II 

111TH CONGRESS 

2D SESSION S. 3664 

To amend the Internal Revenue Code of 1986 to exempt certain farmland 

from the estate tax, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JULY 28, 2010 

Mrs. FEINSTEIN (for herself, Mr. CRAPO, Mr. UDALL of Colorado, Mr. BENNET, and Mrs. BOXER) 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 exempt 

certain farmland from the estate tax, 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 ‘‘Family Farm Estate 

5 Tax Deferral Act of 2010’’. 

6 SEC. 2. EXCLUSION FROM GROSS ESTATE OF CERTAIN 

7 FARMLAND SO LONG AS FARMLAND USE 

8 CONTINUES. 

9 (a) IN GENERAL.—Part III of subchapter A of chap10 ter 11 of the Internal Revenue Code of 1986 (relating to 


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1 gross estate) is amended by inserting after section 2033 

2 the following new section: 

3 ‘‘SEC. 2033A. EXCLUSION OF CERTAIN FARMLAND SO LONG 

4 AS USE AS FARMLAND CONTINUES. 

5 ‘‘(a) IN GENERAL.—In the case of an estate of a de6 cedent to which this section applies, the value of the gross 

7 estate shall not include the adjusted value of qualified 

8 farmland included in the estate. 

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

10 section shall apply to an estate if— 

11 ‘‘(1) the executor elects the application of this 

12 section and files an agreement referred to in section 

13 2032A(d)(2), 

14 ‘‘(2) the decedent was (at the date of the dece15 dent’s death) a citizen or resident of the United 

16 States, 

17 ‘‘(3) the decedent for the 3-taxable-year period 

18 (10-taxable-year period in the case of any qualified 

19 farmland which is qualified woodland described in 

20 section 2032A(c)(2)(F)(i)) preceding the date of the 

21 decedent’s death had an average adjusted gross in22 come not exceeding the average adjusted gross in23 come limitation applicable under subparagraphs (A) 

24 and (B) of section 1001D(b)(1) of the Food Security 


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1 Act of 1985 (7 U.S.C. 1308–3a(b)(1)) (as in effect 

2 on such date), 

3 ‘‘(4) 50 percent or more of the adjusted value 

4 of the gross estate at the date of the decedent’s 

5 death consists of real or personal property which is 

6 used as a farm for farming purposes (within the 

7 meaning of section 2032A(e)), 

8 ‘‘(5) 25 percent or more of the adjusted value 

9 of the gross estate consists of the adjusted value of 

10 qualified farmland which is real property, and 

11 ‘‘(6) during the 8-year period ending on the 

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

13 aggregating 5 years or more during which— 

14 ‘‘(A) the qualified farmland which is such 

15 real property was owned by the decedent or a 

16 member of the decedent’s family, and 

17 ‘‘(B) there was material participation 

18 (within the meaning of section 2032A(e)(6)) by 

19 the decedent or a member of the decedent’s 

20 family in the operation of such farmland. 

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

22 of section 2032A(b) shall apply for purposes of sub23 paragraph (B). 

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


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1 ‘‘(1) QUALIFIED FARMLAND.—The term ‘quali2 fied farmland’ means any real property which— 

3 ‘‘(A) is located in the United States, 

4 ‘‘(B) is used as a farm for farming pur5 poses (within the meaning of section 2032A(e)), 

6 ‘‘(C) was acquired from or passed from the 

7 decedent to a qualified heir of the decedent and 

8 which, on the date of the decedent’s death, was 

9 being so used by the decedent or a member of 

10 the decedent’s family, and 

11 ‘‘(D) is property designated in the agree12 ment filed under subsection (b)(1). 

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

14 value’ means the value of farmland for purposes of 

15 this chapter (determined without regard to this sec16 tion), reduced by any amounts allowable as a deduc17 tion in respect to such farmland under paragraph 

18 (3) or (4) of section 2053(a). 

19 ‘‘(3) OTHER TERMS.—Any other term used in 

20 this section which is also used in section 2032A shall 

21 have the same meaning given such term by section 

22 2032A. 

23 ‘‘(d) TAX TREATMENT OF DISPOSITIONS AND FAIL24 URES TO USE FOR FARMING PURPOSES.— 


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1 ‘‘(1) IMPOSITION OF RECAPTURE TAX.—If, at 

2 any time after the decedent’s death and before the 

3 death of the qualified heir— 

4 ‘‘(A) the qualified heir disposes of any in5 terest in qualified farmland (other than by a 

6 disposition to a member of his family), or 

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

8 real property which was acquired (or passed) 

9 from the decedent as a farm for farming pur10 poses, 

11 then, there is hereby imposed a recapture tax. 

12 ‘‘(2) AMOUNT OF RECAPTURE TAX, ETC.— 

13 ‘‘(A) IN GENERAL.—Except as provided in 

14 subparagraph (B), rules similar to the rules of 

15 section 2032A(c) (other than paragraphs (1) 

16 and (2)(E) thereof) with respect to the addi17 tional estate tax shall apply for purposes of this 

18 subsection with respect to the recapture tax. 

19 ‘‘(B) ADJUSTMENT OF RECAPTURE TAX TO

20 REFLECT INCREASE IN VALUE OF FARM21 LAND.—The amount of the recapture tax other22 wise determined under rules described in sub23 paragraph (A) shall be increased by the per24 centage (if any) by which the value of the inter25 est in the qualified farmland at the time of the 


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1 imposition of such tax is greater than the ad2 justed value of such farmland included in the 

3 estate. 

4 ‘‘(e) APPLICATION OF OTHER RULES.—Rules similar 

5 to the rules of subsections (d), (e) (other than paragraph 

6 (13) thereof), (f), (g), (h), and (i) of section 2032A shall 

7 apply for purposes of this section.’’. 

8 (b) APPLICATION OF LIEN.—Section 6324B of the 

9 Internal Revenue Code of 1986 (relating to special lien 

10 for additional estate tax attributable to farm, etc., valu11 ation) is amended by adding at the end the following new 

12 subsection: 

13 ‘‘(e) APPLICATION TO QUALIFIED FARMLAND.— 

14 ‘‘(1) IN GENERAL.—In the case of any interest 

15 in qualified farmland (within the meaning of section 

16 2033A(c)(1)), this section shall apply in the same 

17 manner as such section applies to qualified real 

18 property. 

19 ‘‘(2) FORM AND CONTENT.—In addition to any 

20 form and content otherwise required by the Sec21 retary with respect to a notice of lien filed against 

22 qualified farmland, such notice shall include a state23 ment that such lien is imposed solely for purposes of 

24 the estate tax exclusion granted with respect to such 

25 qualified farmland under section 2033A.’’. 


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1 (c) WOODLANDS SUBJECT TO MANAGEMENT

2 PLAN.—Paragraph (2) of section 2032A(c) of the Internal 

3 Revenue Code of 1986 is amended by adding at the end 

4 the following new subparagraph: 

5 ‘‘(F) EXCEPTION FOR WOODLANDS SUB6 JECT TO FOREST STEWARDSHIP PLAN.— 

7 ‘‘(i) IN GENERAL.—Subparagraph (E) 

8 shall not apply to any disposition or sever9 ance of standing timber on a qualified 

10 woodland that is made pursuant to a forest 

11 stewardship plan developed under the Co12 operative Forestry Assistance Act of 1978 

13 (16 U.S.C. 2103a) or an equivalent plan 

14 approved by the State Forester. 

15 ‘‘(ii) COMPLIANCE WITH FOREST

16 STEWARDSHIP PLAN.—Clause (i) shall not 

17 apply if, during the 10-year period under 

18 paragraph (1), the qualified heir fails to 

19 comply with such forest stewardship plan 

20 or equivalent plan.’’. 

21 (d) CERTAIN CONSERVATION TRANSACTIONS NOT

22 TREATED AS DISPOSITIONS.—Paragraph (8) of section 

23 2032A(c) of the Internal Revenue Code of 1986 is amend24 ed to read as follows: 


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1 ‘‘(8) CERTAIN CONSERVATION TRANSACTIONS

2 NOT TREATED AS DISPOSITIONS.— 

3 ‘‘(A) QUALIFIED CONSERVATION CON4 TRIBUTIONS.—A qualified conservation con5 tribution by gift or otherwise shall not be 

6 deemed a disposition under subsection 

7 (c)(1)(A). 

8 ‘‘(B) QUALIFIED CONSERVATION EASE9 MENT SOLD TO QUALIFIED ORGANIZATION.—A 

10 sale of a qualified conservation easement to a 

11 qualified organization shall not be deemed a 

12 disposition under subsection (c)(1)(A). 

13 ‘‘(C) DEFINITIONS.—For purposes of this 

14 paragraph— 

15 ‘‘(i) the terms ‘qualified conservation 

16 contribution’ and ‘qualified organization’ 

17 have the meanings given such terms by 

18 section 170(h), and 

19 ‘‘(ii) the term ‘qualified conservation 

20 easement’ has the meaning given such 

21 term by section 2031(c)(8).’’. 

22 (e) CLERICAL AMENDMENT.—The table of sections 

23 for part III of subchapter A of chapter 11 of the Internal 

24 Revenue Code of 1986 is amended by inserting after the 

25 item relating to section 2033 the following new item: 


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‘‘Sec. 2033A. Exclusion of certain farmland so long as use as farmland continues.’’. 

1 (f) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to estates of decedents dying after 

3 the date of the enactment of this Act. 

4 SEC. 3. INCREASE IN LIMITATIONS ON THE AMOUNT EX5 CLUDED FROM THE GROSS ESTATE WITH RE6 SPECT TO LAND SUBJECT TO A QUALIFIED 

7 CONSERVATION EASEMENT. 

8 (a) INCREASE IN DOLLAR LIMITATION ON EXCLU9 SION.—Paragraph (3) of section 2031(c) of the Internal 

10 Revenue Code of 1986 (relating to exclusion limitation) 

11 is amended by striking ‘‘the exclusion limitation is’’ and 

12 all that follows and inserting ‘‘the exclusion limitation is 

13 $5,000,000.’’. 

14 (b) INCREASE IN PERCENTAGE OF VALUE OF LAND

15 WHICH IS EXCLUDABLE.—Paragraph (2) of section 

16 2031(c) of the Internal Revenue Code of 1986 (relating 

17 to applicable percentage) is amended— 

18 (1) by striking ‘‘40 percent’’ and inserting ‘‘50 

19 percent’’, and 

20 (2) by striking ‘‘2 percentage points’’ and in21 serting ‘‘2.5 percentage points’’. 


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

2 this section shall apply to the estates of decedents dying 

3 after the date of the enactment of this Act. 

Æ 


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