America's Brownfield Cleanup Act - Amends the Internal Revenue Code to allow a business tax credit for 50% of expenditures for the abatement or control of any hazardous substance, the demolition of any structure, the removal and disposal of property, and the reconstruction of utilities at certain contaminated sites.
Allows a tax exclusion for certain contributions made for the remediation of contaminated sites.
[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4480 Introduced in House (IH)]
109th CONGRESS
1st Session
H. R. 4480
To amend the Internal Revenue Code of 1986 to provide tax incentives
for the remediation of contaminated sites.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
December 8, 2005
Mr. Turner (for himself, Mr. English of Pennsylvania, Mr. Boehner, Mr.
Gillmor, Mr. Tiberi, Mr. Shays, Mr. LaTourette, Mr. Hobson, Mr. Ney,
Ms. Hart, Mr. Regula, Ms. Pryce of Ohio, Mr. Gerlach, Mr. Kline, Mrs.
Jones of Ohio, Mr. Oxley, and Mrs. Johnson of Connecticut) introduced
the following bill; which was referred to the Committee on Ways and
Means
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to provide tax incentives
for the remediation of contaminated sites.
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 ``America's Brownfield Cleanup Act''.
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. 45N. 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
at the qualified contaminated site in accordance with an
approved remediation plan,
``(2) the demolition of any structure (or portion thereof)
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.
Such term includes the cost of financial assurances (including bonding)
and insurance described in subsection (g)(4).
``(c) Qualified Contaminated Site.--For purposes of this section--
``(1) In general.--The term `qualified contaminated site'
means any area--
``(A) which is an eligible response site as defined
in section 101(41) of the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980,
``(B) which is held by the taxpayer for use in a
trade or business or for the production of income, or
which is property described in section 1221(a)(1) in
the hands of the taxpayer,
``(C) at or on which there has been a release (or
threat of release) or disposal of any hazardous
substance, and
``(D) with respect to which an approved remediation
plan and an approved redevelopment plan are both in
effect.
``(2) National priorities listed sites not included.--Such
term shall not include any site which is on, or proposed for,
the national priorities list under section 105(a)(8)(B) of the
Comprehensive Environmental Response, Compensation, and
Liability Act of 1980 (as in effect on the date of the
enactment of this section).
``(d) Hazardous Substance.--For purposes of this section--
``(1) In general.--The term `hazardous substance' means--
``(A) any substance which is a hazardous substance
as defined in section 101(14) of the Comprehensive
Environmental Response, Compensation, and Liability Act
of 1980,
``(B) any substance which is designated as a
hazardous substance under section 102 of such Act, and
``(C) any petroleum product (within the meaning of
section 4612(a)(3)).
``(2) Exception.--Such term shall not include any substance
with respect to which a removal or remedial action is not
permitted under section 104 of such Act by reason of subsection
(a)(3) thereof.
``(e) Approved Remediation Plan.--For purposes of this section, the
term `approved remediation plan' means, with respect to any site, any
plan for the conduct of the activities described in paragraphs (1)
through (4) of subsection (b)--
``(1) which is approved by a State environmental agency--
``(A) pursuant to a response program which includes
each of the elements listed in section 128(a)(2) of the
Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, and
``(B) after a determination by such agency that the
plan provides for the abatement or control of the
hazardous substances at such site, and
``(2) which includes a written statement from such agency
that such site meets the requirements of paragraphs (1)(A),
(1)(C), and (2) of subsection (c).
``(f) Approved Redevelopment Plan.--For purposes of this section,
the term `approved redevelopment plan' means, with respect to any site,
any plan for the redevelopment of such site which is approved by the
State development agency after a determination by such agency that the
plan provides for the redevelopment of such site in a manner beneficial
to the State and local economy and to the local community generally.
``(g) 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 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--
``(i) an approved remediation plan and an
approved redevelopment plan are both in effect
with respect to such site, and
``(ii) such amount is allocated pursuant to
a qualified allocation plan of the State
development agency.
``(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 empowerment zone, enterprise
community, 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 site in addition
to environmental remediation,
``(VI) the extent of the financial
commitment to such redevelopment,
``(VII) the amount of new
employment expected to result from such
redevelopment, and
``(VIII) whether it is reasonably
expected that under the approved
remediation plan at least 25 percent of
the estimated total qualified
remediation expenditures will be borne
by one or more persons who are
potentially liable under section 107(a)
of the Comprehensive Environmental
Response, Compensation, and Liability
Act of 1980.
``(4) States may impose other conditions.--Nothing in this
section shall be construed to prevent any State from
requiring--
``(A) 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,
``(B) that the taxpayer obtain insurance which
reimburses qualified remediation expenditures in excess
of the total estimated amount of such expenditures, or
``(C) that the taxpayer obtain insurance covering
liability for personal injury, death, or property
damage.
``(h) State Environmental Remediation Credit Ceiling.--For purposes
of this section--
``(1) Limitation.--The aggregate credit amounts allocated
by the State development agency during any calendar year shall
not exceed the State environmental remediation credit ceiling
applicable to such State for such calendar year.
``(2) Determination of limitation amount.--The State
environmental remediation credit ceiling applicable to any
State for any calendar year shall be an amount equal to the sum
of--
``(A) such State's share of the national
environmental remediation credit limitation for the
calendar year,
``(B) the unused State environmental remediation
credit ceiling (if any) of such State 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
(5) to such State by the Secretary.
``(3) 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.
``(4) Unused state environmental remediation credit
ceiling.--The unused State environmental remediation credit
ceiling for any calendar year is the excess (if any) of--
``(A) the State environmental remediation credit
ceiling applicable to the State for the preceding
calendar year (determined without regard to paragraph
(2)(B)), over
``(B) the aggregate environmental remediation
credit amount allocated by the State for such preceding
year.
``(5) Unused environmental remediation credit allocated
among states after 1-year carryforward.--
``(A) In general.--The excess unused environmental
remediation credit of a State for any calendar year
shall be assigned to the Secretary for allocation among
qualified States for the succeeding calendar year.
``(B) Excess unused environmental remediation
credit.--For purposes of this paragraph, the excess
unused environmental remediation credit of a State for
any calendar year is the excess (if any) of--
``(i) the unused State environmental
remediation credit ceiling for the preceding
calendar year, over
``(ii) the aggregate environmental
remediation credit amount allocated by the
State for such preceding year.
``(C) Formula for allocation of excess unused
environmental remediation credit among states.--Rules
similar to the rules of clauses (iii) and (iv) of
section 42(h)(3)(D) shall apply for purposes of this
paragraph.
``(6) Population.--For purposes of this subsection,
population shall be determined in accordance with section
146(j).
``(7) Inflation adjustment.--In the case of any calendar
year after 2006, the $1,000,000,000 amount contained in
paragraph (3) 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 2005' 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.
``(i) Other Definitions and Special Rule.--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 or Indian tribal government if such entire area
contains at least 1 census tract having a poverty rate
of at least 20 percent.
``(B) Use of equivalent county divisions.--In the
case of any 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 treated as census
tracts for purposes of subparagraph (A).
``(C) Use of census data.--For purposes of this
paragraph, population and poverty rate shall be
determined by the most recent decennial census data
available.
``(2) State environmental agency.--The term `State
environmental agency' means any State agency specifically
authorized by gubernatorial act or State statute to carry out
the functions and responsibilities of a State environmental
agency for purposes of this section.
``(3) State development agency.--The term `State
development agency' means any State agency specifically
authorized by gubernatorial act or State statute to carry out
the functions and responsibilities of a State development
agency for purposes of this section.
``(4) Possessions treated as states.--The term `State'
includes a possession of the United States.
``(5) Special rules for hazardous substances that are
petroleum products.--In the case of an area at or on which
there has been a release (or threat of release) or disposal of
any hazardous substance that is a petroleum product, the
following rules shall apply:
``(A) The requirement of subsection (c)(1)(A) shall
be deemed to be met.
``(B) The requirement of subsection (e)(1)(A) shall
be deemed to be met.
``(C) Subsection (e)(2) shall be applied by
substituting `(1)(C) and (2)' for `(1)(A), (1)(C), and
(2)'.
``(j) 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
this title (other than this paragraph).
``(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 shall be
includible in such person's gross income.
``(k) Recapture of Credit If Approved Remediation Plan or Approved
Redevelopment Plan not Properly Completed.--
``(1) In general.--If--
``(A) the State environmental agency determines
that the approved remediation plan for the qualified
contaminated site was not properly completed, or
``(B) the State development agency determines that
the approved redevelopment plan for such site was not
properly completed,
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.
``(l) 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 41(f)(5)) or a trade or business which
is treated as being under common control with other trades or
businesses (within the meaning of section 41(f)(1)(B)), this
subsection shall be applied under rules prescribed by the
Secretary similar to the rules applicable under subparagraphs
(A) and (B) of section 41(f)(1).
``(m) Cost of Removal or Remedial Action.--The credit allowed under
this section shall not be treated as a cost of removal or remedial
action incurred by the United States for purposes of section
107(a)(4)(A) of the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980.''.
(b) Exclusion by Site Owner of Remediation Expenditures Paid by
Potentially Responsible Parties.--Part III of subchapter B of chapter 1
of such Code is amended by inserting after section 139A the following
new section:
``SEC. 139B. REMEDIATION CONTRIBUTIONS BY POTENTIALLY RESPONSIBLE
PARTIES.
``(a) In General.--Gross income shall not include any amount
received as a qualified remediation contribution.
``(b) Qualified Remediation Contribution.--For purposes of this
section, the term `qualified remediation contribution' means any amount
which is paid to or for the benefit of the owner of any property by a
potentially responsible party (within the meaning of the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980) with
respect to such property for qualified remediation expenditures (as
defined in section 45N(b)) with respect to such property.
``(c) Denial of Double Benefit.--Notwithstanding any other
provision of this subtitle--
``(1) no deduction or credit shall be allowed (to the
person for whose benefit a qualified remediation contribution
is made) for, or by reason of, any expenditure to the extent of
the amount excluded under this section with respect to such
expenditure, and
``(2) no increase in the basis of any property shall result
from any amount excluded under this section with respect to
such property.''.
(c) Credit Treated as Business Credit.--Section 38(b) of such Code
is amended by striking ``and'' at the end of paragraph (25), by
striking the period at the end of paragraph (26) and inserting ``,
plus'', and by adding at the end the following new paragraph:
``(27) the environmental remediation credit determined
under section 45N(a).''.
(d) Clerical Amendments.--
(1) 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. 45N. Environmental remediation credit.''.
(2) The table of sections for part III of subchapter B of
chapter 1 of such Code is amended by inserting after the item
relating to section 139A the following new item:
``Sec. 139B. Remediation contributions by potentially responsible
parties.''.
(e) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2005.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Ways and Means.
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