fishing and hunting rights shall not be consid-
ered commercial recreational activity when such
leasing is subordinate to the activities of farm-
ing, ranching, forestry, horticulture or viticul-
ture.
‘‘(C) MEMBER
OF
FAMILY.—The term
‘member of the decedent’s family’ means any
member of the family (as defined in section
2032A(e)(2)) of the decedent.’’
‘‘(7) APPLICATION OF THIS SECTION TO INTER-
ESTS
IN
PARTNERSHIPS, 
CORPORATIONS, 
AND
TRUSTS.—The Secretary shall prescribe regulations
applying this section to an interest in a partnership,
corporation, or trust which, with respect to the dece-
dent, is an interest in a closely held business (within
the meaning of paragraph (1) of section 6166(b)).’’
(b) CARRYOVER BASIS.—Section 1014(a) of such
Code (relating to basis of property acquired from a dece-
dent) is amended by striking the period at the end of para-
graph (3) and inserting ‘‘, or’’ and by adding after para-
graph (3) the following new paragraph:
‘‘(4) to the extent of the applicability of the ex-
clusion described in section 2031(c), the basis in the
hands of the decedent.’’
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to estates of decedents dying after
December 31, 1996.
SEC. 3. GIFT TAX ON LAND SUBJECT TO A QUALIFIED CON-
SERVATION EASEMENT.
(a) GIFT TAX WITH RESPECT TO LAND SUBJECT TO
A QUALIFIED CONSERVATION EASEMENT.—Section 2503
of the Internal Revenue Code of 1986 (relating to taxable
gifts) is amended by adding at the end the following new
subsection:
‘‘(h) GIFT TAX WITH RESPECT TO LAND SUBJECT
TO A QUALIFIED CONSERVATION EASEMENT.—The trans-
fer by gift of land subject to a qualified conservation ease-
ment shall not be treated as a transfer of property by gift
for purposes of this chapter. For purposes of this sub-
section, the term ‘land subject to a qualified conservation
easement’ has the meaning given to such term by section
2031(c); except that references to the decedent shall be
treated as references to the donor and references to the
date of the decedent’s death shall be treated as references
to the date of the transfer by the donor.’’
(b) EFFECTIVE DATE.—The amendment made by
this section shall apply to gifts made after December 31,
1996.
SEC. 4. QUALIFIED CONSERVATION CONTRIBUTION IS NOT
A DISPOSITION.
(a) QUALIFIED CONSERVATION CONTRIBUTION IS
NOT A DISPOSITION.—Subsection (c) of section 2032A of
the Internal Revenue Code of 1986 (relating to alternative
valuation method) is amended by adding at the end the
following new paragraphs:
‘‘(8) QUALIFIED CONSERVATION CONTRIBUTION
IS
NOT
A
DISPOSITION.—A qualified conservation
contribution (as defined in section 170(h)) by gift or
otherwise shall not be deemed a disposition under
subsection (c)(1)(A).
‘‘(9) EXCEPTION FOR REAL PROPERTY IS LAND
SUBJECT
TO
A
QUALIFIED
CONSERVATION
EASE-
MENT.—If qualified real property is land subject to
a qualified conservation easement (as defined in sec-
tion 2031(c)), the preceding paragraphs of this sub-
section shall not apply.’’
(b) LAND SUBJECT TO A QUALIFIED CONSERVATION
EASEMENT IS NOT DISQUALIFIED.—Subsection (b) of
section 2032A of such Code (relating to alternative valu-
ation method) is amended by adding at the end the follow-
ing paragraph:
‘‘(E) If property is otherwise qualified real
property, the fact that it is land subject to a
qualified conservation easement (as defined in
section 2031(c)) shall not disqualify it under
this section.’’
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply with respect to contributions made,
and easements granted, after December 31, 1996.
SEC. 5. QUALIFIED CONSERVATION CONTRIBUTION WHERE
SURFACE AND MINERAL RIGHTS ARE SEPA-
RATED.
(a) IN GENERAL.—Section 170(h)(5)(B)(ii) of the
Internal Revenue Code of 1986 (relating to special rule)
is amended to read as follows:
‘‘(ii) SPECIAL RULE.—With respect to any con-
tribution of property in which the ownership of the
surface estate and mineral interests has been and re-
mains separated, subparagraph (A) shall be treated
as met if the probability of surface mining occurring
on such property is so remote as to be negligible.’’
(b) EFFECTIVE DATE.—The amendment made by
this section shall apply with respect to contributions made
after December 31, 1992, in taxable years ending after
such date.
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