containing material, polychlorinated biphenyls, or
urea formaldehyde foam insulation.
‘‘(b) ENVIRONMENTAL
REMEDIATION.—For pur-
poses of this subpart, the term ‘environmental remedi-
ation’ means—
‘‘(1) removal or remediation activity in accord-
ance with an approved environmental plan including
soil and ground water remediation,
‘‘(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,
‘‘(4) environmental audits,
‘‘(5) remediation of off-site contamination
caused by activity on the site, and
‘‘(6) any other costs reasonably required by rea-
son of the environmental conditions of the site in-
cluding demolition of existing contaminated struc-
tures, site security, and permit fees necessary for re-
mediation.
‘‘(c) LARGE CITY.—For purposes of this subpart, the
term ‘large city’ means any city with a population of at
least 1,000,000 as determined on the basis of the most
recent decennial census.
‘‘(d) MEDIUM SIZE CITY.—For purposes of this sub-
part, the term ‘medium size city’ means any city with a
population of at least 250,000 but less than 1,000,000 as
determined on the basis of the most recent decennial cen-
sus.
‘‘(e) BASIS REDUCTION.—The basis of any qualified
contaminated site shall be reduced by the amount of any
credit determined under this subpart with respect to such
site.
‘‘(f) 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).’’
(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 (7),
by striking the period at the end of paragraph (8) and
inserting ‘‘, plus’’, and by adding at the end thereof the
following new paragraph:
‘‘(9) 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:
‘‘(4) 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 ending be-
fore 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 (4), by striking the period
at the end of paragraph (5) and inserting ‘‘, and’’, and
by adding at the end thereof the following new paragraph:
‘‘(6) 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 take effect on the date of the enactment
of this Act.
SEC. 2. TAX-EXEMPT FINANCING OF ENVIRONMENTAL RE-
MEDIATION OF QUALIFIED CONTAMINATED
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 is-
sued 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 (as defined in section 54C(b))—