S 2242
Calendar No. 446
110th CONGRESS
1st Session
S. 2242
[Report No. 110-206]
To amend the Trade Act of 1974 to establish supplemental agricultural
disaster assistance and to amend the Internal Revenue Code of 1986 to
provide tax incentives for conservation and alternative energy sources
and to provide tax relief for farmers, and for other purposes.
IN THE SENATE OF THE UNITED STATES
October 25, 2007
Mr. BAUCUS, from the Committee on Finance, reported the following original
bill; which was read twice and placed on the calendar
A BILL
To amend the Trade Act of 1974 to establish supplemental agricultural
disaster assistance and to amend the Internal Revenue Code of 1986 to
provide tax incentives for conservation and alternative energy sources
and to provide tax relief for farmers, 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; AMENDMENTS TO 1986 CODE; TABLE OF CONTENTS.
(a) Short Title- This Act may be cited as the `Heartland, Habitat, Harvest,
and Horticulture Act of 2007'.
(b) Amendments to 1986 Code- Except as otherwise expressly provided,
whenever in this Act an amendment or repeal is expressed in terms of
an amendment to, or repeal of, a section or other provision, the reference
shall be considered to be made to a section or other provision of the
Internal Revenue Code of 1986.
(c) Table of Contents- The table of contents for this Act is as follows:
Sec. 1. Short title; amendments to 1986 Code; table of contents.
TITLE I--SUPPLEMENTAL AGRICULTURAL DISASTER ASSISTANCE FROM THE AGRICULTURE
DISASTER RELIEF TRUST FUND
Sec. 101. Supplemental agriculture disaster assistance.
TITLE II--CONSERVATION PROVISIONS
Subtitle A--Land and Species Preservation Provisions
Sec. 201. Conservation reserve tax credit.
Sec. 202. Exclusion of Conservation Reserve Program payments from
SECA tax for certain individuals.
Sec. 203. Permanent extension of special rule encouraging contributions
of capital gain real property for conservation purposes.
Sec. 204. Tax credit for recovery and restoration of endangered species.
Sec. 205. Deduction for endangered species recovery expenditures.
Sec. 206. Exclusion for certain payments and programs relating to
fish and wildlife.
Sec. 207. Credit for easements granted under certain Department of
Agriculture conservation programs.
Subtitle B--Timber Provisions
Sec. 211. Forest conservation bonds.
Sec. 212. Deduction for qualified timber gain.
Sec. 213. Excise tax not applicable to section 1203 deduction of real
estate investment trusts.
Sec. 214. Timber REIT modernization.
Sec. 215. Mineral royalty income qualifying income for timber REITs.
Sec. 216. Modification of taxable REIT subsidiary asset test for timber
REITs.
Sec. 217. Safe harbor for timber property.
TITLE III--ENERGY PROVISIONS
Subtitle A--Electricity Generation
Sec. 301. Credit for residential and business wind property.
Sec. 302. Landowner incentive to encourage electric transmission build-out.
Sec. 303. Exception to reduction of renewable electricity credit.
Subtitle B--Alcohol Fuel
Sec. 311. Expansion of special allowance to cellulosic biomass alcohol
fuel plant property.
Sec. 312. Credit for production of cellulosic biomass alcohol.
Sec. 313. Extension of small ethanol producer credit.
Sec. 314. Credit for producers of fossil free alcohol.
Sec. 315. Modification of alcohol credit.
Sec. 316. Calculation of volume of alcohol for fuel credits.
Sec. 317. Ethanol tariff extension.
Sec. 318. Elimination and reductions of duty drawback on certain imported
ethanol.
Subtitle C--Biodiesel and Renewable Diesel Fuel
Sec. 321. Extension and modification of credit for biodiesel and renewable
diesel used as fuel.
Sec. 322. Treatment of qualified alcohol fuel mixtures and qualified
biodiesel fuel mixtures as taxable fuels.
Subtitle D--Alternative Fuel
Sec. 331. Extension and modification of alternative fuel credit.
Sec. 332. Extension of alternative fuel vehicle refueling property
credit.
TITLE IV--AGRICULTURAL PROVISIONS
Sec. 401. Increase in loan limits on agricultural bonds.
Sec. 402. Modification of installment sale rules for certain farm
property.
Sec. 403. Allowance of section 1031 treatment for exchanges involving
certain mutual ditch, reservoir, or irrigation company stock.
Sec. 404. Credit to holders of rural renaissance bonds.
Sec. 405. Agricultural chemicals security credit.
Sec. 406. Credit for drug safety and effectiveness testing for minor
animal species.
Sec. 407. Certain farming business machinery and equipment treated
as 5-year property.
Sec. 408. Expensing of broadband Internet access expenditures.
Sec. 409. Credit for energy efficient motors.
TITLE V--REVENUE RAISING PROVISIONS
Subtitle A--Miscellaneous Revenue Provisions
Sec. 501. Limitation on farming losses of certain taxpayers.
Sec. 502. Modification to optional method of computing net earnings
from self-employment.
Sec. 503. Information reporting for Commodity Credit Corporation transactions.
Sec. 504. Modification of section 1031 treatment for certain real
estate.
Sec. 505. Modification of effective date of leasing provisions of
the American Jobs Creation Act of 2004.
Sec. 506. Time for payment of corporate estimated taxes.
Sec. 507. Ineligibility of collectibles for nontaxable like kind exchange
treatment.
Sec. 508. Denial of deduction for certain fines, penalties, and other
amounts.
Sec. 509. Increase in information return penalties.
Subtitle B--Economic Substance Doctrine
Sec. 511. Clarification of economic substance doctrine.
Sec. 512. Penalty for understatements attributable to transactions
lacking economic substance, etc.
Sec. 513. Denial of deduction for interest on underpayments attributable
to noneconomic substance transactions.
TITLE I--SUPPLEMENTAL AGRICULTURAL DISASTER ASSISTANCE FROM THE AGRICULTURE
DISASTER RELIEF TRUST FUND
SEC. 101. SUPPLEMENTAL AGRICULTURE DISASTER ASSISTANCE.
(a) In General- The Trade Act of 1974 (19 U.S.C. 2101 et seq.) is amended
by adding at the end the following:
`TITLE IX--SUPPLEMENTAL AGRICULTURE DISASTER ASSISTANCE
`SEC. 901. PERMANENT AUTHORITY FOR SUPPLEMENTAL REVENUE ASSISTANCE.
`(a) Definitions- In this section:
`(1) ACTUAL PRODUCTION HISTORY YIELD- The term `actual production
history yield' means the weighted average actual production history
for each insurable commodity or noninsurable commodity, as calculated
under the Federal Crop Insurance Act (7 U.S.C. 1501 et seq.) or the
noninsured crop disaster assistance program, respectively.
`(2) COUNTER-CYCLICAL PROGRAM PAYMENT YIELD- The term `counter-cyclical
program payment yield' means the weighted average payment yield established
under section 1102 of the Farm Security and Rural Investment Act of
2002 (7 U.S.C. 7912).
`(A) IN GENERAL- The term `disaster county' means a county included
in the geographic area covered by a qualifying natural disaster
declaration.
`(B) INCLUSION- The term `disaster county' includes--
`(i) a county contiguous to a county described in subparagraph
(A); and
`(ii) any farm in which, during a calendar year, the total loss
of production of the farm relating to weather is greater than
50 percent of the normal production of the farm, as determined
by the Secretary.
`(4) ELIGIBLE PRODUCER ON A FARM-
`(A) IN GENERAL- The term `eligible producer on a farm' means an
individual or entity described in subparagraph (B) that, as determined
by the Secretary, assumes the production and market risks associated
with the agricultural production of crops or livestock.
`(B) DESCRIPTION- An individual or entity referred to in subparagraph
(A) is--
`(i) a citizen of the United States;
`(iii) a partnership of citizens of the United States; or
`(iv) a corporation, limited liability corporation, or other farm
organizational structure organized under State law.
`(A) IN GENERAL- The term `farm' means, in relation to an eligible
producer on a farm, the sum of all crop acreage in all counties
that--
`(i) is used for grazing by the eligible producer; or
`(ii) is planted or intended to be planted for harvest by the
eligible producer.
`(B) AQUACULTURE- In the case of aquaculture, the term `farm' means,
in relation to an eligible producer on a farm, all fish being produced
in all counties that are intended to be harvested for sale by the
eligible producer.
`(C) HONEY- In the case of honey, the term `farm' means, in relation
to an eligible producer on a farm, all bees and beehives in all
counties that are intended to be harvested for a honey crop by the
eligible producer.
`(6) FARM-RAISED FISH- The term `farm-raised fish' means any aquatic
species (including any species of finfish, mollusk, crustacean, or
other aquatic invertebrate, amphibian, reptile, or aquatic plant)
that is propagated and reared in a controlled or semicontrolled environment.
`(7) INSURABLE COMMODITY- The term `insurable commodity' means an
agricultural commodity (excluding livestock) for which the producer
on a farm is eligible to obtain a policy or plan of insurance under
the Federal Crop Insurance Act (7 U.S.C. 1501 et seq.).
`(8) LIVESTOCK- The term `livestock' includes--
`(A) cattle (including dairy cattle);
`(G) other livestock, as determined by the Secretary.
`(9) MOVING 5-YEAR OLYMPIC AVERAGE COUNTY YIELD- The term `moving
5-year Olympic average county yield' means the weighted average yield
obtained from the 5 most recent years of yield data provided by the
National Agriculture Statistics Service obtained from data after dropping
the highest and the lowest yields.
`(10) NONINSURABLE COMMODITY- The term `noninsurable commodity' means
a crop for which the eligible producers on a farm are eligible to
obtain assistance under the noninsured crop assistance program.
`(11) NONINSURED CROP ASSISTANCE PROGRAM- The term `noninsured crop
assistance program' means the program carried out under section 196
of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C.
7333).
`(12) QUALIFYING NATURAL DISASTER DECLARATION- The term `qualifying
natural disaster declaration' means a natural disaster declared by
the Secretary for production losses under section 321(a) of the Consolidated
Farm and Rural Development Act (7 U.S.C. 1961(a)).
`(13) SECRETARY- The term `Secretary' means the Secretary of Agriculture.
`(14) STATE- The term `State' means--
`(B) the District of Columbia;
`(C) the Commonwealth of Puerto Rico; and
`(D) any other territory or possession of the United States.
`(15) TRUST FUND- The term `Trust Fund' means the Agriculture Disaster
Relief Trust Fund established under section 902.
`(16) UNITED STATES- The term `United States' when used in a geographical
sense, means all of the States.
`(b) Supplemental Revenue Assistance Payments-
`(1) IN GENERAL- The Secretary shall use such sums as are necessary
from the Trust Fund to make crop disaster assistance payments to eligible
producers on farms in disaster counties that have incurred crop production
losses or crop quality losses, or both, during the crop year.
`(A) IN GENERAL- Subject to subparagraph (B), the Secretary shall
provide crop disaster assistance payments under this section to
an eligible producer on a farm in an amount equal to 52 percent
of the difference between--
`(i) the disaster assistance program guarantee, as described in
paragraph (3); and
`(ii) the total farm revenue for a farm, as described in paragraph
(4).
`(B) LIMITATION- The disaster assistance program guarantee for a
crop used to calculate the payments for a farm under subparagraph
(A)(i) may not be greater than 90 percent of the sum of the expected
revenue, as described in paragraph (5) for each of the crops on
a farm, as determined by the Secretary.
`(3) SUPPLEMENTAL REVENUE ASSISTANCE PROGRAM GUARANTEE-
`(A) IN GENERAL- Except as otherwise provided in this paragraph,
the supplemental assistance program guarantee shall be the sum obtained
by adding--
`(i) for each insurable commodity on the farm, the product obtained
by multiplying--
`(aa) the actual production history yield;
`(bb) 85 percent of the moving 5-year Olympic average county
yield; and
`(cc) the counter-cyclical program payment yield for each
crop;
`(II) the percentage of the crop insurance yield guarantee;
`(III) the percentage of crop insurance price elected by the
eligible producer;
`(IV) the crop insurance price; and
`(ii) for each noninsurable commodity on a farm, the product obtained
by multiplying--
`(I) the weighted noninsured crop assistance program yield guarantee;
`(II) except as provided in subparagraph (B), 100 percent of
the noninsured crop assistance program established price; and
`(B) SUPPLEMENTAL BUY-UP NONINSURED ASSISTANCE PROGRAM- Beginning
on the date that the Secretary makes available supplemental buy-up
coverage under the noninsured assistance program in accordance with
subsection (h), the percentage described in subclause (II) of subparagraph
(A)(ii) shall be equal to the percentage of the noninsured assistance
program price guarantee elected by the producer.
`(C) ADJUSTMENT INSURANCE GUARANTEE- Notwithstanding subparagraph
(A), in the case of an insurable commodity for which a plan of insurance
provides for an adjustment in the guarantee, such as in the case
of prevented planting, the adjusted insurance guarantee shall be
the basis for determining the disaster assistance program guarantee
for the insurable commodity.
`(D) ADJUSTED ASSISTANCE LEVEL- Notwithstanding subparagraph (A),
in the case of a noninsurable commodity for which the noninsured
crop assistance program provides for an adjustment in the level
of assistance, such as in the case of prevented harvesting, the
adjusted assistance level shall be the basis for determining the
disaster assistance program guarantee for the noninsurable commodity.
`(E) EQUITABLE TREATMENT FOR NON-YIELD BASED POLICIES- The Secretary
shall establish equitable treatment for non-yield based policies
and plans of insurance, such as the Adjusted Gross Revenue Lite
insurance program.
`(F) PUBLIC MANAGED LAND- Notwithstanding subparagraph (A), if rangeland
is managed by a Federal agency and the carrying capacity of the
managed rangeland is reduced as a result of a disaster in the preceding
year that was the basis for a qualifying natural disaster declaration--
`(i) the calculation for the supplemental assistance program guarantee
determined under subparagraph (A) as the guarantee applies to
the managed rangeland shall be not less than 75 percent of the
guarantee for the preceding year; and
`(ii) the requirement for a designation by the Secretary for the
current year is waived.
`(A) IN GENERAL- For purposes of this subsection, the total farm
revenue for a farm, shall equal the sum obtained by adding--
`(i) the estimated actual value for grazing and for each crop
produced on a farm by using the product obtained by multiplying--
`(I) the actual crop acreage grazed or harvested by an eligible
producer on a farm;
`(II) the estimated actual yield of the grazing land or crop
production; and
`(III) subject to subparagraphs (B) and (C), the average market
price received or value of the production during the first 5
months of the marketing year for the county in which the farm
or portion of a farm is located;
`(ii) 20 percent of amount of any direct payments made to the
producer under section 1103 of the Farm Security and Rural Investment
Act of 2002 (7 U.S.C. 7913);
`(iii) the amount of payments for prevented planting on a farm;
`(iv) the amount of crop insurance indemnities received by an
eligible producer on a farm for each crop on a farm, including
indemnities for grazing losses;
`(v) the amount of payments an eligible producer on a farm received
under the noninsured crop assistance program for each crop on
a farm, including grazing losses; and
`(vi) the value of any other natural disaster assistance payments
provided by the Federal Government to an eligible producer on
a farm for each crop on a farm for the same loss for which the
eligible producer is seeking assistance.
`(B) ADJUSTMENT- The Secretary shall adjust the average market price
received by the eligible producer on a farm--
`(i) to reflect the average quality discounts applied to the local
or regional market price of a crop, hay, or forage due to a reduction
in the intrinsic characteristics of the production resulting from
adverse weather, as determined annually by the State office of
the Farm Service Agency; and
`(ii) to account for a crop the value of which is reduced due
to excess moisture resulting from a disaster-related condition.
`(C) MAXIMUM AMOUNT FOR CERTAIN CROPS- With respect to a crop for
which an eligible producer on a farm receives assistance under the
noninsured crop assistance program, the average market price received
or value of the production during the first 5 months of the marketing
year for the county in which the farm or portion of a farm is located
shall be an amount not more than 100 percent of the price of the
crop established under the noninsured crop assistance program.
`(5) EXPECTED REVENUE- The expected revenue for each crop on a farm
shall equal the sum obtained by adding--
`(A) the expected value of grazing;
`(B) the product obtained by multiplying--
`(I) the actual production history yield of the eligible producer
on a farm;
`(II) the moving 5-year Olympic average county yield; and
`(III) the counter-cyclical program payment yield;
`(ii) the acreage planted or intended to be planted for each crop;
and
`(iii) 100 percent of the insurance price guarantee; and
`(C) the product obtained by multiplying--
`(i) 100 percent of the noninsured crop assistance program yield;
and
`(ii) 100 percent of the noninsured crop assistance program price
for each of the crops on a farm.
`(c) Livestock Indemnity Payments-
`(1) IN GENERAL- The Secretary shall use such sums as are necessary
from the Trust Fund to make livestock indemnity payments to eligible
producers on farms that have incurred livestock death losses in excess
of the normal mortality due to adverse weather, as determined by the
Secretary, during the calendar year, including losses due to hurricanes,
floods, blizzards, disease, wildfires, extreme heat, and extreme cold.
`(2) PAYMENT RATES- Indemnity payments to an eligible producer on
a farm under paragraph (1) shall be made at a rate of 75 percent of
the market value of the applicable livestock on the day before the
date of death of the livestock, as determined by the Secretary.
`(d) Emergency Assistance for Livestock, Honey Bees, and Farm-Raised
Fish-
`(1) IN GENERAL- The Secretary shall use up to $35,000,000 per year
from the Trust Fund to provide emergency relief to eligible producers
of livestock, honey bees, and farm-raised fish to aid in the reduction
of losses due to adverse weather or other environmental conditions,
such as blizzards and wildfires, as determined by the Secretary, that
are not covered under the authority of the Secretary to make qualifying
natural disaster declarations.
`(2) USE OF FUNDS- Funds made available under this subsection shall
be used to reduce losses caused by feed or water shortages, disease,
or other factors as determined by the Secretary.
`(3) AVAILABILITY OF FUNDS- Any funds made available under this subsection
and not used in a crop year shall remain available until expended.
`(e) Tree Assistance Program-
`(1) DEFINITIONS- In this subsection:
`(A) ELIGIBLE ORCHARDIST- The term `eligible orchardist' means a
person that--
`(i) produces annual crops from trees for commercial purposes;
or
`(ii) produces nursery, ornamental, fruit, nut, or Christmas trees
for commercial sale.
`(B) NATURAL DISASTER- The term `natural disaster' means plant disease,
insect infestation, drought, fire, freeze, flood, earthquake, lightning,
or other occurrence, as determined by the Secretary.
`(C) TREE- The term `tree' includes a tree, bush, and vine.
`(A) LOSS- Subject to subparagraph (B), the Secretary shall provide
assistance under paragraph (3) to eligible orchardists that planted
trees for commercial purposes but lost the trees as a result of
a natural disaster, as determined by the Secretary.
`(B) LIMITATION- An eligible orchardist shall qualify for assistance
under subparagraph (A) only if the tree mortality of the eligible
orchardist, as a result of damaging weather or related condition,
exceeds 15 percent (adjusted for normal mortality).
`(3) ASSISTANCE- The assistance provided by the Secretary to eligible
orchardists for losses described in paragraph (2) shall consist of--
`(A)(i) reimbursement of 75 percent of the cost of replanting trees
lost due to a natural disaster, as determined by the Secretary,
in excess of 15 percent mortality (adjusted for normal mortality);
or
`(ii) at the option of the Secretary, sufficient seedlings to reestablish
a stand; and
`(B) reimbursement of 50 percent of the cost of pruning, removal,
and other costs incurred by an eligible orchardist to salvage existing
trees or, in the case of tree mortality, to prepare the land to
replant trees as a result of damage or tree mortality due to a natural
disaster, as determined by the Secretary, in excess of 15 percent
damage or mortality (adjusted for normal tree damage and mortality).
`(f) Pest and Disease Management and Disaster Prevention-
`(1) DEFINITIONS- In this subsection:
`(A) EARLY PEST DETECTION AND SURVEILLANCE- The term `early pest
detection and surveillance' means the full range of activities undertaken
to find newly introduced pests, whether the pests are new to the
United States or new to certain areas of the United States, before--
`(i) the pests become established; or
`(ii) the pest infestations become too large and costly to eradicate
or control.
`(B) PEST- The term `pest' has the meaning given the term `plant
pest' in section 403 of the Plant Protection Act (7 U.S.C. 7702).
`(C) SPECIALTY CROP- The term `specialty crop' has the meaning given
the term in section 3 of the Specialty Crops Competitiveness Act
of 2004 (7 U.S.C. 1621 note; Public Law 108-465).
`(D) STATE DEPARTMENT OF AGRICULTURE- The term `State department
of agriculture' means an agency of a State that has a legal responsibility
to perform early pest detection and surveillance activities.
`(2) ESTABLISHMENT- The Secretary shall establish a program--
`(A) to conduct early pest detection and surveillance activities
in cooperation with State departments of agriculture;
`(B) to determine and prioritize pest and disease threats to domestic
production of specialty crops;
`(C) to create an audit-based certification approach to protect
against the spread of plant pests and to facilitate the interstate
movement of plants and plant products; and
`(D) to prevent potential damage from crop disasters caused by pests
and diseases.
`(3) EARLY PEST DETECTION AND SURVEILLANCE IMPROVEMENT PROGRAM-
`(A) COOPERATIVE AGREEMENTS- The Secretary shall enter into cooperative
agreements with State departments of agriculture to provide grants
to the State departments of agriculture for early pest detection
and surveillance activities.
`(i) IN GENERAL- A State department of agriculture seeking to
enter into a cooperative agreement under this subsection shall
submit to the Secretary an application containing such information
as the Secretary may require.
`(ii) NOTIFICATION- The Secretary shall notify applicants of--
`(I) the requirements to be imposed on a State department of
agriculture for auditing of, and reporting on, the use of any
funds provided by the Secretary under the cooperative agreement;
`(II) the criteria to be used to ensure that early pest detection
and surveillance activities supported under the cooperative
agreement are based on sound scientific data or thorough risk
assessments; and
`(III) the means of identifying pathways of pest introductions.
`(i) PEST DETECTION AND SURVEILLANCE ACTIVITIES- A State department
of agriculture that receives funds under this subsection shall
use the funds to carry out early pest detection and surveillance
activities approved by the Secretary to prevent the introduction
or spread of a pest.
`(ii) SUBAGREEMENTS- A State department of agriculture may use
funds received under this subsection to enter into subagreements
with political subdivisions in the State that have legal responsibilities
relating to agricultural pest and disease surveillance.
`(D) SPECIAL FUNDING CONSIDERATIONS- Subject to the availability
of funds under paragraph (9), the Secretary shall provide funds
to a State department of agriculture that the Secretary determines
is in a State that has a high risk of being affected by 1 or more
pest, based on--
`(i) the number of international airports and maritime facilities
in the State;
`(ii) the volume of international passenger and cargo entry into
the State;
`(iii)(I) the geographic location of the State; and
`(II) whether the location is conducive to agricultural pest and
disease establishment due to the climate or crop diversity of
the State;
`(iv)(I) the types of agricultural commodities or plants produced
in the State; and
`(II) whether the commodities or plants produced are conducive
to agricultural pest and disease establishment due to the climate
or crop diversity of the State;
`(v) whether the Secretary has declared an emergency in the State
pursuant to section 442 of the Plant Protection Act (7 U.S.C.
7772) due to an agricultural pest or disease of Federal concern;
and
`(vi) such other factors as the Secretary considers appropriate.
`(i) FEDERAL COST SHARE; FORM OF NON-FEDERAL COST SHARE- Except
as provided in clause (ii), a cooperative agreement entered into
under subparagraph (A) shall provide that--
`(I) the Federal share of carrying out the cooperative agreement
shall not exceed 75 percent of the total cost;
`(II) the non-Federal share of the cost of carrying out the
agreement may be provided in-kind; and
`(III) any in-kind costs may include indirect costs as considered
appropriate by the Secretary.
`(ii) ABILITY TO PROVIDE FUNDS- The Secretary shall not take the
ability to provide non-Federal costs to carry out a cooperative
agreement entered into under subparagraph (A) into consideration
in deciding whether to enter into a cooperative agreement with
a State department of agriculture.
`(iii) SPECIAL FUNDING CONSIDERATIONS- The non-Federal share of
carrying out subparagraph (D) shall not exceed 40 percent of the
total costs of carrying out that subparagraph.
`(F) REPORTING REQUIREMENT- Not later than 180 days after the date
of completion of an early pest detection and surveillance activity
conducted by a State department of agriculture using funds provided
under this subsection, the State department of agriculture shall
submit to the Secretary a report that describes the purposes and
results of the activities, including any activities conducted pursuant
to a subagreement referred to in subparagraph (C)(ii).
`(4) THREAT IDENTIFICATION AND MITIGATION PROGRAM-
`(A) IN GENERAL- In conducting the program established under paragraph
(2), the Secretary shall--
`(i) develop risk assessments of the existing and potential threat
to the specialty crop industry in the United States from pests
and disease;
`(ii) prepare a list that prioritizes pest and disease threats
to the specialty crop industry;
`(iii) develop action plans, in consultation with State departments
of agriculture and other State or regional resource partnerships,
that effectively address pest and disease threats to the specialty
crop industry, including pathway analysis, domestic and offshore
mitigation measures, and comprehensive exclusion measures at ports
of entry and other key distribution centers, in addition to strategies
to employ if a pest or disease is introduced;
`(iv) implement the action plans as soon as the action plans are
developed to test the effectiveness of the action plans and help
prevent new foreign and domestic pest and disease threats from
being introduced or widely disseminated in the United States;
and
`(v) collaborate with the nursery industry, research institutions,
and other appropriate entities to develop a nursery pest risk
management system--
`(I) to identify nursery pests and diseases;
`(II) to prevent the introduction, establishment, and spread
of the pests and diseases; and
`(III) to reduce the risk of, prioritize, mitigate, and eradicate
the pests and diseases.
`(B) REPORTS- Not later than 1 year after the date of enactment
of this title, and annually thereafter, the Secretary shall update
and submit to Congress the priority list and action plans described
in subparagraph (A), including an accounting of funds expended on
the action plans.
`(5) AUDIT-BASED APPROACH TO SPECIALTY CROP PHYTOSANITARY CERTIFICATION-
In conducting the program established under paragraph (2), the Secretary
shall provide funds and technical assistance to specialty crop growers,
organizations representing specialty crop growers, and State and local
agencies working with specialty crop growers and organizations for
the development and implementation of certification systems based
on audit-based approaches (such as best management practices or nursery
pest risk management systems) to address plant pests and mitigate
the risk of plant pests in the movement of plants and plant products.
`(6) COOPERATIVE AGREEMENTS- The Secretary may enter into cooperative
agreements with other Federal departments or agencies, States or political
subdivisions of States, national governments, local governments of
other nations, domestic or international organizations, domestic or
international associations, and other persons to carry out this subsection.
`(7) CONSULTATION- The Secretary shall consult with the National Plant
Board, State departments of agriculture, and specialty crop grower
organizations to establish funding priorities under this subsection
for each fiscal year.
`(8) ADMINISTRATIVE COSTS- Not more than 5 percent of the funds provided
under this subsection may be used for administrative costs.
`(9) FUNDING- The Secretary shall use from the Trust Fund to carry
out this subsection--
`(A) $10,000,000 for fiscal year 2008;
`(B) $15,000,000 for fiscal year 2009;
`(C) $30,000,000 for fiscal year 2010;
`(D) $45,000,000 for fiscal year 2011; and
`(E) $60,000,000 for fiscal year 2012.
`(g) Risk Management Purchase Requirement-
`(1) IN GENERAL- Except as otherwise provided in this subsection,
the eligible producers on a farm shall not be eligible for assistance
under this section with respect to losses to an insurable commodity
or noninsurable commodity if the eligible producers on the farm--
`(A) in the case of an insurable commodity, did not obtain a policy
or plan of insurance for the insurable commodity under the Federal
Crop Insurance Act (7 U.S.C. 1501 et seq.) (excluding a crop insurance
pilot program under that Act) for the crop incurring the losses;
or
`(B) in the case of a noninsurable commodity, did not file the required
paperwork, and pay the administrative fee by the applicable State
filing deadline, for the noninsurable commodity under the noninsured
crop assistance program for the crop incurring the losses.
`(2) MINIMUM- To be considered to have obtained insurance under paragraph
(1), an eligible producer on a farm shall have obtained a policy or
plan of insurance with not less than 50 percent yield coverage at
55 percent of the insurable price for each crop grazed, planted, or
intended to be planted for harvest on a whole farm.
`(3) WAIVER- With respect to eligible producers that are limited resource,
minority, or beginning farmers or ranchers, as determined by the Secretary,
the Secretary may--
`(A) waive paragraph (1); and
`(B) provide disaster assistance under this section at a level that
the Secretary determines to be equitable and appropriate.
`(4) EQUITABLE RELIEF- The Secretary may provide equitable relief
to eligible producers on a farm that unintentionally fail to meet
the requirements of paragraph (1) for 1 or more crops on a farm on
a case-by-case basis, as determined by the Secretary.
`(h) Supplemental Buy-up Noninsured Assistance Program-
`(1) IN GENERAL- The Secretary shall establish a program under which
eligible producers on a farm may purchase under the noninsured crop
assistance program additional yield and price coverage for a crop,
including a forage, hay, or honey crop, of--
`(A) 60 or 65 percent (as elected by the producers on the farm)
of the yield established for the crop under the program; and
`(B) 100 percent of the price established for the crop under the
program.
`(2) FEES- The Secretary shall establish and collect fees from eligible
producers on a farm participating in the program established under
paragraph (1) to offset all of the costs of the program, as determined
by the Secretary.
`(i) Payment Limitations-
`(1) IN GENERAL- The total amount of disaster assistance that an eligible
producer on a farm may receive under this section may not exceed $100,000.
`(2) AGI LIMITATION- Section 1001D of the Food Security Act of 1985
(7 U.S.C. 1308-3a or any successor provision) shall apply with respect
to assistance provided under this section.
`(j) Period of Effectiveness- This section shall be effective only for
losses that are incurred as the result of a disaster, adverse weather,
or other environmental condition that occurs on or before September
30, 2012, as determined by the Secretary.
`SEC. 902. AGRICULTURE DISASTER RELIEF TRUST FUND.
`(a) Creation of Trust Fund- There is established in the Treasury of
the United States a trust fund to be known as the `Agriculture Disaster
Relief Trust Fund', consisting of such amounts as may be appropriated
or credited to such Trust Fund as provided in this section.
`(b) Transfer to Trust Fund-
`(1) IN GENERAL- There are appropriated to the Agriculture Disaster
Relief Trust Fund amounts equivalent to 3.34 percent of the amounts
received in the general fund of the Treasury of the United States
during fiscal years 2008 through 2012 attributable to the duties collected
on articles entered, or withdrawn from warehouse, for consumption
under the Harmonized Tariff Schedule of the United States.
`(2) AMOUNTS BASED ON ESTIMATES- The amounts appropriated under this
section shall be transferred at least monthly from the general fund
of the Treasury of the United States to the Agriculture Disaster Relief
Trust Fund on the basis of estimates made by the Secretary of the
Treasury. Proper adjustments shall be made in the amounts subsequently
transferred to the extent prior estimates were in excess of or less
than the amounts required to be transferred.
`(1) REPORTS- The Secretary of the Treasury shall be the trustee of
the Agriculture Disaster Relief Trust Fund and shall submit an annual
report to Congress each year on the financial condition and the results
of the operations of such Trust Fund during the preceding fiscal year
and on its expected condition and operations during the 5 fiscal years
succeeding such fiscal year. Such report shall be printed as a House
document of the session of Congress to which the report is made.
`(A) IN GENERAL- The Secretary of the Treasury shall invest such
portion of the Agriculture Disaster Relief Trust Fund as is not
in his judgment required to meet current withdrawals. Such investments
may be made only in interest bearing obligations of the United States.
For such purpose, such obligations may be acquired--
`(i) on original issue at the issue price, or
`(ii) by purchase of outstanding obligations at the market price.
`(B) SALE OF OBLIGATIONS- Any obligation acquired by the Agriculture
Disaster Relief Trust Fund may be sold by the Secretary of the Treasury
at the market price.
`(C) INTEREST ON CERTAIN PROCEEDS- The interest on, and the proceeds
from the sale or redemption of, any obligations held in the Agriculture
Disaster Relief Trust Fund shall be credited to and form a part
of such Trust Fund.
`(d) Expenditures From Trust Fund- Amounts in the Agriculture Disaster
Relief Trust Fund shall be available for the purposes of making expenditures
to meet those obligations of the United States incurred under section
901.
`(e) Authority to Borrow-
`(1) IN GENERAL- There are authorized to be appropriated, and are
appropriated, to the Agriculture Disaster Relief Trust Fund, as repayable
advances, such sums as may be necessary to carry out the purposes
of such Trust Fund.
`(2) REPAYMENT OF ADVANCES-
`(A) IN GENERAL- Advances made to the Agriculture Disaster Relief
Trust Fund shall be repaid, and interest on such advances shall
be paid, to the general fund of the Treasury when the Secretary
determines that moneys are available for such purposes in such Trust
Fund.
`(B) RATE OF INTEREST- Interest on advances made pursuant to this
subsection shall be--
`(i) at a rate determined by the Secretary of the Treasury (as
of the close of the calendar month preceding the month in which
the advance is made) to be equal to the current average market
yield on outstanding marketable obligations of the United States
with remaining periods to maturity comparable to the anticipated
period during which the advance will be outstanding, and
`(ii) compounded annually.'.
(b) Secretarial Discretion- Section 442(c) of the Plant Protection Act
(7 U.S.C. 7772(c)) is amended by striking `of longer than 60 days'.
TITLE II--CONSERVATION PROVISIONS
Subtitle A--Land and Species Preservation Provisions
SEC. 201. CONSERVATION RESERVE TAX CREDIT.
(a) Allowance of Credit- Subpart B of part IV of subchapter A of chapter
1 is amended by adding at the end the following new section:
`SEC. 30D. CONSERVATION RESERVE CREDIT.
`(a) In General- There shall be allowed as a credit against the tax
imposed by this chapter for the taxable year an amount equal to the
rental value of any land enrolled in the conservation reserve program.
`(1) LIMITATION BASED ON AMOUNT OF TAX- The credit allowed under this
section for any taxable year shall not exceed the excess of--
`(A) the 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, over
`(B) the tentative minimum tax for the taxable year.
`(2) LIMITATION BASED ON ALLOCATED PORTION OF NATIONAL LIMITATION-
The credit allowed under subsection (a) for any taxpayer for any taxable
year shall not exceed the excess of--
`(A) the amount of the national credit limitation allocated to such
taxpayer under subsection (c) for the fiscal year in which such
taxable year ends and all prior fiscal years, over
`(B) the credit allowed under subsection (a) for all prior taxable
years.
`(c) Conservation Reserve Credit Limitation-
`(1) IN GENERAL- There is a conservation reserve credit limitation
for each fiscal year of the United States. Such limitation is--
`(A) $750,000,000 for each of fiscal years 2008 through 2012, and
`(A) IN GENERAL- The Secretary, in consultation with the Secretary
of Agriculture, shall allocate the conservation reserve credit limitation
to taxpayers--
`(i) who are owners or operators of land enrolled in the conservation
reserve program, and
`(ii) who have entered into an agreement with the Secretary of
Agriculture to receive an allocation under this paragraph in lieu
of a rental payment for such year under section 1234 of the Food
Security Act of 1985.
`(B) ALLOCATION LIMITATION- The Secretary may not allocate more
than $50,000 to any 1 taxpayer for any fiscal year.
`(3) CARRYFORWARD OF LIMITATION-
`(A) IN GENERAL- If for any fiscal year the limitation under paragraph
(1) (after the application of this paragraph) exceeds the amount
allocated to all eligible taxpayers for such fiscal year, the limitation
amount for the following fiscal year shall be increased by the amount
of such excess.
`(B) SPECIAL RULE FOR 2012- Notwithstanding subparagraph (A), no
amount of the conservation reserve credit limitation may be carried
to any fiscal year following fiscal year 2012.
`(d) Carryforward- If the amount of the credit allowable under subsection
(a) for any taxpayer for any taxable year (determined without regard
to subsection (b)(1)) exceeds the limitation under subsection (b)(1),
such excess may be carried forward to the succeeding taxable year and
added to the credit allowable under subsection (a) for such succeeding
taxable year.
`(e) Other Definitions and Special Rules- For purposes of this section--
`(1) CONSERVATION RESERVE PROGRAM- For purposes of this subsection,
the term `conservation reserve program' means the conservation reserve
program established under subchapter B of chapter 1 of subtitle D
of title XII of the Food Security Act of 1985.
`(2) DENIAL OF DOUBLE BENEFIT- No deduction or other credit shall
be allowed under this chapter for any amount with respect to which
a credit is allowed under subsection (a).
`(3) RECAPTURE OF ALLOCATION- If a taxpayer terminates a contract
under the conservation reserve program before the end of the fiscal
year with respect to which an allocation under subsection (c)(2) is
made, the Secretary shall recapture the amount of the credit allowed
under this section which bears the same ratio to the amount so allocated
as the number of days in the fiscal year during which the contract
was not in effect bears to 365.
`(4) TREATMENT OF CREDIT UNDER INCOME TAX AND SELF-EMPLOYMENT INCOME
TAX- Notwithstanding any agreement between the taxpayer and the Secretary
of Agriculture, for purposes of this chapter and chapter 2, the amount
of any credit received under this section shall not be treated as
income.'.
(b) Conforming Amendment- The table of sections for subpart B of part
IV of subchapter A of chapter 1 is amended by inserting after the item
relating to section 30C the following new item:
`Sec. 30D. Conservation reserve credit.'.
(c) Effective Date- The amendments made by this section shall apply
to taxable years ending after the date of the enactment of this Act.
SEC. 202. EXCLUSION OF CONSERVATION RESERVE PROGRAM PAYMENTS FROM
SECA TAX FOR CERTAIN INDIVIDUALS.
(a) Internal Revenue Code- Section 1402(a)(1) (defining net earnings
from self-employment) is amended by inserting `, and including payments
under section 1233(2) of the Food Security Act of 1985 (16 U.S.C. 3833(2))
to individuals receiving benefits under section 202 or 223 of the Social
Security Act' after `crop shares'.
(b) Social Security Act- Section 211(a)(1) of the Social Security Act
is amended by inserting `, and including payments under section 1233(2)
of the Food Security Act of 1985 (16 U.S.C. 3833(2)) to individuals
receiving benefits under section 202 or 223' after `crop shares'.
(c) Effective Date- The amendments made by this section shall apply
to payments made after December 31, 2007.
SEC. 203. PERMANENT EXTENSION OF SPECIAL RULE ENCOURAGING CONTRIBUTIONS
OF CAPITAL GAIN REAL PROPERTY FOR CONSERVATION PURPOSES.
(1) INDIVIDUALS- Subparagraph (E) of section 170(b)(1) (relating to
contributions of qualified conservation contributions) is amended
by striking clause (vi).
(2) CORPORATIONS- Subparagraph (B) of section 170(b)(2) (relating
to qualified conservation contributions by certain corporate farmers
and ranchers) is amended by striking clause (iii).
(b) Effective Date- The amendments made by this section shall apply
to contributions made in taxable years beginning after December 31,
2007.
SEC. 204. TAX CREDIT FOR RECOVERY AND RESTORATION OF ENDANGERED SPECIES.
(a) In General- Subpart B of part IV of subchapter A of chapter 1, as
amended by this Act, is amended by adding at the end the following new
section:
`SEC. 30E. ENDANGERED SPECIES RECOVERY AND RESTORATION CREDIT.
`(a) In General- In the case of an eligible taxpayer, there shall be
allowed as a credit against the tax imposed by this chapter for the
taxable year an amount equal to the sum of--
`(1) the habitat protection easement credit, plus
`(2) the habitat restoration credit.
`(1) IN GENERAL- The credit allowed under subsection (a) for any taxpayer
for any taxable year shall not exceed the endangered species recovery
credit limitation allocated to the eligible taxpayer under subsection
(f) for the calendar year in which the taxpayer's taxable year ends.
`(A) IN GENERAL- If the amount of the credit allowable under subsection
(a) for any taxpayer for any taxable year (determined without regard
to paragraph (1)) exceeds the endangered species recovery credit
limitation allocated under subsection (f) to such taxpayer for the
calendar year in which the taxpayer's taxable year ends, such excess
may be carried forward to the next taxable year for which an allocation
is made to such taxpayer under subsection (f). Any amount carried
to another taxable year under this subparagraph shall be treated
as added to the credit allowable under subsection (a)(1) or (a)(2),
whichever is appropriate, for such taxable year.
`(B) CARRYFORWARD OF ALLOCATION AMOUNT- If the amount of the endangered
species recovery credit limitation allocated to a taxpayer for any
calendar year under subsection (f) exceeds the amount of the credit
allowed to the taxpayer under subsection (a) for the taxable year
ending in such calendar year, such excess may be carried forward
to the next taxable year of the taxpayer. Any amount carried to
another taxable year under this subparagraph shall be treated as
allocated to the taxpayer for use in such taxable year under subsection
(f).
`(c) Eligible Taxpayer; Qualified Agreements- For purposes of this section--
`(1) IN GENERAL- The term `eligible taxpayer' means--
`(i) owns real property which contains the habitat of a qualified
species, and
`(ii) enters into a qualified perpetual habitat protection agreement,
a qualified 30-year habitat protection agreement, or a qualified
habitat protection agreement with respect to such real property,
and
`(B) any other taxpayer who--
`(i) is a party to a qualified perpetual habitat protection agreement,
a qualified 30-year habitat protection agreement, or a qualified
habitat protection agreement, and
`(ii) as part of any such agreement, agrees to assume responsibility
for costs paid or incurred as a result of implementing such agreement.
`(2) QUALIFIED PERPETUAL HABITAT PROTECTION AGREEMENT- The term `qualified
perpetual habitat protection agreement' means an agreement--
`(A) under which a taxpayer described in paragraph (1)(A) grants
to the appropriate Secretary, the Secretary of Agriculture, the
Secretary of Defense, or a State an easement in perpetuity for the
protection of the habitat of a qualified species, and
`(B) which meets the requirements of paragraph (5).
`(3) QUALIFIED 30-YEAR HABITAT PROTECTION AGREEMENT- The term `qualified
30-year habitat protection agreement' means an agreement not described
in paragraph (2)--
`(A) under which a taxpayer described in paragraph (1)(A) grants
to the appropriate Secretary, the Secretary of Agriculture, the
Secretary of Defense, or a State an easement for a period of 30
years or greater for the protection of the habitat of a qualified
species, and
`(B) which meets the requirements of paragraph (5).
`(4) QUALIFIED HABITAT PROTECTION AGREEMENT- The term `qualified habitat
protection agreement' means an agreement--
`(A) under which a taxpayer described in paragraph (1)(A) enters
into an agreement not described in paragraph (2) or (3) with the
appropriate Secretary, the Secretary of Agriculture, the Secretary
of Defense, or a State to protect the habitat of a qualified species
for a specified period of time, and
`(B) which meets the requirements of paragraph (5).
`(5) REQUIREMENTS- An agreement meets the requirements of this paragraph
if the agreement--
`(A) is consistent with any recovery plan which is applicable and
which has been approved for a qualified species under section 4
of the Endangered Species Act of 1973,
`(B) includes a habitat management plan agreed to by the appropriate
Secretary and the eligible taxpayer, and
`(C) requires that technical assistance with respect to the duties
under the habitat management plan be provided to the taxpayer by
the appropriate Secretary or an entity approved by the appropriate
Secretary.
`(d) Habitat Protection Easement Credit-
`(1) IN GENERAL- For purposes of subsection (a)(1), the habitat protection
easement credit for any taxable year is an amount equal to--
`(A) in the case of a taxpayer described in subsection (c)(1)(A)
who has entered into a qualified perpetual habitat protection agreement
during such taxable year, 100 percent of the excess (if any) of--
`(i) the fair market value of the real property with respect to
which the qualified 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 a taxpayer described in subsection (c)(1)(A)
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 taxpayer, zero.
`(2) REDUCTION FOR AMOUNT RECEIVED FOR EASEMENT- The amount determined
under paragraph (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, 30C, and 30D, and
`(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 paragraph (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 subsection unless the eligible taxpayer includes
with the taxpayer's return for the taxable year a qualified appraisal
(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 taxpayer
during such taxable year pursuant to the habitat management plan
under such agreement,
`(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 habitat management plan
under such agreement, and
`(C) in the case of a qualified habitat protection agreement, 50
percent of the costs paid or incurred by an eligible taxpayer during
such taxable year pursuant to the habitat management plan 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 taxable year reduced by the
sum of the credits allowable under subpart A, sections 27, 30, 30B,
30C, 30D, and subsection (a)(1), 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 paragraph (2) for such taxable year, such excess shall be carried
to the succeeding taxable year and added to the credit allowable under
subsection (a)(2) for such succeeding taxable year.
`(A) CERTAIN COSTS NOT INCLUDED- No amount shall be taken into account
with respect to any cost which is paid or incurred by a taxpayer
to comply with any requirement of a Federal, State, or local government
(other than costs required under an agreement described in subsection
(c)).
`(B) SUBSIDIZED FINANCING- For purposes of paragraph (1), the amount
of costs paid or incurred by an eligible taxpayer pursuant to any
habitat management plan described in subsection (c)(5)(B) shall
be reduced by the amount of any financing provided under any Federal
or State program a principal purpose of which is to subsidize financing
for the conservation of the habitat of a qualified species.
`(f) Endangered Species Recovery Credit Limitation-
`(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--
`(i) with respect to allocations described in paragraph (2)(A)--
`(I) $5,000,000 with respect to qualified perpetual habitat
protection agreements,
`(II) $2,000,000 with respect to qualified 30-year habitat protection
agreements, and
`(III) $1,000,000 with respect to qualified habitat protection
agreements, and
`(ii) with respect to allocations described in paragraph (2)(B)--
`(I) $290,000,000 with respect to qualified perpetual habitat
protection agreements,
`(II) $55,000,000 with respect to qualified 30-year habitat
protection agreements, and
`(III) $35,000,000 with respect to qualified habitat protection
agreements, and
`(B) except as provided in paragraph (3), zero thereafter.
`(2) ALLOCATION OF LIMITATION-
`(A) ALLOCATIONS IN COORDINATION WITH THE SECRETARY OF AGRICULTURE-
The limitations described in paragraph (1)(A)(i) shall be allocated
to eligible taxpayers by the Secretary in consultation with the
Secretary of Agriculture.
`(i) IN GENERAL- The limitations described in paragraph (1)(A)(ii)
shall be allocated to eligible taxpayers in consultation with
the Secretary of the Interior and the Secretary of Commerce.
`(ii) ESTABLISHMENT OF ALLOCATION PROGRAM- Not later than 180
days after the date of the enactment of this Act, the Secretary,
in consultation with the Secretary of the Interior and the Secretary
of Commerce, shall, by regulation, establish a program to process
applications from eligible taxpayers and to determine how to best
allocate the credit limitations under clause (i) taking into account
the considerations described in clause (iii).
`(iii) CONSIDERATIONS- In accepting applications to make allocations
to eligible taxpayers under this section, priority shall be given
to taxpayers with agreements--
`(I) relating to habitats that will significantly increase the
likelihood of recovering and delisting a species as an endangered
species or a threatened species (as defined under section 2
of the Endangered Species Act of 1973),
`(II) that are cost-effective and maximize 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 Endangered
Species Act of 1973,
`(IV) relating to habitats with the potential to contribute
significantly to the improvement of the status of a qualified
species,
`(V) relating to habitats with the potential 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 habitat for the recovery of a qualified species,
`(VIII) relating to habitats for qualified species with an urgent
need for protection,
`(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 protection of qualified species and otherwise lawful
human activities, and
`(XI) with habitat management plans that may resolve conflicts
between the protection of a qualified species and military training
or other military operations.
`(3) CARRYOVER OF UNUSED LIMITATION- If for any calendar year any
of the limitations under paragraph (1) (after the application of this
paragraph) exceeds the amount allocated to eligible taxpayers for
such calendar year, such 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 `appropriate Secretary' has the
meaning given to the term `Secretary' under section 3(15) of the Endangered
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 species to which the plan
applies,
`(i) restore or enhance the habitat of the qualified species,
or
`(ii) reduce threats to the qualified species through the management
of the habitat,
`(C) describes the current condition of the habitat to be restored
or enhanced,
`(D) describes the threats to the qualified species that are intended
to be reduced through the plan,
`(E) describes the management practices to be undertaken by the
taxpayer,
`(F) provides a schedule of deadlines for undertaking such management
practices and the expected responses of the habitat and the species,
`(G) requires monitoring of the management practices and the status
of the qualified species and its habitat, and
`(H) describes the technical assistance to be provided to the taxpayer
and identifies the entity that will provide such assistance.
`(3) QUALIFIED SPECIES- The term `qualified species' means--
`(A) any species listed as an endangered species or threatened species
under the Endangered Species Act of 1973, or
`(B) any species for which a finding has been made under section
4(b)(3) of the 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--
`(A) HABITAT PROTECTION EASEMENT CREDIT- The basis of any property
for which a credit is allowed under subsection (a)(1) shall be reduced
by the amount of basis which is allocated, under regulations prescribed
by the Secretary, to the easement granted as part of a qualified
perpetual habitat protection agreement or a qualified 30-year habitat
protection agreement.
`(B) HABITAT RESTORATION CREDIT- If a credit is allowed under
