[Congressional Record Volume 142, Number 2 (Thursday, January 4, 1996)]
[Extensions of Remarks]
[Pages E16-E17]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          INTRODUCTION OF THE BROWN- FIELDS REDEVELOPMENT ACT

                                 ______


                         HON. WILLIAM J. COYNE

                            of pennsylvania

                    in the house of representatives

                       Thursday, January 4, 1996

  Mr. COYNE. Mr. Speaker, environmental cleanup and economic 
redevelopment of old, abandoned industrial sites is a critical issue 
for cities across America. These unproductive, often polluted sites are 
called brownfields.
  There are over 400,000 brownfield sites scattered across the United 
States. Over the last decades, these brownfield sites have become not 
only public health and pollution problems, but also serious impediments 
to the economic health of the surrounding communities. Because the risk 
of assuming financial liability for a brownfield site is so great, 
potential purchasers and lenders have shied away from redevelopment of 
such properties. The result has been the loss of job opportunities and 
tax revenue in many communities, blighted neighborhoods, and the 
expensive, unnecessary, and wasteful construction of infrastructure 
like roads and sewers at new ``greenfield'' sites in nearby 
communities.
  Affordable financing is one of the major stumbling blocks in the 
cleanup and reuse of brownfield sites. The Brownfields Redevelopment 
Act, which I am introducing today, seeks to address and ease the 
financial impediments to brownfield redevelopment through two separate 
provisions. First, the Brownfields Redevelopment Act would create a 
substantial tax incentive for private sector brownfield cleanups. In 
many cases, companies which are in the process of building new 
facilities might prefer to build these facilities on brownfield sites, 
where the necessary public infrastructure--roads and sewers, for 
example--is already in place and where a ready supply of prospective 
employees live nearby. However, the cost of environmental remediation 
and the risk of future financial liability has too often caused 
companies to shy away from such otherwise desirable locations. Cleaning 
up hazardous waste sites is an expensive, risky, and often time-
consuming process. To provide an incentive for brownfield cleanup and 
redevelopment, the Brownfields Redevelopment Act would create a tax 
credit for private sector environmental remediation.
  Specifically, this bill would provide a 50-percent tax credit for 
environmental remediation expenses incurred in completing a cleanup 
plan approved by the EPA or a designated State agency. In order to 
target this tax credit at the most potentially productive sites, the 
tax credit would be restricted to those sites that meet the following 
four criteria: the site has had no productive use for at least 1 year; 
the site would be unlikely to undergo redevelopment without tax credit 
assistance; the site has a strong likelihood of creating jobs and 
expanding the tax base after redevelopment; and the planned 
environmental remediation and redevelopment would be completed in a 
reasonably short period of time. The tax credit would also be available 
only to ``innocent owners'' of polluted property. It is my hope that 
such a tax credit will stimulate increased brownfield cleanup and 
redevelopment all across the country.
  If this credit is successful in encouraging brownfield cleanup and 
redevelopment, it will bring jobs and revitalization to thousands of 
communities across the country. I believe that the benefits such 
redevelopment would provide by revitalizing our central cities would 
far outweigh the cost of the credit. Moreover, the costs of allowing 
these sites to remain vacant and contaminated are--while less obvious--
quite substantial.

  The second provision of the Brownfield Redevelopment Act would modify 
the Internal Revenue Code's existing qualified redevelopment bond [QRB] 
provisions to specify that environmental remediation was an allowable 
use of such bonds. The interest paid on qualified redevelopment bonds--
bonds which are used for financing redevelopment in designated blighted 
areas--is tax-exempt. As a result, municipalities that issue such bonds 
can pay lower interest rates when they borrow money for redevelopment 
projects. In effect, the Federal Government subsidizes local 
governments' redevelopment activities through this Tax Code provision. 
Although brownfield sites are clearly blighted areas, environmental 
remediation is not specifically identified in the Tax Code as an 
allowable use of qualified redevelopment Bond proceeds. To address this 
oversight, the Brownfields Redevelopment Act would add environmental 
remediation to the list of activities that qualify for the use of the 
proceeds from the sale of qualified redevelopment bonds. This change 
would allow local governments to borrow money for brownfield cleanup at 
slightly less than market rates.
  The bill would also waive a number of existing QRB restrictions when 
the bonds were issued for environmental remediation activities. Most 
importantly, the Brownfields Redevelopment Act would waive a section of 
the current law that requires that designated blighted areas be at 
least 100 acres in size. The great majority of brownfield sites 
desperately in need of redevelopment are much smaller than 100 acres. 
Many, in fact, are only a few acres. Consequently, this and similar 
requirements would be modified under the Brownfields Redevelopment Act 
to address the special conditions that are often associated with 
brownfield sites.
  The QRB provisions of the Brownfield Redevelopment Act would be 
nearly revenue-neutral. While thousands of brownfield sites would be 
eligible for redevelopment using tax-exempt 

[[Page E17]]
QRB's, the volume of qualified redevelopment bonds issued would be 
constrained by the existing State bond volume caps established under 
section 146 of the Internal Revenue Code. Local governments wishing to 
issue qualified redevelopment bonds for brownfield sites would have to 
compete with other issuers for authority to issue private activity 
bonds under the State volume cap.
  Mr. Speaker, vacant, polluted brownfield sites have become a serious 
problem for our country. They have blighted many of our communities in 
both financial and environmental terms, and they have contributed to 
urban sprawl. Restoring and redeveloping our country's brownfield sites 
will be a difficult task--it will take the cooperation of both the 
public and private sectors. The financial assistance provided in this 
bill would be a valuable tool in the environmental and economic 
redevelopment of America. I urge my colleagues to join me as cosponsors 
of this legislation.

                          ____________________