‘‘(ii) paragraph (1) shall not apply to
the extent that the deduction equivalent of
such portion exceeds—
‘‘(I) $25,000, reduced by
‘‘(II) the aggregate amount of
the passive activity loss (and the de-
duction equivalent of any passive ac-
tivity credit which is not so attrib-
utable and is not attributable to the
rehabilitation credit determined under
section 47) to which paragraph (1)
applies after the application of sub-
paragraph (A).
‘‘(C) $55,500 LIMIT FOR REHABILITATION
CREDITS.—In the case of the portion of the
passive activity credit for any taxable year
which is attributable to the rehabilitation credit
determined under section 47—
‘‘(i) subparagraph (A) shall not apply,
and
‘‘(ii) paragraph (1) shall not apply to
the extent that the deduction equivalent of
such portion exceeds—
‘‘(I) $55,500, reduced by
‘‘(II) the aggregate amount of
the passive activity loss (and the de-
duction equivalent of any passive ac-
tivity credit which is not so attrib-
utable) to which paragraph (1) applies
for the taxable year after the applica-
tion of subparagraphs (A) and (B).
‘‘(3) ADJUSTED GROSS INCOME.—For purposes
of paragraph (2)(A), adjusted gross income shall be
determined without regard to—
‘‘(A) any amount includable in gross in-
come under section 86,
‘‘(B) any amount excludable from gross in-
come under section 135,
‘‘(C) any amount allowable as a deduction
under section 219, and
‘‘(D) any passive activity loss.’’.
(b) CONFORMING AMENDMENTS.—
(1) Subparagraph (B) of section 469(i)(4) of
the Internal Revenue Code of 1986 is amended to
read as follows:
‘‘(B) 
REDUCTION
FOR
SURVIVING
SPOUSE’S EXEMPTION.—For purposes of sub-
paragraph (A), the $25,000 amounts under
paragraph (2)(A) and (2)(B)(ii) and the
$55,500 amount under paragraph (2)(C)(ii)
shall each be reduced by the amount of the ex-
emption under paragraph (1) (determined with-
out regard to the reduction contained in para-
graph (2)(A)) which is allowable to the surviv-
ing spouse of the decedent for the taxable year
ending with or within the taxable year of the es-
tate.’’.
(2) Subparagraph (A) of section 469(i)(5) of
such Code is amended by striking clauses (i), (ii),
and (iii) and inserting the following:
‘‘(i) ‘$12,500’ for ‘$25,000’ in sub-
paragraphs (A) and (B)(ii) of paragraph
(2),
‘‘(ii) ‘$50,000’ for ‘$100,000’ in para-
graph (2)(A)’’, and
‘‘(iii) ‘$27,750’ for ‘$55,500’ in para-
graph (2)(C)(ii).’’.
(3) The subsection heading for subsection (i) of
section 469 of such Code is amended by striking
‘‘$25,000’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to property placed in service on
or after the date of the enactment of this Act, in taxable
years ending on or after such date.
SEC. 202. REHABILITATION CREDIT ALLOWED TO OFFSET
PORTION OF ALTERNATIVE MINIMUM TAX.
(a) IN GENERAL.—Section 38(c) of the Internal Rev-
enue Code of 1986 (relating to limitation based on amount
of tax) is amended by redesignating paragraph (2) as
paragraph (3) and by inserting after paragraph (1) the
following new paragraph:
‘‘(2) REHABILITATION
INVESTMENT
CREDIT
MAY OFFSET PORTION OF MINIMUM TAX.—
‘‘(A) IN GENERAL.—In the case of the re-
habilitation investment tax credit—
‘‘(i) this section and section 39 shall
be applied separately with respect to such
credit, and
‘‘(ii) for purposes of applying para-
graph (1) to such credit—
‘‘(I) the tentative minimum tax
under subparagraph (A) thereof shall
be reduced by the minimum tax offset
amount determined under subpara-
graph (B) of this paragraph, and
‘‘(II) the limitation under para-
graph (1) (as modified by subclause
(I)) shall be reduced by the credit al-
lowed under subsection (a) for the
taxable year (other than the rehabili-
tation investment tax credit).
‘‘(B) MINIMUM
TAX
OFFSET
AMOUNT.—
For purposes of subparagraph (A)(ii)(I), the
minimum tax offset amount is an amount equal
to—
‘‘(i) in the case of a taxpayer not de-
scribed in clause (ii), the lesser of—
‘‘(I) 25 percent of the tentative
minimum tax for the taxable year, or
‘‘(II) $20,000, or
‘‘(ii) in the case of a C corporation
other than a closely held C corporation (as
defined in section 469(j)(1)), 5 percent of
the tentative minimum tax for the taxable
year.
‘‘(C) REHABILITATION
INVESTMENT
TAX
CREDIT.—For purposes of this paragraph, the
term ‘regular investment tax credit’ means the
portion of the credit under subsection (a) which
is attributable to the credit determined under
section 47.’’.
(b) CONFORMING AMENDMENT.—Section 38(d) of
the Internal Revenue Code of 1986 (relating to compo-
nents of investment credit) is amended by adding at the
end the following new paragraph:
‘‘(4) SPECIAL
RULE
FOR
REHABILITATION
CREDIT.—Notwithstanding paragraphs (1) and (2),
the rehabilitation investment tax credit (as defined
in subsection (c)(2)(C)) shall be treated as used
last.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 1994.
SEC. 
203. 
COMMERCIAL 
INDUSTRIAL 
DEVELOPMENT
BONDS.
(a) FACILITY BONDS.—
(1) IN
GENERAL.—Subsection (a) of section
142 of the Internal Revenue Code of 1986 (relating
to exempt facility bond) is amended by striking ‘‘or’’
at the end of paragraph (11), by striking the period
at the end of paragraph (12) and inserting a
comma, and by adding at the end the following new
paragraphs:
‘‘(13) sports facilities,
‘‘(14) convention or trade show facilities,
‘‘(15) freestanding parking facilities,
‘‘(16) air or water pollution control facilities, or
‘‘(17) industrial parks.’’
(2) INDUSTRIAL PARKS DEFINED.—Section 142
of the Internal Revenue Code of 1986 is amended by
adding at the end the following new subsection:
‘‘(k) INDUSTRIAL PARKS.—A facility shall be treated
as described in subsection (a)(17) only if all of the prop-
erty to be financed by the net proceeds of the issue—
‘‘(1) is—
‘‘(A) land, and
‘‘(B) water, sewage, drainage, or similar
facilities, or transportation, power, or commu-
nication facilities incidental to the use of such
land as an industrial park, and
‘‘(2) is not structures or buildings (other than
with respect to facilities described in paragraph
(1)(B)).’’
(3) CONFORMING AMENDMENTS.—
(A) Section 147(c) of the Internal Revenue
Code of 1986 (relating to limitation on use for
land acquisition) is amended by adding at the
end the following new paragraph:
‘‘(4) SPECIAL RULE FOR INDUSTRIAL PARKS.—
In the case of a bond described in section
142(a)(17), paragraph (1)(A) shall be applied by
substituting ‘50 percent’ for ‘25 percent’.’’
(B) Section 147(e) of such Code (relating
to no portion of bonds may be issued for
skyboxes, airplanes, gambling establishments,
etc.) is amended by striking ‘‘A private activity
bond’’ and inserting ‘‘Except in the case of a
bond described in section 142(a)(13), a private
activity bond’’.
(b) SMALL ISSUE BONDS.—Section 144(a)(12) of the
Internal Revenue Code of 1986 (relating to termination
of qualified small issue bonds) is amended—
(1) by striking ‘‘any bond’’ in subparagraph
(A)(i) and inserting ‘‘any bond described in subpara-
graph (B)’’,
(2) by striking ‘‘a bond’’ in subparagraph
(A)(ii) and inserting ‘‘a bond described in subpara-
graph (B)’’, and
(3) by striking subparagraph (B) and inserting
the following:
‘‘(B) BONDS FOR FARMING PURPOSES.—A
bond is described in this subparagraph if it is
issued as part of an issue 95 percent or more
of the net proceeds of which are to be used to
provide any land or property not in accordance
with section 147(c)(2).’’
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to bonds issued after December
31, 1994.
SEC. 204. INCREASE IN AMOUNT OF QUALIFIED SMALL
ISSUE BONDS PERMITTED FOR FACILITIES
TO BE USED BY RELATED PRINCIPAL USERS.
(a) IN GENERAL.—Clause (i) of section 144(a)(4)(A)
of the Internal Revenue Code of 1986 (relating to
$10,000,000 limit in certain cases) is amended by striking
‘‘$10,000,000’’ and inserting ‘‘$50,000,000’’.
(b) CLERICAL AMENDMENT.—The heading of para-
graph (4) of section 144(a) of the Internal Revenue Code
of 1986 is amended by striking ‘‘$10,000,000’’ and insert-
ing ‘‘$50,000,000’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to—
(1) obligations issued after the date of the en-
actment of this Act, and
(2) capital expenditures made after such date
with respect to obligations issued on or before such
date.
SEC. 205. SIMPLIFICATION OF ARBITRAGE INTEREST RE-
BATE WAIVER.
(a) IN GENERAL.—Clause (ii) of section 148(f)(4)(C)
of the Internal Revenue Code of 1986 (relating to excep-
tion from rebate for certain proceeds to be used to finance
construction expenditures) is amended to read as follows:
‘‘(ii) SPENDING REQUIREMENT.—The
spending requirement of this clause is met
if 100 percent of the available construction
proceeds of the construction issue are
spent for the governmental purposes of the
issue within the 3-year period beginning on
the date the bonds are issued.’’.
(b) CONFORMING AMENDMENTS.—
(1) Clause (iii) of section 148(f)(4)(C) of the
Internal Revenue Code of 1986 (relating to excep-
tion for reasonable retainage) is repealed.
(2) Subclause (II) of section 148(f)(4)(C)(vi) of
such Code (relating to available construction pro-
ceeds) is amended by striking ‘‘2-year period’’ and
inserting ‘‘3-year period’’.
(3) Subclause (I) of section 148(f)(4)(C)(vii) of
such Code (relating to election to pay penalty in lieu
of rebate) is amended by striking ‘‘, with respect to
each 6-month period after the date the bonds were
issued,’’ and ‘‘, as of the close of such 6-month pe-
riod,’’.
(4) Clause (viii) of section 148(f)(4)(C) of such
Code (relating to election to terminate 11⁄2 percent
penalty) is amended by striking ‘‘to any 6-month pe-
riod’’ in the matter preceding subclause (I).
(5) Clause (ii) of section 148(c)(2)(D) of such
Code (relating to bonds used to provide construction
financing) is amended by striking ‘‘2 years’’ and in-
serting ‘‘3 years’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to bonds issued after the date of
the enactment of this Act.
TITLE III—COMMUNITY
REGULATORY RELIEF
SEC. 301. FINDINGS AND PURPOSE.
(a) FINDINGS.—The Congress finds and declares
that—
(1) unfunded Federal mandates imposed on
State and local governments have become increas-
ingly extensive in recent years;
(2) such mandates have, in many instances,
added to the growing deficits in State and local gov-
ernment budgets and have resulted in the need for
State and local governments to increase revenue or
curtail sometimes essential services; and
(3) such excessive fiscal burdens on State and
local governments have undermined, in many in-
stances, the ability of State and local governments
an economic analysis of the effects of such bill or resolu-
tion by each State government and by each local govern-
ment within each State in complying with the Federal
mandate. The analysis prepared by the Director shall be
included in the report accompanying such bill or resolution
if timely submitted to such committee before such report
is filed.
(b) REPORT OF THE DIRECTOR.—For each fiscal
year in which a Federal mandate will be in effect, the Di-
rector, in consultation with representatives of State and
local governments, shall prepare and submit to the Presi-
dent and the Congress, with the President’s budget in
January preceding the beginning of a fiscal year, a report
that contains an estimate, for that fiscal year and the fol-
lowing fiscal year, of the total amount of direct costs that
have been incurred or will be incurred by each State gov-
ernment and by each local government within each State
in complying with the Federal mandate.
SEC. 304. EFFECT OF SUBSEQUENT ENACTMENTS.
No statute enacted after the date of enactment of this
title shall supersede this title unless the statute does so
in specific terms, referring to this title, and declares that
that statute supersedes this title.
SEC. 305. DEFINITIONS.
As used in this title:
(1) The term ‘‘direct costs’’ means the amount
of costs incurred by a State or local government
dedicated to compliance with a Federal statute or
regulation or that is in excess of the amount that
the State or local government would incur in carry-
ing out that activity in the absence of the regulation,
but does not include any amount that a State or
local government is required or permitted by law to
contribute as a non-Federal share under a Federal
assistance program.
(2) The term ‘‘Director’’ shall mean the Direc-
tor of the Congressional Budget Office or his or her
designee.
(3) The term ‘‘Federal mandates’’ means a
statute or regulation that requires a State or local
government to—
(A) take certain actions (including a re-
quirement that a government meet national
standards in providing a service); or
(B) comply with certain specified condi-
tions in order to receive or continue to receive
Federal assistance and which requires the ter-
mination or reduction of such assistance if such
government fails to comply with such condi-
tions.
(4) The term ‘‘local government’’ has the same
meaning as in section 6501(6) of title 31, United
States Code.
(5) The term ‘‘State’’ has the same meaning as
in section 6501(8) of title 31, United States Code.
TITLE IV—COMMUNITY-BASED
HOUSING DEVELOPMENT
SEC. 401. SECTION 8 RENT SUBSIDIES.
Section 8(d)(2) of the United States Housing Act of
1937 (42 U.S.C. 1437f(d)(2)) is amended—
(1) in subparagraph (A), by striking ‘‘than 15
percent’’ and inserting ‘‘than 50 percent’’;
(2) in subparagraph (B)(ii), by striking ‘‘15
percent’’ and inserting ‘‘50 percent’’; and
(3) in subparagraph (E), by striking ‘‘15 per-
cent’’.
SEC. 402. BLOCK GRANT STUDY.
(a) IN GENERAL.—The Secretary of Housing and
Urban Development shall conduct a study regarding—
(1) the feasibility of consolidating existing pub-
lic and low-income housing programs under the
United States Housing Act of 1937 into a com-
prehensive block grant system of Federal aid that—
(A) provides assistance on an annual basis;
(B) maximizes funding certainty and flexi-
bility; and
(C) minimizes paperwork and delay; and
(2) the possibility of administering future public
and low-income housing programs under the United
States Housing Act of 1937 in accordance with such
a block grant system.
(b) REPORT TO COMPTROLLER GENERAL.—Not later
than 18 months after the date of enactment of this Act,
the Secretary of Housing and Urban Development shall
submit to the Comptroller General of the United States
a report that includes—
(1) the results of the study conducted under
subsection (a); and
(2) any recommendations for legislation.
(c) REPORT
TO CONGRESS.—Not later than 24
months after the date of enactment of this Act, the Comp-
troller General of the United States shall submit to the
Congress a report that includes—
(1) an analysis of the report submitted under
subsection (b); and
(2) any recommendations for legislation.
SEC. 403. DEMOLITION AND DISPOSITION OF PUBLIC HOUS-
ING.
Section 18(b)(3) of the United States Housing Act
of 1937 (42 U.S.C. 1437p(b)(3)) is amended—
(1) in subparagraph (G), by striking ‘‘and’’ at
the end;
(2) in subparagraph (H), by adding ‘‘and’’ at
the end; and
(3) by adding at the end the following new sub-
paragraph:
‘‘(I) provides, wherever practicable, for—
‘‘(i) the eventual reconstruction of
units on the same property on which the
units to be demolished or disposed of are
located; and
‘‘(ii) the ultimate relocation of dis-
placed tenants to that property;’’.
TITLE V—RESPONSE TO URBAN
ENVIRONMENTAL CHALLENGES
Subtitle A—Environmental
Cleanup
SEC. 501. EXEMPTION FROM LIABILITY FOR LOCAL GOV-
ERNMENTS THAT ARE OWNERS OR OPERA-
TORS OF FACILITIES IN DISTRESSED URBAN
AREAS.
Section 101 of the Comprehensive Environmental Re-
sponse, Compensation, and Liability Act of 1980 (42
U.S.C. 9601) is amended—
(1) in paragraph (20), by adding at the end the
following:
‘‘(E) EXCLUSION OF DISTRESSED URBAN
AREAS.—The term ‘owner or operator’ does not
include a unit of local government for a dis-
tressed urban area that—
‘‘(i) purchased real property, in the
distressed urban area, on or in which a fa-
cility is located;
‘‘(ii) purchased the property to fur-
ther the redevelopment of the property for
industrial activities;
‘‘(iii) did not conduct or permit the
generation, transportation, storage, treat-
ment, or disposal of any hazardous sub-
stance at the facility; and
‘‘(iv) did not contribute to the release
or threat of release of a hazardous sub-
stance at the facility through any action or
omission.’’; and
(2) by adding at the end the following new
paragraphs:
‘‘(39) DISTRESSED
URBAN
AREA.—The term
‘distressed urban area’ has the meaning given the
term in section 104(d) of the New Urban Agenda
Act of 1994.
‘‘(40) INDUSTRIAL ACTIVITY.—The term ‘indus-
trial activity’ means commercial, manufacturing, or
any other activity carried out to further the develop-
ment, manufacturing, or distribution of goods and
services, including administration, research and de-
velopment, warehousing, shipping, transport, re-
manufacturing, and repair and maintenance of com-
mercial machinery and equipment.’’.
SEC. 502. STANDARDS FOR REMEDIATION IN DISTRESSED
URBAN AREAS.
Section 121 of the Comprehensive Environmental Re-
sponse, Compensation, and Liability Act of 1980 (42
U.S.C. 9621) is amended by adding at the end the follow-
ing:
‘‘(g) FACILITIES IN DISTRESSED URBAN AREAS.—
‘‘(1) IDENTIFICATION.—The President shall
identify the facilities on the National Priorities List
that are located in distressed urban areas.
‘‘(2) STUDY AND REPORT.—The President shall
conduct, directly or by grant or contract, a study of
appropriate response actions for facilities located in
distressed urban areas. In conducting the study, the
President shall examine the appropriate degree of
cleanup of hazardous substances, pollutants, and
contaminants released into the environment at such
a facility, and the appropriate considerations for the
selection of a response action at such a facility.
‘‘(3) STANDARDS.—Notwithstanding any other
provision of this Act, the President shall by regula-
tion establish standards for the degree of cleanup
described in paragraph (2), and the considerations
described in paragraph (2), for such a facility. In es-
tablishing the standards, the President shall take
into consideration the results of the study described
in paragraph (2).’’.
Subtitle B—Environmental-
Economic Recovery
SEC. 511. FINDINGS.
Congress finds that—
(1) plants such as the SEMASS plant in Roch-
ester, Massachusetts, and the Wheelabrator plant in
Baltimore, Maryland, provide an effective and effi-
cient means of disposing of solid waste and obtain-
ing inexpensive electrical power and steam; and
(2) the availability of such plants in a commu-
nity will attract energy intensive industry to the
community, increasing the tax base and strengthen-
ing the economy of the community.
SEC. 512. DEFINITIONS.
As used in this subtitle:
(1) DISTRESSED URBAN AREA.—The term ‘‘dis-
tressed urban area’’ has the meaning given the term
in section 104(d).
(2) ENERGY INTENSIVE INDUSTRY.—The term
‘‘energy intensive industry’’ means an industry that
consumes more than 25,000 BTUs per dollar of
value added, as determined by the Secretary.
(3) FULLY
OPERATIONAL.—The term ‘‘fully
operational’’ means at least 90 percent operational,
determined by averaging the percentage of solid
waste intake capacity achieved and the percentage of
electric output capacity achieved.
(4) MARKET RATE.—The term ‘‘market rate’’
means the applicable rate for retail bulk power sales
made by the electric utility within the service terri-
tory concerned.
(5) SECRETARY.—The term ‘‘Secretary’’ means
the Secretary of Energy.
(6) SOLID WASTE.—The term ‘‘solid waste’’ has
the meaning given the term in section 1004(27) of
the Solid Waste Disposal Act (42 U.S.C. 6903(27)).
SEC. 513. LOAN AUTHORITY.
(a) LOANS.—
(1) IN GENERAL.—The Secretary shall make
not more than 3 loans to units of local government
for distressed urban areas for the establishment of
facilities described in section 514.
(2) PRIORITY.—In making one of the loans, the
Secretary shall give priority to a unit of local gov-
ernment that demonstrates that the unit of local
government will establish the facility through a con-
tract or agreement with an organization that has
demonstrated an ability to oversee and manage the
creation of a comprehensive, national, strategic, en-
ergy intensive, environmental industry initiative.
(b) AUTHORITY TO BORROW.—
(1) IN GENERAL.—Subject to paragraphs (2),
(3), and (4), and notwithstanding any other provi-
sion of law, the Secretary may borrow from the
Treasury such funds as the Secretary determines to
be necessary to make loans under this section.
(2) AMOUNTS.—The Secretary may borrow
funds under paragraph (1) if amounts sufficient to
pay for the cost, as defined in section 502(5) of the
Congressional Budget Act of 1974 (2 U.S.C.
661a(5)), of the loan involved are provided in ad-
vance in appropriation Acts.
(3) TERMS.—Subject to paragraph (4), the Sec-
retary may borrow the funds on such terms as may
be established by the Secretary and the Secretary of
the Treasury.
(4) INTEREST.—The rate of interest to be
charged in connection with a loan made under para-
graph (1) shall be not less than a rate determined
by the Secretary of the Treasury, taking into consid-
eration current market yields on outstanding mar-
ketable obligations of the United States of com-
parable maturities.
SEC. 514. FACILITY.
Each facility referred to in section 513—
(1) shall produce electric power, or steam, from
solid waste;
(2) shall have 2 boilers and be capable of ex-
pansion;
(3) shall be located in a distressed urban area
in the United States;
(4) shall provide electricity or steam to energy
intensive industry customers at no more than 40
percent of the market rate for electricity;
(5) may provide electricity to public entities or
light industry, but not to residential consumers; and
(6) shall obtain a continuing supply of feed-
stock sufficient to sustain maximum operational ca-
pability through long-term contracts with municipal
and other governmental sources.
SEC. 515. REINVESTMENT OF SAVINGS.
(a) IN GENERAL.—Any energy intensive industry
customer obtaining electricity or steam from the facility
described in section 514 shall—
(1) invest in equipment, physical plant, or in-
creased employment at least 7 percent of the saving
gained by such customer; and
(2) from the saving gained by such customer,
make payments to the Secretary, in an amount de-
termined by the Secretary to be appropriate, to as-