I

105TH CONGRESS

1ST SESSION H. R. 990

To amend the Comprehensive Environmental Response, Compensation, and

Liability Act of 1980 to provide for the development and use of

brownfields, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

MARCH 6, 1997

Mr. QUINN (for himself, Mr. MCHALE, Mr. FRANKS of New Jersey, Mr.

MEEHAN, Mr. DOYLE, Mrs. KELLY, Mr. TRAFICANT, Mr. SMITH of New

Jersey, Mr. EHLERS, Mr. LIPINSKI, Mr. GREENWOOD, Mr.

FRELINGHUYSEN, Mr. CONYERS, Mrs. CARSON, Mr. PORTER, Mr. HOLDEN, Ms. CHRISTIAN-GREEN, Mr. KENNEDY of Rhode Island, and Mr.

MCHUGH) introduced the following bill; which was referred to the Committee on Commerce, and in addition to the Committees on Transportation and Infrastructure, and Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such

provisions as fall within the jurisdiction of the committee concerned

A BILL

To amend the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 to provide for the

development and use of brownfields, and for other

purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
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1 SECTION 1. SHORT TITLE.

2 This Act may be cited as the ‘‘Brownfields Remedi3 ation and Economic Development Act of 1997’’.

4 SEC. 2. FINDINGS AND PURPOSES.

5 (a) FINDINGS.—The Congress finds that:

6 (1) The General Accounting Office has esti7 mated that between 130,000 and 425,000 aban8 doned industrial sites will need cleanup action to be9 come economically viable once again.

10 (2) The cleanup costs to remediate these

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

12 hundreds of billions of dollars.

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

14 one economic priority in many American cities.

15 (4) Encouraging private investment for these

16 remediation efforts presents an opportunity to create

17 jobs and promote economic development in localities

18 and the States.

19 (b) PURPOSE.—The purpose of this Act is to estab20 lish a program under which the Federal Government, in

21 cooperation with appropriate State and local entities, shall

22 remediate ‘‘brownfields’’ in order to return them to pro23 ductive use while conserving prime open space, or ‘‘green24 fields’’.
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1 SEC. 3. EPA CERTIFICATION OF STATE BROWNFIELD PRO2 GRAMS.

3 (a) CERTIFICATION.—The Administrator of the Envi4 ronmental Protection Agency (hereinafter in this Act re5 ferred to as the ‘‘Administrator’’) shall certify any State

6 brownfield program submitted to the Administrator under

7 this Act that satisfies the criteria of section 4. Certifi8 cation of State programs shall be granted only for pro9 grams which have jurisdiction over brownfield sites which

10 have been contaminated prior to enactment of this Act.

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

12 a significant change in a certified State brownfield pro13 gram, the State shall submit a statement to the Adminis14 trator demonstrating that the program continues of satisfy

15 the criteria of section 4.

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

17 the States, where appropriate, technical assistance and ex18 pertise with respect to certified State brownfield pro19 grams.

20 SEC. 4. EVALUATION CRITERIA FOR STATE BROWNFIELDS

21 PROGRAMS.

22 A State brownfields program may be certified under

23 this Act if the program—

24 (1) covers only contaminated sites that are not

25 listed on the National Priorities List;
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1 (2) provides for public participation, in good

2 faith prior to the granting of a release from liability

3 under sections 4 and 5;

4 (3) provides for the reopening of a brownfields

5 cleanup proposal:

6 (A) if any person has undertaken any as7 pect of the site assessment or remediation in a

8 fraudulent manner, including misrepresentation

9 of such person’s relationship to the site;

10 (B) if there is a significant change in sci11 entific standards applicable under the State

12 program to remediation;

13 (C) if a landowner or prospective pur14 chaser of a brownfield site wishes to change the

15 proposed use of a site to one that demands a

16 higher cleanup standard; or

17 (D) if the proposed remediation fails or the

18 remedy is not properly maintained or operated;

19 and

20 (4) contains cleanup criteria for brownfield sites

21 that are protective of public health and the environ22 ment; and

23 (5) includes coordination among State agencies

24 for environmental protection and business/economic

25 development.
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1 SEC. 5. LANDOWNER LIABILITY.

2 In the case of any brownfield site remediation carried

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

4 upon completion of remediation pursuant to such program

5 and release from State liability under any applicable State

6 provisions regarding liability for contaminated sites, the

7 owner of the brownfield site and the facility operator at

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

9 107 of the Comprehensive Environmental Response, Com10 pensation, and Liability Act of 1980 for the contamination

11 described in the site assessment and evaluation carried out

12 under the State program at the site concerned to the ex13 tent such liability is based on the status of such person

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

15 SEC. 6. OTHER LIABILITY RELEASES.

16 In the case of any brownfield site remediation carried

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

18 upon completion of remediation pursuant to such program

19 and release from State liability under any applicable State

20 provisions regarding liability for contaminated sites, the

21 Administrator shall release the following persons from li22 ability under sections 106 and 107 of the Comprehensive

23 Environmental Response, Compensation, and Liability Act

24 of 1980 for the contamination described in the site assess25 ment and evaluation carried out under the State program

26 at the site concerned to the extent such liability is based
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1 on the status of such person as described in paragraph

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

3 (1) LENDERS AND DEVELOPERS.—Lenders and

4 economic developers, except that no lender or devel5 oper shall be released from liability under sections

6 106 and 107 for pollution directly caused by their

7 actions.

8 (2) PROSPECTIVE PURCHASERS.—Prospective

9 purchasers of a brownfields site.

10 (3) LOCAL GOVERNMENTS.—Local governments

11 who have not been involved with the management of

12 a brownfields site.

13 SEC. 7. FEDERAL WAIVER.

14 If the State brownfield cleanup program includes a

15 waiver from State permitting requirements, relevant Fed16 eral permit requirements shall also be waived by operation

17 of law.

18 SEC. 8. BROWNFIELDS IRA.

19 (a) IN GENERAL.—Subpart C of part II of sub20 chapter E of chapter 1 of the Internal Revenue Code of

21 1986 is amended by inserting after section 468B the fol22 lowing new section:
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1 ‘‘SEC. 468C. SPECIAL RULES FOR HAZARDOUS WASTE RE2 MEDIATION RESERVES.

3 ‘‘(a) IN GENERAL.—There shall be allowed as a de4 duction for any taxable year the amount of payments

5 made by the taxpayer to a Hazardous Waste Remediation

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

7 such taxable year.

8 ‘‘(b) LIMITATION ON AMOUNTS PAID INTO RE9 SERVE.—The amount which a taxpayer may pay into the

10 Reserve for any taxable year shall not exceed the lesser

11 of—

12 ‘‘(1) $5,000,000, or

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

14 amount paid into the Reserve for all prior taxable

15 years.

16 ‘‘(c) INCOME AND DEDUCTIONS OF THE TAX17 PAYER.—

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

19 There shall be includible in the gross income of the

20 taxpayer for any taxable year—

21 ‘‘(A) any amount distributed from the Re22 serve during such taxable year, and

23 ‘‘(B) any deemed distribution under sub24 section (e).

25 ‘‘(2) DEDUCTION WHEN ECONOMIC PERFORM26 ANCE OCCURS.—In addition to any deduction under
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1 subsection (a), there shall be allowable as a deduc2 tion for any taxable year the amount of the qualified

3 hazardous waste costs with respect to which eco4 nomic performance (within the meaning of section

5 461(h)(2)) occurs during such taxable year.

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

7 ‘‘(1) IN GENERAL.—For purposes of this sec8 tion, the term ‘Hazardous Waste Remediation Re9 serve’ means a reserve established by the taxpayer

10 for purposes of this section.

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

12 Hazardous Waste Remediation Reserve is exempt

13 from taxation under this subtitle unless such Re14 serve has ceased to be a Hazardous Waste Remedi15 ation Reserve by reason of subsection (e). Notwith16 standing the preceding sentence, any such Reserve

17 shall be subject to the taxes imposed by section 511

18 (relating to imposition of tax on unrelated business

19 income of charitable, etc. organizations).

20 ‘‘(3) CONTRIBUTIONS TO RESERVE.—The Re21 serve shall not accept any payments (or other

22 amounts) other than payments with respect to which

23 a deduction is allowable under subsection (a).
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1 ‘‘(4) USE OF RESERVE.—The Reserve shall be

2 used exclusively to pay the qualified hazardous waste

3 costs of the taxpayer.

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

5 Under regulations prescribed by the Secretary, for

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

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

8 treated in the same manner as a trust described in

9 section 501(c)(21).

10 ‘‘(e) DEEMED DISTRIBUTIONS.—

11 ‘‘(1) DISQUALIFICATION OF RESERVE FOR

12 SELF-DEALING.—In any case in which a Reserve vio13 lates any provision of this section or section 4951,

14 the Secretary may disqualify such Reserve from the

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

16 paragraph applies, the Reserve shall be treated as

17 having distributed all of its funds on the date such

18 determination takes effect.

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

20 shall be treated as having distributed all of its

21 funds—

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

23 the date such Reserve was established unless,

24 as of such date—
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1 ‘‘(i) it has been determined that some

2 property of the taxpayer is contaminated

3 with hazardous waste, and

4 ‘‘(ii) a remediation plan has been pre5 pared for such site, and

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

7 Secretary, on the date which is 10 years after

8 the date such Reserve was established unless,

9 as of such date, it is reasonably anticipated that

10 the remaining funds in the Reserve will be dis11 tributed before the date which is 15 years after

12 the date such Reserve was established.

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

14 QUALIFIED HAZARDOUS WASTE COSTS.—The tax im15 posed by this chapter for any taxable year in which any

16 amount distributed from a Reserve is not used exclusively

17 to pay qualified hazardous waste costs shall be increased

18 by 10 percent of such amount.

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

20 purposes of this section, the term ‘qualified hazardous

21 waste costs’ means—

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

23 in connection with the assessment of—
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1 ‘‘(A) the extent of the environmental con2 tamination of a site which is owned by the tax3 payer, and

4 ‘‘(B) the expected cost of environmental

5 remediation required for such site, and

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

7 to remediate such contamination.

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

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

10 52 shall be treated as one person for purposes of sub11 section (b), and the dollar amount contained in such sub12 section shall be allocated among such persons in such

13 manner as the Secretary shall prescribe.

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

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

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

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

taxable year and is made within 21 18 ⁄2 months after the close

19 of such taxable year.’’.

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

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

22 such Code is amended by inserting after the item relating

23 to section 468B the following new item:

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

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