I 
113TH CONGRESS 
1ST SESSION H. R. 1614 
To amend the Internal Revenue Code of 1986 to authorize agricultural 
producers to establish and contribute to tax-exempt farm risk manage-
ment accounts. 
IN THE HOUSE OF REPRESENTATIVES 
APRIL 18, 2013 
Mr. CRAWFORD 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 authorize 
agricultural producers to establish and contribute to tax- 
exempt farm risk management accounts. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Farm Risk Abatement 
and Mitigation Election Act of 2013’’ or the ‘‘FRAME 
Act of 2013’’. 
SEC. 2. FARM RISK MANAGEMENT ACCOUNTS. 
(a) IN GENERAL.—Part VII of subchapter B of chap-
ter 1 of the Internal Revenue Code of 1986 (relating to 
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additional itemized deductions for individuals) is amended 
by redesignating section 224 as section 225 and by insert-
ing after section 223 the following new section: 
‘‘SEC. 224. FRAME ACCOUNTS. 
‘‘(a) DEDUCTION ALLOWED.—In the case of a quali-
fied farmer, there shall be allowed as a deduction for the 
taxable year an amount equal to the aggregate amount 
paid in cash during such taxable year by or on behalf of 
such individual to a FRAME account of such individual. 
‘‘(b) LIMITATION.—The amount allowable as a de-
duction under subsection (a) shall not exceed the least of 
the following: 
‘‘(1) The taxable income of the taxpayer for the 
taxable year which is attributable to farming and 
ranching. 
‘‘(2) $50,000. 
‘‘(3) $500,000 reduced by the aggregate con-
tributions of the taxpayer to all FRAME accounts of 
the taxpayer for all taxable years. 
‘‘(c) QUALIFIED FARMER.—For purposes of this sec-
tion, the term ‘qualified farmer’ means, with respect to 
any taxable year, any individual who, during such year— 
‘‘(1) was actively engaged in the trade or busi-
ness of farming or ranching, and 
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‘‘(2) has in effect an agreement with the Sec-
retary of Agriculture with respect to each FRAME 
account of which the individual is an account bene-
ficiary. 
‘‘(d) FRAME ACCOUNT.—For purposes of this sec-
tion— 
‘‘(1) IN
GENERAL.—The term ‘FRAME ac-
count’ means a trust created or organized in the 
United States as a FRAME account exclusively for 
the purpose of making qualified distributions, but 
only if the written governing instrument creating the 
trust meets the following requirements: 
‘‘(A) No contribution will be accepted un-
less it is in cash. 
‘‘(B) The trustee is a bank (as defined in 
section 408(n)) or another person who dem-
onstrates to the satisfaction of the Secretary 
that the manner in which such person will ad-
minister the trust will be consistent with the re-
quirements of this section. 
‘‘(C) The assets of the trust will not be 
commingled with other property except in a 
common trust fund or common investment 
fund. 
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‘‘(D) The interest of an individual in the 
balance in his account is nonforfeitable. 
‘‘(2) QUALIFIED
DISTRIBUTION.—The term 
‘qualified distribution’ means any of the following 
amounts paid from a FRAME account to the ac-
count beneficiary: 
‘‘(A) Any distributions in a taxable year 
during which the gross income attributable to 
farm to which the FRAME account relates is 
less than 95 percent of the average gross in-
come attributable to such farm for the 5 pre-
ceding taxable years, but only so much as does 
not exceed such difference. 
‘‘(B) Any distributions to the extent such 
distribution does not exceed amounts necessary 
to protect the solvency of the farm to which the 
FRAME account relates, as determined by the 
Secretary. 
‘‘(C) Any distributions to the extent such 
distributions do not exceed amounts paid or in-
curred to procure revenue or crop insurance 
with respect to the farm to which the FRAME 
account relates. 
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‘‘(3) ACCOUNT
BENEFICIARY.—The term ‘ac-
count beneficiary’ means the individual on whose be-
half the FRAME account was established. 
‘‘(4) ACCOUNTS PER FARM LIMITATION.—The 
Secretary of Agriculture shall have in effect not 
more than 4 agreements for FRAME accounts with 
respect to any farm. The Secretary of Agriculture 
shall by regulation prescribe rules preventing the 
avoidance of the preceding limitation through use of 
multiple entities, related parties, division of farms, 
or de minimis ownership. 
‘‘(5) OTHER RULES.—Rules similar to the fol-
lowing rules shall apply for purposes of this section: 
‘‘(A) Section 219(d)(2) (relating to no de-
duction for rollovers). 
‘‘(B) Section 219(f)(3) (relating to time 
when contributions deemed made). 
‘‘(C) Section 408(g) (relating to commu-
nity property laws). 
‘‘(D) Section 408(h) (relating to custodial 
accounts). 
‘‘(e) TAX TREATMENT OF ACCOUNTS.— 
‘‘(1) IN GENERAL.—A FRAME account is ex-
empt from taxation under this subtitle unless such 
account has ceased to be a FRAME account. Not-
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withstanding the preceding sentence, any such ac-
count is subject to the taxes imposed by section 511 
(relating to imposition of tax on unrelated business 
income of charitable, etc. organizations). 
‘‘(2) TERMINATION OF ACCOUNTS.—If the ac-
count beneficiary ceases to engage in the trade or 
business of farming or ranching— 
‘‘(A) all FRAME accounts of such indi-
vidual shall cease to be such accounts, and 
‘‘(B) the balance of all such accounts shall 
be treated as— 
‘‘(i) distributed to such individual, 
and 
‘‘(ii) not paid in a qualified distribu-
tion. 
‘‘(f) TAX TREATMENT OF DISTRIBUTIONS.— 
‘‘(1) IN GENERAL.—Any amount paid or dis-
tributed out of a FRAME account (other than a 
rollover contribution described in paragraph (4)) 
shall be included in gross income. 
‘‘(2) ADDITIONAL TAX ON NON-QUALIFIED DIS-
TRIBUTIONS.— 
‘‘(A) IN GENERAL.—The tax imposed by 
this chapter on the account beneficiary for any 
taxable year in which there is a payment or dis-
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tribution from a FRAME account of such bene-
ficiary which is not a qualified distribution shall 
be increased by 20 percent of the amount of 
such payment or distribution which is not a 
qualified distribution. 
‘‘(B) EXCEPTION
FOR
DISABILITY
OR 
DEATH.—Subparagraph (A) shall not apply if 
the payment or distribution is made after the 
account beneficiary becomes disabled within the 
meaning of section 72(m)(7) or dies. 
‘‘(3) EXCESS CONTRIBUTIONS RETURNED BE-
FORE DUE DATE OF RETURN.— 
‘‘(A) IN
GENERAL.—If any excess con-
tribution is contributed for a taxable year to a 
FRAME account of an individual, paragraph 
(2) shall not apply to distributions from the 
FRAME accounts of such individual (to the ex-
tent such distributions do not exceed the aggre-
gate excess contributions to all such accounts of 
such individual for such year) if— 
‘‘(i) such distribution is received by 
the individual on or before the last day 
prescribed by law (including extensions of 
time) for filing such individual’s return for 
such taxable year, and 
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‘‘(ii) such distribution is accompanied 
by the amount of net income attributable 
to such excess contribution. 
Any net income described in clause (ii) shall be 
included in the gross income of the individual 
for the taxable year in which it is received. 
‘‘(B) EXCESS
CONTRIBUTION.—For pur-
poses of subparagraph (A), the term ‘excess 
contribution’ means any contribution (other 
than a rollover contribution) which is not de-
ductible under this section. 
‘‘(4) ROLLOVER CONTRIBUTION.—An amount is 
described in this paragraph as a rollover contribu-
tion if it meets the requirements of subparagraphs 
(A) and (B). 
‘‘(A) IN GENERAL.—For purposes of this 
section, any amount paid or distributed from a 
FRAME account to the account beneficiary 
shall be treated as a qualified distribution to 
the extent the amount received is paid into a 
FRAME account for the benefit of such bene-
ficiary not later than the 60th day after the day 
on which the beneficiary receives the payment 
or distribution. 
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‘‘(B) LIMITATION.—This paragraph shall 
not apply to any amount described in subpara-
graph (A) received by an individual from a 
FRAME account if, at any time during the 1- 
year period ending on the day of such receipt, 
such individual received any other amount de-
scribed in subparagraph (A) from a FRAME 
account which was not included in the individ-
ual’s gross income because of the application of 
this paragraph. 
‘‘(5) TRANSFER OF ACCOUNT INCIDENT TO DI-
VORCE.—The transfer of an individual’s interest in 
a FRAME account to an individual’s spouse or 
former spouse under a divorce or separation instru-
ment described in subparagraph (A) of section 
71(b)(2) shall not be considered a taxable transfer 
made by such individual notwithstanding any other 
provision of this subtitle, and such interest shall, 
after such transfer, be treated as a FRAME account 
with respect to which such spouse is the account 
beneficiary. 
‘‘(6) TREATMENT AFTER DEATH OF ACCOUNT 
BENEFICIARY.— 
‘‘(A) TREATMENT IN CASE OF INDIVIDUAL 
DESIGNATED BENEFICIARY.—If any individual 
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acquires 
such 
beneficiary’s 
interest 
in 
a 
FRAME account by reason of being the des-
ignated beneficiary of such account at the death 
of the account beneficiary, such FRAME ac-
count shall be treated as if such individual were 
the account beneficiary. 
‘‘(B) OTHER CASES.— 
‘‘(i) IN GENERAL.—If, by reason of 
the death of the account beneficiary, any 
person acquires the account beneficiary’s 
interest in a FRAME account in a case to 
which subparagraph (A) does not apply— 
‘‘(I) such account shall cease to 
be a FRAME account as of the date 
of death, and 
‘‘(II) an amount equal to the fair 
market value of the assets in such ac-
count on such date shall be included 
if such person is not the estate of 
such beneficiary, in such person’s 
gross income for the taxable year 
which includes such date, or if such 
person is the estate of such bene-
ficiary, in such beneficiary’s gross in-
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come for the last taxable year of such 
beneficiary. 
‘‘(ii) 
DEDUCTION
FOR
ESTATE 
TAXES.—An appropriate deduction shall be 
allowed under section 691(c) to any person 
(other than the decedent or the decedent’s 
spouse) with respect to amounts included 
in gross income under clause (i) by such 
person. 
‘‘(g) REPORTS.—The Secretary may require the 
trustee of a FRAME account to make such reports regard-
ing such account to the Secretary and to the account bene-
ficiary with respect to contributions, distributions, and 
such other matters as the Secretary determines appro-
priate. The reports required by this subsection shall be 
filed at such time and in such manner and furnished to 
such individuals at such time and in such manner as may 
be required by the Secretary.’’. 
(b) DEDUCTION ALLOWED WHETHER OR NOT INDI-
VIDUAL ITEMIZES OTHER DEDUCTIONS.—Subsection (a) 
of section 62 of such Code is amended by inserting after 
paragraph (21) the following new paragraph: 
‘‘(22) FRAME ACCOUNTS.—The deduction al-
lowed by section 224.’’. 
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(c) TAX ON EXCESS CONTRIBUTIONS.—Section 4973 
of such Code (relating to tax on excess contributions to 
certain tax-favored accounts and annuities) is amended— 
(1) by striking ‘‘or’’ at the end of subsection 
(a)(4), by inserting ‘‘or’’ at the end of subsection 
(a)(5), and by inserting after subsection (a)(5) the 
following new paragraph: 
‘‘(6) a FRAME account (within the meaning of 
section 224(d)),’’, and 
(2) by adding at the end the following new sub-
section: 
‘‘(h) EXCESS
CONTRIBUTIONS
TO
FRAME AC-
COUNTS.—For purposes of this section, in the case of 
FRAME accounts (within the meaning of section 224(d)), 
the term ‘excess contribution’ means the sum of— 
‘‘(1) the aggregate amount contributed for the 
taxable year to the accounts (other than rollover 
contributions described in section 224(f)(4)) which is 
not allowable as a deduction under section 224 for 
such year, and 
‘‘(2) the amount determined under this sub-
section for the preceding taxable year, reduced by 
the sum of— 
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‘‘(A) the distributions out of the accounts 
with respect to which additional tax was im-
posed under section 224(f)(2), and 
‘‘(B) the excess (if any) of— 
‘‘(i) the maximum amount allowable 
as a deduction under section 224(b) for 
the taxable year, over 
‘‘(ii) the amount contributed to the 
accounts for the taxable year. 
For purposes of this subsection, any contribution 
which is distributed out of the FRAME account in 
a distribution to which section 224(f)(3) applies 
shall be treated as an amount not contributed.’’. 
(d) TAX ON PROHIBITED TRANSACTIONS.— 
(1) Section 4975(c) of such Code (relating to 
tax on prohibited transactions) is amended by add-
ing at the end the following new paragraph: 
‘‘(7) SPECIAL RULE FOR FRAME ACCOUNTS.— 
An individual for whose benefit a FRAME account 
(within the meaning of section 224(d)) is established 
shall be exempt from the tax imposed by this section 
with respect to any transaction concerning such ac-
count (which would otherwise be taxable under this 
section) if, with respect to such transaction, the ac-
count ceases to be a FRAME account by reason of 
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the application of section 224(e)(2) to such ac-
count.’’. 
(2) Section 4975(e)(1) of such Code is amended 
by redesignating subparagraphs (F) and (G) as sub-
paragraphs (G) and (H), respectively, and by insert-
ing after subparagraph (E) the following new sub-
paragraph: 
‘‘(F) a FRAME account described in sec-
tion 224(d),’’. 
(e) FAILURE TO PROVIDE REPORTS ON FRAME AC-
COUNTS.—Section 6693(a)(2) of such Code (relating to 
reports) is amended by redesignating subparagraphs (D) 
and (E) as subparagraphs (E) and (F), respectively, and 
by inserting after subparagraph (C) the following new sub-
paragraph: 
‘‘(D) section 224(g) (relating to FRAME 
accounts),’’. 
(f) CLERICAL AMENDMENT.—The table of sections 
for part VII of subchapter B of chapter 1 of such Code 
is amended by striking the last item and inserting the fol-
lowing: 
‘‘Sec. 224. FRAME accounts. 
‘‘Sec. 225. Cross reference.’’. 
(g) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act. 
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SEC. 3. FRAME CONTRIBUTION CREDIT. 
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by adding at the end the following new 
section: 
‘‘SEC. 45S. FRAME CONTRIBUTION CREDIT. 
‘‘(a) GENERAL RULE.—For purposes of section 38, 
in the case of a qualified farmer (as defined in section 
224(c)), the FRAME contribution credit determined 
under this section for any taxable year is an amount equal 
to the applicable percentage of the taxpayer’s contribu-
tions to any FRAME account of the taxpayer. 
‘‘(b) APPLICABLE PERCENTAGE.—For purposes of 
subsection (a), the applicable percentage is— 
‘‘(1) in the case of the taxable year during 
which the first FRAME account of the taxpayer is 
established, and the 2nd and 3rd taxable years 
thereafter, 10 percent, 
‘‘(2) in the case of the 4th through 5th taxable 
years thereafter, 5 percent, and 
‘‘(3) in the case of the 7th through 9th taxable 
years thereafter, 3.5 percent. 
‘‘(c) LIMITATION.—Only contributions for which a 
deduction is allowed under section 224 shall be taken into 
account under this section.’’. 
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(b) CREDIT MADE PART OF GENERAL BUSINESS 
CREDIT.—Subsection (b) of section 38 of such Code is 
amended by striking ‘‘plus’’ at the end of paragraph (35), 
by striking the period at the end of paragraph (36) and 
inserting ‘‘, plus’’, and by adding at the end the following 
new paragraph: 
‘‘(37) the FRAME contribution credit deter-
mined under section 45S(a).’’. 
(c) CLERICAL AMENDMENT.—The table of sections 
for subpart D of part IV of subchapter A of chapter 1 
of such Code is amended by adding at the end the fol-
lowing new item: 
‘‘Sec. 45S. FRAME contribution credit.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act. 
Æ 
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