```

[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5054 Introduced in House (IH)]

106th CONGRESS
  2d Session
                                H. R. 5054

To amend the Internal Revenue Code of 1986 to exclude from gross income 
   gain on the sale or exchange of qualified conservation easements.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                             July 27, 2000

Mr. Klink (for himself and Mr. Hoeffel) 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 exclude from gross income 
   gain on the sale or exchange of qualified conservation easements.

    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 ``Farmland Protection and Sprawl 
Reduction Act of 2000''.

SEC. 2. EXCLUSION OF GAIN FROM SALE OR EXCHANGE OF QUALIFIED 
              CONSERVATION EASEMENTS.

    (a) General Rule.--Part III of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 (relating to items specifically excluded 
from gross income) is amended by redesignating section 139 as section 
139A and by inserting after section 138 the following new section:

``SEC. 139. SALES AND EXCHANGES OF QUALIFIED CONSERVATION EASEMENTS.

    ``(a) General Rule.--In the case of a taxpayer who owns qualified 
real property, gross income does not include gain from the sale or 
exchange of a qualified conservation easement in such real property.
    ``(b) Definitions.--For purposes of this section--
            ``(1) Qualified conservation easement.--The term `qualified 
        conservation easement' means a restriction (granted in 
        perpetuity) on the use which may be made of qualified real 
        property which does not permit any use of such property for any 
        purpose other than use exclusively for a conservation purpose.
            ``(2) Qualified real property.--The term `qualified real 
        property' means any real property--
                    ``(A) which is located in the United States, and
                    ``(B) which is used exclusively for conservation 
                purposes.
            ``(3) Conservation purpose.--The term `conservation 
        purpose' has the meaning given to such term by section 
        170(h)(4)(A), other than clause (iv) thereof. Such term shall 
        include use for purposes of a farming business (as defined in 
        section 263A(e)(4)).
    ``(c) Verification of Easement.--Subsection (a) shall not apply by 
reason of any qualified conservation easement unless the taxpayer--
            ``(1) notifies the Secretary in such form and manner as the 
        Secretary may by regulations prescribe, and
            ``(2) submits to the Secretary a copy of such easement.
    ``(d) Basis Adjustment.--No adjustment shall be made in the basis 
of real property by reason of the exclusion from gross income under 
subsection (a) of gain from the sale or exchange of a qualified 
conservation easement in such property.''.
    (b) Clerical Amendment.--The table of sections for such part is 
amended by striking the last item and inserting the following new 
items:

                              ``Sec. 139. Sales and exchanges of 
                                        qualified conservation 
                                        easements.
                              ``Sec. 139A. Cross references to other 
                                        Acts.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to restrictions first recorded after December 31, 2000, and to 
sales and exchanges after such date.
                                 <all>
```