HR 4212 IH
101st CONGRESS
2d Session
 H. R. 4212
To amend the Internal Revenue Code of 1986 to allow a credit for expenditures
for conservation measures to protect wetlands of the United States, and for
other purposes.
IN THE HOUSE OF REPRESENTATIVES
March 7, 1990
Mr. HAYES  of Louisiana introduced the following bill; which was referred
to the Committee on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to allow a credit for expenditures
for conservation measures to protect wetlands of the United States, 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.
  This Act may be cited as the `Wetlands Conservation Initiative Act of 1990'.
SEC. 2. FINDINGS AND PURPOSE.
  (a) FINDINGS- The Congress finds that--
  (1) wetlands play an integral role in maintaining the quality of life
  in America through contributions to our national economy, food supply,
  water supply, flood control, and fish, wildlife, and plant resources, and,
  consequently, to the health, safety, recreation, and economic prosperity
  of this Nation;
  (2) wetlands provide habitat essential for a major portion of the Nation's
  fish and wildlife, including birds, endangered species, commercially and
  recreationally important fisheries, as well as many unique species of
  native plants;
  (3) wetlands and the fish, wildlife, and plants supported by wetlands,
  provide significant national public benefits, including--
  (A) contributions to multi-billion dollar commercial marine harvests,
  (B) support for a major portion of the Nation's multi-billion dollar annual
  fur and hide harvests,
  (C) fishing, hunting, bird-watching, nature observation, and other
  wetland-related recreational activities and the industries they support;
  coastal wetlands also act as nurseries and habitat for over 90 percent of
  the commercially and recreationally important fisheries resources;
  (4) wetlands enhance water quality through the filtering of waters moving
  through the vegetated wetlands;
  (5) coastal wetlands provide a valuable buffer against storm surges,
  flooding, and salt water intrusion into fresh water swamps, lakes,
  and marshes;
  (6) coastal wetlands are being lost at an alarming and unacceptable rate
  of as much as 50 to 60 square miles per year in one State alone;
  (7) this loss of wetlands also threatens Federal navigation projects,
  hurricane protection projects, highways, homes, buildings, oil and gas
  facilities, and businesses; and
  (8) with 74 percent of the Nation's wetlands in private ownership,
  the successful protection and restoration of the Nation's wetlands is
  dependent upon the active involvement of the private sector in conjunction
  with efforts from Federal, State, and local governments.
  (b) PURPOSE- The purpose of this Act is to encourage conservation measures
  to protect the wetlands of the United States.
SEC. 3. CREDITS FOR WETLANDS CONSERVATION EXPENDITURES AND LEASES.
  (a) IN GENERAL- Subpart B of part IV of subchapter A of chapter 1 of the
  Internal Revenue Code of 1986 (relating to foreign tax credit, etc.) is
  amended by adding at the end thereof the following new sections:
`SEC. 30. WETLANDS CONSERVATION EXPENDITURES.
  `(a) GENERAL RULE- There shall be allowed as a credit against the tax
  imposed by this chapter for the taxable year an amount equal to 75 percent
  of the wetland conservation expenditures paid or incurred by the taxpayer
  during the taxable year.
  `(b) WETLAND CONSERVATION EXPENDITURES- For purposes of this section--
  `(1) IN GENERAL- The term `wetland conservation expenditure' means an
  expenditure for the restoration, conservation, construction, rehabilitation
  or maintenance (including expenditures for maintenance of wetlands leased
  pursuant to section 30(A) or donated pursuant to section 30(B)) of a
  wetlands if such expenditure is--
  `(A) for the purpose of restoring, preserving, constructing, rehabilitating
  or maintenance of the values and functions of wetlands, and
  `(B) undertaken pursuant to a plan for conservation or restoration of
  wetlands approved by--
  `(i) each Federal or State agency (if any) with authority to approve
  activities undertaken pursuant to such a plan, and
  `(ii) the Soil Conservation Service of the Department of Agriculture
  pursuant to the Wetlands Protection and Water Act.
Such term shall not include any expenditure which is required to be made
pursuant to any Federal or State law.
  `(2) TREATMENT OF DEPRECIABLE PROPERTY- The term `wetland conservation
  expenditure' does any include any expenditure for the acquisition or
  improvement of property which is of a character subject to the allowance
  for depreciation provided by section 167 but the depreciation allowances
  under such section shall be treated as expenditures.
  `(c) LIMITATION BASED ON AMOUNT OF TAX-
  `(1) IN GENERAL- The credit allowed by this section for any taxable year
  shall not exceed the excess (if any) of--
  `(A) the regular tax for the taxable year (reduced by the sum of the
  credits allowable under subpart A and sections 27, 28, and 29), over
  `(B) the tentative minimum tax for the taxable year.
  `(2) CARRYFORWARD OF UNUSED CREDIT-
  `(A) IN GENERAL- If the amount of the credit allowable under subsection
  (a) for any taxable year exceeds the limitation contained in paragraph
  (1) for such taxable year (hereinafter in this paragraph referred to the
  `unused credit year'), such excess shall be a credit carryover to each of
  the 15 years following the unused credit year and shall be added to the
  amount allowable as a credit by this section for such years.
`SEC. 30A. WETLANDS CONSERVATION LEASES.
  `(a) GENERAL RULE- There shall be allowed as a credit against the tax
  imposed by this chapter for the taxable year an amount equal to 75 percent
  of the sum of--
  `(1) the value of any qualified wetlands conservation lease allocable to
  such taxable year, and
  `(2) the expenditures paid or incurred by the taxpayer during such year
  for maintenance of the land subject to the lease as required under the lease.
  `(b) AMOUNT OF CREDIT- The portion of the value of any qualified wetlands
  conservation lease which is allocable to the taxable year is the present
  value of the aggregate estimated annual fair rental value of the land for its
  highest and best use divided by the number of years in the term of the lease.
  `(c) QUALIFIED WETLANDS CONSERVATION LEASE- For purposes of this section--
  `(1) IN GENERAL- The term `qualified wetlands conservation lease' means
  any lease which meets the requirements of paragraph (2) with respect to
  land which meets the requirements of paragraph (3).
  `(2) LEASE REQUIREMENTS- A lease meets the requirements of this paragraph
  if--
  `(A) the lease is for a term of not less than 15 years,
  `(B) the lessee of which is a local, State, or Federal Government, or
  a non-profit corporation defined under section 501 of the U.S. Internal
  Revenue Code,
  `(C) the lease is subject to terms and conditions (including determination
  of value, maintenance requirements, and stipulations governing access to
  subsurface interests) that are acceptable to the lessee, and
  `(D) the taxpayer does not receive any consideration from any source for
  entering into such lease.
A lease shall not be treated as failing to meet the requirement of paragraph
(1) by reason of a purchase of the land by the lessee during the lease term.
  `(3) LAND REQUIREMENTS- Land meets the requirements of this paragraph if
  the lessee has designated the land as appropriate for--
  `(A) the preservation of values and functions associated with wetlands
  (including wildlife habitat preservation, protection of water quality,
  and limitation on erosion), and
  `(B) the acquisition or lease by the United States or the lessee for
  preservation purposes.
  `(d) LIMITATION BASED ON AMOUNT OF TAX-
  `(1) IN GENERAL- The credit allowed by this section for any taxable year
  shall not exceed the excess (if any) of--
  `(A) the regular tax for the taxable year (reduced by the sum of the
  credits allowable under subpart A and sections 27, 28, 29, and 30, over
  `(B) the tentative minimum tax for the taxable year.
  `(2) CARRYFORWARD OF UNUSED CREDIT-
  `(A) IN GENERAL- If the amount of the credit allowable under subsection
  (a) for any taxable year exceeds the limitation contained in paragraph
  (1) for such taxable year (hereinafter in this paragraph referred to the
  `unused credit year'), such excess shall be a credit carryover to each of
  the 15 years following the unused credit year and shall be added to the
  amount allowable as a credit by this section for such years.
`SEC. 30B. DONATION OF WETLANDS.
  `(a) GENERAL RULE- In the case of a taxpayer who makes a qualified charitable
  contribution during the taxable year of environmentally valuable wetlands,
  there shall be allowed as a credit against the tax imposed by this chapter
  for such taxable year an amount equal to 75 percent of the fair market
  value of such wetlands.
  `(b) QUALIFIED CHARITABLE CONTRIBUTION- For purposes of this section, the
  term `qualified charitable contribution' means any charitable contribution
  to a governmental unit described in section 170(c)(1) or a non-profit
  corporation as defined under section 501 of the U.S. Internal Revenue
  Code if--
  `(1) the donee certifies to the Secretary that--
  `(A) it has authority to acquire and maintain such lands for purposes of
  conservation, and
  `(B) the land has significant natural resource values associated with
  wetlands and--
  `(i) is in a condition (at the time of the contribution) appropriate for
  purposes of preservation, or
  `(ii) is in a condition suitable for inclusion in a wetlands restoration,
  enhancement, or rehabilitation project to be undertaken by the donee;
  `(2) the contribution is of all rights, title, and interests in the
  property, and
  `(3) the donor does not receive any consideration (other than a nominal
  amount if required by law) from any source for making the contribution.
A contribution shall not fail to be treated as meeting the requirement of
paragraph (2) by reason of the retention by the donor of a qualified mineral
interest (as defined in section 170(h)(6)).
  `(c) ENVIRONMENTALLY VALUABLE WETLANDS DEFINED- For purposes of this section,
  the term `environmentally valuable wetlands' means wetlands identified in
  accordance with Federal, State, or local law as appropriate for acquisition
  and long-term preservation by the donee because such lands have significant
  natural resource values associated with wetlands, including wildlife,
  fisheries, and vegetative habitat values, water quality, erosion prevention,
  and flood control functions.
  `(d) LIMITATION-
  `(1) IN GENERAL- The credit allowed under this section for any taxable
  year shall not exceed the excess (if any) of--
  `(A) the regular tax for the taxable year reduced by the sum of the credits
  allowable under subpart A and sections 27, 28, 29, 30, and 30A; over
  `(B) the tentative minimum tax for the taxable year.
  `(2) CARRYFORWARD OF UNUSED CREDIT-
  `(A) IN GENERAL- If the amount of the credit allowable under subsection
  (a) for any taxable year exceeds the limitation contained in paragraph
  (1) for such taxable year (hereinafter in this paragraph referred to the
  `unused credit year'), such excess shall be a credit carryover to each of
  the 15 years following the unused credit year and shall be added to the
  amount allowable as a credit by this section for such years.
  `(e) DENIAL OF DEDUCTION- No deduction shall be allowed under any provision
  of this title for any contribution for which credit is allowed under
  this section.'
  (b) CLERICAL AMENDMENT- The table of sections for such subpart B is amended
  by adding at the end thereof the following new items:
`Sec. 30. Wetlands conservation expenditures.
`Sec. 30A. Wetlands conservation leases.
`Sec. 30B. Donation of wetlands.'
SEC. 4. EFFECTIVE DATE.
  (a) SECTION 30 OF CODE- Section 30 of the Internal Revenue Code of 1986,
  as added by this Act, shall apply to amounts paid or incurred after the
  date of the enactment of this Act in taxable years ending after such date.
  (b) SECTION 30A OF CODE- Section 30A of such Code, as added by this Act,
  shall apply to leases entered into after the date of the enactment of this
  Act in taxable years ending after such date.
  (c) SECTION 30B OF CODE- Section 30B of such Code, as added by this Act,
  shall apply to contributions made after the date of the enactment of this
  Act in taxable years ending after such date.