[Congressional Record Volume 150, Number 126 (Thursday, October 7, 2004)]
[Senate]
[Pages S10725-S10727]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. VOINOVICH (for himself and Mr. Coleman):
  S. 2926. A bill to amend the Internal Revenue Code of 1986 to allow 
taxpayers a credit against income tax for expenditures to remediate 
contaminated sites; to the Committee on Finance.
  Mr. VOINOVICH. Mr. President, revitalizing our urban areas has been 
an issue I have been passionate about for many years. As former Mayor 
of Cleveland, I experienced firsthand the difficulties that cities face 
in redeveloping these sites for reuse.
  The legislation I am introducing today with Senator Coleman, the 
Brownfields Revitalization Act of 2004, will provide incentives to 
clean up abandoned industrial sites--or brownfields--across the country 
and put them back into productive use and preserve our green spaces. I 
am pleased to be working on this important legislation with my 
colleague from Ohio, Congressman Mike Turner.
  I have been working on brownfields issues at the national level since 
I became Governor of Ohio in 1990 and through my involvement with the 
National Governors' Association and the Republican Governors' 
Association. For almost 15 years, I have worked closely with 
congressional leaders to develop legislation that would encourage 
cleanup and redevelopment of these sites nationwide.
  In 2001, I was closely involved in the Senate Environment and Public 
Works Committee's work on the Brownfields Revitalization and 
Environmental Restoration Act which, in part, provided grants to local 
governments to remediate and redevelop brownfields sites. Grants such 
as these are important because they provide incentives to clean up 
existing sites, which will provide better protection for the health and 
safety of our citizens and the environment. I believe the tax 
incentives in the bill I'm introducing today will work hand in hand 
with the grants that are already authorized to encourage private 
remediation and redevelopment efforts.
  To enhance and encourage cleanup efforts, my State of Ohio has 
implemented a private sector-based program to clean up brownfields 
sites. When I was Governor, Ohio EPA, Republicans and Democrats in the 
Ohio General Assembly and I worked hard to implement a program that we 
believe works for Ohio. Our program is already successful in improving 
Ohio's environment and economy. In fact, 141 sites have been cleaned up 
under Ohio's voluntary cleanup program in 8 years. And many more 
cleanups are underway.
  The legislation I am introducing today will build upon the success of 
State programs such as Ohio's by providing even more incentives to 
clean up brownfield sites in order to provide better protection for the 
health and safety of our citizens and the environment.
  This legislation will provide additional tools to recycle our urban 
wastelands, prevent urban sprawl and preserve our farmland and 
greenspaces. We will be able to clean up industrial eyesores in our 
cities and make them more desirable places to live. Because they are 
putting abandoned sites back into productive use, they are a key 
element to providing economic rebirth to many urban areas, and good-
paying jobs to local residents.
  This bill makes sense for our environment and it makes sense for our 
economy. It is supported by the mayors of Ohio's major cities, the U.S. 
Conference of Mayors, the International Council of Shopping Centers, 
Empower America, American Council of Engineering Companies, and the 
National Association of Home Builders.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2926

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Brownfields Revitalization 
     Act of 2004''.

     SEC. 2. CREDIT FOR EXPENDITURES TO REMEDIATE CONTAMINATED 
                   SITES.

       (a) In General.--Subpart D of part IV of subchapter A of 
     chapter 1 of the Internal Revenue Code of 1986 (relating to 
     business related credits) is amended by adding at the end the 
     following new section:

     ``SEC. 45G. ENVIRONMENTAL REMEDIATION CREDIT.

       ``(a) In General.--For purposes of section 38, the 
     environmental remediation credit determined under this 
     section is 50 percent of the qualified remediation 
     expenditures paid or incurred by the taxpayer during the 
     taxable year with respect to a qualified contaminated site 
     located in an eligible area.
       ``(b) Qualified Remediation Expenditures.--For purposes of 
     this section, the term `qualified remediation expenditures' 
     means expenditures, whether or not chargeable to capital 
     account, in connection with--
       ``(1) the abatement or control of any hazardous substance 
     (as defined in section 198(d)), petroleum, or any petroleum 
     by-product at the qualified contaminated site in accordance 
     with an approved remediation and redevelopment plan,
       ``(2) the complete demolition of any structure on such site 
     if any portion of such structure is demolished in connection 
     with such abatement or control,
       ``(3) the removal and disposal of property in connection 
     with the activities described in paragraphs (1) and (2), and
       ``(4) the reconstruction of utilities in connection with 
     such activities.

     For purposes of this section, the term `approved remediation 
     and redevelopment plan' means any plan for such abatement, 
     control, and redevelopment of a qualified contaminated site 
     which is approved by the State development agency for the 
     State in which the qualified contaminated site is located.
       ``(c) Credit May Not Exceed Allocation.--
       ``(1) In general.--The environmental remediation credit 
     determined under this section with respect to any qualified 
     contaminated site shall not exceed the credit amount 
     allocated under this section by the State development agency 
     to the taxpayer for the remediation and redevelopment plan 
     submitted by the taxpayer with respect to such site.
       ``(2) Time for making allocation.--An allocation shall be 
     taken into account under paragraph (1) for any taxable year 
     only if made before the close of the calendar year in which 
     such taxable year begins.
       ``(3) Manner of allocation.--
       ``(A) Allocation must be pursuant to plan.--No amount may 
     be allocated under this subsection to any qualified 
     contaminated site unless such amount is allocated pursuant to 
     a qualified allocation plan of the State development agency 
     of the State in which such site is located.
       ``(B) Qualified allocation plan.--For purposes of this 
     paragraph, the term `qualified allocation plan' means any 
     plan--
       ``(i) which sets forth selection criteria to be used to 
     determine priorities of the State development agency in 
     allocating credit amounts under this section, and
       ``(ii) which gives preference in allocating credit amounts 
     under this section to qualified contaminated sites based on--

       ``(I) the extent of poverty,
       ``(II) whether the site is located in an enterprise zone or 
     renewal community,
       ``(III) whether the site is located in the central business 
     district of the local jurisdiction,
       ``(IV) the extent of the required environmental 
     remediation,
       ``(V) the extent of the commercial, industrial, or 
     residential redevelopment of the

[[Page S10726]]

     site in addition to environmental remediation,
       ``(VI) the extent of the financial commitment to such 
     redevelopment, and
       ``(VII) the amount of new employment expected to result 
     from such redevelopment.

       ``(4) States may impose other conditions.--Nothing in this 
     section shall be construed to prevent any State from 
     requiring assurances, including bonding, that any project for 
     which a credit amount is allocated under this section will be 
     properly completed or that the financial commitments of the 
     taxpayer are actually carried out.
       ``(d) State Environmental Remediation Credit Ceiling.--
       ``(1) In general.--The State environmental remediation 
     credit ceiling applicable to any State for any calendar year 
     shall be an amount equal to the sum of--
       ``(A) the unused State environmental remediation credit 
     ceiling (if any) of such State for the preceding calendar 
     year,
       ``(B) such State's share of the national environmental 
     remediation credit limitation for the calendar year,
       ``(C) the amount of State environmental remediation credit 
     ceiling returned in the calendar year, plus
       ``(D) the amount (if any) allocated under paragraph (3) to 
     such State by the Secretary.

     For purposes of subparagraph (A), the unused State 
     environmental remediation credit ceiling for any calendar 
     year is the excess (if any) of the sum of the amounts 
     described in subparagraphs (B), (C), and (D) over the 
     aggregate environmental remediation credit amount allocated 
     for such year.
       ``(2) National environmental remediation credit 
     limitation.--
       ``(A) In general.--The national environmental remediation 
     credit limitation for each calendar year is $1,000,000,000.
       ``(B) State's share of limitation.--A State's share of such 
     limitation is the amount which bears the same ratio to the 
     limitation applicable under subparagraph (A) for the calendar 
     year as such State's population bears to the population of 
     the United States.
       ``(3) Unused environmental remediation credit carryovers 
     allocated among certain states.--
       ``(A) In general.--The unused environmental remediation 
     credit carryover of a State for any calendar year shall be 
     assigned to the Secretary for allocation among qualified 
     States for the succeeding calendar year.
       ``(B) Unused environmental remediation credit carryover.--
     For purposes of this paragraph, the unused environmental 
     remediation credit carryover of a State for any calendar year 
     is the excess (if any) of--
       ``(i) the unused State environmental remediation credit 
     ceiling for the year preceding such year, over
       ``(ii) the aggregate environmental remediation credit 
     amount allocated for such year.
       ``(C) Formula for allocation of unused environmental 
     remediation credit carryovers among qualified states.--Rules 
     similar to the rules of clauses (iii) and (iv) of section 
     42(h)(3)(D) shall apply for purposes of this paragraph.
       ``(4) Population.--For purposes of this subsection, 
     population shall be determined in accordance with section 
     146(j).
       ``(5) Inflation adjustment.--In the case of any calendar 
     year after 2004, the $1,000,000,000 amount contained in 
     paragraph (2) shall be increased by an amount equal to--
       ``(A) such dollar amount, multiplied by
       ``(B) the cost-of-living adjustment determined under 
     section 1(f)(3) for the calendar year, determined by 
     substituting `calendar year 2003' for `calendar year 1992' in 
     subparagraph (B) thereof.

     Any increase determined under the preceding sentence shall be 
     rounded to the nearest multiple of $500,000.
       ``(e) Eligible Area; Other Definitions.--For purposes of 
     this section--
       ``(1) Eligible area.--
       ``(A) In general.--The term `eligible area' means the 
     entire area encompassed by a local governmental unit if such 
     area contains at least 1 census tract having a poverty rate 
     of at least 20 percent.
       ``(B) Areas not within census tracts.--In the case of an 
     area which is not tracted for population census tracts, the 
     equivalent county divisions (as defined by the Bureau of the 
     Census for purposes of defining poverty areas) shall be used 
     for purposes of determining poverty rates.
       ``(C) Use of census data.--Population and poverty rate 
     shall be determined by the most recent decennial census data 
     available.
       ``(2) Qualified contaminated site.--The term `qualified 
     contaminated site' has the meaning given to such term by 
     section 198, determined by treating petroleum and petroleum 
     by-products as hazardous substances.
       ``(3) Possessions treated as states.--The term `State' 
     includes a possession of the United States.
       ``(f) Credit May Be Assigned.--
       ``(1) In general.--If a taxpayer elects the application of 
     this subsection for any taxable year, the amount of credit 
     determined under this section for such year which would (but 
     for this subsection) be allowable to the taxpayer shall be 
     allowable to the person designated by the taxpayer. The 
     person so designated shall be treated as the taxpayer for 
     purposes of subsection (h).
       ``(2) Treatment of amounts paid for assignment.--If any 
     amount is paid to the person who assigns the credit 
     determined under this section, no portion of such amount or 
     such credit shall be includible in the payee's gross income.
       ``(g) Treatment of Potential Responsible Parties.--
       ``(1) In general.--No credit shall be allowed under this 
     section to any potential responsible party (within the 
     meaning of the Comprehensive Environmental Response, 
     Compensation, and Liability Act of 1980) with respect to any 
     qualified contaminated site (including by reason of receiving 
     an assignment of the credit under subsection (f)) unless at 
     least 25 percent of the cost of remediating such site is 
     borne by such party.
       ``(2) Relief from liability for other 75 percent.--If the 
     requirement of paragraph (1) is met by a potential 
     responsible party, such party shall not be liable under any 
     Federal law for any cost taken into account in determining 
     whether such requirement is met.
       ``(3) Amounts paid for credit assignment not eligible.--
     Amounts paid by a potential responsible party to any person 
     for the assignment by such person of the credit under 
     subsection (f)) shall not be taken into account in 
     determining whether the requirement of paragraph (1) is met.
       ``(h) Recapture of Credit if Environmental Remediation Not 
     Properly Completed.--
       ``(1) In general.--If the State development agency of the 
     State in which the qualified contaminated site is located 
     determines that the environmental remediation which is part 
     of the approved remediation and redevelopment plan for such 
     site was not properly completed, then the taxpayer's tax 
     under this chapter for the taxable year in which such 
     determination is made shall be increased by the credit 
     recapture amount.
       ``(2) Credit recapture amount.--For purposes of paragraph 
     (1), the credit recapture amount is an amount equal to the 
     sum of--
       ``(A) the aggregate decrease in the credits allowed to the 
     taxpayer under section 38 for all prior taxable years which 
     would have resulted if the credit allowable by reason of this 
     section were not allowed, plus
       ``(B) interest at the overpayment rate established under 
     section 6621 on the amount determined under subparagraph (A) 
     for each prior taxable year for the period beginning on the 
     due date for filing the return for the prior taxable year 
     involved.

     No deduction shall be allowed under this chapter for interest 
     described in subparagraph (B).
       ``(3) Special rules.--
       ``(A) Tax benefit rule.--The tax for the taxable year shall 
     be increased under paragraph (1) only with respect to credits 
     allowed by reason of this section which were used to reduce 
     tax liability. In the case of credits not so used to reduce 
     tax liability, the carryforwards and carrybacks under section 
     39 shall be appropriately adjusted.
       ``(B) No credits against tax.--Any increase in tax under 
     this subsection shall not be treated as a tax imposed by this 
     chapter for purposes of determining the amount of any credit 
     or the tax imposed by section 55.
       ``(i) Denial of Double Benefit.--
       ``(1) In general.--No deduction shall be allowed for that 
     portion of the qualified remediation expenditures otherwise 
     allowable as a deduction for the taxable year which is equal 
     to the amount of the credit determined for such taxable year 
     under this section.
       ``(2) Similar rule where taxpayer capitalizes rather than 
     deducts expenses.--If--
       ``(A) the amount of the credit determined for the taxable 
     year under this section, exceeds
       ``(B) the amount allowable as a deduction for such taxable 
     year for qualified remediation expenditures (determined 
     without regard to paragraph (1)),

     the amount chargeable to capital account for the taxable year 
     for such expenditures shall be reduced by the amount of such 
     excess.
       ``(3) Controlled groups.--In the case of a corporation 
     which is a member of a controlled group of corporations 
     (within the meaning of section 52(a)) or a trade or business 
     which is treated as being under common control with other 
     trades or businesses (within the meaning of section 52(b)), 
     this subsection shall be applied under rules prescribed by 
     the Secretary similar to the rules applicable under 
     subsections (a) and (b) of section 52.''
       (b) Credit Treated as Business Credit.--Section 38(b) of 
     such Code is amended by striking ``plus'' at the end of 
     paragraph (14), by striking the period at the end of 
     paragraph (15) and inserting ``, plus'', and by adding at the 
     end the following new paragraph:
       ``(16) the environmental remediation credit determined 
     under section 45G(a).''.
       (c) No Carrybacks Before Effective Date.--Subsection (d) of 
     section 39 of such Code (relating to carryback and 
     carryforward of unused credits) is amended by adding at the 
     end the following:
       ``(11) No carryback of section 45g credit before effective 
     date.--No portion of the unused business credit for any 
     taxable year which is attributable to the environmental 
     remediation credit determined under section 45G may be 
     carried back to a taxable year ending before the date of the 
     enactment of section 45G.''.
       (d) Conforming Amendment.--The table of sections for 
     subpart D of part IV of subchapter A of chapter 1 of such 
     Code is amended by adding at the end the following new item:

``Sec. 45G. Environmental remediation credit.''.


[[Page S10727]]


       (e) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.
                                 ______