[Congressional Record Volume 143, Number 83 (Monday, June 16, 1997)]
[Senate]
[Pages S5709-S5710]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                         ADDITIONAL STATEMENTS

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                      TAX BENEFITS AT BROWNFIELDS

 Mr. ABRAHAM. Mr. President, this week, the Senate Finance 
Committee will begin consideration of the tax portion of this year's 
budget agreement. I strongly support the pro-family and pro-growth 
portions of that package and I intend to discuss these provisions at a 
later time. Today, I wanted to address the Senate regarding a smaller 
tax issue of interest to the State of Michigan and communities 
nationwide--targeting tax benefits at brownfields.
  Mr. President, brownfields are abandoned commercial and industrial 
properties which are suspected of being environmentally contaminated. 
Earlier this year, I visited several locations in Michigan which fit 
this definition, and I want to relate to the Senate why this is an 
issue of national importance. It is an issue of community renewal, 
economic growth, job creation, and environmental remediation.
  Heatherwood Farms in Lansing, MI is a good example of how brownfields 
affect all these issues. Located in a middle-class residential 
neighborhood with several other commercial properties, it was the 
former site of an industrial

[[Page S5710]]

warehouse for over 50 years. According to the Michigan Department of 
Environmental Quality, assessment work is needed to verify whether the 
property is contaminated with PCB's, chemical solvents, asbestos, and 
other contaminants.
  Mr. President, who will conduct this work? The former owners are 
bankrupt. The State government doesn't have the resources to 
investigate every abandoned industrial site in Michigan. And potential 
purchasers are scared away by tax and environmental laws that combine 
few benefits with unlimited liability.
  The city of Flint faces the same dilemma, where the former site of 
Thrall Oil Co. now sits vacant. Economic development officials believe 
this property should attract future manufacturing development, but, 
because the Michigan Department of Environmental Quality has labelled 
it ``contaminated,'' developers cannot be found.
  This problem is not limited to Michigan. Across the country, there 
are over 30,000 sites similar to Heatherwood Farms --abandoned former 
industrial sites which may or may not be contaminated. A survey of 
Toledo, OH businesses found that environmental concerns were affecting 
62 percent of the area's commercial and industrial real estate 
transactions. The result is lost jobs and opportunities for the 
residents of these communities and lower economic growth in the country 
as a whole.
  Which brings me to my tax provision. For the past two Congresses, I 
have advocated changing the Tax Code to permit new owners of so-called 
brownfields to deduct the cost of cleaning up these sites from their 
income. This reform is a vast improvement over the current code, which 
requires companies to capitalize these costs over many years. It is a 
small provision which I believe will have far-reaching economic effects 
in attracting new owners to these abandoned properties.
  It will also have positive environmental effects that we can all 
support. First, it will accelerate the remediation of contaminated 
properties. As I said previously, the State, local, and Federal 
governments do not have the resources to identify and clean these 
properties. To make progress, we must enlist the assistance and 
resources of the private sector. This brownfields tax provision does 
just that.
  Second, it will protect so-called greenfields from development. When 
developers turn away from Heatherwood Farms and other brownfields, they 
turn instead to properties that have no history of industrial or 
commercial use. That is certainly not in the interest of communities 
like Lansing or Flint, and it is not conducive toward maintaining our 
undeveloped countryside.
  Mr. President, earlier this year I joined Senators Lieberman, 
Moseley-Braun, D'Amato, Jeffords, and others in introducing legislation 
which would target this tax incentive at distressed communities across 
the country. This legislation has the support of the administration and 
the United State Conference of Mayors. I encourage Senator Roth to 
include this provision in his tax bill when he presents it to the 
Finance Committee this week, and I look forward to working with all 
Senators in promoting economic growth and job creation in our 
distressed communities nationwide. 

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