‘‘(i) the fair market value of the real 
property with respect to which the quali-
fied perpetual habitat protection agreement 
is made, determined on the day before 
such agreement is entered into, over 
‘‘(ii) the fair market value of such 
property, determined on the day after such 
agreement is entered into, 
‘‘(B) in the case of an eligible taxpayer 
who has entered into a qualified 30-year habitat 
protection agreement during such taxable year, 
75 percent of such excess, and 
‘‘(C) in the case of any other eligible tax-
payer, zero. 
‘‘(2) REDUCTION FOR AMOUNT RECEIVED FOR 
EASEMENT.—The credit allowed under subsection 
(a)(1) shall be reduced by any amount received by 
the taxpayer in connection with the easement. 
‘‘(3) LIMITATION
BASED
ON
AMOUNT
OF 
TAX.—The credit allowed under subsection (a)(1) for 
any taxable year shall not exceed the sum of— 
‘‘(A) the taxpayer’s regular tax liability for 
the taxable year reduced by the sum of the 
credits allowable under subpart A and sections 
27, 30, 30B, and 30C, and 
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‘‘(B) the tax imposed by section 55(a) for 
the taxable year. 
‘‘(4) CARRYFORWARD OF UNUSED CREDIT.—If 
the credit allowable under subsection (a)(1) for any 
taxable year exceeds the limitation imposed by para-
graph (3) for such taxable year, such excess shall be 
carried to the succeeding taxable year and added to 
the credit allowable under subsection (a)(1) for such 
succeeding taxable year. 
‘‘(5) QUALIFIED
APPRAISALS
REQUIRED.—No 
amount shall be taken into account under this sub-
section unless the eligible taxpayer includes with the 
taxpayer’s return for the taxable year a qualified ap-
praisal 
(within 
the 
meaning 
of 
section 
170(f)(11)(E)) of the real property. 
‘‘(e) HABITAT RESTORATION CREDIT.— 
‘‘(1) IN GENERAL.—For purposes of subsection 
(a)(2), the habitat restoration credit for any taxable 
year shall be an amount equal to— 
‘‘(A) in the case of a qualified perpetual 
habitat protection agreement, 100 percent of 
the costs paid or incurred by an eligible tax-
payer during such taxable year pursuant to the 
habitat management plan entered into under 
such agreement, 
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‘‘(B) in the case of a qualified 30-year 
habitat protection agreement, 75 percent of the 
costs paid or incurred by an eligible taxpayer 
during such taxable year pursuant to the habi-
tat management plan entered into under such 
agreement, and 
‘‘(C) in the case of a qualified habitat pro-
tection agreement, 50 percent of the costs paid 
or incurred by an eligible taxpayer during such 
taxable year pursuant to the habitat manage-
ment plan entered into under such agreement. 
‘‘(2) LIMITATION
BASED
ON
AMOUNT
OF 
TAX.—The credit allowed under subsection (a)(2) for 
any taxable year shall not exceed the excess (if any) 
of— 
‘‘(A) the regular tax liability for the tax-
able year reduced by the sum of the credits al-
lowable under subpart A and sections 27, 30, 
30B, and 30C, over 
‘‘(B) the tentative minimum tax for the 
taxable year. 
‘‘(3) CARRYFORWARD OF UNUSED CREDIT.—If 
the credit allowable under subsection (a)(2) for any 
taxable year exceeds the limitation imposed by para-
graph (2) for such taxable year, such excess shall be 
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carried to the succeeding taxable year and added to 
the credit allowable under subsection (a)(2) for such 
succeeding taxable year. 
‘‘(4) SPECIAL RULES.— 
‘‘(A) CERTAIN COSTS NOT INCLUDED.—No 
credit shall be allowed under subsection (a)(2) 
for any cost which is paid or incurred by a tax-
payer to comply with any requirement of a Fed-
eral, State, or local government. 
‘‘(B) SUBSIDIZED
FINANCING.—For pur-
poses of paragraph (1), the amount of costs 
paid or incurred by an eligible taxpayer pursu-
ant to any agreement described in subsection 
(c) shall be reduced by the amount of any fi-
nancing provided under any Federal or State 
program a principal purpose of which is to sub-
sidize financing for the conservation of the 
habitat of a qualified species. 
‘‘(f) ENDANGERED SPECIES RECOVERY CREDIT LIM-
ITATION.— 
‘‘(1) IN
GENERAL.—There is an endangered 
species recovery credit limitation for each calendar 
year. Such limitation is — 
‘‘(A) for 2008, 2009, 2010, 2011, and 
2012— 
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‘‘(i) $300,000,000 with respect to 
qualified 
perpetual 
habitat 
protection 
agreements, 
‘‘(ii) $60,000,000 with respect to 
qualified 30-year habitat protection agree-
ments, and 
‘‘(iii) $40,000,000 with respect to 
qualified habitat protection agreements, 
and 
‘‘(B) except as provided in paragraph (3), 
zero thereafter. 
‘‘(2) ALLOCATION OF LIMITATION.— 
‘‘(A) IN GENERAL.—The Secretary, in con-
sultation with the Secretary of the Interior and 
the Secretary of Commerce, shall allocate the 
endangered species recovery credit limitation to 
eligible taxpayers. 
‘‘(B) ESTABLISHMENT
OF
ALLOCATION 
PROGRAM.—Not later than 180 days after the 
date of the enactment of this Act, the Secretary 
of the Treasury, in consultation with the Sec-
retary of the Interior and the Secretary of 
Commerce, shall, by regulation, establish a pro-
gram to process applications from eligible tax-
payers and to determine how to best allocate 
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the credit limitation under subparagraph (A), 
taking into account the considerations described 
in subparagraph (C). 
‘‘(C) CONSIDERATIONS.—In accepting ap-
plications to make allocations to eligible tax-
payers under this section, priority shall be given 
to taxpayers with agreements— 
‘‘(i) relating to habitats that will sig-
nificantly increase the likelihood of recov-
ering and delisting a species as an endan-
gered species or a threatened species (as 
defined under section 2 of the Endangered 
Species Act of 1973), 
‘‘(ii) that are cost-effective and maxi-
mize the benefits to a qualified species per 
dollar expended, 
‘‘(iii) relating to habitats of species 
which have a federally approved recovery 
plan pursuant to section 4 of the Endan-
gered Species Act of 1973, 
‘‘(iv) relating to habitats with the po-
tential to contribute significantly to the im-
provement of the status of a qualified spe-
cies, 
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‘‘(v) relating to habitats with the po-
tential to contribute significantly to the 
eradication or control of invasive species 
that are imperiling a qualified species, 
‘‘(vi) with habitat management plans 
that will manage multiple qualified species, 
‘‘(vii) with habitat management plans 
that will create adjacent or proximate habi-
tat for the recovery of a qualified species, 
‘‘(viii) relating to habitats for quali-
fied species with an urgent need for protec-
tion, 
‘‘(ix) with habitat management plans 
that assist in preventing the listing of a 
species as endangered or threatened under 
the Endangered Species Act of 1973 or a 
similar State law, 
‘‘(x) with habitat management plans 
that may resolve conflicts between the pro-
tection of qualified species and otherwise 
lawful human activities, and 
‘‘(xi) with habitat management plans 
that may resolve conflicts between the pro-
tection of a qualified species and military 
training or other military operations. 
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‘‘(3) CARRYOVER OF UNUSED LIMITATION.—If 
for any calendar year the limitation under paragraph 
(1) (after the application of this paragraph) exceeds 
the amount allocated to all eligible taxpayers for 
such calendar year, the limitation amount for the 
following calendar year shall be increased by the 
amount of such excess. 
‘‘(g) OTHER DEFINITIONS AND SPECIAL RULES.— 
‘‘(1) APPROPRIATE SECRETARY.—The term ‘ap-
propriate Secretary’ has the meaning given to the 
term ‘Secretary’ under section 3(15) of the Endan-
gered Species Act of 1973. 
‘‘(2) HABITAT MANAGEMENT PLAN.—The term 
‘habitat management plan’ means, with respect to 
any habitat, a plan which— 
‘‘(A) identifies one or more qualified spe-
cies to which the plan applies, 
‘‘(B) describes the management practices 
to be undertaken by the taxpayer, 
‘‘(C) describes the technical assistance to 
be provided to the taxpayer and identifies the 
entity that will provide such assistance, 
‘‘(D) provides a schedule of deadlines for 
undertaking such management practices, and 
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‘‘(E) requires monitoring of the manage-
ment practices and the status of the qualified 
species. 
‘‘(3) QUALIFIED SPECIES.—The term ‘qualified 
species’ means— 
‘‘(A) any species listed as an endangered 
species or threatened species under the Endan-
gered Species Act of 1973, or 
‘‘(B) any species for which a finding has 
been made under section 4(b)(3) of Endangered 
Species Act of 1973 that listing under such Act 
may be warranted. 
‘‘(4) TAKING.—The term ‘taking’ has the 
meaning given to such term under the Endangered 
Species Act of 1973. 
‘‘(5) REDUCTION IN BASIS.—For purposes of 
this subtitle, the basis of any property for which a 
credit is allowable under subsection (a)(1) shall be 
reduced by the amount of the credit so allowed. 
‘‘(6) DENIAL OF DOUBLE BENEFIT.—No deduc-
tion shall be allowed under this chapter for any 
amount with respect to which a credit is allowed 
under subsection (a). 
‘‘(7) CERTIFICATION.—No credit shall be al-
lowed under subsection (a) unless the appropriate 
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Secretary certifies that any agreement described in 
subsection (c) which is entered into by an eligible 
taxpayer will contribute to the recovery of a qualified 
species. 
‘‘(8) REQUEST FOR AUTHORIZATION OF INCI-
DENTAL TAKINGS.—The Secretary shall request the 
appropriate Secretary to consider whether to author-
ize under the Endangered Species Act of 1973 
takings by an eligible taxpayer of a qualified species 
to which an agreement described in subsection (c) 
relates if the takings are incidental to— 
‘‘(A) the restoration, enhancement, or 
management of the habitat pursuant to the 
habitat management plan under the agreement, 
or 
‘‘(B) the use of the property to which the 
agreement pertains at any time after the expi-
ration of the easement or the specified period 
described in subsection (c)(4)(A), but only if 
such use will leave the qualified species at least 
as well off on the property as it was before the 
agreement was made. 
‘‘(9) RECAPTURE.—The Secretary shall, by reg-
ulations, provide for recapturing the benefit under 
any credit allowable under subsection (a) if the Sec-
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retary, in consultation with the appropriate Sec-
retary, determines that— 
‘‘(A) the eligible taxpayer has failed to 
carry out the duties of the taxpayer under the 
terms of a qualified perpetual habitat protection 
agreement, a qualified 30-year habitat protec-
tion agreement, or a qualified habitat protection 
agreement, and 
‘‘(B) there are no other available means to 
remediate such failure.’’. 
(b) GAO STUDY.— 
(1) IN GENERAL.—The Comptroller General of 
the United States shall undertake a study on the ef-
fectiveness of the endangered species recovery credit 
under section 30D of the Internal Revenue Code of 
1986 (as added by this Act). 
(2) ISSUES TO BE STUDIED.—The study under 
paragraph (1) shall— 
(A) evaluate— 
(i) the effectiveness of the endangered 
species recovery credit in encouraging 
landowners to enter into agreements for 
the protection of the habitats of endan-
gered and threatened species, and 
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(ii) the degree to which such agree-
ments are effective in— 
(I) preserving the habitats of en-
dangered and threatened species, and 
(II) assisting in the recovery of 
such species, and 
(B) include recommendations for improv-
ing the effectiveness of endangered species re-
covery credit. 
(3) REPORTS.— 
(A) INTERIM REPORT.—Not later than 3 
years after the date of the enactment of this 
Act, the Comptroller General of the United 
States shall submit to Congress an interim re-
port on the study conducted under paragraph 
(1). 
(B) FINAL
REPORT.—Not later than 5 
years after the date of the enactment of this 
Act, the Comptroller General of the United 
States shall submit to Congress a final report 
on the study conducted under paragraph (1). 
(c) CONFORMING AMENDMENTS.— 
(1) Section 1016(a) of the Internal Revenue 
Code of 1986 is amended by striking ‘‘and’’ at the 
end of paragraph (36), by striking the period at the 
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end of paragraph (37) and inserting ‘‘, and’’, and by 
inserting after paragraph (37) the following new 
paragraph: 
‘‘(38) to the extent provided in section 
30D(g)(5).’’. 
(2) The table of sections for subpart B of part 
IV of subchapter A of chapter 1 of such Code is 
amended by inserting after the item relating to sec-
tion 30C the following new item: 
‘‘Sec. 30D. Endangered species recovery credit.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2007. 
SEC. 3. DEDUCTION FOR ENDANGERED SPECIES RECOV-
ERY EXPENDITURES. 
(a) DEDUCTION FOR ENDANGERED SPECIES RECOV-
ERY EXPENDITURES.— 
(1) IN
GENERAL.—Paragraph (1) of section 
175(c) of the Internal Revenue Code of 1986 (relat-
ing to definitions) is amended by inserting after the 
first sentence the following new sentence: ‘‘Such 
term shall include expenditures paid or incurred for 
the purpose of achieving specific actions rec-
ommended in recovery plans approved pursuant to 
the Endangered Species Act of 1973.’’. 
(2) CONFORMING AMENDMENTS.— 
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(A) Section 175 of such Code is amended 
by inserting ‘‘, or for endangered species recov-
ery’’ after ‘‘prevention of erosion of land used 
in farming’’ each place it appears in subsections 
(a) and (c). 
(B) The heading of section 175 of such 
Code is amended by inserting ‘‘; ENDAN-
GERED
SPECIES
RECOVERY
EXPENDI-
TURES’’ before the period. 
(C) The item relating to section 175 in the 
table of sections for part VI of subchapter B of 
chapter 1 of such Code is amended by inserting 
‘‘; endangered species recovery expenditures’’ 
before the period. 
(b) LIMITATIONS.—Paragraph (3) of section 175(c) 
of the Internal Revenue Code of 1986 (relating to addi-
tional limitations) is amended— 
(1) in the heading, by inserting ‘‘OR ENDAN-
GERED SPECIES RECOVERY PLAN’’ after ‘‘CONSERVA-
TION PLAN’’, and 
(2) in subparagraph (A)(i), by inserting ‘‘or the 
recovery plan approved pursuant to the Endangered 
Species Act of 1973’’ after ‘‘Department of Agri-
culture’’. 
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(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to expenditures paid or incurred 
after the date of the enactment of this Act. 
SEC. 4. EXCLUSION FOR COST SHARING PAYMENTS UNDER 
THE PARTNERS FOR FISH AND WILDLIFE ACT 
AND CERTAIN OTHER PROGRAMS AUTHOR-
IZED BY THE FISH AND WILDLIFE ACT OF 
1956. 
(a) IN GENERAL.—Subsection (a) of section 126 of 
the Internal Revenue Code of 1986 (relating to certain 
cost-sharing payments) is amended by redesignating para-
graph (10) as paragraph (12) and by inserting after para-
graph (9) the following new paragraphs: 
‘‘(10) The Partners for Fish and Wildlife Pro-
gram authorized by the Partners for Fish and Wild-
life Act. 
‘‘(11) The Landowner Incentive Program, the 
State Wildlife Grants Program, and the Private 
Stewardship Grants Program authorized by the Fish 
and Wildlife Act of 1956.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to payments received after the date 
of the enactment of this Act. 
Æ 
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