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‘‘(B) LIMITATION.—No election may be
made under this paragraph with respect to pay-
ments to a landowner under a special wetlands
reserve enhancement program described in sub-
section (h).’’.
(2) GRASSLAND
RESERVE
PROGRAM.—Section
1238P(b)(2) of the Food Security Act of 1985 (16
U.S.C. 3838p(b)(2)) is amended by adding at the end
the following new subparagraph:
‘‘(C) ELECTION TO RECEIVE TAX CREDITS
IN LIEU OF CERTAIN PAYMENTS.—In lieu of a
payment in return for a permanent conservation
easement under subparagraph (A)(i)(I) or a 30-
year conservation easement under subparagraph
(A)(i)(II), the landowner may elect to receive an
allocation of tax credits under section 30E(e)(2)
of the Internal Revenue Code of 1986.’’.
PART II—TIMBER PROVISIONS
SEC. 12211. FOREST CONSERVATION BONDS.
(a) TAX-EXEMPT BOND FINANCING.—
(1) IN GENERAL.—For purposes of the Internal
Revenue Code of 1986, any qualified forest conserva-
tion bond shall be treated as an exempt facility bond
under section 142 of such Code.
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(2) QUALIFIED FOREST CONSERVATION BOND.—
For purposes of this section, the term ‘‘qualified forest
conservation bond’’ means any bond issued as part of
an issue if—
(A) 95 percent or more of the net proceeds
(as defined in section 150(a)(3) of such Code) of
such issue are to be used for qualified project
costs, and
(B) such bond is issued before the date
which is 36 months after the date of the enact-
ment of this Act.
(3) 
LIMITATION
ON
AGGREGATE
AMOUNT
ISSUED.—
(A) IN GENERAL.—The maximum aggregate
face amount of bonds which may be issued under
this subsection shall not exceed $1,500,000,000
for all projects (excluding refunding bonds).
(B) ENFORCEMENT
OF
LIMITATION.—An
issue shall not be treated as an issue described in
paragraph (2) if the aggregate face amount of
bonds issued pursuant to such issue for any
qualified projects costs (when added to the aggre-
gate face amount of bonds previously so issued
for such costs) exceeds the amount allocated
under subparagraph (C).
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(C) INITIAL ALLOCATION OF LIMITATION.—
The limitation described in subparagraph (A)
shall be allocated by the Secretary of the Treas-
ury among qualified organizations as follows:
(i) 35 percent for qualified project costs
with respect to the cost of acquisition by
any qualified organization in the Pacific
Northwest region.
(ii) 30 percent for qualified project
costs with respect to the cost of acquisition
by any qualified organization in the West-
ern region.
(iii) 17.5 percent for qualified project
costs with respect to the cost of acquisition
by any qualified organization in the South-
east region.
(iv) 17.5 percent for qualified project
costs with respect to the cost of acquisition
by any qualified organization in the North-
east region.
(D) 
SECONDARY
ALLOCATION
PROCE-
DURE.—If for the period ending on the last day
of the 24th month after the date of the enactment
of this Act, the limitation amount for any region
under subparagraph (C) exceeds the amount of
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bonds allocated by the Secretary of the Treasury
during such period, the Secretary of the Treas-
ury may allocate such excess among qualified or-
ganizations in any other region in such manner
as the Secretary of the Treasury determines ap-
propriate.
(E) 
REGIONS.—For 
purposes 
of 
this
paragraph—
(i) PACIFIC NORTHWEST REGION.—The
term ‘‘Pacific Northwest region’’ means Re-
gion 6 as defined by the United States For-
est Service of the Department of Agriculture
under section 200.2 of title 36, Code of Fed-
eral Regulations.
(ii) WESTERN
REGION.—The 
term
‘‘Western region’’ means Regions 1, 2, 3, 4,
5, and 10 (as so defined).
(iii) SOUTHEAST
REGION.—The term
‘‘Southeast region’’ means Region 8 (as so
defined).
(iv) NORTHEAST
REGION.—The term
‘‘Northeast region’’ means Region 9 (as so
defined).
(4) QUALIFIED PROJECT COSTS.—For purposes
of this subsection, the term ‘‘qualified project costs’’
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means the costs of acquisition by a qualified organi-
zation from an unrelated person of forests and forest
land which, at the time of acquisition or immediately
thereafter, are subject to a conservation restriction de-
scribed in subsection (c)(2).
(5) SPECIAL RULES.—In applying the Internal
Revenue Code of 1986 to any qualified forest con-
servation bond, the following modifications shall
apply:
(A) Section 146 of such Code (relating to
volume cap) shall not apply.
(B) For purposes of section 147(b) of such
Code (relating to maturity may not exceed 120
percent of economic life), the land and standing
timber acquired with proceeds of qualified forest
conservation bonds shall have an economic life of
35 years.
(C) Subsections (c) and (d) of section 147
of such Code (relating to limitations on acquisi-
tion of land and existing property) shall not
apply.
(6) 
TREATMENT
OF
CURRENT
REFUNDING
BONDS.—Paragraphs (2)(B) and (3) shall not apply
to any bond (or series of bonds) issued to refund a
qualified forest conservation bond issued before the