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[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1863 Introduced in House (IH)]

106th CONGRESS
  1st Session
                                H. R. 1863

 To amend the Internal Revenue Code of 1986 to modify the treatment of 
    bonds issued to acquire renewable resources on land subject to 
                         conservation easement.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                              May 19, 1999

    Ms. Dunn (for herself, Mr. Tanner, Mr. Herger, and Mr. Matsui) 
 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 modify the treatment of 
    bonds issued to acquire renewable resources on land subject to 
                         conservation easement.

    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 ``Community Forestry and Agriculture 
Conservation Act of 1999''.

SEC. 2. TREATMENT OF BONDS ISSUED TO ACQUIRE RENEWABLE RESOURCES ON 
              LAND SUBJECT TO CONSERVATION EASEMENT.

    (a) In General.--Section 145 of the Internal Revenue Code of 1986 
(defining qualified 501(c)(3) bond) is amended by redesignating 
subsection (e) as subsection (f) and by inserting after subsection (d) 
the following new subsection:
    ``(e) Bonds Issued To Acquire Renewable Resources on Land Subject 
to Conservation Easement.--
            ``(1) In general.--If--
                    ``(A) the proceeds of any bond are used to acquire 
                land (or a long-term lease thereof) together with any 
                renewable resource associated with the land (including 
                standing timber, agricultural crops, or water rights) 
                from an unaffiliated person,
                    ``(B) the land is subject to a conservation 
                restriction--
                            ``(i) which is granted in perpetuity to an 
                        unaffiliated person that is--
                                    ``(I) a 501(c)(3) organization, or
                                    ``(II) a Federal, State, or local 
                                government conservation organization,
                            ``(ii) which meets the requirements of 
                        clauses (ii) and (iii)(II) of section 
                        170(h)(4)(A),
                            ``(iii) which exceeds the requirements of 
                        relevant environmental and land use statutes 
                        and regulations, and
                            ``(iv) which obligates the owner of the 
                        land to pay the costs incurred by the holder of 
                        the conservation restriction in monitoring 
                        compliance with such restriction,
                    ``(C) a management plan which meets the 
                requirements of the statutes and regulations referred 
                to subparagraph (B)(iii) is developed for the 
                conservation of the renewable resources, and
                    ``(D) such bond would be a qualified 501(c)(3) bond 
                (after the application of paragraph (2)) but for the 
                failure to use revenues derived by the 501(c)(3) 
                organization from the sale, lease, or other use of such 
                renewable resource as otherwise required by this part,
        such bond shall not fail to be a qualified 501(c)(3) bond by 
        reason of the failure to so use such revenues if the revenues 
        which are not used as otherwise required by this part are used 
        in a manner consistent with the stated charitable purposes of 
        the 501(c)(3) organization.
            ``(2) Treatment of timber, etc.--
                    ``(A) In general.--For purposes of subsection (a), 
                the cost of any renewable resource acquired with 
                proceeds of such bonds shall be treated as a cost of 
                acquiring the land associated with the renewable 
                resource and such land shall not be treated as used for 
                a private business use because of the sale or leasing 
                of the renewable resource to, or other use of the 
                renewable resource by, an unaffiliated person to the 
                extent that such sale, leasing, or other use does not 
                constitute an unrelated trade or business, determined 
                by applying section 513(a).
                    ``(B) Application of bond maturity limitation.--For 
                purposes of section 147(b), the cost of any land or 
                renewable resource acquired with proceeds of such bonds 
                shall have an economic life commensurate with the 
                economic and ecological feasibility of the financing of 
                such land or renewable resource.
                    ``(C) Unaffiliated person.--For purposes of this 
                subsection, the term `unaffiliated person' means any 
                person who controls no more than 20 percent of the 
                governing body of another person.''
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to obligations issued after the date of the enactment of this 
Act.
                                 <all>
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