I 

108TH CONGRESS 

1ST SESSION H. R. 2964

To amend the Internal Revenue Code of 1986 to provide a tax incentive 

for land sales for conservation purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 25, 2003

Mr. PORTMAN (for himself and Mr. MATSUI) 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 

a tax incentive for land sales for conservation 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 ‘‘Conservation Tax In5 centives Act of 2003’’.
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1 SEC. 2. EXCLUSION OF 50 PERCENT OF GAIN ON SALES OF 

2 LAND OR INTERESTS IN LAND OR WATER TO 

3 ELIGIBLE ENTITIES FOR CONSERVATION 

4 PURPOSES. 

5 (a) IN GENERAL.—Part III of subchapter B of chap6 ter 1 of the Internal Revenue Code of 1986 (relating to 

7 items specifically excluded from gross income) is amended 

8 by inserting after section 121 the following new section: 

9 ‘‘SEC. 121A. 50-PERCENT EXCLUSION OF GAIN ON SALES OF 

10 LAND OR INTERESTS IN LAND OR WATER TO 

11 ELIGIBLE ENTITIES FOR CONSERVATION 

12 PURPOSES. 

13 ‘‘(a) EXCLUSION.—Gross income shall not include 50 

14 percent of any gain from the sale of land or an interest 

15 in land or water (determined without regard to any im16 provements) to an eligible entity if—

17 ‘‘(1) such land or interest in land or water was 

18 owned by the taxpayer or a member of the tax19 payer’s family (as defined in section 2032A(e)(2)) at 

20 all times during the 3-year period ending on the date 

21 of the sale, and 

22 ‘‘(2) such land or interest in land or water is 

23 being acquired by an eligible entity which provides 

24 the taxpayer, at the time of acquisition, a written 

25 letter of intent which shall include the following 

26 statement: ‘The purchaser’s intent is that this acqui-
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1 sition will serve 1 or more of the conservation pur2 poses specified in clause (i), (ii), or (iii) of section 

3 170(h)(4)(A). 

4 ‘‘(b) ELIGIBLE ENTITY.—For purposes of this sec5 tion, the term ‘eligible entity’ means an entity described 

6 in section 170(h)(3) or an agency or department thereof 

7 and which is organized and at all times operated prin8 cipally for 1 or more of the conservation purposes specified 

9 in clause (i), (ii), or (iii) of section 170(h)(4)(A). 

10 ‘‘(c) STOCK IN HOLDING CORPORATIONS.—For pur11 poses of this section, the term ‘land or an interest in land 

12 or water’ shall include a controlling stock interest in any 

13 corporation if the fair market value of the corporation’s 

14 land or interests in land or water equals or exceeds 90 

15 percent of the fair market value of all of such corpora16 tion’s assets at all times during the 3-year period ending 

17 on the date of the sale. For purposes of the preceding sen18 tence, the term ‘control’ means ownership of stock in a 

19 corporation which meets the requirements of section 

20 1504(a)(2) (determined by substituting ‘50 percent’ for 

21 ‘80 percent’ each place it appears).’’. 

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

23 for part III of subchapter B of chapter 1 of such Code 

24 is amended by inserting after the item relating to section 

25 121 the following new item:
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‘‘Sec. 121A. 50-percent exclusion of gain on sales of land or interests in land or water to eligible entities for conservation purposes.’’.

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

2 this section shall apply to sales occurring on or after the 

3 date of enactment of this Act.

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