I

106TH CONGRESS

1ST SESSION H. R. 1756

To provide for comprehensive brownfields assessment, cleanup, and

redevelopment.

IN THE HOUSE OF REPRESENTATIVES

MAY 11, 1999

Mr. FRANKS of New Jersey (for himself, Mr. MEEHAN, Mr. HOEFFEL, Mr.

BROWN of Ohio, Mr. MALONEY of Connecticut, and Mr. CAPUANO) introduced the following bill; which was referred to the Committee on Commerce, and in addition to the Committees on Ways and Means, and Small

Business, 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 provide for comprehensive brownfields assessment,

cleanup, and redevelopment.

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 ‘‘Brownfield Redevelop5 ment and Environmental Revitalization Act of 1999’’.

6 SEC. 2. TABLE OF CONTENTS.

7 The table of contents is as follows:

Sec. 1. Short title.

Sec. 2. Table of contents.
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Sec. 3. Findings and purpose.

TITLE I—FINANCIAL SUPPORT FOR BROWNFIELD SITE

REMEDIATION

Sec. 101. Grants for inventories, site assessments, and other pre-cleanup activities.

Sec. 102. Grants for revolving loan programs.

Sec. 103. Environmental cleanup grants.

Sec. 104. Limitations on use of funds.

Sec. 105. Effect on other laws.

Sec. 106. Regulations.

Sec. 107. Authorizations of appropriations.

TITLE II—FINANCIAL SUPPORT FOR BROWNFIELD SITE

PREVENTION AND REDEVELOPMENT

Sec. 201. Environmental remediation tax credit.

Sec. 202. Brownfields IRA.

Sec. 203. Issuance of bond to finance tax-exempt environmental remediation of

contaminated sites.

Sec. 204. Small business administration set-aside for brownfield prevention and

redevelopment projects under section 504 development company program.

Sec. 205. Promotion of small business investment companies for brownfield activities.

1 SEC. 3. FINDINGS AND PURPOSE.

2 (a) FINDINGS.—Congress finds the following:

3 (1) Abandoned and underutilized commercial

4 and industrial property is often avoided by investors

5 and developers because of real or perceived contami6 nation on-site.

7 (2) Reuse of these sites requires pre-cleanup as8 sistance as well as financial support for redevelop9 ment activities.

10 (b) PURPOSE.—The purpose of this Act is to provide

11 public sector support for brownfield redevelopment and to

12 further enable the private sector to invest and conduct

13 cleanup and redevelopment activities.
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1 TITLE I—FINANCIAL SUPPORT

2 FOR BROWNFIELD SITE RE3 MEDIATION

4 SEC. 101. GRANTS FOR INVENTORIES, SITE ASSESSMENTS,

5 AND OTHER PRE-CLEANUP ACTIVITIES.

6 (a) IN GENERAL.—The Administrator shall establish

7 a program to award grants to States and local govern8 ments to inventory brownfield sites and to conduct site

9 assessments and other pre-cleanup activities relating to

10 such sites, including site identification, site characteriza11 tion, and the planning and design of response actions for

12 such sites.

13 (b) SCOPE OF PROGRAM.—

14 (1) GRANT AWARDS.—To carry out subsection

15 (a), the Administrator may, on approval of an appli16 cation, provide financial assistance to a State or

17 local government.

18 (2) GRANT APPLICATION.—An application for a

19 grant under this section shall include, to the extent

20 practicable, each of the following:

21 (A) An identification of the brownfield

22 sites for which assistance is sought and a de23 scription of the effect of the brownfield sites on

24 the community.
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1 (B) A description of the need of the appli2 cant for Federal financial assistance to inven3 tory brownfield sites and to conduct site assess4 ments or other pre-cleanup activities at such

5 sites.

6 (C) A demonstration of the potential of the

7 grant assistance to stimulate economic develop8 ment or create recreational space.

9 (D) A description of the local commitment

10 as of the date of the application, which shall in11 clude a community involvement plan that dem12 onstrates meaningful community involvement.

13 (E) A plan that shows how the site identi14 fication, site assessment, or other pre-cleanup

15 activities will be implemented.

16 (F) A statement on the long-term benefits

17 of the proposed project.

18 (G) Such other factors as the Adminis19 trator considers relevant to carry out this title.

20 (3) APPROVAL OF APPLICATION.—

21 (A) IN GENERAL.—In making a decision

22 whether to approve an application under para23 graph (1), the Administrator shall—
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1 (i) consider the need of the State or

2 local government for Federal financial as3 sistance to carry out this section;

4 (ii) consider the ability of the appli5 cant to carry out or ensure an inventory,

6 site assessment, or other pre-cleanup activ7 ity under this section; and

8 (iii) consider such other factors as the

9 Administrator considers relevant to carry

10 out this section.

11 (B) GRANT CONDITIONS.—As a condition

12 of awarding a grant under this section, the Ad13 ministrator may, on the basis of the criteria

14 considered under subparagraph (A), attach

15 such conditions to the grant as the Adminis16 trator determines appropriate.

17 (4) GRANT AMOUNT.—The amount of a grant

18 awarded to any State or local government under

19 subsection (a) for inventory, site assessment, and

20 other pre-cleanup activities with respect to 1 or more

21 brownfield sites shall not exceed $200,000, except

22 that the Administrator may increase the amount in

23 special circumstances as determined by the Adminis24 trator.
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1 (5) TERMINATION OF GRANTS.—If the Admin2 istrator determines that a State or local government

3 that receives a grant under this subsection is in vio4 lation of a condition of a grant referred to in para5 graph (3)(B), the Administrator may terminate the

6 grant made to the State or local government and re7 quire full or partial repayment of the grant.

8 SEC. 102. GRANTS FOR REVOLVING LOAN PROGRAMS.

9 (a) IN GENERAL.—

10 (1) ESTABLISHMENT.—The Administrator shall

11 establish a program to award grants to be used by

12 States and local governments to capitalize revolving

13 loan funds for the cleanup of brownfield sites.

14 (2) LOANS.—The loans may be provided by the

15 local government, or by the State on behalf of a local

16 government, to finance cleanups of brownfield sites

17 by the local government, or by an owner or a pro18 spective purchaser of a brownfield site (including a

19 local government) at which a cleanup is being con20 ducted or is proposed to be conducted.

21 (b) SCOPE OF PROGRAM.—

22 (1) IN GENERAL.—

23 (A) GRANTS.—In carrying out subsection

24 (a), the Administrator may award a grant to a

25 State or local government that submits an ap-
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1 plication to the Administrator that is approved

2 by the Administrator.

3 (B) USE OF GRANT.—The grant shall be

4 used by the State or local government to cap5 italize a revolving loan fund to be used for

6 cleanup of one or more brownfield sites.

7 (C) GRANT APPLICATION.—An application

8 for a grant under this section shall be in such

9 form as the Administrator determines appro10 priate. The application shall include the fol11 lowing:

12 (i) Evidence that the grant applicant

13 has the financial controls and resources to

14 administer a revolving loan fund in accord15 ance with this title.

16 (ii) Provisions that—

17 (I) ensure that the grant appli18 cant has the ability to monitor the use

19 of funds provided to loan recipients

20 under this title;

21 (II) ensure that any cleanup con22 ducted by the applicant is protective

23 of human health and the environment;

24 and
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1 (III) ensure that any cleanup

2 funded under this Act will comply

3 with all laws that apply to the clean4 up.

5 (iii) Identification of the criteria to be

6 used by the State or local government in

7 providing for loans under the program.

8 The criteria shall include the financial

9 standing of the applicants for the loans,

10 the use to which the loans will be put, the

11 provisions to be used to ensure repayment

12 of the loan funds, the proposed method

13 and anticipated period of time required to

14 clean up the environmental contamination

15 at the brownfield site, and such other cri16 teria as the Administrator considers appro17 priate.

18 (2) GRANT APPROVAL.—In determining wheth19 er to award a grant under this section, the Adminis20 trator shall consider—

21 (A) the need of the local government for fi22 nancial assistance to clean up brownfield sites

23 that are the subject of the application, taking

24 into consideration the financial resources avail25 able to the local government;
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1 (B) the ability of the State or local govern2 ment to ensure that the applicants repay the

3 loans in a timely manner;

4 (C) the extent to which the cleanup of the

5 brownfield site or sites would reduce health and

6 environmental risks caused by the release of

7 hazardous substances, pollutants, or contami8 nants at, or from, the brownfield site or sites;

9 (D) the demonstrable potential of the

10 brownfield site or sites for stimulating economic

11 development or creation of recreational areas on

12 completion of the cleanup;

13 (E) the demonstrated ability of the grant

14 recipient to administer such a loan program;

15 (F) the demonstrated experience of the

16 local government regarding brownfield sites and

17 the reuse of contaminated land, including

18 whether the government has received any grant

19 under the Comprehensive Environmental Re20 sponse, Compensation, and Liability Act of

21 1980 (42 U.S.C. 9601 et seq.) to assess

22 brownfield sites, except that applicants who

23 have not previously received such a grant may

24 be considered for awards under this section;
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1 (G) the efficiency of having the loan ad2 ministered by the level of government rep3 resented by the applicant entity;

4 (H) the experience of administering any

5 loan programs by the entity, including the loan

6 repayment rates;

7 (I) the demonstrations made regarding the

8 ability of the local government to ensure a fair

9 distribution of grant funds among brownfield

10 sites within the jurisdiction of the local govern11 ment; and

12 (J) such other factors as the Administrator

13 considers relevant to carry out this section.

14 (3) GRANT AMOUNT.—The amount of a grant

15 made to an applicant under this section shall not ex16 ceed $500,000, except that the Administrator may

17 increase the amount in special circumstances as de18 termined by the Administrator.

19 (4) REVOLVING LOAN FUND APPROVAL.—Each

20 application for a grant to capitalize a revolving loan

21 fund under this section shall, as a condition of ap22 proval by the Administrator, include a written state23 ment by the local government that cleanups to be

24 funded under the loan program of the local govern25 ment shall be conducted under the auspices of, and
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1 in compliance with, the State voluntary response

2 program or State Superfund program or Federal au3 thority.

4 (c) GRANT AGREEMENTS.—Each grant under this

5 section for a revolving loan fund shall be made pursuant

6 to a grant agreement. At a minimum, the grant agreement

7 shall include provisions that ensure the following:

8 (1) COMPLIANCE WITH LAW.—The local govern9 ment will include in all loan agreements a require10 ment that the loan recipient shall comply with all

11 laws applicable to the cleanup and shall ensure that

12 the cleanup is protective of human health and the

13 environment.

14 (2) REPAYMENT.—The State or local govern15 ment will require repayment of the loan consistent

16 with this title.

17 (3) USE OF FUNDS.—The State or local govern18 ment will use the funds solely for purposes of estab19 lishing and capitalizing a loan program in accord20 ance with this title and of cleaning up the environ21 mental contamination at the brownfield site or sites.

22 (4) REPAYMENT OF FUNDS.—The State or local

23 government will require in each loan agreement, and

24 take necessary steps to ensure, that the loan recipi25 ent will use the loan funds solely for the purposes
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1 stated in paragraph (3), and will require the return

2 of any excess funds immediately on a determination

3 by the appropriate local official that the cleanup has

4 been completed.

5 (5) NONTRANSFERABILITY.—The funds will not

6 be transferable, unless the Administrator agrees to

7 the transfer in writing.

8 (6) LIENS.—

9 (A) DEFINITIONS.—In this paragraph, the

10 terms ‘‘security interest’’ and ‘‘purchaser’’ have

11 the meanings given the terms in section

12 6323(h) of the Internal Revenue Code of 1986.

13 (B) LIENS.—A lien in favor of the grant

14 recipient shall arise on the contaminated prop15 erty subject to a loan under this section.

16 (C) COVERAGE.—The lien shall cover all

17 real property included in the legal description of

18 the property at the time the loan agreement

19 provided for in this section is signed, and all

20 rights to the property, and shall continue until

21 the terms and conditions of the loan agreement

22 have been fully satisfied.

23 (D) TIMING.—The lien shall—

24 (i) arise at the time a security interest

25 is appropriately recorded in the real prop-
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1 erty records of the appropriate office of the

2 State, county, or other governmental sub3 division, as designated by State law, in

4 which the real property subject to the lien

5 is located; and

6 (ii) be subject to the rights of any

7 purchaser, holder of a security interest, or

8 judgment lien creditor whose interest is or

9 has been perfected under applicable State

10 law before the notice has been filed in the

11 appropriate office of the State, county, or

12 other governmental subdivision, as des13 ignated by State law, in which the real

14 property subject to the lien is located.

15 (7) NOTICE TO STATE.—When a local govern16 ment is a grant recipient, the local government will

17 notify the State in which the local government is lo18 cated of the receipt of the grant and of the identity

19 of recipients of loans made under the revolving loan

20 fund.

21 (d) AUDITS.—

22 (1) IN GENERAL.—The Inspector General of

23 the Environmental Protection Agency shall audit a

24 portion of the grants awarded under this section to
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1 ensure that all funds are used for the purposes set

2 forth in this section.

3 (2) FUTURE GRANTS.—The result of the audit

4 shall be taken into account in awarding any future

5 grants to the local government.

6 (e) AUTHORITY TO AWARD GRANTS TO STATES.—

7 The Administrator may award a grant to a State under

8 the program established under this section at the request

9 of a local government in the State if the Administrator

10 determines that a grant to the State is necessary in order

11 to facilitate the receipt of funds by one or more local gov12 ernments that otherwise do not have the capabilities, such

13 as personnel and other resources, to manage grants under

14 the program.

15 SEC. 103. ENVIRONMENTAL CLEANUP GRANTS.

16 (a) EXPENDITURES FROM THE SUPERFUND.—

17 Amounts in the Hazardous Substance Superfund estab18 lished by section 9507 of the Internal Revenue Code of

19 1986 shall be made available consistent with, and for the

20 purposes of carrying out, the grant programs established

21 under sections 101 and 102.

22 (b) AUTHORITY TO AWARD GRANTS.—There is au23 thorized to be appropriated from the Hazardous Sub24 stance Superfund for grants to local governments under
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1 sections 101 and 102, $45,000,000 for each of fiscal years

2 2000 through 2002.

3 SEC. 104. LIMITATIONS ON USE OF FUNDS.

4 (a) EXCLUDED FACILITIES.—(1) A grant for site in5 ventory and assessment under section 101 or to capitalize

6 a revolving loan fund under section 102 may not be used

7 for any activity involving—

8 (A) a facility or portion of a facility that is the

9 subject of a response action (including a facility or

10 portion of a facility with respect to which a record

11 of decision, other than a no-action record of deci12 sion, has been issued) under the Comprehensive En13 vironmental Response, Compensation, and Liability

14 Act of 1980 (42 U.S.C. 9601 et seq.), unless a pre15 liminary assessment, site investigation, or response

16 action has been completed at such facility or portion

17 of a facility and the President has decided not to

18 take further response action at such facility or por19 tion of a facility;

20 (B) a facility included, or proposed for inclu21 sion, on the National Priorities List maintained by

22 the President under the Comprehensive Environ23 mental Response, Compensation, and Liability Act

24 of 1980 (42 U.S.C. 9601 et seq.);
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1 (C) an NPL-caliber facility, as defined in para2 graph (2);

3 (D) a facility that is subject to corrective action

4 under section 3004(u) or 3008(h) of the Solid Waste

5 Disposal Act (42 U.S.C. 6924(u) or 6928(h)) to

6 which a corrective action permit or order has been

7 issued or modified to require the implementation of

8 corrective measures;

9 (E) any land disposal unit with respect to which

10 a closure notification under subtitle C of the Solid

11 Waste Disposal Act (42 U.S.C. 6921 et seq.) has

12 been submitted and closure requirements have been

13 specified in a closure plan or permit;

14 (F) a facility at which there has been a release

15 of a polychlorinated biphenyl and that is subject to

16 the Toxic Substances Control Act (15 U.S.C. 2601

17 et seq.);

18 (G) a facility with respect to which an adminis19 trative or judicial order or decree requiring cleanup

20 has been issued or entered into by the President

21 under—

22 (i) the Comprehensive Environmental Re23 sponse, Compensation, and Liability Act of

24 1980 (42 U.S.C. 9601 et seq.);
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1 (ii) the Solid Waste Disposal Act (42

2 U.S.C. 6901 et seq.);

3 (iii) the Federal Water Pollution Control

4 Act (33 U.S.C. 1251 et seq.);

5 (iv) the Toxic Substances Control Act (15

6 U.S.C. 2601 et seq.); or

7 (v) the Safe Drinking Water Act (42

8 U.S.C. 300f et seq.);

9 (H) the portion of a facility at which assistance

10 for response activities may be obtained under sub11 title I of the Solid Waste Disposal Act (42 U.S.C.

12 6991 et seq.) from the Leaking Underground Stor13 age Tank Trust Fund established by section 9508 of

14 the Internal Revenue Code of 1986; and

15 (I) a facility owned or operated by a depart16 ment, agency, or instrumentality of the United

17 States, except for land held in trust by the United

18 States for an Indian tribe.

19 (2) For purposes of paragraph (1), the term ‘‘NPL20 caliber facility’’ means a facility for which the President,

21 in consultation with the State concerned, has prepared or

22 is preparing a hazardous ranking system scoring package

23 or that satisfies such other definition as the Administrator

24 may promulgate by regulation. The term does not include

25 a facility for which the President—
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1 (A) has obtained a score under the hazardous

2 ranking system; and

3 (B) based on that score, has made a determina4 tion not to list on the National Priorities List.

5 (3) Notwithstanding paragraph (1), the President

6 may, on a facility-by-facility basis, allow a grant under

7 section 101 or section 102 to be used for an activity in8 volving any facility listed in subparagraph (D), (E), (F),

9 (G)(ii), (G)(iii), (G)(iv), (G)(v), (H), or (I) of paragraph

10 (1). In the case of a facility listed in subparagraph (I),

11 the President may use the authority in the preceding sen12 tence only if the facility is not a facility described in sub13 paragraph (A), (B), (C), or (G)(i).

14 (b) FINES AND COST-SHARING.—A grant made

15 under this title may not be used to pay any fine or penalty

16 owed to a State or the Federal Government, or to meet

17 any Federal cost-sharing requirement.

18 (c) OTHER LIMITATIONS.—

19 (1) IN GENERAL.—Funds made available to a

20 local government under the grant programs estab21 lished under section 101 shall be used only to inven22 tory and assess brownfield sites as authorized by

23 this title. Funds made available to a local govern24 ment under the grant programs established under
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1 section 102 shall be used only for capitalizing a re2 volving loan fund as authorized by this title.

3 (2) RESPONSIBILITY FOR CLEANUP ACTION.—

4 Funds made available under this title may not be

5 used to relieve a local government of the commit6 ment or responsibilities of the local government

7 under State law to assist or carry out cleanup ac8 tions at brownfield sites.

9 SEC. 105. EFFECT ON OTHER LAWS.

10 Nothing in this title changes, modifies, or otherwise

11 affects the liability of any person or the obligations im12 posed or authorities provided under any other law or regu13 lation, including—

14 (1) the Comprehensive Environmental Re15 sponse, Compensation, and Liability Act of 1980 (42

16 U.S.C. 9601 et seq.);

17 (2) the Solid Waste Disposal Act (42 U.S.C.

18 6901 et seq.);

19 (3) the Federal Water Pollution Control Act

20 (33 U.S.C. 1251 et seq.);

21 (4) the Toxic Substances Control Act (15

22 U.S.C. 2601 et seq.); and

23 (5) the Safe Drinking Water Act (42 U.S.C.

24 300f et seq.).
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1 SEC. 106. REGULATIONS.

2 (a) IN GENERAL.—The Administrator may issue

3 such regulations as are necessary to carry out this title.

4 (b) PROCEDURES AND STANDARDS.—The regulations

5 shall include such procedures and standards as the Admin6 istrator considers necessary, including procedures and

7 standards for evaluating an application for a grant or loan

8 submitted under this title.

9 SEC. 107. AUTHORIZATIONS OF APPROPRIATIONS.

10 (a) SITE ASSESSMENT PROGRAM.—There is author11 ized to be appropriated to carry out section 101

12 $15,000,000 for each of fiscal years 2000 through 2002.

13 (b) ECONOMIC REDEVELOPMENT ASSISTANCE PRO14 GRAM.—There is authorized to be appropriated to carry

15 out section 102 $30,000,000 for each of fiscal years 2000

16 through 2002.

17 (c) AVAILABILITY OF FUNDS.—The amounts appro18 priated under this section shall remain available until ex19 pended.

20 TITLE II—FINANCIAL SUPPORT

21 FOR BROWNFIELD SITE PRE22 VENTION AND REDEVELOP23 MENT

24 SEC. 201. ENVIRONMENTAL REMEDIATION TAX CREDIT.

25 (a) GENERAL RULE.—Part IV of subchapter A of

26 chapter 1 of the Internal Revenue Code of 1986 (relating
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1 to credits allowable) is amended by adding at the end

2 thereof the following new subpart:

3 ‘‘Subpart H—Environmental Remediation Credit

‘‘Sec. 54. Amount of environmental remediation credit.

‘‘Sec. 54A. Definitions and special rules.

4 ‘‘SEC. 54. AMOUNT OF ENVIRONMENTAL REMEDIATION

5 CREDIT.

6 ‘‘(a) GENERAL RULE.—For purposes of section 38,

7 the environmental remediation credit determined under

8 this section is 50 percent of the costs—

9 ‘‘(1) which are paid or incurred by the taxpayer

10 for environmental remediation with respect to any

11 qualified contaminated site which is owned by the

12 taxpayer, and

13 ‘‘(2) which are incurred by the taxpayer pursu14 ant to an environmental remediation plan for such

15 site which was approved by the Administrator of the

16 Environmental Protection Agency or by the head of

17 any State or local government agency designated by

18 the Administrator to carry out the Administrator’s

19 functions under this subpart with respect to such

20 site.

21 ‘‘(b) REMEDIATION PLAN MUST BE COMPLETED.—

22 ‘‘(1) IN GENERAL.—Except as otherwise pro23 vided in paragraph (2)—
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1 ‘‘(A) no environmental remediation credit

2 shall be determined under this section with re3 spect to any qualified contaminated site unless

4 the Administrator of the Environmental Protec5 tion Agency (or such Administrator’s designee

6 under subsection (a)(2)) certifies the environ7 mental remediation plan for such site has been

8 completed, and

9 ‘‘(B) if such Administrator (or designee)

10 certifies that such plan has been completed,

11 such credit shall be taken into account under

12 subsection (a) ratably over the 5 taxable year

13 period beginning with the taxable year in which

14 such plan was completed.

15 ‘‘(2) SPECIAL RULE WHERE EXTRAORDINARY

16 COST INCREASES.—If—

17 ‘‘(A) the taxpayer determines that due to

18 unforeseen circumstances the cost of completing

19 the remediation plan for any qualified contami20 nated site exceeds 200 percent of the estimated

21 costs of completing such plan, and

22 ‘‘(B) the State or local official admin23 istering the remediation credit program agrees

24 with such determination,
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1 the taxpayer may cease the implementation of such

2 plan and shall be entitled to an environmental reme3 diation credit with respect to costs incurred before

4 such cessation. Such credit shall be taken into ac5 count under subsection (a) ratably over the 5-tax6 able-year period beginning with the taxable year in

7 which such cessation occurs.

8 ‘‘(c) CERTAIN PARTIES NOT ELIGIBLE.—

9 ‘‘(1) IN GENERAL.—A taxpayer shall not be eli10 gible for any credit determined under this section

11 with respect to any qualified contaminated site if—

12 ‘‘(A) at any time on or before the date of

13 the enactment of this subpart, such taxpayer

14 was the owner or operator of any business on

15 such site,

16 ‘‘(B) at any time before, on, or after such

17 date of enactment such taxpayer—

18 ‘‘(i) had (by contract, agreement, or

19 otherwise) arranged for the disposal or

20 treatment of any hazardous materials at

21 such site or arranged with a transporter

22 for transport for disposal or treatment of

23 any hazardous materials at such site, or

24 ‘‘(ii) had accepted any hazardous ma25 terials for transport to such site, or
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1 ‘‘(C) the taxpayer is related to any tax2 payer referred to in subparagraph (A) or (B).

3 ‘‘(2) EXCEPTIONS.—

4 ‘‘(A) ACQUISITION OF BUSINESS OR SITE

5 BY FORECLOSURE, ETC.—Paragraph (1) shall

6 not apply to a taxpayer who became described

7 therein by reason of the acquisition of the busi8 ness or site through foreclosure (or the equiva9 lent) of a security interest held by the taxpayer

10 or a related party if the taxpayer undertakes to

11 sell or otherwise dispose of such business or site

12 in a reasonably expeditious manner on commer13 cially reasonable terms.

14 ‘‘(B) USE OF SITE REMEDIATED BY TAX15 PAYER.—Subparagraph (B) of paragraph (1)

16 shall not apply to a taxpayer with respect to

17 any site if—

18 ‘‘(i) the only actions described in such

19 subparagraph of the taxpayer (or a related

20 person) with respect to such site occur

21 after such taxpayer (or person) carry out

22 an environmental remediation plan for

23 such site (and the completion of such plan

24 is certified under subsection (b)(1)), and
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1 ‘‘(ii) such actions are part of a bona

2 fide manufacturing process (or other in3 dustrial activity at such site) of such tax4 payer (or person) which complies with all

5 Federal environmental laws and regula6 tions.

7 ‘‘(d) QUALIFIED CONTAMINATED SITE.—For pur8 poses of this subpart, the term ‘qualified contaminated

9 site’ means any contaminated site if—

10 ‘‘(1) the condition of the contaminated site is

11 such that without participation in the environmental

12 remediation credit program redevelopment is un13 likely,

14 ‘‘(2) there is a strong likelihood of redevelop15 ment of the site for industrial or commercial use

16 that will result in creation of jobs and expansion of

17 the tax base, and

18 ‘‘(3) environmental remediation and redevelop19 ment are likely to be completed within a reasonable

20 period of time.

21 ‘‘SEC. 54A. DEFINITIONS AND SPECIAL RULES.

22 ‘‘(a) CONTAMINATED SITE.—For purposes of this

23 subpart—
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1 ‘‘(1) IN GENERAL.—The term ‘contaminated

2 site’ means any site if at least 1 of the following en3 vironmental conditions is present on such site:

4 ‘‘(A) A release or threatened release of any

5 hazardous, toxic, or dangerous substance.

6 ‘‘(B) Any storage tanks which contain any

7 hazardous, toxic, or dangerous substance.

8 ‘‘(C) Any illegal disposal of solid waste.

9 ‘‘(2) HAZARDOUS, TOXIC, OR DANGEROUS SUB10 STANCE.—Any substance, waste, or material shall be

11 treated as a hazardous, toxic, or dangerous sub12 stance if it is so treated under—

13 ‘‘(A) the Comprehensive Environmental

14 Response, Compensation, and Liability Act of

15 1980 (42 U.S.C. 9601 et seq.) as in effect on

16 the date of the enactment of this section, or

17 ‘‘(B) the Solid Waste Disposal Act (42

18 U.S.C. 6901 et seq.) as so in effect.

19 The following materials shall in any event be treated

20 as such a substance: petroleum or crude oil or any

21 derivative thereof, friable asbestos or any asbestos

22 containing material, polychlorinated biphenyls, and

23 lead paint.
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1 ‘‘(b) ENVIRONMENTAL REMEDIATION.—For pur2 poses of this subpart, the term ‘environmental remedi3 ation’ means—

4 ‘‘(1) removal or remediation activity in accord5 ance with the plan approved under section 54(a)(2),

6 ‘‘(2) restoration of natural, historic or cultural

7 resources at the site, or the mitigation of unavoid8 able losses of such resources incurred in connection

9 with the remediation or response activity,

10 ‘‘(3) health assessments or health effects stud11 ies related to the site,

12 ‘‘(4) remediation of off-site contamination

13 caused by activity on the site (other than remedi14 ation activities of a type not permitted for the site),

15 and

16 ‘‘(5) any other costs specified in the plan ap17 proved under section 54(a)(2), including demolition

18 of existing contaminated structures, site security,

19 permit fees necessary for remediation, and environ20 mental audits.

21 ‘‘(c) RELATED PERSON.—For purposes of this sub22 part, persons shall be treated as related to each other if

23 such persons are treated as a single employer under the

24 regulations prescribed under section 52(b) or such persons
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1 bear a relationship to each other specified in section

2 267(b) or 707(b).

3 ‘‘(d) COORDINATION WITH EXPENSING OF ENVIRON4 MENTAL REMEDIATION COSTS.—The costs taken into ac5 count under section 54(a) do not include any costs for

6 which an election is in effect under section 198.’’.

7 (b) CREDIT MADE PART OF GENERAL BUSINESS

8 CREDIT.—Subsection (b) of section 38 of such Code is

9 amended by striking ‘‘plus’’ at the end of paragraph (11),

10 by striking the period at the end of paragraph (12) and

11 inserting ‘‘, plus’’, and by adding at the end thereof the

12 following new paragraph:

13 ‘‘(13) the environmental remediation credit

14 under section 54(a).’’.

15 (c) LIMITATION ON CARRYBACK.—Subsection (d) of

16 section 39 of such Code is amended by adding at the end

17 thereof the following new paragraph:

18 ‘‘(9) NO CARRYBACK OF ENVIRONMENTAL RE19 MEDIATION CREDIT BEFORE EFFECTIVE DATE.—No

20 portion of the unused business credit for any taxable

21 year which is attributable to the credit under section

22 54 may be carried back to a taxable year beginning

23 on or before the date of the enactment of section

24 54.’’.
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1 (d) DEDUCTION FOR UNUSED CREDIT.—Subsection

2 (c) of section 196 of such Code is amended by striking

3 ‘‘and’’ at the end of paragraph (7), by striking the period

4 at the end of paragraph (8) and inserting ‘‘, and’’, and

5 by adding at the end thereof the following new paragraph:

6 ‘‘(9) the environmental remediation credit de7 termined under section 54.’’.

8 (e) CLERICAL AMENDMENT.—The table of subparts

9 for part IV of subchapter A of chapter 1 of such Code

10 is amended by adding at the end thereof the following new

11 item:

‘‘Subpart H. Environmental remediation credit.’’.

12 (f) EFFECTIVE DATE.—The amendments made by

13 this section shall apply to taxable years beginning after

14 the date of the enactment of this Act.

15 SEC. 202. BROWNFIELDS IRA.

16 (a) IN GENERAL.—Subpart C of part II of sub17 chapter E of chapter 1 of the Internal Revenue Code of

18 1986 is amended by inserting after section 468B the fol19 lowing new section:

20 ‘‘SEC. 468C. SPECIAL RULES FOR HAZARDOUS WASTE RE21 MEDIATION RESERVES.

22 ‘‘(a) IN GENERAL.—There shall be allowed as a de23 duction for any taxable year the amount of payments

24 made by the taxpayer to a Hazardous Waste Remediation
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1 Reserve (hereinafter referred to as the ‘Reserve’) during

2 such taxable year.

3 ‘‘(b) LIMITATION ON AMOUNTS PAID INTO RE4 SERVE.—The amount which a taxpayer may pay into the

5 Reserve for any taxable year shall not exceed the lesser

6 of—

7 ‘‘(1) $5,000,000, or

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

9 amount paid into the Reserve for all prior taxable

10 years.

11 ‘‘(c) INCOME AND DEDUCTIONS OF THE TAX12 PAYER.—

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

14 There shall be includible in the gross income of the

15 taxpayer for any taxable year—

16 ‘‘(A) any amount distributed from the Re17 serve during such taxable year, and

18 ‘‘(B) any deemed distribution under sub19 section (e).

20 ‘‘(2) DEDUCTION WHEN ECONOMIC PERFORM21 ANCE OCCURS.—In addition to any deduction under

22 subsection (a), there shall be allowable as a deduc23 tion for any taxable year the amount of the qualified

24 hazardous waste costs with respect to which eco-
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1 nomic performance (within the meaning of section

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

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

4 ‘‘(1) IN GENERAL.—For purposes of this sec5 tion, the term ‘Hazardous Waste Remediation Re6 serve’ means a reserve established by the taxpayer

7 for purposes of this section.

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

9 Hazardous Waste Remediation Reserve is exempt

10 from taxation under this subtitle unless such Re11 serve has ceased to be a Hazardous Waste Remedi12 ation Reserve by reason of subsection (e). Notwith13 standing the preceding sentence, any such Reserve

14 shall be subject to the taxes imposed by section 511

15 (relating to imposition of tax on unrelated business

16 income of charitable, etc. organizations).

17 ‘‘(3) CONTRIBUTIONS TO RESERVE.—The Re18 serve shall not accept any payments (or other

19 amounts) other than payments with respect to which

20 a deduction is allowable under subsection (a).

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

22 used exclusively to pay the qualified hazardous waste

23 costs of the taxpayer.

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

25 Under regulations prescribed by the Secretary, for
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1 purposes of section 4951 (and so much of this title

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

3 treated in the same manner as a trust described in

4 section 501(c)(21).

5 ‘‘(e) DEEMED DISTRIBUTIONS.—

6 ‘‘(1) DISQUALIFICATION OF RESERVE FOR

7 SELF-DEALING.—In any case in which a Reserve vio8 lates any provision of this section or section 4951,

9 the Secretary may disqualify such Reserve from the

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

11 paragraph applies, the Reserve shall be treated as

12 having distributed all of its funds on the date such

13 determination takes effect.

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

15 shall be treated as having distributed all of its

16 funds—

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

18 the date such Reserve was established unless,

19 as of such date—

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

21 property of the taxpayer is contaminated

22 with hazardous waste, and

23 ‘‘(ii) a remediation plan has been pre24 pared for such site, and
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1 ‘‘(B) except as otherwise provided by the

2 Secretary, on the date which is 10 years after

3 the date such Reserve was established unless,

4 as of such date, it is reasonably anticipated that

5 the remaining funds in the Reserve will be dis6 tributed before the date which is 15 years after

7 the date such Reserve was established.

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

9 QUALIFIED HAZARDOUS WASTE COSTS.—The tax im10 posed by this chapter for any taxable year in which any

11 amount distributed from a Reserve is not used exclusively

12 to pay qualified hazardous waste costs shall be increased

13 by 10 percent of such amount.

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

15 purposes of this section, the term ‘qualified hazardous

16 waste costs’ means—

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

18 in connection with the assessment of—

19 ‘‘(A) the extent of the environmental con20 tamination of a site which is owned by the tax21 payer, and

22 ‘‘(B) the expected cost of environmental

23 remediation required for such site, and

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

25 to remediate such contamination.
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1 ‘‘(h) CONTROLLED GROUPS.—All persons treated as

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

3 52 shall be treated as one person for purposes of sub4 section (b), and the dollar amount contained in such sub5 section shall be allocated among such persons in such

6 manner as the Secretary shall prescribe.

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

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

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

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

taxable year and is made within 21 11 ⁄2 months after the close

12 of such taxable year.’’.

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

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

15 such Code is amended by inserting after the item relating

16 to section 468B the following new item:

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

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

18 this section shall apply to taxable years beginning after

19 the date of the enactment of this Act.

20 SEC. 203. ISSUANCE OF BOND TO FINANCE TAX-EXEMPT EN21 VIRONMENTAL REMEDIATION OF CONTAMI22 NATED SITES.

23 (a) IN GENERAL.—Subsection (e) of section 141 of

24 the Internal Revenue Code of 1986 (defining qualified
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1 bond) is amended by striking ‘‘or’’ at the end of subpara2 graph (F), by redesignating subparagraph (G) as subpara3 graph (H), and by inserting after subparagraph (F) the

4 following new subparagraph:

5 ‘‘(G) a qualified contaminated site remedi6 ation bond, or’’.

7 (b) QUALIFIED CONTAMINATED SITE REMEDIATION

8 BOND.—Section 144 of such Code is amended by adding

9 at the end thereof the following new subsection:

10 ‘‘(d) QUALIFIED CONTAMINATED SITE REMEDIATION

11 BOND.—For purposes of this part—

12 ‘‘(1) IN GENERAL.—The term ‘qualified con13 taminated site remediation bond’ means any bond

14 issued as part of an issue 95 percent or more of the

15 proceeds of which are to finance—

16 ‘‘(A) the acquisition of a qualified contami17 nated site, or

18 ‘‘(B) the costs of environmental remedi19 ation with respect to such a site which is owned

20 by the person incurring such costs.

21 ‘‘(2) LIMITATIONS.—

22 ‘‘(A) IN GENERAL.—Such term shall not

23 include any bond issued to provide financing

24 with respect to a qualified contaminated site

25 if—
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1 ‘‘(i) any amount of such financing is

2 provided directly or indirectly to any ineli3 gible person,

4 ‘‘(ii) less than 60 percent of the

5 amount of the financing so provided with

6 respect to such site is for costs described

7 in paragraph (1)(B), or

8 ‘‘(iii) the amount of the financing so

9 provided to acquire such site exceeds the

10 excess of—

11 ‘‘(I) the fair market value of the

12 site after the completion of the envi13 ronmental remediation, over

14 ‘‘(II) the amount of the financing

15 so provided with respect to such site

16 for costs described in paragraph

17 (1)(B).

18 ‘‘(B) INELIGIBLE PERSON.—For purposes

19 of subparagraph (A), a person is an ineligible

20 person with respect to any site if—

21 ‘‘(i) at any time on or before the date

22 of the enactment of this subsection such

23 person was the owner or operator of any

24 business on such site,
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1 ‘‘(ii) at any time before, on, or after

2 such date of enactment such person—

3 ‘‘(I) had (by contract, agreement,

4 or otherwise) arranged for the dis5 posal or treatment of any hazardous

6 materials at such site or arranged

7 with a transporter for transport for

8 disposal or treatment of any haz9 ardous materials at such site, or

10 ‘‘(II) had accepted any hazardous

11 materials for transport to such site, or

12 ‘‘(iii) the person is related to any per13 son referred to in clause (i) or (ii).

14 ‘‘(C) RELATED PERSON.—For purposes of

15 this paragraph, persons shall be treated as re16 lated to each other if such persons are treated

17 as a single employer under the regulations pre18 scribed under section 52(b) or such persons

19 bear a relationship to each other specified in

20 section 267(b) or 707(b).

21 ‘‘(3) RESTRICTION ON LAND ACQUISITION NOT

22 TO APPLY.—Section 147(c) shall not apply to any

23 qualified contaminated site remediation bond.

24 ‘‘(4) QUALIFIED CONTAMINATED SITE.—
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1 ‘‘(A) IN GENERAL.—For purposes of this

2 subsection, the term ‘qualified contaminated

3 site’ means any site if the appropriate agency

4 certifies that at least 1 of the following environ5 mental conditions is present on such site:

6 ‘‘(i) A release or threatened release of

7 any hazardous, toxic, or dangerous sub8 stance.

9 ‘‘(ii) Any storage tanks which contain

10 any hazardous, toxic, or dangerous sub11 stance.

12 ‘‘(iii) Any illegal disposal of solid

13 waste.

14 Such term shall not include any site listed on

15 the National Priorities List under the Com16 prehensive Environmental Response, Compensa17 tion, and Liability Act of 1980.

18 ‘‘(B) APPROPRIATE AGENCY.—For pur19 poses of subparagraph (A), the appropriate

20 agency is—

21 ‘‘(i) the agency of the State in which

22 the site is located which is designated by

23 the Administrator of the Environmental

24 Protection Agency for purposes of this

25 paragraph, or
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1 ‘‘(ii) if the agency described in clause

2 (i) designates an agency of the local gov3 ernment in which the site is located for

4 purposes of this paragraph, such local gov5 ernment agency.

6 ‘‘(5) HAZARDOUS, TOXIC, OR DANGEROUS SUB7 STANCE.—For purposes of this subsection, any sub8 stance, waste, or material shall be treated as a haz9 ardous, toxic, or dangerous substance if it is so

10 treated under—

11 ‘‘(A) the Comprehensive Environmental

12 Response, Compensation, and Liability Act of

13 1980 (42 U.S.C. 9601 et seq.),

14 ‘‘(B) the Solid Waste Disposal Act (42

15 U.S.C. 6901 et seq.), or

16 ‘‘(C) any State or local environmental law

17 or ordinance.

18 The following materials shall in any event be treated

19 as such a substance: petroleum or crude oil or any

20 derivative thereof, friable asbestos or any asbestos

21 containing material, polychlorinated biphenyls, or

22 urea formaldehyde foam insulation.

23 ‘‘(6) ENVIRONMENTAL REMEDIATION.—For

24 purposes of this subsection, the term ‘environmental

25 remediation’ means—
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1 ‘‘(A) removal or remediation activity, in2 cluding soil and ground water remediation,

3 ‘‘(B) restoration of natural, historic, or

4 cultural resources at the site or the mitigation

5 of unavoidable losses of such resources incurred

6 in connection with the remediation or response

7 activity,

8 ‘‘(C) health assessments or health effects

9 studies,

10 ‘‘(D) environmental investigations,

11 ‘‘(E) remediation of off-site contamination

12 caused by activity on the site, and

13 ‘‘(F) any other costs reasonably required

14 by reason of the environmental conditions of the

15 site including demolition of existing contami16 nated structures, site security, and permit fees

17 necessary for remediation.’’.

18 (c) CLERICAL AMENDMENTS.—The section heading

19 for section 144 of such Code is amended by inserting be20 fore the period ‘‘; QUALIFIED CONTAMINATED SITE

21 REMEDIATION BOND’’.
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1 SEC. 204. SMALL BUSINESS ADMINISTRATION SET-ASIDE

2 FOR BROWNFIELD PREVENTION AND REDE3 VELOPMENT PROJECTS UNDER SECTION 504

4 DEVELOPMENT COMPANY PROGRAM.

5 Section 504 of the Small Business Investment Act

6 of 1958 (15 U.S.C. 697a) is amended by adding at the

7 end the following new subsection:

8 ‘‘(c) SET-ASIDE FOR BROWNFIELD PREVENTION

9 AND REDEVELOPMENT PROJECTS.—

10 ‘‘(1) PURPOSE.—The purpose of this subsection

11 is to make capital available to small, polluting indus12 tries, or to the prospective purchasers of such indus13 tries, that have limited or no access to capital from

14 conventional sources for the purposes of assessing

15 and cleaning up their sites and facilities or acquiring

16 new, clean technologies and production equipment.

17 ‘‘(2) SET-ASIDE.—The Administration shall set

18 aside the lesser of $50,000,000 or 10 percent of the

19 amount available for the development company pro20 gram in a fiscal year for local development compa21 nies to use to finance projects that—

22 ‘‘(A) assist existing businesses to carry out

23 site assessment and cleanup activities; or

24 ‘‘(B) assist prospective new business own25 ers or operators to carry out site assessment

26 and cleanup activities in order to facilitate the
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1 transition to new ownership or encourage indus2 trial succession.

3 ‘‘(3) DEFINITION.—In this subsection, the term

4 ‘site assessment’, with respect to a brownfield site,

5 means any investigation of the site determined ap6 propriate by the President and undertaken pursuant

7 to section 104(b) of the Comprehensive Environ8 mental Response, Compensation, and Liability Act

9 of 1980 (42 U.S.C. 9604(b)).’’.

10 SEC. 205. PROMOTION OF SMALL BUSINESS INVESTMENT

11 COMPANIES FOR BROWNFIELD ACTIVITIES.

12 Title III of the Small Business Investment Act of

13 1958 (15 U.S.C. 681 et seq.) is amended by adding at

14 the end the following new section:

15 ‘‘SEC. 321. SMALL BUSINESS INVESTMENT COMPANIES FOR

16 BROWNFIELD ACTIVITIES.

17 ‘‘(a) PROMOTION OF CERTAIN SMALL BUSINESS IN18 VESTMENT COMPANIES.—The Administration shall pro19 mote the formation of one or more small business invest20 ment companies devoted to—

21 ‘‘(1) brownfield site cleanup activities, including

22 those that use innovative or experimental cleanup

23 technologies; or

24 ‘‘(2) projects that help existing companies clean

25 up their facilities and adopt new, clean technologies.
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1 ‘‘(b) AUTHORITY TO WAIVE CERTAIN FEE.—For

2 any small business investment company described in sub3 section (a), the Administration may waive the filing fee

4 usually imposed by the Administration.

5 ‘‘(c) SET-ASIDE.—The Small Business Administra6 tion shall set aside the lesser of $2,000,000 or 10 percent

7 of the amount available for the small business investment

8 company program under this title to use to provide lever9 age to any small business investment company described

10 in subsection (a).

11 ‘‘(d) DEFINITION.—In this section, the term

12 ‘brownfield site’ means an abandoned, idled, or underused

13 commercial or industrial facility, the expansion or redevel14 opment of which is complicated by real or perceived envi15 ronmental contamination.’’.

Æ