Text: H.R.1539 — 102nd Congress (1991-1992)All Information (Except Text)

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HR 1539 IH
102d CONGRESS
1st Session
 H. R. 1539
To amend the Internal Revenue Code of 1986 to limit the ability of taxpayers
to deduct the cost of cleaning up oil and hazardous substances spills.
IN THE HOUSE OF REPRESENTATIVES
March 20, 1991
Mr. LIPINSKI 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 limit the ability of taxpayers
to deduct the cost of cleaning up oil and hazardous substances spills.
  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 `Oil Spill Tax Act'.
SEC. 2. DISALLOWANCE OF COSTS FOR CLEANUP OF OIL OR HAZARDOUS SUBSTANCE
DISCHARGES.
  (a) IN GENERAL- Section 162 of the Internal Revenue Code of 1986 (relating
  to deduction for trade or business expenses) is amended by redesignating
  subsection (m) as subsection (n) and by inserting after subsection (1)
  the following new subsection:
  `(m) OIL AND HAZARDOUS SUBSTANCES CLEANUP COSTS-
  `(1) GENERAL RULE- No deduction shall be allowed under subsection (a)
  for any applicable oil or hazardous substances cleanup costs if--
  `(A) the Secretary receives notification from the Commandant of the
  Coast Guard or his delegate that the taxpayer has failed to comply with
  section 311(c) or 311(e) of the Federal Water Pollution Control Act,
  or any administrative or judicial order or consent decree issued under
  section 311 of the Federal Water Pollution Control Act or the provisions
  of the National Contingency Plan for oil discharges; or
  `(B) the Secretary receives notification from the Administrator of the
  Environmental Protection Agency or his delegate that the taxpayer has failed
  to comply with any administrative or judicial order or consent decree issued
  under section 104, 106 or 122 of the Comprehensive Environmental Response,
  Compensation and Liability Act (CERCLA), section 3008(h) or 7003 of the
  Resource Conservation and Recovery Act or under applicable State statutes
  for hazardous substances discharges.
  `(2) NEGLIGENCE- Notwithstanding any other provision of this subsection,
  no deduction shall be allowed under subsection (a) for any applicable oil
  or hazardous substances cleanup costs where it can be shown that the oil
  or hazardous substance discharge was the result of willful negligence or
  willful misconduct.
  `(3) REDUCTION OF TAX ATTRIBUTES- The tax attributes of the taxpayer
  shall be reduced in the manner prescribed in section 108(b)(2) (without
  reference to sections 108(b)(4) and 108(b)(5)) by an amount equal to the
  amount disallowed under paragraph (1) or (2).
  `(4) ITEMIZATION OF COSTS- The costs described in this subsection shall
  be separately stated in such manner as the Secretary may prescribe on a
  form accompanying the return of tax for the taxable year in which such
  costs were paid or incurred.
  `(5) DEFINITIONS- For purposes of this subsection the term--
  `(A) `applicable oil or hazardous substances cleanup costs' means any
  costs paid or incurred (whether or not in the taxable year in which the
  discharge occurs) in connection with the cleanup of any oil or hazardous
  substances discharged by the taxpayer.
  `(B) The term `applicable oil or hazardous substances cleanup costs'
  includes, but is not limited to--
  `(i) any legal expenses arising directly or indirectly from a discharge
  of oil or hazardous substances;
  `(ii) any payments or restitution to any person arising out of such
  discharge;
  `(iii) any costs incurred to restore and replace natural resources damaged
  by such discharges; and
  `(iv) any costs required by any applicable Federal law or regulation.
  `(C) `discharge' means--
  `(i) `discharge' as defined in section 311(a)(2) of the Federal Water
  Pollution Control Act; and
  `(ii) `release' as defined in 42 USC section 9601(22) and section 101(22)
  of the Comprehensive Environmental Response, Compensation and Liability Act
  (CERCLA), as amended;
  `(D) `oil' shall have the meaning provided in section 311(a)(1) of the
  Federal Water Pollution Control Act (33 USC, Section 1321(a)(1));
  `(E) `hazardous substance' shall have the meaning provided in 42 USC,
  section 9601(14) and section 101(14) of the Comprehensive Environmental
  Response, Compensation and Liability Act (CERCLA), as amended.'
SEC. 3. DENIAL OF DEDUCTION FOR LOSSES RESULTING FROM CERTAIN OIL OR HAZARDOUS
SUBSTANCE DISCHARGES.
  Section 165 of the Internal Revenue Code of 1986 (relating to deductions
  for losses) is amended by redesignating subsection (m) as subsection (n)
  and by inserting after subsection (l) the following new subsection:
  `(m) DENIAL OF DEDUCTION FOR LOSSES RESULTING FROM CERTAIN OIL OR HAZARDOUS
  SUBSTANCE DISCHARGES- Nothing in subsection (a) or in any other provision
  of law shall be construed to provide a deduction for any loss sustained
  by a taxpayer if the loss is attributable to, results from, or arises
  in connection with, any oil or hazardous substance discharge the cleanup
  costs of which are disallowed as a deduction under section 162(m).'
SEC. 4. LIMITATIONS ON DEFICIENCIES AND CREDITS ARISING FROM CLEANUP
NOTIFICATION.
  (a) DEFICIENCIES- Section 6501 of the Internal Revenue Code of 1986 is
  amended by redesignating subsection (o) as subsection (p) and inserting
  after subsection (n) the following new subsection:
  `(o) SPECIAL RULE FOR CLEANUP NOTIFICATION- In the case of any deduction
  disallowed under section 162(m), if the Secretary receives the notification
  described in section 162(m)(1)(A) or 162(m)(1)(B), the period for assessing
  any deficiency attributable to the receipt of such notification shall
  not expire before the date which is 1 year after the date on which such
  notification is issued.'
  (b) CREDITS- Section 6511 of such Code is amended by redesignating subsection
  (h) as (i) and inserting after subsection (g) the following new subsection:
  `(h) SPECIAL RULE FOR CLEANUP NOTIFICATION- In the case of any deduction
  disallowed under section 162(m), if the Secretary receives the notification
  described in section 162(m)(1)(A) or 162(m)(1)(B), the period for filing
  a claim for credit or refund attributable to receipt of such notification
  shall not expire before the date which is 1 year after the date on which
  such notification is issued.'
SEC. 5. DISTRIBUTION OF LOST DEDUCTION TO EXISTING TRUST FUNDS.
  (a) IN GENERAL- There is established in the Treasury of the United States an
  account, consisting of such amounts as may be appropriated to the account
  as provided in subsection (b).
  (b) TRANSFER TO ACCOUNT- There is hereby appropriated to the account for
  each fiscal year an amount equal to the amount which the Secretary or his
  delegate determines to be the increase in revenues for such fiscal year
  by reason of the amendments made by this Act. The amounts appropriated
  by the preceding sentence shall be transferred to the account from the
  general fund of the Treasury in the manner provided under section 9601 of
  the Internal Revenue Code of 1986.
  (c) EXPENDITURES FROM ACCOUNT- Amounts in the account established under
  subsection (a) shall be available, as provided in appropriation Acts, only--
  (1) in the case of amounts attributable to any oil discharge, for making
  expenditures for the purposes described in section 311(k) of the Federal
  Water Pollution Control Act (33 USC, section 1321(k)), or
  (2) in the case of any other amounts, for transfer to the Hazardous Substance
  Superfund established under section 9507 of the Internal Revenue Act of 1986.
SEC. 6. EFFECTIVE DATE.
  The provisions of this Act are effective for all discharges occurring
  after the date of the enactment of this Act, in taxable years ending after
  such date.
SEC. 7. STUDY AND REPORT.
  (a) STUDY OF REVENUE LOSS- Not later than 6 months after the date of
  enactment of this Act, the Secretary or his delegate shall submit to the
  House Committee on Ways and Means and the Senate Committee on Finance an
  estimate of the decrease of Federal revenues during the period beginning
  January 1, 1970, and ending December 31, 1988, by reason of the allowance
  of applicable cleanup costs (within the meaning of section 162(m) of the
  Internal Revenue Code of 1986).
  (b) ANNUAL REPORT TO CONGRESS- The Secretary or his delegate shall make
  an annual report to the House Committee on Ways and Means and the Senate
  Committee on Finance detailing the amount expended on environmental cleanup
  costs and the amount accruing to the Treasury under section 162(m) of the
  Internal Revenue Code of 1986.
  (c) EFFECTIVE DATE- The first report required by subsection (b) shall
  be submitted 12 months after the study in subsection (a) is submitted
  to Congress.

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