‘‘(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. 303. EXCLUSION OF INTEREST RECEIVED ON INDEBT-
EDNESS INCURRED FOR ENVIRONMENTAL
REMEDIATION.
(a) GENERAL RULE.—Part III of subchapter B of
chapter 1 of the Internal Revenue Code of 1986 (relating
to items specifically excluded from gross income) is
amended by redesignating section 139 as section 139A
and by inserting after section 138 the following new sec-
tion:
‘‘SEC. 139. EXCLUSION OF INTEREST RECEIVED ON INDEBT-
EDNESS INCURRED FOR ENVIRONMENTAL
REMEDIATION.
‘‘(a) GENERAL RULE.—In the case of a financial in-
stitution, gross income does not include amounts received
as interest on indebtedness incurred for environmental re-
mediation with respect to any qualified contaminated site.
‘‘(b) LIMITATION.—The amount excluded under sub-
section (a) for a taxable year shall not exceed $100,000.
‘‘(c) DEFINITIONS.—For purposes of this section—
‘‘(1) 
ENVIRONMENTAL
REMEDIATION
AND
QUALIFIED CONTAMINATED SITE.—The term ‘envi-
ronmental remediation’ has the meaning given to
such term in section 54A(b) and the term ‘qualified
contaminated site’ has the meaning given such term
in section 54(d).
‘‘(2) FINANCIAL INSTITUTION.—The term ‘fi-
nancial institution’ shall have the meaning given to
such term by section 265(b)(5).’’.
(b) CLERICAL AMENDMENT.—The table of sections
for Part III of subchapter B of chapter 1 of such Code
is amended by striking the last item and inserting the fol-
lowing new items:
‘‘Sec. 139. Exclusion of interest received on indebtedness incurred
for environmental remediation.
‘‘Sec. 139A. Cross references to other Acts.’’.
(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. 304. EXPENSING OF ENVIRONMENTAL REMEDIATION
COSTS.
(a) DEDUCTION MADE PERMANENT.—Section 198 of
the Internal Revenue Code of 1986 (relating to expensing
of environmental remediation costs) is amended by strik-
ing subsection (h).
(b) SITE SUBJECT TO LONG-TERM LEASE.—Para-
graph (1) of section 198(c) of such Code (defining quali-
fied contaminated site) is amended by adding at the end
the following new subparagraph:
‘‘(D) LONG-TERM LEASE.—An area shall
not fail to be described in subparagraph (A)(i)
solely because such area is subject to a lease
the term of which is not less than 30 years and
the lessee of which is the taxpayer.’’.
(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. 305. CREDIT FOR ENVIRONMENTAL REMEDIATION
TECHNOLOGY RESEARCH.
(a) IN GENERAL.—Subsection (a) of section 41 of the
Internal Revenue Code of 1986 (relating to general rule
for credit for increasing research activities) is amended by
striking ‘‘and’’ at the end of paragraph (1), by striking
the period at the end of paragraph (2) and inserting ‘‘,
and’’, and by inserting after paragraph (2) the following
new paragraph:
‘‘(3) 20 percent of the environmental research
remediation technology expenses.’’.
(b) 
ENVIRONMENTAL
RESEARCH
REMEDIATION
TECHNOLOGY EXPENSES.—Section 41 of such Code is
amended by redesignating subsections (f), (g), and (h) as
subsections (g), (h), and (i), respectively, and by inserting
after subsection (e) the following new subsection: