I 

110TH CONGRESS 

1ST SESSION H. R. 1422 

To amend the Internal Revenue Code to provide a tax credit to individuals 

who enter into agreements to protect the habitats of endangered and 

threatened species, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 8, 2007 

Mr. THOMPSON of California (for himself, Mr. YOUNG of Alaska, Mr. KIND, 

and Mr. RAMSTAD) introduced the following bill; which was referred to 

the Committee on Ways and Means 

A BILL 

To amend the Internal Revenue Code to provide a tax credit 

to individuals who enter into agreements to protect the 

habitats of endangered and threatened species, 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 ‘‘Endangered Species 

5 Recovery Act of 2007’’. 

6 SEC. 2. ENDANGERED SPECIES RECOVERY CREDIT. 

7 (a) IN GENERAL.—Subpart B of part IV of sub8 chapter A of chapter 1 of the Internal Revenue Code of 


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1 1986 is amended by adding at the end the following new 

2 section: 

3 ‘‘SEC. 30D. ENDANGERED SPECIES RECOVERY CREDIT. 

4 ‘‘(a) IN GENERAL.—In the case of an eligible tax5 payer, there shall be allowed as a credit against the tax 

6 imposed by this chapter for the taxable year an amount 

7 equal to the sum of— 

8 ‘‘(1) the habitat protection easement credit, 

9 plus 

10 ‘‘(2) the habitat restoration credit. 

11 ‘‘(b) LIMITATION.— 

12 ‘‘(1) IN GENERAL.—The credit allowed under 

13 subsection (a) for any eligible taxpayer for any tax14 able year shall not exceed the endangered species re15 covery credit limitation allocated to the eligible tax16 payer under subsection (f) for the calendar year in 

17 which the taxpayer’s taxable year ends. 

18 ‘‘(2) CARRYFORWARDS.— 

19 ‘‘(A) IN GENERAL.—If the amount of the 

20 credit allowable under subsection (a) for any 

21 taxpayer for any taxable year exceeds the en22 dangered species recovery credit limitation allo23 cated under subsection (f) to such taxpayer for 

24 the calendar year in which the taxpayer’s tax25 able year ends, such excess may be carried forVerDate Aug 31 2005 23:11 Mar 12, 2007 Jkt 059200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H1422.IH H1422

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1 ward to the next taxable year for which such 

2 taxpayer is allocated a portion of the endan3 gered species recovery credit limitation. 

4 ‘‘(B) CARRYFORWARD OF ALLOCATION

5 AMOUNT.—If the amount of the endangered 

6 species recovery credit limitation allocated to an 

7 eligible taxpayer for any calendar year under 

8 subsection (f) exceeds the amount of the credit 

9 allowed to the taxpayer under subsection (a) for 

10 the taxable year ending in such calendar year, 

11 such excess may be carried forward to the next 

12 taxable year of the taxpayer. For purposes of 

13 this paragraph, any amount carried to another 

14 taxable year under this subparagraph shall be 

15 treated as allocated to the taxpayer for use in 

16 such taxable year under subsection (f). 

17 ‘‘(c) ELIGIBLE TAXPAYER.—For purposes of this sec18 tion— 

19 ‘‘(1) IN GENERAL.—The term ‘eligible taxpayer’ 

20 means— 

21 ‘‘(A) a taxpayer who— 

22 ‘‘(i) owns real property which contains 

23 the habitat of a qualified species, and 

24 ‘‘(ii) enters into a qualified perpetual 

25 habitat protection agreement, a qualified 


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1 30-year habitat protection agreement, or a 

2 qualified habitat protection agreement with 

3 the appropriate Secretary with respect to 

4 such real property, and 

5 ‘‘(B) any other taxpayer who— 

6 ‘‘(i) is a party to a qualified perpetual 

7 habitat protection agreement, a qualified 

8 30-year habitat protection agreement, or a 

9 qualified habitat protection agreement, and 

10 ‘‘(ii) as part of any such agreement, 

11 agrees to assume responsibility for costs 

12 paid or incurred as a result of imple13 menting such agreement. 

14 ‘‘(2) QUALIFIED PERPETUAL HABITAT PROTEC15 TION AGREEMENT.—The term ‘qualified perpetual 

16 habitat protection agreement’ means an agree17 ment— 

18 ‘‘(A) under which the taxpayer grants to 

19 the appropriate Secretary, the Secretary of Ag20 riculture, the Secretary of Defense, or a State 

21 an easement in perpetuity for the protection of 

22 the habitat of a qualified species, and 

23 ‘‘(B) which meets the requirements of 

24 paragraph (5). 


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1 ‘‘(3) QUALIFIED 30-YEAR HABITAT PROTECTION

2 AGREEMENT.—The term ‘qualified 30-year habitat 

3 protection agreement’ means an agreement— 

4 ‘‘(A) under which the taxpayer grants to 

5 the appropriate Secretary, the Secretary of Ag6 riculture, the Secretary of Defense, or a State 

7 an easement for a period of not less than 30 

8 years and less than perpetuity for the protec9 tion of the habitat of a qualified species, and 

10 ‘‘(B) which meets the requirements of 

11 paragraph (5). 

12 ‘‘(4) QUALIFIED HABITAT PROTECTION AGREE13 MENT.—The term ‘qualified habitat protection 

14 agreement’ means an agreement— 

15 ‘‘(A) under which the taxpayer enters into 

16 an agreement with the appropriate Secretary, 

17 the Secretary of Agriculture, the Secretary of 

18 Defense, or a State to protect the habitat of a 

19 qualified species for a specified period of time, 

20 and 

21 ‘‘(B) which meets the requirements of 

22 paragraph (5). 

23 ‘‘(5) REQUIREMENTS.—An agreement meets 

24 the requirements of this paragraph if— 


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1 ‘‘(A) the agreement is consistent with any 

2 recovery plan which is applicable and which has 

3 been approved for a qualified species under sec4 tion 4 of the Endangered Species Act of 1973, 

5 ‘‘(B) the appropriate Secretary and the eli6 gible taxpayer enter into a habitat management 

7 plan designed to— 

8 ‘‘(i) restore or enhance the habitat of 

9 a qualified species, or 

10 ‘‘(ii) reduce threats to a qualified spe11 cies through the management of the habi12 tat, and 

13 ‘‘(C) the appropriate Secretary ensures 

14 that the eligible taxpayer is provided with tech15 nical assistance in carrying out the duties of the 

16 taxpayer under the terms of the agreement. 

17 ‘‘(d) HABITAT PROTECTION EASEMENT CREDIT.— 

18 ‘‘(1) IN GENERAL.—For purposes of subsection 

19 (a)(1), the habitat protection easement credit for 

20 any taxable year is an amount equal to— 

21 ‘‘(A) in the case of an eligible taxpayer 

22 who has entered into a qualified perpetual habi23 tat protection agreement during such taxable 

24 year, 100 percent of the excess (if any) of— 


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1 ‘‘(i) the fair market value of the real 

2 property with respect to which the quali3 fied perpetual habitat protection agreement 

4 is made, determined on the day before 

5 such agreement is entered into, over 

6 ‘‘(ii) the fair market value of such 

7 property, determined on the day after such 

8 agreement is entered into, 

9 ‘‘(B) in the case of an eligible taxpayer 

10 who has entered into a qualified 30-year habitat 

11 protection agreement during such taxable year, 

12 75 percent of such excess, and 

13 ‘‘(C) in the case of any other eligible tax14 payer, zero. 

15 ‘‘(2) REDUCTION FOR AMOUNT RECEIVED FOR

16 EASEMENT.—The credit allowed under subsection 

17 (a)(1) shall be reduced by any amount received by 

18 the taxpayer in connection with the easement. 

19 ‘‘(3) LIMITATION BASED ON AMOUNT OF

20 TAX.—The credit allowed under subsection (a)(1) for 

21 any taxable year shall not exceed the sum of— 

22 ‘‘(A) the taxpayer’s regular tax liability for 

23 the taxable year reduced by the sum of the 

24 credits allowable under subpart A and sections 

25 27, 30, 30B, and 30C, and 


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1 ‘‘(B) the tax imposed by section 55(a) for 

2 the taxable year. 

3 ‘‘(4) CARRYFORWARD OF UNUSED CREDIT.—If 

4 the credit allowable under subsection (a)(1) for any 

5 taxable year exceeds the limitation imposed by para6 graph (3) for such taxable year, such excess shall be 

7 carried to the succeeding taxable year and added to 

8 the credit allowable under subsection (a)(1) for such 

9 succeeding taxable year. 

10 ‘‘(5) QUALIFIED APPRAISALS REQUIRED.—No 

11 amount shall be taken into account under this sub12 section unless the eligible taxpayer includes with the 

13 taxpayer’s return for the taxable year a qualified ap14 praisal (within the meaning of section 

15 170(f)(11)(E)) of the real property. 

16 ‘‘(e) HABITAT RESTORATION CREDIT.— 

17 ‘‘(1) IN GENERAL.—For purposes of subsection 

18 (a)(2), the habitat restoration credit for any taxable 

19 year shall be an amount equal to— 

20 ‘‘(A) in the case of a qualified perpetual 

21 habitat protection agreement, 100 percent of 

22 the costs paid or incurred by an eligible tax23 payer during such taxable year pursuant to the 

24 habitat management plan entered into under 

25 such agreement, 


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1 ‘‘(B) in the case of a qualified 30-year 

2 habitat protection agreement, 75 percent of the 

3 costs paid or incurred by an eligible taxpayer 

4 during such taxable year pursuant to the habi5 tat management plan entered into under such 

6 agreement, and 

7 ‘‘(C) in the case of a qualified habitat pro8 tection agreement, 50 percent of the costs paid 

9 or incurred by an eligible taxpayer during such 

10 taxable year pursuant to the habitat manage11 ment plan entered into under such agreement. 

12 ‘‘(2) LIMITATION BASED ON AMOUNT OF

13 TAX.—The credit allowed under subsection (a)(2) for 

14 any taxable year shall not exceed the excess (if any) 

15 of— 

16 ‘‘(A) the regular tax liability for the tax17 able year reduced by the sum of the credits al18 lowable under subpart A and sections 27, 30, 

19 30B, and 30C, over 

20 ‘‘(B) the tentative minimum tax for the 

21 taxable year. 

22 ‘‘(3) CARRYFORWARD OF UNUSED CREDIT.—If 

23 the credit allowable under subsection (a)(2) for any 

24 taxable year exceeds the limitation imposed by para25 graph (2) for such taxable year, such excess shall be 


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1 carried to the succeeding taxable year and added to 

2 the credit allowable under subsection (a)(2) for such 

3 succeeding taxable year. 

4 ‘‘(4) SPECIAL RULES.— 

5 ‘‘(A) CERTAIN COSTS NOT INCLUDED.—No 

6 credit shall be allowed under subsection (a)(2) 

7 for any cost which is paid or incurred by a tax8 payer to comply with any requirement of a Fed9 eral, State, or local government. 

10 ‘‘(B) SUBSIDIZED FINANCING.—For pur11 poses of paragraph (1), the amount of costs 

12 paid or incurred by an eligible taxpayer pursu13 ant to any agreement described in subsection 

14 (c) shall be reduced by the amount of any fi15 nancing provided under any Federal or State 

16 program a principal purpose of which is to sub17 sidize financing for the conservation of the 

18 habitat of a qualified species. 

19 ‘‘(f) ENDANGERED SPECIES RECOVERY CREDIT LIM20 ITATION.— 

21 ‘‘(1) IN GENERAL.—There is an endangered 

22 species recovery credit limitation for each calendar 

23 year. Such limitation is — 

24 ‘‘(A) for 2008, 2009, 2010, 2011, and 

25 2012— 


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1 ‘‘(i) $300,000,000 with respect to 

2 qualified perpetual habitat protection 

3 agreements, 

4 ‘‘(ii) $60,000,000 with respect to 

5 qualified 30-year habitat protection agree6 ments, and 

7 ‘‘(iii) $40,000,000 with respect to 

8 qualified habitat protection agreements, 

9 and 

10 ‘‘(B) except as provided in paragraph (3), 

11 zero thereafter. 

12 ‘‘(2) ALLOCATION OF LIMITATION.— 

13 ‘‘(A) IN GENERAL.—The Secretary, in con14 sultation with the Secretary of the Interior and 

15 the Secretary of Commerce, shall allocate the 

16 endangered species recovery credit limitation to 

17 eligible taxpayers. 

18 ‘‘(B) ESTABLISHMENT OF ALLOCATION

19 PROGRAM.—Not later than 180 days after the 

20 date of the enactment of this Act, the Secretary 

21 of the Treasury, in consultation with the Sec22 retary of the Interior and the Secretary of 

23 Commerce, shall, by regulation, establish a pro24 gram to process applications from eligible tax25 payers and to determine how to best allocate 


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1 the credit limitation under subparagraph (A), 

2 taking into account the considerations described 

3 in subparagraph (C). 

4 ‘‘(C) CONSIDERATIONS.—In accepting ap5 plications to make allocations to eligible tax6 payers under this section, priority shall be given 

7 to taxpayers with agreements— 

8 ‘‘(i) relating to habitats that will sig9 nificantly increase the likelihood of recov10 ering and delisting a species as an endan11 gered species or a threatened species (as 

12 defined under section 2 of the Endangered 

13 Species Act of 1973), 

14 ‘‘(ii) that are cost-effective and maxi15 mize the benefits to a qualified species per 

16 dollar expended, 

17 ‘‘(iii) relating to habitats of species 

18 which have a federally approved recovery 

19 plan pursuant to section 4 of the Endan20 gered Species Act of 1973, 

21 ‘‘(iv) relating to habitats with the po22 tential to contribute significantly to the im23 provement of the status of a qualified spe24 cies, 


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1 ‘‘(v) relating to habitats with the po2 tential to contribute significantly to the 

3 eradication or control of invasive species 

4 that are imperiling a qualified species, 

5 ‘‘(vi) with habitat management plans 

6 that will manage multiple qualified species, 

7 ‘‘(vii) with habitat management plans 

8 that will create adjacent or proximate habi9 tat for the recovery of a qualified species, 

10 ‘‘(viii) relating to habitats for quali11 fied species with an urgent need for protec12 tion, 

13 ‘‘(ix) with habitat management plans 

14 that assist in preventing the listing of a 

15 species as endangered or threatened under 

16 the Endangered Species Act of 1973 or a 

17 similar State law, 

18 ‘‘(x) with habitat management plans 

19 that may resolve conflicts between the pro20 tection of qualified species and otherwise 

21 lawful human activities, and 

22 ‘‘(xi) with habitat management plans 

23 that may resolve conflicts between the pro24 tection of a qualified species and military 

25 training or other military operations. 


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1 ‘‘(3) CARRYOVER OF UNUSED LIMITATION.—If 

2 for any calendar year the limitation under paragraph 

3 (1) (after the application of this paragraph) exceeds 

4 the amount allocated to all eligible taxpayers for 

5 such calendar year, the limitation amount for the 

6 following calendar year shall be increased by the 

7 amount of such excess. 

8 ‘‘(g) OTHER DEFINITIONS AND SPECIAL RULES.— 

9 ‘‘(1) APPROPRIATE SECRETARY.—The term ‘ap10 propriate Secretary’ has the meaning given to the 

11 term ‘Secretary’ under section 3(15) of the Endan12 gered Species Act of 1973. 

13 ‘‘(2) HABITAT MANAGEMENT PLAN.—The term 

14 ‘habitat management plan’ means, with respect to 

15 any habitat, a plan which— 

16 ‘‘(A) identifies one or more qualified spe17 cies to which the plan applies, 

18 ‘‘(B) describes the management practices 

19 to be undertaken by the taxpayer, 

20 ‘‘(C) describes the technical assistance to 

21 be provided to the taxpayer and identifies the 

22 entity that will provide such assistance, 

23 ‘‘(D) provides a schedule of deadlines for 

24 undertaking such management practices, and 


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1 ‘‘(E) requires monitoring of the manage2 ment practices and the status of the qualified 

3 species. 

4 ‘‘(3) QUALIFIED SPECIES.—The term ‘qualified 

5 species’ means— 

6 ‘‘(A) any species listed as an endangered 

7 species or threatened species under the Endan8 gered Species Act of 1973, or 

9 ‘‘(B) any species for which a finding has 

10 been made under section 4(b)(3) of Endangered 

11 Species Act of 1973 that listing under such Act 

12 may be warranted. 

13 ‘‘(4) TAKING.—The term ‘taking’ has the 

14 meaning given to such term under the Endangered 

15 Species Act of 1973. 

16 ‘‘(5) REDUCTION IN BASIS.—For purposes of 

17 this subtitle, the basis of any property for which a 

18 credit is allowable under subsection (a)(1) shall be 

19 reduced by the amount of the credit so allowed. 

20 ‘‘(6) DENIAL OF DOUBLE BENEFIT.—No deduc21 tion shall be allowed under this chapter for any 

22 amount with respect to which a credit is allowed 

23 under subsection (a). 

24 ‘‘(7) CERTIFICATION.—No credit shall be al25 lowed under subsection (a) unless the appropriate 


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1 Secretary certifies that any agreement described in 

2 subsection (c) which is entered into by an eligible 

3 taxpayer will contribute to the recovery of a qualified 

4 species. 

5 ‘‘(8) REQUEST FOR AUTHORIZATION OF INCI6 DENTAL TAKINGS.—The Secretary shall request the 

7 appropriate Secretary to consider whether to author8 ize under the Endangered Species Act of 1973 

9 takings by an eligible taxpayer of a qualified species 

10 to which an agreement described in subsection (c) 

11 relates if the takings are incidental to— 

12 ‘‘(A) the restoration, enhancement, or 

13 management of the habitat pursuant to the 

14 habitat management plan under the agreement, 

15 or 

16 ‘‘(B) the use of the property to which the 

17 agreement pertains at any time after the expi18 ration of the easement or the specified period 

19 described in subsection (c)(4)(A), but only if 

20 such use will leave the qualified species at least 

21 as well off on the property as it was before the 

22 agreement was made. 

23 ‘‘(9) RECAPTURE.—The Secretary shall, by reg24 ulations, provide for recapturing the benefit under 

25 any credit allowable under subsection (a) if the SecVerDate Aug 31 2005 23:11 Mar 12, 2007 Jkt 059200 PO 00000 Frm 00016 Fmt 6652 Sfmt 6201 E:\BILLS\H1422.IH H1422

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1 retary, in consultation with the appropriate Sec2 retary, determines that— 

3 ‘‘(A) the eligible taxpayer has failed to 

4 carry out the duties of the taxpayer under the 

5 terms of a qualified perpetual habitat protection 

6 agreement, a qualified 30-year habitat protec7 tion agreement, or a qualified habitat protection 

8 agreement, and 

9 ‘‘(B) there are no other available means to 

10 remediate such failure.’’. 

11 (b) GAO STUDY.— 

12 (1) IN GENERAL.—The Comptroller General of 

13 the United States shall undertake a study on the ef14 fectiveness of the endangered species recovery credit 

15 under section 30D of the Internal Revenue Code of 

16 1986 (as added by this Act). 

17 (2) ISSUES TO BE STUDIED.—The study under 

18 paragraph (1) shall— 

19 (A) evaluate— 

20 (i) the effectiveness of the endangered 

21 species recovery credit in encouraging 

22 landowners to enter into agreements for 

23 the protection of the habitats of endan24 gered and threatened species, and 


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1 (ii) the degree to which such agree2 ments are effective in— 

3 (I) preserving the habitats of en4 dangered and threatened species, and 

5 (II) assisting in the recovery of 

6 such species, and 

7 (B) include recommendations for improv8 ing the effectiveness of endangered species re9 covery credit. 

10 (3) REPORTS.— 

11 (A) INTERIM REPORT.—Not later than 3 

12 years after the date of the enactment of this 

13 Act, the Comptroller General of the United 

14 States shall submit to Congress an interim re15 port on the study conducted under paragraph 

16 (1). 

17 (B) FINAL REPORT.—Not later than 5 

18 years after the date of the enactment of this 

19 Act, the Comptroller General of the United 

20 States shall submit to Congress a final report 

21 on the study conducted under paragraph (1). 

22 (c) CONFORMING AMENDMENTS.— 

23 (1) Section 1016(a) of the Internal Revenue 

24 Code of 1986 is amended by striking ‘‘and’’ at the 

25 end of paragraph (36), by striking the period at the 


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1 end of paragraph (37) and inserting ‘‘, and’’, and by 

2 inserting after paragraph (37) the following new 

3 paragraph: 

4 ‘‘(38) to the extent provided in section 

5 30D(g)(5).’’. 

6 (2) The table of sections for subpart B of part 

7 IV of subchapter A of chapter 1 of such Code is 

8 amended by inserting after the item relating to sec9 tion 30C the following new item: 

‘‘Sec. 30D. Endangered species recovery credit.’’. 

10 (d) EFFECTIVE DATE.—The amendments made by 

11 this section shall apply to taxable years beginning after 

12 December 31, 2007. 

13 SEC. 3. DEDUCTION FOR ENDANGERED SPECIES RECOV14 ERY EXPENDITURES. 

15 (a) DEDUCTION FOR ENDANGERED SPECIES RECOV16 ERY EXPENDITURES.— 

17 (1) IN GENERAL.—Paragraph (1) of section 

18 175(c) of the Internal Revenue Code of 1986 (relat19 ing to definitions) is amended by inserting after the 

20 first sentence the following new sentence: ‘‘Such 

21 term shall include expenditures paid or incurred for 

22 the purpose of achieving specific actions rec23 ommended in recovery plans approved pursuant to 

24 the Endangered Species Act of 1973.’’. 

25 (2) CONFORMING AMENDMENTS.— 


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1 (A) Section 175 of such Code is amended 

2 by inserting ‘‘, or for endangered species recov3 ery’’ after ‘‘prevention of erosion of land used 

4 in farming’’ each place it appears in subsections 

5 (a) and (c). 

6 (B) The heading of section 175 of such 

7 Code is amended by inserting ‘‘; ENDAN8 GERED SPECIES RECOVERY EXPENDI9 TURES’’ before the period. 

10 (C) The item relating to section 175 in the 

11 table of sections for part VI of subchapter B of 

12 chapter 1 of such Code is amended by inserting 

13 ‘‘; endangered species recovery expenditures’’ 

14 before the period. 

15 (b) LIMITATIONS.—Paragraph (3) of section 175(c) 

16 of the Internal Revenue Code of 1986 (relating to addi17 tional limitations) is amended— 

18 (1) in the heading, by inserting ‘‘OR ENDAN19 GERED SPECIES RECOVERY PLAN’’ after ‘‘CONSERVA20 TION PLAN’’, and 

21 (2) in subparagraph (A)(i), by inserting ‘‘or the 

22 recovery plan approved pursuant to the Endangered 

23 Species Act of 1973’’ after ‘‘Department of Agri24 culture’’. 


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

2 this section shall apply to expenditures paid or incurred 

3 after the date of the enactment of this Act. 

4 SEC. 4. EXCLUSION FOR COST SHARING PAYMENTS UNDER 

5 THE PARTNERS FOR FISH AND WILDLIFE ACT 

6 AND CERTAIN OTHER PROGRAMS AUTHOR7 IZED BY THE FISH AND WILDLIFE ACT OF 

8 1956. 

9 (a) IN GENERAL.—Subsection (a) of section 126 of 

10 the Internal Revenue Code of 1986 (relating to certain 

11 cost-sharing payments) is amended by redesignating para12 graph (10) as paragraph (12) and by inserting after para13 graph (9) the following new paragraphs: 

14 ‘‘(10) The Partners for Fish and Wildlife Pro15 gram authorized by the Partners for Fish and Wild16 life Act. 

17 ‘‘(11) The Landowner Incentive Program, the 

18 State Wildlife Grants Program, and the Private 

19 Stewardship Grants Program authorized by the Fish 

20 and Wildlife Act of 1956.’’. 

21 (b) EFFECTIVE DATE.—The amendments made by 

22 this section shall apply to payments received after the date 

23 of the enactment of this Act. 

Æ 


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