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:
‘‘468C. Special rules for hazardous waste remediation reserves.’’.
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act.
Æ