Wetlands and Green Space Preservation Assistance Act of 1993

Summary: Wetlands and Green Space Preservation Assistance Act of 1993 - Amends the Internal Revenue Code to provide for determining the environmental use value of sensitive environmental areas for estate tax purposes.  Requires the estate to grant an environmental preservation easement for a period of ten years after the death of the decedent.  Imposes an additional estate tax if an heir fails to maintain the easement.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Wetlands and Green Space 
Preservation Assistance Act of 1993''.

SEC. 2. SPECIAL VALUATION FOR SENSITIVE ENVIRONMENTAL AREAS.

    (a) In General.--Part III of subchapter A of chapter 11 of the 
Internal Revenue Code of 1986 (relating to gross estate) is amended by 
adding immediately after section 2032A the following new section:

``SEC. 2032B. VALUATION OF SENSITIVE ENVIRONMENTAL AREAS.

    ``(a) Value Based on Environmental Use.--If--
            ``(1) the decedent was (at the time of his death) a citizen 
        or resident of the United States, and
            ``(2) the executor elects the application of this section,
then, for purposes of this chapter, the value of any interest in any 
sensitive environmental area in the gross estate of the decedent shall 
be its environmental use value.
    ``(b) Definitions; Special Rules.--For purposes of this section--
            ``(1) In general.--The term `sensitive environmental area' 
        means--
                    ``(A) any wetlands area (as defined by section 3(5) 
                of the Emergency Wetlands Revenues Act of 1986 (16 
                U.S.C. 3902(5)), or
                    ``(B) any other area of undeveloped natural 
                condition or open space.
            ``(2) Environmental use value.--The term `environmental use 
        value' means the value of the interest in a sensitive 
        environmental area, subject to an environmental preservation 
        easement.
            ``(3) Environmental preservation easement.--
                    ``(A) In general.--The term `environmental 
                preservation easement' means, with respect to any 
                sensitive environmental area included in the gross 
                estate of the decedent, a preservation easement granted 
                for a period of 10 years beginning on the date of death 
                of the decedent.
                    ``(B) Grantor.--Any environmental preservation 
                easement may be granted by--
                            ``(i) the decedent (including by lifetime 
                        transfer), or
                            ``(ii) the executor with the consent of the 
                        qualified heirs of the decedent.
                    ``(C) Charitable deduction limitation.--No 
                deduction shall be allowed under sections 170 or 2055 
                for a grant of an environmental preservation easement 
                under subparagraph (B)(ii) of this paragraph.
            ``(4) Qualified heir.--The term `qualified heir' means, 
        with respect to any interest in any sensitive environmental 
        area--
                    ``(A) the estate of the decedent, or
                    ``(B) any person who acquires such interest (or to 
                whom such interest passes) from the decedent.
    ``(c) Recapture of Tax on Failure to Maintain Easement.--
            ``(1) Imposition of additional estate tax.--If, after the 
        death of the decedent, a qualified heir of the decedent fails 
        to maintain an environmental preservation easement in a 
        sensitive environmental area, then there is hereby imposed an 
        additional estate tax.
            ``(2) Amount of additional tax.--
                    ``(A) In general.--The amount of the additional tax 
                imposed by paragraph (1) with respect to any interest 
                in any sensitive environmental area shall be the amount 
                equal to the greater of--
                            ``(i) the adjusted tax difference 
                        attributable to such interest, or
                            ``(ii) the excess of the amount realized 
                        with respect to the interest (or, in any case 
                        other than a sale or exchange at arm's length, 
                        the fair market value of the interest) over the 
                        environmental use value of the interest.
                    ``(B) Adjusted tax difference attributable to 
                interest.--For purposes of subparagraph (A), the 
                adjusted tax difference attributable to an interest is 
                the amount which bears the same ratio to the adjusted 
                tax difference with respect to the estate (determined 
                under subparagraph (C)) as--
                            ``(i) the excess of the value of such 
                        interest for purposes of this chapter 
                        (determined without regard to its environmental 
                        use value) over the environmental use value of 
                        such interest, bears to
                            ``(ii) a similar excess determined for all 
                        sensitive environmental areas in such estate.
                    ``(C) Adjusted tax difference with respect to the 
                estate.--For purposes of subparagraph (B), the term 
                `adjusted tax difference with respect to the estate' 
                means the excess of what would have been the estate tax 
                liability, but for subsection (a), over the estate tax 
                liability. 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.
            ``(3) Due date.--The additional tax imposed by this 
        subsection shall become due and payable on the day which is 6 
        months after the date of the failure referred to in paragraph 
        (1).
            ``(4) Liability for tax: furnishing of bond.--The qualified 
        heir receiving an interest for which an election under 
        subsection (a) has been made shall be personally liable for the 
        additional tax imposed by this subsection with respect to his 
        interest unless such heir has furnished bond which meets the 
        requirements of paragraph (5).
            ``(5) Bond in lieu of personal liability.--If a qualified 
        heir makes written application to the Secretary for 
        determination of the maximum amount of the additional tax which 
        may be imposed by this subsection with respect to such heir's 
        interest, the Secretary (as soon as possible, and in any event 
        within 1 year after the making of such application) shall 
        notify such heir of such maximum amount. The qualified heir, on 
        furnishing a bond in such amount and for such period as may be 
        required, shall be discharged from personal liability for any 
        additional tax imposed by this subsection and shall be entitled 
        to a receipt or writing showing such discharge.
    ``(d) Election.--The election under this section shall be made not 
later than the time prescribed by section 607(a) for filing the return 
of tax imposed by section 2001 (including extension thereof), and shall 
be made in such manner as the Secretary shall by regulations prescribe. 
Such election once made shall be irrevocable.
    ``(e) Statute of Limitations.--If there is a failure to maintain an 
environmental preservation easement in a sensitive environmental area 
as described in subsection (c), then--
            ``(1) the statutory period for the assessment of any 
        additional tax under subsection (c) attributable to such 
        failure shall not expire before the expiration of 3 years from 
        the date the Secretary is notified (in such manner as the 
        Secretary may by regulations prescribe) of such failure, 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 which would otherwise prevent 
        such assessment.''
    (b) Conforming Amendments.--
            (1) Subsection (l) of section 170 of such Code (relating to 
        disallowance of charitable deductions in certain cases) is 
        amended by adding at the end thereof the following new 
        paragraph:
            ``For disallowance of deductions for certain contributions 
        of environmental preservation easements, see section 
        2032B(b)(3)(C).''
            (2) Paragraph (3) of section 1014(a) of such Code (relating 
        to basis of property acquired from a decedent) is amended by 
        inserting ``or section 2032B'' after ``section 2032A''.
            (3) Subsection (c) of section 1016 of such Code (relating 
        to increase in basis of property on which additional estate tax 
        is imposed) is amended--
                    (A) by inserting ``or section 2032B(c)(1)'' after 
                ``section 2032A(c)(1)'' each place it appears in 
                paragraphs (1), (3), and (5)(B),
                    (B) by inserting ``or section 2032B'' after 
                ``2032A'' in paragraph (1)(A),
                    (C) by striking ``section 2032A(a)'' in paragraph 
                (1)(B) and inserting ``subsection (a) of the section 
                under which such additional estate tax is imposed''.
            (4) Section 1040 of such Code (relating to transfer of 
        certain farm, etc., real property) is amended--
                    (A) by inserting ``or section 2032B(b)(4)'' after 
                ``section 2032A(e)(1)'' in subsection (a),
                    (B) by inserting ``or section 2032B'' after ``under 
                section 2032A'' each place it appears therein,
                    (C) by striking ``to section 2032A'' and inserting 
                ``to sections 2032A and 2032B'' in subsection (a), and
                    (D) by striking ``farm, etc., real'' in the heading 
                and inserting ``special valuation''.
            (5) Subparagraph (C) of section 1223(12) of such Code 
        (relating to holding period of property) is amended by 
        inserting ``or section 2032B(b)(4)''.
            (6) Subsection (f) of section 2013 of such Code (relating 
        to treatment of additional estate tax imposed) is amended--
                    (A) by inserting ``or section 2032B(c)'' after 
                ``section 2032A(c)'' each place it appears,
                    (B) by inserting ``or section 2032B'' after ``If 
                section 2032A'',
                    (C) by striking ``as if section 2032A'' in 
                paragraph (2) and inserting ``as if sections 2032A and 
                2032B'', and
                    (D) by inserting ``or Section 2032B'' after 
                ``Section 2032A'' in the caption thereof.
            (7) Subsection (e) of section 2055 of such Code (relating 
        to disallowance of deduction for transfers for public, 
        charitable, and religious uses in certain cases) is amended by 
        adding at the end thereof the following new paragraph:
            ``(5) No deduction shall be allowed under this section for 
        a transfer described under paragraph (3)(B) of section 
        2032B(b).''
            (8) Section 2624(b) of such Code (relating to valuation in 
        generation-skipping transfers) is amended by striking ``2032 
        and 2032A'' and inserting ``2032, 2032A, and 2032B''.
            (9) Section 2663(1) of such Code (relating to regulations 
        for generation-skipping transfers) is amended by striking 
        ``section 2032A(c)'' and inserting ``sections 2032A(c) and 
        2032B(c)''.
            (10) The table of sections for part III of subchapter A of 
        chapter 11 of such Code is amended by inserting immediately 
        after the item relating to section 2032A the following:

                                  ``Sec. 2032B. Special valuation for 
                                        sensitive environmental 
                                        areas.''.
            (11) The table of sections for part III of subchapter O of 
        chapter 1 of such Code is amended by striking ``farm, etc., 
        real'' in the item relating to section 1040 and inserting 
        ``special valuation''.
    (c) Effective Date.--The amendments made by this section shall 
apply to estates of decedents dying after the date of the enactment of 
this Act.