SECTION 1. CONSERVATION HABITAT RESERVE PROGRAM.

    (a) Establishment.--The Secretary shall enter into contracts in 
accordance with this section with owners and operators of lands 
suitable for conservation habitat, under which the owners and operators 
manage the land for the protection of protected species in exchange for 
cash payments from the Secretary.
    (b) Contract Requirements.--
            (1) Duties of owners and operators.--
                    (A) In general.--Each contract entered into under 
                this section with respect to land shall obligate the 
                owner or operator of the land--
                            (i) to implement a plan approved by the 
                        Secretary, in consultation with the Secretary 
                        of the Interior, for management of the land;
                            (ii) not to use the land in a manner that 
                        is inconsistent with the purpose of the 
                        contract; and
                            (iii) on the violation of a term or 
                        condition of the contract at any time the owner 
                        or operator has control of the land--
                                    (I) to forfeit all rights to 
                                receive rental payments and management 
                                fees under the contract, if the 
                                Secretary, after considering the 
                                recommendations of the Secretary of the 
                                Interior, determines that the violation 
                                warrants termination of the contract; 
                                or
                                    (II) to refund to the Secretary, or 
                                accept adjustments to, the rental 
                                payments and management fees provided 
                                to the owner or operator, as the 
                                Secretary considers appropriate, if the 
                                Secretary, after considering the 
                                recommendations of the Secretary of the 
                                Interior, determines that the violation 
                                does not warrant termination of the 
                                contract.
                    (B) Contents of plan.--The plan referred to in 
                subparagraph (A)(i) shall set forth--
                            (i) the management practices to be carried 
                        out by the owner or operator of the land; and
                            (ii) any permitted use of the land.
            (2) Duties of the secretary.--Each contract entered into 
        under this section shall obligate the Secretary--
                    (A) to pay the cost of carrying out the management 
                measures and practices set forth in the contract, to 
                the extent that the Secretary determines is appropriate 
                and in the public interest;
                    (B) for a period of years not in excess of the term 
                of the contract, to pay an annual rental payment in an 
                amount necessary to compensate for the conversion of 
                the land to, or use of the land for, conservation 
                habitat; and
                    (C) to provide technical assistance and management 
                training to assist the owner or operator in carrying 
                out the contract.
            (3) Duration.--Each contract entered into under this 
        section shall be for a term of not fewer than 5 years and not 
        greater than 10 years.
    (c) Other Rules Applicable to Contracts.--
            (1) Modification.--The Secretary may modify a contract 
        entered into with an owner or operator under this section if 
        the owner or operator agrees to the modification.
            (2) Renewal.--Notwithstanding subsection (g)(3)(C), the 
        Secretary may renew a contract entered into under this section 
        only if, at the time the contract would otherwise expire, a 
        protected species is occupying the land subject to the 
        contract.
            (3) Termination.--The Secretary may terminate a contract 
        entered into with an owner or operator under this section if--
                    (A) the owner or operator agrees to the 
                termination; and
                    (B) the Secretary determines that the termination 
                would be in the public interest.
            (4) Effect of transfer of ownership of land.--If, during 
        the term of a contract entered into under this section, an 
        owner or operator of land subject to the contract sells or 
        otherwise transfers the ownership or right of occupancy of the 
        land, the new owner or operator of the land may--
                    (A) notwithstanding subsection (g)(3)(C)--
                            (i) continue the contract under the same 
                        terms or conditions; or
                            (ii) enter into a new contract in 
                        accordance with this section; or
                    (B) elect not to participate in the program 
                established under this section.
    (d) Limitations.--
            (1) County impact.--The Secretary shall not, at any one 
        time, have in effect under this section contracts with respect 
        to more than 25 percent of the land or water in any one county, 
        except to the extent that the Secretary determines that doing 
        so would not adversely affect the local economy of the county.
            (2) Recent changes in ownership.--
                    (A) 3-year rule.--The Secretary may not, on any 
                date, enter into a contract under this section with 
                respect to land the ownership of which has changed in 
                the immediately preceding 3-year period.
                    (B) Exceptions.--Subparagraph (A) shall not apply 
                to a change of ownership if--
                            (i) the change of ownership occurred by 
                        reason of the operation of a will or by 
                        succession as a result of the death of the 
                        previous owner;
                            (ii) the change of ownership occurred 
                        before January 1, 1995; or
                            (iii) the Secretary determines that the 
                        change of ownership occurred under 
                        circumstances which give adequate assurance 
                        that the land was not acquired for the purpose 
                        of placement in the program established under 
                        this section.
                    (C) Rules of interpretation.--Subparagraph (A) 
                shall not be construed to--
                            (i) prohibit a new owner of land from 
                        electing to assume the obligations of the 
                        previous owner under a contract entered into 
                        under this section with respect to the land, 
                        and otherwise continue the contract in effect; 
                        or
                            (ii) require a person, as a condition of 
                        eligibility to enter into a contract under this 
                        section with respect to land, to own the land 
                        if the person--
                                    (I) has operated the land for at 
                                least 3 years preceding the date of the 
                                contract or since January 1, 1995, 
                                whichever is later; and
                                    (II) will control the land for the 
                                duration of the contract.
    (e) Payments.--
            (1) Determination of amount.--
                    (A) Incentive to participation.--In determining the 
                amount of annual rental payments to be paid under 
                contracts entered into under this section, the 
                Secretary may consider, among other things, the amount 
                necessary to encourage owners or operators to 
                participate in the program established by this section.
                    (B) Use of bids.--The Secretary may determine the 
                amounts payable to owners or operators in the form of 
                rental payments under contracts entered into under this 
                section, through the submission of bids in such manner 
                as the Secretary may prescribe.
            (2) Timing.--
                    (A) In general.--The Secretary shall provide 
                payment for obligations incurred by the Secretary under 
                a contract entered into under this section--
                            (i) with respect to any cost for management 
                        incurred by the Secretary, as soon as possible 
                        after the obligation is incurred; and
                            (ii) with respect to any annual rental 
                        payment obligation incurred by the Secretary--
                                    (I) as soon as practicable after 
                                October 1 of each calendar year; or
                                    (II) at the discretion of the 
                                Secretary, at any time before such date 
                                during the year that the obligation is 
                                incurred.
                    (B) Authority to make payments before determining 
                performance.--The Secretary may make payments under 
                this section before determining performance.
            (3) Payments to third parties.--If an owner or operator who 
        is entitled to a payment under a contract entered into under 
        this section dies, becomes incompetent, is otherwise unable to 
        receive the payment, or is succeeded by another person who 
        renders or completes the performance required of the owner or 
        operator under the contract, the Secretary shall make the 
        payment, in accordance with regulations prescribed by the 
        Secretary and without regard to any other provision of law, in 
        such manner as the Secretary determines is fair and reasonable 
        in light of all of the circumstances.
            (4) No effect on other payments.--Rental payments received 
        by an owner or operator under this section shall be in addition 
        to, and shall not affect, the total amount of payments that the 
        owner or operator is otherwise eligible to receive under this 
        section, the Agricultural Act of 1949, or other Federal law.
    (f) Consultation With the Secretary of the Interior.--The Secretary 
shall consult with the Secretary of the Interior on all determinations 
and actions that are necessary to carry out this section.
    (g) Definitions.--As used in this section:
            (1) Land suitable for conservation habitat.--The term 
        ``land suitable for conservation habitat'' means qualified 
        land--
                    (A) that is occupied by a protected species; or
                    (B) that--
                            (i) provides habitat which is suitable for 
                        a protected species; and
                            (ii) is likely to be occupied by a 
                        protected species for part of each year.
            (2) Protected species.--The term ``protected species'' 
        means any species that is--
                    (A) included in a list published pursuant to 
                section 4(c) of the Endangered Species Act of 1973; or
                    (B) proposed pursuant to such Act to be included in 
                such a list.
            (3) Qualified land.--The term ``qualified land'' means land 
        that--
                    (A) as of January 1, 1995, was used for any 
                agricultural purpose;
                    (B) is covered by--
                            (i) a cooperative management agreement 
                        provided for in section 6 of the Endangered 
                        Species Act of 1973; or
                            (ii) a conservation plan provided for in 
                        section 10(a) of such Act;
                    (C) is not the subject of a contract in effect 
                under this section; and
                    (D) is not the subject of a contract in effect 
                under chapter 1 of subtitle D of title XII of the Food 
                Security Act of 1985.
            (4) Secretary.--The term ``Secretary'' means the Secretary 
        of Agriculture.
    (h) Authority Subject to Appropriations.--The authority provided by 
this section shall be exercised only to the extent and in the amounts 
provided in advance in appropriations Acts.
Directs the Secretary of Agriculture to enter into contacts with owners and operators of agricultural land to provide conservation habitat for protected species.  States that such contracts shall provide financing for conservation measures, rental payments, and technical assistance. 
Sets forth provisions regarding land ownership transfer and county impact.
To provide incentives for the owners and operators of agricultural land to provide habitat for protected species.