I
107TH CONGRESS
1ST SESSION
H. R. 1711
To amend the Internal Revenue Code of 1986 to modify the treatment
of bonds issued to acquire renewable resources on land subject to con-
servation easement.
IN THE HOUSE OF REPRESENTATIVES
MAY 3, 2001
Ms. DUNN (for herself, Mr. TANNER, Mr. HERGER, and Mr. MATSUI) intro-
duced the following bill; which was referred to the Committee on Ways
and Means
A BILL
To amend the Internal Revenue Code of 1986 to modify
the treatment of bonds issued to acquire renewable re-
sources on land subject to conservation easement.
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 ‘‘Community Forestry
and Agriculture Conservation Act of 2001’’.
SEC. 2. TREATMENT OF BONDS ISSUED TO ACQUIRE RE-
NEWABLE RESOURCES ON LAND SUBJECT TO
CONSERVATION EASEMENT.
(a) IN GENERAL.—Section 145 of the Internal Rev-
enue Code of 1986 (defining qualified 501(c)(3) bond) is
amended by redesignating subsection (e) as subsection (f)
and by inserting after subsection (d) the following new
subsection:
‘‘(e) BONDS ISSUED TO ACQUIRE RENEWABLE RE-
SOURCES ON LAND SUBJECT TO CONSERVATION EASE-
MENT.—
‘‘(1) IN GENERAL.—If—
‘‘(A) the proceeds of any bond are used to
acquire land (or a long-term lease thereof) to-
gether with any renewable resource associated
with the land (including standing timber, agri-
cultural crops, or water rights) from an unaffili-
ated person,
‘‘(B) the land is subject to a conservation
restriction—
‘‘(i) which is granted in perpetuity to
an unaffiliated person that is—
‘‘(I) a 501(c)(3) organization, or
‘‘(II) a Federal, State, or local
government conservation organization,
‘‘(ii) which meets the requirements of
clauses 
(ii) 
and 
(iii)(II) 
of 
section
170(h)(4)(A),
‘‘(iii) which exceeds the requirements
of relevant environmental and land use
statutes and regulations, and
‘‘(iv) which obligates the owner of the
land to pay the costs incurred by the hold-
er of the conservation restriction in moni-
toring compliance with such restriction,
‘‘(C) a management plan which meets the
requirements of the statutes and regulations re-
ferred to subparagraph (B)(iii) is developed for
the conservation of the renewable resources,
and
‘‘(D) such bond would be a qualified
501(c)(3) bond (after the application of para-
graph (2)) but for the failure to use revenues
derived by the 501(c)(3) organization from the
sale, lease, or other use of such renewable re-
source as otherwise required by this part,
such bond shall not fail to be a qualified 501(c)(3)
bond by reason of the failure to so use such revenues
if the revenues which are not used as otherwise re-
quired by this part are used in a manner consistent
with the stated charitable purposes of the 501(c)(3)
organization.
‘‘(2) TREATMENT OF TIMBER, ETC.—
‘‘(A) IN GENERAL.—For purposes of sub-
section (a), the cost of any renewable resource
acquired with proceeds of such bonds shall be
treated as a cost of acquiring the land associ-
ated with the renewable resource and such land
shall not be treated as used for a private busi-
ness use because of the sale or leasing of the
renewable resource to, or other use of the re-
newable resource by, an unaffiliated person to
the extent that such sale, leasing, or other use
does not constitute an unrelated trade or busi-
ness, determined by applying section 513(a).
‘‘(B) APPLICATION
OF
BOND
MATURITY
LIMITATION.—For purposes of section 147(b),
the cost of any land or renewable resource ac-
quired with proceeds of such bonds shall have
an economic life commensurate with the eco-
nomic and ecological feasibility of the financing
of such land or renewable resource.
‘‘(C) UNAFFILIATED
PERSON.—For pur-
poses of this subsection, the term ‘unaffiliated
person’ means any person who controls no more
than 20 percent of the governing body of an-
other person.’’
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to obligations issued after the
date of the enactment of this Act.
Æ