II 

112TH CONGRESS 

1ST SESSION S. 664 

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, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

MARCH 29, 2011 

Ms. LANDRIEU (for herself and Mr. CRAPO) 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 clarify 

the capital gain or loss treatment of the sale or exchange 

of mitigation credits earned by restoring wetlands, and 

for other purposes. 

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 ‘‘Wetlands Conservation 

5 Investment Act of 2011’’. 


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•S 664 IS

1 SEC. 2. CLARIFICATION OF TREATMENT OF SALES OR EX2 CHANGES OF WETLAND MITIGATION CRED3 ITS AS LONG-TERM CAPITAL GAIN OR LOSS. 

4 (a) IN GENERAL.—Part IV of subchapter P of chap5 ter 1 of the Internal Revenue Code of 1986 is amended 

6 by inserting after section 1257 the following new section: 

7 ‘‘SEC. 1257A. GAINS OR LOSSES FROM SALES OR EX8 CHANGES OF WETLANDS MITIGATION CRED9 ITS. 

10 ‘‘(a) GENERAL RULE.—Gain or loss attributable to 

11 the sale or exchange of a mitigation bank credit by the 

12 sponsor of the mitigation bank who earned such credit 

13 shall be considered the sale or exchange of a capital asset 

14 held for more than 1 year. 

15 ‘‘(b) DEFINITIONS.—For purposes of this section, the 

16 terms ‘mitigation bank’ and ‘mitigation bank credit’ have 

17 the respective meanings given such terms by part 332 of 

18 title 33 of the Code of Federal Regulations.’’. 

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

20 for part IV of subchapter P of chapter 1 of the Internal 

21 Revenue Code of 1986 is amended by inserting after the 

22 item relating to section 1257 the following new item: 

‘‘Sec. 1257A. Gains or losses from sales or exchanges of wetlands mitigation 

credits.’’. 

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

24 this section shall apply with respect to sales or exchanges 


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1 of mitigation bank credits occurring before, on, or after 

2 the date of enactment of this Act. 

3 SEC. 3. EXEMPTION OF WETLAND MITIGATION CREDIT 

4 SALES FROM FIRPTA. 

5 (a) IN GENERAL.—Section 897(c)(6) of the Internal 

6 Revenue Code of 1986 is amended by adding at the end 

7 the following new subparagraph: 

8 ‘‘(D) EXEMPTION OF WETLAND MITIGA9 TION CREDIT SALES.—The term ‘United States 

10 real property interest’ does not include any 

11 mitigation bank credit (as defined in part 332 

12 of title 33 of the Code of Federal Regulations.’’. 

13 (b) CONFORMING AMENDMENT.—Section 

14 897(c)(1)(A) of the Internal Revenue Code of 1986 is 

15 amended by inserting ‘‘and paragraph (6)(C)’’ after ‘‘sub16 paragraph (B)’’. 

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

18 this section shall apply with respect to sales or exchanges 

19 of mitigation bank credits occurring before, on, or after 

20 the date of enactment of this Act. 

Æ 


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