[Congressional Record Volume 143, Number 28 (Thursday, March 6, 1997)]
[Extensions of Remarks]
[Page E412]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




     ENVIRONMENTAL REMEDIATION TAX CREDIT AND TAX-EXEMPT FINANCING

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                           HON. JERRY WELLER

                              of illinois

                    in the house of representatives

                        Thursday, March 6, 1997

  Mr. WELLER. Mr. Speaker, I come to the well today with colleagues 
from both sides of the aisle, and particularly from the Illinois 
delegation to introduce bipartisan legislation to address the problem 
of brownfields that plague many of our districts. I have worked closely 
with my colleagues and with Mayor Daley of Chicago to develop 
incentives to encourage the clean up and redevelopment of these 
abandoned industrial sites which blight our communities. State and 
local governments will also receive greater flexibility to assist in 
the financing of such efforts. Fostering private sector remediation 
will attract business activity, leading to economic growth and 
stability and will ultimately place these sites back on the tax rolls.
  Current law provides disincentives for investors to buy brownfield 
sites for redevelopment. Today, if you own a parcel of land and 
contaminate it, you can take a current year deduction for the full cost 
of cleaning up the site. However, if you buy a contaminated site to 
redevelop it you must recover your clean up cost over a number of 
years. The number of years you must capitalize the expense depends upon 
the use of the property. Depending on the intended use of the property, 
the recovery period can be as long as 28 years.
  To turn this around, our bill would allow developers to deduct up to 
$500,000 of the costs in year that they are incurred and capitalize the 
remaining costs over a much shorter period of 5 years. According to the 
date we have collected, close to 50 percent of the brownfield sites in 
America could be restored for under $500,000.
  For more extensive remediation, developers often look to the local 
community to assist in attracting additional investment. Our second 
bill creates a new category of private activity bonds, namely 
remediation bonds. State and local jurisdictions can use this new type 
of bond under their existing issuance authority limit to solicit 
private investment to assist in the financing of redeveloping abandoned 
sites.
  Both bills as a package have been endorsed by Mayor Daley and the 
majority of the Illinois delegation from both sides of the aisle. I am 
very proud of the work that has gone into developing an approach that 
has garnered broad bipartisan support and I look forward to working 
with my colleagues to secure enactment of this important and historic 
legislation.

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