[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1756 Introduced in House (IH)]







106th CONGRESS
  1st Session
                                H. R. 1756

   To provide for comprehensive brownfields assessment, cleanup, and 
                             redevelopment.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              May 11, 1999

  Mr. Franks of New Jersey (for himself, Mr. Meehan, Mr. Hoeffel, Mr. 
Brown of Ohio, Mr. Maloney of Connecticut, and Mr. Capuano) introduced 
 the following bill; which was referred to the Committee on Commerce, 
    and in addition to the Committees on Ways and Means, and Small 
Business, for a period to be subsequently determined by the Speaker, in 
   each case for consideration of such provisions as fall within the 
                jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
   To provide for comprehensive brownfields assessment, cleanup, and 
                             redevelopment.

    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 ``Brownfield Redevelopment and 
Environmental Revitalization Act of 1999''.

SEC. 2. TABLE OF CONTENTS.

    The table of contents is as follows:

Sec. 1. Short title.
Sec. 2. Table of contents.
Sec. 3. Findings and purpose.
       TITLE I--FINANCIAL SUPPORT FOR BROWNFIELD SITE REMEDIATION

Sec. 101. Grants for inventories, site assessments, and other pre-
                            cleanup activities.
Sec. 102. Grants for revolving loan programs.
Sec. 103. Environmental cleanup grants.
Sec. 104. Limitations on use of funds.
Sec. 105. Effect on other laws.
Sec. 106. Regulations.
Sec. 107. Authorizations of appropriations.
    TITLE II--FINANCIAL SUPPORT FOR BROWNFIELD SITE PREVENTION AND 
                             REDEVELOPMENT

Sec. 201. Environmental remediation tax credit.
Sec. 202. Brownfields IRA.
Sec. 203. Issuance of bond to finance tax-exempt environmental 
                            remediation of contaminated sites.
Sec. 204. Small business administration set-aside for brownfield 
                            prevention and redevelopment projects under 
                            section 504 development company program.
Sec. 205. Promotion of small business investment companies for 
                            brownfield activities.

SEC. 3. FINDINGS AND PURPOSE.

    (a) Findings.--Congress finds the following:
            (1) Abandoned and underutilized commercial and industrial 
        property is often avoided by investors and developers because 
        of real or perceived contamination on-site.
            (2) Reuse of these sites requires pre-cleanup assistance as 
        well as financial support for redevelopment activities.
    (b) Purpose.--The purpose of this Act is to provide public sector 
support for brownfield redevelopment and to further enable the private 
sector to invest and conduct cleanup and redevelopment activities.

       TITLE I--FINANCIAL SUPPORT FOR BROWNFIELD SITE REMEDIATION

SEC. 101. GRANTS FOR INVENTORIES, SITE ASSESSMENTS, AND OTHER PRE-
              CLEANUP ACTIVITIES.

    (a) In General.--The Administrator shall establish a program to 
award grants to States and local governments to inventory brownfield 
sites and to conduct site assessments and other pre-cleanup activities 
relating to such sites, including site identification, site 
characterization, and the planning and design of response actions for 
such sites.
    (b) Scope of Program.--
            (1) Grant awards.--To carry out subsection (a), the 
        Administrator may, on approval of an application, provide 
        financial assistance to a State or local government.
            (2) Grant application.--An application for a grant under 
        this section shall include, to the extent practicable, each of 
        the following:
                    (A) An identification of the brownfield sites for 
                which assistance is sought and a description of the 
                effect of the brownfield sites on the community.
                    (B) A description of the need of the applicant for 
                Federal financial assistance to inventory brownfield 
                sites and to conduct site assessments or other pre-
                cleanup activities at such sites.
                    (C) A demonstration of the potential of the grant 
                assistance to stimulate economic development or create 
                recreational space.
                    (D) A description of the local commitment as of the 
                date of the application, which shall include a 
                community involvement plan that demonstrates meaningful 
                community involvement.
                    (E) A plan that shows how the site identification, 
                site assessment, or other pre-cleanup activities will 
                be implemented.
                    (F) A statement on the long-term benefits of the 
                proposed project.
                    (G) Such other factors as the Administrator 
                considers relevant to carry out this title.
            (3) Approval of application.--
                    (A) In general.--In making a decision whether to 
                approve an application under paragraph (1), the 
                Administrator shall--
                            (i) consider the need of the State or local 
                        government for Federal financial assistance to 
                        carry out this section;
                            (ii) consider the ability of the applicant 
                        to carry out or ensure an inventory, site 
                        assessment, or other pre-cleanup activity under 
                        this section; and
                            (iii) consider such other factors as the 
                        Administrator considers relevant to carry out 
                        this section.
                    (B) Grant conditions.--As a condition of awarding a 
                grant under this section, the Administrator may, on the 
                basis of the criteria considered under subparagraph 
                (A), attach such conditions to the grant as the 
                Administrator determines appropriate.
            (4) Grant amount.--The amount of a grant awarded to any 
        State or local government under subsection (a) for inventory, 
        site assessment, and other pre-cleanup activities with respect 
        to 1 or more brownfield sites shall not exceed $200,000, except 
        that the Administrator may increase the amount in special 
        circumstances as determined by the Administrator.
            (5) Termination of grants.--If the Administrator determines 
        that a State or local government that receives a grant under 
        this subsection is in violation of a condition of a grant 
        referred to in paragraph (3)(B), the Administrator may 
        terminate the grant made to the State or local government and 
        require full or partial repayment of the grant.

SEC. 102. GRANTS FOR REVOLVING LOAN PROGRAMS.

    (a) In General.--
            (1) Establishment.--The Administrator shall establish a 
        program to award grants to be used by States and local 
        governments to capitalize revolving loan funds for the cleanup 
        of brownfield sites.
            (2) Loans.--The loans may be provided by the local 
        government, or by the State on behalf of a local government, to 
        finance cleanups of brownfield sites by the local government, 
        or by an owner or a prospective purchaser of a brownfield site 
        (including a local government) at which a cleanup is being 
        conducted or is proposed to be conducted.
    (b) Scope of Program.--
            (1) In general.--
                    (A) Grants.--In carrying out subsection (a), the 
                Administrator may award a grant to a State or local 
                government that submits an application to the 
                Administrator that is approved by the Administrator.
                    (B) Use of grant.--The grant shall be used by the 
                State or local government to capitalize a revolving 
                loan fund to be used for cleanup of one or more 
                brownfield sites.
                    (C) Grant application.--An application for a grant 
                under this section shall be in such form as the 
                Administrator determines appropriate. The application 
                shall include the following:
                            (i) Evidence that the grant applicant has 
                        the financial controls and resources to 
                        administer a revolving loan fund in accordance 
                        with this title.
                            (ii) Provisions that--
                                    (I) ensure that the grant applicant 
                                has the ability to monitor the use of 
                                funds provided to loan recipients under 
                                this title;
                                    (II) ensure that any cleanup 
                                conducted by the applicant is 
                                protective of human health and the 
                                environment; and
                                    (III) ensure that any cleanup 
                                funded under this Act will comply with 
                                all laws that apply to the cleanup.
                            (iii) Identification of the criteria to be 
                        used by the State or local government in 
                        providing for loans under the program. The 
                        criteria shall include the financial standing 
                        of the applicants for the loans, the use to 
                        which the loans will be put, the provisions to 
                        be used to ensure repayment of the loan funds, 
                        the proposed method and anticipated period of 
                        time required to clean up the environmental 
                        contamination at the brownfield site, and such 
                        other criteria as the Administrator considers 
                        appropriate.
            (2) Grant approval.--In determining whether to award a 
        grant under this section, the Administrator shall consider--
                    (A) the need of the local government for financial 
                assistance to clean up brownfield sites that are the 
                subject of the application, taking into consideration 
                the financial resources available to the local 
                government;
                    (B) the ability of the State or local government to 
                ensure that the applicants repay the loans in a timely 
                manner;
                    (C) the extent to which the cleanup of the 
                brownfield site or sites would reduce health and 
                environmental risks caused by the release of hazardous 
                substances, pollutants, or contaminants at, or from, 
                the brownfield site or sites;
                    (D) the demonstrable potential of the brownfield 
                site or sites for stimulating economic development or 
                creation of recreational areas on completion of the 
                cleanup;
                    (E) the demonstrated ability of the grant recipient 
                to administer such a loan program;
                    (F) the demonstrated experience of the local 
                government regarding brownfield sites and the reuse of 
                contaminated land, including whether the government has 
                received any grant under the Comprehensive 
                Environmental Response, Compensation, and Liability Act 
                of 1980 (42 U.S.C. 9601 et seq.) to assess brownfield 
                sites, except that applicants who have not previously 
                received such a grant may be considered for awards 
                under this section;
                    (G) the efficiency of having the loan administered 
                by the level of government represented by the applicant 
                entity;
                    (H) the experience of administering any loan 
                programs by the entity, including the loan repayment 
                rates;
                    (I) the demonstrations made regarding the ability 
                of the local government to ensure a fair distribution 
                of grant funds among brownfield sites within the 
                jurisdiction of the local government; and
                    (J) such other factors as the Administrator 
                considers relevant to carry out this section.
            (3) Grant amount.--The amount of a grant made to an 
        applicant under this section shall not exceed $500,000, except 
        that the Administrator may increase the amount in special 
        circumstances as determined by the Administrator.
            (4) Revolving loan fund approval.--Each application for a 
        grant to capitalize a revolving loan fund under this section 
        shall, as a condition of approval by the Administrator, include 
        a written statement by the local government that cleanups to be 
        funded under the loan program of the local government shall be 
        conducted under the auspices of, and in compliance with, the 
State voluntary response program or State Superfund program or Federal 
authority.
    (c) Grant Agreements.--Each grant under this section for a 
revolving loan fund shall be made pursuant to a grant agreement. At a 
minimum, the grant agreement shall include provisions that ensure the 
following:
            (1) Compliance with law.--The local government will include 
        in all loan agreements a requirement that the loan recipient 
        shall comply with all laws applicable to the cleanup and shall 
        ensure that the cleanup is protective of human health and the 
        environment.
            (2) Repayment.--The State or local government will require 
        repayment of the loan consistent with this title.
            (3) Use of funds.--The State or local government will use 
        the funds solely for purposes of establishing and capitalizing 
        a loan program in accordance with this title and of cleaning up 
        the environmental contamination at the brownfield site or 
        sites.
            (4) Repayment of funds.--The State or local government will 
        require in each loan agreement, and take necessary steps to 
        ensure, that the loan recipient will use the loan funds solely 
        for the purposes stated in paragraph (3), and will require the 
        return of any excess funds immediately on a determination by 
        the appropriate local official that the cleanup has been 
        completed.
            (5) Nontransferability.--The funds will not be 
        transferable, unless the Administrator agrees to the transfer 
        in writing.
            (6) Liens.--
                    (A) Definitions.--In this paragraph, the terms 
                ``security interest'' and ``purchaser'' have the 
                meanings given the terms in section 6323(h) of the 
                Internal Revenue Code of 1986.
                    (B) Liens.--A lien in favor of the grant recipient 
                shall arise on the contaminated property subject to a 
                loan under this section.
                    (C) Coverage.--The lien shall cover all real 
                property included in the legal description of the 
                property at the time the loan agreement provided for in 
                this section is signed, and all rights to the property, 
                and shall continue until the terms and conditions of 
                the loan agreement have been fully satisfied.
                    (D) Timing.--The lien shall--
                            (i) arise at the time a security interest 
                        is appropriately recorded in the real property 
                        records of the appropriate office of the State, 
                        county, or other governmental subdivision, as 
                        designated by State law, in which the real 
                        property subject to the lien is located; and
                            (ii) be subject to the rights of any 
                        purchaser, holder of a security interest, or 
                        judgment lien creditor whose interest is or has 
                        been perfected under applicable State law 
                        before the notice has been filed in the 
                        appropriate office of the State, county, or 
                        other governmental subdivision, as designated 
                        by State law, in which the real property 
                        subject to the lien is located.
            (7) Notice to state.--When a local government is a grant 
        recipient, the local government will notify the State in which 
        the local government is located of the receipt of the grant and 
        of the identity of recipients of loans made under the revolving 
        loan fund.
    (d) Audits.--
            (1) In general.--The Inspector General of the Environmental 
        Protection Agency shall audit a portion of the grants awarded 
        under this section to ensure that all funds are used for the 
        purposes set forth in this section.
            (2) Future grants.--The result of the audit shall be taken 
        into account in awarding any future grants to the local 
        government.
    (e) Authority To Award Grants to States.--The Administrator may 
award a grant to a State under the program established under this 
section at the request of a local government in the State if the 
Administrator determines that a grant to the State is necessary in 
order to facilitate the receipt of funds by one or more local 
governments that otherwise do not have the capabilities, such as 
personnel and other resources, to manage grants under the program.

SEC. 103. ENVIRONMENTAL CLEANUP GRANTS.

    (a) Expenditures From the Superfund.--Amounts in the Hazardous 
Substance Superfund established by section 9507 of the Internal Revenue 
Code of 1986 shall be made available consistent with, and for the 
purposes of carrying out, the grant programs established under sections 
101 and 102.
    (b) Authority To Award Grants.--There is authorized to be 
appropriated from the Hazardous Substance Superfund for grants to local 
governments under sections 101 and 102, $45,000,000 for each of fiscal 
years 2000 through 2002.

SEC. 104. LIMITATIONS ON USE OF FUNDS.

    (a) Excluded Facilities.--(1) A grant for site inventory and 
assessment under section 101 or to capitalize a revolving loan fund 
under section 102 may not be used for any activity involving--
            (A) a facility or portion of a facility that is the subject 
        of a response action (including a facility or portion of a 
        facility with respect to which a record of decision, other than 
        a no-action record of decision, has been issued) under the 
        Comprehensive Environmental Response, Compensation, and 
        Liability Act of 1980 (42 U.S.C. 9601 et seq.), unless a 
        preliminary assessment, site investigation, or response action 
        has been completed at such facility or portion of a facility 
        and the President has decided not to take further response 
        action at such facility or portion of a facility;
            (B) a facility included, or proposed for inclusion, on the 
        National Priorities List maintained by the President under the 
        Comprehensive Environmental Response, Compensation, and 
        Liability Act of 1980 (42 U.S.C. 9601 et seq.);
            (C) an NPL-caliber facility, as defined in paragraph (2);
            (D) a facility that is subject to corrective action under 
        section 3004(u) or 3008(h) of the Solid Waste Disposal Act (42 
        U.S.C. 6924(u) or 6928(h)) to which a corrective action permit 
        or order has been issued or modified to require the 
        implementation of corrective measures;
            (E) any land disposal unit with respect to which a closure 
        notification under subtitle C of the Solid Waste Disposal Act 
        (42 U.S.C. 6921 et seq.) has been submitted and closure 
        requirements have been specified in a closure plan or permit;
            (F) a facility at which there has been a release of a 
        polychlorinated biphenyl and that is subject to the Toxic 
        Substances Control Act (15 U.S.C. 2601 et seq.);
            (G) a facility with respect to which an administrative or 
        judicial order or decree requiring cleanup has been issued or 
        entered into by the President under--
                    (i) the Comprehensive Environmental Response, 
                Compensation, and Liability Act of 1980 (42 U.S.C. 9601 
                et seq.);
                    (ii) the Solid Waste Disposal Act (42 U.S.C. 6901 
                et seq.);
                    (iii) the Federal Water Pollution Control Act (33 
                U.S.C. 1251 et seq.);
                    (iv) the Toxic Substances Control Act (15 U.S.C. 
                2601 et seq.); or
                    (v) the Safe Drinking Water Act (42 U.S.C. 300f et 
                seq.);
            (H) the portion of a facility at which assistance for 
        response activities may be obtained under subtitle I of the 
        Solid Waste Disposal Act (42 U.S.C. 6991 et seq.) from the 
        Leaking Underground Storage Tank Trust Fund established by 
        section 9508 of the Internal Revenue Code of 1986; and
            (I) a facility owned or operated by a department, agency, 
        or instrumentality of the United States, except for land held 
        in trust by the United States for an Indian tribe.
    (2) For purposes of paragraph (1), the term ``NPL-caliber 
facility'' means a facility for which the President, in consultation 
with the State concerned, has prepared or is preparing a hazardous 
ranking system scoring package or that satisfies such other definition 
as the Administrator may promulgate by regulation. The term does not 
include a facility for which the President--
            (A) has obtained a score under the hazardous ranking 
        system; and
            (B) based on that score, has made a determination not to 
        list on the National Priorities List.
    (3) Notwithstanding paragraph (1), the President may, on a 
facility-by-facility basis, allow a grant under section 101 or section 
102 to be used for an activity involving any facility listed in 
subparagraph (D), (E), (F), (G)(ii), (G)(iii), (G)(iv), (G)(v), (H), or 
(I) of paragraph (1). In the case of a facility listed in subparagraph 
(I), the President may use the authority in the preceding sentence only 
if the facility is not a facility described in subparagraph (A), (B), 
(C), or (G)(i).
    (b) Fines and Cost-Sharing.--A grant made under this title may not 
be used to pay any fine or penalty owed to a State or the Federal 
Government, or to meet any Federal cost-sharing requirement.
    (c) Other Limitations.--
            (1) In general.--Funds made available to a local government 
        under the grant programs established under section 101 shall be 
        used only to inventory and assess brownfield sites as 
        authorized by this title. Funds made available to a local 
        government under the grant programs established under section 
        102 shall be used only for capitalizing a revolving loan fund 
        as authorized by this title.
            (2) Responsibility for cleanup action.--Funds made 
        available under this title may not be used to relieve a local 
        government of the commitment or responsibilities of the local 
        government under State law to assist or carry out cleanup 
        actions at brownfield sites.

SEC. 105. EFFECT ON OTHER LAWS.

    Nothing in this title changes, modifies, or otherwise affects the 
liability of any person or the obligations imposed or authorities 
provided under any other law or regulation, including--
            (1) the Comprehensive Environmental Response, Compensation, 
        and Liability Act of 1980 (42 U.S.C. 9601 et seq.);
            (2) the Solid Waste Disposal Act (42 U.S.C. 6901 et seq.);
            (3) the Federal Water Pollution Control Act (33 U.S.C. 1251 
        et seq.);
            (4) the Toxic Substances Control Act (15 U.S.C. 2601 et 
        seq.); and
            (5) the Safe Drinking Water Act (42 U.S.C. 300f et seq.).

SEC. 106. REGULATIONS.

    (a) In General.--The Administrator may issue such regulations as 
are necessary to carry out this title.
    (b) Procedures and Standards.--The regulations shall include such 
procedures and standards as the Administrator considers necessary, 
including procedures and standards for evaluating an application for a 
grant or loan submitted under this title.

SEC. 107. AUTHORIZATIONS OF APPROPRIATIONS.

    (a) Site Assessment Program.--There is authorized to be 
appropriated to carry out section 101 $15,000,000 for each of fiscal 
years 2000 through 2002.
    (b) Economic Redevelopment Assistance Program.--There is authorized 
to be appropriated to carry out section 102 $30,000,000 for each of 
fiscal years 2000 through 2002.
    (c) Availability of Funds.--The amounts appropriated under this 
section shall remain available until expended.

    TITLE II--FINANCIAL SUPPORT FOR BROWNFIELD SITE PREVENTION AND 
                             REDEVELOPMENT

SEC. 201. 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 a 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) 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
            ``(3) 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 is 
        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 of 1980 (42 U.S.C. 9601 
                et seq.) as in effect on the date of the enactment of 
                this section, or
                    ``(B) the Solid Waste Disposal 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).
    ``(d) Coordination With Expensing of Environmental Remediation 
Costs.--The costs taken into account under section 54(a) do not include 
any costs for which an election is in effect under section 198.''.
    (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 (11), by striking the period at the end of paragraph (12) and 
inserting ``, plus'', and by adding at the end thereof the following 
new paragraph:
            ``(13) 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:
            ``(9)  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 (7), 
by striking the period at the end of paragraph (8) and inserting ``, 
and'', and by adding at the end thereof the following new paragraph:
            ``(9) 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. 202. BROWNFIELDS IRA.

    (a) In General.--Subpart C of part II of subchapter E of chapter 1 
of the Internal Revenue Code of 1986 is amended by inserting after 
section 468B the following new section:

``SEC. 468C. SPECIAL RULES FOR HAZARDOUS WASTE REMEDIATION RESERVES.

    ``(a) In General.--There shall be allowed as a deduction for any 
taxable year the amount of payments made by the taxpayer to a Hazardous 
Waste Remediation Reserve (hereinafter referred to as the `Reserve') 
during such taxable year.
    ``(b) Limitation on Amounts Paid Into Reserve.--The amount which a 
taxpayer may pay into the Reserve for any taxable year shall not exceed 
the lesser of--
            ``(1) $5,000,000, or
            ``(2) the excess (if any) of $5,000,000 over the amount 
        paid into the Reserve for all prior taxable years.
    ``(c) Income and Deductions of the Taxpayer.--
            ``(1) Inclusion of amounts distributed.--There shall be 
        includible in the gross income of the taxpayer for any taxable 
        year--
                    ``(A) any amount distributed from the Reserve 
                during such taxable year, and
                    ``(B) any deemed distribution under subsection (e).
            ``(2) Deduction when economic performance occurs.--In 
        addition to any deduction under subsection (a), there shall be 
        allowable as a deduction for any taxable year the amount of the 
        qualified hazardous waste costs with respect to which economic 
        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 section, the term 
        `Hazardous Waste Remediation Reserve' 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 Reserve has ceased to be a Hazardous Waste 
        Remediation Reserve by reason of subsection (e). 
        Notwithstanding 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 Reserve 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 violates 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 prepared 
                        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 distributed 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 imposed 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 contamination 
                of a site which is owned by the taxpayer, 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 subsection (b), and the dollar amount contained 
in such subsection 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 2\1/2\ 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 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.

SEC. 203. ISSUANCE OF BOND TO FINANCE TAX-EXEMPT ENVIRONMENTAL 
              REMEDIATION OF CONTAMINATED SITES.

    (a) In General.--Subsection (e) of section 141 of the Internal 
Revenue Code of 1986 (defining qualified bond) is amended by striking 
``or'' at the end of subparagraph (F), by redesignating subparagraph 
(G) as subparagraph (H), and by inserting after subparagraph (F) the 
following new subparagraph:
                    ``(G) a qualified contaminated site remediation 
                bond, or''.
    (b) Qualified Contaminated Site Remediation Bond.--Section 144 of 
such Code is amended by adding at the end thereof the following new 
subsection:
    ``(d) Qualified Contaminated Site Remediation Bond.--For purposes 
of this part--
            ``(1) In general.--The term `qualified contaminated site 
        remediation bond' means any bond issued as part of an issue 95 
        percent or more of the proceeds of which are to finance--
                    ``(A) the acquisition of a qualified contaminated 
                site, or
                    ``(B) the costs of environmental remediation with 
                respect to such a site which is owned by the person 
                incurring such costs.
            ``(2) Limitations.--
                    ``(A) In general.--Such term shall not include any 
                bond issued to provide financing with respect to a 
                qualified contaminated site if--
                            ``(i) any amount of such financing is 
                        provided directly or indirectly to any 
                        ineligible person,
                            ``(ii) less than 60 percent of the amount 
                        of the financing so provided with respect to 
                        such site is for costs described in paragraph 
                        (1)(B), or
                            ``(iii) the amount of the financing so 
                        provided to acquire such site exceeds the 
                        excess of--
                                    ``(I) the fair market value of the 
                                site after the completion of the 
                                environmental remediation, over
                                    ``(II) the amount of the financing 
                                so provided with respect to such site 
                                for costs described in paragraph 
                                (1)(B).
                    ``(B) Ineligible person.--For purposes of 
                subparagraph (A), a person is an ineligible person with 
                respect to any site if--
                            ``(i) at any time on or before the date of 
                        the enactment of this subsection such person 
                        was the owner or operator of any business on 
                        such site,
                            ``(ii) at any time before, on, or after 
                        such date of enactment such person--
                                    ``(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
                            ``(iii) the person is related to any person 
                        referred to in clause (i) or (ii).
                    ``(C) Related person.--For purposes of this 
                paragraph, 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).
            ``(3) Restriction on land acquisition not to apply.--
        Section 147(c) shall not apply to any qualified contaminated 
        site remediation bond.
            ``(4) Qualified contaminated site.--
                    ``(A) In general.--For purposes of this subsection, 
                the term `qualified contaminated site' means any site 
                if the appropriate agency certifies that at least 1 of 
                the following environmental conditions is present on 
                such site:
                            ``(i) A release or threatened release of 
                        any hazardous, toxic, or dangerous substance.
                            ``(ii) Any storage tanks which contain any 
                        hazardous, toxic, or dangerous substance.
                            ``(iii) Any illegal disposal of solid 
                        waste.
                Such term shall not include any site listed on the 
                National Priorities List under the Comprehensive 
                Environmental Response, Compensation, and Liability Act 
                of 1980.
                    ``(B) Appropriate agency.--For purposes of 
                subparagraph (A), the appropriate agency is--
                            ``(i) the agency of the State in which the 
                        site is located which is designated by the 
                        Administrator of the Environmental Protection 
                        Agency for purposes of this paragraph, or
                            ``(ii) if the agency described in clause 
                        (i) designates an agency of the local 
                        government in which the site is located for 
                        purposes of this paragraph, such local 
                        government agency.
            ``(5) Hazardous, toxic, or dangerous substance.--For 
        purposes of this subsection, 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 of 1980 (42 U.S.C. 9601 
                et seq.),
                    ``(B) the Solid Waste Disposal Act (42 U.S.C. 6901 
                et seq.), or
                    ``(C) any State or local environmental law or 
                ordinance.
        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, or urea formaldehyde foam 
        insulation.
            ``(6) Environmental remediation.--For purposes of this 
        subsection, the term `environmental remediation' means--
                    ``(A) removal or remediation activity, including 
                soil and ground water remediation,
                    ``(B) 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,
                    ``(C) health assessments or health effects studies,
                    ``(D) environmental investigations,
                    ``(E) remediation of off-site contamination caused 
                by activity on the site, and
                    ``(F) any other costs reasonably required by reason 
                of the environmental conditions of the site including 
                demolition of existing contaminated structures, site 
                security, and permit fees necessary for remediation.''.
    (c) Clerical Amendments.--The section heading for section 144 of 
such Code is amended by inserting before the period ``; qualified 
contaminated site remediation bond''.

SEC. 204. SMALL BUSINESS ADMINISTRATION SET-ASIDE FOR BROWNFIELD 
              PREVENTION AND REDEVELOPMENT PROJECTS UNDER SECTION 504 
              DEVELOPMENT COMPANY PROGRAM.

    Section 504 of the Small Business Investment Act of 1958 (15 U.S.C. 
697a) is amended by adding at the end the following new subsection:
    ``(c) Set-Aside for Brownfield Prevention and Redevelopment 
Projects.--
            ``(1) Purpose.--The purpose of this subsection is to make 
        capital available to small, polluting industries, or to the 
        prospective purchasers of such industries, that have limited or 
        no access to capital from conventional sources for the purposes 
        of assessing and cleaning up their sites and facilities or 
        acquiring new, clean technologies and production equipment.
            ``(2) Set-aside.--The Administration shall set aside the 
        lesser of $50,000,000 or 10 percent of the amount available for 
        the development company program in a fiscal year for local 
        development companies to use to finance projects that--
                    ``(A) assist existing businesses to carry out site 
                assessment and cleanup activities; or
                    ``(B) assist prospective new business owners or 
                operators to carry out site assessment and cleanup 
                activities in order to facilitate the transition to new 
                ownership or encourage industrial succession.
            ``(3) Definition.--In this subsection, the term `site 
        assessment', with respect to a brownfield site, means any 
        investigation of the site determined appropriate by the 
        President and undertaken pursuant to section 104(b) of the 
        Comprehensive Environmental Response, Compensation, and 
        Liability Act of 1980 (42 U.S.C. 9604(b)).''.

SEC. 205. PROMOTION OF SMALL BUSINESS INVESTMENT COMPANIES FOR 
              BROWNFIELD ACTIVITIES.

    Title III of the Small Business Investment Act of 1958 (15 U.S.C. 
681 et seq.) is amended by adding at the end the following new section:

``SEC. 321. SMALL BUSINESS INVESTMENT COMPANIES FOR BROWNFIELD 
              ACTIVITIES.

    ``(a) Promotion of Certain Small Business Investment Companies.--
The Administration shall promote the formation of one or more small 
business investment companies devoted to--
            ``(1) brownfield site cleanup activities, including those 
        that use innovative or experimental cleanup technologies; or
            ``(2) projects that help existing companies clean up their 
        facilities and adopt new, clean technologies.
    ``(b) Authority To Waive Certain Fee.--For any small business 
investment company described in subsection (a), the Administration may 
waive the filing fee usually imposed by the Administration.
    ``(c) Set-Aside.--The Small Business Administration shall set aside 
the lesser of $2,000,000 or 10 percent of the amount available for the 
small business investment company program under this title to use to 
provide leverage to any small business investment company described in 
subsection (a).
    ``(d) Definition.--In this section, the term `brownfield site' 
means an abandoned, idled, or underused commercial or industrial 
facility, the expansion or redevelopment of which is complicated by 
real or perceived environmental contamination.''.
                                 <all>