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 paragraph (9)(B)) with respect to a qualified contaminated site (as defined in paragraph (9)(C)) 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)

Redevelopment bonds for environmental remediation

For purposes of clause (v) of paragraph (3)(A)— (A)

Certain requirements not to apply

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)— (i)paragraph (2)(A)(i) shall not apply, (ii)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, (iii)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), (iv)subparagraphs (C) and (D) of paragraph (2) shall not apply, (v)subparagraphs (C) and (D) of paragraph (4) shall not apply, and (vi)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. (B)

Environmental Remediation

The term environmental remediation means— (i)abatement or control of hazardous substances (as defined by section 101 of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C. 9601)), (ii)demolition of existing contaminated structures, permit fees necessary for remediation, and environmental audits, (iii)health assessments or health effects studies related to the site, and (iv)remediation of off-site contamination caused by activity on the site (other than remediation activities of a type permitted for the site). (C)

Qualified contaminated site

The term qualified contaminated site means any contaminated site if— (i)the condition of the contaminated site is such that without funding under this section redevelopment is unlikely, (ii)the contaminated site has not been in productive use for at least 1 year before such funding, (iii)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 (iv)environmental remediation and redevelopment are likely to be completed within a reasonable period of time.

(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.