I
105TH CONGRESS
2D SESSION
H. R. 4094
To provide for comprehensive brownfields assessment, cleanup, and
redevelopment.
IN THE HOUSE OF REPRESENTATIVES
JUNE 19, 1998
Mr. FRANKS New of Jersey (for himself and Mr. MEEHAN) introduced the fol-
lowing bill; which was referred to the Committee on Commerce, and in
addition to the Committees on Ways and Means, and Small Business, for
a period to be subsequently determined by the Speaker, in each case for
consideration of such provisions as fall within the jurisdiction of the com-
mittee concerned
A BILL
To provide for comprehensive brownfields assessment,
cleanup, and redevelopment.
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 Redevelop-
ment and Environmental Revitalization Act of 1998’’.
SEC. 2. TABLE OF CONTENTS.
The table of contents is as follows:
Sec. 1. Short title.
Sec. 2. Table of contents.
Sec. 3. Findings and purpose.
TITLE I—FINANCIAL SUPPORT FOR BROWNFIELD SITE
REMEDIATION
Sec. 101. Grants for inventories, site assessments, and other pre-cleanup activi-
ties.
Sec. 102. Grants for revolving loan programs.
Sec. 103. Environmental cleanup grants.
Sec. 104. Limitations on use of funds.
Sec. 105. Effect on other laws.
Sec. 106. Regulations.
Sec. 107. Authorizations of appropriations.
TITLE II—FINANCIAL SUPPORT FOR BROWNFIELD SITE
PREVENTION AND REDEVELOPMENT
Sec. 201. Environmental remediation tax credit.
Sec. 202. Brownfields IRA.
Sec. 203. Issuance of bond to finance tax-exempt environmental remediation of
contaminated sites.
Sec. 204. Small business administration set-aside for brownfield prevention and
redevelopment projects under section 504 development com-
pany program.
Sec. 205. Promotion of small business investment companies for brownfield ac-
tivities.
SEC. 3. FINDINGS AND PURPOSE.
(a) FINDINGS.—Congress finds the following:
(1) Abandoned and underutilized commercial
and industrial property is often avoided by investors
and developers because of real or perceived contami-
nation on-site.
(2) Reuse of these sites requires pre-cleanup as-
sistance as well as financial support for redevelop-
ment activities.
(b) PURPOSE.—The purpose of this Act is to provide
public sector support for brownfield redevelopment and to
further enable the private sector to invest and conduct
cleanup and redevelopment activities.
TITLE I—FINANCIAL SUPPORT
FOR BROWNFIELD SITE RE-
MEDIATION
SEC. 101. GRANTS FOR INVENTORIES, SITE ASSESSMENTS,
AND OTHER PRE-CLEANUP ACTIVITIES.
(a) IN GENERAL.—The Administrator shall establish
a program to award grants to States and local govern-
ments to inventory brownfield sites and to conduct site
assessments and other pre-cleanup activities relating to
such sites, including site identification, site characteriza-
tion, and the planning and design of response actions for
such sites.
(b) SCOPE OF PROGRAM.—
(1) GRANT AWARDS.—To carry out subsection
(a), the Administrator may, on approval of an appli-
cation, provide financial assistance to a State or
local government.
(2) GRANT APPLICATION.—An application for a
grant under this section shall include, to the extent
practicable, each of the following:
(A) An identification of the brownfield
sites for which assistance is sought and a de-
scription of the effect of the brownfield sites on
the community.
(B) A description of the need of the appli-
cant for Federal financial assistance to inven-
tory brownfield sites and to conduct site assess-
ments or other pre-cleanup activities at such
sites.
(C) A demonstration of the potential of the
grant assistance to stimulate economic develop-
ment or create recreational space.
(D) A description of the local commitment
as of the date of the application, which shall in-
clude a community involvement plan that dem-
onstrates meaningful community involvement.
(E) A plan that shows how the site identi-
fication, site assessment, or other pre-cleanup
activities will be implemented.
(F) A statement on the long-term benefits
of the proposed project.
(G) Such other factors as the Adminis-
trator considers relevant to carry out this title.
(3) APPROVAL OF APPLICATION.—
(A) IN GENERAL.—In making a decision
whether to approve an application under para-
graph (1), the Administrator shall—
(i) consider the need of the State or
local government for Federal financial as-
sistance to carry out this section;
(ii) consider the ability of the appli-
cant to carry out or ensure an inventory,
site assessment, or other pre-cleanup activ-
ity under this section; and
(iii) consider such other factors as the
Administrator considers relevant to carry
out this section.
(B) GRANT CONDITIONS.—As a condition
of awarding a grant under this section, the Ad-
ministrator may, on the basis of the criteria
considered under subparagraph (A), attach
such conditions to the grant as the Adminis-
trator determines appropriate.
(4) GRANT AMOUNT.—The amount of a grant
awarded to any State or local government under
subsection (a) for inventory, site assessment, and
other pre-cleanup activities with respect to 1 or more
brownfield sites shall not exceed $200,000, except
that the Administrator may increase the amount in
special circumstances as determined by the Adminis-
trator.
(5) TERMINATION OF GRANTS.—If the Admin-
istrator determines that a State or local government
that receives a grant under this subsection is in vio-
lation of a condition of a grant referred to in para-
graph (3)(B), the Administrator may terminate the
grant made to the State or local government and re-
quire full or partial repayment of the grant.
SEC. 102. GRANTS FOR REVOLVING LOAN PROGRAMS.
(a) IN GENERAL.—
(1) ESTABLISHMENT.—The Administrator shall
establish a program to award grants to be used by
States and local governments to capitalize revolving
loan funds for the cleanup of brownfield sites.
(2) LOANS.—The loans may be provided by the
local government, or by the State on behalf of a local
government, to finance cleanups of brownfield sites
by the local government, or by an owner or a pro-
spective purchaser of a brownfield site (including a
local government) at which a cleanup is being con-
ducted or is proposed to be conducted.
(b) SCOPE OF PROGRAM.—
(1) IN GENERAL.—
(A) GRANTS.—In carrying out subsection
(a), the Administrator may award a grant to a
State or local government that submits an ap-
plication to the Administrator that is approved
by the Administrator.
(B) USE OF GRANT.—The grant shall be
used by the State or local government to cap-
italize a revolving loan fund to be used for
cleanup of one or more brownfield sites.
(C) GRANT APPLICATION.—An application
for a grant under this section shall be in such
form as the Administrator determines appro-
priate. The application shall include the follow-
ing:
(i) Evidence that the grant applicant
has the financial controls and resources to
administer a revolving loan fund in accord-
ance with this title.
(ii) Provisions that—
(I) ensure that the grant appli-
cant has the ability to monitor the use
of funds provided to loan recipients
under this title;
(II) ensure that any cleanup con-
ducted by the applicant is protective
of human health and the environment;
and
(III) ensure that any cleanup
funded under this Act will comply
with all laws that apply to the clean-
up.
(iii) Identification of the criteria to be
used by the State or local government in
providing for loans under the program.
The criteria shall include the financial
standing of the applicants for the loans,
the use to which the loans will be put, the
provisions to be used to ensure repayment
of the loan funds, the proposed method
and anticipated period of time required to
clean up the environmental contamination
at the brownfield site, and such other cri-
teria as the Administrator considers appro-
priate.
(2) GRANT APPROVAL.—In determining wheth-
er to award a grant under this section, the Adminis-
trator shall consider—
(A) the need of the local government for fi-
nancial assistance to clean up brownfield sites
that are the subject of the application, taking
into consideration the financial resources avail-
able to the local government;
(B) the ability of the State or local govern-
ment to ensure that the applicants repay the
loans in a timely manner;
(C) the extent to which the cleanup of the
brownfield site or sites would reduce health and
environmental risks caused by the release of
hazardous substances, pollutants, or contami-
nants at, or from, the brownfield site or sites;
(D) the demonstrable potential of the
brownfield site or sites for stimulating economic
development or creation of recreational areas on
completion of the cleanup;
(E) the demonstrated ability of the grant
recipient to administer such a loan program;
(F) the demonstrated experience of the
local government regarding brownfield sites and
the reuse of contaminated land, including
whether the government has received any grant
under the Comprehensive Environmental Re-
sponse, Compensation, and Liability Act of
1980 (42 U.S.C. 9601 et seq.) to assess
brownfield sites, except that applicants who
have not previously received such a grant may
be considered for awards under this section;
(G) the efficiency of having the loan ad-
ministered by the level of government rep-
resented by the applicant entity;
(H) the experience of administering any
loan programs by the entity, including the loan
repayment rates;
(I) the demonstrations made regarding the
ability of the local government to ensure a fair
distribution of grant funds among brownfield
sites within the jurisdiction of the local govern-
ment; and
(J) such other factors as the Administrator
considers relevant to carry out this section.
(3) GRANT AMOUNT.—The amount of a grant
made to an applicant under this section shall not ex-
ceed $500,000, except that the Administrator may
increase the amount in special circumstances as de-
termined by the Administrator.
(4) REVOLVING LOAN FUND APPROVAL.—Each
application for a grant to capitalize a revolving loan
fund under this section shall, as a condition of ap-
proval by the Administrator, include a written state-
ment by the local government that cleanups to be
funded under the loan program of the local govern-
ment shall be conducted under the auspices of, and
in compliance with, the State voluntary response
program or State Superfund program or Federal au-
thority.
(c) GRANT AGREEMENTS.—Each grant under this
section for a revolving loan fund shall be made pursuant
to a grant agreement. At a minimum, the grant agreement
shall include provisions that ensure the following:
(1) COMPLIANCE WITH LAW.—The local govern-
ment will include in all loan agreements a require-
ment that the loan recipient shall comply with all
laws applicable to the cleanup and shall ensure that
the cleanup is protective of human health and the
environment.
(2) REPAYMENT.—The State or local govern-
ment will require repayment of the loan consistent
with this title.
(3) USE OF FUNDS.—The State or local govern-
ment will use the funds solely for purposes of estab-
lishing and capitalizing a loan program in accord-
ance with this title and of cleaning up the environ-
mental contamination at the brownfield site or sites.
(4) REPAYMENT OF FUNDS.—The State or local
government will require in each loan agreement, and
take necessary steps to ensure, that the loan recipi-
ent will use the loan funds solely for the purposes
stated in paragraph (3), and will require the return
of any excess funds immediately on a determination
by the appropriate local official that the cleanup has
been completed.
(5) NONTRANSFERABILITY.—The funds will not
be transferable, unless the Administrator agrees to
the transfer in writing.
(6) LIENS.—
(A) DEFINITIONS.—In this paragraph, the
terms ‘‘security interest’’ and ‘‘purchaser’’ have
the meanings given the terms in section
6323(h) of the Internal Revenue Code of 1986.
(B) LIENS.—A lien in favor of the grant
recipient shall arise on the contaminated prop-
erty subject to a loan under this section.
(C) COVERAGE.—The lien shall cover all
real property included in the legal description of
the property at the time the loan agreement
provided for in this section is signed, and all
rights to the property, and shall continue until
the terms and conditions of the loan agreement
have been fully satisfied.
(D) TIMING.—The lien shall—
(i) arise at the time a security interest
is appropriately recorded in the real prop-
erty records of the appropriate office of the
State, county, or other governmental sub-
division, as designated by State law, in
which the real property subject to the lien
is located; and
(ii) be subject to the rights of any
purchaser, holder of a security interest, or
judgment lien creditor whose interest is or
has been perfected under applicable State
law before the notice has been filed in the
appropriate office of the State, county, or
other governmental subdivision, as des-
ignated by State law, in which the real
property subject to the lien is located.
(7) NOTICE TO STATE.—When a local govern-
ment is a grant recipient, the local government will
notify the State in which the local government is lo-
cated of the receipt of the grant and of the identity
of recipients of loans made under the revolving loan
fund.
(d) AUDITS.—
(1) IN
GENERAL.—The Inspector General of
the Environmental Protection Agency shall audit a
portion of the grants awarded under this section to
ensure that all funds are used for the purposes set
forth in this section.
(2) FUTURE GRANTS.—The result of the audit
shall be taken into account in awarding any future
grants to the local government.
(e) AUTHORITY TO AWARD GRANTS TO STATES.—
The Administrator may award a grant to a State under
the program established under this section at the request
of a local government in the State if the Administrator
determines that a grant to the State is necessary in order
to facilitate the receipt of funds by one or more local gov-
ernments that otherwise do not have the capabilities, such
as personnel and other resources, to manage grants under
the program.
SEC. 103. ENVIRONMENTAL CLEANUP GRANTS.
(a) EXPENDITURES
FROM
THE
SUPERFUND.—
Amounts in the Hazardous Substance Superfund estab-
lished by section 9507 of the Internal Revenue Code of
1986 shall be made available consistent with, and for the
purposes of carrying out, the grant programs established
under sections 101 and 102.
(b) AUTHORITY TO AWARD GRANTS.—There is au-
thorized to be appropriated from the Hazardous Sub-
stance Superfund for grants to local governments under
sections 101 and 102, $45,000,000 for each of fiscal years
1998 through 2000.
SEC. 104. LIMITATIONS ON USE OF FUNDS.
(a) EXCLUDED FACILITIES.—(1) A grant for site in-
ventory and assessment under section 101 or to capitalize
a revolving loan fund under section 102 may not be used
for any activity involving—
(A) a facility or portion of a facility that is the
subject of a response action (including a facility or
portion of a facility with respect to which a record
of decision, other than a no-action record of deci-
sion, has been issued) under the Comprehensive En-
vironmental Response, Compensation, and Liability
Act of 1980 (42 U.S.C. 9601 et seq.), unless a pre-
liminary assessment, site investigation, or response
action has been completed at such facility or portion
of a facility and the President has decided not to
take further response action at such facility or por-
tion of a facility;
(B) a facility included, or proposed for inclu-
sion, on the National Priorities List maintained by
the President under the Comprehensive Environ-
mental Response, Compensation, and Liability Act
of 1980 (42 U.S.C. 9601 et seq.);
(C) an NPL-caliber facility, as defined in para-
graph (2);
(D) a facility that is subject to corrective action
under section 3004(u) or 3008(h) of the Solid Waste
Disposal Act (42 U.S.C. 6924(u) or 6928(h)) to
which a corrective action permit or order has been
issued or modified to require the implementation of
corrective measures;
(E) any land disposal unit with respect to which
a closure notification under subtitle C of the Solid
Waste Disposal Act (42 U.S.C. 6921 et seq.) has
been submitted and closure requirements have been
specified in a closure plan or permit;
(F) a facility at which there has been a release
of a polychlorinated biphenyl and that is subject to
the Toxic Substances Control Act (15 U.S.C. 2601
et seq.);
(G) a facility with respect to which an adminis-
trative or judicial order or decree requiring cleanup
has been issued or entered into by the President
under—
(i) the Comprehensive Environmental Re-
sponse, Compensation, and Liability Act of
1980 (42 U.S.C. 9601 et seq.);
(ii) the Solid Waste Disposal Act (42
U.S.C. 6901 et seq.);
(iii) the Federal Water Pollution Control
Act (33 U.S.C. 1251 et seq.);
(iv) the Toxic Substances Control Act (15
U.S.C. 2601 et seq.); or
(v) the Safe Drinking Water Act (42
U.S.C. 300f et seq.);
(H) the portion of a facility at which assistance
for response activities may be obtained under sub-
title I of the Solid Waste Disposal Act (42 U.S.C.
6991 et seq.) from the Leaking Underground Stor-
age Tank Trust Fund established by section 9508 of
the Internal Revenue Code of 1986; and
(I) a facility owned or operated by a depart-
ment, agency, or instrumentality of the United
States, except for land held in trust by the United
States for an Indian tribe.
(2) For purposes of paragraph (1), the term ‘‘NPL-
caliber facility’’ means a facility for which the President,
in consultation with the State concerned, has prepared or
is preparing a hazardous ranking system scoring package
or that satisfies such other definition as the Administrator
may promulgate by regulation. The term does not include
a facility for which the President—
(A) has obtained a score under the hazardous
ranking system; and
(B) based on that score, has made a determina-
tion not to list on the National Priorities List.
(3) Notwithstanding paragraph (1), the President
may, on a facility-by-facility basis, allow a grant under
section 101 or section 102 to be used for an activity in-
volving any facility listed in subparagraph (D), (E), (F),
(G)(ii), (G)(iii), (G)(iv), (G)(v), (H), or (I) of paragraph
(1). In the case of a facility listed in subparagraph (I),
the President may use the authority in the preceding sen-
tence only if the facility is not a facility described in sub-
paragraph (A), (B), (C), or (G)(i).
(b) FINES
AND COST-SHARING.—A grant made
under this title may not be used to pay any fine or penalty
owed to a State or the Federal Government, or to meet
any Federal cost-sharing requirement.
(c) OTHER LIMITATIONS.—
(1) IN GENERAL.—Funds made available to a
local government under the grant programs estab-
lished under section 101 shall be used only to inven-
tory and assess brownfield sites as authorized by
this title. Funds made available to a local govern-
ment under the grant programs established under
section 102 shall be used only for capitalizing a re-
volving loan fund as authorized by this title.
(2) RESPONSIBILITY FOR CLEANUP ACTION.—
Funds made available under this title may not be
used to relieve a local government of the commit-
ment or responsibilities of the local government
under State law to assist or carry out cleanup ac-
tions at brownfield sites.
SEC. 105. EFFECT ON OTHER LAWS.
Nothing in this title changes, modifies, or otherwise
affects the liability of any person or the obligations im-
posed or authorities provided under any other law or regu-
lation, including—
(1) the Comprehensive Environmental Re-
sponse, Compensation, and Liability Act of 1980 (42
U.S.C. 9601 et seq.);
(2) the Solid Waste Disposal Act (42 U.S.C.
6901 et seq.);
(3) the Federal Water Pollution Control Act
(33 U.S.C. 1251 et seq.);
(4) the Toxic Substances Control Act (15
U.S.C. 2601 et seq.); and
(5) the Safe Drinking Water Act (42 U.S.C.
300f et seq.).
SEC. 106. REGULATIONS.
(a) IN GENERAL.—The Administrator may issue
such regulations as are necessary to carry out this title.
(b) PROCEDURES AND STANDARDS.—The regulations
shall include such procedures and standards as the Admin-
istrator considers necessary, including procedures and
standards for evaluating an application for a grant or loan
submitted under this title.
SEC. 107. AUTHORIZATIONS OF APPROPRIATIONS.
(a) SITE ASSESSMENT PROGRAM.—There is author-
ized to be appropriated to carry out section 101
$15,000,000 for each of fiscal years 1998 through 2000.
(b) ECONOMIC REDEVELOPMENT ASSISTANCE PRO-
GRAM.—There is authorized to be appropriated to carry
out section 102 $30,000,000 for each of fiscal years 1998
through 2000.
(c) AVAILABILITY OF FUNDS.—The amounts appro-
priated under this section shall remain available until ex-
pended.
TITLE II—FINANCIAL SUPPORT
FOR BROWNFIELD SITE PRE-
VENTION AND REDEVELOP-
MENT
SEC. 201. 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. 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 50 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 or by the head of
any State or local government agency designated by
the Administrator to carry out the Administrator’s
functions under this subpart with respect to such
site.
‘‘(b) 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 (or such Administrator’s designee
under subsection (a)(2)) certifies the environ-
mental remediation plan for such site has been
completed, and
‘‘(B) if such Administrator (or designee)
certifies that such plan has been completed,
such credit shall be taken into account under
subsection (a) ratably 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.
‘‘(c) CERTAIN PARTIES NOT ELIGIBLE.—
‘‘(1) IN GENERAL.—A taxpayer shall not be eli-
gible for any credit determined under this section
with respect to any qualified contaminated site if—
‘‘(A) 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,
‘‘(B) at any time before, on, or after such
date of enactment such taxpayer—
‘‘(i) had (by contract, agreement, or
otherwise) arranged for the disposal or
treatment of any hazardous materials at
such site or arranged with a transporter
for transport for disposal or treatment of
any hazardous materials at such site, or
‘‘(ii) had accepted any hazardous ma-
terials for transport to such site, or
‘‘(C) the taxpayer is related to any tax-
payer referred to in subparagraph (A) or (B).
‘‘(2) EXCEPTIONS.—
‘‘(A) ACQUISITION OF BUSINESS OR SITE
BY FORECLOSURE, ETC.—Paragraph (1) shall
not apply to a taxpayer who became described
therein by reason of the acquisition of the busi-
ness or site through foreclosure (or the equiva-
lent) of a security interest held by the taxpayer
or a related party if the taxpayer undertakes to
sell or otherwise dispose of such business or site
in a reasonably expeditious manner on commer-
cially reasonable terms.
‘‘(B) USE OF SITE REMEDIATED BY TAX-
PAYER.—Subparagraph (B) of paragraph (1)
shall not apply to a taxpayer with respect to
any site if—
‘‘(i) the only actions described in such
subparagraph of the taxpayer (or a related
person) with respect to such site occur
after such taxpayer (or person) carry out
an environmental remediation plan for
such site (and the completion of such plan
is certified under subsection (b)(1)), and
‘‘(ii) such actions are part of bona
fide manufacturing process (or other in-
dustrial activity at such site) of such tax-
payer (or person) which complies with all
Federal environmental laws and regula-
tions.
‘‘(d) QUALIFIED CONTAMINATED SITE.—For pur-
poses of this subpart, the term ‘qualified contaminated
site’ means any contaminated site if—
‘‘(1) the condition of the contaminated site is
such that without participation in the environmental
remediation credit program redevelopment is un-
likely,
‘‘(2) there is a strong likelihood of redevelop-
ment of the site for industrial or commercial use
that will result in creation of jobs and expansion of
the tax base, and
‘‘(3) environmental remediation and redevelop-
ment are likely to be completed within a reasonable
period of time.
‘‘SEC. 54A. 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.) as in effect on the date of
the enactment of this section, or
‘‘(B) the Solid Waste Disposal Act (42
U.S.C. 6901 et seq.) as so in effect.
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, and
lead paint.
‘‘(b) ENVIRONMENTAL
REMEDIATION.—For pur-
poses of this subpart, the term ‘environmental remedi-
ation’ means—
‘‘(1) removal or remediation activity in accord-
ance with the plan approved under section 54(a)(2),
‘‘(2) restoration of natural, historic or cultural
resources at the site, or the mitigation of unavoid-
able losses of such resources incurred in connection
with the remediation or response activity,
‘‘(3) health assessments or health effects stud-
ies related to the site,
‘‘(4) remediation of off-site contamination
caused by activity on the site (other than remedi-
ation activities of a type not permitted for the site),
and
‘‘(5) any other costs specified in the plan ap-
proved under section 54(a)(2), including demolition
of existing contaminated structures, site security,
permit fees necessary for remediation, and environ-
mental audits.
‘‘(c) RELATED PERSON.—For purposes of this sub-
part, 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).
‘‘(d) COORDINATION WITH EXPENSING OF ENVIRON-
MENTAL REMEDIATION COSTS.—The costs taken into ac-
count under section 54(a) do not include any costs for
which an election is in effect under section 198.’’.
(b) CREDIT MADE PART OF GENERAL BUSINESS
CREDIT.—Subsection (b) of section 38 of such Code is
amended by striking ‘‘plus’’ at the end of paragraph (10),
by striking the period at the end of paragraph (11) and
inserting ‘‘, plus’’, and by adding at the end thereof the
following new paragraph:
‘‘(12) the environmental remediation credit
under section 54(a).’’.
(c) LIMITATION ON CARRYBACK.—Subsection (d) of
section 39 of such Code is amended by adding at the end
thereof the following new paragraph:
‘‘(7) NO CARRYBACK OF ENVIRONMENTAL RE-
MEDIATION CREDIT BEFORE EFFECTIVE DATE.—No
portion of the unused business credit for any taxable
year which is attributable to the credit under section
54 may be carried back to a taxable year beginning
on or before the date of the enactment of section
54.’’.
(d) DEDUCTION FOR UNUSED CREDIT.—Subsection
(c) of section 196 of such Code is amended by striking
‘‘and’’ at the end of paragraph (6), by striking the period
at the end of paragraph (7) and inserting ‘‘, and’’, and
by adding at the end thereof the following new paragraph:
‘‘(8) the environmental remediation credit de-
termined under section 54.’’.
(e) CLERICAL AMENDMENT.—The table of subparts
for part IV of subchapter A of chapter 1 of such Code
is amended by adding at the end thereof the following new
item:
‘‘Subpart H. Environmental remediation credit.’’.
(f) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
the date of the enactment of this Act.
SEC. 202. BROWNFIELDS IRA.
(a) IN GENERAL.—Subpart C of part II of sub-
chapter E of chapter 1 of the Internal Revenue Code of
1986 is amended by inserting after section 468B the fol-
lowing new section:
‘‘SEC. 468C. SPECIAL RULES FOR HAZARDOUS WASTE RE-
MEDIATION RESERVES.
‘‘(a) IN GENERAL.—There shall be allowed as a de-
duction for any taxable year the amount of payments
made by the taxpayer to a Hazardous Waste Remediation
Reserve (hereinafter referred to as the ‘Reserve’) during
such taxable year.
‘‘(b) LIMITATION
ON AMOUNTS PAID INTO RE-
SERVE.—The amount which a taxpayer may pay into the
Reserve for any taxable year shall not exceed the lesser
of—
‘‘(1) $5,000,000, or
‘‘(2) the excess (if any) of $5,000,000 over the
amount paid into the Reserve for all prior taxable
years.
‘‘(c) INCOME
AND
DEDUCTIONS
OF
THE
TAX-
PAYER.—
‘‘(1) INCLUSION OF AMOUNTS DISTRIBUTED.—
There shall be includible in the gross income of the
taxpayer for any taxable year—
‘‘(A) any amount distributed from the Re-
serve during such taxable year, and
‘‘(B) any deemed distribution under sub-
section (e).
‘‘(2) DEDUCTION WHEN ECONOMIC PERFORM-
ANCE OCCURS.—In addition to any deduction under
subsection (a), there shall be allowable as a deduc-
tion for any taxable year the amount of the qualified
hazardous waste costs with respect to which eco-
nomic performance (within the meaning of section
461(h)(2)) occurs during such taxable year.
‘‘(d) HAZARDOUS WASTE REMEDIATION RESERVE.—
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, the term ‘Hazardous Waste Remediation Re-
serve’ means a reserve established by the taxpayer
for purposes of this section.
‘‘(2) RESERVE EXEMPT FROM TAXATION.—Any
Hazardous Waste Remediation Reserve is exempt
from taxation under this subtitle unless such Re-
serve has ceased to be a Hazardous Waste Remedi-
ation Reserve by reason of subsection (e). Notwith-
standing the preceding sentence, any such Reserve
shall be subject to the taxes imposed by section 511
(relating to imposition of tax on unrelated business
income of charitable, etc. organizations).
‘‘(3) CONTRIBUTIONS TO RESERVE.—The Re-
serve shall not accept any payments (or other
amounts) other than payments with respect to which
a deduction is allowable under subsection (a).
‘‘(4) USE OF RESERVE.—The Reserve shall be
used exclusively to pay the qualified hazardous waste
costs of the taxpayer.
‘‘(5) PROHIBITIONS AGAINST SELF-DEALING.—
Under regulations prescribed by the Secretary, for
purposes of section 4951 (and so much of this title
as relates to such section), the Reserve shall be
treated in the same manner as a trust described in
section 501(c)(21).
‘‘(e) DEEMED DISTRIBUTIONS.—
‘‘(1) DISQUALIFICATION
OF
RESERVE
FOR
SELF-DEALING.—In any case in which a Reserve vio-
lates any provision of this section or section 4951,
the Secretary may disqualify such Reserve from the
application of this section. In any case to which this
paragraph applies, the Reserve shall be treated as
having distributed all of its funds on the date such
determination takes effect.
‘‘(2) FAILURE TO SPEND FUNDS.—A Reserve
shall be treated as having distributed all of its
funds—
‘‘(A) on the date which is 10 years after
the date such Reserve was established unless,
as of such date—
‘‘(i) it has been determined that some
property of the taxpayer is contaminated
with hazardous waste, and
‘‘(ii) a remediation plan has been pre-
pared for such site, and
‘‘(B) except as otherwise provided by the
Secretary, on the date which is 10 years after
the date such Reserve was established unless,
as of such date, it is reasonably anticipated that
the remaining funds in the Reserve will be dis-
tributed before the date which is 15 years after
the date such Reserve was established.
‘‘(f) PENALTY FOR DISTRIBUTIONS NOT USED FOR
QUALIFIED HAZARDOUS WASTE COSTS.—The tax im-
posed by this chapter for any taxable year in which any
amount distributed from a Reserve is not used exclusively
to pay qualified hazardous waste costs shall be increased
by 10 percent of such amount.
‘‘(g) QUALIFIED HAZARDOUS WASTE COSTS.—For
purposes of this section, the term ‘qualified hazardous
waste costs’ means—
‘‘(1) the costs paid or incurred by the taxpayer
in connection with the assessment of—
‘‘(A) the extent of the environmental con-
tamination of a site which is owned by the tax-
payer, and
‘‘(B) the expected cost of environmental
remediation required for such site, and
‘‘(2) the costs paid or incurred by the taxpayer
to remediate such contamination.
‘‘(h) CONTROLLED GROUPS.—All persons treated as
a single employer under subsection (a) or (b) of section
52 shall be treated as one person for purposes of sub-
section (b), and the dollar amount contained in such sub-
section shall be allocated among such persons in such
manner as the Secretary shall prescribe.
‘‘(i) TIME WHEN PAYMENTS DEEMED MADE.—For
purposes of this section, a taxpayer shall be deemed to
have made a payment to the Reserve on the last day of
a taxable year if such payment is made on account of such
taxable year and is made within 21⁄2 months after the close
of such taxable year.’’.
(b) CLERICAL AMENDMENT.—The table of sections
for subpart C of part II of subchapter E of chapter 1 of
such Code is amended by inserting after the item relating
to section 468B the following new item:
‘‘Sec. 468C. Special rules for hazardous waste remediation re-
serves.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
the date of the enactment of this Act.
SEC. 203. ISSUANCE OF BOND TO FINANCE TAX-EXEMPT EN-
VIRONMENTAL REMEDIATION OF CONTAMI-
NATED SITES.
(a) IN GENERAL.—Subsection (e) of section 141 of
the Internal Revenue Code of 1986 (defining qualified
bond) is amended by striking ‘‘or’’ at the end of subpara-
graph (F), by redesignating subparagraph (G) as subpara-
graph (H), and by inserting after subparagraph (F) the
following new subparagraph:
‘‘(G) a qualified contaminated site remedi-
ation bond, or’’.
(b) QUALIFIED CONTAMINATED SITE REMEDIATION
BOND.—Section 144 of such Code is amended by adding
at the end thereof the following new subsection:
‘‘(d) QUALIFIED CONTAMINATED SITE REMEDIATION
BOND.—For purposes of this part—
‘‘(1) IN
GENERAL.—The term ‘qualified con-
taminated site remediation bond’ means any bond
issued as part of an issue 95 percent or more of the
proceeds of which are to finance—
‘‘(A) the acquisition of a qualified contami-
nated site, or
‘‘(B) the costs of environmental remedi-
ation with respect to such a site which is owned
by the person incurring such costs.
‘‘(2) LIMITATIONS.—
‘‘(A) IN GENERAL.—Such term shall not
include any bond issued to provide financing
with respect to a qualified contaminated site
if—
‘‘(i) any amount of such financing is
provided directly or indirectly to any ineli-
gible person,
‘‘(ii) less than 60 percent of the
amount of the financing so provided with
respect to such site is for costs described
in paragraph (1)(B), or
‘‘(iii) the amount of the financing so
provided to acquire such site exceeds the
excess of—
‘‘(I) the fair market value of the
site after the completion of the envi-
ronmental remediation, over
‘‘(II) the amount of the financing
so provided with respect to such site
for costs described in paragraph
(1)(B).
‘‘(B) INELIGIBLE PERSON.—For purposes
of subparagraph (A), a person is an ineligible
person with respect to any site if—
‘‘(i) at any time on or before the date
of the enactment of this subsection such
person was the owner or operator of any
business on such site,