I 

108TH CONGRESS 

1ST SESSION H. R. 402

To amend the Internal Revenue Code of 1986 to expand the incentives 

for the environmental cleanup of certain contaminated industrial sites 

designated as brownfields. 

IN THE HOUSE OF REPRESENTATIVES 

JANUARY 28, 2003

Mr. ANDREWS 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 expand 

the incentives for the environmental cleanup of certain 

contaminated industrial sites designated as brownfields.

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 Cleanup 

5 Enhancement Act of 2003’’.

6 SEC. 2. CREDIT TO HOLDERS OF QUALIFIED BROWNFIELDS 

7 CLEANUP BONDS. 

8 (a) IN GENERAL.—Subpart B of part IV of sub9 chapter A of chapter 1 of the Internal Revenue Code of 
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1 1986 is amended by adding at the end the following new 

2 section: 

3 ‘‘SEC. 30B. CREDIT TO HOLDERS OF QUALIFIED 

4 BROWNFIELDS CLEANUP BONDS. 

5 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of a tax6 payer who holds a qualified brownfields cleanup bond on 

7 a credit allowance date of such bond which occurs during 

8 the taxable year, there shall be allowed as a credit against 

9 the tax imposed by this chapter for such taxable year an 

10 amount equal to the sum of the credits determined under 

11 subsection (b) with respect to credit allowance dates dur12 ing such year on which the taxpayer holds such bond. 

13 ‘‘(b) AMOUNT OF CREDIT.—

14 ‘‘(1) IN GENERAL.—The amount of the credit 

15 determined under this subsection with respect to any 

16 credit allowance date for a qualified brownfields 

17 cleanup bond is 25 percent of the annual credit de18 termined with respect to such bond. 

19 ‘‘(2) ANNUAL CREDIT.—The annual credit de20 termined with respect to any qualified brownfields 

21 cleanup bond is the product of—

22 ‘‘(A) the applicable credit rate, multiplied 

23 by 

24 ‘‘(B) the outstanding face amount of the 

25 bond. 
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1 ‘‘(3) APPLICABLE CREDIT RATE.—For purposes 

2 of paragraph (1), the applicable credit rate with re3 spect to an issue is the rate equal to an average 

4 market yield (as of the day before the date of 

5 issuance of the issue) on outstanding long-term cor6 porate debt obligations (determined under regula7 tions prescribed by the Secretary). 

8 ‘‘(4) SPECIAL RULE FOR ISSUANCE AND RE9 DEMPTION.—In the case of a bond which is issued 

10 during the 3-month period ending on a credit allow11 ance date, the amount of the credit determined 

12 under this subsection with respect to such credit al13 lowance date shall be a ratable portion of the credit 

14 otherwise determined based on the portion of the 3-

15 month period during which the bond is outstanding. 

16 A similar rule shall apply when the bond is re17 deemed. 

18 ‘‘(c) QUALIFIED BROWNFIELDS CLEANUP BOND.—

19 For purposes of this section—

20 ‘‘(1) IN GENERAL.—The term ‘qualified 

21 brownfields cleanup bond’ means any bond issued as 

22 part of an issue if—

23 ‘‘(A) 95 percent or more of the proceeds of 

24 such issue are to be used for the abatement or 
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1 control of hazardous substances at a qualified 

2 contaminated site, 

3 ‘‘(B) the bond is issued by a State or local 

4 government within the jurisdiction of which 

5 such site is located, 

6 ‘‘(C) the issuer designates such bond for 

7 purposes of this section, and 

8 ‘‘(D) the term of each bond which is part 

9 of such issue does not exceed 15 years. 

10 ‘‘(2) LIMITATION ON AMOUNT OF BONDS DES11 IGNATED.—The maximum aggregate face amount of 

12 bonds issued during any calendar year which may be 

13 designated under paragraph (1) by any issuer shall 

14 not exceed the limitation amount allocated under 

15 paragraph (3) for such calendar year to such issuer. 

16 ‘‘(3) NATIONAL LIMITATION ON AMOUNT OF

17 BONDS DESIGNATED.—There is a national qualified 

18 brownfields cleanup bond limitation for each cal19 endar year. Such limitation is—

20 ‘‘(A) $100,000,000 for 2004, and 

21 ‘‘(B) $150,000,000 for 2005. 

22 ‘‘(4) ALLOCATION OF LIMITATION AMONG

23 STATES.—The limitation applicable under paragraph 

24 (3) for any calendar year shall be allocated among 

25 the States by the Secretary of the Treasury. 
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1 ‘‘(5) CARRYOVER OF UNUSED LIMITATION.—If 

2 for any calendar year—

3 ‘‘(A) the amount allocated under para4 graph (4) to any State, exceeds 

5 ‘‘(B) the amount of bonds issued during 

6 such year which are designated under para7 graph (1) pursuant to such allocation, 

8 the limitation amount under paragraph (4) for such 

9 State for the following calendar year shall be in10 creased by the amount of such excess. 

11 ‘‘(6) BOND TO BE PAID BACK FROM ANY TAX

12 REVENUE INCREASE.—A bond shall not be treated 

13 as a qualified brownfields cleanup bond unless any 

14 increase in real property tax revenues (attributable 

15 to increases in assessed value) by reason of the car16 rying out of the purposes described in paragraph 

17 (1)(A) is reserved exclusively for debt service on the 

18 issue referred to in paragraph (1) (and similar 

19 issues) to the extent such increase does not exceed 

20 such debt service.

21 ‘‘(d) LIMITATION BASED ON AMOUNT OF TAX.—

22 ‘‘(1) IN GENERAL.—The credit allowed under 

23 subsection (a) for any taxable year shall not exceed 

24 the excess of—
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1 ‘‘(A) the sum of the regular tax liability 

2 (as defined in section 26(b)) plus the tax im3 posed by section 55, over 

4 ‘‘(B) the sum of the credits allowable 

5 under part IV of subchapter A (other than sub6 part C thereof, relating to refundable credits). 

7 ‘‘(2) CARRYOVER OF UNUSED CREDIT.—If the 

8 credit allowable under subsection (a) exceeds the 

9 limitation imposed by paragraph (1) for such taxable 

10 year, such excess shall be carried to the succeeding 

11 taxable year and added to the credit allowable under 

12 subsection (a) for such taxable year. 

13 ‘‘(e) OTHER DEFINITIONS.—For purposes of this 

14 section—

15 ‘‘(1) CREDIT ALLOWANCE DATE.—The term 

16 ‘credit allowance date’ means—

17 ‘‘(A) March 15, 

18 ‘‘(B) June 15, 

19 ‘‘(C) September 15, and 

20 ‘‘(D) December 15. 

21 Such term includes the last day on which the bond 

22 is outstanding. 

23 ‘‘(2) BOND.—The term ‘bond’ includes any ob24 ligation. 
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1 ‘‘(3) STATE.—The term ‘State’ includes the 

2 District of Columbia and any possession of the 

3 United States. 

4 ‘‘(4) QUALIFIED CONTAMINATED SITE.—The 

5 term ‘qualified contaminated site’ means a 

6 brownfield site designated by the Administrator of 

7 the Environmental Protection Agency. 

8 ‘‘(5) HAZARDOUS SUBSTANCE.—The term ‘haz9 ardous substance’ has the meaning provided by sec10 tion 198(d). 

11 ‘‘(f) CREDIT INCLUDED IN GROSS INCOME.—Gross 

12 income includes the amount of the credit allowed to the 

13 taxpayer under this section (determined without regard to 

14 subsection (d)) and the amount so included shall be treat15 ed as interest income. 

16 ‘‘(g) BONDS HELD BY REGULATED INVESTMENT

17 COMPANIES.—If any qualified brownfields cleanup bond 

18 is held by a regulated investment company, the credit de19 termined under subsection (a) shall be allowed to share20 holders of such company under procedures prescribed by 

21 the Secretary. 

22 ‘‘(h) CREDITS MAY BE STRIPPED.—Under regula23 tions prescribed by the Secretary— 

24 ‘‘(1) IN GENERAL.—There may be a separation 

25 (including at issuance) of the ownership of a quali-
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1 fied brownfields cleanup bond and the entitlement to 

2 the credit under this section with respect to such 

3 bond. In case of any such separation, the credit 

4 under this section shall be allowed to the person who 

5 on the credit allowance date holds the instrument ev6 idencing the entitlement to the credit and not to the 

7 holder of the bond. 

8 ‘‘(2) CERTAIN RULES TO APPLY.—In the case 

9 of a separation described in paragraph (1), the rules 

10 of section 1286 shall apply to the qualified 

11 brownfields cleanup bond as if it were a stripped 

12 bond and to the credit under this section as if it 

13 were a stripped coupon. 

14 ‘‘(i) TREATMENT FOR ESTIMATED TAX PURPOSES.—

15 Solely for purposes of sections 6654 and 6655, the credit 

16 allowed by this section to a taxpayer by reason of holding 

17 a qualified brownfields cleanup bond on a credit allowance 

18 date shall be treated as if it were a payment of estimated 

19 tax made by the taxpayer on such date. 

20 ‘‘(j) CREDIT MAY BE TRANSFERRED.—Nothing in 

21 any law or rule of law shall be construed to limit the trans22 ferability of the credit allowed by this section through sale 

23 and repurchase agreements. 
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1 ‘‘(k) REPORTING.—Issuers of qualified brownfields 

2 cleanup bonds shall submit reports similar to the reports 

3 required under section 149(e).’’

4 (b) REPORTING.—Subsection (d) of section 6049 of 

5 such Code (relating to returns regarding payments of in6 terest) is amended by adding at the end the following new 

7 paragraph: 

8 ‘‘(8) REPORTING OF CREDIT ON QUALIFIED

9 BROWNFIELDS CLEANUP BONDS.—

10 ‘‘(A) IN GENERAL.—For purposes of sub11 section (a), the term ‘interest’ includes amounts 

12 includible in gross income under section 30B(f) 

13 and such amounts shall be treated as paid on 

14 the credit allowance date (as defined in section 

15 30B(e)(1)). 

16 ‘‘(B) REPORTING TO CORPORATIONS, 

17 ETC.—Except as otherwise provided in regula18 tions, in the case of any interest described in 

19 subparagraph (A) of this paragraph, subsection 

20 (b)(4) of this section shall be applied without 

21 regard to subparagraphs (A), (H), (I), (J), (K), 

22 and (L)(i). 

23 ‘‘(C) REGULATORY AUTHORITY.—The Sec24 retary may prescribe such regulations as are 

25 necessary or appropriate to carry out the pur-
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1 poses of this paragraph, including regulations 

2 which require more frequent or more detailed 

3 reporting.’’

4 (c) CONFORMING AMENDMENT.—The table of sec5 tions for subpart B of part IV of subchapter A of chapter 

6 1 of such Code is amended by adding at the end the fol7 lowing new item:

‘‘Sec. 30B. Credit to holders of qualified public brownfields cleanup bonds.’’

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

9 this section shall apply to obligations issued after Decem10 ber 31, 2003.

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