I
103D CONGRESS
1ST SESSION
H. R. 2340
To amend the Internal Revenue Code of 1986 to allow a credit for the
cleanup of certain contaminated industrial sites.
IN THE HOUSE OF REPRESENTATIVES
JUNE 8, 1993
Mr. REYNOLDS 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 a
credit for the cleanup of certain contaminated industrial
sites.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. ENVIRONMENTAL REMEDIATION TAX CREDIT.
(a) GENERAL RULE.—Part IV of subchapter A of
chapter 1 of the Internal Revenue Code of 1986 (relating
to credits allowable) is amended by adding at the end
thereof the following new subpart:
‘‘Subpart H—Environmental Remediation Credit
‘‘Sec. 54. Amount of environmental remediation credit.
‘‘Sec. 54A. Designation of eligible jurisdictions.
‘‘Sec. 54B. Allocation of credit limits.
‘‘Sec. 54C. Definitions and special rules.
‘‘SEC. 54. AMOUNT OF ENVIRONMENTAL REMEDIATION
CREDIT.
‘‘(a) GENERAL RULE.—For purposes of section 38,
the environmental remediation credit determined under
this section is 25 percent of the costs—
‘‘(1) which are paid or incurred by the taxpayer
for environmental remediation with respect to any
qualified contaminated site which is owned by the
taxpayer, and
‘‘(2) which are incurred by the taxpayer pursu-
ant to an environmental remediation plan for such
site which was approved by the Administrator of the
Environmental Protection Agency.
‘‘(b) CREDIT MAY NOT EXCEED ALLOCATION.—The
environmental remediation credit determined under this
section with respect to any qualified contaminated site
shall not exceed the remediation credit amount allocated
to the taxpayer under section 54B with respect to such
site.
‘‘(c) REMEDIATION PLAN MUST BE COMPLETED.—
‘‘(1) IN GENERAL.—Except as otherwise pro-
vided in paragraph (2)—
‘‘(A) no environmental remediation credit
shall be determined under this section with re-
spect to any qualified contaminated site unless
the Administrator of the Environmental Protec-
tion Agency certifies the environmental remedi-
ation plan for such site has been completed,
and
‘‘(B) if such Administrator certifies that
such plan has been completed, such credit shall
be taken into account under subsection (a) rat-
ably over the 5 taxable year period beginning
with the taxable year in which such plan was
completed.
‘‘(2) SPECIAL
RULE
WHERE
EXTRAORDINARY
COST INCREASES.—If—
‘‘(A) the taxpayer determines that due to
unforeseen circumstances the cost of completing
the remediation plan for any qualified contami-
nated site exceeds 200 percent of the estimated
costs of completing such plan, and
‘‘(B) the State or local official administer-
ing the remediation credit program agrees with
such determination,
the taxpayer may cease the implementation of such
plan and shall be entitled to an environmental reme-
diation credit with respect to costs incurred before
such cessation. Such credit shall be taken into ac-
count under subsection (a) ratably over the 5-tax-
able-year period beginning with the taxable year in
which such cessation occurs.
‘‘(d) CERTAIN PARTIES NOT ELIGIBLE.—A taxpayer
shall not be eligible for any credit determined 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 subpart 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).
‘‘(e) QUALIFIED CONTAMINATED SITE.—For pur-
poses of this subpart, the term ‘qualified contaminated
site’ means any contaminated site if such site is within—
‘‘(1) any large city or medium-size city des-
ignated under section 54A(a) for participation in the
environmental remediation credit program, or
‘‘(2) the portion of any State designated under
section 54A(b) for participation in the environmental
remediation credit program which is not within the
borders of a large city or medium-size city.
‘‘(f) ADMINISTRATION BY STATE OR LOCAL GOVERN-
MENT AGENCIES PERMITTED.—Any reference in this sec-
tion, section 144(d), or section 150(b)(7) to the Adminis-
trator of the Environmental Protection Agency shall in-
clude a reference to the head of any State or local govern-
ment agency designated by the Administrator to carry out
the Administrator’s functions under such sections with re-
spect to any site.
‘‘SEC. 54A. DESIGNATION OF ELIGIBLE JURISDICTIONS.
‘‘(a) DESIGNATION OF CITIES.—
‘‘(1) IN GENERAL.—The Secretary of Housing
and Urban Development shall—
‘‘(A) designate 4 large cities under this
subsection for participation in the environ-
mental remediation credit program, and
‘‘(B) designate 20 medium-size cities under
this subsection for participation in such pro-
gram.
All such designations shall be made within the 180-
day period beginning on the date of the enactment
of this subpart.
‘‘(2) ELIGIBILITY
REQUIREMENTS.—No city
may be designated under paragraph (1) unless—
‘‘(A) such city has submitted an applica-
tion for such a designation to the Secretary of
Housing and Urban Development in such man-
ner as such Secretary may require,
‘‘(B) such city has established an environ-
mental credit remediation program which shall
include—
‘‘(i) procedures for the assessment of
contaminated sites located within such city
for purposes of determining whether such
sites are appropriate for participation in
the environmental remediation credit pro-
gram,
‘‘(ii) a credit allocation plan which
contains the selection criteria required
under paragraph (4), and
‘‘(iii) provision for non-Federal con-
tributions to the environmental remedi-
ation of selected sites through grants,
loans, property or income tax abatement,
contributions by private parties or non-
Federal governmental sources, or any other
direct or indirect financial assistance; and
‘‘(C) such city has designated a city official
responsible for the administration of its envi-
ronmental remediation credit program.
‘‘(3) SELECTION CRITERIA.—From among the
cities eligible for designation under paragraph (1),
the Secretary of Housing and Urban Development
shall make designations under paragraph (1) on the
basis of the following factors (with the factor speci-
fied in subparagraph (A) weighted at 50 points and
the factors specified in subparagraphs (B) and (C)
weighted at 25 points each):
‘‘(A) The comparative degree of economic
deterioration among cities of the same category,
as measured by the city’s manufacturing job
loss between 1970 and 1990.
‘‘(B) The strength and quality of the es-
tablished local commitment to remediate con-
taminated sites.
‘‘(C) The percentage of the total Com-
prehensive Environmental Response, and Liabil-
ity Information System sites which are located
in such city.
‘‘(4) SELECTION CRITERIA.—The selection cri-
teria required under this paragraph are the follow-
ing:
‘‘(A) The condition of the contaminated
site is such that without participation in the en-
vironmental remediation credit program redevel-
opment is unlikely.
‘‘(B) The contaminated site has not been
in productive use for at least 1 year before par-
ticipation in the program.
‘‘(C) There is a strong likelihood of rede-
velopment of the site for industrial or commer-
cial use that will result in creation of jobs and
expansion of the tax base.
‘‘(D) Environmental remediation and rede-
velopment are likely to be completed within a
reasonable period of time.
‘‘(b) DESIGNATION OF STATES.—
‘‘(1) IN
GENERAL.—The Secretary of Agri-
culture shall designate 5 States for participation in
the environmental remediation credit program. All
such designations shall be made before lll.
‘‘(2) REQUIREMENTS
FOR
DESIGNATION.—No
State may be designated under paragraph (1) unless
such State meets requirements comparable to those
required under paragraph (2) of subsection (a).
‘‘(3) SELECTION CRITERIA.—From among the
States eligible for designation under paragraph (1),
the Secretary of Agriculture shall make designations
under paragraph (1) on the basis of the following
factors (with the factors specified in subparagraphs
(A) and (B) weighted at 25 points each and the fac-
tor specified in subparagraph (C) weighted at 50
points):
‘‘(A) The comparative degree of economic
deterioration among States as measured by the
State’s manufacturing job loss between 1970
and 1990.
‘‘(B) The strength and quality of the es-
tablished State or local commitment to remedi-
ate contaminated sites.
‘‘(C) The comparative prevalence of envi-
ronmentally contaminated sites as measured by
the ratio of the Comprehensive Environmental
Response, Compensation, and Liability Infor-
mation System sites in the State per capita.
‘‘SEC. 54C. DEFINITIONS AND SPECIAL RULES.
‘‘(a) CONTAMINATED SITE.—For purposes of this
subpart—
‘‘(1) IN
GENERAL.—The term ‘contaminated
site’ means any site if at least 1 of the following en-
vironmental conditions are present on such site:
‘‘(A) A release or threatened release of any
hazardous, toxic, or dangerous substance.
‘‘(B) Any storage tanks which contain any
hazardous, toxic, or dangerous substance.
‘‘(C) Any illegal disposal of solid waste.
‘‘(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 (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