itemized deductions for individuals and corporations) is
amended by adding at the end the following new section:
‘‘SEC. 198. EXPENSING AND RAPID AMORTIZATION FOR
CERTAIN 
ENVIRONMENTAL 
REMEDIATION
EXPENDITURES.
‘‘(a) TREATMENT AS EXPENSES.—
‘‘(1) IN GENERAL.—At the election of the tax-
payer, qualified environmental remediation expendi-
tures which are paid or incurred by the taxpayer
during the taxable year in connection with a trade
or business shall be treated as expenses which are
not chargeable to capital account. The expenditures
so treated shall be allowed as a deduction.
‘‘(2) LIMITATION.—The amount treated under
paragraph (1) as an expense with respect to any
qualified 
contaminated 
site 
shall 
not 
exceed
$500,000 for all taxable years.
‘‘(3) CONTROLLED GROUPS.—Rules similar to
the rules of paragraphs (6), (7), and (8) of section
179(d) shall apply for purposes of this subsection.
‘‘(b) 60-MONTH AMORTIZATION OF REMAINING EN-
VIRONMENTAL REMEDIATION EXPENDITURES.—
‘‘(1) IN GENERAL.—At the election of the tax-
payer, qualified environmental remediation expendi-
tures—
‘‘(A) which are paid or incurred by the
taxpayer in connection with his trade or busi-
ness, and
‘‘(B) which are not treated as expenses
under subsection (a),
may be treated as deferred expenses.
‘‘(2) 
AMORTIZATION
OF
DEFERRED
EX-
PENSES.—In computing taxable income, such de-
ferred expenses shall be allowed as a deduction rat-
ably over such period of not less than 60 months as
may be selected by the taxpayer (beginning with the
month in which the taxpayer pays or incurs such ex-
penditures). Such deferred expenses shall be treated
as expenditures which are properly chargeable to
capital account for purposes of section 1016(a)(1)
(relating to adjustments to basis of property).
‘‘(c) CERTAIN PERSONS NOT ELIGIBLE.—A taxpayer
shall not be eligible for the treatment under this section
with respect to any qualified contaminated site if—
‘‘(1) at any time on or before the date of the
enactment of this section such taxpayer was the
owner or operator of any business on such site,
‘‘(2) at any time before, on, or after such date
of enactment such taxpayer—
‘‘(A) had (by contract, agreement, or oth-
erwise) arranged for the disposal or treatment
of any hazardous materials at such site or ar-
ranged with a transporter for transport for dis-
posal or treatment of any hazardous materials
at such site, or
‘‘(B) had accepted any hazardous mate-
rials for transport to such site, or
‘‘(3) the taxpayer is related to any taxpayer re-
ferred to in paragraph (1) or (2).
‘‘(d) QUALIFIED
ENVIRONMENTAL
REMEDIATION
EXPENDITURES.—For purposes of this section, the term
‘qualified environmental remediation expenditure’ means
any amount (otherwise chargeable to capital account)
which is paid or incurred by the taxpayer for environ-
mental remediation with respect to any qualified contami-
nated site which is owned by the taxpayer.
‘‘(e) OTHER DEFINITIONS.—For purposes of this
section—
‘‘(1) QUALIFIED CONTAMINATED SITE.—
‘‘(A) IN GENERAL.—For purposes of this
subsection, the term ‘qualified contaminated
site’ means any site if the appropriate agency
certifies that at least 1 of the following environ-
mental conditions is present on such site:
‘‘(i) A release or threatened release of
any hazardous, toxic, or dangerous sub-
stance.
‘‘(ii) Any storage tanks which contain
any hazardous, toxic, or dangerous sub-
stance.
‘‘(iii) Any illegal disposal of solid
waste.
Such term shall not include any site listed on
the National Priorities List under the Com-
prehensive Environmental Response, Compensa-
tion, and Liability Act of 1980.
‘‘(B) APPROPRIATE
AGENCY.—For pur-
poses of subparagraph (A), the appropriate
agency is—
‘‘(i) the agency of the State in which
the site is located which is designated by
the Administrator of the Environmental
Protection Agency for purposes of this
paragraph, or
‘‘(ii) if the agency described in clause
(i) designates an agency of the local gov-
ernment in which the site is located for
purposes of this paragraph, such local gov-
ernment agency.
‘‘(2) HAZARDOUS, TOXIC, OR DANGEROUS SUB-
STANCE.—Any substance, waste, or material shall be
treated as a hazardous, toxic, or dangerous sub-
stance if it is so treated under—
‘‘(A) the Comprehensive Environmental
Response, Compensation, and Liability Act of
1980 (42 U.S.C. 9601 et seq.),
‘‘(B) the Resource Conservation and Re-
covery Act (42 U.S.C. 6901 et seq.), or
‘‘(C) any State or local environmental law
or ordinance.
The following materials shall in any event be treated
as such a substance: petroleum or crude oil or any
derivative thereof, friable asbestos or any asbestos
containing material, polychlorinated biphenyls, or
urea formaldehyde foam insulation.
‘‘(3) 
ENVIRONMENTAL
REMEDIATION.—The
term ‘environmental remediation’ means—
‘‘(A) removal or remediation activity, in-
cluding soil and ground water remediation,
‘‘(B) restoration of natural, historic or cul-
tural resources at the site, or the mitigation of
unavoidable losses of such resources incurred in
connection with the remediation or response ac-
tivity,
‘‘(C) health assessments or health effects
studies,
‘‘(D) environmental investigations,
‘‘(E) remediation of off-site contamination
caused by activity on the site, and
‘‘(F) any other costs reasonably required
by reason of the environmental conditions of the
site, including demolition of existing contami-
nated structures, site security, and permit fees
necessary for remediation.
‘‘(4) RELATED
PERSON.—Persons shall be
treated as related to each other if such persons are
treated as a single employer under the regulations
prescribed under section 52(b) or such persons bear
a relationship to each other specified in section
267(b) or 707(b).
‘‘(f) LAND AND OTHER PROPERTY.—This section
shall not apply to any expenditure for—
‘‘(1) the acquisition or improvement of land, or
‘‘(2) the acquisition or improvement of property
of a character which is subject to the allowance
under section 167 (relating to allowance for depre-
ciation, etc.) or section 611 (relating to allowance