II

107TH CONGRESS

1ST SESSION S. 1329

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

for land sales for conservation purposes.

IN THE SENATE OF THE UNITED STATES

AUGUST 2, 2001

Mr. JEFFORDS (for himself, Mr. BINGAMAN, Mr. HATCH, Mr. GRASSLEY, Mr.

DASCHLE, Mr. DURBIN, Mr. CHAFEE, and Mr. BOND) introduced the following bill; which was read twice and referred to the Committee on Finance

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 2001’’.
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•S 1329 IS

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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•S 1329 IS

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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