[Congressional Record Volume 147, Number 59 (Thursday, May 3, 2001)]
[Senate]
[Pages S4256-S4257]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mrs. MURRAY (for herself, Mr. Smith of Oregon, Mr. Craig, Mr. 
        Daschle, and Mr. Leahy):
  S. 822. A bill to amend the Internal Revenue Code of 1986 to modify 
the treatment of bonds issues to acquire renewable resources on land 
subject to conservation easement; to the Committee on Finance.
  Mrs. MURRAY. Mr. President, I rise today to reintroduce the 
``Community Forestry and Agriculture Conservation Act of 2001.''
  Communities across the United States are losing private forest and 
farmland to development. Many citizens are demanding that we protect 
green space, control sprawl, and protect natural resources, fish and 
wildlife.
  Unfortunately, there are few options available to local communities 
to protect these working green spaces. Federal, state or local 
governments can purchase the land outright. But this is expensive, and 
simply unworkable for larger tracts of forest and agricultural land. 
Outright purchase also raises concerns about harming local economies, 
reducing the tax base, and hurting private property rights.
  Meanwhile, landowners are often land-rich and cash-poor. My bill 
would allow landowners to capitalize some or all of their assets.
  We have a responsibility to find solutions that protect private 
forests and farm land, enhance economic prosperity, and bring 
communities together in the process. The Community Forestry and 
Agriculture Conservation Act would accomplish these goals.
  The bill modifies the tax code to make it easier for communities to 
issue tax-exempt revenue bonds on behalf of a private non-profit 
corporation to purchase tracts of land. This protects the land from 
development, while allowing jobs that depend on harvesting the land to 
continue. The bonds would be serviced by harvesting the resources on 
the land in a responsible, sustainable way.
  I want to give an example of the concept behind this bill, and then 
mention some of the benefits.
  A group of community leaders would form a non-profit organization 
with a diverse board of directors. The non-profit organization would 
work with a landowner to reach a voluntary sale agreement at fair 
market value. The non-profit organization would then develop a binding 
management plan, which would allow for continued harvesting, but in a 
manner that exceeds federal and state conservation standards.
  A local government could then issue tax-exempt revenue bonds on 
behalf of the non-profit organization to fund the acquisition of the 
land. The bonds would be serviced by the non-profit organization with 
revenue raised by the continued harvest of trees or crops in accordance 
with the management plan. The non-profit would hold title to the land, 
but an independent third party would monitor the permanent conservation 
easement.
  There are three benefits to this bill.
  First, it gives communities a new tool to protect green spaces from 
development. Second, communities are able to keep resource-based jobs 
and their tax base. Third, this legislation will bring communities 
together. It will move us away from the conflicts of the past and will 
encourage environmentalists, timber companies, farmers, and local 
governments to work together to maintain these green spaces.
  This legislation is supported by a number of conservation 
organizations, private companies, local governments, and private 
associations, including: World Wildlife Fund; The Nature Conservancy; 
Trust for Public Land; Land Trust Alliance; Pacific Forest Trust; 
American Sportfishing Association; Plum Creek Timber Company; Collins 
Pine Companies; Mendocino Redwood Company; The Harwood Group; Port 
Blakely Tree Farms; Weyerhaeuser; The Campbell Group; King County, 
Washington; Mendocino County, California; Society of American 
Foresters; and the Political Economy Research Center.
  In addition, the Senate agreed to a modified version of this 
legislation as an amendment to the Senate version of H.R. 2488 in 1999. 
The amendment was removed during conference.
  As I did two years ago, I want to emphasize that this is an approach 
that every Senator can support. It is bipartisan. It is inexpensive. It 
is voluntary. It respects private property rights. It limits government 
involvement but establishes proper enforcement to prevent abuse. It 
protects the environment. It provides local control.
  I would like to thank Senators G. Smith, Craig, Leahy, and Daschle 
for cosponsoring this legislation, and I urge my other colleagues to 
support it as well.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 822

       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) 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

[[Page S4257]]

     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.
                                 ______