I 111th CONGRESS 1st Session H. R. 3609 IN THE HOUSE OF REPRESENTATIVES September 21, 2009 Mr. Melancon (for himself and Mr. Tanner) 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 clarify the capital gain or loss treatment of the sale or exchange of mitigation credits earned by restoring wetlands.

1.

Short title

This Act may be cited as the Wetlands Conservation Investment Act of 2009.

2.

Clarification of treatment of sales or exchanges of wetland mitigation credits as long-term capital gain or loss

(a)

In general

Part IV of subchapter P of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after section 1257 the following new section:

1257A.

Gains or losses from sales or exchanges of wetlands mitigation credits

(a)

General Rule

Gain or loss attributable to the sale or exchange of a mitigation bank credit by the sponsor of the mitigation bank who earned such credit shall be considered the sale or exchange of a capital asset held for more than 1 year. (b)

Definitions

For purposes of this section, the terms mitigation bank and mitigation bank credit have the respective meanings given such terms by part 332 of title 33 of the Code of Federal Regulations.

. (b)

Clerical amendment

The table of sections for part IV of subchapter P of chapter 1 of such Code is amended by inserting after the item relating to section 1257 the following new item: Sec. 1257A. Gains or losses from sales or exchanges of wetlands mitigation credits.. (c)

Effective date

The amendments made by this section shall apply with respect to sales or exchanges of mitigation banking credits occurring before, on, or after the date of enactment of this Act.