[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 1392 Introduced in Senate (IS)]







106th CONGRESS
  1st Session
                                S. 1392

 To amend the Internal Revenue Code of 1986 to provide tax incentives 
  for the voluntary conservation of endangered species, and for other 
                               purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             July 19, 1999

  Mr. Baucus introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
 To amend the Internal Revenue Code of 1986 to provide tax incentives 
  for the voluntary conservation of endangered species, and for other 
                               purposes.

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

SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE.

    (a) Short Title.--This Act may be cited as the ``Species 
Conservation Tax Act of 1999''.
    (b) Amendment of 1986 Code.--Except as otherwise expressly 
provided, whenever in this Act an amendment or repeal is expressed in 
terms of an amendment to, or repeal of, a section or other provision, 
the reference shall be considered to be made to a section or other 
provision of the Internal Revenue Code of 1986.

SEC. 2. TAX EXCLUSION FOR COST-SHARING PAYMENTS UNDER PARTNERS FOR 
              WILDLIFE PROGRAM.

    (a) In General.--Section 126(a) (relating to certain cost-sharing 
payments) is amended by redesignating paragraph (10) as paragraph (11) 
and by inserting after paragraph (9) the following:
            ``(10) The Partners for Fish and Wildlife Program 
        authorized by the Fish and Wildlife Act of 1956 (16 U.S.C. 742a 
        et seq.).''
    (b) Effective Date.--The amendments made by this section shall 
apply to payments received after the date of the enactment of this Act.

SEC. 3. ENHANCED DEDUCTION FOR THE DONATION OF A CONSERVATION EASEMENT.

    (a) In General.--Subparagraph (A) of section 170(h)(4) (defining 
conservation purpose) is amended by striking ``or'' at the end of 
clause (iii), by striking the period at the end of clause (iv) and 
inserting ``, or'', and by adding at the end the following:
                            ``(v) the conservation of a species 
                        designated by the Secretary of the Interior or 
                        the Secretary of Commerce under the Endangered 
                        Species Act of 1973 (16 U.S.C. 1531 et seq) as 
                        endangered or threatened, proposed by such 
                        Secretary for designation as endangered or 
                        threatened, or identified by such Secretary as 
                        a candidate for such designation, provided the 
                        property is not required, as of the date of 
                        contribution, to be used for such purpose other 
                        than by reason of the terms of contribution.''
    (b) Enhanced Deductions.--Subsection (e) of section 170 (defining 
qualified conservation contribution) is amended by adding at the end 
the following:
            ``(7) Special rules for contributions related to 
        conservation of species.--
                    ``(A) In general.--In the case of a qualified 
                conservation contribution by an individual for the 
                conservation of endangered or threatened species, 
                proposed species, or candidate species under (h)(4)(v):
                            ``(i) 50 percent limitation to apply.--Such 
                        a contribution shall be treated for the 
                        purposes of this section as described in 
                        subsection (b)(l)(A).
                            ``(ii) 20-year carry forward.--Subsection 
                        (d)(1) shall be applied by substituting `20 
                        years' for `5 years' each place it appears and 
                        with appropriate adjustments in the application 
                        of subparagraph (A)(ii) thereof.
                            ``(iii) Unused deduction carryover allowed 
                        on taxpayer's last return.--If the taxpayer 
                        dies before the close of the last taxable year 
                        for which a deduction could have been allowed 
                        under subsection (d)(1), any portion of the 
                        deduction for such contribution which has not 
                        been allowed shall be allowed as a deduction 
                        under subsection (a) (without regard to 
                        subsection (b)) for the taxable year in which 
                        such death occurs or such portion may be used 
                        as a deduction against the gross estate of the 
                        taxpayer.''
    (c) Effective Date.--The amendments made by this section shall 
apply to contributions made after the date of the enactment of this 
Act.

SEC. 4. EXCLUSION FROM ESTATE TAX FOR REAL PROPERTY SUBJECT TO 
              ENDANGERED SPECIES CONSERVATION AGREEMENT.

    (a) In General.--Part IV of subchapter A of chapter 11 of the 
Internal Revenue Code of 1986 (relating to taxable estate) is amended 
by adding at the end the following new section:

``SEC. 2058. CERTAIN REAL PROPERTY SUBJECT TO ENDANGERED SPECIES 
              CONSERVATION AGREEMENT.

    ``(a) General Rule.--For purposes of the tax imposed by section 
2001, the value of the taxable estate shall be determined by deducting 
from the value of the gross estate an amount equal to lesser of--
            ``(1) the adjusted value of real property included in the 
        gross estate which is subject to an endangered species 
        conservation agreement, or
            ``(2) $10,000,000.
    ``(b) Property Subject to an Endangered Species Conservation 
Agreement.--For purposes of this section--
            ``(1) In general.--Real property shall be treated as 
        subject to an endangered species conservation agreement if--
                    ``(A) such property was owned by the decedent or a 
                member of the decedent's family at all times during the 
                3-year period ending on the date of the decedent's 
                death,
                    ``(B) each person who has an interest in such 
                property (whether or not in possession) has entered 
                into--
                            ``(i) an endangered species conservation 
                        agreement with respect to such property, and
                            ``(ii) a written agreement with the 
                        Secretary consenting to the application of 
                        subsection (d), and
                    ``(C) the executor of the decedent's estate--
                            ``(i) elects the application of this 
                        section, and
                            ``(ii) files with the Secretary such 
                        endangered species conservation agreement.
            ``(2) Adjusted value.--
                    ``(A) In general.--The adjusted value of any real 
                property shall be its value for purposes of this 
                chapter, reduced by--
                            ``(i) any amount deductible under section 
                        2055(f) with respect to the property, and
                            ``(ii) any acquisition indebtedness with 
                        respect to the property.
                    ``(B) Acquisition indebtedness.--For purposes of 
                this paragraph, the term `acquisition indebtedness' 
                means, with respect to any real property, the unpaid 
                amount of--
                            ``(i) the indebtedness incurred by the 
                        donor in acquiring such property,
                            ``(ii) the indebtedness incurred before the 
                        acquisition of such property if such 
                        indebtedness would not have been incurred but 
                        for such acquisition,
                            ``(iii) the indebtedness incurred after the 
                        acquisition of such property if such 
                        indebtedness would not have been incurred but 
                        for such acquisition and the incurrence of such 
                        indebtedness was reasonably foreseeable at the 
                        time of such acquisition, and
                            ``(iv) the extension, renewal, or 
                        refinancing of an acquisition indebtedness.
    ``(c) Endangered Species Conservation Agreement.--For purposes of 
this section--
            ``(1) In general.--The term `endangered species 
        conservation agreement' means a written agreement entered into 
        with the Secretary of the Interior or the Secretary of 
        Commerce--
                    ``(A) which commits each person who signed such 
                agreement to carry out on the real property activities 
                or practices not otherwise required by law or to 
                refrain from carrying out on such property activities 
                or practices that could otherwise be lawfully carried 
                out and includes--
                            ``(i) objective and measurable species of 
                        concern conservation goals,
                            ``(ii) site-specific and other management 
                        measures necessary to achieve those goals, and
                            ``(iii) objective and measurable criteria 
                        to monitor progress toward those goals,
                    ``(B) which is certified by such Secretary as 
                providing a major contribution to the conservation of a 
                species of concern, and
                    ``(C) which is for a term that such Secretary 
                determines is sufficient to achieve the purposes of the 
                agreement, but not less than 10 years beginning on the 
                date of the decedent's death.
            ``(2) Species of concern.--The term `species of concern' 
        means any species designated by the Secretary of the Interior 
        or the Secretary of Commerce under the Endangered Species Act 
        of 1973 (16 U.S.C. 1531 et seq) as endangered or threatened, 
        proposed by such Secretary for designation as endangered or 
        threatened, or identified by such Secretary as a candidate for 
        such designation.
            ``(3) Annual certification to the secretary by the 
        secretary of the interior or the secretary of commerce of the 
        status of endangered species conservation agreements.--If the 
        executor elects the application of this section, the executor 
        shall promptly give written notice of such election to the 
        Secretary of the Interior or the Secretary of Commerce. The 
        Secretary of the Interior or the Secretary of Commerce shall 
        thereafter annually certify to the Secretary that the 
        endangered species conservation agreement applicable to any 
        property for which such election has been made remains in 
        effect and is being satisfactorily complied with.
    ``(d) Recapture of Tax Benefit in Certain Cases.--
            ``(1) Disposition of interest or material breach.--
                    ``(A) In general.--An additional tax in the amount 
                determined under subparagraph (B) shall be imposed on 
                any person on the earlier of--
                            ``(i) the disposition by such person of any 
                        interest in property subject to an endangered 
                        species conservation agreement (other than a 
                        disposition described in subparagraph (C)),
                            ``(ii) a material breach by such person of 
                        the endangered species conservation agreement, 
                        or
                            ``(iii) the termination of the endangered 
                        species conservation agreement.
                    ``(B) Amount of additional tax.--
                            ``(i) In general.--The amount of the 
                        additional tax imposed by subparagraph (A) with 
                        respect to any interest shall be an amount 
                        equal to the applicable percentage of the 
                        lesser of--
                                    ``(I) the adjusted tax difference 
                                attributable to such interest (within 
                                the meaning of section 2032A(c)(2)(B)), 
                                or
                                    ``(II) the excess of the amount 
                                realized with respect to the interest 
                                (or, in any case other than a sale 
or exchange at arm's length, the fair market value of the interest) 
over the value of the interest determined under subsection (a).
                            ``(ii) Applicable percentage.--For purposes 
                        of clause (i), the applicable percentage is 
                        determined in accordance with the following 
                        table:

``If, with respect to the date of   The applicable percentage is--
        the agreement, the date of 
        the event described in 
        subparagraph (A) occurs--   

    Before 10 years...............................                 100 
    After 9 years and before 20 years.............                  75 
    After 19 years and before 30 years............                  50 
    After 29 years and before 40 years............                  25 
    After 39......................................                   0.
                    ``(C) Exception if certain heirs assume obligations 
                upon the death of a person executing the agreement.--
                Subparagraph (A)(i) shall not apply if--
                            ``(i) upon the death of a person described 
                        in subsection (b)(1)(B) during the term of such 
                        agreement, the property subject to such 
                        agreement passes to a member of the person's 
                        family, and
                            ``(ii) the member agrees--
                                    ``(I) to assume the obligations 
                                imposed on such person under the 
                                endangered species conservation 
                                agreement,
                                    ``(II) to assume personal liability 
                                for any tax imposed under subparagraph 
                                (A) with respect to any future event 
                                described in subparagraph (A), and
                                    ``(III) to notify the Secretary of 
                                the Treasury and the Secretary of the 
                                Interior or the Secretary of Commerce 
                                that the member has assumed such 
                                obligations and liability.
                If a member of the person's family enters into an 
                agreement described in subclauses (I), (II), and (III), 
                such member shall be treated as signatory to the 
                endangered species conservation agreement the person 
                entered into.
            ``(2) Due date of additional tax.--The additional tax 
        imposed by paragraph (1) shall become due and payable on the 
        day that is 6 months after the date of the disposition referred 
        to in paragraph (1)(A)(i) or, in the case of an event described 
        in clause (ii) or (iii) of paragraph (1)(A), on April 15 of the 
        calendar year following any year in which the Secretary of the 
        Interior or the Secretary of Commerce fails to provide the 
        certification required under subsection (c)(3).
    ``(e) Statute of Limitations.--If a taxpayer incurs a tax liability 
pursuant to subsection (d)(1)(A), then--
            ``(1) the statutory period for the assessment of any 
        additional tax imposed by subsection (d)(1)(A) shall not expire 
        before the expiration of 3 years from the date the Secretary is 
        notified (in such manner as the Secretary may by regulation 
        prescribe) of the incurring of such tax liability, and
            ``(2) such additional tax may be assessed before the 
        expiration of such 3-year period notwithstanding the provisions 
        of any other law or rule of law that would otherwise prevent 
        such assessment.
    ``(f) Election and Filing of Agreement.--The election under this 
section shall be made on the return of the tax imposed by section 2001. 
Such election, and the filing under subsection (b) of an endangered 
species conservation agreement, shall be made in such manner as the 
Secretary shall by regulation provide.
    ``(g) Application of This Section to Interests in Partnerships, 
Corporations, and Trusts.--This section shall apply to an interest in a 
partnership, corporation, or trust if at least 30 percent of the entity 
is owned (directly or indirectly) by the decedent, as determined under 
the rules described in section 2057(e)(3).
    ``(h) Member of Family.--For purposes of this section, the term 
`member of the family' means any member of the family (as defined in 
section 2032A(e)(2)) of the decedent.''
    (b) Carryover Basis.--Section 1014(a)(4) of the Internal Revenue 
Code of 1986 (relating to basis of property acquired from a decedent) 
is amended by inserting ``or 2058'' after ``section 2031(c)''.
    (c) Clerical Amendment.--The table of sections for part IV of 
subchapter A of chapter 11 of the Internal Revenue Code of 1986 is 
amended by adding at the end the following new item:

                              ``Sec. 2058. Certain real property 
                                        subject to endangered species 
                                        conservation agreement.''
    (d) Effective Date.--The amendments made by this section shall 
apply to estates of decedents dying after the date of the enactment of 
this Act.

SEC. 5. EXPANSION OF ESTATE TAX EXCLUSION FOR REAL PROPERTY SUBJECT TO 
              QUALIFIED CONSERVATION EASEMENT.

    (a) Repeal of Certain Restrictions on Where Land Is Located.--
Clause (i) of section 2031(c)(8)(A) (defining land subject to a 
qualified conservation easement) is amended to read as follows:
                            ``(i) which is located in the United States 
                        or any possession of the United States,''.
    (b) Effective Date.--The amendments made by this section shall 
apply to estates of decedents dying after the date of the enactment of 
this Act.
                                 <all>