[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 1994 Introduced in Senate (IS)]







110th CONGRESS
  1st Session
                                S. 1994

 To amend the Internal Revenue Code of 1986 to exempt certain farmland 
                          from the estate tax.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             August 3, 2007

 Mr. Salazar (for himself, Mr. Roberts, Mrs. Feinstein, and Mr. Crapo) 
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 exempt certain farmland 
                          from the estate tax.

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

SECTION 1. 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) either--
                    ``(A) with respect to each of 3 or more of the 5 
                consecutive taxable years ending with the decedent's 
                last taxable year, the decedent's gross income from the 
                trade or business of farming exceeds 50 percent of the 
                decedent's gross income, or
                    ``(B) 50 percent or more of the adjusted value of 
                the gross estate at the date of the decedent's death 
                consists of the qualified farmland, and
            ``(3) 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).
            ``(3) Other terms.--Any other term used in this section 
        which is also used in section 2032A shall have the same meaning 
        given such term by section 2032A.
    ``(d) Tax Treatment of Dispositions and Failures to Use for Farming 
Purposes.--
            ``(1) Imposition of recapture 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 a recapture tax.
            ``(2) Amount of recapture tax, etc.--Rules similar to the 
        rules of section 2032A(c) with respect to the additional estate 
        tax shall apply for purposes of this subsection with respect to 
        the recapture tax.
    ``(e) Application of Other Rules.--Rules similar to the rules of 
subsections (e), (f), (g), (h), and (i) of section 2032A shall apply 
for purposes of this section.''
    (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.
                                 <all>