I

106TH CONGRESS

1ST SESSION H. R. 1537

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

APRIL 22, 1999

Mr. QUINN 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 1999’’.

6 SEC. 2. FINDINGS AND PURPOSES.

7 (a) FINDINGS.—The Congress finds that:
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1 (1) The General Accounting Office has esti2 mated that between 130,000 and 425,000 aban3 doned industrial sites will need cleanup action to be4 come economically viable once again.

5 (2) The cleanup costs to remediate these

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

7 hundreds of billions of dollars.

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

9 one economic priority in many American cities.

10 (4) Encouraging private investment for these

11 remediation efforts presents an opportunity to create

12 jobs and promote economic development in localities

13 and the States.

14 (b) PURPOSE.—The purpose of this Act is to estab15 lish a program under which the Federal Government, in

16 cooperation with appropriate State and local entities, shall

17 remediate ‘‘brownfields’’ in order to return them to pro18 ductive use while conserving prime open space, or ‘‘green19 fields’’.

20 SEC. 3. EPA CERTIFICATION OF STATE BROWNFIELD PRO21 GRAMS.

22 (a) CERTIFICATION.—The Administrator of the Envi23 ronmental Protection Agency (hereinafter in this Act re24 ferred to as the ‘‘Administrator’’) shall certify any State

25 brownfield program submitted to the Administrator under
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1 this Act that satisfies the criteria of section 4. Certifi2 cation of State programs shall be granted only for pro3 grams which have jurisdiction over brownfield sites which

4 have been contaminated prior to enactment of this Act.

5 (b) CHANGE IN PROGRAM.—Whenever a State makes

6 a significant change in a certified State brownfield pro7 gram, the State shall submit a statement to the Adminis8 trator demonstrating that the program continues of satisfy

9 the criteria of section 4.

10 (c) ASSISTANCE.—The Administrator shall provide to

11 the States, where appropriate, technical assistance and ex12 pertise with respect to certified State brownfield pro13 grams.

14 SEC. 4. EVALUATION CRITERIA FOR STATE BROWNFIELDS

15 PROGRAMS.

16 A State brownfields program may be certified under

17 this Act if the program—

18 (1) covers only contaminated sites that are not

19 listed on the National Priorities List;

20 (2) provides for public participation, in good

21 faith prior to the granting of a release from liability

22 under sections 4 and 5;

23 (3) provides for the reopening of a brownfields

24 cleanup proposal:
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1 (A) if any person has undertaken any as2 pect of the site assessment or remediation in a

3 fraudulent manner, including misrepresentation

4 of such person’s relationship to the site;

5 (B) if there is a significant change in sci6 entific standards applicable under the State

7 program to remediation;

8 (C) if a landowner or prospective pur9 chaser of a brownfield site wishes to change the

10 proposed use of a site to one that demands a

11 higher cleanup standard; or

12 (D) if the proposed remediation fails or the

13 remedy is not properly maintained or operated;

14 and

15 (4) contains cleanup criteria for brownfield sites

16 that are protective of public health and the environ17 ment; and

18 (5) includes coordination among State agencies

19 for environmental protection and business/economic

20 development.

21 SEC. 5. LANDOWNER LIABILITY.

22 In the case of any brownfield site remediation carried

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

24 upon completion of remediation pursuant to such program

25 and release from State liability under any applicable State
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1 provisions regarding liability for contaminated sites, the

2 owner of the brownfield site and the facility operator at

3 such site shall cease to be liable under sections 106 and

4 107 of the Comprehensive Environmental Response, Com5 pensation, and Liability Act of 1980 for the contamination

6 described in the site assessment and evaluation carried out

7 under the State program at the site concerned to the ex8 tent such liability is based on the status of such person

9 as described in paragraph (1) or (2) of section 107(a).

10 SEC. 6. OTHER LIABILITY RELEASES.

11 In the case of any brownfield site remediation carried

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

13 upon completion of remediation pursuant to such program

14 and release from State liability under any applicable State

15 provisions regarding liability for contaminated sites, the

16 Administrator shall release the following persons from li17 ability under sections 106 and 107 of the Comprehensive

18 Environmental Response, Compensation, and Liability Act

19 of 1980 for the contamination described in the site assess20 ment and evaluation carried out under the State program

21 at the site concerned to the extent such liability is based

22 on the status of such person as described in paragraph

23 (1) or (2) of section 107(a):

24 (1) LENDERS AND DEVELOPERS.—Lenders and

25 economic developers, except that no lender or devel-
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1 oper shall be released from liability under sections

2 106 and 107 for pollution directly caused by their

3 actions.

4 (2) PROSPECTIVE PURCHASERS.—Prospective

5 purchasers of a brownfields site.

6 (3) LOCAL GOVERNMENTS.—Local governments

7 who have not been involved with the management of

8 a brownfields site.

9 SEC. 7. FEDERAL WAIVER.

10 If the State brownfield cleanup program includes a

11 waiver from State permitting requirements, relevant Fed12 eral permit requirements shall also be waived by operation

13 of law.

14 SEC. 8. BROWNFIELDS IRA.

15 (a) IN GENERAL.—Subpart C of part II of sub16 chapter E of chapter 1 of the Internal Revenue Code of

17 1986 is amended by inserting after section 468B the fol18 lowing new section:

19 ‘‘SEC. 468C. SPECIAL RULES FOR HAZARDOUS WASTE RE20 MEDIATION RESERVES.

21 ‘‘(a) IN GENERAL.—There shall be allowed as a de22 duction for any taxable year the amount of payments

23 made by the taxpayer to a Hazardous Waste Remediation

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

25 such taxable year.
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1 ‘‘(b) LIMITATION ON AMOUNTS PAID INTO RE2 SERVE.—The amount which a taxpayer may pay into the

3 Reserve for any taxable year shall not exceed the lesser

4 of—

5 ‘‘(1) $5,000,000, or

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

7 amount paid into the Reserve for all prior taxable

8 years.

9 ‘‘(c) INCOME AND DEDUCTIONS OF THE TAX10 PAYER.—

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

12 There shall be includible in the gross income of the

13 taxpayer for any taxable year—

14 ‘‘(A) any amount distributed from the Re15 serve during such taxable year, and

16 ‘‘(B) any deemed distribution under sub17 section (e).

18 ‘‘(2) DEDUCTION WHEN ECONOMIC PERFORM19 ANCE OCCURS.—In addition to any deduction under

20 subsection (a), there shall be allowable as a deduc21 tion for any taxable year the amount of the qualified

22 hazardous waste costs with respect to which eco23 nomic performance (within the meaning of section

24 461(h)(2)) occurs during such taxable year.

25 ‘‘(d) HAZARDOUS WASTE REMEDIATION RESERVE.—
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1 ‘‘(1) IN GENERAL.—For purposes of this sec2 tion, the term ‘Hazardous Waste Remediation Re3 serve’ means a reserve established by the taxpayer

4 for purposes of this section.

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

6 Hazardous Waste Remediation Reserve is exempt

7 from taxation under this subtitle unless such Re8 serve has ceased to be a Hazardous Waste Remedi9 ation Reserve by reason of subsection (e). Notwith10 standing the preceding sentence, any such Reserve

11 shall be subject to the taxes imposed by section 511

12 (relating to imposition of tax on unrelated business

13 income of charitable, etc. organizations).

14 ‘‘(3) CONTRIBUTIONS TO RESERVE.—The Re15 serve shall not accept any payments (or other

16 amounts) other than payments with respect to which

17 a deduction is allowable under subsection (a).

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

19 used exclusively to pay the qualified hazardous waste

20 costs of the taxpayer.

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

22 Under regulations prescribed by the Secretary, for

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

24 as relates to such section), the Reserve shall be
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1 treated in the same manner as a trust described in

2 section 501(c)(21).

3 ‘‘(e) DEEMED DISTRIBUTIONS.—

4 ‘‘(1) DISQUALIFICATION OF RESERVE FOR

5 SELF-DEALING.—In any case in which a Reserve vio6 lates any provision of this section or section 4951,

7 the Secretary may disqualify such Reserve from the

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

9 paragraph applies, the Reserve shall be treated as

10 having distributed all of its funds on the date such

11 determination takes effect.

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

13 shall be treated as having distributed all of its

14 funds—

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

16 the date such Reserve was established unless,

17 as of such date—

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

19 property of the taxpayer is contaminated

20 with hazardous waste, and

21 ‘‘(ii) a remediation plan has been pre22 pared for such site, and

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

24 Secretary, on the date which is 10 years after

25 the date such Reserve was established unless,
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1 as of such date, it is reasonably anticipated that

2 the remaining funds in the Reserve will be dis3 tributed before the date which is 15 years after

4 the date such Reserve was established.

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

6 QUALIFIED HAZARDOUS WASTE COSTS.—The tax im7 posed by this chapter for any taxable year in which any

8 amount distributed from a Reserve is not used exclusively

9 to pay qualified hazardous waste costs shall be increased

10 by 10 percent of such amount.

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

12 purposes of this section, the term ‘qualified hazardous

13 waste costs’ means—

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

15 in connection with the assessment of—

16 ‘‘(A) the extent of the environmental con17 tamination of a site which is owned by the tax18 payer, and

19 ‘‘(B) the expected cost of environmental

20 remediation required for such site, and

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

22 to remediate such contamination.

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

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

25 52 shall be treated as one person for purposes of sub-
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1 section (b), and the dollar amount contained in such sub2 section shall be allocated among such persons in such

3 manner as the Secretary shall prescribe.

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

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

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

7 a taxable year if such payment is made on account of such

taxable year and is made within 21 8 ⁄2 months after the close

9 of such taxable year.’’.

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

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

12 such Code is amended by inserting after the item relating

13 to section 468B the following new item:

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

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

15 this section shall apply to taxable years beginning after

16 the date of the enactment of this Act.

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