I 

111TH CONGRESS 

1ST SESSION H. R. 3524 

To amend the Internal Revenue Code of 1986 to provide an exclusion from 

the gross estate for certain farmlands and lands subject to qualified 

conservation easements, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 31, 2009 

Mr. THOMPSON of California (for himself and Mr. SALAZAR) 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 provide 

an exclusion from the gross estate for certain farmlands 

and lands subject to qualified conservation easements, 

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 Preser5 vation and Conservation Estate Tax Act’’. 


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1 SEC. 2. EXCLUSION FROM GROSS ESTATE FOR 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 SO LONG 

9 AS USE AS FARMLAND CONTINUES. 

10 ‘‘(a) IN GENERAL.—In the case of an estate of a de11 cedent to which this section applies, if the executor makes 

12 the election described in subsection (f), the value of the 

13 gross estate shall not include the adjusted value of quali14 fied 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, and 

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, except 

5 that ‘material participation’ shall also include 

6 any rental of real estate and related property 

7 between the estate of the decedent or any suc8 cessor thereto and any tenant so long as the 

9 tenant uses the real estate and related property 

10 to produce agricultural or horticultural com11 modities, including but not limited to livestock, 

12 bees, poultry, orchards and woodlands, timber 

13 and fur-bearing animals and wildlife on such 

14 farmland. 

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

16 of section 2032A(b) shall apply for purposes of sub17 paragraph (B). 

18 ‘‘(c) DEFINITIONS AND SPECIAL RULE.—For pur19 poses of this section— 

20 ‘‘(1) QUALIFIED FARMLAND.—The term ‘quali21 fied farmland’ means any real property or other 

22 property related to the farm operation— 

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

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

25 purposes, and 


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

2 from the decedent to a qualified heir of the de3 cedent and which, on the date of the decedent’s 

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

5 member of the decedent’s family. 

6 ‘‘(2) MEMBER OF FAMILY.—A member of a 

7 family, with respect to any individual, means— 

8 ‘‘(A) a member of the family (as defined 

9 by section 2031A(e)(2)), and 

10 ‘‘(B) includes— 

11 ‘‘(i) a lineal descendant of any spouse 

12 described in subparagraph (D) of section 

13 2032A(e)(2), 

14 ‘‘(ii) a lineal descendant of a sibling of 

15 a parent of such individual, 

16 ‘‘(iii) a spouse of any lineal descend17 ant described in clause (ii), and 

18 ‘‘(iv) a lineal descendant of a spouses 

19 described in clause (iii). 

20 ‘‘(3) 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 ‘‘(4) OTHER TERMS.—Any other term used in 

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

3 have the same meaning given such term by section 

4 2032A. 

5 ‘‘(d) TAX TREATMENT OF DISPOSITIONS AND FAIL6 URES TO USE FOR FARMING PURPOSES.— 

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

8 any time after the decedent’s death— 

9 ‘‘(A) the qualified heir disposes of any in10 terest in qualified farmland (other than by a 

11 disposition to a member of his family), or 

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

13 real property which was acquired (or passed) 

14 from the decedent as a farm for farming pur15 poses, 

16 then there is hereby imposed a recapture tax on 

17 such disposition or cessation of use. 

18 ‘‘(2) AMOUNT OF RECAPTURE TAX.—The 

19 amount of the tax imposed by paragraph (1) shall 

20 be the excess of— 

21 ‘‘(A) the tax which would have been im22 posed by section 2001 on the estate of the dece23 dent but determined as if such estate included 

24 the interest in qualified farmland described in 

25 paragraph (1) which was so disposed of or 


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1 ceased to be so used, reduced by the credits al2 lowable against such tax, over 

3 ‘‘(B) the tax imposed by section 2001 on 

4 the estate of the decedent, reduced by such 

5 credits. 

6 For purposes of this paragraph, the value of the in7 terest in qualified farmland specified in subpara8 graph (A) shall be the adjusted value of such inter9 est as of the date of the disposition or cessation of 

10 such interest described in paragraph (1). 

11 ‘‘(3) REGULATIONS.—The Secretary may pre12 scribe such regulations as may be necessary or ap13 propriate to carry out this subsection, including reg14 ulations requiring record keeping and information 

15 reporting, except that the Secretary may not impose 

16 a lien on the estate of the decedent or qualified 

17 farmland for such purposes. 

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

19 to the rules of subsections (e) (other than paragraph (13) 

20 thereof), (f), (g), (h), and (i) of section 2032A shall apply 

21 for purposes of this section. 

22 ‘‘(f) ELECTION.—The election under this subsection 

23 shall be made on or before the due date (including exten24 sions) for filing the return of tax imposed by section 2001 

25 and shall be made on such return.’’. 


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

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

3 is amended by inserting after the item relating to section 

4 2033 the following new item: 

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

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

6 this section shall apply to estates of decedents dying after 

7 the date of the enactment of this Act. 

8 SEC. 3. TEMPORARY EXCLUSION OF QUALIFIED CONSERVA9 TION EASEMENTS. 

10 (a) IN GENERAL.—Part III of subchapter A of chap11 ter 11 of the Internal Revenue Code of 1986 (relating to 

12 gross estate), as amended by section 2, is amended by in13 serting after section 2033A the following new section: 

14 ‘‘SEC. 2033B. TEMPORARY EXCLUSION OF QUALIFIED CON15 SERVATION EASEMENTS. 

16 ‘‘(a) IN GENERAL.—In the case of an estate of a de17 cedent to which this section applies, if the executor makes 

18 the election described in subsection (d)— 

19 ‘‘(1) the value of the gross estate shall not in20 clude the value of land subject to a qualified con21 servation easement included in the estate, but 

22 ‘‘(2) a tax under subsection (b) shall apply. 

23 ‘‘(b) TAX TREATMENT OF DISPOSITIONS AND FOR

24 USE INCOMPATIBLE WITH CONSERVATION EASEMENT.— 


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

2 any time after the decedent’s death— 

3 ‘‘(A) the qualified heir disposes of any in4 terest in the land described in subsection (a)(1) 

5 (other than by a disposition to a member of his 

6 family), or 

7 ‘‘(B) the qualified heir uses any portion of 

8 the land described in subsection (a)(1) in a 

9 manner which violates the terms of such ease10 ment, 

11 then there is hereby imposed a recapture tax on 

12 such disposition or use. 

13 ‘‘(2) AMOUNT OF RECAPTURE TAX.—The 

14 amount of the tax imposed by paragraph (1) shall 

15 be the excess of— 

16 ‘‘(A) the tax which would have been im17 posed by section 2001 on the estate of the dece18 dent, determined as if— 

19 ‘‘(i) section 2031(c) did not apply, 

20 and 

21 ‘‘(ii) as if such estate included the in22 terest described in paragraph (1)(A) or the 

23 portion described in paragraph (1)(B), as 

24 applicable, 


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1 reduced by the credits allowable against such 

2 tax, over 

3 ‘‘(B) the tax imposed by section 2001 on 

4 the estate of the decedent, reduced by such 

5 credits. 

6 For purposes of this paragraph, the value of any in7 terest in land or portion of land subject to a quali8 fied conservation easement shall be the fair market 

9 value of such interest or portion as of the date of 

10 the disposition or use of such interest or portion de11 scribed in paragraph (1). 

12 ‘‘(3) REGULATIONS.—The Secretary may pre13 scribe such regulations as may be necessary or ap14 propriate to carry out this subsection, including reg15 ulations requiring record keeping and information 

16 reporting, except that the Secretary may not impose 

17 a lien on the estate of the decedent, land subject to 

18 a qualified conservation easement, or qualified con19 servation easement for such purposes. 

20 ‘‘(c) LAND SUBJECT TO QUALIFIED CONSERVATION

21 EASEMENT.—For purposes of this section, the terms ‘land 

22 subject to a qualified conservation easement’ and ‘quali23 fied conservation easement’ have the meanings given such 

24 terms by section 2031(c)(8). 


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1 ‘‘(d) ELECTION.—The election under this subsection 

2 shall be made on or before the due date (including exten3 sions) for filing the return of tax imposed by section 2001 

4 and shall be made on such return.’’. 

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

6 for subchapter B of chapter 62 of such Code is amended 

7 by adding at the end the following new item: 

‘‘Sec. 2033B. Temporary exclusion of qualified conservation easements.’’. 

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

9 this section shall apply to estates of decedents dying after 

10 the date of the enactment of this Act. 

11 SEC. 4. MODIFICATION OF DEFINITION OF QUALIFIED CON12 SERVATION EASEMENT. 

13 (a) IN GENERAL.—Subparagraph (B) of section 

14 2031(c)(8) of the Internal Revenue Code of 1986 is 

15 amended by striking ‘‘and the restriction on the use of 

16 such interest described in section 170(h)(2)(C) shall in17 clude a prohibition on more than a de minimis use for 

18 a commercial recreational activity’’. 

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

20 this section shall apply to estates of decedents dying after 

21 the date of the enactment of this Act. 


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1 SEC. 5. MODIFICATION OF RULES RELATING TO VALU2 ATION OF CERTAIN FARM, ETC., REAL PROP3 ERTY. 

4 (a) DISPOSITION OF INTEREST SUBJECT TO QUALI5 FIED CONSERVATION EASEMENT.—Subparagraph (A) of 

6 section 2032A(c)(1) of the Internal Revenue Code of 1986 

7 is amended by striking ‘‘family)’’ and inserting ‘‘family 

8 or by a disposition to any other person when such interest 

9 in real property is subject to a qualified conservation ease10 ment (as defined in section 2031(c)(8)(B)))’’. 

11 (b) WOODLANDS SUBJECT TO MANAGEMENT

12 PLAN.—Paragraph (2) of section 2032A(c) of such Code 

13 is amended by adding at the end the following new sub14 paragraph: 

15 ‘‘(F) EXCEPTION FOR WOODLANDS SUB16 JECT TO MANAGEMENT PLAN.—Subparagraph 

17 (E) shall not apply to any disposition or sever18 ance of standing timber on a qualified woodland 

19 that is made pursuant to— 

20 ‘‘(i) a written forest management plan 

21 developed by a credentialed professional 

22 forester, 

23 ‘‘(ii) a written forest management 

24 plan that is equivalent to a forest steward25 ship plan, or 


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1 ‘‘(iii) a third-party audited forest cer2 tification system or similar land manage3 ment protocol.’’. 

4 (c) SALE OF CONSERVATION EASEMENT NOT A DIS5 POSITION.—Paragraph (8) of section 2032A(c) of such 

6 Code is amended— 

7 (1) by striking ‘‘A qualified’’ and inserting 

8 ‘‘Neither a qualified’’, and 

9 (2) by inserting ‘‘nor a sale of a conservation 

10 easement limiting the use of qualified real property’’ 

11 after ‘‘otherwise’’. 

12 (d) FARM DEFINED.—Paragraph (4) of section 

13 2032A(e) of such Code is amended by striking ‘‘orchards 

14 and woodlands’’ and inserting ‘‘orchards, woodlands, and 

15 properties managed to provide habitat in support of fish 

16 and wildlife dependent recreation’’. 

17 (e) FARMING PURPOSE DEFINED.—Paragraph (5) of 

18 section 2032A(e) of such Code is amended— 

19 (1) in subparagraph (A) by inserting ‘‘, silvicul20 tural,’’ after ‘‘agricultural’’, and 

21 (2) by striking ‘‘and’’ at the end of subpara22 graph (B), by striking the period at the end of sub23 paragraph (C) and inserting ‘‘, and’’, and by adding 

24 at the end the following: 


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1 ‘‘(D) creating, restoring, enhancing, or 

2 maintaining habitat for the purpose of gener3 ating revenue from nature-oriented recreational 

4 opportunities, including hunting, fishing, wild5 life observation, and related fish and wildlife de6 pendent recreation.’’. 

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

8 this section shall apply to estates of decedents dying after 

9 the date of the enactment of this Act. 

Æ 


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