[Congressional Record Volume 141, Number 45 (Friday, March 10, 1995)]
[Extensions of Remarks]
[Page E578]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


         THE NATIONAL FAMILY ENTERPRISE PRESERVATION ACT OF 1995

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                            HON. LINDA SMITH

                             of washington

                    in the house of representatives

                         Friday, March 10, 1995
  Mrs. SMITH of Washington. Mr. Speaker, today I am introducing a bill 
to help encourage the preservation and growth of family farms and 
businesses. Our current Tax Code severely discourages owners of family 
farms and businesses from passing their enterprise on to the next 
generation. This situation stems from a Tax Code that forces heirs of 
family businesses to sell their assets in order to pay off hefty 
Federal estate taxes.
  Estate taxes are hurting the very family businesses of America that 
have played a significant role in the foundation of our economy. I 
believe these businesses deserve some measure of estate tax relief in 
order to survive when they move from one generation to the next.
  The bill I am introducing, the National Family Enterprise 
Preservation Act of 1995, will provide estate tax relief to more than 
95 percent of our Nation's family-owned farms and businesses. It will 
do so by increasing the current unified estate and gift tax credit of 
$192,800 to $314,600 for family enterprise property. This provision 
will effectively increase the current $600,000 estate tax exemption to 
$1,000,000 for family enterprises. To ensure that the family farm and 
business remains in the hands of qualified family members, the heir 
must continue in the active management of the farm or business for 10 
years following the decedent's death, otherwise appropriate recapture 
provisions would apply.
  Two other provisions in the bill are also designed to provide tax 
relief to family businesses. The first would increase the current 
annual gift tax exclusion of $10,000 to $20,000 in the case of gifts to 
qualify family members of family enterprise property. The second would 
increase the maximum reduction allowable for special use valuation from 
the current level of $750,000 to $1 million for family enterprises.
  This legislation is greatly needed to help ensure the perpetuation of 
our country's family businesses. I urge my colleagues to show their 
support for family businesses by supporting this important measure.


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