< Back to S. 901 (105th Congress, 1997–1998)

Text of the Endangered Species Habitat Protection Act of 1997

This bill was introduced on June 12, 1997, in a previous session of Congress, but was not enacted. The text of the bill below is as of Jun 12, 1997 (Introduced).

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S 901 IS

105th CONGRESS

1st Session

S. 901

To provide Federal tax incentives to owners of environmentally sensitive lands to enter into conservation easements for the protection of habitat; to amend the Internal Revenue Code of 1986 to allow a deduction from the gross estate of a decedent in an amount equal to the value of real property subject to an endangered species conservation agreement; and for other purposes.

IN THE SENATE OF THE UNITED STATES

JUNE 12, 1997

Mr. KEMPTHORNE introduced the following bill; which was read twice and referred to the Committee on Finance


A BILL

To provide Federal tax incentives to owners of environmentally sensitive lands to enter into conservation easements for the protection of habitat; to amend the Internal Revenue Code of 1986 to allow a deduction from the gross estate of a decedent in an amount equal to the value of real property subject to an endangered species conservation agreement; and for other purposes.

    Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) SHORT TITLE- This Act may be cited as the ‘Endangered Species Habitat Protection Act of 1997’.

    (b) TABLE OF CONTENTS- The table of contents for this Act is as follows:

      Sec. 1. Short title; table of contents.

      Sec. 2. Findings.

      Sec. 3. Enhanced deduction for the denotation of a conservation easement.

      Sec. 4. Exclusion from estate for real property subject to endangered species conservation agreement.

      Sec. 5. Income tax incentives to preserve land to protect endangered species.

SEC. 2. FINDINGS.

    The Senate finds and declares the following:

      (1) The majority of American property owners recognize the importance of protecting the environment, including the habitat upon which endangered and threatened species depend.

      (2) Current Federal tax laws discourage placement of privately held lands into endangered and threatened species conservation agreements.

      (3) The Federal Government should assist landowners in the goal of conserving endangered and threatened species and their habitat.

      (4) If the environment is to be protected and preserved, existing Federal tax laws must be modified or changed to provide tax incentives to landowners to attain the goal of conservation of endangered and threatened species and the habitats they depend upon.

SEC. 3. ENHANCED DEDUCTION FOR THE DONATION OF A CONSERVATION EASEMENT.

    (a) IN GENERAL- Subparagraph (A) of section 170(h)(4) of the Internal Revenue Code of 1986 (defining conservation purpose) is amended by striking ‘or’ at the end of clause (iii), by striking the period at the end of clause (iv) and inserting ‘, or’, and by adding at the end the following new clause:

      ‘(v) the protection of a designated as endangered or threatened species, species proposed for listing and candidate species by the Secretary of the Interior or the Secretary of Commerce.’

    (b) ENHANCED VALUATION- Section 170(h) of the Internal Revenue Code of 1986 (defining qualified conservation contribution) is amended by adding at the end the following new paragraph:

      ‘(7) ENHANCED VALUATION OF PROPERTY WITH ENDANGERED SPECIES AND OTHER SPECIES- For purposes of this section, the valuation of a perpetual restriction granted to the Secretary of the Interior or the Secretary of Commerce or to a State agency implementing an endangered species program for the purpose described in paragraph (4)(A)(iii) shall be made by comparing the value of the property after the restriction is granted with the value of that same property without either the encumbrance of such restriction or any of the restrictions placed on such property by the Endangered Species Act of 1973 (16 U.S.C. 1531 et seq.).’

    (c) EFFECTIVE DATE- The amendments made by this section shall apply to contributions made after the date of the enactment of this Act.

SEC. 4. EXCLUSION FROM ESTATE FOR REAL PROPERTY SUBJECT TO ENDANGERED SPECIES CONSERVATION AGREEMENT.

    (a) IN GENERAL- Part IV of subchapter A of chapter 11 of the Internal Revenue Code of 1986 (relating to taxable estate) is amended by adding at the end the following new section:

‘SEC. 2057. CERTAIN REAL PROPERTY SUBJECT TO ENDANGERED SPECIES CONSERVATION AGREEMENT.

    ‘(a) GENERAL RULE- For purposes of the tax imposed by section 2001, the value of the taxable estate shall be determined by deducting from the value of the gross estate an amount equal to the adjusted value of real property included in the gross estate which is subject to an endangered species conservation agreement.

    ‘(b) PROPERTY SUBJECT TO AN ENDANGERED SPECIES CONSERVATION AGREEMENT- For purposes of this section--

      ‘(1) IN GENERAL- Real property shall be treated as subject to an endangered species conservation agreement if--

        ‘(A) each person who has an interest in such property (whether or not in possession) has entered into--

          ‘(i) an endangered species conservation agreement with respect to such property, and

          ‘(ii) a written agreement with the Secretary consenting to the application of subsection (d), and

        ‘(B) the executor of the decedent’s estate--

          ‘(i) elects the application of this section, and

          ‘(ii) files with the Secretary such endangered species conservation agreement.

      ‘(2) ADJUSTED VALUE- The adjusted value of any real property shall be its value for purposes of this chapter, reduced by any amount deductible under section 2053(a)(4) with respect to the property.

    ‘(c) ENDANGERED SPECIES CONSERVATION AGREEMENT- For purposes of this section--

      ‘(1) IN GENERAL- The term ‘endangered species conservation agreement’ means a written agreement entered into with the Secretary of the Interior or the Secretary of Commerce--

        ‘(A) which commits each person who signed such agreement to carry out on the real property activities or practices not otherwise required by law or to refrain from carrying out on such property activities or practices that could otherwise be lawfully carried out,

        ‘(B) which is certified by such Secretary as assisting in the conservation of any species which is--

          ‘(i) designated by such Secretary as an endangered or threatened species under the Endangered Species Act of 1973 (16 U.S.C. 1531 et seq.),

          ‘(ii) proposed for such designation, or

          ‘(iii) officially identified by such Secretary as a candidate for possible future protection as an endangered or threatened species.

      ‘(2) ANNUAL CERTIFICATION TO THE SECRETARY BY THE SECRETARY OF THE INTERIOR OR THE SECRETARY OF COMMERCE OF THE STATUS OF ENDANGERED SPECIES CONSERVATION AGREEMENTS- If the executor elects the application of this section, the executor shall promptly give written notice of such election to the Secretary of the Interior or the Secretary of Commerce. The Secretary of the Interior or the Secretary of Commerce shall thereafter annually certify to the Secretary that the endangered species conservation agreement applicable to any property for which such election has been made remains in effect and is being satisfactorily complied with.

    ‘(d) RECAPTURE OF TAX BENEFIT IN CERTAIN CASES-

      ‘(1) DISPOSITION OF INTEREST OR MATERIAL BREACH-

        ‘(A) IN GENERAL- Except as provided in subparagraph (C), an additional tax in the amount determined under subparagraph (B) shall be imposed on any person on the earlier of--

          ‘(i) the disposition by such person of any interest in property subject to an endangered species conservation agreement (other than a disposition described in subparagraph (C)),

          ‘(ii) the failure by such person to comply with the terms of the endangered species conservation agreement, or

          ‘(iii) the termination of the endangered species conservation agreement.

        ‘(B) AMOUNT OF ADDITIONAL TAX- The amount of the additional tax imposed by subparagraph (A) shall be an amount that bears the same ratio of the fair market value of the real property at the time of the event described in subparagraph (A) to the ratio of the amount by which the estate tax liability was reduced by virtue of this section bore to the fair market value of such property at the time the executor filed the agreement under subsection (b)(1). For purposes of this subparagraph, the term ‘estate tax liability’ means the tax imposed by section 2001 reduced by the credits allowable against such tax.

        ‘(C) EXCEPTION IF TRANSFEREE ASSUMES OBLIGATIONS OF TRANSFEROR- Subparagraph (A)(i) shall not apply if the transferor and the transferee of the property enter into a written agreement pursuant to which the transferee agrees--

          ‘(i) to assume the obligations imposed on the transferor under the endangered species conservation agreement,

          ‘(ii) to assume personal liability for any tax imposed under subparagraph (A) with respect to any future event described in subparagraph (A), and

          ‘(iii) to notify the Secretary of the Treasury and the Secretary of the Interior to the Secretary of Commerce that the transferee has assumed such obligations and liability. If a transferee enters into an agreement described in clauses (i), (ii), and (iii), such transferee shall be treated as signatory to the endangered species conservation agreement the transferor entered into.

      ‘(2) DUE DATE OF ADDITIONAL TAX- The additional tax imposed by paragraph (1) shall become due and payable on the day that is 6 months after the date of the disposition referred to in paragraph (1)(A)(i) or, in the case of an event described in clause (ii) or (iii) of paragraph (1)(A), on April 15 of the calendar year following any year in which the Secretary of the Interior or the Secretary of Commerce fails to provide the certification required under subsection (c)(2).

    ‘(e) STATUTE OF LIMITATIONS- If a taxpayer incurs a tax liability pursuant to subsection (d)(1)(A), then--

      ‘(1) the statutory period for the assessment of any additional tax imposed by subsection (d)(1)(A) shall not expire before the expiration of 3 years from the date the Secretary is notified (in such manner as the Secretary may by regulation

prescribe) of the incurring of such tax liability, and

      ‘(2) such additional tax may be assessed before the expiration of such 3-year period notwithstanding the provisions of any other law or rule of law that would otherwise prevent such assessment.

    ‘(f) ELECTION AND FILING OF AGREEMENT- The election under this section shall be made on the return of the tax imposed by section 2001. Such election, and the filing under subsection (a) of an endangered species conservation agreement, shall be made in such manner as the Secretary shall by regulation provide.

    ‘(g) APPLICATION OF THIS SECTION TO INTERESTS IN PARTNERSHIPS, CORPORATIONS, AND TRUSTS- The Secretary shall prescribe regulations setting forth the application of this section in the case of an interest in a partnership, corporation, or trust which, with respect to a decedent, is an interest in a closely held business (within the meaning of paragraph (1) of section 6166(b)). For purposes of the preceding sentence, an interest in a discretionary trust all the beneficiaries of which are heirs of the decedent shall be treated as a present interest.’

    ‘(h) CLERICAL AMENDMENT- The table of sections for part IV of subchapter A of chapter 11 of the Internal Revenue Code of 1986 is amended by adding at the end of the following new item:

‘Sec. 2057. Certain real property subject to endangered species conservation agreement.’

    ‘(i) EFFECTIVE DATE- The amendments made by this section shall apply to estates of decedents dying after the date of the enactment of this Act.

SEC. 5 INCOME TAX INCENTIVES TO PRESERVE LAND TO PROTECT ENDANGERED SPECIES. EXCLUSION OF 75 PERCENT OF GAIN ON SALES OF LAND TO CERTAIN PERSONS FOR THE PROTECTION OF HABITAT.

    (a) IN GENERAL- Part I of subchapter P of chapter 1 (relating to treatment of capital gains) is amended by adding at the end the following new section:

‘SEC 1203. 75 PERCENT EXCLUSION FOR GAIN ON SALES OF LAND TO CERTAIN PERSONS FOR THE PROTECTION OF HABITAT.

    ‘(a) EXCLUSION- Gross income shall not include 75 percent of any gain from the sale of any land to a conservation purchaser if--

      ‘(1) such land was owned by the taxpayer or a member of the taxpayer’s family (as defined in section 2032A(e)(2)) at all times during the 3-year period ending on the date of the sale, and

      ‘(2) such land is being acquired by a conservation purchaser for the purpose of protecting the habitat of endangered and threatened species, species proposed for listing and candidate species.

    ‘(b) CONSERVATION PURCHASER- For purposes of this section, the term ‘conservation purchaser’ means--

      ‘(1) any agency of the United States or of any State or local government, and

      ‘(2) any qualified organization.