
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1 ‘‘(i) the condition of the contaminated 

2 site is such that without funding under 

3 this section redevelopment is unlikely, 

4 ‘‘(ii) the contaminated site has not 

5 been in productive use for at least 1 year 

6 before such funding, 

7 ‘‘(iii) there is a strong likelihood of re8 development of the site for industrial or 

9 commercial use that will result in creation 

10 of jobs and expansion of the tax base, and 

11 ‘‘(iv) environmental remediation and 

12 redevelopment are likely to be completed 

13 within a reasonable period of time.’’. 

14 (c) PENALTY FOR FAILURE TO SATISFACTORILY

15 COMPLETE REMEDIATION PLAN.—Subsection (b) of sec16 tion 150 of such Code is amended by adding at the end 

17 thereof the following new paragraph: 

18 ‘‘(7) QUALIFIED CONTAMINATED SITE REMEDI19 ATION BONDS.—In the case of financing provided for 

20 costs described in section 144(c)(3)(A)(v), no deduc21 tion shall be allowed under this chapter for interest 

22 on such financing during any period during which 

23 there is a determination by the Administrator of the 

24 Environmental Protection Agency (or by the head of 

25 any State or local government agency designated by 
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1 the Administrator to carry out the Administrator’s 

2 functions under this paragraph) that the remedi3 ation plan under which such costs were incurred was 

4 not satisfactorily completed.’’. 

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

6 this section shall apply to bonds issued after the date of 

7 the enactment of this Act.

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