II

104TH CONGRESS

1ST SESSION S. 17

To promote a new urban agenda, and for other purposes.

IN THE SENATE OF THE UNITED STATES

JANUARY 4, 1995

Mr. SPECTER (for himself and Ms. MOSELEY-BRAUN) introduced the following

bill; which was read twice and referred to the Committee on Finance

A BILL

To promote a new urban agenda, 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; TABLE OF CONTENTS.

4 (a) SHORT TITLE.—This Act may be cited as the

5 ‘‘New Urban Agenda Act of 1995’’.

6 (b) TABLE OF CONTENTS.—The table of contents for

7 this Act is as follows:

Sec. 1. Short title; table of contents.

Sec. 2. Findings and purposes.

TITLE I—FEDERAL COMMITMENT TO URBAN ECONOMIC

DEVELOPMENT

Sec. 101. Federal purchases from businesses in empowerment zones, enterprise

communities, and enterprise zones.

Sec. 102. Minimum allocation of foreign assistance for purchase of certain

United States goods.
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Sec. 103. Preference for location of manufacturing outreach centers in urban

areas.

Sec. 104. Preference for construction and improvement of Federal facilities in

distressed urban areas.

Sec. 105. Definitions.

TITLE II—TAX INCENTIVES TO STIMULATE URBAN ECONOMIC

DEVELOPMENT.

Sec. 201. Treatment of rehabilitation credit under passive activity limitations.

Sec. 202. Rehabilitation credit allowed to offset portion of alternative minimum

tax.

Sec. 203. Commercial industrial development bonds.

Sec. 204. Increase in amount of qualified small issue bonds permitted for facilities to be used by related principal users.

Sec. 205. Simplification of arbitrage interest rebate waiver.

TITLE III—COMMUNITY-BASED HOUSING DEVELOPMENT

Sec. 301. Block grant study.

Sec. 302. Demolition and disposition of public housing.

TITLE IV—RESPONSE TO URBAN ENVIRONMENTAL CHALLENGES

Subtitle A—Environmental Cleanup

Sec. 401. Exemption from liability for local governments that are owners or operators of facilities in distressed urban areas.

Sec. 402. Standards for remediation in distressed urban areas.

Subtitle B—Environmental-Economic Recovery

Sec. 411. Findings.

Sec. 412. Definitions.

Sec. 413. Loan authority.

Sec. 414. Facility.

Sec. 415. Reinvestment of savings.

Sec. 416. Report to Congress.

1 SEC. 2. FINDINGS AND PURPOSES.

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

3 (1) cities in the United States have been facing

4 an economic downhill trend in the past several years;

5 and

6 (2) a new approach to help such cities prosper

7 is necessary.

8 (b) PURPOSES.—It is the purpose of this Act to—
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1 (1) provide various incentives for the economic

2 growth of cities in the United States;

3 (2) provide an economic agenda designed to re4 verse current urban economic trends; and

5 (3) revitalize the jobs and tax base of such

6 cities without significant new Federal outlays.

7 TITLE I—FEDERAL COMMIT8 MENT TO URBAN ECONOMIC

9 DEVELOPMENT

10 SEC. 101. FEDERAL PURCHASES FROM BUSINESSES IN

11 EMPOWERMENT ZONES, ENTERPRISE COM12 MUNITIES, AND ENTERPRISE ZONES.

13 (a) REQUIREMENTS.—The Office of Federal Procure14 ment Policy Act (41 U.S.C. 401 et seq.) is amended by

15 adding at the end the following new section:

16 ‘‘PURCHASES FROM BUSINESSES IN EMPOWERMENT

17 ZONES, ENTERPRISE COMMUNITIES, AND ENTER18 PRISE ZONES

19 ‘‘SEC. 29. (a) MINIMUM PURCHASE REQUIRE20 MENT.—Not less than 15 percent of the total amount ex21 pended by executive agencies for the purchase of goods

22 in a fiscal year shall be expended for the purchase of goods

23 from businesses located in empowerment zones, enterprise

24 communities, or enterprise zones.

25 ‘‘(b) RECYCLED PRODUCTS.—To the maximum ex26 tent practicable consistent with applicable law, the head
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1 of an executive agency shall purchase recycled products

2 that meet the needs of the executive agency from busi3 nesses located in empowerment zones, enterprise commu4 nities, or enterprise zones.

5 ‘‘(c) REGULATIONS.—The Federal Acquisition Regu6 lations shall include provisions that ensure the attainment

7 of the minimum purchase requirement set out in sub8 section (a).

9 ‘‘(d) DEFINITIONS.—In this section:

10 ‘‘(1) The term ‘empowerment zone’ means a

11 zone designated as an empowerment zone pursuant

12 to subchapter U of chapter 1 of the Internal Reve13 nue Code of 1986 (26 U.S.C. 1391 et seq.).

14 ‘‘(2) The term ‘enterprise community’ means a

15 community designated as an enterprise community

16 pursuant to subchapter U of chapter 1 of the Inter17 nal Revenue Code of 1986 (26 U.S.C. 1391 et seq.).

18 ‘‘(3) The term ‘enterprise zone’ has the mean19 ing given such term in section 701(a)(1) of the

20 Housing and Community Development Act of 1987

21 (42 U.S.C. 11501(a)(1)).’’.

22 (b) EFFECTIVE DATE.—Section 29 of the Office of

23 Federal Procurement Policy Act, as added by subsection

24 (a), shall take effect on the date of the enactment of this
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1 Act and shall apply with respect to fiscal years beginning

2 after September 30, 1995.

3 SEC. 102. MINIMUM ALLOCATION OF FOREIGN ASSISTANCE

4 FOR PURCHASE OF CERTAIN UNITED STATES

5 GOODS.

6 (a) ALLOCATION OF ASSISTANCE.—Notwithstanding

7 any other provision of law, effective beginning with fiscal

8 year 1996, not less than 15 percent of United States as9 sistance provided in a fiscal year shall be provided in the

10 form of credits which may only be used for the purchase

11 of United States goods produced, manufactured, or assem12 bled in empowerment zones, enterprise communities, or

13 enterprise zones within the United States.

14 (b) UNITED STATES ASSISTANCE.—As used in this

15 section, the term ‘‘United States assistance’’ means—

16 (1) any assistance under the Foreign Assistance

17 Act of 1961;

18 (2) sales, or financing of sales under the Arms

19 Export Control Act; and

20 (3) assistance and other activities under the

21 Support for East European Democracy (SEED) Act

22 of 1989 (Public Law 101–179, as amended).
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1 SEC. 103. PREFERENCE FOR LOCATION OF MANUFACTUR2 ING OUTREACH CENTERS IN URBAN AREAS.

3 (a) DESIGNATION.—In designating an organization

4 as a manufacturing outreach center under paragraph (1)

5 of section 304(c) of the Stevenson-Wydler Technology In6 novation Act of 1980, the Secretary of Commerce shall,

7 to the maximum extent practicable, designate organiza8 tions that are located in empowerment zones, enterprise

9 communities, or enterprise zones.

10 (b) FINANCIAL ASSISTANCE.—In utilizing a competi11 tive, merit-based review process to determine the manufac12 turing outreach centers to which to provide financial as13 sistance under paragraph (3) of such section, the Sec14 retary shall give such additional preference to centers lo15 cated in empowerment zones, enterprise communities, and

16 enterprise zones as the Secretary determines appropriate

17 in order to ensure the continuing existence of such centers

18 in such zones.

19 SEC. 104. PREFERENCE FOR CONSTRUCTION AND IM20 PROVEMENT OF FEDERAL FACILITIES IN DIS21 TRESSED URBAN AREAS.

22 (a) PREFERENCE.—Notwithstanding any other provi23 sion of law, in determining the location for the construc24 tion of a new facility of a department or agency of the

25 Federal Government, in determining to improve an exist26 ing facility (including an improvement in lieu of such con-
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1 struction), or in determining the location to which to relo2 cate functions of a department or agency, the head of the

3 department or agency making the determination shall take

4 affirmative action to construct or improve the facility, or

5 to relocate the functions, in a distressed urban area.

6 (b) URBAN IMPACT STATEMENT.—A determination

7 to construct a new facility of a department or agency of

8 the Federal Government, to improve an existing facility,

9 or to relocate the functions of a department or agency may

10 not be made until the head of the department or agency

11 making the determination prepares and submits to the

12 President a report that—

13 (1) in the case of a facility to be constructed—

14 (A) identifies at least one distressed urban

15 area that is an appropriate location for the fa16 cility;

17 (B) describes the costs and benefits arising

18 from the construction and utilization of the fa19 cility in the area, including the effects of such

20 construction and utilization on the rate of un21 employment in the area; and

22 (C) describes the effect on the economy of

23 the area of the closure or consolidation, if any,

24 of Federal facilities located in the area during

25 the 10-year period ending on the date of the re-
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1 port, including the total number of Federal and

2 non-Federal employment positions terminated

3 in the area as a result of such closure or con4 solidation;

5 (2) in the case of a facility to be improved that

6 is not located in a distressed urban area—

7 (A) identifies at least one facility located in

8 a distressed urban area that would serve as an

9 appropriate alternative location for the facility;

10 (B) describes the costs and benefits arising

11 from the improvement and utilization of the fa12 cility located in such area as an alternative lo13 cation for the facility to be improved, including

14 the effect of the improvement and utilization of

15 the facility so located on the rate of unemploy16 ment in such area; and

17 (C) describes the effect on the economy of

18 such area of the closure or consolidation, if any,

19 of Federal facilities located in such area during

20 the 10-year period ending on the date of the re21 port, including the total number of Federal and

22 non-Federal employment positions terminated

23 in such area as a result of such closure or con24 solidation;
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1 (3) in the case of a facility to be improved that

2 is located in a distressed urban area—

3 (A) describes the costs and benefits arising

4 from the improvement and continuing utiliza5 tion of the facility in the area, including the ef6 fect of such improvement and continuing utili7 zation on the rate of unemployment in the area;

8 and

9 (B) describes the effect on the economy of

10 the area of the closure or consolidation, if any,

11 of Federal facilities located in the area during

12 the 10-year period ending on the date of the re13 port, including the total number of Federal and

14 non-Federal employment positions terminated

15 in the area as a result of such closure or con16 solidation; or

17 (4) in the case of a relocation of functions—

18 (A) identifies at least one distressed urban

19 area that would serve as an appropriate loca20 tion for the carrying out of the functions;

21 (B) describes the costs and benefits arising

22 from carrying out the functions in the area, in23 cluding the effect of carrying out the functions

24 on the rate of unemployment in the area; and
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1 (C) describes the effect on the economy of

2 the area of the closure or consolidation, if any,

3 of Federal facilities located in the area during

4 the 10-year period ending on the date of the re5 port, including the total number of Federal and

6 non-Federal employment positions terminated

7 in the area as a result of such closure or con8 solidation.

9 (c) APPLICABILITY TO DEPARTMENT OF DEFENSE

10 FACILITIES.—The requirements set forth in subsections

11 (a) and (b) shall apply to a determination to construct

12 or improve any facility of the Department of Defense, or

13 to relocate any functions of the Department, unless the

14 President determines that the waiver of the application of

15 such requirements to the facility, or to such relocation,

16 is in the national interest.

17 (d) DEFINITION.—In this section, the term ‘‘dis18 tressed urban area’’ means any city having a population

19 of more than 100,000 that meets (as determined by the

20 Secretary of Housing and Urban Development) the quali21 fications for a distressed community that are otherwise es22 tablished for large cities and urban counties under section

23 570.452(c) of title 24, Code of Federal Regulations.

24 SEC. 105. DEFINITIONS.

25 As used in this title:
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1 (1) The term ‘‘empowerment zone’’ means a

2 zone designated as an empowerment zone pursuant

3 to subchapter U of chapter 1 of the Internal Reve4 nue Code of 1986 (26 U.S.C. 1391 et seq.).

5 (2) The term ‘‘enterprise community’’ means a

6 community designated as an enterprise community

7 pursuant to subchapter U of chapter 1 of the Inter8 nal Revenue Code of 1986 (26 U.S.C. 1391 et seq.).

9 (3) The term ‘‘enterprise zone’’ has the mean10 ing given such term in section 701(a)(1) of the

11 Housing and Community Development Act of 1987

12 (42 U.S.C. 11501(a)(1)).

13 TITLE II—TAX INCENTIVES TO

14 STIMULATE URBAN ECO15 NOMIC DEVELOPMENT

16 SEC. 201. TREATMENT OF REHABILITATION CREDIT UNDER

17 PASSIVE ACTIVITY LIMITATIONS.

18 (a) GENERAL RULE.—Paragraphs (2) and (3) of sec19 tion 469(i) of the Internal Revenue Code of 1986 (relating

20 to $25,000 offset for rental real estate activities) are

21 amended to read as follows:

22 ‘‘(2) DOLLAR LIMITATIONS.—

23 ‘‘(A) IN GENERAL.—Except as otherwise

24 provided in this paragraph, the aggregate

25 amount to which paragraph (1) applies for any
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1 taxable year shall not exceed $25,000 reduced

2 (but not below zero) by 50 percent of the

3 amount (if any) by which the adjusted gross in4 come of the taxpayer for the taxable year ex5 ceeds $100,000.

6 ‘‘(B) PHASEOUT NOT APPLICABLE TO

7 LOW-INCOME HOUSING CREDIT.—In the case of

8 the portion of the passive activity credit for any

9 taxable year which is attributable to any credit

10 determined under section 42—

11 ‘‘(i) subparagraph (A) shall not apply,

12 and

13 ‘‘(ii) paragraph (1) shall not apply to

14 the extent that the deduction equivalent of

15 such portion exceeds—

16 ‘‘(I) $25,000, reduced by

17 ‘‘(II) the aggregate amount of

18 the passive activity loss (and the de19 duction equivalent of any passive ac20 tivity credit which is not so attrib21 utable and is not attributable to the

22 rehabilitation credit determined under

23 section 47) to which paragraph (1)

24 applies after the application of sub25 paragraph (A).
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1 ‘‘(C) $55,500 LIMIT FOR REHABILITATION

2 CREDITS.—In the case of the portion of the

3 passive activity credit for any taxable year

4 which is attributable to the rehabilitation credit

5 determined under section 47—

6 ‘‘(i) subparagraph (A) shall not apply,

7 and

8 ‘‘(ii) paragraph (1) shall not apply to

9 the extent that the deduction equivalent of

10 such portion exceeds—

11 ‘‘(I) $55,500, reduced by

12 ‘‘(II) the aggregate amount of

13 the passive activity loss (and the de14 duction equivalent of any passive ac15 tivity credit which is not so attrib16 utable) to which paragraph (1) applies

17 for the taxable year after the applica18 tion of subparagraphs (A) and (B).

19 ‘‘(3) ADJUSTED GROSS INCOME.—For purposes

20 of paragraph (2)(A), adjusted gross income shall be

21 determined without regard to—

22 ‘‘(A) any amount includable in gross in23 come under section 86,

24 ‘‘(B) any amount excludable from gross in25 come under section 135,
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1 ‘‘(C) any amount allowable as a deduction

2 under section 219, and

3 ‘‘(D) any passive activity loss.’’.

4 (b) CONFORMING AMENDMENTS.—

5 (1) Subparagraph (B) of section 469(i)(4) of

6 the Internal Revenue Code of 1986 is amended to

7 read as follows:

8 ‘‘(B) REDUCTION FOR SURVIVING

9 SPOUSE’S EXEMPTION.—For purposes of sub10 paragraph (A), the $25,000 amounts under

11 paragraph (2)(A) and (2)(B)(ii) and the

12 $55,500 amount under paragraph (2)(C)(ii)

13 shall each be reduced by the amount of the ex14 emption under paragraph (1) (determined with15 out regard to the reduction contained in para16 graph (2)(A)) which is allowable to the surviv17 ing spouse of the decedent for the taxable year

18 ending with or within the taxable year of the es19 tate.’’.

20 (2) Subparagraph (A) of section 469(i)(5) of

21 such Code is amended by striking clauses (i), (ii),

22 and (iii) and inserting the following:

23 ‘‘(i) ‘$12,500’ for ‘$25,000’ in sub24 paragraphs (A) and (B)(ii) of paragraph

25 (2),
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1 ‘‘(ii) ‘$50,000’ for ‘$100,000’ in para2 graph (2)(A)’’, and

3 ‘‘(iii) ‘$27,750’ for ‘$55,500’ in para4 graph (2)(C)(ii).’’.

5 (3) The subsection heading for subsection (i) of

6 section 469 of such Code is amended by striking

7 ‘‘$25,000’’.

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

9 this section shall apply to property placed in service on

10 or after the date of the enactment of this Act, in taxable

11 years ending on or after such date.

12 SEC. 202. REHABILITATION CREDIT ALLOWED TO OFFSET

13 PORTION OF ALTERNATIVE MINIMUM TAX.

14 (a) IN GENERAL.—Section 38(c) of the Internal Rev15 enue Code of 1986 (relating to limitation based on amount

16 of tax) is amended by redesignating paragraph (2) as

17 paragraph (3) and by inserting after paragraph (1) the

18 following new paragraph:

19 ‘‘(2) REHABILITATION INVESTMENT CREDIT

20 MAY OFFSET PORTION OF MINIMUM TAX.—

21 ‘‘(A) IN GENERAL.—In the case of the re22 habilitation investment tax credit—

23 ‘‘(i) this section and section 39 shall

24 be applied separately with respect to such

25 credit, and
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1 ‘‘(ii) for purposes of applying para2 graph (1) to such credit—

3 ‘‘(I) the tentative minimum tax

4 under subparagraph (A) thereof shall

5 be reduced by the minimum tax offset

6 amount determined under subpara7 graph (B) of this paragraph, and

8 ‘‘(II) the limitation under para9 graph (1) (as modified by subclause

10 (I)) shall be reduced by the credit al11 lowed under subsection (a) for the

12 taxable year (other than the rehabili13 tation investment tax credit).

14 ‘‘(B) MINIMUM TAX OFFSET AMOUNT.—

15 For purposes of subparagraph (A)(ii)(I), the

16 minimum tax offset amount is an amount equal

17 to—

18 ‘‘(i) in the case of a taxpayer not de19 scribed in clause (ii), the lesser of—

20 ‘‘(I) 25 percent of the tentative

21 minimum tax for the taxable year, or

22 ‘‘(II) $20,000, or

23 ‘‘(ii) in the case of a C corporation

24 other than a closely held C corporation (as

25 defined in section 469(j)(1)), 5 percent of
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1 the tentative minimum tax for the taxable

2 year.

3 ‘‘(C) REHABILITATION INVESTMENT TAX

4 CREDIT.—For purposes of this paragraph, the

5 term ‘regular investment tax credit’ means the

6 portion of the credit under subsection (a) which

7 is attributable to the credit determined under

8 section 47.’’.

9 (b) CONFORMING AMENDMENT.—Section 38(d) of

10 the Internal Revenue Code of 1986 (relating to compo11 nents of investment credit) is amended by adding at the

12 end the following new paragraph:

13 ‘‘(4) SPECIAL RULE FOR REHABILITATION

14 CREDIT.—Notwithstanding paragraphs (1) and (2),

15 the rehabilitation investment tax credit (as defined

16 in subsection (c)(2)(C)) shall be treated as used

17 last.’’.

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

19 this section shall apply to taxable years beginning after

20 December 31, 1995.

21 SEC. 203. COMMERCIAL INDUSTRIAL DEVELOPMENT

22 BONDS.

23 (a) FACILITY BONDS.—

24 (1) IN GENERAL.—Subsection (a) of section

25 142 of the Internal Revenue Code of 1986 (relating
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1 to exempt facility bond) is amended by striking ‘‘or’’

2 at the end of paragraph (11), by striking the period

3 at the end of paragraph (12) and inserting a

4 comma, and by adding at the end the following new

5 paragraphs:

6 ‘‘(13) sports facilities,

7 ‘‘(14) convention or trade show facilities,

8 ‘‘(15) freestanding parking facilities,

9 ‘‘(16) air or water pollution control facilities, or

10 ‘‘(17) industrial parks.’’.

11 (2) INDUSTRIAL PARKS DEFINED.—Section 142

12 of the Internal Revenue Code of 1986 is amended by

13 adding at the end the following new subsection:

14 ‘‘(k) INDUSTRIAL PARKS.—A facility shall be treated

15 as described in subsection (a)(17) only if all of the prop16 erty to be financed by the net proceeds of the issue—

17 ‘‘(1) is—

18 ‘‘(A) land, and

19 ‘‘(B) water, sewage, drainage, or similar

20 facilities, or transportation, power, or commu21 nication facilities incidental to the use of such

22 land as an industrial park, and

23 ‘‘(2) is not structures or buildings (other than

24 with respect to facilities described in paragraph

25 (1)(B)).’’.
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1 (3) CONFORMING AMENDMENTS.—

2 (A) Section 147(c) of the Internal Revenue

3 Code of 1986 (relating to limitation on use for

4 land acquisition) is amended by adding at the

5 end the following new paragraph:

6 ‘‘(4) SPECIAL RULE FOR INDUSTRIAL PARKS.—

7 In the case of a bond described in section

8 142(a)(17), paragraph (1)(A) shall be applied by

9 substituting ‘50 percent’ for ‘25 percent’.’’.

10 (B) Section 147(e) of such Code (relating

11 to no portion of bonds may be issued for

12 skyboxes, airplanes, gambling establishments,

13 etc.) is amended by striking ‘‘A private activity

14 bond’’ and inserting ‘‘Except in the case of a

15 bond described in section 142(a)(13), a private

16 activity bond’’.

17 (b) SMALL ISSUE BONDS.—Section 144(a)(12) of the

18 Internal Revenue Code of 1986 (relating to termination

19 of qualified small issue bonds) is amended—

20 (1) by striking ‘‘any bond’’ in subparagraph

21 (A)(i) and inserting ‘‘any bond described in subpara22 graph (B)’’,

23 (2) by striking ‘‘a bond’’ in subparagraph

24 (A)(ii) and inserting ‘‘a bond described in subpara25 graph (B)’’, and
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1 (3) by striking subparagraph (B) and inserting

2 the following:

3 ‘‘(B) BONDS FOR FARMING PURPOSES.—A

4 bond is described in this subparagraph if it is

5 issued as part of an issue 95 percent or more

6 of the net proceeds of which are to be used to

7 provide any land or property not in accordance

8 with section 147(c)(2).’’.

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

10 this section shall apply to bonds issued after December

11 31, 1995.

12 SEC. 204. INCREASE IN AMOUNT OF QUALIFIED SMALL

13 ISSUE BONDS PERMITTED FOR FACILITIES

14 TO BE USED BY RELATED PRINCIPAL USERS.

15 (a) IN GENERAL.—Clause (i) of section 144(a)(4)(A)

16 of the Internal Revenue Code of 1986 (relating to

17 $10,000,000 limit in certain cases) is amended by striking

18 ‘‘$10,000,000’’ and inserting ‘‘$50,000,000’’.

19 (b) CLERICAL AMENDMENT.—The heading of para20 graph (4) of section 144(a) of the Internal Revenue Code

21 of 1986 is amended by striking ‘‘$10,000,000’’ and insert22 ing ‘‘$50,000,000’’.

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

24 this section shall apply to—
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1 (1) obligations issued after the date of the en2 actment of this Act, and

3 (2) capital expenditures made after such date

4 with respect to obligations issued on or before such

5 date.

6 SEC. 205. SIMPLIFICATION OF ARBITRAGE INTEREST RE7 BATE WAIVER.

8 (a) IN GENERAL.—Clause (ii) of section 148(f)(4)(C)

9 of the Internal Revenue Code of 1986 (relating to excep10 tion from rebate for certain proceeds to be used to finance

11 construction expenditures) is amended to read as follows:

12 ‘‘(ii) SPENDING REQUIREMENT.—The

13 spending requirement of this clause is met

14 if 100 percent of the available construction

15 proceeds of the construction issue are

16 spent for the governmental purposes of the

17 issue within the 3-year period beginning on

18 the date the bonds are issued.’’.

19 (b) CONFORMING AMENDMENTS.—

20 (1) Clause (iii) of section 148(f)(4)(C) of the

21 Internal Revenue Code of 1986 (relating to excep22 tion for reasonable retainage) is repealed.

23 (2) Subclause (II) of section 148(f)(4)(C)(vi) of

24 such Code (relating to available construction pro-
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1 ceeds) is amended by striking ‘‘2-year period’’ and

2 inserting ‘‘3-year period’’.

3 (3) Subclause (I) of section 148(f)(4)(C)(vii) of

4 such Code (relating to election to pay penalty in lieu

5 of rebate) is amended by striking ‘‘, with respect to

6 each 6-month period after the date the bonds were

7 issued,’’ and ‘‘, as of the close of such 6-month pe8 riod,’’.

9 (4) Clause (viii) of section 148(f)(4)(C) of such

Code (relating to election to terminate 11 10 ⁄2 percent

11 penalty) is amended by striking ‘‘to any 6-month pe12 riod’’ in the matter preceding subclause (I).

13 (5) Clause (ii) of section 148(c)(2)(D) of such

14 Code (relating to bonds used to provide construction

15 financing) is amended by striking ‘‘2 years’’ and in16 serting ‘‘3 years’’.

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

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

19 the enactment of this Act.

20 TITLE III—COMMUNITY-BASED

21 HOUSING DEVELOPMENT

22 SEC. 301. BLOCK GRANT STUDY.

23 (a) IN GENERAL.—The Secretary of Housing and

24 Urban Development shall conduct a study regarding—
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1 (1) the feasibility of consolidating existing pub2 lic and low-income housing programs under the

3 United States Housing Act of 1937 into a com4 prehensive block grant system of Federal aid that—

5 (A) provides assistance on an annual basis;

6 (B) maximizes funding certainty and flexi7 bility; and

8 (C) minimizes paperwork and delay; and

9 (2) the possibility of administering future public

10 and low-income housing programs under the United

11 States Housing Act of 1937 in accordance with such

12 a block grant system.

13 (b) REPORT TO COMPTROLLER GENERAL.—Not later

14 than 18 months after the date of enactment of this Act,

15 the Secretary of Housing and Urban Development shall

16 submit to the Comptroller General of the United States

17 a report that includes—

18 (1) the results of the study conducted under

19 subsection (a); and

20 (2) any recommendations for legislation.

21 (c) REPORT TO CONGRESS.—Not later than 24

22 months after the date of enactment of this Act, the Comp23 troller General of the United States shall submit to the

24 Congress a report that includes—
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1 (1) an analysis of the report submitted under

2 subsection (b); and

3 (2) any recommendations for legislation.

4 SEC. 302. DEMOLITION AND DISPOSITION OF PUBLIC HOUS5 ING.

6 Section 18(b)(3) of the United States Housing Act

7 of 1937 (42 U.S.C. 1437p(b)(3)) is amended—

8 (1) in subparagraph (G), by striking ‘‘and’’ at

9 the end;

10 (2) in subparagraph (H), by adding ‘‘and’’ at

11 the end; and

12 (3) by adding at the end the following new sub13 paragraph:

14 ‘‘(I) provides, subject to the approval of

15 both the unit of general local government in

16 which the property on which the units to be de17 molished or disposed of are located and the

18 local public housing agency, for—

19 ‘‘(i) the eventual reconstruction of

20 units on the same property on which the

21 units to be demolished or disposed of are

22 located; and

23 ‘‘(ii) the ultimate relocation of dis24 placed tenants to that property;’’.
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1 TITLE IV—RESPONSE TO URBAN

2 ENVIRONMENTAL CHALLENGES

3 Subtitle A—Environmental

4 Cleanup

5 SEC. 401. EXEMPTION FROM LIABILITY FOR LOCAL GOV6 ERNMENTS THAT ARE OWNERS OR OPERA7 TORS OF FACILITIES IN DISTRESSED URBAN

8 AREAS.

9 Section 101 of the Comprehensive Environmental Re10 sponse, Compensation, and Liability Act of 1980 (42

11 U.S.C. 9601) is amended—

12 (1) in paragraph (20), by adding at the end the

13 following:

14 ‘‘(E) EXCLUSION OF DISTRESSED URBAN

15 AREAS.—The term ‘owner or operator’ does not

16 include a unit of local government for a dis17 tressed urban area that—

18 ‘‘(i) purchased real property, in the

19 distressed urban area, on or in which a fa20 cility is located;

21 ‘‘(ii) purchased the property to fur22 ther the redevelopment of the property for

23 industrial activities;

24 ‘‘(iii) did not conduct or permit the

25 generation, transportation, storage, treat-
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1 ment, or disposal of any hazardous sub2 stance at the facility; and

3 ‘‘(iv) did not contribute to the release

4 or threat of release of a hazardous sub5 stance at the facility through any action or

6 omission.’’; and

7 (2) by adding at the end the following new

8 paragraphs:

9 ‘‘(39) DISTRESSED URBAN AREA.—The term

10 ‘distressed urban area’ has the meaning given the

11 term in section 104(d) of the New Urban Agenda

12 Act of 1995.

13 ‘‘(40) INDUSTRIAL ACTIVITY.—The term ‘indus14 trial activity’ means commercial, manufacturing, or

15 any other activity carried out to further the develop16 ment, manufacturing, or distribution of goods and

17 services, including administration, research and de18 velopment, warehousing, shipping, transport, re19 manufacturing, and repair and maintenance of com20 mercial machinery and equipment.’’.

21 SEC. 402. STANDARDS FOR REMEDIATION IN DISTRESSED

22 URBAN AREAS.

23 Section 121 of the Comprehensive Environmental Re24 sponse, Compensation, and Liability Act of 1980 (42
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1 U.S.C. 9621) is amended by adding at the end the follow2 ing:

3 ‘‘(g) FACILITIES IN DISTRESSED URBAN AREAS.—

4 ‘‘(1) IDENTIFICATION.—The President shall

5 identify the facilities on the National Priorities List

6 that are located in distressed urban areas.

7 ‘‘(2) STUDY AND REPORT.—The President shall

8 conduct, directly or by grant or contract, a study of

9 appropriate response actions for facilities located in

10 distressed urban areas. In conducting the study, the

11 President shall examine the appropriate degree of

12 cleanup of hazardous substances, pollutants, and

13 contaminants released into the environment at such

14 a facility, and the appropriate considerations for the

15 selection of a response action at such a facility.

16 ‘‘(3) STANDARDS.—Notwithstanding any other

17 provision of this Act, the President shall by regula18 tion establish standards for the degree of cleanup

19 described in paragraph (2), and the considerations

20 described in paragraph (2), for such a facility. In es21 tablishing the standards, the President shall take

22 into consideration the results of the study described

23 in paragraph (2).’’.
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1 Subtitle B—Environmental2 Economic Recovery

3 SEC. 411. FINDINGS.

4 Congress finds that—

5 (1) plants such as the SEMASS plant in Roch6 ester, Massachusetts, and the Wheelabrator plant in

7 Baltimore, Maryland, provide an effective and effi8 cient means of disposing of solid waste and obtain9 ing inexpensive electrical power and steam; and

10 (2) the availability of such plants in a commu11 nity will attract energy intensive industry to the

12 community, increasing the tax base and strengthen13 ing the economy of the community.

14 SEC. 412. DEFINITIONS.

15 As used in this subtitle:

16 (1) DISTRESSED URBAN AREA.—The term ‘‘dis17 tressed urban area’’ has the meaning given the term

18 in section 104(d).

19 (2) ENERGY INTENSIVE INDUSTRY.—The term

20 ‘‘energy intensive industry’’ means an industry that

21 consumes more than 25,000 BTUs per dollar of

22 value added, as determined by the Secretary.

23 (3) FULLY OPERATIONAL.—The term ‘‘fully

24 operational’’ means at least 90 percent operational,

25 determined by averaging the percentage of solid
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1 waste intake capacity achieved and the percentage of

2 electric output capacity achieved.

3 (4) MARKET RATE.—The term ‘‘market rate’’

4 means the applicable rate for retail bulk power sales

5 made by the electric utility within the service terri6 tory concerned.

7 (5) SECRETARY.—The term ‘‘Secretary’’ means

8 the Secretary of Energy.

9 (6) SOLID WASTE.—The term ‘‘solid waste’’ has

10 the meaning given the term in section 1004(27) of

11 the Solid Waste Disposal Act (42 U.S.C. 6903(27)).

12 SEC. 413. LOAN AUTHORITY.

13 (a) LOANS.—

14 (1) IN GENERAL.—The Secretary shall make

15 not more than 3 loans to units of local government

16 for distressed urban areas for the establishment of

17 facilities described in section 414.

18 (2) PRIORITY.—In making one of the loans, the

19 Secretary shall give priority to a unit of local gov20 ernment that demonstrates that the unit of local

21 government will establish the facility through a con22 tract or agreement with an organization that has

23 demonstrated an ability to oversee and manage the

24 creation of a comprehensive, national, strategic, en25 ergy intensive, environmental industry initiative.
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1 (b) AUTHORITY TO BORROW.—

2 (1) IN GENERAL.—Subject to paragraphs (2),

3 (3), and (4), and notwithstanding any other provi4 sion of law, the Secretary may borrow from the

5 Treasury such funds as the Secretary determines to

6 be necessary to make loans under this section.

7 (2) AMOUNTS.—The Secretary may borrow

8 funds under paragraph (1) if amounts sufficient to

9 pay for the cost, as defined in section 502(5) of the

10 Congressional Budget Act of 1974 (2 U.S.C.

11 661a(5)), of the loan involved are provided in ad12 vance in appropriation Acts.

13 (3) TERMS.—Subject to paragraph (4), the Sec14 retary may borrow the funds on such terms as may

15 be established by the Secretary and the Secretary of

16 the Treasury.

17 (4) INTEREST.—The rate of interest to be

18 charged in connection with a loan made under para19 graph (1) shall be not less than a rate determined

20 by the Secretary of the Treasury, taking into consid21 eration current market yields on outstanding mar22 ketable obligations of the United States of com23 parable maturities.

24 SEC. 414. FACILITY.

25 Each facility referred to in section 413—
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1 (1) shall produce electric power, or steam, from

2 solid waste;

3 (2) shall have 2 boilers and be capable of ex4 pansion;

5 (3) shall be located in a distressed urban area

6 in the United States;

7 (4) shall provide electricity or steam to energy

8 intensive industry customers at no more than 40

9 percent of the market rate for electricity;

10 (5) may provide electricity to public entities or

11 light industry, but not to residential consumers; and

12 (6) shall obtain a continuing supply of feed13 stock sufficient to sustain maximum operational ca14 pability through long-term contracts with municipal

15 and other governmental sources.

16 SEC. 415. REINVESTMENT OF SAVINGS.

17 (a) IN GENERAL.—Any energy intensive industry

18 customer obtaining electricity or steam from the facility

19 described in section 414 shall—

20 (1) invest in equipment, physical plant, or in21 creased employment at least 7 percent of the saving

22 gained by such customer; and

23 (2) from the saving gained by such customer,

24 make payments to the Secretary, in an amount de25 termined by the Secretary to be appropriate, to as-
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1 sist in repaying the funds borrowed by the Secretary

2 under section 413 and the costs associated with bor3 rowing the funds.

4 (b) DEFINITION.—As used in this section, the term

5 ‘‘saving’’, used with respect to a customer obtaining elec6 tricity or steam from a facility described in section 414,

7 means an amount equal to—

8 (1) the cost of obtaining an amount of such

9 electricity or steam from other sources during a pe10 riod of time; minus

11 (2) the cost of obtaining the same amount of

12 such electricity or steam from the facility during

13 such period.

14 SEC. 416. REPORT TO CONGRESS.

15 (a) REPORT.—Not later than 1 year after the facili16 ties described in section 414 become fully operational, the

17 Secretary shall prepare and submit to Congress a report

18 containing a recommendation concerning whether the Fed19 eral Government should make additional loans similar to

20 the loans authorized by this subtitle.

21 (b) ANALYSIS.—Such recommendation shall be based

22 on analysis of the Secretary concerning whether the loans

23 made under this subtitle have resulted in—
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1 (1) the creation of jobs in the communities in

2 which the facilities are located due to the relocation

3 of energy intensive industry;

4 (2) the effective disposal of solid waste; and

5 (3) easier and less expensive production of elec6 tricity and steam.

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