I 
112TH CONGRESS 
1ST SESSION H. R. 2058 
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 HOUSE OF REPRESENTATIVES 
MAY 31, 2011 
Mr. BOUSTANY 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 clarify 
the capital gain or loss treatment of the sale or exchange 
of mitigation credits earned by restoring wetlands, and 
for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Wetlands Conservation 
Investment Act of 2011’’. 
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SEC. 2. CLARIFICATION OF TREATMENT OF SALES OR EX-
CHANGES OF WETLAND MITIGATION CRED-
ITS AS LONG-TERM CAPITAL GAIN OR LOSS. 
(a) IN GENERAL.—Part IV of subchapter P of chap-
ter 1 of the Internal Revenue Code of 1986 is amended 
by inserting after section 1257 the following new section: 
‘‘SEC. 1257A. GAINS OR LOSSES FROM SALES OR EX-
CHANGES OF WETLANDS MITIGATION CRED-
ITS. 
‘‘(a) GENERAL RULE.—Gain or loss attributable to 
the sale or exchange of a mitigation bank credit by the 
sponsor of the mitigation bank who earned such credit 
shall be considered the sale or exchange of a capital asset 
held for more than 1 year. 
‘‘(b) DEFINITIONS.—For purposes of this section, the 
terms ‘mitigation bank’ and ‘mitigation bank credit’ have 
the respective meanings given such terms by part 332 of 
title 33 of the Code of Federal Regulations.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for part IV of subchapter P of chapter 1 of the Internal 
Revenue Code of 1986 is amended by inserting after the 
item relating to section 1257 the following new item: 
‘‘Sec. 1257A. Gains or losses from sales or exchanges of wetlands mitigation 
credits.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply with respect to sales or exchanges 
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of mitigation bank credits occurring before, on, or after 
the date of enactment of this Act. 
SEC. 3. EXEMPTION OF WETLAND MITIGATION CREDIT 
SALES FROM FIRPTA. 
(a) IN GENERAL.—Section 897(c)(6) of the Internal 
Revenue Code of 1986 is amended by adding at the end 
the following new subparagraph: 
‘‘(D) EXEMPTION
OF
WETLAND
MITIGA-
TION CREDIT SALES.—The term ‘United States 
real property interest’ does not include any 
mitigation bank credit (as defined in part 332 
of title 33 of the Code of Federal Regula-
tions).’’. 
(b) 
CONFORMING
AMENDMENT.—Section 
897(c)(1)(A) of the Internal Revenue Code of 1986 is 
amended by inserting ‘‘and paragraph (6)(C)’’ after ‘‘sub-
paragraph (B)’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply with respect to sales or exchanges 
of mitigation bank credits occurring before, on, or after 
the date of enactment of this Act. 
Æ 
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