[Congressional Record Volume 156, Number 109 (Thursday, July 22, 2010)]
[Senate]
[Pages S6203-S6204]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. UDALL of Colorado (for himsel, Mr. Crapo, Mr. Gregg, Mr. 
        Bennet and Ms. Klobuchar):
  S. 3640. A bill to amend the Internal Revenue Code of 1986 to 
increase the limitations on the amount excluded from the gross estate 
with respect to land subject to a qualified conservation easement; to 
the Committee on Finance.
  Mr. UDALL of Colorado. Mr. President, today I am introducing, along 
with my friend and colleague Senator Crapo, legislation to encourage 
further protection of our treasured lands, ranches and family farms. 
The American Family Farm and Ranchland Protection Act is a bipartisan 
piece of legislation that rewards those who protect these lands through 
conservation easements by increasing their exemption from the estate 
tax. Put simply, we strongly support conservation efforts and believe 
we need to do more to give Americans a real incentive to protect our 
nation's land. It is a companion bill to similar bipartisan legislation 
in the House of Representatives introduced by Congressman Blumenauer.
  I have long made conservation of America's natural resources a core 
component of my public service. In my role as chair of the National 
Parks Subcommittee, I am continuously focused on preserving our public 
lands and waters, because we owe it to future generations to leave them 
a sustainable environment. We did not inherit the land from our 
parents, we are borrowing it from our children.
  However, the Government can only do so much, and many of our most 
important landscapes are privately owned property. If we are serious 
about conservation, we must acknowledge the important role that private 
land owners play in the overall effort to preserve our natural 
resources for generations to come.
  Estate taxes can compromise Americans' ability to conserve private 
property. After the death of a loved one, families are often forced to 
subdivide a property and sell it for development to pay the costs of 
estate taxes. This situation could become more common starting in 2011 
when the estate tax is set to revert back to the 2001 level of 55 
percent above a $1 million per spouse exemption. Nearly 15 years ago, 
in an effort to provide some relief and encourage conservation of 
family farms and ranches, Congress created an exemption from the estate 
tax of up to 40 percent of the value of the land, capped at $500,000, 
for land permanently protected by a conservation easement.

[[Page S6204]]

  A conservation easement is a voluntary agreement between a landowner 
and the government that permanently restricts certain development and 
future uses of the land. It often prevents future commercialization, 
while still permitting historic farming and ranching operations to 
continue in the family. I know in Colorado, our lands are best cared 
for when each generation knows its stewardship will reward the next.
  When Congress first created the conservation easement exemption from 
estate taxes in 1997, a 40 percent exemption up to a total of $500,000 
made sense. Now, that exclusion is simply too small. Since 1997, 
average farm real estate values have more than doubled and the average 
farm is larger, as larger farms are more likely to be economically 
viable. Incidentally, larger farms are also more likely to hold 
resources worthy of conservation. The old cap is simply no longer much 
of an incentive.
  My legislation is a simple solution to the inadequacy of the current 
exemption. It raises the exemption for land under a conservation 
easement to 50 percent, up to a maximum exclusion of $5 million. It 
also encourages more robust conservation easements: less protective 
easements will receive a proportionally lower exemption rate. If we can 
support greater conservation efforts through a simple update to our 
existing tax code, then to me, that sounds like a deal worth taking.
  This is a small change, but it has a profound effect. Those who 
choose to enter into a conservation easement will leave a dramatically 
reduced estate tax burden on their family. This, in turn, will help 
keep family farms and ranches whole, preserving them for future 
generations.
  This is just a small piece of the estate tax puzzle, but it is an 
important one. It is critically important for Congress to address the 
estate tax before the end of this year to prevent it from going back to 
where it was a decade ago, with an exemption of only $1 million. At 
that level, it would affect almost every farmer and rancher in my state 
and in many others, as well as many, many family businesses.
  We can protect the land, respect private property, ease tax burdens, 
and preserve our important farming and ranching heritage with the 
exemption my legislation proposes. I encourage the Senate to take up 
and approve this common-sense bill in an expeditious manner.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 3640

       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 ``American Family Farm and 
     Ranchland Protection Act of 2010''.

     SEC. 2. INCREASE IN LIMITATIONS ON THE AMOUNT EXCLUDED FROM 
                   THE GROSS ESTATE WITH RESPECT TO LAND SUBJECT 
                   TO A QUALIFIED CONSERVATION EASEMENT.

       (a) Increase in Dollar Limitation on Exclusion.--Paragraph 
     (3) of section 2031(c) of the Internal Revenue Code of 1986 
     (relating to exclusion limitation) is amended by striking 
     ``the exclusion limitation is'' and all that follows and 
     inserting ``the exclusion limitation is $5,000,000.''.
       (b) Increase in Percentage of Value of Land Which Is 
     Excludable.--Paragraph (2) of section 2031(c) of such Code 
     (relating to applicable percentage) is amended--
       (1) by striking ``40 percent'' and inserting ``50 
     percent'', and
       (2) by striking ``2 percentage points'' and inserting ``2.5 
     percentage points''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to the estates of decedents dying after December 
     31, 2009.
                                 ______