I 

112TH CONGRESS 

1ST SESSION H. R. 390 

To amend the Internal Revenue Code of 1986 to provide an exclusion from 

the gross estate for certain farmlands and lands subject to qualified 

conservation easements, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JANUARY 20, 2011 

Mr. THOMPSON of California 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 provide 

an exclusion from the gross estate for certain farmlands 

and lands subject to qualified conservation easements, 

and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Family Farm Preser5 vation and Conservation Estate Tax Act’’. 


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1 SEC. 2. EXCLUSION FROM GROSS ESTATE FOR CERTAIN 

2 FARMLAND SO LONG AS FARMLAND USE 

3 CONTINUES. 

4 (a) IN GENERAL.—Part III of subchapter A of chap5 ter 11 of the Internal Revenue Code of 1986 (relating to 

6 gross estate) is amended by inserting after section 2033 

7 the following new section: 

8 ‘‘SEC. 2033A. EXCLUSION OF CERTAIN FARMLAND SO LONG 

9 AS USE AS FARMLAND CONTINUES. 

10 ‘‘(a) IN GENERAL.—In the case of an estate of a de11 cedent to which this section applies, if the executor makes 

12 the election described in subsection (f), the value of the 

13 gross estate shall not include the adjusted value of quali14 fied farmland included in the estate. 

15 ‘‘(b) ESTATES TO WHICH SECTION APPLIES.—This 

16 section shall apply to an estate if— 

17 ‘‘(1) the decedent was (at the date of the dece18 dent’s death) a citizen or resident of the United 

19 States, and 

20 ‘‘(2) during the 8-year period ending on the 

21 date of the decedent’s death there have been periods 

22 aggregating 5 years or more during which— 

23 ‘‘(A) the qualified farmland was owned by 

24 the decedent or a member of the decedent’s 

25 family, and 


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1 ‘‘(B) there was material participation 

2 (within the meaning of section 2032A(e)(6)) by 

3 the decedent or a member of the decedent’s 

4 family in the operation of such farmland, except 

5 that ‘material participation’ shall also include 

6 any rental of real estate and related property 

7 between the estate of the decedent or any suc8 cessor thereto and any tenant so long as the 

9 tenant uses the real estate and related property 

10 to produce agricultural or horticultural com11 modities, including livestock, bees, poultry, or12 chards and woodlands, timber and fur-bearing 

13 animals and wildlife, on such farmland. 

14 Rules similar to the rules of paragraphs (4) and (5) 

15 of section 2032A(b) shall apply for purposes of sub16 paragraph (B). 

17 ‘‘(c) DEFINITIONS AND SPECIAL RULE.—For pur18 poses of this section— 

19 ‘‘(1) QUALIFIED FARMLAND.—The term ‘quali20 fied farmland’ means any real property— 

21 ‘‘(A) which is located in the United States, 

22 ‘‘(B) which is used as a farm for farming 

23 purposes, and 

24 ‘‘(C) which was acquired from or passed 

25 from the decedent to a qualified heir of the deVerDate Mar 15 2010 05:47 Jan 21, 2011 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H390.IH H390

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1 cedent and which, on the date of the decedent’s 

2 death, was being so used by the decedent or a 

3 member of the decedent’s family. 

4 ‘‘(2) MEMBER OF FAMILY.—A member of a 

5 family, with respect to any individual, means— 

6 ‘‘(A) a member of the family (as defined 

7 by section 2031A(e)(2)), and 

8 ‘‘(B) includes— 

9 ‘‘(i) a lineal descendant of any spouse 

10 described in subparagraph (D) of section 

11 2032A(e)(2), 

12 ‘‘(ii) a lineal descendant of a sibling of 

13 a parent of such individual, 

14 ‘‘(iii) a spouse of any lineal descend15 ant described in clause (ii), and 

16 ‘‘(iv) a lineal descendant of a spouse 

17 described in clause (iii). 

18 ‘‘(3) ADJUSTED VALUE.—The term ‘adjusted 

19 value’ means the value of farmland for purposes of 

20 this chapter (determined without regard to this sec21 tion), reduced by the amount deductible under para22 graph (3) or (4) of section 2053(a). 

23 ‘‘(4) OTHER TERMS.—Any other term used in 

24 this section which is also used in section 2032A shall 


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1 have the same meaning given such term by section 

2 2032A. 

3 ‘‘(d) TAX TREATMENT OF DISPOSITIONS AND FAIL4 URES TO USE FOR FARMING PURPOSES.— 

5 ‘‘(1) IMPOSITION OF RECAPTURE TAX.—If, at 

6 any time after the decedent’s death— 

7 ‘‘(A) the qualified heir disposes of any in8 terest in qualified farmland (other than by a 

9 disposition to a member of his family), or 

10 ‘‘(B) the qualified heir ceases to use the 

11 real property which was acquired (or passed) 

12 from the decedent as a farm for farming pur13 poses, 

14 then there is hereby imposed a recapture tax on 

15 such disposition or cessation of use. 

16 ‘‘(2) AMOUNT OF RECAPTURE TAX.—The 

17 amount of the tax imposed by paragraph (1) shall 

18 be the excess of— 

19 ‘‘(A) the tax which would have been im20 posed by section 2001 on the estate of the dece21 dent but determined as if such estate included 

22 the interest in qualified farmland described in 

23 paragraph (1) which was so disposed of or 

24 ceased to be so used, reduced by the credits al25 lowable against such tax, over 


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1 ‘‘(B) the tax imposed by section 2001 on 

2 the estate of the decedent, reduced by such 

3 credits. 

4 For purposes of this paragraph, the value of the in5 terest in qualified farmland specified in subpara6 graph (A) shall be the adjusted value of such inter7 est as of the date of the disposition or cessation of 

8 such interest described in paragraph (1). 

9 ‘‘(3) REGULATIONS.—The Secretary may pre10 scribe such regulations as may be necessary or ap11 propriate to carry out this subsection, including reg12 ulations requiring record keeping and information 

13 reporting, except that the Secretary may not impose 

14 a lien on the estate of the decedent or qualified 

15 farmland for such purposes. 

16 ‘‘(e) APPLICATION OF OTHER RULES.—Rules similar 

17 to the rules of subsections (e) (other than paragraph (13) 

18 thereof), (f), (g), (h), and (i) of section 2032A shall apply 

19 for purposes of this section. 

20 ‘‘(f) ELECTION.—The election under this subsection 

21 shall be made on or before the due date (including exten22 sions) for filing the return of tax imposed by section 2001 

23 and shall be made on such return.’’. 

24 (b) CLERICAL AMENDMENT.—The table of sections 

25 for part III of subchapter A of chapter 11 of such Code 


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1 is amended by inserting after the item relating to section 

2 2033 the following new item: 

‘‘Sec. 2033A. Exclusion of certain farmland so long as use as farmland continues.’’. 

3 (c) EFFECTIVE DATE.—The amendments made by 

4 this section shall apply to estates of decedents dying after 

5 the date of the enactment of this Act. 

6 SEC. 3. TEMPORARY EXCLUSION OF QUALIFIED CONSERVA7 TION EASEMENTS. 

8 (a) IN GENERAL.—Part III of subchapter A of chap9 ter 11 of the Internal Revenue Code of 1986 (relating to 

10 gross estate), as amended by section 2, is amended by in11 serting after section 2033A the following new section: 

12 ‘‘SEC. 2033B. TEMPORARY EXCLUSION OF QUALIFIED CON13 SERVATION EASEMENTS. 

14 ‘‘(a) IN GENERAL.—In the case of an estate of a de15 cedent to which this section applies, if the executor makes 

16 the election described in subsection (d)— 

17 ‘‘(1) the value of the gross estate shall not in18 clude the value of land subject to a qualified con19 servation easement included in the estate, but 

20 ‘‘(2) a tax under subsection (b) shall apply. 

21 ‘‘(b) TAX TREATMENT OF DISPOSITIONS AND FOR

22 USE INCOMPATIBLE WITH CONSERVATION EASEMENT.— 

23 ‘‘(1) IMPOSITION OF RECAPTURE TAX.—If, at 

24 any time after the decedent’s death— 


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1 ‘‘(A) the qualified heir disposes of any in2 terest in the land described in subsection (a)(1) 

3 (other than by a disposition to a member of his 

4 family), or 

5 ‘‘(B) the qualified heir uses any portion of 

6 the land described in subsection (a)(1) in a 

7 manner which violates the terms of such ease8 ment, 

9 then there is hereby imposed a recapture tax on 

10 such disposition or use. 

11 ‘‘(2) AMOUNT OF RECAPTURE TAX.—The 

12 amount of the tax imposed by paragraph (1) shall 

13 be the excess of— 

14 ‘‘(A) the tax which would have been im15 posed by section 2001 on the estate of the dece16 dent, determined as if— 

17 ‘‘(i) section 2031(c) did not apply, 

18 and 

19 ‘‘(ii) as if such estate included the in20 terest described in paragraph (1)(A) or the 

21 portion described in paragraph (1)(B), as 

22 applicable, 

23 reduced by the credits allowable against such 

24 tax, over 


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1 ‘‘(B) the tax imposed by section 2001 on 

2 the estate of the decedent, reduced by such 

3 credits. 

4 For purposes of this paragraph, the value of any in5 terest in land or portion of land subject to a quali6 fied conservation easement shall be the fair market 

7 value of such interest or portion as of the date of 

8 the disposition or use of such interest or portion de9 scribed in paragraph (1). 

10 ‘‘(3) REGULATIONS.—The Secretary may pre11 scribe such regulations as may be necessary or ap12 propriate to carry out this subsection, including reg13 ulations requiring record keeping and information 

14 reporting, except that the Secretary may not impose 

15 a lien on the estate of the decedent, land subject to 

16 a qualified conservation easement, or qualified con17 servation easement for such purposes. 

18 ‘‘(c) LAND SUBJECT TO QUALIFIED CONSERVATION

19 EASEMENT.—For purposes of this section, the terms ‘land 

20 subject to a qualified conservation easement’ and ‘quali21 fied conservation easement’ have the meanings given such 

22 terms by section 2031(c)(8). 

23 ‘‘(d) ELECTION.—The election under this subsection 

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1 sions) for filing the return of tax imposed by section 2001 

2 and shall be made on such return.’’. 

3 (b) CLERICAL AMENDMENT.—The table of sections 

4 for subchapter B of chapter 62 of such Code is amended 

5 by adding at the end the following new item: 

‘‘Sec. 2033B. Temporary exclusion of qualified conservation easements.’’. 

6 (c) EFFECTIVE DATE.—The amendments made by 

7 this section shall apply to estates of decedents dying after 

8 the date of the enactment of this Act. 

9 SEC. 4. MODIFICATION OF DEFINITION OF QUALIFIED CON10 SERVATION EASEMENT. 

11 (a) IN GENERAL.—Subparagraph (B) of section 

12 2031(c)(8) of the Internal Revenue Code of 1986 is 

13 amended by striking ‘‘and the restriction on the use of 

14 such interest described in section 170(h)(2)(C) shall in15 clude a prohibition on more than a de minimis use for 

16 a commercial recreational activity’’. 

17 (b) EFFECTIVE DATE.—The amendments made by 

18 this section shall apply to estates of decedents dying after 

19 the date of the enactment of this Act. 

20 SEC. 5. MODIFICATION OF RULES RELATING TO VALU21 ATION OF CERTAIN FARM, ETC., REAL PROP22 ERTY. 

23 (a) DISPOSITION OF INTEREST SUBJECT TO QUALI24 FIED CONSERVATION EASEMENT.—Subparagraph (A) of 

25 section 2032A(c)(1) of the Internal Revenue Code of 1986 


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1 is amended by striking ‘‘family)’’ and inserting ‘‘family 

2 or by a disposition to any other person when such interest 

3 in real property is subject to a qualified conservation ease4 ment (as defined in section 2031(c)(8)(B)))’’. 

5 (b) WOODLANDS SUBJECT TO MANAGEMENT

6 PLAN.—Paragraph (2) of section 2032A(c) of such Code 

7 is amended by adding at the end the following new sub8 paragraph: 

9 ‘‘(F) EXCEPTION FOR WOODLANDS SUB10 JECT TO MANAGEMENT PLAN.—Subparagraph 

11 (E) shall not apply to any disposition or sever12 ance of standing timber on a qualified woodland 

13 that is made pursuant to— 

14 ‘‘(i) a written forest management plan 

15 developed by a credentialed professional 

16 forester, 

17 ‘‘(ii) a written forest management 

18 plan that is equivalent to a forest steward19 ship plan, or 

20 ‘‘(iii) a third-party audited forest cer21 tification system or similar land manage22 ment protocol.’’. 

23 (c) SALE OF CONSERVATION EASEMENT NOT A DIS24 POSITION.—Paragraph (8) of section 2032A(c) of such 

25 Code is amended— 


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1 (1) by striking ‘‘A qualified’’ and inserting 

2 ‘‘Neither a qualified’’, and 

3 (2) by inserting ‘‘nor a sale of a conservation 

4 easement limiting the use of qualified real property’’ 

5 after ‘‘otherwise’’. 

6 (d) FARM DEFINED.—Paragraph (4) of section 

7 2032A(e) of such Code is amended by striking ‘‘orchards 

8 and woodlands’’ and inserting ‘‘orchards, woodlands, and 

9 properties managed to provide habitat in support of fish 

10 and wildlife dependent recreation’’. 

11 (e) FARMING PURPOSE DEFINED.—Paragraph (5) of 

12 section 2032A(e) of such Code is amended— 

13 (1) in subparagraph (A) by inserting ‘‘, silvicul14 tural,’’ after ‘‘agricultural’’, and 

15 (2) by striking ‘‘and’’ at the end of subpara16 graph (B), by striking the period at the end of sub17 paragraph (C) and inserting ‘‘, and’’, and by adding 

18 at the end the following: 

19 ‘‘(D) creating, restoring, enhancing, or 

20 maintaining habitat for the purpose of gener21 ating revenue from nature-oriented recreational 

22 opportunities, including hunting, fishing, wild23 life observation, and related fish and wildlife de24 pendent recreation.’’. 


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1 (f) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to estates of decedents dying after 

3 the date of the enactment of this Act. 

Æ 


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