[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 523 Introduced in House (IH)]







105th CONGRESS
  1st Session
                                H. R. 523

 To amend the Internal Revenue Code of 1986 to allow a credit for the 
 cleanup of certain contaminated industrial sites and to allow the use 
          of tax-exempt redevelopment bonds for such cleanup.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            February 4, 1997

 Mr. Coyne (for himself and Mr. Rangel) introduced the following bill; 
         which was referred to the Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
 To amend the Internal Revenue Code of 1986 to allow a credit for the 
 cleanup of certain contaminated industrial sites and to allow the use 
          of tax-exempt redevelopment bonds for such cleanup.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Brownfields Redevelopment Act of 
1997''.

SEC. 2. ENVIRONMENTAL REMEDIATION TAX CREDIT.

    (a) General Rule.--Part IV of subchapter A of chapter 1 of the 
Internal Revenue Code of 1986 (relating to credits allowable) is 
amended by adding at the end thereof the following new subpart:

             ``Subpart H--Environmental Remediation Credit

                              ``Sec. 54. Amount of environmental 
                                        remediation credit.
                              ``Sec. 54A. Definitions and special 
                                        rules.

``SEC. 54. AMOUNT OF ENVIRONMENTAL REMEDIATION CREDIT.

    ``(a) General Rule.--For purposes of section 38, the environmental 
remediation credit determined under this section is 50 percent of the 
costs--
            ``(1) which are paid or incurred by the taxpayer for 
        environmental remediation with respect to any qualified 
        contaminated site which is owned by the taxpayer, and
            ``(2) which are incurred by the taxpayer pursuant to an 
        environmental remediation plan for such site which was approved 
        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 subpart with respect to such site.
    ``(b) Remediation Plan Must Be Completed.--
            ``(1) In general.--Except as otherwise provided in 
        paragraph (2)--
                    ``(A) no environmental remediation credit shall be 
                determined under this section with respect to any 
                qualified contaminated site unless the Administrator of 
                the Environmental Protection Agency (or such 
                Administrator's designee under subsection (a)(2)) 
                certifies the environmental remediation plan for such 
                site has been completed, and
                    ``(B) if such Administrator (or designee) certifies 
                that such plan has been completed, such credit shall be 
                taken into account under subsection (a) ratably over 
                the 5 taxable year period beginning with the taxable 
                year in which such plan was completed.
            ``(2) Special rule where extraordinary cost increases.--
        If--
                    ``(A) the taxpayer determines that due to 
                unforeseen circumstances the cost of completing the 
                remediation plan for any qualified contaminated site 
                exceeds 200 percent of the estimated costs of 
                completing such plan, and
                    ``(B) the State or local official administering the 
                remediation credit program agrees with such 
                determination,
        the taxpayer may cease the implementation of such plan and 
        shall be entitled to an environmental remediation credit with 
        respect to costs incurred before such cessation. Such credit 
        shall be taken into account under subsection (a) ratably over 
        the 5-taxable-year period beginning with the taxable year in 
        which such cessation occurs.
    ``(c) Certain Parties Not Eligible.--
            ``(1) In general.--A taxpayer shall not be eligible for any 
        credit determined under this section with respect to any 
        qualified contaminated site if--
                    ``(A) at any time on or before the date of the 
                enactment of this subpart, such taxpayer was the owner 
                or operator of any business on such site,
                    ``(B) at any time before, on, or after such date of 
                enactment such taxpayer--
                            ``(i) had (by contract, agreement, or 
                        otherwise) arranged for the disposal or 
                        treatment of any hazardous materials at such 
                        site or arranged with a transporter for 
                        transport for disposal or treatment of any 
                        hazardous materials at such site, or
                            ``(ii) had accepted any hazardous materials 
                        for transport to such site, or
                    ``(C) the taxpayer is related to any taxpayer 
                referred to in subparagraph (A) or (B).
            ``(2) Exceptions.--
                    ``(A) Acquisition of business or site by 
                foreclosure, etc.--Paragraph (1) 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 dispose of such business or site 
                in a reasonably expeditious manner on commercially 
                reasonable terms.
                    ``(B) Use of site remediated by taxpayer.--
                Subparagraph (B) of paragraph (1) shall not apply to a 
                taxpayer with respect to any site if--
                            ``(i) the only actions described in such 
                        subparagraph of the taxpayer (or a related 
                        person) with respect to such site occur after 
                        such taxpayer (or person) carry out an 
                        environmental remediation plan for such site 
                        (and the completion of such plan is certified 
                        under subsection (b)(1)), and
                            ``(ii) such actions are part of bona fide 
                        manufacturing process (or other industrial 
                        activity at such site) of such taxpayer (or 
                        person) which complies with all Federal 
                        environmental laws and regulations.
    ``(d) Qualified Contaminated Site.--For purposes 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 unlikely,
            ``(2) the contaminated site has not been in productive use 
        for at least 1 year before participation in the program,
            ``(3) there is a strong likelihood of redevelopment 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 redevelopment 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 environmental 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 substance.--Any 
        substance, waste, or material shall be treated as a hazardous, 
        toxic, or dangerous substance 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 Recovery Act 
                (42 U.S.C. 6901 et seq.) as so in effect.
        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 purposes of this subpart, the 
term `environmental remediation' means--
            ``(1) removal or remediation activity in accordance with 
        the plan approved under section 54(a)(2),
            ``(2) restoration of natural, historic or cultural 
        resources at the site, or the mitigation of unavoidable losses 
        of such resources incurred in connection with the remediation 
        or response activity,
            ``(3) health assessments or health effects studies related 
        to the site,
            ``(4) remediation of off-site contamination caused by 
        activity on the site (other than remediation activities of a 
        type not permitted for the site), and
            ``(5) any other costs specified in the plan approved under 
        section 54(a)(2), including demolition of existing contaminated 
        structures, site security, permit fees necessary for 
        remediation, and environmental audits.
    ``(c) Related Person.--For purposes of this subpart, 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 remediation 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 determined 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 ENVIRONMENTAL REMEDIATION.

    (a) Environmental Remediation Included as Redevelopment Purpose.--
Subparagraph (A) of section 144(c)(3) of the Internal Revenue Code of 
1986 (relating 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 
                        remediation (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 
                        remediation plan which was approved 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 clause.''
    (b) Certain Requirements Not To Apply To Redevelopment Bonds for 
Environmental Remediation.--Subsection (c) of section 144 of such Code 
is amended by adding at the end the following new paragraph:
            ``(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 paragraph 
        (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 described 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 
                        applicable elected representative (as defined 
                        in section 147(f)(2)(E)) of the governmental 
                        unit which issued such issue (or on behalf of 
                        which such issue was issued),
                    ``(D) subparagraphs (C) and (D) of paragraph (2) 
                shall not apply,
                    ``(E) subparagraphs (C) and (D) of paragraph (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 section 150 of such Code is amended by adding 
at the end thereof the following new paragraph:
            ``(7) Qualified contaminated site remediation bonds.--In 
        the case of financing provided for costs described in section 
        144(c)(3)(A)(v), no deduction 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 remediation 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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