I 

113TH CONGRESS 

1ST SESSION H. R. 47 

To amend the Internal Revenue Code of 1986 to allow an unlimited exclusion 

from transfer taxes for certain farmland and land of conservation value, 

and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JANUARY 3, 2013 

Mr. BISHOP of New York (for himself and Mr. HANNA) 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 allow an 

unlimited exclusion from transfer taxes for certain farmland and land of conservation value, 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 ‘‘Farmland Preservation 

5 and Land Conservation Act of 2013’’. 

6 SEC. 2. TRANSFER TAX EXCLUSION FOR CERTAIN FARM7 LAND AND LAND OF CONSERVATION VALUE. 

8 (a) ESTATE TAX.— 


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1 (1) IN GENERAL.—Part IV of subchapter A of 

2 chapter 11 of the Internal Revenue Code of 1986 

3 (relating to gross estate) is amended by inserting 

4 after section 2058 the following new section: 

5 ‘‘SEC. 2059. FARM AND CONSERVATION LAND. 

6 ‘‘(a) IN GENERAL.—For purposes of the tax imposed 

7 by section 2001, the value of the taxable estate shall be 

8 determined by deducting from the value of the gross estate 

9 an amount equal to the adjusted value of the qualified 

10 farm or conservation land included in the estate. 

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

12 section shall apply to an estate if— 

13 ‘‘(1) the decedent was (at the date of the dece14 dent’s death) a citizen or resident of the United 

15 States, and 

16 ‘‘(2) the executor elects the application of this 

17 section and files the agreement referred to in sub18 section (d)(2) with respect to the qualified farm or 

19 conservation land. 

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

21 ‘‘(1) QUALIFIED FARM OR CONSERVATION

22 LAND.—The term ‘qualified farm or conservation 

23 land’ means any real property— 

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


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1 ‘‘(B) which, on the date of the decedent’s 

2 death, was being used— 

3 ‘‘(i) as a farm for farming purposes 

4 (within the meaning of section 2032A(e)), 

5 or 

6 ‘‘(ii) exclusively for conservation pur7 poses (within the meaning of section 

8 170(h)), 

9 ‘‘(C) with respect to which there is a re10 corded covenant which prevents any use of such 

11 land which is inconsistent with the uses de12 scribed in subparagraph (B), and 

13 ‘‘(D) which is designated in the agreement 

14 referred to in subsection (d)(2). 

15 ‘‘(2) ADJUSTED VALUE.—The term ‘adjusted 

16 value’ means the value of the qualified farm or con17 servation land for purposes of this chapter, reduced 

18 by the amount allowable as a deduction under para19 graph (4) of section 2053(a). 

20 ‘‘(d) ELECTION; AGREEMENT.— 

21 ‘‘(1) ELECTION.—The election under this sec22 tion shall be made on the return of the tax imposed 

23 by section 2001. Such election shall be made in such 

24 manner as the Secretary shall by regulations preVerDate Mar 15 2010 01:58 Jan 08, 2013 Jkt 029200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H47.IH H47

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1 scribe. Such an election, once made, shall be irrev2 ocable. 

3 ‘‘(2) AGREEMENT.—The agreement referred to 

4 in this paragraph is a written agreement signed by 

5 each person in being who has an interest (whether 

6 or not in possession) in any property designated in 

7 such agreement consenting to the application of sub8 section (e) with respect to such property. 

9 ‘‘(3) MODIFICATION OF ELECTION AND AGREE10 MENT PERMITTED.—The procedures prescribed 

11 under section 2032A(d)(3) shall apply for purposes 

12 of this subsection. 

13 ‘‘(e) TAX TREATMENT OF DISPOSITIONS AND INCON14 SISTENT USES.—In the case of a decedent’s estate which 

15 includes qualified farm or conservation land with respect 

16 to which there is a covenant described in subsection 

17 (c)(1)(C) (including such a covenant made by a prior dece18 dent)— 

19 ‘‘(1) IMPOSITION OF ADDITIONAL ESTATE

20 TAX.—If, at any time after the decedent’s death and 

21 before the death of the heir— 

22 ‘‘(A) the heir disposes of any interest 

23 (other than by a qualified conservation con24 tribution (as defined in section 170(h))) in 

25 qualified farm or conservation land and the perVerDate Mar 15 2010 01:58 Jan 08, 2013 Jkt 029200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H47.IH H47

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1 son acquiring such interest is not subject to the 

2 covenant described in subsection (c)(1)(C), or 

3 ‘‘(B) the heir uses such land in any man4 ner which violates the terms of such covenant, 

5 then, there is hereby imposed an additional estate 

6 tax. 

7 ‘‘(2) AMOUNT OF ADDITIONAL TAX.— 

8 ‘‘(A) IN GENERAL.—The amount of the 

9 additional tax imposed by paragraph (1) with 

10 respect to any interest shall be the amount 

11 equal to the sum of— 

12 ‘‘(i) the adjusted tax difference with 

13 respect to the estate, and 

14 ‘‘(ii) interest at the underpayment 

15 rate established under section 6621 on the 

16 amount determined under clause (i) for the 

17 period beginning on the due date for filing 

18 the estate tax return. 

19 ‘‘(B) ADJUSTED TAX DIFFERENCE WITH

20 RESPECT TO ESTATE.—For purposes of this 

21 subsection, the term ‘adjusted tax difference 

22 with respect to the estate’ means the excess 

23 of— 

24 ‘‘(i) what would have been the estate 

25 tax liability if the fair market value of the 


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1 interest at the time of the disposition or 

2 use described in paragraph (1), over 

3 ‘‘(ii) the estate tax liability. 

4 For purposes of this subparagraph, the term 

5 ‘estate tax liability’ means the tax imposed by 

6 section 2001 reduced by the credits allowable 

7 against such tax. 

8 ‘‘(3) CERTAIN ADDITIONAL RULES TO APPLY.— 

9 Rules similar to the rules of paragraphs (2)(D), 

10 (2)(E), (3), (4), (5), and (8) of section 2032A(c) 

11 shall apply for purposes of this subsection. 

12 ‘‘(4) INCOME TAX TREATMENT OF DISPOSI13 TIONS.—For purposes of chapter 1, in any case in 

14 which an additional tax is imposed by this sub15 section by reason of any disposition or use of an in16 terest, such interest (if not otherwise disposed of in 

17 a transaction in which gain is recognized) shall be 

18 treated as sold at its fair market value at the time 

19 of the disposition or use, and gain shall be recog20 nized notwithstanding any provision of subtitle A. 

21 ‘‘(f) BASIS.—For purposes of this title, the basis of 

22 any qualified farm or conservation land which is included 

23 in the estate of a decedent pursuant to subsection (a) shall 

24 be the adjusted basis of such qualified farm or conserva25 tion land on the date of the decedent’s death. 


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1 ‘‘(g) CERTAIN ADDITIONAL RULES TO APPLY.—For 

2 purposes of this section, rules similar to the following rules 

3 shall apply: 

4 ‘‘(1) CERTAIN REAL PROPERTY INCLUDED.— 

5 Section 2032A(e)(3). 

6 ‘‘(2) DEFINITIONS OF FARM AND FARMING

7 PURPOSES.—Paragraphs (4) and (5) of section 

8 2032A(e). 

9 ‘‘(3) PROPERTY ACQUIRED FROM DECEDENT.— 

10 Section 2032A(e)(9). 

11 ‘‘(4) COMMUNITY PROPERTY.—Section 

12 2032A(e)(10). 

13 ‘‘(5) BOND IN LIEU OF PERSONAL LIABILITY.— 

14 Section 2032A(e)(11). 

15 ‘‘(6) SPECIAL RULE FOR WOODLANDS.—Section 

16 2032A(e)(13). 

17 ‘‘(7) STATUTE OF LIMITATION.—Section 

18 2032A(f). 

19 ‘‘(8) SPECIAL RULES FOR INVOLUNTARY CON20 VERSIONS OF REAL PROPERTY.—Section 2032A(h). 

21 ‘‘(9) EXCHANGES OF QUALIFIED REAL PROP22 ERTY.—Section 2032A(i). 

23 ‘‘(h) CROSS REFERENCE.—See section 6324C for 

24 special lien on farm and conservation land.’’. 


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1 (2) SPECIAL LIEN FOR FARM AND CONSERVA2 TION LAND.—Part II of subchapter C of chapter 64 

3 of such Code (relating to liens) is amended by in4 serting after section 6324B the following new sec5 tion: 

6 ‘‘SEC. 6324C. SPECIAL LIEN ON FARM AND CONSERVATION 

7 LAND. 

8 ‘‘(a) GENERAL RULE.—In the case of qualified farm 

9 or conservation land (within the meaning of section 

10 2059(c)(1)) with respect to which an election is in effect 

11 under section 2059(b)(2) or section 2524(a) or pursuant 

12 to section 2611(b)(2), an amount equal to the adjusted 

13 value attributable to such land (within the meaning of sec14 tion 2059(c)(2)) shall be a lien in favor of the United 

15 States on such land. 

16 ‘‘(b) PERIOD OF LIEN.—The lien imposed by this sec17 tion shall arise at the time an election is filed under sec18 tion 2059 and shall continue with respect to such qualified 

19 farm or conservation land until the earlier of— 

20 ‘‘(1) such land is transferred to a qualified or21 ganization (as defined in section 170(h)(3)), 

22 ‘‘(2) the liability for tax under subsection (e) of 

23 section 2059 with respect to such land has been sat24 isfied or has become unenforceable by reason of 

25 lapse of time, or 


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1 ‘‘(3) it is established to the satisfaction of the 

2 Secretary that no further tax liability may arise 

3 under section 2059(e) with respect to such land. 

4 ‘‘(c) CERTAIN RULES AND DEFINITIONS MADE AP5 PLICABLE.— 

6 ‘‘(1) IN GENERAL.—The rule set forth in para7 graphs (1), (3), and (4) of section 6324A(d) shall 

8 apply with respect to the lien imposed by this section 

9 as if it were a lien imposed by section 6324A. 

10 ‘‘(2) QUALIFIED FARM OR CONSERVATION

11 LAND.—For purposes of this section, the term 

12 ‘qualified farm or conservation land’ includes quali13 fied replacement property (within the meaning of 

14 section 2032A(h)(3)(B)) and qualified exchange 

15 property (within the meaning of section 

16 2032A(i)(3)). 

17 ‘‘(d) SUBSTITUTION OF SECURITY FOR LIEN.—To 

18 the extent provided in regulations prescribed by the Sec19 retary, the furnishing of security may be substituted for 

20 the lien imposed by this section.’’. 

21 (b) CONFORMING AND CLERICAL AMENDMENTS.— 

22 (1) Section 1016(a) of such Code is amended 

23 by striking ‘‘and’’ at the end of paragraph (36), by 

24 striking the period at the end of paragraph (37) and 


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1 inserting ‘‘, and’’, and by inserting after paragraph 

2 (37) the following new paragraph: 

3 ‘‘(38) to the extent provided in section 

4 2059(f).’’. 

5 (2) The table of sections for part IV of sub6 chapter A of chapter 11 of such Code is amended by 

7 inserting after the item relating to section 2058 the 

8 following new item: 

‘‘Sec. 2059. Farm and conservation land.’’. 

9 (3) The table of sections for part II of sub10 chapter C of chapter 64 of such Code is amended by 

11 inserting after the item relating to section 6324B 

12 the following new item: 

‘‘Sec. 6324C. Special lien on farm and conservation land.’’. 

13 (c) GIFT TAX.— 

14 (1) IN GENERAL.—Subchapter C of chapter 12 

15 of subtitle B of such Code (deductions) is amended 

16 by redesignating section 2524 as section 2525 and 

17 inserting after section 2523 the following new sec18 tion: 

19 ‘‘SEC. 2524. GIFT OF FARM AND CONSERVATION LAND. 

20 ‘‘(a) IN GENERAL.—In computing taxable gifts for 

21 the calendar year, there shall be allowed as a deduction 

22 in the case of a citizen or resident the adjusted value of 

23 all gifts made during such year which are qualified farm 

24 or conservation land if the donee elects the application of 


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1 this section and files the agreement referred to in sub2 section (c)(2) with respect to the qualified farm or con3 servation land. 

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

5 ‘‘(1) QUALIFIED FARM OR CONSERVATION

6 LAND.—The term ‘qualified farm or conservation 

7 land’ means any real property— 

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

9 ‘‘(B) which, on the date of the gift, was 

10 being used— 

11 ‘‘(i) as a farm for farming purposes 

12 (within the meaning of section 2032A(e)), 

13 or 

14 ‘‘(ii) exclusively for conservation pur15 poses (within the meaning of section 

16 170(h)), 

17 ‘‘(C) with respect to which there is a re18 corded covenant which prevents any use of such 

19 land which is inconsistent with the uses de20 scribed in subparagraph (B), and 

21 ‘‘(D) which is designated in the agreement 

22 referred to in subsection (c)(2). 

23 ‘‘(2) ADJUSTED VALUE.—The term ‘adjusted 

24 value’ means the value of the qualified farm or con25 servation land for purposes of this chapter, reduced 


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1 by the amount allowable as a deduction under para2 graph (4) of section 2053(a). 

3 ‘‘(c) ELECTION; AGREEMENT.— 

4 ‘‘(1) ELECTION.—The election under this sec5 tion shall be made in such manner as the Secretary 

6 shall by regulations prescribe. Such an election, once 

7 made, shall be irrevocable. 

8 ‘‘(2) AGREEMENT.—The agreement referred to 

9 in this paragraph is a written agreement signed by 

10 each person in being who has an interest (whether 

11 or not in possession) in any property designated in 

12 such agreement consenting to the application of sub13 section (d) with respect to such property. 

14 ‘‘(3) MODIFICATION OF ELECTION AND AGREE15 MENT PERMITTED.—The procedures prescribed 

16 under section 2032A(d)(3) shall apply for purposes 

17 of this subsection. 

18 ‘‘(d) TAX TREATMENT OF DISPOSITIONS AND INCON19 SISTENT USES.—In the case of a decedent’s estate which 

20 includes qualified farm or conservation land with respect 

21 to which there is a covenant described in subsection 

22 (c)(1)(C) (including such a covenant made by a prior dece23 dent)— 


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1 ‘‘(1) IMPOSITION OF ADDITIONAL GIFT TAX.— 

2 If, at any time after the gift described in subsection 

3 (a) and before the death of the donee— 

4 ‘‘(A) the donee disposes of any interest 

5 (other than by a qualified conservation con6 tribution (as defined in section 170(h))) in 

7 qualified farm or conservation land and the per8 son acquiring such interest is not subject to the 

9 covenant described in subsection (b)(1)(C), or 

10 ‘‘(B) the donee uses such land in any man11 ner which violates the terms of such covenant, 

12 then, there is hereby imposed an additional gift tax. 

13 ‘‘(2) AMOUNT OF ADDITIONAL TAX.— 

14 ‘‘(A) IN GENERAL.—The amount of the 

15 additional tax imposed by paragraph (1) with 

16 respect to any interest shall be the amount 

17 equal to the sum of— 

18 ‘‘(i) the adjusted tax difference with 

19 respect to the gift, and 

20 ‘‘(ii) interest at the underpayment 

21 rate established under section 6621 on the 

22 amount determined under clause (i) for the 

23 period beginning on the date of such gift. 

24 ‘‘(B) ADJUSTED TAX DIFFERENCE WITH

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1 section, the term ‘adjusted tax difference with 

2 respect to the gift’ means the excess of— 

3 ‘‘(i) what would have been the gift tax 

4 liability if the fair market value of the in5 terest at the time of the disposition or use 

6 described in paragraph (1), over 

7 ‘‘(ii) the gift tax liability. 

8 For purposes of this subparagraph, the term 

9 ‘gift tax liability’ means the tax imposed by sec10 tion 2501 reduced by the credits allowable 

11 against such tax. 

12 ‘‘(3) CERTAIN ADDITIONAL RULES TO APPLY.— 

13 Rules similar to the rules of paragraphs (2)(D), 

14 (2)(E), (3), (4), (5), and (8) of section 2032A(c) 

15 shall apply for purposes of this subsection. 

16 ‘‘(4) INCOME TAX TREATMENT OF DISPOSI17 TIONS.—For purposes of chapter 1, in any case in 

18 which an additional tax is imposed by this sub19 section by reason of any disposition or use of an in20 terest, such interest (if not otherwise disposed of in 

21 a transaction in which gain is recognized) shall be 

22 treated as sold at its fair market value at the time 

23 of the disposition or use, and gain shall be recog24 nized notwithstanding any provision of subtitle A. 


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1 ‘‘(e) CERTAIN ADDITIONAL RULES TO APPLY.—For 

2 purposes of this section, rules similar to the following rules 

3 shall apply: 

4 ‘‘(1) CERTAIN REAL PROPERTY INCLUDED.— 

5 Section 2032A(e)(3). 

6 ‘‘(2) DEFINITIONS OF FARM AND FARMING

7 PURPOSES.—Paragraphs (4) and (5) of section 

8 2032A(e). 

9 ‘‘(3) BOND IN LIEU OF PERSONAL LIABILITY.— 

10 Section 2032A(e)(11). 

11 ‘‘(4) SPECIAL RULE FOR WOODLANDS.—Section 

12 2032A(e)(12). 

13 ‘‘(5) STATUTE OF LIMITATION.—Section 

14 2032A(f). 

15 ‘‘(6) SPECIAL RULES FOR INVOLUNTARY CON16 VERSIONS OF REAL PROPERTY.—Section 2032A(h). 

17 ‘‘(7) EXCHANGES OF QUALIFIED REAL PROP18 ERTY.—Section 2032A(i). 

19 ‘‘(f) CROSS REFERENCE.—See section 6324C for 

20 special lien on farm and conservation land.’’. 

21 (2) CONFORMING AMENDMENT.—Section 2525 

22 of such Code, as amended by paragraph (1), is 

23 amended by striking ‘‘sections 2522 and 2523’’ and 

24 inserting ‘‘sections 2522, 2523, and 2524’’. 


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1 (3) CLERICAL AMENDMENT.—The table of sec2 tions for such subchapter is amended by striking the 

3 last item and inserting the following new items: 

‘‘Sec. 2524. Gift of farm and conservation land. 

‘‘Sec. 2525. Extent of deductions.’’. 

4 (d) GENERATION SKIPPING TAX.— 

5 (1) EXCLUSION.—Subsection (b) of section 

6 2611 of such Code (relating to certain transfers ex7 cluded) is amended by redesignating paragraph (2) 

8 as paragraph (3) and by inserting after paragraph 

9 (1) the following new paragraph: 

10 ‘‘(2) any transfer which, if made inter vivos by 

11 an individual, would be treated as a deduction under 

12 section 2524 (relating to gift of farm and conserva13 tion land), or’’. 

14 (2) APPLICABLE RULES.—Subsection (b) of sec15 tion 2611 of such Code is amended by adding at the 

16 end the following flush sentence: 

17 ‘‘For purposes of paragraph (2), rules similar to the rules 

18 of section 2524 shall apply.’’. 

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

20 this section shall apply to estates of decedents dying, gifts 

21 made, and generation-skipping transfers after December 

22 31, 2012. 

Æ 


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