I 

108TH CONGRESS 

2D SESSION H. R. 3892

To amend the Internal Revenue Code of 1986 to encourage businesses to 

establish hazardous waste remediation reserves, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 4, 2004

Ms. HART introduced the following bill; which was referred to the Committee 

on Ways and Means 

A BILL

To amend the Internal Revenue Code of 1986 to encourage 

businesses to establish hazardous waste remediation reserves, and for other purposes.

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

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Brownfield Redevelop5 ment Reserve Act’’. 

6 SEC. 2. BROWNFIELDS IRA. 

7 (a) IN GENERAL.—Subpart C of part II of sub8 chapter E of chapter 1 of the Internal Revenue Code of 

9 1986 is amended by inserting after section 468B the fol10 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) $1,000,000, or 

13 ‘‘(2) the excess (if any) of $1,000,000 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:

‘‘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.

Æ