II

106TH CONGRESS

2D SESSION S. 3134

To amend the Internal Revenue Code of 1986 to provide an income tax

credit for certain charitable conservation contributions of land by small

farmers and ranchers, and for other purposes.

IN THE SENATE OF THE UNITED STATES

SEPTEMBER 28 (legislative day, SEPTEMBER 22), 2000

Mr. BAUCUS 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

an income tax credit for certain charitable conservation

contributions of land by small farmers and ranchers,

and for other 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 ‘‘Rural Heritage Con5 servation Act’’.
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1 SEC. 2. CREDIT FOR CERTAIN CHARITABLE CONSERVATION

2 CONTRIBUTIONS OF LAND BY SMALL FARM3 ERS AND RANCHERS.

4 (a) IN GENERAL.—Subpart B of part IV of sub5 chapter A of chapter 1 of the Internal Revenue Code of

6 1986 (relating to foreign tax credit, etc.) is amended by

7 adding at the end the following:

8 ‘‘SEC. 30B. PRIVATE LAND CONSERVATION.

9 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of an eli10 gible farmer or rancher who elects the application of this

11 section for a 15-consecutive-taxable-year period, there

12 shall be allowed as a credit against the tax imposed by

13 this chapter for any taxable year within such period an

14 amount equal to the sum of—

15 ‘‘(1) 10 percent of the amount which would

16 (but for subsection (d)(2)) be allowed for such year

17 as a deduction under section 170 for a qualified con18 servation contribution (as defined in section 170(h)),

19 plus

20 ‘‘(2) the amount of any carryforward credit al21 lowable under subsection (e).

22 ‘‘(b) LIMITATIONS.—

23 ‘‘(1) MAXIMUM CREDIT.—

24 ‘‘(A) IN GENERAL.—The credit allowed by

25 subsection (a) for all taxable years of the tax26 payer shall not exceed $500,000.
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1 ‘‘(B) SPECIAL RULE FOR JOINT RE2 TURNS.—The amount of the credit under sub3 section (a) on a joint return for any taxable

4 year shall be allocated equally between the

5 spouses for purposes of applying the limitation

6 under subparagraph (A) for succeeding taxable

7 years.

8 ‘‘(C) AGGREGATION RULE.—For purposes

9 of this paragraph, all members of the same con10 trolled group of corporations (within the mean11 ing of section 267(f)), and all persons under

12 common control (within the meaning of section

13 52(b)) but treating an interest of more than 20

14 percent as a controlling interest), shall be treat15 ed as 1 taxpayer.

16 ‘‘(2) LIMITATION BASED ON AMOUNT OF

17 TAX.—The credit allowed by subsection (a) for any

18 taxable year shall not exceed the regular tax for the

19 taxable year reduced by the sum of the credits allow20 able under subpart A and the preceding sections of

21 this subpart.

22 ‘‘(c) ELIGIBLE FARMER OR RANCHER.—For pur23 poses of this section, the term ‘eligible farmer or rancher’

24 means a taxpayer—
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1 ‘‘(1) whose gross income from farming (as de2 fined in section 464(e)(1)) is at least 51 percent of

3 the taxpayer’s gross income for the taxable year, and

4 ‘‘(2) in the case of a C corporation, the stock

5 of which is not publicly traded on a recognized ex6 change.

7 ‘‘(d) SPECIAL RULES.—

8 ‘‘(1) ELECTION.—A taxpayer may make only 1

9 election under subsection (a). Such an election, once

10 made, shall be irrevocable.

11 ‘‘(2) APPLICATION WITH SECTION 170.—No de12 duction shall be allowed under section 170 for a

13 qualified conservation contribution (as defined in

14 section 170(h)) to a taxpayer who elects to take the

15 credit allowed by subsection (a) for a qualified con16 servation contribution during the 15-taxable-year pe17 riod described in such subsection, or if shorter, dur18 ing the period ending with the taxable year in which

19 the limitation under subsection (b)(1)(A) is attained.

20 ‘‘(e) CARRYFORWARD OF EXCESS CREDIT.—If the

21 credit allowable under subsection (a) for any taxable year

22 exceeds the amount of the limitation imposed by sub23 section (b)(2) for such taxable year, such excess shall be

24 carried to the succeeding taxable year and added to the
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1 credit allowable under subsection (a) for such succeeding

2 taxable year.’’

3 (b) CONFORMING AMENDMENT.—The table of sec4 tions for subpart B of part IV of subchapter A of chapter

5 1 of such Code is amended by adding at the end the fol6 lowing:

‘‘Sec. 30B. Private land conservation.’’

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

8 this section shall apply to donations of qualified conserva9 tion contributions (as defined in section 170(h) of the In10 ternal Revenue Code of 1986) made after the date of the

11 enactment of this Act, in taxable years ending after such

12 date.

13 SEC. 3. INCREASE IN CHARITABLE CONTRIBUTION LIMIT

14 FOR FARMERS AND RANCHERS DOING BUSI15 NESS IN CORPORATE FORM.

16 (a) IN GENERAL.—Section 170(b)(1) of the Internal

17 Revenue Code of 1986 (relating to corporations) is amend18 ed by redesignating subparagraph (F) as subparagraph

19 (G) and by inserting after subparagraph (E) the following:

20 ‘‘(F) CERTAIN FARMERS AND RANCH21 ERS.—An eligible farmer or rancher (as defined

22 in section 30B(c)) shall be treated as an indi23 vidual for purposes of this section with respect

24 to any qualified conservation contribution.’’
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1 (b) CONFORMING AMENDMENT.—Section 170(b)(2)

2 of such Code is amended by striking ‘‘corporation,’’ and

3 inserting ‘‘corporation (other than a corporation that is

4 an eligible farmer or rancher as defined in section 30B(c)

5 with respect to a qualified conservation contribution),’’.

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

7 this section shall apply to donations of qualified conserva8 tion contributions (as defined in section 170(h) of the In9 ternal Revenue Code of 1986) made after the date of the

10 enactment of this Act, in taxable years ending after such

11 date.

12 SEC. 4. EXPANSION OF ESTATE TAX EXCLUSION FOR LAND

13 SUBJECT TO QUALIFIED CONSERVATION

14 EASEMENT.

15 (a) IN GENERAL.—Subparagraph (A) of section

16 2031(c)(8) of the Internal Revenue Code of 1986 is

17 amended by striking clause (i) and by redesignating

18 clauses (ii) and (iii) as clauses (i) and (ii), respectively.

19 (b) EFFECTIVE DATE.—The amendments made by

20 this section shall apply to donations of qualified conserva21 tion contributions (as defined in section 170(h) of the In22 ternal Revenue Code of 1986) made after the date of the

23 enactment of this Act.

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