Endangered species recovery credit

(a)

In general

Subpart B of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section:

30D.

Endangered species recovery credit

(a)

In general

In the case of an eligible taxpayer, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the sum of— (1)the habitat protection easement credit, plus (2)the habitat restoration credit. (b)

Limitation

(1)

In general

The credit allowed under subsection (a) for any eligible taxpayer for any taxable year shall not exceed the endangered species recovery credit limitation allocated to the eligible taxpayer under subsection (f) for the calendar year in which the taxpayer's taxable year ends. (2)

Carryforwards

(A)

In general

If the amount of the credit allowable under subsection (a) for any taxpayer for any taxable year exceeds the endangered species recovery credit limitation allocated under subsection (f) to such taxpayer for the calendar year in which the taxpayer's taxable year ends, such excess may be carried forward to the next taxable year for which such taxpayer is allocated a portion of the endangered species recovery credit limitation. (B)

Carryforward of allocation amount

If the amount of the endangered species recovery credit limitation allocated to an eligible taxpayer for any calendar year under subsection (f) exceeds the amount of the credit allowed to the taxpayer under subsection (a) for the taxable year ending in such calendar year, such excess may be carried forward to the next taxable year of the taxpayer. For purposes of this paragraph, any amount carried to another taxable year under this subparagraph shall be treated as allocated to the taxpayer for use in such taxable year under subsection (f). (c)

Eligible taxpayer

For purposes of this section— (1)

In general

The term eligible taxpayer means— (A)a taxpayer who— (i)owns real property which contains the habitat of a qualified species, and (ii)enters into a qualified perpetual habitat protection agreement, a qualified 30-year habitat protection agreement, or a qualified habitat protection agreement with the appropriate Secretary with respect to such real property, and (B)any other taxpayer who— (i)is a party to a qualified perpetual habitat protection agreement, a qualified 30-year habitat protection agreement, or a qualified habitat protection agreement, and (ii)as part of any such agreement, agrees to assume responsibility for costs paid or incurred in protecting or preserving the habitat which is the subject of such agreement. (2)

Qualified perpetual habitat protection agreement

The term qualified perpetual habitat protection agreement means an agreement— (A)under which the taxpayer grants to the appropriate Secretary, the Secretary of Agriculture, or a State an easement in perpetuity for the protection of the habitat of a qualified species, and (B)which meets the requirements of paragraph (5). (3)

Qualified 30-year habitat protection agreement

The term qualified 30-year habitat protection agreement means an agreement— (A)under which the taxpayer grants to the appropriate Secretary, the Secretary of Agriculture, or a State an easement for a period of not less than 30 years and less than perpetuity for the protection of the habitat of a qualified species, and (B)which meets the requirements of paragraph (5). (4)

Qualified habitat protection agreement

The term qualified habitat protection agreement means an agreement— (A)under which the taxpayer enters into an agreement with the appropriate Secretary, the Secretary of Agriculture, or a State to protect the habitat of a qualified species for a specified period of time, and (B)which meets the requirements of paragraph (5). (5)

Requirements

An agreement meets the requirements of this paragraph if— (A)the agreement is not inconsistent with any recovery plan which has been approved for a qualified species under section 4 of the Endangered Species Act of 1973, (B)the appropriate Secretary and the eligible taxpayer enter into a habitat management plan designed to— (i)restore or enhance the habitat of a qualified species, or (ii)reduce threats to a qualified species through the management of the habitat, and (C)the appropriate Secretary ensures that the eligible taxpayer is provided with technical assistance in carrying out the duties of the taxpayer under the terms of the agreement. (d)

Habitat protection easement credit

(1)

In general

For purposes of subsection (a)(1), the habitat protection easement credit for any taxable year is an amount equal to— (A)in the case of an eligible taxpayer who has entered into a qualified perpetual habitat protection agreement during such taxable year, 100 percent of the excess (if any) of— (i)the fair market value of the real property with respect to which the qualified perpetual habitat protection agreement is made, determined on the day before such agreement is entered into, over (ii)the fair market value of such property, determined on the day after such agreement is entered into, (B)in the case of an eligible taxpayer who has entered into a qualified 30-year habitat protection agreement during such taxable year, 75 percent of such excess, and (C)in the case of any other eligible taxpayer, zero. (2)

Reduction for amount received for easement

The credit allowed under subsection (a)(1) shall be reduced by any amount received by the taxpayer in connection with the easement. (3)

Limitation based on amount of tax

The credit allowed under subsection (a)(1) for any taxable year shall not exceed the sum of— (A)the taxpayer's regular tax liability for the taxable year reduced by the sum of the credits allowable under subpart A and sections 27, 30, 30B, and 30C, and (B)the tax imposed by section 55(a) for the taxable year. (4)

Carryforward of unused credit

If the credit allowable under subsection (a)(1) for any taxable year exceeds the limitation imposed by paragraph (3) for such taxable year, such excess shall be carried to the succeeding taxable year and added to the credit allowable under subsection (a)(1) for such succeeding taxable year. (5)

Qualified appraisals required

No amount shall be taken into account under this subsection unless the eligible taxpayer includes with the taxpayer's return for the taxable year a qualified appraisal (within the meaning of section 170(f)(11)(E)) of the real property. (e)

Habitat restoration credit

(1)

In general

For purposes of subsection (a)(2), the habitat restoration credit for any taxable year shall be an amount equal to— (A)in the case of a qualified perpetual habitat protection agreement, 100 percent of the costs paid or incurred by an eligible taxpayer during such taxable year pursuant to such agreement, (B)in the case of a qualified 30-year habitat protection agreement, 75 percent of the costs paid or incurred by an eligible taxpayer during such taxable year pursuant to such agreement, and (C)in the case of a qualified habitat protection agreement, 50 percent of the costs paid or incurred by an eligible taxpayer during such taxable year pursuant to such agreement. (2)

Limitation based on amount of tax

The credit allowed under subsection (a)(2) for any taxable year shall not exceed the excess (if any) of— (A)the regular tax liability for the taxable year reduced by the sum of the credits allowable under subpart A and sections 27, 30, 30B, and 30C, over (B)the tentative minimum tax for the taxable year. (3)

Carryforward of unused credit

If the credit allowable under subsection (a)(2) for any taxable year exceeds the limitation imposed by paragraph (2) for such taxable year, such excess shall be carried to the succeeding taxable year and added to the credit allowable under subsection (a)(2) for such succeeding taxable year. (4)

Special rules

(A)

Certain costs not included

No credit shall be allowed under subsection (a)(2) for any cost which is paid or incurred by a taxpayer to comply with any requirement of a Federal, State, or local government. (B)

Subsidized financing

For purposes of paragraph (1), the amount of costs paid or incurred by an eligible taxpayer pursuant to any agreement described in subsection (c) shall be reduced by the amount of any financing provided under any Federal or State program a principal purpose of which is to subsidize financing for the conservation of the habitat of a qualified species. (f)

Endangered species recovery credit limitation

(1)

In general

There is an endangered species recovery credit limitation for each calendar year. Such limitation is — (A)for 2007, 2008, 2009, 2010, and 2011— (i)$300,000,000 with respect to qualified perpetual habitat protection agreements, (ii)$60,000,000 with respect to qualified 30-year habitat protection agreements, and (iii)$40,000,000 with respect to qualified habitat protection agreements, and (B)except as provided in paragraph (3), zero thereafter. (2)

Allocation of limitation

(A)

In general

The Secretary, in consultation with the Secretary of the Interior and the Secretary of Commerce, shall allocate the endangered species recovery credit limitation to eligible taxpayers. (B)

Considerations

In making allocations to eligible taxpayers under this section, priority shall be given to taxpayers with agreements— (i)relating to habitats that will significantly increase the likelihood of recovering and delisting a species as an endangered species or a threatened species (as defined under section 2 of the Endangered Species Act of 1973), (ii)that are cost-effective and maximize the benefits to a qualified species per dollar expended, (iii)relating to habitats of species which have a federally approved recovery plan pursuant to section 4 of the Endangered Species Act of 1973, (iv)relating to habitats with the potential to contribute significantly to the improvement of the status of a qualified species, (v)relating to habitats with the potential to contribute significantly to the eradication or control of invasive species that are imperiling a qualified species, (vi)with habitat management plans that will manage multiple qualified species, (vii)with habitat management plans that will create adjacent or proximate habitat for the recovery of a qualified species, (viii)relating to habitats for qualified species with an urgent need for protection, (ix)with habitat management plans that assist in preventing the listing of a species as endangered or threatened under the Endangered Species Act of 1973 or a similar State law, (x)with habitat management plans that may resolve conflicts between the protection of qualified species and otherwise lawful human activities, and (xi)with habitat management plans that may resolve conflicts between the protection of a qualified species and military training or other military operations. (3)

Carryover of unused limitation

If for any calendar year the limitation under paragraph (1) (after the application of this paragraph) exceeds the amount allocated to all eligible taxpayers for such calendar year, the limitation amount for the following calendar year shall be increased by the amount of such excess. (g)

Other definitions and special rules

(1)

Appropriate Secretary

The term appropriate Secretary has the meaning given to the term Secretary under section 3(15) of the Endangered Species Act of 1973. (2)

Habitat management plan

The term habitat management plan means, with respect to any habitat, a plan which— (A)identifies one or more qualified species to which the plan applies, (B)describes the management practices to be undertaken by the taxpayer, (C)describes the technical assistance to be provided to the taxpayer and identifies the entity that will provide such assistance, (D)provides a schedule of deadlines for undertaking such management practices, and (E)requires monitoring of the management practices and the status of the qualified species. (3)

Qualified species

The term qualified species means— (A)any species listed as an endangered species or threatened species under the Endangered Species Act of 1973, or (B)any species for which a finding has been made under section 4(b)(3) of Endangered Species Act of 1973 that listing under such Act may be warranted. (4)

Taking

The term taking has the meaning given to such term under the Endangered Species Act of 1973. (5)

Reduction in basis

For purposes of this subtitle, the basis of any property for which a credit is allowable under subsection (a)(1) shall be reduced by the amount of the credit so allowed. (6)

Denial of double benefit

No deduction shall be allowed under this chapter for any amount with respect to which a credit is allowed under subsection (a). (7)

Certification

No credit shall be allowed under subsection (a) unless the appropriate Secretary certifies that any agreement described in subsection (c) which is entered into by an eligible taxpayer will contribute to the recovery of a qualified species. (8)

Request for authorization of incidental takings

The Secretary shall request the appropriate Secretary to consider whether to authorize under the Endangered Species Act of 1973 takings by an eligible taxpayer of a qualified species to which an agreement described in subsection (c) relates if the takings are incidental to— (A)the restoration, enhancement, or management of the habitat pursuant to the habitat management plan under the agreement, or (B)the use of the property to which the agreement pertains at any time after the expiration of the easement or the specified period described in subsection (c)(4)(A), but only if such use will leave the qualified species at least as well off on the property as it was before the agreement was made. (9)

Recapture

The Secretary shall, by regulations, provide for recapturing the benefit under any credit allowable under subsection (a) if the Secretary, in consultation with the appropriate Secretary, determines that the eligible taxpayer has failed to carry out the duties of the taxpayer under the terms of a qualified perpetual habitat protection agreement, a qualified 30-year habitat protection agreement, or a qualified habitat protection agreement.

(b)

Conforming amendments

(1)Section 1016(a) of the Internal Revenue Code of 1986 is amended by striking and at the end of paragraph (36), by striking the period at the end of paragraph (37) and inserting , and, and by inserting after paragraph (37) the following new paragraph:

(38)to the extent provided in section 30D(g)(5).

(2)The table of sections for subpart B of part IV of subchapter A of chapter 1 of such Code is amended by inserting after the item relating to section 30C the following new item:

Sec. 30D. Endangered species recovery credit.

(c)

Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2006.