I 

108TH CONGRESS 

2D SESSION H. R. 4721 

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

the value of farmland so long as the farmland use continues and to 

repeal the dollar limitation on the estate tax exclusion for land subject 

to a qualified conservation easement. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 25, 2004 

Mr. BISHOP of New York (for himself, Mrs. MCCARTHY of New York, Mr. 

GRIJALVA, and Mr. BISHOP of Georgia) 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 farmland so long as the 

farmland use continues and to repeal the dollar limitation on the estate tax exclusion for land subject to a 

qualified conservation easement. 

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 ‘‘Estate Tax Deferral 

5 for Working Farms and Land Conservation Act of 2004’’. 
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1 SEC. 2. EXCLUSION FROM GROSS ESTATE OF CERTAIN 

2 FARMLAND SO LONG AS FARMLAND USE 

3 CONTINUES. 

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. 

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

16 section shall apply to an estate if— 

17 ‘‘(1) the decedent was (at the date of the dece18 dent’s death) a citizen or resident of the United 

19 States, 

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

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

22 aggregating 5 years or more during which— 

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

24 the decedent or a member of the decedent’s 

25 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 Rules similar to the rules of paragraphs (4) and (5) 

6 of section 2032A(b) shall apply for purposes of sub7 paragraph (B). 

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

9 ‘‘(1) QUALIFIED FARMLAND.—The term ‘quali10 fied farmland’ means any real property— 

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

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

13 purposes (within the meaning of section 

14 2032A(e)), and 

15 ‘‘(C) which was acquired from or passed 

16 from the decedent to a qualified heir of the de17 cedent and which, on the date of the decedent’s 

18 death, was being so used by the decedent or a 

19 member of the decedent’s family. 

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

21 value’ means the value of farmland for purposes of 

22 this chapter (determined without regard to this sec23 tion), reduced by the amount deductible under para24 graph (3) or (4) of section 2053(a). 
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1 ‘‘(d) TAX TREATMENT OF DISPOSITIONS AND FAIL2 URES TO USE FOR FARMING PURPOSES.— 

3 ‘‘(1) IMPOSITION OF ADDITIONAL ESTATE

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

5 before the death of the qualified heir— 

6 ‘‘(A) the qualified heir disposes of any in7 terest in qualified real property (other than by 

8 a disposition to a member of his family), or 

9 ‘‘(B) the qualified heir ceases to use the 

10 real property which was acquired (or passed) 

11 from the decedent as a farm for farming pur12 poses, 

13 then, there is hereby imposed an additional estate 

14 tax. 

15 ‘‘(2) AMOUNT OF ADDITIONAL TAX.—Rules 

16 similar to the rules of section 2032A(e) shall apply 

17 for purposes of this subsection.’’ 

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

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

20 is amended by inserting after the item relating to section 

21 2033 the following new item: 

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

perpetuity to use as farmland.’’ 

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

23 this section shall apply to restrictions first recorded after 
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1 December 31, 2001, with respect to estates of decedents 

2 dying after such date. 

3 SEC. 3. REPEAL OF DOLLAR LIMITATION ON ESTATE TAX 

4 EXCLUSION FOR LAND SUBJECT TO QUALI5 FIED CONSERVATION EASEMENT. 

6 (a) IN GENERAL.—Subsection (c) of section 2031 of 

7 the Internal Revenue Code of 1986 (relating to Estate tax 

8 with respect to land subject to a qualified conservation 

9 easement) is amended by striking paragraph (3) and by 

10 redesignating the succeeding paragraphs accordingly. 

11 (b) CONFORMING AMENDMENT.—Paragraph (1) of 

12 section 2031(c) of such Code is by striking ‘‘the lesser of’’ 

13 at all that follows and inserting ‘‘the applicable percentage 

14 of the value of land subject to a qualified conservation 

15 easement, reduced by the amount of any deduction under 

16 section 2055(f) with respect to such land.’’ 

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

18 this section shall apply to estates of decedents dying after 

19 the date of the enactment of this Act. 

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