I 
108TH CONGRESS 
1ST SESSION H. R. 2964
To amend the Internal Revenue Code of 1986 to provide a tax incentive 
for land sales for conservation purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 25, 2003
Mr. PORTMAN (for himself and Mr. MATSUI) 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 
a tax incentive for land sales for conservation purposes.
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 ‘‘Conservation Tax In-
centives Act of 2003’’.
SEC. 2. EXCLUSION OF 50 PERCENT OF GAIN ON SALES OF 
LAND OR INTERESTS IN LAND OR WATER TO 
ELIGIBLE 
ENTITIES 
FOR 
CONSERVATION 
PURPOSES. 
(a) IN GENERAL.—Part III of subchapter B of chap-
ter 1 of the Internal Revenue Code of 1986 (relating to 
items specifically excluded from gross income) is amended 
by inserting after section 121 the following new section: 
‘‘SEC. 121A. 50-PERCENT EXCLUSION OF GAIN ON SALES OF 
LAND OR INTERESTS IN LAND OR WATER TO 
ELIGIBLE 
ENTITIES 
FOR 
CONSERVATION 
PURPOSES. 
‘‘(a) EXCLUSION.—Gross income shall not include 50 
percent of any gain from the sale of land or an interest 
in land or water (determined without regard to any im-
provements) to an eligible entity if—
‘‘(1) such land or interest in land or water was 
owned by the taxpayer or a member of the tax-
payer’s family (as defined in section 2032A(e)(2)) at 
all times during the 3-year period ending on the date 
of the sale, and 
‘‘(2) such land or interest in land or water is 
being acquired by an eligible entity which provides 
the taxpayer, at the time of acquisition, a written 
letter of intent which shall include the following 
statement: ‘The purchaser’s intent is that this acqui-
sition will serve 1 or more of the conservation pur-
poses specified in clause (i), (ii), or (iii) of section 
170(h)(4)(A). 
‘‘(b) ELIGIBLE ENTITY.—For purposes of this sec-
tion, the term ‘eligible entity’ means an entity described 
in section 170(h)(3) or an agency or department thereof 
and which is organized and at all times operated prin-
cipally for 1 or more of the conservation purposes specified 
in clause (i), (ii), or (iii) of section 170(h)(4)(A). 
‘‘(c) STOCK IN HOLDING CORPORATIONS.—For pur-
poses of this section, the term ‘land or an interest in land 
or water’ shall include a controlling stock interest in any 
corporation if the fair market value of the corporation’s 
land or interests in land or water equals or exceeds 90 
percent of the fair market value of all of such corpora-
tion’s assets at all times during the 3-year period ending 
on the date of the sale. For purposes of the preceding sen-
tence, the term ‘control’ means ownership of stock in a 
corporation which meets the requirements of section 
1504(a)(2) (determined by substituting ‘50 percent’ for 
‘80 percent’ each place it appears).’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for part III of subchapter B of chapter 1 of such Code 
is amended by inserting after the item relating to section 
121 the following new item:
‘‘Sec. 121A. 50-percent exclusion of gain on sales of land or inter-
ests in land or water to eligible entities for con-
servation purposes.’’.
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to sales occurring on or after the 
date of enactment of this Act.
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