I

107TH CONGRESS

1ST SESSION H. R. 2064

To provide for comprehensive brownfield site assessment, cleanup, and

redevelopment.

IN THE HOUSE OF REPRESENTATIVES

JUNE 5, 2001

Mr. QUINN (for himself, Mr. MEEHAN, Mr. MCHUGH, and Mr. MCGOVERN)

introduced the following bill; which was referred to the Committee on Financial Services, and in addition to the Committees on Small Business,

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 provide for comprehensive brownfield site 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 ‘‘Brownfields Redevelop5 ment Incentives Act’’.

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.

Sec. 4. Definitions.

TITLE I—REDEVELOPMENT OF BROWNFIELD SITES THROUGH

EXISTING COMMUNITY DEVELOPMENT AND SMALL BUSINESS

ASSISTANCE PROGRAMS

Subtitle A—Community Development Programs

Sec. 101. Eligibility of nonentitlement communities for Brownfields Economic

Development Program.

Sec. 102. Collateral for CDBG loan guarantees for loans funding brownfield

sites activities.

Sec. 103. Definitions.

Sec. 104. Community development financial institutions assistance for

brownfield sites activities.

Subtitle B—Small Business Programs

Sec. 111. Set-aside of general business loans for brownfield activities.

Sec. 112. Small business investment companies devoted to brownfield cleanup

activities.

Sec. 113. Small business development company set-aside for brownfield prevention and redevelopment projects.

Sec. 114. Sense of Congress regarding risk.

TITLE II—REDEVELOPMENT OF BROWNFIELD SITES THROUGH

ECONOMIC DEVELOPMENT ADMINISTRATION PROGRAMS

Sec. 201. Purposes.

Sec. 202. Definitions.

Sec. 203. Coordination.

Sec. 204. Grants for brownfield site redevelopment.

Sec. 205. Authorization of appropriations.

TITLE III—TAX INCENTIVES RELATING TO BROWNFIELDS

Sec. 301. Environmental remediation tax credit.

Sec. 302. Brownfields IRA.

Sec. 303. Exclusion of interest received on indebtedness incurred for environmental remediation.

Sec. 304. Expensing of environmental remediation costs.

Sec. 305. Credit for environmental remediation technology research.

1 SEC. 3. FINDINGS.

2 The Congress finds that—

3 (1) the biggest hurdle that cities, communities,

4 and the private sector face when trying to acquire

5 and redevelop brownfield sites is the lack of capital

6 to carry out critical early-stage activities, including
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1 site assessment and remediation planning, and the

2 actual cleanup itself;

3 (2) private financiers, on their own, are often

4 not willing or able to provide the funding needed to

5 take previously used property through the full rede6 velopment cycle;

7 (3) the components of successful brownfield site

8 cleanups fall under the jurisdiction of many existing

9 Federal programs;

10 (4) the issue of brownfields has given rise to

11 new concerns about project risk and collateral value,

12 and has complicated the traditional view of credit13 worthiness;

14 (5) the complexity of brownfield situations,

15 which varies depending on the nature and extent of

16 contamination, the intended end-use of the site, and

17 its location, means that no single approach, and no

18 single financial assistance tool, will fit the majority

19 of brownfield situations;

20 (6) to maximize available Federal resources, a

21 number of financial assistance tools need to be re22 fined so that they better link with existing financial

23 assistance programs; and

24 (7) to ensure that the Environmental Protection

25 Agency is as responsive as possible in meeting ongo-
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1 ing brownfield site challenges, and to reflect the

2 Agency’s evolving optimum role in these efforts, the

3 Environmental Protection Agency should provide

4 training, technical assistance, and direct outreach

5 services in conjunction with State and local

6 brownfield initiatives.

7 SEC. 4. DEFINITIONS.

8 For purposes of this Act:

9 (1) APPROPRIATE FEDERAL AGENT.—The term

10 ‘‘appropriate Federal agent’’ means—

11 (A) with respect to the use of the term

12 ‘‘brownfield site’’ in the Housing and Commu13 nity Development Act of 1974 and the Reigle

14 Community Development and Regulatory Im15 provement Act of 1994, the Secretary of Hous16 ing and Urban Development, in consultation

17 with the Administrator of the Environmental

18 Protection Agency;

19 (B) with respect to the use of the term

20 ‘‘brownfield site’’ in the Small Business Act,

21 the Small Business Investment Act of 1958,

22 and section 114 of this Act, the Administrator

23 of the Small Business Administration, in con24 sultation with the Administrator of the Envi25 ronmental Protection Agency; and
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1 (C) with respect to the use of the term

2 ‘‘brownfield site’’ in section 201(1) of this Act

3 and in the Public Works and Economic Devel4 opment Act of 1965, the Secretary of Com5 merce, in consultation with the Administrator

6 of the Environmental Protection Agency.

7 (2) BROWNFIELD SITE.—

8 (A) IN GENERAL.—The term ‘‘brownfield

9 site’’ means real property, the expansion, rede10 velopment, or reuse of which may be com11 plicated by the presence or potential presence

12 of—

13 (i) a hazardous substance (as defined

14 in section 101 of the Comprehensive Envi15 ronmental Response, Compensation, and

16 Liability Act of 1980 (42 U.S.C. 9601));

17 or

18 (ii) any other pollutant or contami19 nant, as determined by the appropriate

20 Federal agent.

21 (B) EXCLUSIONS.—Except as provided in

22 subparagraph (C), the term ‘‘brownfield site’’

23 does not include—

24 (i) a facility that is the subject of a

25 planned or ongoing removal action under
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1 the Comprehensive Environmental Re2 sponse, Compensation, and Liability Act of

3 1980 (42 U.S.C. 9601 et seq.);

4 (ii) a facility that is listed on the Na5 tional Priorities List, or is proposed for

6 listing on that list, under that Act;

7 (iii) a facility that is the subject of a

8 unilateral administrative order, a court

9 order, an administrative order on consent,

10 or a judicial consent decree that has been

11 issued to or entered into by the parties

12 under that Act;

13 (iv) a facility that is the subject of a

14 unilateral administrative order, a court

15 order, an administrative order on consent,

16 or a judicial consent decree that has been

17 issued to or entered into by the parties, or

18 a facility to which a permit has been issued

19 by the United States or an authorized

20 State, under—

21 (I) the Solid Waste Disposal Act

22 (42 U.S.C. 6901 et seq.);

23 (II) the Federal Water Pollution

24 Control Act (33 U.S.C. 1251 et seq.);
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1 (III) the Toxic Substances Con2 trol Act (15 U.S.C. 2601 et seq.); or

3 (IV) the Safe Drinking Water

4 Act (42 U.S.C. 300f et seq.);

5 (v) a facility—

6 (I) that is subject to corrective

7 action under section 3004(u) or

8 3008(h) of the Solid Waste Disposal

9 Act (42 U.S.C. 6924(u), 6928(h));

10 and

11 (II) to which a corrective action

12 permit or order has been issued or

13 modified to require the implementa14 tion of corrective measures;

15 (vi) a land disposal unit with respect

16 to which—

17 (I) a closure notification under

18 subtitle C of the Solid Waste Disposal

19 Act (42 U.S.C. 6921 et seq.) has been

20 submitted; and

21 (II) closure requirements have

22 been specified in a closure plan or

23 permit;

24 (vii) a facility that is subject to the

25 jurisdiction, custody, or control of a de-
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1 partment, agency, or instrumentality of the

2 United States, except for land held in trust

3 by the United States for an Indian tribe;

4 (viii) a portion of a facility—

5 (I) at which there has been a re6 lease of polychlorinated biphenyls; and

7 (II) that is subject to remediation

8 under the Toxic Substances Control

9 Act (15 U.S.C. 2601 et seq.); or

10 (ix) a portion of a facility, for which

11 portion assistance for response activity has

12 been obtained under subtitle I of the Solid

13 Waste Disposal Act (42 U.S.C. 6991 et

14 seq.) from the Leaking Underground Stor15 age Tank Trust Fund established by sec16 tion 9508 of the Internal Revenue Code of

17 1986.

18 (C) SITE-BY-SITE INCLUSIONS.—The term

19 ‘‘brownfield site’’ includes a site referred to in

20 clause (i), (iv), (v), (vi), (viii), or (ix) of sub21 paragraph (B), if, on a site-by-site basis, the

22 appropriate Federal agent determines that use

23 of the financial assistance at the site will—

24 (i) protect human health and the envi25 ronment; and
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1 (ii)(I) promote economic development;

2 or

3 (II) enable the creation of, preserva4 tion of, or addition to parks, greenways,

5 undeveloped property, other recreational

6 property, or other property used for non7 profit purposes.

8 (D) ADDITIONAL INCLUSIONS.—The term

9 ‘brownfield site’ includes a site that meets the

10 definition of ‘brownfield site’ under subpara11 graphs (A) through (C) that—

12 (i) is contaminated by a controlled

13 substance (as defined in section 102 of the

14 Controlled Substances Act (21 U.S.C.

15 802));

16 (ii)(I) is contaminated by petroleum

17 or a petroleum product excluded from the

18 definition of ‘hazardous substance’ under

19 section 101 of the Comprehensive Environ20 mental Response, Compensation, and Li21 ability Act of 1980 (42 U.S.C. 9601); and

22 (II) is a site determined by the appro23 priate Federal agent to be—

24 (aa) of relatively low risk, as

25 compared with other petroleum-only
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1 sites in the State in which the site is

2 located; and

3 (bb) a site for which there is no

4 viable responsible party and that will

5 be assessed, investigated, or cleaned

6 up by a person that is not potentially

7 liable for cleaning up the site; and

8 (III) is not subject to any order issued

9 under section 9003(h) of the Solid Waste

10 Disposal Act (42 U.S.C. 6991b(h)); or

11 (iii) is mine-scarred land.

12 TITLE I—REDEVELOPMENT OF

13 BROWNFIELD SITES

14 THROUGH EXISTING COMMU15 NITY DEVELOPMENT AND

16 SMALL BUSINESS ASSIST17 ANCE PROGRAMS

18 Subtitle A—Community

19 Development Programs

20 SEC. 101. ELIGIBILITY OF NONENTITLEMENT COMMU21 NITIES FOR BROWNFIELDS ECONOMIC DE22 VELOPMENT PROGRAM.

23 Section 108(q) of the Housing and Community De24 velopment Act of 1974 (42 U.S.C. 5308(q)) is amended—

25 (1) in paragraph (1)—
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1 (A) by inserting ‘‘(A)’’ after ‘‘grants’’; and

2 (B) by inserting before the period at the

3 end the following: ‘‘, and (B) to units of general

4 local government in nonentitlement areas for

5 the purpose of assisting environmental cleanup

6 and economic development activities related to

7 brownfield sites’’;

8 (2) in paragraph (2)—

9 (A) by inserting ‘‘(A)’’ after ‘‘only’’; and

10 (B) by inserting before the period at the

11 end the following: ‘‘, or (B) in the case of

12 grants pursuant to paragraph (1)(B), for the

13 purpose of environmental cleanup and economic

14 development activities related to brownfield

15 sites’’; and

16 (3) in the second sentence of paragraph (3), by

17 striking ‘‘Eligible’’ and inserting ‘‘Except in the case

18 of applications for grants pursuant to paragraph

19 (1)(B), eligible’’.

20 SEC. 102. COLLATERAL FOR CDBG LOAN GUARANTEES FOR

21 LOANS FUNDING BROWNFIELD SITES ACTIVI22 TIES.

23 Section 108(d) of the Housing and Community De24 velopment Act of 1974 (42 U.S.C. 5308(d)) is amended—
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1 (1) in paragraph (1), by striking ‘‘To’’ and in2 serting ‘‘Except as provided in paragraph (2), to’’;—

3 (2) by redesignating paragraph (2) as para4 graph (3); and

5 (3) by inserting after paragraph (1) the fol6 lowing new paragraph:

7 ‘‘(2) In the case of notes or other obligations issued

8 by a metropolitan city or urban county for the purposes

9 of financing environmental cleanup and economic develop10 ment activities related to brownfield sites, to assure the

11 repayment of such notes or obligations and charges in12 curred under this section, the Secretary shall require the

13 issuer—

14 ‘‘(A) to enter into a contract described in para15 graph (1)(A); and

16 ‘‘(B) furnish such security as may be deemed

17 appropriate by the Secretary in making such guar18 antees, including increments in local tax receipts

19 generated by the brownfield site activities and any

20 dedicated sources of revenue from such activities.’’.

21 SEC. 103. DEFINITIONS.

22 Section 108 of the Housing and Community Develop23 ment Act of 1974 (42 U.S.C. 5308) is amended by strik24 ing subsection (o) and inserting the following new sub25 section:
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1 ‘‘(o) DEFINITIONS.—For purposes of this section:

2 ‘‘(1) BROWNFIELD SITE.—The term ‘brownfield

3 site’ has the meaning given such term in section 4

4 of the Brownfields Redevelopment Incentives Act.

5 ‘‘(2) ELIGIBLE PUBLIC ENTITY.—The term ‘eli6 gible public entity’ means any unit of general local

7 government, including units of general local govern8 ment in nonentitlement areas.’’.

9 SEC. 104. COMMUNITY DEVELOPMENT FINANCIAL INSTITU10 TIONS ASSISTANCE FOR BROWNFIELD SITES

11 ACTIVITIES.

12 Section 121(a) of the Reigle Community Develop13 ment and Regulatory Improvement Act of 1994 (12

14 U.S.C. 4718(a)) is amended by inserting at the end the

15 following new paragraph:

16 ‘‘(6) BROWNFIELD CLEANUP AND REDEVELOP17 MENT.—In addition to the amounts authorized to be

18 appropriated under paragraph (1) or otherwise to

19 carry out this subtitle, there are authorized to be ap20 propriated to the Fund $25,000,000, except that

21 such amounts shall be available only for providing

22 assistance under section 108 to a community devel23 opment financial institution for carrying out a lend24 ing strategy that has been developed by the institu25 tion and has as its purpose assisting the environ-
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1 mental cleanup and economic development of invest2 ment areas that consist of one or more brownfield

3 sites (as such term is defined in section 4 of the

4 Brownfields Redevelopment Incentives Act).’’.

5 Subtitle B—Small Business

6 Programs

7 SEC. 111. SET-ASIDE OF GENERAL BUSINESS LOANS FOR

8 BROWNFIELD ACTIVITIES.

9 Section 7(a) of the Small Business Act (15 U.S.C.

10 636(a)) is amended by adding at the end the following

11 new paragraph:

12 ‘‘(31) SET-ASIDE FOR BROWNFIELD ACTIVI13 TIES.—

14 ‘‘(A) IN GENERAL.—In each fiscal year,

15 the Administrator of the Small Business Ad16 ministration shall set aside the lesser of

17 $100,000,000 or 2 percent of the amount made

18 available for the fiscal year to carry out this

19 subsection for loans described in subparagraph

20 (B).

21 ‘‘(B) USE OF FUNDS.—The Administrator

22 may use funds set aside under subparagraph

23 (A) to make loans under this subsection to

24 small-business concerns to assist such concerns

25 in carrying out site assessments, remediation
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1 planning, and cleanup activities with respect to

2 brownfield sites.

3 ‘‘(C) PARTICIPATION IN CERTAIN ACTIVI4 TIES REQUIRED.—The Administrator may not

5 make a loan under this paragraph to a small6 business concern unless the concern participates

7 in—

8 ‘‘(i) a voluntary program for the

9 cleanup of brownfield sites carried out by

10 the State in which the brownfield site for

11 which the loan is made is located; or

12 ‘‘(ii) other activities, approved by such

13 State and the Environmental Protection

14 Agency, for the cleanup of brownfield sites.

15 ‘‘(D) DEFINITIONS.—In this paragraph,

16 the following definitions apply:

17 ‘‘(i) BROWNFIELD SITE.—The term

18 ‘brownfield site’ has the meaning given

19 that term in section 4 of the Brownfields

20 Redevelopment Incentives Act.

21 ‘‘(ii) SITE ASSESSMENT.—The term

22 ‘site assessment’, with respect to a

23 brownfield site, means any investigation of

24 the site determined appropriate by the

25 President and carried out under section
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1 104(b) of the Comprehensive Environ2 mental Response, Compensation, and Li3 ability Act of 1980 (42 U.S.C. 9604(b)).’’.

4 SEC. 112. SMALL BUSINESS INVESTMENT COMPANIES DE5 VOTED TO BROWNFIELD CLEANUP ACTIVI6 TIES.

7 (a) IN GENERAL.—Part A of title III of the Small

8 Business Investment Act of 1958 (15 U.S.C. 681 et seq.)

9 is amended by adding at the end the following new section:

10 ‘‘SEC. 321. SMALL BUSINESS INVESTMENT COMPANIES DE11 VOTED TO BROWNFIELD CLEANUP ACTIVI12 TIES.

13 ‘‘(a) IN GENERAL.—In accordance with this part, the

14 Administrator shall promote the formation of not less than

15 1 small business investment company devoted to making

16 loans to small business concerns for—

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

18 those that use innovative or experimental cleanup

19 technologies; or

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

21 up their facilities and adopt new, clean technologies.

22 ‘‘(b) WAIVER OF FEES.—With respect to a small

23 business investment company described in subsection (a),

24 the Administrator may waive the fees imposed under sec25 tion 301(e).
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1 ‘‘(c) SET-ASIDE.—In each fiscal year, the Adminis2 trator shall set aside the lesser of $2,000,000 or 10 per3 cent of the amount made available for the fiscal year to

4 carry out this part for use in providing leverage to small

5 business investment companies described in subsection

6 (a).

7 ‘‘(d) PARTICIPATION IN CERTAIN ACTIVITIES RE8 QUIRED.—As a condition of the receipt of assistance made

9 available under this section, the Administrator shall re10 quire each small business investment company receiving

11 such assistance to require that each small business con12 cern to which the company makes a loan participate in—

13 ‘‘(1) a voluntary program for the cleanup of

14 brownfield sites carried out by the State in which

15 the brownfield site for which the loan is made is lo16 cated; or

17 ‘‘(2) other activities, approved by such State

18 and the Environmental Protection Agency, for the

19 cleanup of brownfield sites.’’.

20 (b) CONFORMING AMENDMENT.—Section 103 of the

21 Small Business Investment Act of 1958 (15 U.S.C. 662)

22 is amended—

23 (1) in paragraph (16), by striking ‘‘and’’ at the

24 end;
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1 (2) in paragraph (17), by striking the period at

2 the end and inserting ‘‘; and’’; and

3 (3) by adding at the end the following new

4 paragraph:

5 ‘‘(18) the term ‘brownfield site’ has the mean6 ing given that term in section 4 of the Brownfields

7 Redevelopment Incentives Act.’’.

8 SEC. 113. SMALL BUSINESS DEVELOPMENT COMPANY SET9 ASIDE FOR BROWNFIELD PREVENTION AND

10 REDEVELOPMENT PROJECTS.

11 Title 5 of the Small Business Investment Act of 1958

12 (15 U.S.C. 695 et seq.) is amended by adding at the end

13 the following new section:

14 ‘‘SEC. 511. ASSISTANCE FOR BROWNFIELD PREVENTION

15 AND REDEVELOPMENT PROJECTS.

16 ‘‘(a) PURPOSE.—The purpose of this section is to

17 make capital available to small, polluting industries, or to

18 the prospective purchasers of such industries, that have

19 limited or no access to capital from conventional sources

20 for assessing and cleaning up their sites and facilities or

21 acquiring new, clean technologies and production equip22 ment.

23 ‘‘(b) SET-ASIDE.—In each fiscal year, the Adminis24 trator shall set aside the lesser of $50,000,000 or 10 per25 cent of the amount made available for the fiscal year to
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1 carry out this title for assistance to local development

2 companies to enable such companies to finance projects

3 that—

4 ‘‘(1) assist existing small business concerns in

5 carrying out site assessments and cleanup activities

6 at brownfield sites; or

7 ‘‘(2) assist prospective owners or operators of

8 small business concerns in carrying out site assess9 ments and cleanup activities at brownfield sites nec10 essary to facilitate a transition in ownership or to

11 encourage industrial succession.

12 ‘‘(c) SITE ASSESSMENT DEFINED.—In this section,

13 the term ‘site assessment’, with respect to a brownfield

14 site, means any investigation of the site determined appro15 priate by the President and undertaken pursuant to sec16 tion 104(b) of the Comprehensive Environmental Re17 sponse, Compensation, and Liability Act of 1980 (42

18 U.S.C. 9604(b)).

19 ‘‘(d) PARTICIPATION IN CERTAIN ACTIVITIES RE20 QUIRED.—As a condition of the receipt of assistance made

21 available under this section, the Administrator shall re22 quire each local development company receiving such as23 sistance to require that each small business concern to

24 which the company makes a loan participate in—
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1 ‘‘(1) a voluntary program for the cleanup of

2 brownfield sites carried out by the State in which

3 the brownfield site for which the loan is made is lo4 cated; or

5 ‘‘(2) other activities, approved by such State

6 and the Environmental Protection Agency, for the

7 cleanup of brownfield sites.’’.

8 SEC. 114. SENSE OF CONGRESS REGARDING RISK.

9 It is the sense of Congress that—

10 (1) loans made to support activities related to

11 the cleanup and redevelopment of brownfield sites

12 may involve a greater degree of risk than loans

13 made for other purposes;

14 (2) the public good that can be achieved

15 through the cleanup and redevelopment of

16 brownfield sites justifies the making of such loans

17 despite the potential for increased risk; and

18 (3) in carrying out this subtitle, the Adminis19 trator of the Small Business Administration should

20 not fail to make assistance available for the cleanup

21 and redevelopment of brownfield sites merely be22 cause of such potential for increased risk.
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1 TITLE II—REDEVELOPMENT OF

2 BROWNFIELD SITES

3 THROUGH ECONOMIC DEVEL4 OPMENT ADMINISTRATION

5 PROGRAMS

6 SEC. 201. PURPOSES.

7 Consistent with section 2 of the Public Works and

8 Economic Development Act of 1965 (42 U.S.C. 3121), the

9 purposes of this title are—

10 (1) to provide targeted assistance, including

11 planning assistance, for projects that promote the

12 redevelopment, restoration, and economic recovery of

13 brownfield sites; and

14 (2) through such assistance, to further the

15 goals of restoring the employment and tax bases of,

16 and bringing new income and private investment to,

17 distressed communities that have not participated

18 fully in the economic growth of the United States

19 because of a lack of an adequate private sector tax

20 base to support essential public services and facili21 ties.

22 SEC. 202. DEFINITIONS.

23 Section 3 of the Public Works and Economic Devel24 opment Act of 1965 (42 U.S.C. 3122) is amended—
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1 (1) by redesignating paragraphs (1) through

2 (10) as paragraphs (2) through (11), respectively;

3 (2) by inserting before paragraph (2) (as so re4 designated) the following:

5 ‘‘(1) BROWNFIELD SITE.—The term ‘brownfield

6 site’ has the meaning given such term in section 4

7 of the Brownfields Redevelopment Incentives Act.’’;

8 and

9 (3) by adding at the end the following:

10 ‘‘(12) UNUSED LAND.—The term ‘unused land’

11 means any publicly-owned or privately-owned un12 used, underused, or abandoned land that is not con13 tributing to the quality of life or economic well-being

14 of the community in which the land is located.’’.

15 SEC. 203. COORDINATION.

16 Section 103 of the Public Works and Economic De17 velopment Act of 1965 (42 U.S.C. 3z132) is amended—

18 (1) by inserting ‘‘(a) COMPREHENSIVE ECO19 NOMIC DEVELOPMENT STRATEGIES.—’’ before ‘‘The

20 Secretary’’; and

21 (2) by adding at the end the following:

22 ‘‘(b) BROWNFIELD SITE REDEVELOPMENT.—The

23 Secretary shall coordinate activities relating to the redevel24 opment of brownfield sites under this Act with other Fed25 eral agencies, States, local governments, consortia of local
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1 governments, Indian tribes, nonprofit organizations, and

2 public-private partnerships.’’.

3 SEC. 204. GRANTS FOR BROWNFIELD SITE REDEVELOP4 MENT.

5 (a) IN GENERAL.—Title II of the Public Works and

6 Economic Development Act of 1965 (42 U.S.C. 3141 et

7 seq.) is amended—

8 (1) by redesignating sections 210 through 213

9 as sections 211 through 214, respectively; and

10 (2) by inserting after section 209 the following:

11 ‘‘SEC. 210. GRANTS FOR BROWNFIELD SITE REDEVELOP12 MENT.

13 ‘‘(a) IN GENERAL.—On the application of an eligible

14 recipient, the Secretary may make grants for projects to

15 alleviate or prevent conditions of excessive unemployment,

16 underemployment, blight, and infrastructure deterioration

17 associated with brownfield sites, including projects con18 sisting of—

19 ‘‘(1) development of public facilities;

20 ‘‘(2) development of public services;

21 ‘‘(3) business development (including funding of

22 a revolving loan fund);

23 ‘‘(4) planning;

24 ‘‘(5) technical assistance; and

25 ‘‘(6) training.
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1 ‘‘(b) CRITERIA FOR GRANTS.—The Secretary may

2 provide a grant for a project under this section only if—

3 ‘‘(1) the Secretary determines that the project

4 will assist the area where the project is or will be lo5 cated to meet, directly or indirectly, a special need

6 arising from—

7 ‘‘(A) a high level of unemployment or

8 underemployment, or a high proportion of low9 income households;

10 ‘‘(B) the existence of blight and infrastruc11 ture deterioration;

12 ‘‘(C) dislocations resulting from commer13 cial or industrial restructuring;

14 ‘‘(D) outmigration and population loss, as

15 indicated by—

16 ‘‘(i)(I) depletion of human capital (in17 cluding young, skilled, or educated popu18 lations);

19 ‘‘(II) depletion of financial capital (in20 cluding firms and investment); or

21 ‘‘(III) a shrinking tax base; and

22 ‘‘(ii) resulting—

23 ‘‘(I) fiscal pressure;

24 ‘‘(II) restricted access to mar25 kets; and
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1 ‘‘(III) constrained local develop2 ment potential; or

3 ‘‘(E) the closure or realignment of—

4 ‘‘(i) a military or Department of En5 ergy installation; or

6 ‘‘(ii) any other Federal facility; and

7 ‘‘(2) except in the case of a project consisting

8 of planning or technical assistance—

9 ‘‘(A) the Secretary has approved a com10 prehensive economic development strategy for

11 the area where the project is or will be located;

12 and

13 ‘‘(B) the project is consistent with the

14 comprehensive economic development strategy.

15 ‘‘(c) PARTICULAR COMMUNITY ASSISTANCE.—Assist16 ance under this section may include assistance provided

17 for activities identified by a community, the economy of

18 which is injured by the existence of 1 or more brownfield

19 sites, to assist the community in—

20 ‘‘(1) revitalizing affected areas by—

21 ‘‘(A) diversifying the economy of the com22 munity; or

23 ‘‘(B) carrying out industrial or commercial

24 (including mixed use) redevelopment projects on
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1 brownfield sites or sites adjacent to brownfield

2 sites;

3 ‘‘(2) carrying out development that conserves

4 environmental and agricultural resources by—

5 ‘‘(A) reusing existing facilities and infra6 structure;

7 ‘‘(B) reclaiming unused land and aban8 doned buildings; or

9 ‘‘(C) creating publicly owned parks, play10 grounds, recreational facilities, or cultural cen11 ters that contribute to the economic revitaliza12 tion of a community; or

13 ‘‘(3) carrying out a collaborative economic de14 velopment planning process, developed with broad15 based and diverse community participation, that ad16 dresses the economic repercussions and opportunities

17 posed by the existence of brownfield sites in an area.

18 ‘‘(d) DIRECT EXPENDITURE OR REDISTRIBUTION BY

19 ELIGIBLE RECIPIENT.—

20 ‘‘(1) IN GENERAL.—Subject to paragraph (2),

21 an eligible recipient of a grant under this section

22 may directly expend the grant funds or may redis23 tribute the funds to public and private entities in the

24 form of a grant, loan, loan guarantee, payment to
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1 reduce interest on a loan guarantee, or other appro2 priate assistance.

3 ‘‘(2) LIMITATION.—Under paragraph (1), an el4 igible recipient may not provide any grant to a pri5 vate for-profit entity.’’.

6 (b) CONFORMING AMENDMENT.—The table of con7 tents in section 1(b) of the Public Works and Economic

8 Development Act of 1965 (42 U.S.C. prec. 3121) is

9 amended by striking the items relating to sections 210

10 through 213 and inserting the following:

‘‘Sec. 210. Grants for brownfield site redevelopment.

‘‘Sec. 211. Changed project circumstances.

‘‘Sec. 212. Use of funds in projects constructed under projected cost.

‘‘Sec. 213. Reports by recipients.

‘‘Sec. 214. Prohibition on use of funds for attorney’s and consultant’s fees.’’.

11 SEC. 205. AUTHORIZATION OF APPROPRIATIONS.

12 (a) IN GENERAL.—Title VII of the Public Works and

13 Economic Development Act of 1965 (42 U.S.C. 3231 et

14 seq.) is amended by adding at the end the following:

15 ‘‘SEC. 704. AUTHORIZATION OF APPROPRIATIONS FOR

16 BROWNFIELD SITE REDEVELOPMENT.

17 ‘‘(a) IN GENERAL.—In addition to amounts made

18 available under section 701, there are authorized to be ap19 propriated to carry out section 210 $60,000,000 for each

20 of fiscal years 2002 through 2007. Such sums shall re21 main available until expended.

22 ‘‘(b) FEDERAL SHARE.—Notwithstanding section

23 204, subject to section 205, the Federal share of the cost
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1 of activities funded with amounts made available under

2 subsection (a) shall be not more than 75 percent.’’.

3 (b) CONFORMING AMENDMENT.—The table of con4 tents in section 1(b) of the Public Works and Economic

5 Development Act of 1965 (42 U.S.C. prec. 3121) is

6 amended by adding at the end of the items relating to

7 title VII the following:

‘‘Sec. 704. Authorization of appropriations for brownfield site redevelopment.’’.

8 TITLE III—TAX INCENTIVES

9 RELATING TO BROWNFIELDS

10 SEC. 301. ENVIRONMENTAL REMEDIATION TAX CREDIT.

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

12 chapter 1 of the Internal Revenue Code of 1986 (relating

13 to credits allowable) is amended by adding at the end

14 thereof the following new subpart:

15 ‘‘Subpart H—Environmental Remediation Credit

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

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

16 ‘‘SEC. 54. AMOUNT OF ENVIRONMENTAL REMEDIATION

17 CREDIT.

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

19 the environmental remediation credit determined under

20 this section is 50 percent of the costs—

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

22 for environmental remediation with respect to any
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1 qualified contaminated site which is owned by the

2 taxpayer, and

3 ‘‘(2) which are incurred by the taxpayer pursu4 ant to an environmental remediation plan for such

5 site which was approved by the Administrator of the

6 Environmental Protection Agency or by the head of

7 any State or local government agency designated by

8 the Administrator to carry out the Administrator’s

9 functions under this subpart with respect to such

10 site.

11 ‘‘(b) LIMITATION.—The amount of the credit deter12 mined under subsection (a) shall not exceed $50,000.

13 ‘‘(c) REMEDIATION PLAN MUST BE COMPLETED.—

14 ‘‘(1) IN GENERAL.—Except as otherwise pro15 vided in paragraph (2)—

16 ‘‘(A) no environmental remediation credit

17 shall be determined under this section with re18 spect to any qualified contaminated site unless

19 the Administrator of the Environmental Protec20 tion Agency (or such Administrator’s designee

21 under subsection (a)(2)) certifies the environ22 mental remediation plan for such site has been

23 completed, and

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

25 certifies that such plan has been completed,
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1 such credit shall be taken into account under

2 subsection (a) ratably over the 5 taxable year

3 period beginning with the taxable year in which

4 such plan was completed.

5 ‘‘(2) SPECIAL RULE WHERE EXTRAORDINARY

6 COST INCREASES.—If—

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

8 unforeseen circumstances the cost of completing

9 the remediation plan for any qualified contami10 nated site exceeds 200 percent of the estimated

11 costs of completing such plan, and

12 ‘‘(B) the State or local official admin13 istering the remediation credit program agrees

14 with such determination,

15 the taxpayer may cease the implementation of such

16 plan and shall be entitled to an environmental reme17 diation credit with respect to costs incurred before

18 such cessation. Such credit shall be taken into ac19 count under subsection (a) ratably over the 5-tax20 able-year period beginning with the taxable year in

21 which such cessation occurs.

22 ‘‘(d) CERTAIN PARTIES NOT ELIGIBLE.—

23 ‘‘(1) IN GENERAL.—A taxpayer shall not be eli24 gible for any credit determined under this section

25 with respect to any qualified contaminated site if—
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1 ‘‘(A) at any time on or before the date of

2 the enactment of this subpart, such taxpayer

3 was the owner or operator of any business on

4 such site,

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

6 date of enactment such taxpayer—

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

8 otherwise) arranged for the disposal or

9 treatment of any hazardous materials at

10 such site or arranged with a transporter

11 for transport for disposal or treatment of

12 any hazardous materials at such site, or

13 ‘‘(ii) had accepted any hazardous ma14 terials for transport to such site, or

15 ‘‘(C) the taxpayer is related to any tax16 payer referred to in subparagraph (A) or (B).

17 ‘‘(2) EXCEPTIONS.—

18 ‘‘(A) ACQUISITION OF BUSINESS OR SITE

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

20 not apply to a taxpayer who became described

21 therein by reason of the acquisition of the busi22 ness or site through foreclosure (or the equiva23 lent) of a security interest held by the taxpayer

24 or a related party if the taxpayer undertakes to

25 sell or otherwise dispose of such business or site
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1 in a reasonably expeditious manner on commer2 cially reasonable terms.

3 ‘‘(B) USE OF SITE REMEDIATED BY TAX4 PAYER.—Subparagraph (B) of paragraph (1)

5 shall not apply to a taxpayer with respect to

6 any site if—

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

8 subparagraph of the taxpayer (or a related

9 person) with respect to such site occur

10 after such taxpayer (or person) carry out

11 an environmental remediation plan for

12 such site (and the completion of such plan

13 is certified under subsection (c)(1)), and

14 ‘‘(ii) such actions are part of a bona

15 fide manufacturing process (or other in16 dustrial activity at such site) of such tax17 payer (or person) which complies with all

18 Federal environmental laws and regula19 tions.

20 ‘‘(e) QUALIFIED CONTAMINATED SITE.—For pur21 poses of this subpart, the term ‘qualified contaminated

22 site’ means any contaminated site if—

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

24 such that without participation in the environmental
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1 remediation credit program redevelopment is un2 likely,

3 ‘‘(2) there is a strong likelihood of redevelop4 ment of the site for industrial or commercial use

5 that will result in creation of jobs and expansion of

6 the tax base, and

7 ‘‘(3) environmental remediation and redevelop8 ment are likely to be completed within a reasonable

9 period of time.

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

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

12 subpart—

13 ‘‘(1) IN GENERAL.—The term ‘contaminated

14 site’ means any site if at least 1 of the following en15 vironmental conditions is present on such site:

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

17 hazardous, toxic, or dangerous substance.

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

19 hazardous, toxic, or dangerous substance.

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

21 ‘‘(2) HAZARDOUS, TOXIC, OR DANGEROUS SUB22 STANCE.—Any substance, waste, or material shall be

23 treated as a hazardous, toxic, or dangerous sub24 stance if it is so treated under—
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1 ‘‘(A) the Comprehensive Environmental

2 Response, Compensation, and Liability Act of

3 1980 (42 U.S.C. 9601 et seq.) as in effect on

4 the date of the enactment of this section, or

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

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

7 The following materials shall in any event be treated

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

9 derivative thereof, friable asbestos or any asbestos

10 containing material, polychlorinated biphenyls, and

11 lead paint.

12 ‘‘(b) ENVIRONMENTAL REMEDIATION.—For pur13 poses of this subpart, the term ‘environmental remedi14 ation’ means—

15 ‘‘(1) removal or remediation activity in accord16 ance with the plan approved under section 54(a)(2),

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

18 resources at the site, or the mitigation of unavoid19 able losses of such resources incurred in connection

20 with the remediation or response activity,

21 ‘‘(3) health assessments or health effects stud22 ies related to the site,

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

24 caused by activity on the site (other than remedi-
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1 ation activities of a type not permitted for the site),

2 and

3 ‘‘(5) any other costs specified in the plan ap4 proved under section 54(a)(2), including demolition

5 of existing contaminated structures, site security,

6 permit fees necessary for remediation, and environ7 mental audits.

8 ‘‘(c) RELATED PERSON.—For purposes of this sub9 part, persons shall be treated as related to each other if

10 such persons are treated as a single employer under the

11 regulations prescribed under section 52(b) or such persons

12 bear a relationship to each other specified in section

13 267(b) or 707(b).

14 ‘‘(d) COORDINATION WITH EXPENSING OF ENVIRON15 MENTAL REMEDIATION COSTS.—The costs taken into ac16 count under section 54(a) do not include any costs for

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

18 (b) CREDIT MADE PART OF GENERAL BUSINESS

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

20 amended by striking ‘‘plus’’ at the end of paragraph (12),

21 by striking the period at the end of paragraph (13) and

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

23 following new paragraph:

24 ‘‘(14) the environmental remediation credit

25 under section 54(a).’’.
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1 (c) LIMITATION ON CARRYBACK.—Subsection (d) of

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

3 thereof the following new paragraph:

4 ‘‘(10) NO CARRYBACK OF ENVIRONMENTAL RE5 MEDIATION CREDIT BEFORE EFFECTIVE DATE.—No

6 portion of the unused business credit for any taxable

7 year which is attributable to the credit under section

8 54 may be carried back to a taxable year beginning

9 on or before the date of the enactment of section

10 54.’’.

11 (d) DEDUCTION FOR UNUSED CREDIT.—Subsection

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

13 ‘‘and’’ at the end of paragraph (8), by striking the period

14 at the end of paragraph (9) and inserting ‘‘, and’’, and

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

16 ‘‘(10) the environmental remediation credit de17 termined under section 54.’’.

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

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

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

21 item:

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

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

23 this section shall apply to taxable years beginning after

24 the date of the enactment of this Act.
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1 SEC. 302. BROWNFIELDS IRA.

2 (a) IN GENERAL.—Subpart C of part II of sub3 chapter E of chapter 1 of the Internal Revenue Code of

4 1986 is amended by inserting after section 468B the fol5 lowing new section:

6 ‘‘SEC. 468C. SPECIAL RULES FOR HAZARDOUS WASTE RE7 MEDIATION RESERVES.

8 ‘‘(a) IN GENERAL.—There shall be allowed as a de9 duction for any taxable year the amount of payments

10 made by the taxpayer to a Hazardous Waste Remediation

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

12 such taxable year.

13 ‘‘(b) LIMITATION ON AMOUNTS PAID INTO RE14 SERVE.—The amount which a taxpayer may pay into the

15 Reserve for any taxable year shall not exceed the lesser

16 of—

17 ‘‘(1) $1,000,000, or

18 ‘‘(2) the excess (if any) of $1,000,000 over the

19 amount paid into the Reserve for all prior taxable

20 years.

21 ‘‘(c) INCOME AND DEDUCTIONS OF THE TAX22 PAYER.—

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

24 There shall be includible in the gross income of the

25 taxpayer for any taxable year—
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1 ‘‘(A) any amount distributed from the Re2 serve during such taxable year, and

3 ‘‘(B) any deemed distribution under sub4 section (e).

5 ‘‘(2) DEDUCTION WHEN ECONOMIC PERFORM6 ANCE OCCURS.—In addition to any deduction under

7 subsection (a), there shall be allowable as a deduc8 tion for any taxable year the amount of the qualified

9 hazardous waste costs with respect to which eco10 nomic performance (within the meaning of section

11 461(h)(2)) occurs during such taxable year.

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

13 ‘‘(1) IN GENERAL.—For purposes of this sec14 tion, the term ‘Hazardous Waste Remediation Re15 serve’ means a reserve established by the taxpayer

16 for purposes of this section.

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

18 Hazardous Waste Remediation Reserve is exempt

19 from taxation under this subtitle unless such Re20 serve has ceased to be a Hazardous Waste Remedi21 ation Reserve by reason of subsection (e). Notwith22 standing the preceding sentence, any such Reserve

23 shall be subject to the taxes imposed by section 511

24 (relating to imposition of tax on unrelated business

25 income of charitable, etc. organizations).
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1 ‘‘(3) CONTRIBUTIONS TO RESERVE.—The Re2 serve shall not accept any payments (or other

3 amounts) other than payments with respect to which

4 a deduction is allowable under subsection (a).

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

6 used exclusively to pay the qualified hazardous waste

7 costs of the taxpayer.

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

9 Under regulations prescribed by the Secretary, for

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

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

12 treated in the same manner as a trust described in

13 section 501(c)(21).

14 ‘‘(e) DEEMED DISTRIBUTIONS.—

15 ‘‘(1) DISQUALIFICATION OF RESERVE FOR

16 SELF-DEALING.—In any case in which a Reserve vio17 lates any provision of this section or section 4951,

18 the Secretary may disqualify such Reserve from the

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

20 paragraph applies, the Reserve shall be treated as

21 having distributed all of its funds on the date such

22 determination takes effect.

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

24 shall be treated as having distributed all of its

25 funds—
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1 ‘‘(A) on the date which is 10 years after

2 the date such Reserve was established unless,

3 as of such date—

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

5 property of the taxpayer is contaminated

6 with hazardous waste, and

7 ‘‘(ii) a remediation plan has been pre8 pared for such site, and

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

10 Secretary, on the date which is 10 years after

11 the date such Reserve was established unless,

12 as of such date, it is reasonably anticipated that

13 the remaining funds in the Reserve will be dis14 tributed before the date which is 15 years after

15 the date such Reserve was established.

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

17 QUALIFIED HAZARDOUS WASTE COSTS.—The tax im18 posed by this chapter for any taxable year in which any

19 amount distributed from a Reserve is not used exclusively

20 to pay qualified hazardous waste costs shall be increased

21 by 10 percent of such amount.

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

23 purposes of this section, the term ‘qualified hazardous

24 waste costs’ means—
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1 ‘‘(1) the costs paid or incurred by the taxpayer

2 in connection with the assessment of—

3 ‘‘(A) the extent of the environmental con4 tamination of a site which is owned by the tax5 payer, and

6 ‘‘(B) the expected cost of environmental

7 remediation required for such site, and

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

9 to remediate such contamination.

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

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

12 52 shall be treated as one person for purposes of sub13 section (b), and the dollar amount contained in such sub14 section shall be allocated among such persons in such

15 manner as the Secretary shall prescribe.

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

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

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

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

taxable year and is made within 21 20 ⁄2 months after the close

21 of such taxable year.’’.

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

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

24 such Code is amended by inserting after the item relating

25 to section 468B the following new item:
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‘‘Sec. 468C. Special rules for hazardous waste remediation reserves.’’.

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

2 this section shall apply to taxable years beginning after

3 the date of the enactment of this Act.

4 SEC. 303. EXCLUSION OF INTEREST RECEIVED ON INDEBT5 EDNESS INCURRED FOR ENVIRONMENTAL

6 REMEDIATION.

7 (a) GENERAL RULE.—Part III of subchapter B of

8 chapter 1 of the Internal Revenue Code of 1986 (relating

9 to items specifically excluded from gross income) is

10 amended by redesignating section 139 as section 139A

11 and by inserting after section 138 the following new sec12 tion:

13 ‘‘SEC. 139. EXCLUSION OF INTEREST RECEIVED ON INDEBT14 EDNESS INCURRED FOR ENVIRONMENTAL

15 REMEDIATION.

16 ‘‘(a) GENERAL RULE.—In the case of a financial in17 stitution, gross income does not include amounts received

18 as interest on indebtedness incurred for environmental re19 mediation with respect to any qualified contaminated site.

20 ‘‘(b) LIMITATION.—The amount excluded under sub21 section (a) for a taxable year shall not exceed $100,000.

22 ‘‘(c) DEFINITIONS.—For purposes of this section—

23 ‘‘(1) ENVIRONMENTAL REMEDIATION AND

24 QUALIFIED CONTAMINATED SITE.—The term ‘envi-
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1 ronmental remediation’ has the meaning given to

2 such term in section 54A(b) and the term ‘qualified

3 contaminated site’ has the meaning given such term

4 in section 54(d).

5 ‘‘(2) FINANCIAL INSTITUTION.—The term ‘fi6 nancial institution’ shall have the meaning given to

7 such term by section 265(b)(5).’’.

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

9 for Part III of subchapter B of chapter 1 of such Code

10 is amended by striking the last item and inserting the fol11 lowing new items:

‘‘Sec. 139. Exclusion of interest received on indebtedness incurred

for environmental remediation.

‘‘Sec. 139A. Cross references to other Acts.’’.

12 (c) 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. 304. EXPENSING OF ENVIRONMENTAL REMEDIATION

16 COSTS.

17 (a) DEDUCTION MADE PERMANENT.—Section 198 of

18 the Internal Revenue Code of 1986 (relating to expensing

19 of environmental remediation costs) is amended by strik20 ing subsection (h).

21 (b) SITE SUBJECT TO LONG-TERM LEASE.—Para22 graph (1) of section 198(c) of such Code (defining quali23 fied contaminated site) is amended by adding at the end

24 the following new subparagraph:
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1 ‘‘(D) LONG-TERM LEASE.—An area shall

2 not fail to be described in subparagraph (A)(i)

3 solely because such area is subject to a lease

4 the term of which is not less than 30 years and

5 the lessee of which is the taxpayer.’’.

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

7 this section shall apply to taxable years beginning after

8 the date of the enactment of this Act.

9 SEC. 305. CREDIT FOR ENVIRONMENTAL REMEDIATION

10 TECHNOLOGY RESEARCH.

11 (a) IN GENERAL.—Subsection (a) of section 41 of the

12 Internal Revenue Code of 1986 (relating to general rule

13 for credit for increasing research activities) is amended by

14 striking ‘‘and’’ at the end of paragraph (1), by striking

15 the period at the end of paragraph (2) and inserting ‘‘,

16 and’’, and by inserting after paragraph (2) the following

17 new paragraph:

18 ‘‘(3) 20 percent of the environmental research

19 remediation technology expenses.’’.

20 (b) ENVIRONMENTAL RESEARCH REMEDIATION

21 TECHNOLOGY EXPENSES.—Section 41 of such Code is

22 amended by redesignating subsections (f), (g), and (h) as

23 subsections (g), (h), and (i), respectively, and by inserting

24 after subsection (e) the following new subsection:
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1 ‘‘(f) ENVIRONMENTAL RESEARCH REMEDIATION

2 TECHNOLOGY EXPENSES.—For purposes of subsection

3 (a)(3)—

4 ‘‘(1) The term ‘environmental research remedi5 ation technology expenses’ means amounts paid or

6 incurred—

7 ‘‘(A) for research described in paragraph

8 (2) with respect to which expenditures may be

9 treated as an expense under section 174, or

10 ‘‘(B) for equipment which is used in re11 search described in paragraph (2) and which is

12 chargeable to property of a character which is

13 subject to the allowance for depreciation under

14 section 167 (relating to allowance for deprecia15 tion).

16 ‘‘(2) RESEARCH.—For purposes of paragraph

17 (1), research is described in this paragraph if such

18 research addresses the reduction of any hazardous,

19 toxic, or dangerous substance on a contaminated

20 site.

21 ‘‘(3) DEFINITIONS.—For purposes of this sub22 section, the terms ‘hazardous, toxic, or dangerous

23 substance’ and ‘contaminated site’ shall have the

24 meaning given to such terms by section 54A(a).
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1 ‘‘(4) DOUBLE BENEFIT.—Amounts taken into

2 account under this subsection shall not be taken into

3 account under any other provision of this section.’’.

4 (c) CONFORMING AMENDMENTS.—

5 (1) Paragraphs (2) and (4)(B) of section 41(b)

6 of such Code are each amended by striking ‘‘sub7 section (f)(1)’’ and inserting ‘‘subsection (g)(1)’’.

8 (2) Section 41(g)(1)(B) of such Code is amend9 ed by striking ‘‘and basic research payments’’ and

10 inserting ‘‘, basic research payments, and environ11 mental research remediation technology expenses’’.

12 (3) Section 45C(d)(3) of such Code is amended

13 by striking ‘‘section 41(f)’’ and inserting ‘‘section

14 41(g)’’.

15 (4) Paragraphs (1)(C) and (9)(C)(i) of section

16 197(f) of such Code are each amended by striking

17 ‘‘section 41(f)(1)’’ and inserting ‘‘section 41(g)(1)’’.

18 (5) Section 280C(b)(3) of such Code is

19 amended—

20 (A) by striking ‘‘section 41(f)(5)’’ and in21 serting ‘‘section 41(g)(5)’’,

22 (B) by striking ‘‘section 41(f)(1)(B)’’ and

23 inserting ‘‘section 41(g)(1)(B)’’, and

24 (C) by striking ‘‘section 41(f)(1)’’ and in25 serting ‘‘section 41(g)(1)’’.
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1 (6) Section 936 of such Code is amended—

2 (A) in subsection (h)(5)(C)(i)(IV)(c) by

3 striking ‘‘section 41(f)’’ and inserting ‘‘section

4 41(g)’’, and

5 (B) in subsection (j)(5)(D) by striking

6 ‘‘section 41(f)(3)’’ and inserting ‘‘section

7 41(g)(3)’’.

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

9 this section shall apply to amounts paid or incurred after

10 the date of the enactment of this Act.

Æ