I

106TH CONGRESS

2D SESSION H. R. 5336

To amend the Internal Revenue Code of 1986 to exclude from gross income

gain on the sale to a governmental unit of land or an easement therein

for open space conservation purposes.

IN THE HOUSE OF REPRESENTATIVES

SEPTEMBER 28, 2000

Mr. FORBES (for himself and Mr. ENGEL) 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 to a governmental

unit of land or an easement therein for open space

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 and Rein5 vestment Tax-Incentive Act of 2000’’.

6 SEC. 2. FINDINGS.

7 The Congress finds that—
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1 (1) the Nation’s natural resources are vital to

2 the future prosperity of the United States,

3 (2) accessible, open space for all Americans to

4 enjoy promotes health and well being of the people,

5 (3) accessible, open space for all Americans to

6 enjoy provides educational opportunities,

7 (4) many Americans wish to make their land

8 open to all in perpetuity, and

9 (5) the taxes incurred on the sale of land can

10 be a disincentive to owners to choose to keep the

11 land undeveloped.

12 SEC. 3. EXCLUSION OF GAIN FROM SALE OF REAL PROP13 ERTY OR AN EASEMENT THEREIN TO A GOV14 ERNMENTAL UNIT FOR OPEN SPACE CON15 SERVATION PURPOSES.

16 (a) GENERAL RULE.—Part III of subchapter B of

17 chapter 1 of the Internal Revenue Code of 1986 (relating

18 to items specifically excluded from gross income) is

19 amended by redesignating section 139 as section 139A

20 and by inserting after section 138 the following new sec21 tion:
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1 ‘‘SEC. 139. EXCLUSION OF GAIN FROM SALE OF REAL PROP2 ERTY OR AN EASEMENT THEREIN TO A GOV3 ERNMENTAL UNIT FOR OPEN SPACE CON4 SERVATION PURPOSES.

5 ‘‘(a) GENERAL RULE.—Gross income does not in6 clude gain from the sale or exchange to a governmental

7 unit of—

8 ‘‘(1) qualified real property subject to a quali9 fied conservation easement, and

10 ‘‘(2) a qualified conservation easement.

11 ‘‘(b) DEFINITIONS.—For purposes of this section—

12 ‘‘(1) QUALIFIED CONSERVATION PURPOSE.—

13 The term ‘qualified conservation purpose’ has the

14 meaning given to such term by section 170(h)(4)(A),

15 other than clause (iv) thereof.

16 ‘‘(2) QUALIFIED REAL PROPERTY.—The term

17 ‘qualified real property’ means any real property—

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

19 and

20 ‘‘(B) which is used exclusively for con21 servation purposes.

22 ‘‘(3) QUALIFIED CONSERVATION EASEMENT.—

23 The term ‘qualified conservation easement’ means a

24 restriction (granted in perpetuity) on the use which

25 may be made of qualified real property which does

26 not permit any use of such property for any purpose
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1 other than use exclusively for a qualified conserva2 tion purpose.

3 ‘‘(4) GOVERNMENTAL UNIT.—The term ‘gov4 ernmental unit’ means an entity described in section

5 170(c)(1).

6 ‘‘(c) VERIFICATION OF EASEMENT.—Subsection (a)

7 shall not apply by reason of any qualified conservation

8 easement unless the taxpayer—

9 ‘‘(1) notifies the Secretary in such form and

10 manner as the Secretary may by regulations pre11 scribe, and

12 ‘‘(2) submits to the Secretary a copy of such

13 easement.’’.

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

15 for such part is amended by striking the last item and

16 inserting the following new items:

‘‘Sec. 139. Exclusion of gain from sale of real property or an

easement therein to a governmental unit for open

space conservation purposes.

‘‘Sec. 139A. Cross references to other Acts.’’.

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

18 this section shall apply to sales and exchanges after De19 cember 31, 2000.

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