[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[S. 1013 Introduced in Senate (IS)]
103d CONGRESS
1st Session
S. 1013
To amend the Internal Revenue Code of 1986 to provide an election to
exclude from the gross estate the value of land subject to a qualified
conservation easement if certain conditions are satisfied, to permit a
qualified conservation contribution where the probability of surface
mining is remote, and to make technical changes to the alternative
valuation rules.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
May 24 (legislative day, April 19), 1993
Mr. Chafee (for himself and Mr. Thurmond) introduced the following
bill; which was read twice and referred to the Committee on Finance
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to provide an election to
exclude from the gross estate the value of land subject to a qualified
conservation easement if certain conditions are satisfied, to permit a
qualified conservation contribution where the probability of surface
mining is remote, and to make technical changes to the alternative
valuation rules.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE.
(a) Short Title.--This Act may be cited as the ``Rural Land
Conservation Act of 1993''.
(b) Amendment of 1986 Code.--Except as otherwise provided, whenever
in this Act an amendment or repeal is expressed in terms of an
amendment to, or repeal of, a section or provision, the reference shall
be considered to be made to a section or other provision of the
Internal Revenue Code of 1986.
SEC. 2. ESTATE TAX TREATMENT OF LAND SUBJECT TO A QUALIFIED
CONSERVATION EASEMENT.
(a) Estate Tax With Respect to Land Subject to a Qualified
Conservation Easement.--Section 2031 of the Internal Revenue Code of
1986 (relating to the definition of gross estate) is amended by
redesignating subsection (c) as subsection (d) and by inserting after
subsection (b) the following new subsection:
``(c) Estate Tax With Respect to Land Subject to a Qualified
Conservation Easement.--
``(1) In general.--If the executor makes the election
described in paragraph (4) of this subsection, then, except as
otherwise provided in this subsection, there shall be excluded
from the gross estate the value of land subject to a qualified
conservation easement (reduced by the amount of any
indebtedness to which such land is subject).
``(2) Land subject to a qualified conservation easement.--
For purposes of this subsection--
``(A) In general.--The term `land subject to a
qualified conservation easement' means land which--
``(i) is located in or within 50 miles of
an area which, on the date of the decedent's
death, is--
``(I) a metropolitan area (as
defined by the Office of Management and
Budget), or
``(II) a national park, unless it
is determined by the Secretary that
land in or within 50 miles of the park
is not under significant development
pressure,
``(ii) which was owned by the decedent or a
member of the decedent's family at all times
during the 3-year period ending on the date of
the decedent's death, and
``(iii) with respect to which a qualified
conservation contribution (as defined in
section 170(h)(1)) of a qualified real property
interest described in section 170(h)(2)(C) is
(or has been made) by the decedent or a member
of the decedent's family.
``(B) Certain contributions not included.--For
purposes of subparagraph (A), section 170(h)(4)(A)
shall be applied without regard to clause (iv) thereof
in determining whether there is a qualified
conservation contribution.
``(C) Family member.--For purposes of subparagraph
(A), the term `member of the decedent's family' has the
same meaning given such term by section 2032A(e)(2).
``(3) Tax on disposition if land subject to retained
development right.--
``(A) In general.--If the donor retained any
development right when the qualified conservation
contribution described in paragraph (2)(A)(iii) was
made, there is hereby imposed an additional estate tax
on the first person disposing (other than by gift or
devise) of the property after the death of the
decedent.
``(B) Amount of additional tax.--
``(i) In general.--The amount of the
additional tax imposed by subparagraph (A)
shall be the amount equal to the increase in
estate tax liability which would have occurred
if the value of the development right had been
included in the gross estate of the decedent
(as determined under paragraph (4)).
``(ii) Partial disposition.--If only a
portion of the property is disposed of, the
person disposing of the property shall pay a
pro rata portion of the tax imposed by
subparagraph (A) (and such tax shall be reduced
with respect to subsequent dispositions by the
taxes imposed with respect to prior
dispositions).
``(iii) Time for payment of tax.--Any tax
imposed under subparagraph (A) shall be due and
payable by the person disposing of the property
no later than April 15 of the calendar year
following the calendar year in which the
disposition occurs.
``(C) Development right.--For purposes of this
paragraph, the term `development right' means the
right--
``(i) to establish or use any structure
(and the land immediately surrounding it) for
sale, rent, or other commercial purpose which
is not subordinate to and directly supportive
of the conservation purpose of the qualified
conservation contribution described in
paragraph (2)(A)(iii), or
``(ii) to conduct the activity of farming,
forestry, ranching, horticulture, viticulture,
or recreation, whether or not for profit, on
the land.
``(4) Election with respect to land subject to qualified
conservation easement.--The election under this subsection
shall be made on the return of the tax imposed by section 2001
and shall be made in such manner as the Secretary shall by
regulations prescribe. Such an election, once made, shall be
irrevocable.
``(5) Calculation and notice of potential estate tax due.--
``(A) In general.--An executor making the election
described in paragraph (4) of this subsection shall
compute the amount of the additional estate tax
described in paragraph (3)(B).
``(B) Notice.--The executor shall file a `Notice of
Potential Estate Tax Due' in the place or places where
deeds are put to public record for the locality in
which the land subject to the qualified conservation
easement is located.
``(C) Form and manner.--The computation and filing
required by this paragraph shall be done in such manner
and on such forms as the Secretary may prescribe.''.
(b) Carryover Basis.--Section 1014(a) of the Internal Revenue Code
of 1986 (relating to basis of property acquired from a decedent) is
amended by striking the period at the end of paragraph (3) and
inserting ``, or'' at the end thereof, and by inserting at the end the
following new paragraph:
``(4) in the case of property excluded from the gross
estate of the decedent under section 2031(c), the basis of the
property in the hands of the decedent.''.
(c) Effective Date.--The amendments made by this section shall
apply to estates of decedents dying after December 31, 1992, which
includes land subject to qualified conservation easements granted after
December 31, 1992.
SEC. 3. GIFT TAX ON LAND SUBJECT TO A QUALIFIED CONSERVATION EASEMENT.
(a) Gift Tax With Respect to Land Subject to a Qualified
Conservation Easement.--Section 2503 of the Internal Revenue Code of
1986 (relating to taxable gifts) is amended by adding at the end the
following new subsection:
``(h) Gift Tax With Respect to Land Subject to a Qualified
Conservation Easement.--
``(1) In general.--At the election of the donor, the
transfer by gift of land subject to a qualified conservation
easement shall not be treated as a transfer of property by gift
for purposes of this chapter. For purposes of this subsection,
the term `land subject to a qualified conservation easement'
shall have the same meaning as in section 2031(c), except that
any reference to `decedent' or `the date of the decedent's
death' shall refer to the donor and the date of the transfer by
the donor, respectively.''
``(2) Land subject to retained development rights.--
``(A) In general.--If the donor retains any
development right when the gift is made, then there is
hereby imposed an additional gift tax on the first
person disposing (other than by gift or device) of the
property after the date of the gift to which this
subsection applies.
``(B) Amount of tax.--The amount of the tax under
subparagraph (A) shall be equal to the increase in gift
tax liability which would have occurred if the value of
the development right had been treated as a gift.
``(C) Definition and rules.--For purposes of this
paragraph--
``(i) Development right.--The term
`development right' has the meaning given such
term by section 2031(c)(3)(C).
``(ii) Other rules.--The rules of clauses
(ii) and (iii) of paragraph (3)(B) and
paragraph (5) of section 2031(c) shall apply,
except that `donor' shall be substituted for
`executor' each place it appears.''.
(b) Effective Date.--The amendments made by this section shall
apply to gifts of land subject to qualified conservation easements
granted after December 31, 1992.
SEC. 4. QUALIFIED CONSERVATION CONTRIBUTION WHERE SURFACE AND MINERAL
RIGHTS ARE SEPARATED.
(a) In General.--Section 170(h)(5)(B)(ii) of the Internal Revenue
Code of 1986 (relating to special rule) is amended to read as follows:
``(ii) Special rule.--With respect to any
contribution of property in which the ownership
of the surface estate and mineral interests has
been and remains separated, subparagraph (A)
shall be treated as met if the probability of
surface mining occurring on such property is so
remote as to be negligible.''.
(b) Effective Date.--The amendment made by this section shall apply
with respect to contributions made after December 31, 1992, in taxable
years ending after such date.
SEC. 5. QUALIFIED CONSERVATION CONTRIBUTION IS NOT A DISPOSITION.
(a) Qualified Conservation Contribution Is Not a Disposition.--
Subsection (c) of section 2032A of the Internal Revenue Code of 1986
(relating to alternative valuation method) is amended by adding at the
end thereof the following new paragraph:
``(8) Qualified conservation contribution is not a
disposition.--A qualified conservation contribution (as defined
in section 170(h)) by gift or otherwise shall not be treated as
a disposition for purposes of this subsection. If qualified
real property is land subject to a qualified conservation
easement (as defined in section 2031(c)), this subsection shall
not apply to such property.''.
(b) Land Subject to a Qualified Conservation Easement Is Not
Disqualified.--Subsection (b) of section 2032A of the Internal Revenue
Code of 1986 (relating to alternative valuation method) is amended by
adding at the end the following paragraph:
``(6) Qualified conservation easement.--Property shall not
fail to be treated as qualified real property solely because it
is land subject to a qualified conservation easement (as
defined in section 2031(c)).''.
(c) Effective Date.--The amendments made by this section shall
apply to estates of decedents dying after December 31, 1992, which
include land subject to qualified conservation easements granted after
December 31, 1992.
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