I
106TH CONGRESS
1ST SESSION
H. R. 2263
To amend the Internal Revenue Code of 1986 to encourage contributions
by individuals of capital gain real property for conservation purposes,
to encourage qualified conservation contributions, and to modify the
rules governing the estate tax exclusion for land subject to a qualified
conservation easement.
IN THE HOUSE OF REPRESENTATIVES
JUNE 17, 1999
Mrs. JOHNSON of Connecticut (for herself, Mr. BLUMENAUER, Mr. BEREU-
TER, and Mr. MALONEY of Connecticut) 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 encourage
contributions by individuals of capital gain real property
for conservation purposes, to encourage qualified con-
servation contributions, and to modify the rules gov-
erning the estate tax exclusion for land subject to a
qualified conservation easement.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
H.L.C.
.....................................................................
(Original Signature of Member)
106TH CONGRESS
1ST SESSION
H. R. ll
IN THE HOUSE OF REPRESENTATIVES
Mrs. JOHNSON of Connecticut introduced the following bill; which was referred
to the Committee on lllllllllllllll
A BILL
To amend the Internal Revenue Code of 1986 to encourage
contributions by individuals of capital gain real property
for conservation purposes, to encourage qualified con-
servation contributions, and to modify the rules gov-
erning the estate tax exclusion for land subject to a
qualified conservation easement.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
H.L.C.
SECTION 1. MODIFICATIONS TO ENCOURAGE CONTRIBU-
TIONS OF CAPITAL GAIN REAL PROPERTY
MADE FOR CONSERVATION PURPOSES AND
QUALIFIED CONSERVATION CONTRIBUTIONS.
(a) CONTRIBUTIONS OF CAPITAL GAIN REAL PROP-
ERTY MADE
FOR CONSERVATION PURPOSES
AND
OF
QUALIFIED CONSERVATION CONTRIBUTIONS NOT SUB-
JECT TO SPECIAL LIMITATION ON CONTRIBUTIONS OF
CAPITAL GAIN PROPERTY.—Subparagraph (C) of section
170(b)(1) of the Internal Revenue Code of 1986 (relating
to special limitation with respect to contributions de-
scribed in subparagraph (A) of capital gain property) is
amended by redesignating clause (iv) as clause (v) and by
inserting after clause (iii) the following new clause:
‘‘(iv) In the case of charitable con-
tributions described in subparagraph (A)
of capital gain property, clauses (i) and (ii)
shall not apply to—
‘‘(I) any qualified conservation
contribution (as defined in section
170(h)), or
‘‘(II) any other contribution of
capital gain property which is real
property if the contribution is of the
donor’s entire interest in such prop-
erty and is to a qualified organization
H.L.C.
this paragraph, the excess described in the ma-
terial preceding clause (i) of subparagraph (A)
shall be treated as attributable to contributions
described in the preceding sentence of this sub-
paragraph to the extent of such contributions.’’.
(c) EFFECTIVE DATE.—The amendment made by
this section shall apply to contributions made in taxable
years beginning after the date of the enactment of this
Act.
SEC. 2. MODIFICATION OF RULES RELATING TO ESTATE
TAX EXCLUSION FOR LAND SUBJECT TO
QUALIFIED CONSERVATION EASEMENT.
(a) REPEAL OF CERTAIN RESTRICTIONS ON WHERE
LAND IS LOCATED.—Clause (i) of section 2031(c)(8)(A)
of the Internal Revenue Code of 1986 is amended to read
as follows:
‘‘(i) which is located in the United
States or any possession of the United
States,’’.
(b) REPEAL OF LIMITATION ON EXCLUSION.—
(1) IN
GENERAL.—Paragraph (1) of section
2031(c) of such Code is amended by striking ‘‘the
lesser of—’’ and all that follows and inserting ‘‘the
applicable percentage of the value of land subject to
a qualified conservation easement, reduced by the
H.L.C.
amount of any deduction under section 2055(f) with
respect to such land.’’
(2) CONFORMING AMENDMENTS.—
(A) Subsection (c) of section 2031 of such
Code is amended by striking paragraph (3) and
by redesignating paragraphs (4) through (10)
as paragraphs (3) through (9), respectively.
(B) Paragraphs (2) and (6) of section
2031(c) of such Code, as redesignated by sub-
paragraph (A), are each amended by striking
‘‘paragraph (5)’’ and inserting ‘‘paragraph
(4)’’.
(C) Paragraphs (1), (6), and (7)(A)(iii) of
section 2031(c) of such Code, as redesignated
by subparagraph (A), are each amended by
striking ‘‘paragraph (6)’’ and inserting ‘‘para-
graph (5)’’.
(c) DATE FOR DETERMINING VALUE OF LAND AND
EASEMENT.—Paragraph (2) of section 2032(c) of such
Code (defining applicable percentage) is amended by add-
ing at the end the following new sentence: ‘‘The values
taken into account under the preceding sentence shall be
such values as of the date of the contribution referred to
in paragraph (7)(B).’’
H.L.C.
(d) CERTAIN COMMERCIAL RECREATIONAL USES
PERMITTED.—Subparagraph (B) of section 2031(c)(7) of
such Code, as redesignated by subsection (b), is amended
to read as follows:
‘‘(B) QUALIFIED
CONSERVATION
EASE-
MENT.—
‘‘(i) IN GENERAL.—The term ‘quali-
fied conservation easement’ means a quali-
fied conservation contribution (as defined
in section 170(h)(1)) of a qualified real
property interest (as defined in section
170(h)(2)(C)), except that clause (iv) of
section 170(h)(4)(A) shall not apply, and
the restriction on the use of such interest
described in section 170(h)(2)(C) shall in-
clude a prohibition on more than a de
minimis use for a commercial recreational
activity.
‘‘(ii) SPECIAL RULES.—For purposes
of this paragraph—
‘‘(I) RETAINED RIGHTS.—Rights
retained in the conservation easement
to lease the land for hunting and fish-
ing, so long as such leases are not in-
consistent with the conservation pur-
H.L.C.
pose of the easement, shall be deemed
to be de minimis use.
‘‘(II) 
PRE-EFFECTIVE
DATE
EASEMENTS.—Easements 
otherwise
qualifying under the provisions of this
subsection that were donated on or
before the date of the enactment of
this subclause, shall be deemed to
allow no more than de minimis use for
a commercial recreational activity un-
less by their terms they expressly pro-
vide for commercial recreational activ-
ity in excess of that otherwise allowed
by this subparagraph.
‘‘(III) AUTHORITY
TO
EXTIN-
GUISH RIGHT OF COMMERCIAL RECRE-
ATION
ACTIVITY.—For purposes of
this section, if the executor of an es-
tate and every person in being who
has an interest in the land execute an
agreement to amend or extinguish any
right under the easement of commer-
cial recreation activity in the land so
as to ensure that such land is used for
no more than de minimis commercial
H.L.C.
recreational activity, such agreement
shall be treated as in effect as of the
date of the election described in para-
graph (5).’’
(e) EXCLUSION
APPLICABLE
TO
SOLD
EASE-
MENTS.—Clause (i) of section 2031(c)(7) of such Code,
as amended by subsection (d), is amended by adding at
the end the following new sentence: ‘‘A transfer for value
of a qualified real property interest (as defined under sec-
tion 170(h)(2)(C)) shall not fail to be treated as a quali-
fied conservation easement if such interest would meet the
requirements of the preceding sentence were it donated to
the purchaser and any reference in this section to a con-
tribution shall be treated as including a reference to such
a transfer.’’
(f) EFFECTIVE DATE.—The amendments made by
this section shall take effect as if included in the amend-
ments made by section 508 of the Taxpayer Relief Act
of 1997.
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