[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 701 Introduced in Senate (IS)]







107th CONGRESS
  1st Session
                                 S. 701

To amend the Internal Revenue Code of 1986 to provide special rules for 
  the charitable deduction for conservation contributions of land by 
         eligible farmers and ranchers, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             April 5, 2001

  Mr. Baucus introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
To amend the Internal Revenue Code of 1986 to provide special rules for 
  the charitable deduction for conservation contributions of land by 
         eligible farmers and ranchers, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Rural Heritage Conservation Act''.

SEC. 2. SPECIAL LIMITATION FOR CERTAIN CHARITABLE CONTRIBUTIONS OF 
              ELIGIBLE FARMERS AND RANCHERS.

    (a) In General.--Section 170(b)(1) of the Internal Revenue Code of 
1986 (relating to percentage limitations of individuals) is amended by 
redesignating subparagraph (F) as subparagraph (G) and inserting after 
subparagraph (E) the following:
                    ``(F) Special limitation with respect to 
                contributions described in subparagraph (a) of capital 
                gain property by eligible farmers or ranchers.--
                            ``(i) In general.--Notwithstanding 
                        subparagraph (C), in the case of a charitable 
                        contribution described in subparagraph (A) of 
                        capital gain property (as defined in 
                        subparagraph (C)) of an eligible farmer or 
                        rancher who makes an election under clause 
                        (ii), the total amount of contributions of such 
                        property which may be taken into account under 
                        subsection (a) for any taxable year shall not 
                        exceed 100 percent of the taxpayer's 
                        contribution base for such year. For purposes 
                        of this subsection, contributions of capital 
                        gain property to which this subparagraph 
                        applies shall be taken into account after all 
                        other charitable contributions.
                            ``(ii) Election.--
                                    ``(II) In general.--A taxpayer may 
                                make an election under this clause to 
                                take the deduction under subsection (a) 
                                for any contribution described in 
                                clause (i) for a 15-consecutive-
                                taxable-year period.
                                    ``(II) Effect of election.--A 
                                taxpayer may only make 1 election under 
                                this clause. Such election, once made, 
                                shall be irrevocable.
                            ``(iii) Eligible farmer or rancher.--For 
                        purposes of this subparagraph, the term 
                        `eligible farmer or rancher' means a taxpayer--
                                    ``(I) whose gross income from the 
                                trade or business of farming (within 
                                the meaning of section 2032A(e)(5)) is 
                                at least 51 percent of the taxpayer's 
                                gross income for the taxable year, and
                                    ``(II) in the case of a C 
                                corporation, the stock of which is not 
                                publicly traded on a recognized 
                                exchange.''.
    (b) Conforming Amendments.--
            (1) Section 170(b)(1)(C)(i) of the Internal Revenue Code of 
        1986 is amended by inserting ``or (E)'' after ``subparagraph 
        (D)''.
            (2) The second sentence of section 170(b)(1)(D) of such 
        Code is amended by inserting ``(other than charitable 
        contributions to which subparagraph (F) applies)'' before the 
        period.
    (c) Effective Date.--The amendments made by this section shall 
apply to contributions made in taxable years beginning after the date 
of the enactment of this Act.

SEC. 3. MODIFICATIONS TO ENCOURAGE CONTRIBUTIONS OF CAPITAL GAIN REAL 
              PROPERTY MADE FOR CONSERVATION PURPOSES.

    (a) Exclusion From Percentage Limitation.--Section 170(b)(1)(C) of 
the Internal Revenue Code of 1986 (relating to special limitation with 
respect to contributions described in subparagraph (A) of capital gain 
property) is amended by redesignating clause (iv) as clause (v) and by 
inserting after clause (iii) the following:
                            ``(iv) Clauses (i) and (ii) shall not apply 
                        to a contribution of capital gain property 
                        which is a qualified conservation contribution 
(as defined in subsection (h)).''.
    (b) Unlimited Carryover for Certain Conservation Contributions of 
Capital Gain Property.--Paragraph (1) of section 170(d) of the Internal 
Revenue Code of 1986 (relating to carryover of excess contributions) is 
amended by adding at the end the following:
                    ``(C) Unlimited carryover for certain conservation 
                contributions.--Subparagraph (A) shall not apply to a 
                contribution described in subsection (b)(1)(C)(iv). If 
                the amount of the contribution described in subsection 
                (b)(1)(C)(iv), payment of which is made within the 
                taxable year, exceeds the taxpayer's contribution base 
                for the taxable year, such excess shall be treated as a 
                contribution so described paid in each succeeding 
                taxable year, in order of time.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to contributions made in taxable years beginning after the date 
of the enactment of this Act.

SEC. 4. INCREASE IN CHARITABLE CONTRIBUTION LIMIT FOR FARMERS AND 
              RANCHERS DOING BUSINESS IN CORPORATE FORM.

    (a) In General.--Section 170(b)(1) of the Internal Revenue Code of 
1986 (relating to percentage limitation of individuals), as amended by 
section 2(a), is amended by redesignating subparagraph (G) as 
subparagraph (H) and by inserting after subparagraph (F) the following:
                    ``(G) Certain farmers and ranchers.--An eligible 
                farmer or rancher (as defined in subparagraph (F)) 
                shall be treated as an individual for purposes of this 
                section with respect to any qualified conservation 
                contribution.''
    (b) Conforming Amendment.--Section 170(b)(2) of the Internal 
Revenue Code of 1986 is amended by striking ``corporation,'' and 
inserting ``corporation (other than a corporation that is an eligible 
farmer or rancher as defined in paragraph (1)(F) with respect to a 
qualified conservation contribution),''.
    (c) Effective Date.--The amendments made by this section shall 
apply to donations of qualified conservation contributions (as defined 
in section 170(h) of the Internal Revenue Code of 1986) made after the 
date of the enactment of this Act, in taxable years ending after such 
date.

SEC. 5. EXPANSION OF ESTATE TAX EXCLUSION FOR LAND SUBJECT TO QUALIFIED 
              CONSERVATION EASEMENT.

    (a) In General.--Subparagraph (A) of section 2031(c)(8) of the 
Internal Revenue Code of 1986 (defining land subject to a qualified 
conservation easement) is amended by striking clause (i) and by 
redesignating clauses (ii) and (iii) as clauses (i) and (ii), 
respectively.
    (b) Effective Date.--The amendments made by this section shall 
apply to qualified conservation contributions (as defined in section 
170(h) of the Internal Revenue Code of 1986) made after the date of the 
enactment of this Act.
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