II 

109TH CONGRESS 

2D SESSION S. 4087 

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 SENATE OF THE UNITED STATES 

DECEMBER 6, 2006 

Mr. CRAPO (for himself, Mrs. LINCOLN, Mr. GRASSLEY, Mr. BAUCUS, and Mr. 

ALLARD) introduced the following bill; which was read twice and referred 

to the Committee on Finance 

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 2006’’. 

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 23:05 Dec 08, 2006 Jkt 059200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S4087.IS S4087

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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 in protecting or pre13 serving the habitat which is the subject of 

14 such agreement. 

15 ‘‘(2) QUALIFIED PERPETUAL HABITAT PROTEC16 TION AGREEMENT.—The term ‘qualified perpetual 

17 habitat protection agreement’ means an agree18 ment— 

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

20 the appropriate Secretary, the Secretary of Ag21 riculture, or a State an easement in perpetuity 

22 for the protection of the habitat of a qualified 

23 species, and 

24 ‘‘(B) which meets the requirements of 

25 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, or a State an easement for a period 

7 of not less than 30 years and less than per8 petuity for the protection of the habitat of a 

9 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, or a State to pro18 tect the habitat of a qualified species for a spec19 ified period of time, and 

20 ‘‘(B) which meets the requirements of 

21 paragraph (5). 

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

23 the requirements of this paragraph if— 

24 ‘‘(A) the agreement is not inconsistent 

25 with any recovery plan which has been approved 


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1 for a qualified species under section 4 of the 

2 Endangered Species Act of 1973, 

3 ‘‘(B) the appropriate Secretary and the eli4 gible taxpayer enter into a habitat management 

5 plan designed to— 

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

7 a qualified species, or 

8 ‘‘(ii) reduce threats to a qualified spe9 cies through the management of the habi10 tat, and 

11 ‘‘(C) the appropriate Secretary ensures 

12 that the eligible taxpayer is provided with tech13 nical assistance in carrying out the duties of the 

14 taxpayer under the terms of the agreement. 

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

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

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

18 any taxable year is an amount equal to— 

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

20 who has entered into a qualified perpetual habi21 tat protection agreement during such taxable 

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

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

24 property with respect to which the quali25 fied perpetual habitat protection agreement 


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1 is made, determined on the day before 

2 such agreement is entered into, over 

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

4 property, determined on the day after such 

5 agreement is entered into, 

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

7 who has entered into a qualified 30-year habitat 

8 protection agreement during such taxable year, 

9 75 percent of such excess, and 

10 ‘‘(C) in the case of any other eligible tax11 payer, zero. 

12 ‘‘(2) REDUCTION FOR AMOUNT RECEIVED FOR

13 EASEMENT.—The credit allowed under subsection 

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

15 the taxpayer in connection with the easement. 

16 ‘‘(3) LIMITATION BASED ON AMOUNT OF

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

18 any taxable year shall not exceed the sum of— 

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

20 the taxable year reduced by the sum of the 

21 credits allowable under subpart A and sections 

22 27, 30, 30B, and 30C, and 

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

24 the taxable year. 


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

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

3 taxable year exceeds the limitation imposed by para4 graph (3) for such taxable year, such excess shall be 

5 carried to the succeeding taxable year and added to 

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

7 succeeding taxable year. 

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

9 amount shall be taken into account under this sub10 section unless the eligible taxpayer includes with the 

11 taxpayer’s return for the taxable year a qualified ap12 praisal (within the meaning of section 

13 170(f)(11)(E)) of the real property. 

14 ‘‘(e) HABITAT RESTORATION CREDIT.— 

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

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

17 year shall be an amount equal to— 

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

19 habitat protection agreement, 100 percent of 

20 the costs paid or incurred by an eligible tax21 payer during such taxable year pursuant to 

22 such agreement, 

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

24 habitat protection agreement, 75 percent of the 

25 costs paid or incurred by an eligible taxpayer 


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1 during such taxable year pursuant to such 

2 agreement, and 

3 ‘‘(C) in the case of a qualified habitat pro4 tection agreement, 50 percent of the costs paid 

5 or incurred by an eligible taxpayer during such 

6 taxable year pursuant to such agreement. 

7 ‘‘(2) LIMITATION BASED ON AMOUNT OF

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

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

10 of— 

11 ‘‘(A) the regular tax liability for the tax12 able year reduced by the sum of the credits al13 lowable under subpart A and sections 27, 30, 

14 30B, and 30C, over 

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

16 taxable year. 

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

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

19 taxable year exceeds the limitation imposed by para20 graph (2) for such taxable year, such excess shall be 

21 carried to the succeeding taxable year and added to 

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

23 succeeding taxable year. 

24 ‘‘(4) SPECIAL RULES.— 


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

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

3 for any cost which is paid or incurred by a tax4 payer to comply with any requirement of a Fed5 eral, State, or local government. 

6 ‘‘(B) SUBSIDIZED FINANCING.—For pur7 poses of paragraph (1), the amount of costs 

8 paid or incurred by an eligible taxpayer pursu9 ant to any agreement described in subsection 

10 (c) shall be reduced by the amount of any fi11 nancing provided under any Federal or State 

12 program a principal purpose of which is to sub13 sidize financing for the conservation of the 

14 habitat of a qualified species. 

15 ‘‘(f) ENDANGERED SPECIES RECOVERY CREDIT LIM16 ITATION.— 

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

18 species recovery credit limitation for each calendar 

19 year. Such limitation is — 

20 ‘‘(A) for 2007, 2008, 2009, 2010, and 

21 2011— 

22 ‘‘(i) $300,000,000 with respect to 

23 qualified perpetual habitat protection 

24 agreements, 


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1 ‘‘(ii) $60,000,000 with respect to 

2 qualified 30-year habitat protection agree3 ments, and 

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

5 qualified habitat protection agreements, 

6 and 

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

8 zero thereafter. 

9 ‘‘(2) ALLOCATION OF LIMITATION.— 

10 ‘‘(A) IN GENERAL.—The Secretary, in con11 sultation with the Secretary of the Interior and 

12 the Secretary of Commerce, shall allocate the 

13 endangered species recovery credit limitation to 

14 eligible taxpayers. 

15 ‘‘(B) CONSIDERATIONS.—In making allo16 cations to eligible taxpayers under this section, 

17 priority shall be given to taxpayers with agree18 ments— 

19 ‘‘(i) relating to habitats that will sig20 nificantly increase the likelihood of recov21 ering and delisting a species as an endan22 gered species or a threatened species (as 

23 defined under section 2 of the Endangered 

24 Species Act of 1973), 


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1 ‘‘(ii) that are cost-effective and maxi2 mize the benefits to a qualified species per 

3 dollar expended, 

4 ‘‘(iii) relating to habitats of species 

5 which have a federally approved recovery 

6 plan pursuant to section 4 of the Endan7 gered Species Act of 1973, 

8 ‘‘(iv) relating to habitats with the po9 tential to contribute significantly to the im10 provement of the status of a qualified spe11 cies, 

12 ‘‘(v) relating to habitats with the po13 tential to contribute significantly to the 

14 eradication or control of invasive species 

15 that are imperiling a qualified species, 

16 ‘‘(vi) with habitat management plans 

17 that will manage multiple qualified species, 

18 ‘‘(vii) with habitat management plans 

19 that will create adjacent or proximate habi20 tat for the recovery of a qualified species, 

21 ‘‘(viii) relating to habitats for quali22 fied species with an urgent need for protec23 tion, 

24 ‘‘(ix) with habitat management plans 

25 that assist in preventing the listing of a 


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1 species as endangered or threatened under 

2 the Endangered Species Act of 1973 or a 

3 similar State law, 

4 ‘‘(x) with habitat management plans 

5 that may resolve conflicts between the pro6 tection of qualified species and otherwise 

7 lawful human activities, and 

8 ‘‘(xi) with habitat management plans 

9 that may resolve conflicts between the pro10 tection of a qualified species and military 

11 training or other military operations. 

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

13 for any calendar year the limitation under paragraph 

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

15 the amount allocated to all eligible taxpayers for 

16 such calendar year, the limitation amount for the 

17 following calendar year shall be increased by the 

18 amount of such excess. 

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

20 ‘‘(1) APPROPRIATE SECRETARY.—The term ‘ap21 propriate Secretary’ has the meaning given to the 

22 term ‘Secretary’ under section 3(15) of the Endan23 gered Species Act of 1973. 


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

2 ‘habitat management plan’ means, with respect to 

3 any habitat, a plan which— 

4 ‘‘(A) identifies one or more qualified spe5 cies to which the plan applies, 

6 ‘‘(B) describes the management practices 

7 to be undertaken by the taxpayer, 

8 ‘‘(C) describes the technical assistance to 

9 be provided to the taxpayer and identifies the 

10 entity that will provide such assistance, 

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

12 undertaking such management practices, and 

13 ‘‘(E) requires monitoring of the manage14 ment practices and the status of the qualified 

15 species. 

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

17 species’ means— 

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

19 species or threatened species under the Endan20 gered Species Act of 1973, or 

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

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

23 Species Act of 1973 that listing under such Act 

24 may be warranted. 


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

2 meaning given to such term under the Endangered 

3 Species Act of 1973. 

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

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

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

7 reduced by the amount of the credit so allowed. 

8 ‘‘(6) DENIAL OF DOUBLE BENEFIT.—No deduc9 tion shall be allowed under this chapter for any 

10 amount with respect to which a credit is allowed 

11 under subsection (a). 

12 ‘‘(7) CERTIFICATION.—No credit shall be al13 lowed under subsection (a) unless the appropriate 

14 Secretary certifies that any agreement described in 

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

16 taxpayer will contribute to the recovery of a qualified 

17 species. 

18 ‘‘(8) REQUEST FOR AUTHORIZATION OF INCI19 DENTAL TAKINGS.—The Secretary shall request the 

20 appropriate Secretary to consider whether to author21 ize under the Endangered Species Act of 1973 

22 takings by an eligible taxpayer of a qualified species 

23 to which an agreement described in subsection (c) 

24 relates if the takings are incidental to— 


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

2 management of the habitat pursuant to the 

3 habitat management plan under the agreement, 

4 or 

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

6 agreement pertains at any time after the expi7 ration of the easement or the specified period 

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

9 such use will leave the qualified species at least 

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

11 agreement was made. 

12 ‘‘(9) RECAPTURE.—The Secretary shall, by reg13 ulations, provide for recapturing the benefit under 

14 any credit allowable under subsection (a) if the Sec15 retary, in consultation with the appropriate Sec16 retary, determines that the eligible taxpayer has 

17 failed to carry out the duties of the taxpayer under 

18 the terms of a qualified perpetual habitat protection 

19 agreement, a qualified 30-year habitat protection 

20 agreement, or a qualified habitat protection agree21 ment.’’. 

22 (b) 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 (c) EFFECTIVE DATE.—The amendments made by 

11 this section shall apply to taxable years beginning after 

12 December 31, 2006. 

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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