I

104TH CONGRESS

1ST SESSION H. R. 2286

To amend the Internal Revenue Code of 1986 to provide tax incentives

for the conservation of endangered species.

IN THE HOUSE OF REPRESENTATIVES

SEPTEMBER 7, 1995

Mr. POMBO (for himself and Mr. YOUNG of Alaska) 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 provide

tax incentives for the conservation of endangered species.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Endangered Species

5 Conservation Incentives Act of 1995’’.

6 SEC. 2. DESIGNATIONS OF OVERPAYMENTS FOR ENDAN7 GERED SPECIES CONSERVATION.

8 (a) GENERAL RULE.—Subchapter A of chapter 61 of

9 the Internal Revenue Code of 1986 is amended by adding

10 at the end the following new part:
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1 ‘‘PART IX—DESIGNATION OF OVERPAY2 MENTS FOR ENDANGERED SPECIES

3 CONSERVATION

‘‘Sec. 6097. Amounts for endangered species conservation.

4 ‘‘SEC. 6097. AMOUNTS FOR ENDANGERED SPECIES CON5 SERVATION.

6 ‘‘(a) IN GENERAL.—With respect to each taxpayer’s

7 return for the taxable year of the tax imposed by chapter

8 1, such taxpayer may designate that any overpayment of

9 such tax for such taxable year be paid over for endangered

10 species conservation.

11 ‘‘(b) MANNER AND TIME OF DESIGNATION.—A des12 ignation under subsection (a) may be made with respect

13 to any taxable year only at the time of filing the return

14 of the tax imposed by chapter 1 for such taxable year.

15 Such designation shall be made on the first page of the

16 return.

17 ‘‘(c) OVERPAYMENTS TREATED AS REFUNDED.—For

18 purposes of this title, any overpayment of tax designated

19 under subsection (a) shall be treated as being refunded

20 to the taxpayer as of the last date prescribed for filing

21 the return of tax imposed by chapter 1 (determined with22 out regard to extensions) or, if later, the date the return

23 is filed.’’
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1 (b) ENDANGERED SPECIES CONSERVATION TRUST

2 FUND.—

3 (1) IN GENERAL.—Subchapter A of chapter 98

4 of such Code (relating to trust fund code) is amend5 ed by adding at the end the following new section:

6 ‘‘SEC. 9512. ENDANGERED SPECIES CONSERVATION TRUST

7 FUND.

8 ‘‘(a) CREATION OF TRUST FUND.—There is estab9 lished in the Treasury of the United States a trust fund

10 to be known as the ‘Endangered Species Conservation

11 Trust Fund’, consisting of such amounts as may be appro12 priated or credited to the Endangered Species Conserva13 tion Trust Fund as provided in this section or section

14 9602(b).

15 ‘‘(b) TRANSFER TO ENDANGERED SPECIES CON16 SERVATION TRUST FUND OF AMOUNTS DESIGNATED.—

17 There is hereby appropriated to the Endangered Species

18 Conservation Trust Fund amounts equivalent to the

19 amounts designated under section 6097 and received in

20 the Treasury.

21 ‘‘(c) EXPENDITURES FROM TRUST FUND.—

22 ‘‘(1) IN GENERAL.—The Secretary shall pay,

23 not less often than quarterly, to Secretary of the In24 terior from the Endangered Species Conservation

25 Trust Fund an amount equal to the amount in such
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1 Fund as of the time of such payment less any ad2 ministrative expenses of the Secretary which may be

3 paid under paragraph (2).

4 ‘‘(2) ADMINISTRATIVE EXPENSES.—Amounts in

5 the Endangered Species Conservation Trust Fund

6 shall be available to pay the administrative expenses

7 of the Department of the Treasury directly allocable

8 to—

9 ‘‘(A) modifying the individual income tax

10 return forms to carry out section 6097,

11 ‘‘(B) carrying out this chapter with respect

12 to such Fund, and

13 ‘‘(C) processing amounts received under

14 section 6097 and transferring such amounts to

15 such Fund.’’

16 (c) CLERICAL AMENDMENTS.—

17 (1) The table of parts for subchapter A of chap18 ter 61 of such Code is amended by adding at the

19 end the following new item:

‘‘Part IX. Designation of overpayments for endangered species

conservation.’’

20 (2) The table of sections for such subchapter A

21 is amended by adding at the end the following new

22 item:

‘‘Sec. 9512. Endangered Species Conservation Trust Fund.’’
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1 (d) EFFECTIVE DATE.—The amendments made by

2 this section shall apply to taxable years beginning after

3 the date of enactment of this Act.

4 SEC. 3. EXCLUSION FROM ESTATE FOR REAL PROPERTY

5 SUBJECT TO ENDANGERED SPECIES CON6 SERVATION AGREEMENT.

7 (a) IN GENERAL.—Part IV of subchapter A of chap8 ter 11 of the Internal Revenue Code of 1986 (relating to

9 taxable estate) is amended by adding at the end the follow10 ing new section:

11 ‘‘SEC. 2057. CERTAIN REAL PROPERTY SUBJECT TO ENDAN12 GERED SPECIES CONSERVATION AGREE13 MENT.

14 ‘‘(a) GENERAL RULE.—For purposes of the tax im15 posed by section 2001, the value of the taxable estate shall

16 be determined by deducting from the value of the gross

17 estate an amount equal to the value of any endangered

18 species agreement property included in the gross estate.

19 ‘‘(b) ENDANGERED SPECIES AGREEMENT PROP20 ERTY.—For purposes of this section, the term ‘endangered

21 species agreement property’ means any real property if—

22 ‘‘(1) each person who has an interest in such

23 property (whether or not in possession)—
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1 ‘‘(A) has entered into an endangered spe2 cies conservation agreement with respect to

3 such property, and

4 ‘‘(B) has entered into a written agreement

5 with the Secretary consenting to the application

6 of subsection (d), and

7 ‘‘(2) the executor of the decedent’s estate—

8 ‘‘(A) elects the application of this section,

9 and

10 ‘‘(B) files with the Secretary such endan11 gered species conservation agreement.

12 ‘‘(c) ENDANGERED SPECIES CONSERVATION AGREE13 MENT.—For purposes of this section, the term ‘endan14 gered species conservation agreement’ means a written

15 agreement, entered into with the Secretary of the Interior

16 or the Secretary of Commerce—

17 ‘‘(1) which commits each person who signed

18 such agreement to carry out on such property activi19 ties or practices not otherwise required by law, or to

20 refrain from carrying out on such property activities

21 or practices that such person could otherwise law22 fully carry out, or both,

23 ‘‘(2) which is certified by such Secretary as as24 sisting in the conservation of any species which is—
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1 ‘‘(A) designated by such Secretary as an

2 endangered or threatened species under the En3 dangered Species Act of 1973,

4 ‘‘(B) proposed for such designation, or

5 ‘‘(C) officially identified by such Secretary

6 as a candidate for possible future protection as

7 an endangered or threatened species, and

8 ‘‘(3) the duration of which is at least 10 years.

9 ‘‘(d) COORDINATION WITH OTHER BENEFITS.—No

10 credit shall be allowed under section 30A with respect to

11 any endangered species conservation agreement with re12 spect to which an election under this section is made.

13 ‘‘(e) RECAPTURE OF TAX BENEFIT IN CERTAIN

14 CASES.—

15 ‘‘(1) DISPOSITION OF INTEREST OR MATERIAL

16 BREACH.—

17 ‘‘(A) IN GENERAL.—Except as provided in

18 subparagraph (C), if, at any time during the

19 10-year period beginning on the date the endan20 gered species conservation agreement is entered

21 into with respect to any property—

22 ‘‘(i) any person disposes of any inter23 est in such property, or

24 ‘‘(ii) there is a material breach by any

25 person who holds an interest in such prop-
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1 erty of any endangered species conserva2 tion agreement with respect to such prop3 erty,

4 then there is hereby imposed an additional es5 tate tax.

6 ‘‘(B) AMOUNT OF TAX.—The amount of

7 the tax imposed by subparagraph (A) with re8 spect to any interest shall be the amount equal

9 to the lesser of—

10 ‘‘(i) the adjusted tax difference attrib11 utable to such interest (determined under

12 rules similar to the rules of section

13 2032A(c)(2)), or

14 ‘‘(ii) the amount realized with respect

15 to the interest (or, in any case other than

16 a sale or exchange at arm’s length, the fair

17 market value of the interest.

18 ‘‘(C) EXCEPTION IF TRANSFEREE AS19 SUMES OBLIGATIONS OF TRANSFEROR.—Sub20 paragraph (A) shall not apply to a disposition

21 if the transferee enters into a binding written

22 agreement—

23 ‘‘(i) to assume the obligations imposed

24 on the transferor under the endangered

25 species conservation agreement;
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1 ‘‘(ii) to assume liability for any tax

2 imposed under subparagraph (A) with re3 spect to any future dispositions or breaches

4 by such transferee; and

5 ‘‘(iii) to notify the Secretary who en6 tered into the endangered species conserva7 tion agreement and the Secretary that the

8 transferee has assumed the obligations and

9 liabilities described in clauses (i) and (ii).

10 ‘‘(2) DUE DATE OF ADDITIONAL TAX.—The tax

11 imposed by paragraph (1) shall become due and pay12 able on the day that is 6 months after the date of

13 the disposition or breach referred to in paragraph

14 (1)(A).

15 ‘‘(f) STATUTE OF LIMITATIONS.—If a taxpayer in16 curs a tax liability pursuant to subsection (e)(1), then—

17 ‘‘(1) the statutory period for the assessment of

18 any additional tax imposed by subsection (e)(1) shall

19 not expire before the expiration of 3 years from the

20 date the Secretary is notified (in such manner as the

21 Secretary may by regulation prescribe) of the incur22 ring of such tax liability, and

23 ‘‘(2) such additional tax may be assessed before

24 the expiration of such 3-year period notwithstanding
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1 the provisions of any other law or rule of law that

2 would otherwise prevent such assessment.

3 ‘‘(g) ELECTION AND FILING OF AGREEMENT.—The

4 election under this section shall be made on the return

5 of the tax imposed by section 2001. Such election, and

6 the filing under subsection (a) of an endangered species

7 conservation agreement, shall be made in such manner as

8 the Secretary shall by regulation provide.’’

9 (b) CLERICAL AMENDMENT.—The table of sections

10 for part IV of subchapter A of chapter 11 of such Code

11 is amended by adding at the end the following new item:

‘‘Sec. 2057. Certain real property subject to endangered species

conservation agreement.’’

12 (c) EFFECTIVE DATE.—The amendments made by

13 this section shall apply to estates of decedents dying after

14 the date of the enactment of this Act.

15 SEC. 4. ENHANCED DEDUCTION FOR DONATION OF A CON16 SERVATION EASEMENT.

17 (a) IN GENERAL.— Subsection (h) of section 170 of

18 the Internal Revenue Code of 1986 (relating to charitable,

19 etc., contributions and gifts) is amended by adding at the

20 end the following new paragraph:

21 ‘‘(7) ENHANCED VALUATION OF EASEMENT

22 FOR PROTECTION OF ENDANGERED SPECIES.—

23 ‘‘(A) IN GENERAL.—For purposes of this

24 section, if the taxpayer elects the application of
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1 this paragraph, the value of any contribution of

2 a qualified endangered species easement shall

3 be an amount equal to the excess of—

4 ‘‘(i) the value of the property bur5 dened by the easement, determined without

6 regard to—

7 ‘‘(I) such easement, and

8 ‘‘(II) any restrictions imposed by

9 the Endangered Species Act of 1973,

10 over

11 ‘‘(ii) the value of such property, deter12 mined with regard to such easement and

13 restrictions.

14 ‘‘(B) QUALIFIED ENDANGERED SPECIES

15 EASEMENT.—For purposes of this paragraph,

16 the term ‘qualified endangered species ease17 ment’ means any restriction referred to in para18 graph (1)(C) contributed to the Secretary of the

19 Interior, the Secretary of Commerce, or a State

20 agency implementing an endangered species

21 program for the purpose described in paragraph

22 (4)(A)(iii). For purposes of the preceding sen23 tence, a restriction which is granted for at least

24 20 years shall be treated as granted in perpetu25 ity.’’
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1 (b) PROTECTION OF ENDANGERED SPECIES AS CON2 SERVATION PURPOSE.—

3 (1) Subparagraph (A) of section 170(h)(4) of

4 such Code is amended by redesignating clauses (iii)

5 and (iv) as clauses (iv) and (v), respectively, and by

6 inserting after clause (ii) the following new clause:

7 ‘‘(iii) the protection of a species des8 ignated endangered by the Secretary of the

9 Interior, or the Secretary of Commerce,

10 under the Endangered Species Act of

11 1973,’’.

12 (c) EFFECTIVE DATE.—The amendments made by

13 this section shall apply to contributions made after the

14 date of the enactment of this Act.

15 SEC. 5. CREDIT FOR COSTS OF COMPLIANCE WITH ENDAN16 GERED SPECIES CONSERVATION AGREE17 MENT.

18 (a) IN GENERAL.—Subpart B of part IV of sub19 chapter A of chapter 1 of the Internal Revenue Code of

20 1986 is amended by adding at the end the following new

21 section:

22 ‘‘SEC. 30A. COSTS OF COMPLIANCE WITH ENDANGERED

23 SPECIES CONSERVATION AGREEMENT.

24 ‘‘(a) IN GENERAL.—There shall be allowed as a cred25 it against the tax imposed by this chapter for the taxable
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1 year an amount equal to the endangered species conserva2 tion agreement costs paid or incurred by the taxpayer dur3 ing the taxable year.

4 ‘‘(b) ENDANGERED SPECIES CONSERVATION AGREE5 MENT COSTS.—For purposes of subsection (a), the term

6 ‘endangered species conservation agreement costs’ means

7 expenses which would not have been incurred by the tax8 payer but for an endangered species conservation agree9 ment (as defined in section 2057(c) but without regard

10 to paragraph (3) thereof) entered into by the taxpayer.

11 ‘‘(c) APPLICATION WITH OTHER CREDITS.—The

12 credit allowed by subsection (a) for any taxable year shall

13 not exceed the excess (if any) of—

14 ‘‘(1) the regular tax for the taxable year re15 duced by the sum of the credits allowable under sub16 part A and sections 27, 28, 29, and 30, over

17 ‘‘(2) the tentative minimum tax for the taxable

18 year.’’

19 (b) CLERICAL AMENDMENT.—The table of sections

20 for such subpart B is amended by adding at the end the

21 following new item:

‘‘Sec. 30A. Costs of compliance with endangered species conservation agreement.’’
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1 (c) EFFECTIVE DATE.—The amendments made by

2 this section shall apply to taxable years ending after the

3 date of the enactment of this Act.

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