II

103D CONGRESS

2D SESSION S. 2535

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

IN THE SENATE OF THE UNITED STATES

OCTOBER 7 (legislative day, OCTOBER 6), 1994

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

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

Housing, and Urban Affairs

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 1994’’.

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

United States goods.

Sec. 103. Preference for location of manufacturing technology 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 REGULATORY RELIEF

Sec. 301. Findings and purpose.

Sec. 302. Federal funding requirement.

Sec. 303. Duties of the director.

Sec. 304. Effect of subsequent enactments.

Sec. 305. Definitions.

TITLE IV—COMMUNITY-BASED HOUSING DEVELOPMENT

Sec. 401. Section 8 rent subsidies.

Sec. 402. Block grant study.

Sec. 403. Demolition and disposition of public housing.

TITLE V—RESPONSE TO URBAN ENVIRONMENTAL CHALLENGES

Subtitle A—Environmental Cleanup

Sec. 501. Exemption from liability for local governments that are owners or operators of facilities in distressed urban areas.

Sec. 502. Standards for remediation in distressed urban areas.

Subtitle B—Environmental-Economic Recovery

Sec. 511. Findings.

Sec. 512. Definitions.

Sec. 513. Loan authority.

Sec. 514. Facility.

Sec. 515. Reinvestment of savings.

Sec. 516. Report to Congress.

1 SEC. 2. FINDINGS AND PURPOSES.

2 (a) FINDINGS.—The Congress finds that—
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1 (1) cities in the United States have been facing

2 an economic downhill trend in the past several years;

3 and

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

5 is necessary.

6 (b) PURPOSES.—It is the purpose of this Act to—

7 (1) provide various incentives for the economic

8 growth of cities in the United States;

9 (2) provide an economic agenda designed to re10 verse current urban economic trends; and

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

12 cities without significant new Federal outlays.

13 TITLE I—FEDERAL COMMIT14 MENT TO URBAN ECONOMIC

15 DEVELOPMENT

16 SEC. 101. FEDERAL PURCHASES FROM BUSINESSES IN

17 EMPOWERMENT ZONES, ENTERPRISE COM18 MUNITIES, AND ENTERPRISE ZONES.

19 (a) REQUIREMENTS.—The Office of Federal Procure20 ment Policy Act (41 U.S.C. 401 et seq.) is amended by

21 adding at the end the following new section:

22 ‘‘PURCHASES FROM BUSINESSES IN EMPOWERMENT

23 ZONES, ENTERPRISE COMMUNITIES, AND ENTER24 PRISE ZONES

25 ‘‘SEC. 29. (a) MINIMUM PURCHASE REQUIRE26 MENT.—Not less than 15 percent of the total amount ex-
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1 pended by executive agencies for the purchase of goods

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

3 from businesses located in empowerment zones, enterprise

4 communities, or enterprise zones.

5 ‘‘(b) RECYCLED PRODUCTS.—To the maximum ex6 tent practicable consistent with applicable law, the head

7 of an executive agency shall purchase recycled products

8 that meet the needs of the executive agency from busi9 nesses located in empowerment zones, enterprise commu10 nities, or enterprise zones.

11 ‘‘(c) REGULATIONS.—The Federal Acquisition Regu12 lations shall include provisions that ensure the attainment

13 of the minimum purchase requirement set out in sub14 section (a).

15 ‘‘(d) DEFINITIONS.—In this section:

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

17 zone designated as an empowerment zone pursuant

18 to subchapter U of chapter 1 of the Internal Reve19 nue Code of 1986 (26 U.S.C. 1391 et seq.).

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

21 community designated as an enterprise community

22 pursuant to subchapter U of chapter 1 of the Inter23 nal Revenue Code of 1986 (26 U.S.C. 1391 et seq.).

24 ‘‘(3) The term ‘enterprise zone’ has the mean25 ing given such term in section 701(a)(1) of the
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1 Housing and Community Development Act of 1987

2 (42 U.S.C. 11501(a)(1)).’’.

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

4 Federal Procurement Policy Act, as added by subsection

5 (a), shall take effect on the date of the enactment of this

6 Act and shall apply with respect to fiscal years beginning

7 after September 30, 1994.

8 SEC. 102. MINIMUM ALLOCATION OF FOREIGN ASSISTANCE

9 FOR PURCHASE OF CERTAIN UNITED STATES

10 GOODS.

11 (a) ALLOCATION OF ASSISTANCE.—Notwithstanding

12 any other provision of law, effective beginning with fiscal

13 year 1995, not less than 15 percent of United States as14 sistance provided in a fiscal year shall be provided in the

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

16 of United States goods produced, manufactured, or assem17 bled in empowerment zones, enterprise communities, or

18 enterprise zones within the United States.

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

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

21 (1) any assistance under the Foreign Assistance

22 Act of 1961;

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

24 Export Control Act; and
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1 (3) assistance and other activities under the

2 Support for East European Democracy (SEED) Act

3 of 1989 (Public Law 101–179, as amended).

4 SEC. 103. PREFERENCE FOR LOCATION OF MANUFACTUR5 ING TECHNOLOGY OUTREACH CENTERS IN

6 URBAN AREAS.

7 (a) DESIGNATION.—In designating an organization

8 as a Manufacturing Technology Outreach Center under

9 paragraph (1) of section 304(c) of the Stevenson-Wydler

10 Technology Innovation Act of 1980, the Secretary of Com11 merce shall, to the maximum extent practicable, designate

12 organizations that are located in empowerment zones, en13 terprise communities, or enterprise zones.

14 (b) FINANCIAL ASSISTANCE.—In utilizing a competi15 tive, merit-based review process to determine the Manu16 facturing Technology Outreach Centers to which to pro17 vide financial assistance under paragraph (3) of such sec18 tion, the Secretary shall give such additional preference

19 to centers located in empowerment zones, enterprise com20 munities, and enterprise zones as the Secretary deter21 mines appropriate in order to ensure the continuing exist22 ence of such centers in such zones.
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1 SEC. 104. PREFERENCE FOR CONSTRUCTION AND IM2 PROVEMENT OF FEDERAL FACILITIES IN DIS3 TRESSED URBAN AREAS.

4 (a) PREFERENCE.—Notwithstanding any other provi5 sion of law, in determining the location for the construc6 tion of a new facility of a department or agency of the

7 Federal Government, in determining to improve an exist8 ing facility (including an improvement in lieu of such con9 struction), or in determining the location to which to relo10 cate functions of a department or agency, the head of the

11 department or agency making the determination shall take

12 affirmative action to construct or improve the facility, or

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

14 (b) URBAN IMPACT STATEMENT.—A determination

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

16 the Federal Government, to improve an existing facility,

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

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

19 making the determination prepares and submits to the

20 President a report that—

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

22 (A) identifies at least one distressed urban

23 area that is an appropriate location for the fa24 cility;

25 (B) describes the costs and benefits arising

26 from the construction and utilization of the fa-
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1 cility in the area, including the effects of such

2 construction and utilization on the rate of un3 employment in the area; and

4 (C) describes the effect on the economy of

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

6 of Federal facilities located in the area during

7 the 10-year period ending on the date of the re8 port, including the total number of Federal and

9 non-Federal employment positions terminated

10 in the area as a result of such closure or con11 solidation;

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

13 is not located in a distressed urban area—

14 (A) identifies at least one facility located in

15 a distressed urban area that would serve as an

16 appropriate alternative location for the facility;

17 (B) describes the costs and benefits arising

18 from the improvement and utilization of the fa19 cility located in such area as an alternative lo20 cation for the facility to be improved, including

21 the effect of the improvement and utilization of

22 the facility so located on the rate of unemploy23 ment in such area; and

24 (C) describes the effect on the economy of

25 such area of the closure or consolidation, if any,
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1 of Federal facilities located in such area during

2 the 10-year period ending on the date of the re3 port, including the total number of Federal and

4 non-Federal employment positions terminated

5 in such area as a result of such closure or con6 solidation;

7 (3) in the case of a facility to be improved that

8 is located in a distressed urban area—

9 (A) describes the costs and benefits arising

10 from the improvement and continuing utiliza11 tion of the facility in the area, including the ef12 fect of such improvement and continuing utili13 zation on the rate of unemployment in the area;

14 and

15 (B) describes the effect on the economy of

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

17 of Federal facilities located in the area during

18 the 10-year period ending on the date of the re19 port, including the total number of Federal and

20 non-Federal employment positions terminated

21 in the area as a result of such closure or con22 solidation; or

23 (4) in the case of a relocation of functions—
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1 (A) identifies at least one distressed urban

2 area that would serve as an appropriate loca3 tion for the carrying out of the functions;

4 (B) describes the costs and benefits arising

5 from carrying out the functions in the area, in6 cluding the effect of carrying out the functions

7 on the rate of unemployment in the area; and

8 (C) describes the effect on the economy of

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

10 of Federal facilities located in the area during

11 the 10-year period ending on the date of the re12 port, including the total number of Federal and

13 non-Federal employment positions terminated

14 in the area as a result of such closure or con15 solidation.

16 (c) APPLICABILITY TO DEPARTMENT OF DEFENSE

17 FACILITIES.—The requirements set forth in subsections

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

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

20 to relocate any functions of the Department, unless the

21 President determines that the waiver of the application of

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

23 is in the national interest.

24 (d) DEFINITION.—In this section, the term ‘‘dis25 tressed urban area’’ means any city having a population
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1 of more than 100,000 that meets (as determined by the

2 Secretary of Housing and Urban Development) the quali3 fications for a distressed community that are otherwise es4 tablished for large cities and urban counties under section

5 570.452(c) of title 24, Code of Federal Regulations.

6 SEC. 105. DEFINITIONS.

7 As used in this title:

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

9 zone designated as an empowerment zone pursuant

10 to subchapter U of chapter 1 of the Internal Reve11 nue Code of 1986 (26 U.S.C. 1391 et seq.).

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

13 community designated as an enterprise community

14 pursuant to subchapter U of chapter 1 of the Inter15 nal Revenue Code of 1986 (26 U.S.C. 1391 et seq.).

16 (3) The term ‘‘enterprise zone’’ has the mean17 ing given such term in section 701(a)(1) of the

18 Housing and Community Development Act of 1987

19 (42 U.S.C. 11501(a)(1)).
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1 TITLE II—TAX INCENTIVES TO

2 STIMULATE URBAN ECO3 NOMIC DEVELOPMENT.

4 SEC. 201. TREATMENT OF REHABILITATION CREDIT UNDER

5 PASSIVE ACTIVITY LIMITATIONS.

6 (a) GENERAL RULE.—Paragraphs (2) and (3) of sec7 tion 469(i) of the Internal Revenue Code of 1986 (relating

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

9 amended to read as follows:

10 ‘‘(2) DOLLAR LIMITATIONS.—

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

12 provided in this paragraph, the aggregate

13 amount to which paragraph (1) applies for any

14 taxable year shall not exceed $25,000 reduced

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

16 amount (if any) by which the adjusted gross in17 come of the taxpayer for the taxable year ex18 ceeds $100,000.

19 ‘‘(B) PHASEOUT NOT APPLICABLE TO

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

21 the portion of the passive activity credit for any

22 taxable year which is attributable to any credit

23 determined under section 42—

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

25 and
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1 ‘‘(ii) paragraph (1) shall not apply to

2 the extent that the deduction equivalent of

3 such portion exceeds—

4 ‘‘(I) $25,000, reduced by

5 ‘‘(II) the aggregate amount of

6 the passive activity loss (and the de7 duction equivalent of any passive ac8 tivity credit which is not so attrib9 utable and is not attributable to the

10 rehabilitation credit determined under

11 section 47) to which paragraph (1)

12 applies after the application of sub13 paragraph (A).

14 ‘‘(C) $55,500 LIMIT FOR REHABILITATION

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

16 passive activity credit for any taxable year

17 which is attributable to the rehabilitation credit

18 determined under section 47—

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

20 and

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

22 the extent that the deduction equivalent of

23 such portion exceeds—

24 ‘‘(I) $55,500, reduced by
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1 ‘‘(II) the aggregate amount of

2 the passive activity loss (and the de3 duction equivalent of any passive ac4 tivity credit which is not so attrib5 utable) to which paragraph (1) applies

6 for the taxable year after the applica7 tion of subparagraphs (A) and (B).

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

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

10 determined without regard to—

11 ‘‘(A) any amount includable in gross in12 come under section 86,

13 ‘‘(B) any amount excludable from gross in14 come under section 135,

15 ‘‘(C) any amount allowable as a deduction

16 under section 219, and

17 ‘‘(D) any passive activity loss.’’.

18 (b) CONFORMING AMENDMENTS.—

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

20 the Internal Revenue Code of 1986 is amended to

21 read as follows:

22 ‘‘(B) REDUCTION FOR SURVIVING

23 SPOUSE’S EXEMPTION.—For purposes of sub24 paragraph (A), the $25,000 amounts under

25 paragraph (2)(A) and (2)(B)(ii) and the
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1 $55,500 amount under paragraph (2)(C)(ii)

2 shall each be reduced by the amount of the ex3 emption under paragraph (1) (determined with4 out regard to the reduction contained in para5 graph (2)(A)) which is allowable to the surviv6 ing spouse of the decedent for the taxable year

7 ending with or within the taxable year of the es8 tate.’’.

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

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

11 and (iii) and inserting the following:

12 ‘‘(i) ‘$12,500’ for ‘$25,000’ in sub13 paragraphs (A) and (B)(ii) of paragraph

14 (2),

15 ‘‘(ii) ‘$50,000’ for ‘$100,000’ in para16 graph (2)(A)’’, and

17 ‘‘(iii) ‘$27,750’ for ‘$55,500’ in para18 graph (2)(C)(ii).’’.

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

20 section 469 of such Code is amended by striking

21 ‘‘$25,000’’.

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

23 this section shall apply to property placed in service on

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

25 years ending on or after such date.
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1 SEC. 202. REHABILITATION CREDIT ALLOWED TO OFFSET

2 PORTION OF ALTERNATIVE MINIMUM TAX.

3 (a) IN GENERAL.—Section 38(c) of the Internal Rev4 enue Code of 1986 (relating to limitation based on amount

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

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

7 following new paragraph:

8 ‘‘(2) REHABILITATION INVESTMENT CREDIT

9 MAY OFFSET PORTION OF MINIMUM TAX.—

10 ‘‘(A) IN GENERAL.—In the case of the re11 habilitation investment tax credit—

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

13 be applied separately with respect to such

14 credit, and

15 ‘‘(ii) for purposes of applying para16 graph (1) to such credit—

17 ‘‘(I) the tentative minimum tax

18 under subparagraph (A) thereof shall

19 be reduced by the minimum tax offset

20 amount determined under subpara21 graph (B) of this paragraph, and

22 ‘‘(II) the limitation under para23 graph (1) (as modified by subclause

24 (I)) shall be reduced by the credit al25 lowed under subsection (a) for the
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1 taxable year (other than the rehabili2 tation investment tax credit).

3 ‘‘(B) MINIMUM TAX OFFSET AMOUNT.—

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

5 minimum tax offset amount is an amount equal

6 to—

7 ‘‘(i) in the case of a taxpayer not de8 scribed in clause (ii), the lesser of—

9 ‘‘(I) 25 percent of the tentative

10 minimum tax for the taxable year, or

11 ‘‘(II) $20,000, or

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

13 other than a closely held C corporation (as

14 defined in section 469(j)(1)), 5 percent of

15 the tentative minimum tax for the taxable

16 year.

17 ‘‘(C) REHABILITATION INVESTMENT TAX

18 CREDIT.—For purposes of this paragraph, the

19 term ‘regular investment tax credit’ means the

20 portion of the credit under subsection (a) which

21 is attributable to the credit determined under

22 section 47.’’.

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

24 the Internal Revenue Code of 1986 (relating to compo-
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1 nents of investment credit) is amended by adding at the

2 end the following new paragraph:

3 ‘‘(4) SPECIAL RULE FOR REHABILITATION

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

5 the rehabilitation investment tax credit (as defined

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

7 last.’’.

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

9 this section shall apply to taxable years beginning after

10 December 31, 1994.

11 SEC. 203. COMMERCIAL INDUSTRIAL DEVELOPMENT

12 BONDS.

13 (a) FACILITY BONDS.—

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

15 142 of the Internal Revenue Code of 1986 (relating

16 to exempt facility bond) is amended by striking ‘‘or’’

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

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

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

20 paragraphs:

21 ‘‘(13) sports facilities,

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

23 ‘‘(15) freestanding parking facilities,

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

25 ‘‘(17) industrial parks.’’
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1 (2) INDUSTRIAL PARKS DEFINED.—Section 142

2 of the Internal Revenue Code of 1986 is amended by

3 adding at the end the following new subsection:

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

5 as described in subsection (a)(17) only if all of the prop6 erty to be financed by the net proceeds of the issue—

7 ‘‘(1) is—

8 ‘‘(A) land, and

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

10 facilities, or transportation, power, or commu11 nication facilities incidental to the use of such

12 land as an industrial park, and

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

14 with respect to facilities described in paragraph

15 (1)(B)).’’

16 (3) CONFORMING AMENDMENTS.—

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

18 Code of 1986 (relating to limitation on use for

19 land acquisition) is amended by adding at the

20 end the following new paragraph:

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

22 In the case of a bond described in section

23 142(a)(17), paragraph (1)(A) shall be applied by

24 substituting ‘50 percent’ for ‘25 percent’.’’
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1 (B) Section 147(e) of such Code (relating

2 to no portion of bonds may be issued for

3 skyboxes, airplanes, gambling establishments,

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

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

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

7 activity bond’’.

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

9 Internal Revenue Code of 1986 (relating to termination

10 of qualified small issue bonds) is amended—

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

12 (A)(i) and inserting ‘‘any bond described in subpara13 graph (B)’’,

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

15 (A)(ii) and inserting ‘‘a bond described in subpara16 graph (B)’’, and

17 (3) by striking subparagraph (B) and inserting

18 the following:

19 ‘‘(B) BONDS FOR FARMING PURPOSES.—A

20 bond is described in this subparagraph if it is

21 issued as part of an issue 95 percent or more

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

23 provide any land or property not in accordance

24 with section 147(c)(2).’’
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1 (c) EFFECTIVE DATE.—The amendments made by

2 this section shall apply to bonds issued after December

3 31, 1994.

4 SEC. 204. INCREASE IN AMOUNT OF QUALIFIED SMALL

5 ISSUE BONDS PERMITTED FOR FACILITIES

6 TO BE USED BY RELATED PRINCIPAL USERS.

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

8 of the Internal Revenue Code of 1986 (relating to

9 $10,000,000 limit in certain cases) is amended by striking

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

11 (b) CLERICAL AMENDMENT.—The heading of para12 graph (4) of section 144(a) of the Internal Revenue Code

13 of 1986 is amended by striking ‘‘$10,000,000’’ and insert14 ing ‘‘$50,000,000’’.

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

16 this section shall apply to—

17 (1) obligations issued after the date of the en18 actment of this Act, and

19 (2) capital expenditures made after such date

20 with respect to obligations issued on or before such

21 date.

22 SEC. 205. SIMPLIFICATION OF ARBITRAGE INTEREST RE23 BATE WAIVER.

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

25 of the Internal Revenue Code of 1986 (relating to excep-
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1 tion from rebate for certain proceeds to be used to finance

2 construction expenditures) is amended to read as follows:

3 ‘‘(ii) SPENDING REQUIREMENT.—The

4 spending requirement of this clause is met

5 if 100 percent of the available construction

6 proceeds of the construction issue are

7 spent for the governmental purposes of the

8 issue within the 3-year period beginning on

9 the date the bonds are issued.’’.

10 (b) CONFORMING AMENDMENTS.—

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

12 Internal Revenue Code of 1986 (relating to excep13 tion for reasonable retainage) is repealed.

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

15 such Code (relating to available construction pro16 ceeds) is amended by striking ‘‘2-year period’’ and

17 inserting ‘‘3-year period’’.

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

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

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

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

22 issued,’’ and ‘‘, as of the close of such 6-month pe23 riod,’’.

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

Code (relating to election to terminate 11 25 ⁄2 percent
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1 penalty) is amended by striking ‘‘to any 6-month pe2 riod’’ in the matter preceding subclause (I).

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

4 Code (relating to bonds used to provide construction

5 financing) is amended by striking ‘‘2 years’’ and in6 serting ‘‘3 years’’.

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

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

9 the enactment of this Act.

10 TITLE III—COMMUNITY

11 REGULATORY RELIEF

12 SEC. 301. FINDINGS AND PURPOSE.

13 (a) FINDINGS.—The Congress finds and declares

14 that—

15 (1) unfunded Federal mandates imposed on

16 State and local governments have become increas17 ingly extensive in recent years;

18 (2) such mandates have, in many instances,

19 added to the growing deficits in State and local gov20 ernment budgets and have resulted in the need for

21 State and local governments to increase revenue or

22 curtail sometimes essential services; and

23 (3) such excessive fiscal burdens on State and

24 local governments have undermined, in many in25 stances, the ability of State and local governments
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1 to achieve their responsibilities under State and local

2 law.

3 (b) PURPOSE.—The purpose of this title is to require

4 that the Federal Government pays the total amount of di5 rect costs incurred by State and local governments in com6 plying with certain Federal mandates which take effect on

7 or after the date of the enactment of this title under a

8 Federal statute or regulation.

9 SEC. 302. FEDERAL FUNDING REQUIREMENT.

10 (a) IN GENERAL.—Notwithstanding any other provi11 sion of law, any requirement under a Federal statute or

12 regulation that creates a Federal mandate shall apply to

13 the State or local government only if all funds necessary

14 to pay the direct costs incurred by the State or local gov15 ernment in conducting the activity are provided by the

16 Federal Government for the fiscal year in which the direct

17 cost is incurred.

18 (b) APPLICATION.—This section shall apply only to

19 requirements which take effect on or after the date of the

20 enactment of this title.

21 SEC. 303. DUTIES OF THE DIRECTOR.

22 (a) FISCAL NOTE.—The Director shall prepare, to

23 accompany each bill, resolution or conference report re24 ported by any committee of the House of Representatives

25 or the Senate or considered on the floor of either House,
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1 an economic analysis of the effects of such bill or resolu2 tion by each State government and by each local govern3 ment within each State in complying with the Federal

4 mandate. The analysis prepared by the Director shall be

5 included in the report accompanying such bill or resolution

6 if timely submitted to such committee before such report

7 is filed.

8 (b) REPORT OF THE DIRECTOR.—For each fiscal

9 year in which a Federal mandate will be in effect, the Di10 rector, in consultation with representatives of State and

11 local governments, shall prepare and submit to the Presi12 dent and the Congress, with the President’s budget in

13 January preceding the beginning of a fiscal year, a report

14 that contains an estimate, for that fiscal year and the fol15 lowing fiscal year, of the total amount of direct costs that

16 have been incurred or will be incurred by each State gov17 ernment and by each local government within each State

18 in complying with the Federal mandate.

19 SEC. 304. EFFECT OF SUBSEQUENT ENACTMENTS.

20 No statute enacted after the date of enactment of this

21 title shall supersede this title unless the statute does so

22 in specific terms, referring to this title, and declares that

23 that statute supersedes this title.

24 SEC. 305. DEFINITIONS.

25 As used in this title:
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1 (1) The term ‘‘direct costs’’ means the amount

2 of costs incurred by a State or local government

3 dedicated to compliance with a Federal statute or

4 regulation or that is in excess of the amount that

5 the State or local government would incur in carry6 ing out that activity in the absence of the regulation,

7 but does not include any amount that a State or

8 local government is required or permitted by law to

9 contribute as a non-Federal share under a Federal

10 assistance program.

11 (2) The term ‘‘Director’’ shall mean the Direc12 tor of the Congressional Budget Office or his or her

13 designee.

14 (3) The term ‘‘Federal mandates’’ means a

15 statute or regulation that requires a State or local

16 government to—

17 (A) take certain actions (including a re18 quirement that a government meet national

19 standards in providing a service); or

20 (B) comply with certain specified condi21 tions in order to receive or continue to receive

22 Federal assistance and which requires the ter23 mination or reduction of such assistance if such

24 government fails to comply with such condi25 tions.
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1 (4) The term ‘‘local government’’ has the same

2 meaning as in section 6501(6) of title 31, United

3 States Code.

4 (5) The term ‘‘State’’ has the same meaning as

5 in section 6501(8) of title 31, United States Code.

6 TITLE IV—COMMUNITY-BASED

7 HOUSING DEVELOPMENT

8 SEC. 401. SECTION 8 RENT SUBSIDIES.

9 Section 8(d)(2) of the United States Housing Act of

10 1937 (42 U.S.C. 1437f(d)(2)) is amended—

11 (1) in subparagraph (A), by striking ‘‘than 15

12 percent’’ and inserting ‘‘than 50 percent’’;

13 (2) in subparagraph (B)(ii), by striking ‘‘15

14 percent’’ and inserting ‘‘50 percent’’; and

15 (3) in subparagraph (E), by striking ‘‘15 per16 cent’’.

17 SEC. 402. BLOCK GRANT STUDY.

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

19 Urban Development shall conduct a study regarding—

20 (1) the feasibility of consolidating existing pub21 lic and low-income housing programs under the

22 United States Housing Act of 1937 into a com23 prehensive block grant system of Federal aid that—

24 (A) provides assistance on an annual basis;
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1 (B) maximizes funding certainty and flexi2 bility; and

3 (C) minimizes paperwork and delay; and

4 (2) the possibility of administering future public

5 and low-income housing programs under the United

6 States Housing Act of 1937 in accordance with such

7 a block grant system.

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

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

10 the Secretary of Housing and Urban Development shall

11 submit to the Comptroller General of the United States

12 a report that includes—

13 (1) the results of the study conducted under

14 subsection (a); and

15 (2) any recommendations for legislation.

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

17 months after the date of enactment of this Act, the Comp18 troller General of the United States shall submit to the

19 Congress a report that includes—

20 (1) an analysis of the report submitted under

21 subsection (b); and

22 (2) any recommendations for legislation.
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1 SEC. 403. DEMOLITION AND DISPOSITION OF PUBLIC HOUS2 ING.

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

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

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

6 the end;

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

8 the end; and

9 (3) by adding at the end the following new sub10 paragraph:

11 ‘‘(I) provides, wherever practicable, for—

12 ‘‘(i) the eventual reconstruction of

13 units on the same property on which the

14 units to be demolished or disposed of are

15 located; and

16 ‘‘(ii) the ultimate relocation of dis17 placed tenants to that property;’’.
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1 TITLE V—RESPONSE TO URBAN

2 ENVIRONMENTAL CHALLENGES

3 Subtitle A—Environmental

4 Cleanup

5 SEC. 501. 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 1994.

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. 502. 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. 511. 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. 512. 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. 513. 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 514.

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. 514. FACILITY.

25 Each facility referred to in section 513—
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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. 515. REINVESTMENT OF SAVINGS.

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

18 customer obtaining electricity or steam from the facility

19 described in section 514 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 513 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 514,

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. 516. REPORT TO CONGRESS.

15 (a) REPORT.—Not later than 1 year after the facili16 ties described in section 514 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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