[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 822 Introduced in Senate (IS)]







107th CONGRESS
  1st Session
                                 S. 822

 To amend the Internal Revenue Code of 1986 to modify the treatment of 
    bonds issued to acquire renewable resources on land subject to 
                         conservation easement.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              May 3, 2001

Mrs. Murray (for herself, Mr. Smith of Oregon, Mr. Craig, Mr. Daschle, 
and Mr. Leahy) 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 modify the treatment of 
    bonds issued to acquire renewable resources on land subject to 
                         conservation easement.

    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 ``Community Forestry and Agriculture 
Conservation Act of 2001''.

SEC. 2. TREATMENT OF BONDS ISSUED TO ACQUIRE RENEWABLE RESOURCES ON 
              LAND SUBJECT TO CONSERVATION EASEMENT.

    (a) In General.--Section 145 of the Internal Revenue 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 Resources on Land Subject 
to Conservation Easement.--
            ``(1) In general.--If--
                    ``(A) the proceeds of any bond are used to acquire 
                land (or a long-term lease thereof) from a willing 
                seller together with any renewable resource associated 
                with the land (including standing timber, agricultural 
                crops, or water rights) from an unaffiliated 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 holder of 
                        the conservation restriction in monitoring 
                        compliance with such restriction,
                    ``(C) a management plan which meets the 
                requirements of the statutes and regulations referred 
                to in 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 paragraph (2)) but for the 
                failure to use revenues derived by the 501(c)(3) 
                organization from the sale, lease, or other use of such 
                resource 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 required 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 subsection (a), 
                the cost of any renewable resource acquired with 
                proceeds of any bond described in paragraph (1) shall 
                be treated as a cost of acquiring the land associated 
                with the renewable resource and such land shall not be 
                treated as used for a private business use because of 
                the sale or leasing of the renewable resource to, or 
                other use of the renewable resource by, an unaffiliated 
                person to the extent that such sale, leasing, or other 
                use does not constitute an unrelated trade or business, 
                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 acquired with proceeds of any bond 
                described in paragraph (1) shall have an economic life 
                commensurate with the economic and ecological 
                feasibility of the financing of such land or renewable 
                resource.
                    ``(C) Unaffiliated person.--For purposes of this 
                subsection, the term `unaffiliated person' means any 
                person who controls not more than 20 percent of the 
                governing body of another person.''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to obligations issued after the date of the enactment of this 
Act.
                                 <all>