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.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Brownfield Cleanup 
Enhancement Act of 2003’’.
SEC. 2. CREDIT TO HOLDERS OF QUALIFIED BROWNFIELDS 
CLEANUP BONDS. 
(a) IN GENERAL.—Subpart B of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of
1986 is amended by adding at the end the following new 
section: 
‘‘SEC. 
30B. 
CREDIT 
TO 
HOLDERS 
OF 
QUALIFIED 
BROWNFIELDS CLEANUP BONDS. 
‘‘(a) ALLOWANCE OF CREDIT.—In the case of a tax-
payer who holds a qualified brownfields cleanup bond on 
a credit allowance date of such bond which occurs during 
the taxable year, there shall be allowed as a credit against 
the tax imposed by this chapter for such taxable year an 
amount equal to the sum of the credits determined under 
subsection (b) with respect to credit allowance dates dur-
ing such year on which the taxpayer holds such bond. 
‘‘(b) AMOUNT OF CREDIT.—
‘‘(1) IN GENERAL.—The amount of the credit 
determined under this subsection with respect to any 
credit allowance date for a qualified brownfields 
cleanup bond is 25 percent of the annual credit de-
termined with respect to such bond. 
‘‘(2) ANNUAL CREDIT.—The annual credit de-
termined with respect to any qualified brownfields 
cleanup bond is the product of—
‘‘(A) the applicable credit rate, multiplied 
by 
‘‘(B) the outstanding face amount of the 
bond.
‘‘(3) APPLICABLE CREDIT RATE.—For purposes 
of paragraph (1), the applicable credit rate with re-
spect to an issue is the rate equal to an average 
market yield (as of the day before the date of 
issuance of the issue) on outstanding long-term cor-
porate debt obligations (determined under regula-
tions prescribed by the Secretary). 
‘‘(4) SPECIAL RULE FOR ISSUANCE AND RE-
DEMPTION.—In the case of a bond which is issued 
during the 3-month period ending on a credit allow-
ance date, the amount of the credit determined 
under this subsection with respect to such credit al-
lowance date shall be a ratable portion of the credit 
otherwise determined based on the portion of the 3-
month period during which the bond is outstanding. 
A similar rule shall apply when the bond is re-
deemed. 
‘‘(c) QUALIFIED BROWNFIELDS CLEANUP BOND.—
For purposes of this section—
‘‘(1) 
IN
GENERAL.—The 
term 
‘qualified 
brownfields cleanup bond’ means any bond issued as 
part of an issue if—
‘‘(A) 95 percent or more of the proceeds of 
such issue are to be used for the abatement or
control of hazardous substances at a qualified 
contaminated site, 
‘‘(B) the bond is issued by a State or local 
government within the jurisdiction of which 
such site is located, 
‘‘(C) the issuer designates such bond for 
purposes of this section, and 
‘‘(D) the term of each bond which is part 
of such issue does not exceed 15 years. 
‘‘(2) LIMITATION ON AMOUNT OF BONDS DES-
IGNATED.—The maximum aggregate face amount of 
bonds issued during any calendar year which may be 
designated under paragraph (1) by any issuer shall 
not exceed the limitation amount allocated under 
paragraph (3) for such calendar year to such issuer. 
‘‘(3) NATIONAL
LIMITATION
ON
AMOUNT
OF 
BONDS DESIGNATED.—There is a national qualified 
brownfields cleanup bond limitation for each cal-
endar year. Such limitation is—
‘‘(A) $100,000,000 for 2004, and 
‘‘(B) $150,000,000 for 2005. 
‘‘(4) ALLOCATION
OF
LIMITATION
AMONG 
STATES.—The limitation applicable under paragraph 
(3) for any calendar year shall be allocated among 
the States by the Secretary of the Treasury.
‘‘(5) CARRYOVER OF UNUSED LIMITATION.—If 
for any calendar year—
‘‘(A) the amount allocated under para-
graph (4) to any State, exceeds 
‘‘(B) the amount of bonds issued during 
such year which are designated under para-
graph (1) pursuant to such allocation, 
the limitation amount under paragraph (4) for such 
State for the following calendar year shall be in-
creased by the amount of such excess. 
‘‘(6) BOND TO BE PAID BACK FROM ANY TAX 
REVENUE INCREASE.—A bond shall not be treated 
as a qualified brownfields cleanup bond unless any 
increase in real property tax revenues (attributable 
to increases in assessed value) by reason of the car-
rying out of the purposes described in paragraph 
(1)(A) is reserved exclusively for debt service on the 
issue referred to in paragraph (1) (and similar 
issues) to the extent such increase does not exceed 
such debt service.
‘‘(d) LIMITATION BASED ON AMOUNT OF TAX.—
‘‘(1) IN GENERAL.—The credit allowed under 
subsection (a) for any taxable year shall not exceed 
the excess of—
‘‘(A) the sum of the regular tax liability 
(as defined in section 26(b)) plus the tax im-
posed by section 55, over 
‘‘(B) the sum of the credits allowable 
under part IV of subchapter A (other than sub-
part C thereof, relating to refundable credits). 
‘‘(2) CARRYOVER OF UNUSED CREDIT.—If the 
credit allowable under subsection (a) exceeds the 
limitation imposed by paragraph (1) for such taxable 
year, such excess shall be carried to the succeeding 
taxable year and added to the credit allowable under 
subsection (a) for such taxable year. 
‘‘(e) OTHER DEFINITIONS.—For purposes of this 
section—
‘‘(1) CREDIT
ALLOWANCE
DATE.—The term 
‘credit allowance date’ means—
‘‘(A) March 15, 
‘‘(B) June 15, 
‘‘(C) September 15, and 
‘‘(D) December 15. 
Such term includes the last day on which the bond 
is outstanding. 
‘‘(2) BOND.—The term ‘bond’ includes any ob-
ligation.
‘‘(3) STATE.—The term ‘State’ includes the 
District of Columbia and any possession of the 
United States. 
‘‘(4) QUALIFIED
CONTAMINATED
SITE.—The 
term 
‘qualified 
contaminated 
site’ 
means 
a 
brownfield site designated by the Administrator of 
the Environmental Protection Agency. 
‘‘(5) HAZARDOUS SUBSTANCE.—The term ‘haz-
ardous substance’ has the meaning provided by sec-
tion 198(d). 
‘‘(f) CREDIT INCLUDED IN GROSS INCOME.—Gross 
income includes the amount of the credit allowed to the 
taxpayer under this section (determined without regard to 
subsection (d)) and the amount so included shall be treat-
ed as interest income. 
‘‘(g) BONDS HELD
BY REGULATED INVESTMENT 
COMPANIES.—If any qualified brownfields cleanup bond 
is held by a regulated investment company, the credit de-
termined under subsection (a) shall be allowed to share-
holders of such company under procedures prescribed by 
the Secretary. 
‘‘(h) CREDITS MAY BE STRIPPED.—Under regula-
tions prescribed by the Secretary— 
‘‘(1) IN GENERAL.—There may be a separation 
(including at issuance) of the ownership of a quali-
fied brownfields cleanup bond and the entitlement to 
the credit under this section with respect to such 
bond. In case of any such separation, the credit 
under this section shall be allowed to the person who 
on the credit allowance date holds the instrument ev-
idencing the entitlement to the credit and not to the 
holder of the bond. 
‘‘(2) CERTAIN RULES TO APPLY.—In the case 
of a separation described in paragraph (1), the rules 
of section 1286 shall apply to the qualified 
brownfields cleanup bond as if it were a stripped 
bond and to the credit under this section as if it 
were a stripped coupon. 
‘‘(i) TREATMENT FOR ESTIMATED TAX PURPOSES.—
Solely for purposes of sections 6654 and 6655, the credit 
allowed by this section to a taxpayer by reason of holding 
a qualified brownfields cleanup bond on a credit allowance 
date shall be treated as if it were a payment of estimated 
tax made by the taxpayer on such date. 
‘‘(j) CREDIT MAY BE TRANSFERRED.—Nothing in 
any law or rule of law shall be construed to limit the trans-
ferability of the credit allowed by this section through sale 
and repurchase agreements.
‘‘(k) REPORTING.—Issuers of qualified brownfields 
cleanup bonds shall submit reports similar to the reports 
required under section 149(e).’’
(b) REPORTING.—Subsection (d) of section 6049 of 
such Code (relating to returns regarding payments of in-
terest) is amended by adding at the end the following new 
paragraph: 
‘‘(8) REPORTING
OF
CREDIT
ON
QUALIFIED 
BROWNFIELDS CLEANUP BONDS.—
‘‘(A) IN GENERAL.—For purposes of sub-
section (a), the term ‘interest’ includes amounts 
includible in gross income under section 30B(f) 
and such amounts shall be treated as paid on 
the credit allowance date (as defined in section 
30B(e)(1)). 
‘‘(B) 
REPORTING
TO
CORPORATIONS, 
ETC.—Except as otherwise provided in regula-
tions, in the case of any interest described in 
subparagraph (A) of this paragraph, subsection 
(b)(4) of this section shall be applied without 
regard to subparagraphs (A), (H), (I), (J), (K), 
and (L)(i). 
‘‘(C) REGULATORY AUTHORITY.—The Sec-
retary may prescribe such regulations as are 
necessary or appropriate to carry out the pur-
poses of this paragraph, including regulations 
which require more frequent or more detailed 
reporting.’’
(c) CONFORMING AMENDMENT.—The table of sec-
tions for subpart B of part IV of subchapter A of chapter 
1 of such Code is amended by adding at the end the fol-
lowing new item:
‘‘Sec. 30B. Credit to holders of qualified public brownfields clean-
up bonds.’’
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to obligations issued after Decem-
ber 31, 2003.
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