The preceding sentence shall not apply to a taxpayer who
became described therein by reason of the acquisition of
the business or site through foreclosure (or the equivalent)
of a security interest held by the taxpayer or a related
party if the taxpayer undertakes to sell or otherwise dis-
pose of such business or site in a reasonably expeditious
manner on commercially reasonable terms.
‘‘(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) the contaminated site has not been in pro-
ductive use for at least 1 year before participation
in the program,
‘‘(3) 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
‘‘(4) 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 Resource Conservation and Re-
covery Act (42 U.S.C. 6901 et seq.) as so in ef-
fect.
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).’’
(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. 3. USE OF REDEVELOPMENT BONDS FOR ENVIRON-
MENTAL REMEDIATION.
(a) ENVIRONMENTAL REMEDIATION INCLUDED AS
REDEVELOPMENT PURPOSE.—Subparagraph (A) of sec-
tion 144(c)(3) of the Internal Revenue Code of 1986 (re-
lating to redevelopment purposes) is amended by striking
‘‘and’’ at the end of clause (iii), by striking the period
at the end of clause (iv) and inserting ‘‘, and’’, and by
adding at the end the following new clause:
‘‘(v) the costs of environmental reme-
diation (as defined in section 54A(b)) with
respect to a qualified contaminated site (as
defined in section 54(d)) if such costs are
incurred pursuant to an environmental re-
mediation plan which was approved by the
Administrator of the Environmental Pro-
tection Agency or by the head of any State
or local government agency designated by
the Administrator to carry out the Admin-
istrator’s functions under this clause.’’
(b) CERTAIN REQUIREMENTS NOT TO APPLY TO
REDEVELOPMENT BONDS FOR ENVIRONMENTAL REME-
DIATION.—Subsection (c) of section 144 of such Code is
amended by adding at the end the following new para-
graph:
‘‘(9) CERTAIN REQUIREMENTS NOT TO APPLY
TO REDEVELOPMENT BONDS FOR ENVIRONMENTAL
REMEDIATION.—In the case of any bond issued as
part of an issue 95 percent or more of the proceeds
of which are to finance costs referred to in para-
graph (3)(A)(v)—
‘‘(A) paragraph (2)(A)(i) shall not apply,
‘‘(B) paragraph (2)(A)(ii) shall not apply
to any issue issued by the governing body de-
scribed in paragraph (4)(A) with respect to the
area which includes the site,
‘‘(C) 
the 
requirement 
of 
paragraph
(2)(B)(ii) shall be treated as met if—
‘‘(i) the payment of the principal and
interest on such issue is secured by taxes
imposed by a governmental unit, or
‘‘(ii) such issue is approved by the ap-
plicable elected representative (as defined
in section 147(f)(2)(E)) of the govern-
mental unit which issued such issue (or on
behalf of which such issue was issued),
‘‘(D) subparagraphs (C) and (D) of para-
graph (2) shall not apply,
‘‘(E) subparagraphs (C) and (D) of para-
graph (4) shall not apply, and
‘‘(F) if the real property referred to in
clause (iii) of paragraph (3)(A) is 1 or more
dwelling units, such clause shall apply only if
the requirements of section 142(d) or 143 (as
the case may be) are met with respect to such
units.’’
(c) PENALTY
FOR FAILURE
TO SATISFACTORILY
COMPLETE REMEDIATION PLAN.—Subsection (b) of sec-
tion 150 of such Code is amended by adding at the end
thereof the following new paragraph:
‘‘(7) QUALIFIED CONTAMINATED SITE REMEDI-
ATION BONDS.—In the case of financing provided for
costs described in section 144(c)(3)(A)(v), no deduc-
tion shall be allowed under this chapter for interest
on such financing during any period during which
there is a determination 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 paragraph) that the remedi-
ation plan under which such costs were incurred was
not satisfactorily completed.’’
(d) EFFECTIVE DATE.—The amendments made by
this section shall apply to bonds issued after the date of
the enactment of this Act.
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