I 

108TH CONGRESS 

2D SESSION H. R. 4480

To amend the Internal Revenue Code of 1986 to allow taxpayers a credit 

against income tax for expenditures to remediate contaminated sites. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 2, 2004

Mr. TURNER of Ohio (for himself, Mr. BOEHNER, Mr. BRADLEY of New 

Hampshire, Mr. CHABOT, Mr. CHOCOLA, Mr. ENGLISH, Mr. GERLACH, 

Mr. GILLMOR, Ms. HART, Mr. HOBSON, Mr. HOEKSTRA, Mrs. JOHNSON

of Connecticut, Mr. KLINE, Mr. LATOURETTE, Mr. NEY, Mr. OXLEY, 

Mr. PORTMAN, Ms. PRYCE of Ohio, Mr. REGULA, Mr. ROGERS of Michigan, Mr. SHAYS, Mr. TIBERI, Mrs. JONES of Ohio, and Mr. WALSH) 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 allow taxpayers a credit against income tax for expenditures to 

remediate contaminated sites.

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 Revitaliza5 tion Act of 2004’’. 
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1 SEC. 2. CREDIT FOR EXPENDITURES TO REMEDIATE CON2 TAMINATED SITES. 

3 (a) IN GENERAL.—Subpart D of part IV of sub4 chapter A of chapter 1 of the Internal Revenue Code of 

5 1986 (relating to business related credits) is amended by 

6 adding at the end the following new section: 

7 ‘‘SEC. 45G. ENVIRONMENTAL REMEDIATION CREDIT. 

8 ‘‘(a) IN GENERAL.—For purposes of section 38, the 

9 environmental remediation credit determined under this 

10 section is 50 percent of the qualified remediation expendi11 tures paid or incurred by the taxpayer during the taxable 

12 year with respect to a qualified contaminated site located 

13 in an eligible area. 

14 ‘‘(b) QUALIFIED REMEDIATION EXPENDITURES.—

15 For purposes of this section, the term ‘qualified remedi16 ation expenditures’ means expenditures, whether or not 

17 chargeable to capital account, in connection with—

18 ‘‘(1) the abatement or control of any hazardous 

19 substance (as defined in section 198(d)), petroleum, 

20 or any petroleum by-product at the qualified con21 taminated site in accordance with an approved reme22 diation and redevelopment plan, 

23 ‘‘(2) the complete demolition of any structure 

24 on such site if any portion of such structure is de25 molished in connection with such abatement or con26 trol, 
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1 ‘‘(3) the removal and disposal of property in 

2 connection with the activities described in para3 graphs (1) and (2), and 

4 ‘‘(4) the reconstruction of utilities in connection 

5 with such activities. 

6 For purposes of this section, the term ‘approved remedi7 ation and redevelopment plan’ means any plan for such 

8 abatement, control, and redevelopment of a qualified con9 taminated site which is approved by the State development 

10 agency for the State in which the qualified contaminated 

11 site is located. 

12 ‘‘(c) CREDIT MAY NOT EXCEED ALLOCATION.—

13 ‘‘(1) IN GENERAL.—The environmental remedi14 ation credit determined under this section with re15 spect to any qualified contaminated site shall not ex16 ceed the credit amount allocated under this section 

17 by the State development agency to the taxpayer for 

18 the remediation and redevelopment plan submitted 

19 by the taxpayer with respect to such site. 

20 ‘‘(2) TIME FOR MAKING ALLOCATION.—An allo21 cation shall be taken into account under paragraph 

22 (1) for any taxable year only if made before the 

23 close of the calendar year in which such taxable year 

24 begins. 

25 ‘‘(3) MANNER OF ALLOCATION.—
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1 ‘‘(A) ALLOCATION MUST BE PURSUANT TO

2 PLAN.—No amount may be allocated under this 

3 subsection to any qualified contaminated site 

4 unless such amount is allocated pursuant to a 

5 qualified allocation plan of the State develop6 ment agency of the State in which such site is 

7 located. 

8 ‘‘(B) QUALIFIED ALLOCATION PLAN.—For 

9 purposes of this paragraph, the term ‘qualified 

10 allocation plan’ means any plan—

11 ‘‘(i) which sets forth selection criteria 

12 to be used to determine priorities of the 

13 State development agency in allocating 

14 credit amounts under this section, and 

15 ‘‘(ii) which gives preference in allo16 cating credit amounts under this section to 

17 qualified contaminated sites based on—

18 ‘‘(I) the extent of poverty, 

19 ‘‘(II) whether the site is located 

20 in an enterprise zone or renewal com21 munity, 

22 ‘‘(III) whether the site is located 

23 in the central business district of the 

24 local jurisdiction, 
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1 ‘‘(IV) the extent of the required 

2 environmental remediation, 

3 ‘‘(V) the extent of the commer4 cial, industrial, or residential redevel5 opment of the site in addition to envi6 ronmental remediation, 

7 ‘‘(VI) the extent of the financial 

8 commitment to such redevelopment, 

9 and 

10 ‘‘(VII) the amount of new em11 ployment expected to result from such 

12 redevelopment. 

13 ‘‘(4) STATES MAY IMPOSE OTHER CONDI14 TIONS.—Nothing in this section shall be construed 

15 to prevent any State from requiring assurances, in16 cluding bonding, that any project for which a credit 

17 amount is allocated under this section will be prop18 erly completed or that the financial commitments of 

19 the taxpayer are actually carried out. 

20 ‘‘(d) STATE ENVIRONMENTAL REMEDIATION CREDIT

21 CEILING.—

22 ‘‘(1) IN GENERAL.—The State environmental 

23 remediation credit ceiling applicable to any State for 

24 any calendar year shall be an amount equal to the 

25 sum of—
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1 ‘‘(A) the unused State environmental re2 mediation credit ceiling (if any) of such State 

3 for the preceding calendar year, 

4 ‘‘(B) such State’s share of the national en5 vironmental remediation credit limitation for 

6 the calendar year, 

7 ‘‘(C) the amount of State environmental 

8 remediation credit ceiling returned in the cal9 endar year, plus 

10 ‘‘(D) the amount (if any) allocated under 

11 paragraph (3) to such State by the Secretary. 

12 For purposes of subparagraph (A), the unused State 

13 environmental remediation credit ceiling for any cal14 endar year is the excess (if any) of the sum of the 

15 amounts described in subparagraphs (B), (C), and 

16 (D) over the aggregate environmental remediation 

17 credit amount allocated for such year. 

18 ‘‘(2) NATIONAL ENVIRONMENTAL REMEDIATION

19 CREDIT LIMITATION.—

20 ‘‘(A) IN GENERAL.—The national environ21 mental remediation credit limitation for each 

22 calendar year is $1,000,000,000. 

23 ‘‘(B) STATE’S SHARE OF LIMITATION.—A 

24 State’s share of such limitation is the amount 

25 which bears the same ratio to the limitation ap-
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1 plicable under subparagraph (A) for the cal2 endar year as such State’s population bears to 

3 the population of the United States. 

4 ‘‘(3) UNUSED ENVIRONMENTAL REMEDIATION

5 CREDIT CARRYOVERS ALLOCATED AMONG CERTAIN

6 STATES.—

7 ‘‘(A) IN GENERAL.—The unused environ8 mental remediation credit carryover of a State 

9 for any calendar year shall be assigned to the 

10 Secretary for allocation among qualified States 

11 for the succeeding calendar year. 

12 ‘‘(B) UNUSED ENVIRONMENTAL REMEDI13 ATION CREDIT CARRYOVER.—For purposes of 

14 this paragraph, the unused environmental reme15 diation credit carryover of a State for any cal16 endar year is the excess (if any) of—

17 ‘‘(i) the unused State environmental 

18 remediation credit ceiling for the year pre19 ceding such year, over 

20 ‘‘(ii) the aggregate environmental re21 mediation credit amount allocated for such 

22 year. 

23 ‘‘(C) FORMULA FOR ALLOCATION OF UN24 USED ENVIRONMENTAL REMEDIATION CREDIT

25 CARRYOVERS AMONG QUALIFIED STATES.—
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1 Rules similar to the rules of clauses (iii) and 

2 (iv) of section 42(h)(3)(D) shall apply for pur3 poses of this paragraph. 

4 ‘‘(4) POPULATION.—For purposes of this sub5 section, population shall be determined in accord6 ance with section 146(j). 

7 ‘‘(5) INFLATION ADJUSTMENT.—In the case of 

8 any calendar year after 2004, the $1,000,000,000 

9 amount contained in paragraph (2) shall be in10 creased by an amount equal to—

11 ‘‘(A) such dollar amount, multiplied by 

12 ‘‘(B) the cost-of-living adjustment deter13 mined under section 1(f)(3) for the calendar 

14 year, determined by substituting ‘calendar year 

15 2003’ for ‘calendar year 1992’ in subparagraph 

16 (B) thereof. 

17 Any increase determined under the preceding sen18 tence shall be rounded to the nearest multiple of 

19 $500,000. 

20 ‘‘(e) ELIGIBLE AREA; OTHER DEFINITIONS.—For 

21 purposes of this section—

22 ‘‘(1) ELIGIBLE AREA.—

23 ‘‘(A) IN GENERAL.—The term ‘eligible 

24 area’ means the entire area encompassed by a 

25 local governmental unit if such area contains at 
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1 least 1 census tract having a poverty rate of at 

2 least 20 percent. 

3 ‘‘(B) AREAS NOT WITHIN CENSUS

4 TRACTS.—In the case of an area which is not 

5 tracted for population census tracts, the equiva6 lent county divisions (as defined by the Bureau 

7 of the Census for purposes of defining poverty 

8 areas) shall be used for purposes of determining 

9 poverty rates. 

10 ‘‘(C) USE OF CENSUS DATA.—Population 

11 and poverty rate shall be determined by the 

12 most recent decennial census data available. 

13 ‘‘(2) QUALIFIED CONTAMINATED SITE.—The 

14 term ‘qualified contaminated site’ has the meaning 

15 given to such term by section 198, determined by 

16 treating petroleum and petroleum by-products as 

17 hazardous substances. 

18 ‘‘(3) POSSESSIONS TREATED AS STATES.—The 

19 term ‘State’ includes a possession of the United 

20 States. 

21 ‘‘(f) CREDIT MAY BE ASSIGNED.—

22 ‘‘(1) IN GENERAL.—If a taxpayer elects the ap23 plication of this subsection for any taxable year, the 

24 amount of credit determined under this section for 

25 such year which would (but for this subsection) be 
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1 allowable to the taxpayer shall be allowable to the 

2 person designated by the taxpayer. The person so 

3 designated shall be treated as the taxpayer for pur4 poses of subsection (h). 

5 ‘‘(2) TREATMENT OF AMOUNTS PAID FOR AS6 SIGNMENT.—If any amount is paid to the person 

7 who assigns the credit determined under this sec8 tion, no portion of such amount or such credit shall 

9 be includible in the payee’s gross income. 

10 ‘‘(g) TREATMENT OF POTENTIAL RESPONSIBLE PAR11 TIES.—

12 ‘‘(1) IN GENERAL.—No credit shall be allowed 

13 under this section to any potential responsible party 

14 (within the meaning of the Comprehensive Environ15 mental Response, Compensation, and Liability Act 

16 of 1980) with respect to any qualified contaminated 

17 site (including by reason of receiving an assignment 

18 of the credit under subsection (f)) unless at least 25 

19 percent of the cost of remediating such site is borne 

20 by such party. 

21 ‘‘(2) RELIEF FROM LIABILITY FOR OTHER 75

22 PERCENT.—If the requirement of paragraph (1) is 

23 met by a potential responsible party, such party 

24 shall not be liable under any Federal law for any
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1 cost taken into account in determining whether such 

2 requirement is met. 

3 ‘‘(3) AMOUNTS PAID FOR CREDIT ASSIGNMENT

4 NOT ELIGIBLE.—Amounts paid by a potential re5 sponsible party to any person for the assignment by 

6 such person of the credit under subsection (f)) shall 

7 not be taken into account in determining whether 

8 the requirement of paragraph (1) is met. 

9 ‘‘(h) RECAPTURE OF CREDIT IF ENVIRONMENTAL

10 REMEDIATION NOT PROPERLY COMPLETED.—

11 ‘‘(1) IN GENERAL.—If the State development 

12 agency of the State in which the qualified contami13 nated site is located determines that the environ14 mental remediation which is part of the approved re15 mediation and redevelopment plan for such site was 

16 not properly completed, then the taxpayer’s tax 

17 under this chapter for the taxable year in which 

18 such determination is made shall be increased by the 

19 credit recapture amount. 

20 ‘‘(2) CREDIT RECAPTURE AMOUNT.—For pur21 poses of paragraph (1), the credit recapture amount 

22 is an amount equal to the sum of—

23 ‘‘(A) the aggregate decrease in the credits 

24 allowed to the taxpayer under section 38 for all 

25 prior taxable years which would have resulted if 
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1 the credit allowable by reason of this section 

2 were not allowed, plus 

3 ‘‘(B) interest at the overpayment rate es4 tablished under section 6621 on the amount de5 termined under subparagraph (A) for each 

6 prior taxable year for the period beginning on 

7 the due date for filing the return for the prior 

8 taxable year involved. 

9 No deduction shall be allowed under this chapter for 

10 interest described in subparagraph (B). 

11 ‘‘(3) SPECIAL RULES.—

12 ‘‘(A) TAX BENEFIT RULE.—The tax for 

13 the taxable year shall be increased under para14 graph (1) only with respect to credits allowed 

15 by reason of this section which were used to re16 duce tax liability. In the case of credits not so 

17 used to reduce tax liability, the carryforwards 

18 and carrybacks under section 39 shall be appro19 priately adjusted. 

20 ‘‘(B) NO CREDITS AGAINST TAX.—Any in21 crease in tax under this subsection shall not be 

22 treated as a tax imposed by this chapter for 

23 purposes of determining the amount of any 

24 credit or the tax imposed by section 55. 

25 ‘‘(i) DENIAL OF DOUBLE BENEFIT.—
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1 ‘‘(1) IN GENERAL.—No deduction shall be al2 lowed for that portion of the qualified remediation 

3 expenditures otherwise allowable as a deduction for 

4 the taxable year which is equal to the amount of the 

5 credit determined for such taxable year under this 

6 section. 

7 ‘‘(2) SIMILAR RULE WHERE TAXPAYER CAP8 ITALIZES RATHER THAN DEDUCTS EXPENSES.—If—

9 ‘‘(A) the amount of the credit determined 

10 for the taxable year under this section, exceeds 

11 ‘‘(B) the amount allowable as a deduction 

12 for such taxable year for qualified remediation 

13 expenditures (determined without regard to 

14 paragraph (1)), 

15 the amount chargeable to capital account for the 

16 taxable year for such expenditures shall be reduced 

17 by the amount of such excess. 

18 ‘‘(3) CONTROLLED GROUPS.—In the case of a 

19 corporation which is a member of a controlled group 

20 of corporations (within the meaning of section 

21 52(a)) or a trade or business which is treated as 

22 being under common control with other trades or 

23 businesses (within the meaning of section 52(b)), 

24 this subsection shall be applied under rules pre-
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1 scribed by the Secretary similar to the rules applica2 ble under subsections (a) and (b) of section 52.’’

3 (b) CREDIT TREATED AS BUSINESS CREDIT.—Sec4 tion 38(b) of such Code is amended by striking ‘‘plus’’ 

5 at the end of paragraph (14), by striking the period at 

6 the end of paragraph (15) and inserting ‘‘, plus’’, and by 

7 adding at the end the following new paragraph: 

8 ‘‘(16) the environmental remediation credit de9 termined under section 45G(a).’’. 

10 (c) NO CARRYBACKS BEFORE EFFECTIVE DATE.—

11 Subsection (d) of section 39 of such Code (relating to 

12 carryback and carryforward of unused credits) is amended 

13 by adding at the end the following: 

14 ‘‘(11) NO CARRYBACK OF SECTION 45G CREDIT

15 BEFORE EFFECTIVE DATE.—No portion of the un16 used business credit for any taxable year which is 

17 attributable to the environmental remediation credit 

18 determined under section 45G may be carried back 

19 to a taxable year ending before the date of the en20 actment of section 45G.’’. 

21 (d) CONFORMING AMENDMENT.—The table of sec22 tions for subpart D of part IV of subchapter A of chapter 

23 1 of such Code is amended by adding at the end the fol24 lowing new item:

‘‘Sec. 45G. Environmental remediation credit.’’.
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1 (e) 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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