[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3523 Introduced in House (IH)]







109th CONGRESS
  1st Session
                                H. R. 3523

To amend the Internal Revenue Code of 1986 to exclude from estate taxes 
  the value of farmland so long as the farmland use continues and to 
   repeal the dollar limitation on the estate tax exclusion for land 
             subject to a qualified conservation easement.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             July 28, 2005

    Mr. Bishop of New York 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 exclude from estate taxes 
  the value of farmland so long as the farmland use continues and to 
   repeal the dollar limitation on the estate tax exclusion for land 
             subject to a qualified 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 ``Estate Tax Deferral for Working 
Farms and Land Conservation Act of 2005''.

SEC. 2. EXCLUSION FROM GROSS ESTATE OF CERTAIN FARMLAND SO LONG AS 
              FARMLAND USE CONTINUES.

    (a) In General.--Part III of subchapter A of chapter 11 of the 
Internal Revenue Code of 1986 (relating to gross estate) is amended by 
inserting after section 2033 the following new section:

``SEC. 2033A. EXCLUSION OF CERTAIN FARMLAND SO LONG AS USE AS FARMLAND 
              CONTINUES.

    ``(a) In General.--In the case of an estate of a decedent to which 
this section applies, the value of the gross estate shall not include 
the adjusted value of qualified farmland included in the estate.
    ``(b) Estates to Which Section Applies.--This section shall apply 
to an estate if--
            ``(1) the decedent was (at the date of the decedent's 
        death) a citizen or resident of the United States,
            ``(2) during the 8-year period ending on the date of the 
        decedent's death there have been periods aggregating 5 years or 
        more during which--
                    ``(A) the qualified farmland was owned by the 
                decedent or a member of the decedent's family, and
                    ``(B) there was material participation (within the 
                meaning of section 2032A(e)(6)) by the decedent or a 
                member of the decedent's family in the operation of 
                such farmland.
        Rules similar to the rules of paragraphs (4) and (5) of section 
        2032A(b) shall apply for purposes of subparagraph (B).
    ``(c) Definitions.--For purposes of this section--
            ``(1) Qualified farmland.--The term `qualified farmland' 
        means any real property--
                    ``(A) which is located in the United States,
                    ``(B) which is used as a farm for farming purposes 
                (within the meaning of section 2032A(e)), and
                    ``(C) which was acquired from or passed from the 
                decedent to a qualified heir of the decedent and which, 
                on the date of the decedent's death, was being so used 
                by the decedent or a member of the decedent's family.
            ``(2) Adjusted value.--The term `adjusted value' means the 
        value of farmland for purposes of this chapter (determined 
        without regard to this section), reduced by the amount 
        deductible under paragraph (3) or (4) of section 2053(a).
    ``(d) Tax Treatment of Dispositions and Failures to Use for Farming 
Purposes.--
            ``(1) Imposition of additional estate tax.--If, at any time 
        after the decedent's death and before the death of the 
        qualified heir--
                    ``(A) the qualified heir disposes of any interest 
                in qualified farmland (other than by a disposition to a 
                member of his family), or
                    ``(B) the qualified heir ceases to use the real 
                property which was acquired (or passed) from the 
                decedent as a farm for farming purposes, then, there is 
                hereby imposed an additional estate tax.
            ``(2) Amount of additional tax.--Rules similar to the rules 
        of section 2032A(e) shall apply for purposes of this 
        subsection.''
    (b) Clerical Amendment.--The table of sections for part III of 
subchapter A of chapter 11 of such Code is amended by inserting after 
the item relating to section 2033 the following new item:

``Sec. 2033A. Exclusion of certain farmland so long as use as farmland 
                            continues.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to estates of decedents dying after the date of the enactment of 
this Act.

SEC. 3. REPEAL OF DOLLAR LIMITATION ON ESTATE TAX EXCLUSION FOR LAND 
              SUBJECT TO QUALIFIED CONSERVATION EASEMENT.

    (a) In General.--Subsection (c) of section 2031 of the Internal 
Revenue Code of 1986 (relating to Estate tax with respect to land 
subject to a qualified conservation easement) is amended by striking 
paragraph (3) and by redesignating the succeeding paragraphs 
accordingly.
    (b) Conforming Amendment.--Paragraph (1) of section 2031(c) of such 
Code is by striking ``the lesser of'' at all that follows and inserting 
``the applicable percentage of the value of land subject to a qualified 
conservation easement, reduced by the amount of any deduction under 
section 2055(f) with respect to such land.''
    (c) Effective Date.--The amendments made by this section shall 
apply to estates of decedents dying after the date of the enactment of 
this Act.
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