II 109th CONGRESS 1st Session S. 398 IN THE SENATE OF THE UNITED STATES February 16, 2005 Mr. Santorum (for himself and Mr. Bayh) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend the Internal Revenue Code of 1986 to expand the expensing of environmental remediation costs.

1.

Expansion of expensing of environmental remediation costs

(a)

Provision made permanent

Section 198 of the Internal Revenue Code of 1986 (relating to expensing of environmental remediation costs) is amended by striking subsection (h). (b)

Expansion of eligible contaminates

(1)

In general

Section 198(c)(1)(B) of the Internal Revenue Code of 1986 (defining qualified contaminated site) is amended by striking hazardous substance and inserting hazardous or toxic substance, or in which is located 1 or more structures in which such substance is found or of which such substance is a part. (2)

Hazardous or Toxic substance

Section 198(d)(1) of such Code (defining hazardous substance) is amended— (A) by inserting or toxic after hazardous in the matter preceding subparagraph (A), (B) by striking and at the end of subparagraph (A), (C) by striking the period at the end of subparagraph (B) and inserting a comma, and (D) by adding at the end the following new subparagraphs: (C) any substance which is listed as an extremely hazardous substance under section 302(a) of the Emergency Planning and Community Right-to-Know Act of 1986, and (D) any oil (as defined in section 1001(23) of the Oil Pollution Act of 1990). . (3)

Conforming amendments

(A) Paragraphs (1) and (2) of section 198(b) of such Code are each amended by inserting or toxic after hazardous. (B) Section 198(d)(2) of such Code is amended by striking of such Act and all that follows and inserting of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 by reason of subparagraph (A) or (C) of subsection (a)(3) thereof.. (C) The heading for section 198(d) of such Code is amended by inserting or Toxic after Hazardous. (c)

Elimination of recapture on sale

Section 198 of the Internal Revenue Code of 1986 is amended by striking subsection (e) and by redesignating subsections (f) and (g) as subsections (e) and (f), respectively. (d)

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.