I

104TH CONGRESS

2D SESSION H. R. 2919

To amend the Comprehensive Environmental Response, Compensation, and

Liability Act of 1980 to provide for the development and use of

brownfields, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

JANUARY 31, 1996

Mr. QUINN (for himself, Mr. MCHALE, Mr. FRANKS of New Jersey, Mr.

MEEHAN, and Mr. BLUTE) introduced the following bill; which was referred to the Committee on Commerce, and in addition to the Committees

on Transportation and Infrastructure and Ways and Means, for a period

to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee

concerned

A BILL

To amend the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 to provide for the

development and use of brownfields, and for other

purposes.

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

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Brownfields Remedi5 ation and Economic Development Act of 1996’’.
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1 SEC. 2. FINDINGS AND PURPOSES.

2 (a) FINDINGS.—The Congress finds that:

3 (1) The General Accounting Office has esti4 mated that between 130,000 and 425,000 aban5 doned industrial sites will need cleanup action to be6 come economically viable once again.

7 (2) The cleanup costs to remediate these

8 ‘‘brownfield’’ sites to productive use could reach

9 hundreds of billions of dollars.

10 (3) ‘‘Brownfields’’ remediation is the number

11 one economic priority in many American cities.

12 (4) Encouraging private investment for these

13 remediation efforts presents an opportunity to create

14 jobs and promote economic development in localities

15 and the States.

16 (b) PURPOSE.—The purpose of this Act is to estab17 lish a program under which the Federal Government, in

18 cooperation with appropriate State and local entities, shall

19 remediate ‘‘brownfields’’ in order to return them to pro20 ductive use while conserving prime open space, or ‘‘green21 fields’’.

22 SEC. 3. FOR EPA CERTIFICATION OF STATE BROWNFIELD

23 PROGRAMS.

24 (a) CERTIFICATION.—The Administrator of the Envi25 ronmental Protection Agency (hereinafter in this Act re26 ferred to as the ‘‘Administrator’’) shall certify any State
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1 brownfield program submitted to the Administrator under

2 this Act that satisfies the criteria of section 4. Certifi3 cation of State programs shall be granted only for pro4 grams which have jurisdiction over brownfield sites which

5 have been contaminated prior to enactment of this Act.

6 (b) REVIEW.—The Administrator shall review cer7 tified State brownfield programs every 2 years after cer8 tification to assure compliance with certification criteria,

9 and to provide to the States, where appropriate, technical

10 assistance and expertise.

11 SEC. 4. EVALUATION CRITERIA FOR STATE BROWNFIELDS

12 PROGRAMS.

13 A State brownfields program may be certified under

14 this Act if the program—

15 (1) covers only contaminated sites that are not

16 listed on the National Priorities List;

17 (2) provides for public participation, in good

18 faith prior to the granting of a release from liability

19 under sections 4 and 5;

20 (3) provides for the reopening of a brownfields

21 cleanup proposal:

22 (A) if any person has undertaken any as23 pect of the site assessment or remediation in a

24 fraudulent manner, including misrepresentation

25 of such person’s relationship to the site;
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1 (B) if a State changes remediation stand2 ards by an order of magnitude;

3 (C) if a landowner or prospective pur4 chaser of a brownfield site wishes to change the

5 proposed use of a site to one that demands a

6 higher cleanup standard; or

7 (D) if the proposed remediation fails or the

8 remedy is not properly maintained or operated;

9 and

10 (4) contains cleanup standards for brownfield

11 sites that are protective of public health and the en12 vironment; and

13 (5) includes coordination among State agencies

14 for environmental protection and business/economic

15 development.

16 SEC. 5. LANDOWNER LIABILITY.

17 In the case of any brownfield site remediation carried

18 out pursuant to a State program certified under this Act,

19 upon completion of remediation pursuant to such program

20 and release from State liability under any applicable State

21 provisions regarding liability for contaminated sites, the

22 Administrator shall release the owner of the brownfield

23 site or the facility operator at such site, or both, from li24 ability under sections 106 and 107 of the Comprehensive

25 Environmental Response, Compensation, and Liability Act
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1 of 1980 for the contamination described in the site assess2 ment and evaluation carried out under the State program

3 at the site concerned.

4 SEC. 6. OTHER LIABILITY RELEASES.

5 In the case of any brownfield site remediation carried

6 out pursuant to a State program certified under this Act,

7 upon completion of remediation pursuant to such program

8 and release from State liability under any applicable State

9 provisions regarding liability for contaminated sites, the

10 Administrator shall release the following persons from li11 ability under sections 106 and 107 of the Comprehensive

12 Environmental Response, Compensation, and Liability Act

13 of 1980 for the contamination described in the site assess14 ment and evaluation carried out under the State program

15 at the site concerned:

16 (1) LENDERS AND DEVELOPERS.—Lenders and

17 economic developers, except that no lender or devel18 oper shall be released from liability under sections

19 106 and 107 for pollution directly caused by their

20 actions.

21 (2) PROSPECTIVE PURCHASERS.—Prospective

22 purchasers of a brownfields site.

23 (3) LOCAL GOVERNMENTS.—Local governments

24 who have not been involved with the management of

25 a brownfields site.
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1 SEC. 7. FEDERAL WAIVER.

2 If the State brownfield cleanup program includes a

3 waiver from State permitting requirements, the Adminis4 trator may waive relevant Federal permit requirements to

5 facilitate the site cleanup.

6 SEC. 8. BROWNFIELDS IRA.

7 (a) IN GENERAL.—Subpart C of part II of sub8 chapter E of chapter 1 of the Internal Revenue Code of

9 1986 is amended by inserting after section 468B the fol10 lowing new section:

11 ‘‘SEC. 468C. SPECIAL RULES FOR HAZARDOUS WASTE RE12 MEDIATION RESERVES.

13 ‘‘(a) IN GENERAL.—There shall be allowed as a de14 duction for any taxable year the amount of payments

15 made by the taxpayer to a Hazardous Waste Remediation

16 Reserve (hereinafter referred to as the ‘Reserve’) during

17 such taxable year.

18 ‘‘(b) LIMITATION ON AMOUNTS PAID INTO RE19 SERVE.—The amount which a taxpayer may pay into the

20 Reserve for any taxable year shall not exceed the lesser

21 of—

22 ‘‘(1) $5,000,000, or

23 ‘‘(2) the excess (if any) of $5,000,000 over the

24 amount paid into the Reserve for all prior taxable

25 years.
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1 ‘‘(c) INCOME AND DEDUCTIONS OF THE TAX2 PAYER.—

3 ‘‘(1) INCLUSION OF AMOUNTS DISTRIBUTED.—

4 There shall be includible in the gross income of the

5 taxpayer for any taxable year—

6 ‘‘(A) any amount distributed from the Re7 serve during such taxable year, and

8 ‘‘(B) any deemed distribution under sub9 section (e).

10 ‘‘(2) DEDUCTION WHEN ECONOMIC PERFORM11 ANCE OCCURS.—In addition to any deduction under

12 subsection (a), there shall be allowable as a deduc13 tion for any taxable year the amount of the qualified

14 hazardous waste costs with respect to which eco15 nomic performance (within the meaning of section

16 461(h)(2)) occurs during such taxable year.

17 ‘‘(d) HAZARDOUS WASTE REMEDIATION RESERVE.—

18 ‘‘(1) IN GENERAL.—For purposes of this sec19 tion, the term ‘Hazardous Waste Remediation Re20 serve’ means a reserve established by the taxpayer

21 for purposes of this section.

22 ‘‘(2) RESERVE EXEMPT FROM TAXATION.—Any

23 Hazardous Waste Remediation Reserve is exempt

24 from taxation under this subtitle unless such Re25 serve has ceased to be a Hazardous Waste Remedi-
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1 ation Reserve by reason of subsection (e). Notwith2 standing the preceding sentence, any such Reserve

3 shall be subject to the taxes imposed by section 511

4 (relating to imposition of tax on unrelated business

5 income of charitable, etc. organizations).

6 ‘‘(3) CONTRIBUTIONS TO RESERVE.—The Re7 serve shall not accept any payments (or other

8 amounts) other than payments with respect to which

9 a deduction is allowable under subsection (a).

10 ‘‘(4) USE OF RESERVE.—The Reserve shall be

11 used exclusively to pay the qualified hazardous waste

12 costs of the taxpayer.

13 ‘‘(5) PROHIBITIONS AGAINST SELF-DEALING.—

14 Under regulations prescribed by the Secretary, for

15 purposes of section 4951 (and so much of this title

16 as relates to such section), the Reserve shall be

17 treated in the same manner as a trust described in

18 section 501(c)(21).

19 ‘‘(e) DEEMED DISTRIBUTIONS.—

20 ‘‘(1) DISQUALIFICATION OF RESERVE FOR

21 SELF-DEALING.—In any case in which a Reserve vio22 lates any provision of this section or section 4951,

23 the Secretary may disqualify such Reserve from the

24 application of this section. In any case to which this

25 paragraph applies, the Reserve shall be treated as
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1 having distributed all of its funds on the date such

2 determination takes effect.

3 ‘‘(2) FAILURE TO SPEND FUNDS.—A Reserve

4 shall be treated as having distributed all of its

5 funds—

6 ‘‘(A) on the date which is 10 years after

7 the date such Reserve was established unless,

8 as of such date—

9 ‘‘(i) it has been determined that some

10 property of the taxpayer is contaminated

11 with hazardous waste, and

12 ‘‘(ii) a remediation plan has been pre13 pared for such site, and

14 ‘‘(B) except as otherwise provided by the

15 Secretary, on the date which is 10 years after

16 the date such Reserve was established unless,

17 as of such date, it is reasonably anticipated that

18 the remaining funds in the Reserve will be dis19 tributed before the date which is 15 years after

20 the date such Reserve was established.

21 ‘‘(f) PENALTY FOR DISTRIBUTIONS NOT USED FOR

22 QUALIFIED HAZARDOUS WASTE COSTS.—The tax im23 posed by this chapter for any taxable year in which any

24 amount distributed from a Reserve is not used exclusively
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1 to pay qualified hazardous waste costs shall be increased

2 by 10 percent of such amount.

3 ‘‘(g) QUALIFIED HAZARDOUS WASTE COSTS.—For

4 purposes of this section, the term ‘qualified hazardous

5 waste costs’ means—

6 ‘‘(1) the costs paid or incurred by the taxpayer

7 in connection with the assessment of—

8 ‘‘(A) the extent of the environmental con9 tamination of a site which is owned by the tax10 payer, and

11 ‘‘(B) the expected cost of environmental

12 remediation required for such site, and

13 ‘‘(2) the costs paid or incurred by the taxpayer

14 to remediate such contamination.

15 ‘‘(h) CONTROLLED GROUPS.—All persons treated as

16 a single employer under subsection (a) or (b) of section

17 52 shall be treated as one person for purposes of sub18 section (b), and the dollar amount contained in such sub19 section shall be allocated among such persons in such

20 manner as the Secretary shall prescribe.

21 ‘‘(i) TIME WHEN PAYMENTS DEEMED MADE.—For

22 purposes of this section, a taxpayer shall be deemed to

23 have made a payment to the Reserve on the last day of

24 a taxable year if such payment is made on account of such
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taxable year and is made within 21 1 ⁄2 months after the close

2 of such taxable year.’’.

3 (b) CLERICAL AMENDMENT.—The table of sections

4 for subpart C of part II of subchapter E of chapter 1 of

5 such Code is amended by inserting after the item relating

6 to section 468B the following new item:

‘‘Sec. 468C. Special rules for hazardous waste remediation reserves.’’.

7 (c) EFFECTIVE DATE.—The amendments made by

8 this section shall apply to taxable years beginning after

9 the date of the enactment of this Act.

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