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107TH CONGRESS

1ST SESSION H. R. 893

To amend the Internal Revenue Code of 1986 to exclude from estate taxes

the value of certain farmland the use of which is restricted in perpetuity

to use as farmland.

IN THE HOUSE OF REPRESENTATIVES

MARCH 6, 2001

Mr. PITTS 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 estate taxes the value of certain farmland the use

of which is restricted in perpetuity to use as farmland.

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 ‘‘Farmland Preservation

5 Act of 2001’’.
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1 SEC. 2. EXCLUSION FROM GROSS ESTATE OF CERTAIN

2 FARMLAND WHICH IS RESTRICTED IN PER3 PETUITY TO USE AS FARMLAND.

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 WHICH IS

9 RESTRICTED IN PERPETUITY TO USE AS

10 FARMLAND.

11 ‘‘(a) IN GENERAL.—In the case of an estate of a de12 cedent to which this section applies, the value of the gross

13 estate shall not include the adjusted value of qualified

14 farmland included in the estate if there is in effect on the

15 date of death a qualified farmland conservation easement.

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

17 section shall apply to an estate if—

18 ‘‘(1) the decedent was (at the date of the dece19 dent’s death) a citizen or resident of the United

20 States, and

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

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

23 aggregating 5 years or more during which—

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

25 the decedent or a member of the decedent’s

26 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.

5 ‘‘(c) DEFINITIONS.—For purposes of this section—

6 ‘‘(1) QUALIFIED FARMLAND.—The term ‘quali7 fied farmland’ means any real property—

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

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

10 purposes (within the meaning of section

11 2032A(e)), and

12 ‘‘(C) which is located in a county which

13 has a population of 100 or more persons per

14 square mile.

15 ‘‘(2) QUALIFIED FARMLAND CONSERVATION

16 EASEMENT.—The term ‘qualified farmland conserva17 tion easement’ means a restriction (granted in per18 petuity) which does not permit any use of the land

19 for any purpose other than use as a farm for farm20 ing purposes (within the meaning of section

21 2032A(e)).

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

23 value’ means the value of farmland for purposes of

24 this chapter (determined without regard to this sec-
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1 tion), reduced by the amount deductible under para2 graph (3) or (4) of section 2053(a).

3 ‘‘(d) VERIFICATION OF EASEMENT.—Subsection (a)

4 shall not apply by reason of any qualified farmland con5 servation easement unless the executor—

6 ‘‘(1) notifies (in such form and manner as the

7 Secretary may by regulations prescribe) both the

8 Secretary and the Secretary of Agriculture of the

9 political subdivision of the State in which such ease10 ment is recorded, and

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

12 easement.’’

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

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

15 is amended by inserting after the item relating to section

16 2033 the following new item:

‘‘Sec. 2033A. Exclusion of certain farmland which is restricted in

perpetuity to use as farmland.’’

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

18 this section shall apply to restrictions first recorded after

19 December 31, 2001, with respect to estates of decedents

20 dying after such date.

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