voluntary cleanup program as the Administrator de-
termines appropriate.
(c) ELIGIBILITY
REQUIREMENTS.—The Adminis-
trator may establish such criteria for eligibility for grants
under this section as the Administrator considers appro-
priate.
(d) APPLICATION.—A grant may not be awarded
under this subsection unless an application is submitted
to, and approved by, the Administrator. Such an applica-
tion shall be submitted in such form and manner, and con-
tain such information, as the Administrator determines
appropriate.
(e) VOLUNTARY CLEANUP PROGRAM DEFINED.—For
purposes of this section, a voluntary cleanup program is
a program established by a State or Indian tribe under
which a person may respond voluntarily to a release or
threatened release of hazardous substances at brownfield
sites under the jurisdiction of the State or Indian tribe.
SEC. 107. AUTHORIZATION OF APPROPRIATIONS.
There is authorized to be appropriated to the Envi-
ronmental Protection Agency $87,400,000 for each of fis-
cal years 1998, 1999, 2000, and 2001 for purposes of car-
rying out this title.
TITLE 
II—DEPARTMENT 
OF
HOUSING AND URBAN DEVEL-
OPMENT 
BROWNFIELD
GRANTS.
SEC. 201. ECONOMIC DEVELOPMENT GRANTS IN CONNEC-
TION 
WITH 
COMMUNITY 
DEVELOPMENT
LOAN GUARANTEES.
Section 108(q) of the Housing and Community De-
velopment Act of 1974 (42 U.S.C. 5308(q)) is amended
by adding at the end the following new paragraph:
‘‘(5) BROWNFIELDS REDEVELOPMENT.—
‘‘(A) IN GENERAL.—The Secretary shall,
to the extent amounts are made available pur-
suant to subparagraph (F) and applications are
approved under this paragraph, make grants
under this paragraph to eligible public entities
for projects for the cleanup and economic rede-
velopment of brownfield sites. The provisions of
paragraphs (1) through (4) of this subsection
shall apply to grants under this paragraph and
the requirements under this paragraph shall be
in addition to the requirements under para-
graphs (1) through (4).
‘‘(B) 
ELIGIBLE
RECIPIENTS.—Grants
under this paragraph may be made only to eli-
gible public entities requesting guarantees
under subsection (a) for notes or other obliga-
tions to finance a project involving eligible ac-
tivities under subparagraph (C).
‘‘(C) ELIGIBLE
ACTIVITIES.—Assistance
under this paragraph may be used only for the
purposes of and in conjunction with projects
and activities for the economic redevelopment of
brownfield sites.
‘‘(D) SELECTION CRITERIA.—
‘‘(i) ADDITIONAL
CRITERION.—The
criteria for awarding assistance under this
paragraph shall include the extent to which
the applicant has developed an approach or
process for the cleanup and redevelopment
of brownfield sites and is coordinating such
program with appropriate environmental
regulatory agencies.
‘‘(ii) PRIORITY.—In awarding such
assistance, the Secretary shall give priority
to eligible entities meeting the selection cri-
teria (established pursuant to paragraph
(4) and clause (i)) and proposing a plan
involving 
projects 
and 
activities 
for
brownfield 
sites 
located 
within 
any
empowerment zone or enterprise commu-
nity (as such terms are defined in section
1393(b) of the Internal Revenue Code of
1986).
‘‘(E) COORDINATION WITH EPA.—The Sec-
retary shall consult and coordinate with the Ad-
ministrator of the Environmental Protection
Agency in providing assistance under this para-
graph and establishing selection criteria under
subparagraph (D) to ensure that activities as-
sisted with amounts provided under this para-
graph are consistent and coordinated with ef-
forts of such Agency and other agencies and or-
ganizations 
to 
clean 
up 
and 
redevelop
brownfield sites.
‘‘(F) DEFINITION.—For purposes of this
paragraph, the term ‘brownfield site’ has the
meaning provided by section 101(2) of the
Brownfield Economic Revitalization Act of
1997.
‘‘(G) 
AUTHORIZATION
OF
APPROPRIA-
TIONS.—For grants under this paragraph, there
is authorized to be appropriated to the Sec-
retary $25,000,000 for each of fiscal years
1998, 1999, 2000, and 2001.’’.
TITLE III—EXPENSING OF ENVI-
RONMENTAL 
REMEDIATION
COSTS
SEC. 301. EXPENSING OF ENVIRONMENTAL REMEDIATION
COSTS.
(a) IN GENERAL.—Part VI of subchapter B of chap-
ter 1 of the Internal Revenue Code of 1986 is amended
by adding at the end the following new section:
‘‘SEC. 198. EXPENSING OF ENVIRONMENTAL REMEDIATION
COSTS.
‘‘(a) IN GENERAL.—A taxpayer may elect to treat
any qualified environmental remediation expenditure
which is paid or incurred by the taxpayer as an expense
which is not chargeable to capital account. Any expendi-
ture which is so treated shall be allowed as a deduction
for the taxable year in which it is paid or incurred.
‘‘(b) QUALIFIED
ENVIRONMENTAL
REMEDIATION
EXPENDITURE.—For purposes of this section—
‘‘(1) IN GENERAL.—The term ‘qualified envi-
ronmental remediation expenditure’ means any ex-
penditure—
‘‘(A) which is otherwise chargeable to cap-
ital account, and
‘‘(B) which is paid or incurred in connec-
tion with the abatement or control of hazardous
substances at a qualified contaminated site.
‘‘(2) SPECIAL RULE FOR EXPENDITURES FOR
DEPRECIABLE PROPERTY.—Such term shall not in-
clude any expenditure for the acquisition of property
of a character subject to the allowance for deprecia-
tion which is used in connection with the abatement
or control of hazardous substances at a qualified
contaminated site; except that the portion of the al-
lowance under section 167 for such property which
is otherwise allocated to such site shall be treated as
a qualified environmental remediation expenditure.
‘‘(c) QUALIFIED CONTAMINATED SITE.—For pur-
poses of this section—
‘‘(1) QUALIFIED CONTAMINATED SITE.—
‘‘(A) IN
GENERAL.—The term ‘qualified
contaminated site’ means any area—
‘‘(i) which is held by the taxpayer for
use in a trade or business or for the pro-
duction of income, or which is property de-
scribed in section 1221(1) in the hands of
the taxpayer,
‘‘(ii) which is within a targeted area,
and
‘‘(iii) at or on which there is a release
or threat of release or disposal of any haz-
ardous substance.
‘‘(B) TAXPAYER
MUST
RECEIVE
STATE-
MENT
FROM
STATE
ENVIRONMENTAL
AGEN-
CY.—An area shall be treated as a qualified
contaminated site with respect to expenditures
paid or incurred during any taxable year only
if the taxpayer receives a statement from the
appropriate agency of the State in which such
area is located that such area meets the re-
quirements of clauses (ii) and (iii) of subpara-
graph (A).
‘‘(C) APPROPRIATE STATE AGENCY.—For
purposes of subparagraph (B), the appropriate
agency of a State is the agency designated by
the Administrator of the Environmental Protec-
tion Agency for purposes of this section. If no
agency of a State is designated under the pre-
ceding sentence, the appropriate agency for
such State shall be the Environmental Protec-
tion Agency.
‘‘(2) TARGETED AREA.—
‘‘(A) IN
GENERAL.—The term ‘targeted
area’ means—
‘‘(i) any population census tract with
a poverty rate of not less than 20 percent,
‘‘(ii) a population census tract with a
population of less than 2,000 if—
‘‘(I) more than 75 percent of
such tract is zoned for commercial or
industrial use, and
‘‘(II) such tract is contiguous to
1 or more other population census
tracts which meet the requirement of
clause (i) without regard to this
clause,
‘‘(iii) any empowerment zone or enter-
prise community (and any supplemental
zone designated on December 21, 1994),
and
‘‘(iv) any site announced before Feb-
ruary 1, 1997, as being included as a
brownfields pilot project of the Environ-
mental Protection Agency.
‘‘(B) NATIONAL PRIORITIES LISTED SITES
NOT INCLUDED.—Such term shall not include
any site which is on, or is proposed for, the na-
tional priorities list under section 105(a)(8)(B)
of the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 (as in
effect on the date of the enactment of this sec-
tion).
‘‘(C) CERTAIN
RULES
TO
APPLY.—For
purposes of this paragraph, the rules of sections
1392(b)(4) and 1393(a)(9) shall apply.
‘‘(D) TREATMENT
OF
CERTAIN
SITES.—
For purposes of this paragraph, a single con-
taminated site shall be treated as within a tar-
geted area if—
‘‘(i) a substantial portion of the site is
located within a targeted area described in
subparagraph (A) (determined without re-
gard to this subparagraph), and
‘‘(ii) the remaining portions are con-
tiguous to, but outside, such targeted area.
‘‘(d) HAZARDOUS SUBSTANCE.—For purposes of this
section—
‘‘(1) IN GENERAL.—The term ‘hazardous sub-
stance’ means—
‘‘(A) any substance which is a hazardous
substance as defined in section 101(14) of the
Comprehensive Environmental Response, Com-
pensation, and Liability Act of 1980, and
‘‘(B) any substance which is designated as
a hazardous substance under section 102 of
such Act.
‘‘(2) EXCEPTION.—Such term shall not include
any substance with respect to which a removal or re-
medial action is not permitted under section 104 of
such Act by reason of subsection (a)(3) thereof.
‘‘(e) DEDUCTION RECAPTURED AS ORDINARY IN-
COME ON SALE, ETC.—Solely for purposes of section
1245, in the case of property to which a qualified environ-
mental remediation expenditure would have been capital-
ized but for this section—
‘‘(1) the deduction allowed by this section for
such expenditure shall be treated as a deduction for
depreciation, and
‘‘(2) such property (if not otherwise section
1245 property) shall be treated as section 1245
property solely for purposes of applying section 1245
to such deduction.
‘‘(f) COORDINATION WITH OTHER PROVISIONS.—
Sections 280B and 468 shall not apply to amounts which
are treated as expenses under this section.
‘‘(g) REGULATIONS.—The Secretary shall prescribe
such regulations as may be necessary or appropriate to
carry out the purposes of this section.’’
(b) CLERICAL AMENDMENT.—The table of sections
for part VI of subchapter B of chapter 1 of the Internal
Revenue Code of 1986 is amended by adding at the end
the following new item:
‘‘Sec. 198. Expensing of environmental remediation costs.’’
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to expenditures paid or incurred
after the date of the enactment of this Act, in taxable
years ending after such date.
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