I
105TH CONGRESS
2D SESSION
H. R. 4496
To amend the Internal Revenue Code of 1986 to provide tax incentives
for land sales for conservation purposes.
IN THE HOUSE OF REPRESENTATIVES
AUGUST 6, 1998
Mr. PORTMAN (for himself, Mr. MATSUI, Mr. ENSIGN, and Mr. TANNER) in-
troduced 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
tax incentives 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 1998’’.
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 I of subchapter P of chapter
1 of the Internal Revenue Code of 1986 (relating to treat-
ment of capital gains) is amended by adding at the end
the following new section:
‘‘SEC. 1203. 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 with funds from
a program or source established for or consistent
with 1 or more of the conservation purposes speci-
fied 
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—
‘‘(1) any agency of the United States or of any
State or local government, or
‘‘(2) any other organization that—
‘‘(A) is organized and at all times operated
principally for 1 or more of the conservation
purposes specified in clause (i), (ii), or (iii) of
section 170(h)(4)(A),
‘‘(B) is described in section 501(c)(3) and
exempt from tax under section 501(a), and
‘‘(C)(i) meets the requirements of section
509(a)(2), or
‘‘(ii) meets the requirements of section
509(a)(3) and is controlled by an organization
described in section 509(a)(2).
‘‘(c) STOCK IN HOLDING CORPORATIONS.—For pur-
poses of this section, the term ‘land or an interest in land
or water’ shall include stock 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 corporation’s assets at all times during
the 3-year period ending on the date of the sale.’’
(b) CLERICAL AMENDMENT.—The table of sections
for part I of subchapter P of chapter 1 of the Internal
Revenue Code of 1986 is amended by adding at the end
the following new item:
‘‘Sec. 1203. 50-percent exclusion of gain on sales of land or interests in land
or water to eligible entities for conservation 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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