[Congressional Record Volume 149, Number 114 (Tuesday, July 29, 2003)]
[Senate]
[Page S10136]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




      THE BEGINNING FARMERS AND RANCHERS TAX INCENTIVE ACT OF 2003

  Mr. HAGEL. Mr. President, I rise today to discuss S. 1464, 
legislation I recently introduced with Senator Dorgan to provide a 
capital gains tax incentive to agricultural producers on the sale of 
their farm or ranch land.
  Agriculture is a vital engine that helps drive this Nation's economy. 
But this engine is only as powerful as the next generation of 
producers. The relentless financial problems facing the agricultural 
sector, particularly for beginning farmers, are daunting. It is often 
difficult for beginning farmers to compete for land with large capital-
based operations. S. 1464 helps level the playing field by easing the 
transfer of land between the old and new generations of farmers and 
ranchers.
  S. 1464, the Beginning Farmers and Ranchers Tax Incentive Act, would 
provide all agricultural producers selling their property to a 
beginning farmer or rancher a 100-percent reduction of their capital 
gains tax rate. Producers selling their land to someone who pledges to 
keep the land in agricultural production would receive a 50-percent 
reduction of their capital gains taxes. All producers selling their 
land would receive an automatic 25-percent reduction of their capital 
gains taxes. These incentives would encourage repopulation of the rural 
landscape with a new generation of young, energetic agricultural 
producers.
  Family farmers and ranchers often do not benefit from some tax 
incentives already in place for other Americans. In 1997, Congress 
enacted a $500,000 capital gains tax exclusion for home sales. 
Unfortunately, this provision often does not benefit family farmers 
since their homes are typically included as part of the larger 
farmstead. S. 1464 would correct this inequity by extending the 
$500,000 exclusion to farmers and ranchers.
  It is imperative that we do more to ensure that beginning farmers and 
ranchers are given opportunities to succeed in strengthening rural 
communities. S. 1464 helps do this by reducing the tax burden on 
retiring farmers and ranchers, so that the continuity of agricultural 
production remains unbroken from one generation to the next.

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