Farmland Preservation and Land Conservation Act of 2013- Amends the Internal Revenue Code to allow an estate and gift tax exclusion for real property located in the United States which at the time of a decedent's death was being used as a farm for farming purposes or exclusively for conservation purposes. Imposes: (1) an additional estate or gift tax with respect to such property if an heir or donee disposes of or uses such property for other than farming or conservation purposes, and (2) a federal tax lien on such property until liability for estate or gift tax with respect to such property has been satisfied or has become unenforceable.
[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[H.R. 47 Introduced in House (IH)]
113th CONGRESS
1st Session
H. R. 47
To amend the Internal Revenue Code of 1986 to allow an unlimited
exclusion from transfer taxes for certain farmland and land of
conservation value, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
January 3, 2013
Mr. Bishop of New York (for himself and Mr. Hanna) introduced the
following bill; which was referred to the Committee on Ways and Means
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to allow an unlimited
exclusion from transfer taxes for certain farmland and land of
conservation value, and for other purposes.
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 ``Farmland Preservation and Land
Conservation Act of 2013''.
SEC. 2. TRANSFER TAX EXCLUSION FOR CERTAIN FARMLAND AND LAND OF
CONSERVATION VALUE.
(a) Estate Tax.--
(1) In general.--Part IV of subchapter A of chapter 11 of
the Internal Revenue Code of 1986 (relating to gross estate) is
amended by inserting after section 2058 the following new
section:
``SEC. 2059. FARM AND CONSERVATION LAND.
``(a) In General.--For purposes of the tax imposed by section 2001,
the value of the taxable estate shall be determined by deducting from
the value of the gross estate an amount equal to the adjusted value of
the qualified farm or conservation land 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, and
``(2) the executor elects the application of this section
and files the agreement referred to in subsection (d)(2) with
respect to the qualified farm or conservation land.
``(c) Definitions.--For purposes of this section--
``(1) Qualified farm or conservation land.--The term
`qualified farm or conservation land' means any real property--
``(A) which is located in the United States,
``(B) which, on the date of the decedent's death,
was being used--
``(i) as a farm for farming purposes
(within the meaning of section 2032A(e)), or
``(ii) exclusively for conservation
purposes (within the meaning of section
170(h)),
``(C) with respect to which there is a recorded
covenant which prevents any use of such land which is
inconsistent with the uses described in subparagraph
(B), and
``(D) which is designated in the agreement referred
to in subsection (d)(2).
``(2) Adjusted value.--The term `adjusted value' means the
value of the qualified farm or conservation land for purposes
of this chapter, reduced by the amount allowable as a deduction
under paragraph (4) of section 2053(a).
``(d) Election; Agreement.--
``(1) Election.--The election under this section shall be
made on the return of the tax imposed by section 2001. Such
election shall be made in such manner as the Secretary shall by
regulations prescribe. Such an election, once made, shall be
irrevocable.
``(2) Agreement.--The agreement referred to in this
paragraph is a written agreement signed by each person in being
who has an interest (whether or not in possession) in any
property designated in such agreement consenting to the
application of subsection (e) with respect to such property.
``(3) Modification of election and agreement permitted.--
The procedures prescribed under section 2032A(d)(3) shall apply
for purposes of this subsection.
``(e) Tax Treatment of Dispositions and Inconsistent Uses.--In the
case of a decedent's estate which includes qualified farm or
conservation land with respect to which there is a covenant described
in subsection (c)(1)(C) (including such a covenant made by a prior
decedent)--
``(1) Imposition of additional estate tax.--If, at any time
after the decedent's death and before the death of the heir--
``(A) the heir disposes of any interest (other than
by a qualified conservation contribution (as defined in
section 170(h))) in qualified farm or conservation land
and the person acquiring such interest is not subject
to the covenant described in subsection (c)(1)(C), or
``(B) the heir uses such land in any manner which
violates the terms of such covenant,
then, there is hereby imposed an additional estate tax.
``(2) Amount of additional tax.--
``(A) In general.--The amount of the additional tax
imposed by paragraph (1) with respect to any interest
shall be the amount equal to the sum of--
``(i) the adjusted tax difference with
respect to the estate, and
``(ii) interest at the underpayment rate
established under section 6621 on the amount
determined under clause (i) for the period
beginning on the due date for filing the estate
tax return.
``(B) Adjusted tax difference with respect to
estate.--For purposes of this subsection, the term
`adjusted tax difference with respect to the estate'
means the excess of--
``(i) what would have been the estate tax
liability if the fair market value of the
interest at the time of the disposition or use
described in paragraph (1), over
``(ii) the estate tax liability.
For purposes of this subparagraph, the term `estate tax
liability' means the tax imposed by section 2001
reduced by the credits allowable against such tax.
``(3) Certain additional rules to apply.--Rules similar to
the rules of paragraphs (2)(D), (2)(E), (3), (4), (5), and (8)
of section 2032A(c) shall apply for purposes of this
subsection.
``(4) Income tax treatment of dispositions.--For purposes
of chapter 1, in any case in which an additional tax is imposed
by this subsection by reason of any disposition or use of an
interest, such interest (if not otherwise disposed of in a
transaction in which gain is recognized) shall be treated as
sold at its fair market value at the time of the disposition or
use, and gain shall be recognized notwithstanding any provision
of subtitle A.
``(f) Basis.--For purposes of this title, the basis of any
qualified farm or conservation land which is included in the estate of
a decedent pursuant to subsection (a) shall be the adjusted basis of
such qualified farm or conservation land on the date of the decedent's
death.
``(g) Certain Additional Rules To Apply.--For purposes of this
section, rules similar to the following rules shall apply:
``(1) Certain real property included.--Section 2032A(e)(3).
``(2) Definitions of farm and farming purposes.--Paragraphs
(4) and (5) of section 2032A(e).
``(3) Property acquired from decedent.--Section
2032A(e)(9).
``(4) Community property.--Section 2032A(e)(10).
``(5) Bond in lieu of personal liability.--Section
2032A(e)(11).
``(6) Special rule for woodlands.--Section 2032A(e)(13).
``(7) Statute of limitation.--Section 2032A(f).
``(8) Special rules for involuntary conversions of real
property.--Section 2032A(h).
``(9) Exchanges of qualified real property.--Section
2032A(i).
``(h) Cross Reference.--See section 6324C for special lien on farm
and conservation land.''.
(2) Special lien for farm and conservation land.--Part II
of subchapter C of chapter 64 of such Code (relating to liens)
is amended by inserting after section 6324B the following new
section:
``SEC. 6324C. SPECIAL LIEN ON FARM AND CONSERVATION LAND.
``(a) General Rule.--In the case of qualified farm or conservation
land (within the meaning of section 2059(c)(1)) with respect to which
an election is in effect under section 2059(b)(2) or section 2524(a) or
pursuant to section 2611(b)(2), an amount equal to the adjusted value
attributable to such land (within the meaning of section 2059(c)(2))
shall be a lien in favor of the United States on such land.
``(b) Period of Lien.--The lien imposed by this section shall arise
at the time an election is filed under section 2059 and shall continue
with respect to such qualified farm or conservation land until the
earlier of--
``(1) such land is transferred to a qualified organization
(as defined in section 170(h)(3)),
``(2) the liability for tax under subsection (e) of section
2059 with respect to such land has been satisfied or has become
unenforceable by reason of lapse of time, or
``(3) it is established to the satisfaction of the
Secretary that no further tax liability may arise under section
2059(e) with respect to such land.
``(c) Certain Rules and Definitions Made Applicable.--
``(1) In general.--The rule set forth in paragraphs (1),
(3), and (4) of section 6324A(d) shall apply with respect to
the lien imposed by this section as if it were a lien imposed
by section 6324A.
``(2) Qualified farm or conservation land.--For purposes of
this section, the term `qualified farm or conservation land'
includes qualified replacement property (within the meaning of
section 2032A(h)(3)(B)) and qualified exchange property (within
the meaning of section 2032A(i)(3)).
``(d) Substitution of Security for Lien.--To the extent provided in
regulations prescribed by the Secretary, the furnishing of security may
be substituted for the lien imposed by this section.''.
(b) Conforming and Clerical Amendments.--
(1) Section 1016(a) of such Code is amended by striking
``and'' at the end of paragraph (36), by striking the period at
the end of paragraph (37) and inserting ``, and'', and by
inserting after paragraph (37) the following new paragraph:
``(38) to the extent provided in section 2059(f).''.
(2) The table of sections for part IV of subchapter A of
chapter 11 of such Code is amended by inserting after the item
relating to section 2058 the following new item:
``Sec. 2059. Farm and conservation land.''.
(3) The table of sections for part II of subchapter C of
chapter 64 of such Code is amended by inserting after the item
relating to section 6324B the following new item:
``Sec. 6324C. Special lien on farm and conservation land.''.
(c) Gift Tax.--
(1) In general.--Subchapter C of chapter 12 of subtitle B
of such Code (deductions) is amended by redesignating section
2524 as section 2525 and inserting after section 2523 the
following new section:
``SEC. 2524. GIFT OF FARM AND CONSERVATION LAND.
``(a) In General.--In computing taxable gifts for the calendar
year, there shall be allowed as a deduction in the case of a citizen or
resident the adjusted value of all gifts made during such year which
are qualified farm or conservation land if the donee elects the
application of this section and files the agreement referred to in
subsection (c)(2) with respect to the qualified farm or conservation
land.
``(b) Definitions.--For purposes of this section--
``(1) Qualified farm or conservation land.--The term
`qualified farm or conservation land' means any real property--
``(A) which is located in the United States,
``(B) which, on the date of the gift, was being
used--
``(i) as a farm for farming purposes
(within the meaning of section 2032A(e)), or
``(ii) exclusively for conservation
purposes (within the meaning of section
170(h)),
``(C) with respect to which there is a recorded
covenant which prevents any use of such land which is
inconsistent with the uses described in subparagraph
(B), and
``(D) which is designated in the agreement referred
to in subsection (c)(2).
``(2) Adjusted value.--The term `adjusted value' means the
value of the qualified farm or conservation land for purposes
of this chapter, reduced by the amount allowable as a deduction
under paragraph (4) of section 2053(a).
``(c) Election; Agreement.--
``(1) Election.--The election under this section shall be
made in such manner as the Secretary shall by regulations
prescribe. Such an election, once made, shall be irrevocable.
``(2) Agreement.--The agreement referred to in this
paragraph is a written agreement signed by each person in being
who has an interest (whether or not in possession) in any
property designated in such agreement consenting to the
application of subsection (d) with respect to such property.
``(3) Modification of election and agreement permitted.--
The procedures prescribed under section 2032A(d)(3) shall apply
for purposes of this subsection.
``(d) Tax Treatment of Dispositions and Inconsistent Uses.--In the
case of a decedent's estate which includes qualified farm or
conservation land with respect to which there is a covenant described
in subsection (c)(1)(C) (including such a covenant made by a prior
decedent)--
``(1) Imposition of additional gift tax.--If, at any time
after the gift described in subsection (a) and before the death
of the donee--
``(A) the donee disposes of any interest (other
than by a qualified conservation contribution (as
defined in section 170(h))) in qualified farm or
conservation land and the person acquiring such
interest is not subject to the covenant described in
subsection (b)(1)(C), or
``(B) the donee uses such land in any manner which
violates the terms of such covenant,
then, there is hereby imposed an additional gift tax.
``(2) Amount of additional tax.--
``(A) In general.--The amount of the additional tax
imposed by paragraph (1) with respect to any interest
shall be the amount equal to the sum of--
``(i) the adjusted tax difference with
respect to the gift, and
``(ii) interest at the underpayment rate
established under section 6621 on the amount
determined under clause (i) for the period
beginning on the date of such gift.
``(B) Adjusted tax difference with respect to
gift.--For purposes of this subsection, the term
`adjusted tax difference with respect to the gift'
means the excess of--
``(i) what would have been the gift tax
liability if the fair market value of the
interest at the time of the disposition or use
described in paragraph (1), over
``(ii) the gift tax liability.
For purposes of this subparagraph, the term `gift tax
liability' means the tax imposed by section 2501
reduced by the credits allowable against such tax.
``(3) Certain additional rules to apply.--Rules similar to
the rules of paragraphs (2)(D), (2)(E), (3), (4), (5), and (8)
of section 2032A(c) shall apply for purposes of this
subsection.
``(4) Income tax treatment of dispositions.--For purposes
of chapter 1, in any case in which an additional tax is imposed
by this subsection by reason of any disposition or use of an
interest, such interest (if not otherwise disposed of in a
transaction in which gain is recognized) shall be treated as
sold at its fair market value at the time of the disposition or
use, and gain shall be recognized notwithstanding any provision
of subtitle A.
``(e) Certain Additional Rules To Apply.--For purposes of this
section, rules similar to the following rules shall apply:
``(1) Certain real property included.--Section 2032A(e)(3).
``(2) Definitions of farm and farming purposes.--Paragraphs
(4) and (5) of section 2032A(e).
``(3) Bond in lieu of personal liability.--Section
2032A(e)(11).
``(4) Special rule for woodlands.--Section 2032A(e)(12).
``(5) Statute of limitation.--Section 2032A(f).
``(6) Special rules for involuntary conversions of real
property.--Section 2032A(h).
``(7) Exchanges of qualified real property.--Section
2032A(i).
``(f) Cross Reference.--See section 6324C for special lien on farm
and conservation land.''.
(2) Conforming amendment.--Section 2525 of such Code, as
amended by paragraph (1), is amended by striking ``sections
2522 and 2523'' and inserting ``sections 2522, 2523, and
2524''.
(3) Clerical amendment.--The table of sections for such
subchapter is amended by striking the last item and inserting
the following new items:
``Sec. 2524. Gift of farm and conservation land.
``Sec. 2525. Extent of deductions.''.
(d) Generation Skipping Tax.--
(1) Exclusion.--Subsection (b) of section 2611 of such Code
(relating to certain transfers excluded) is amended by
redesignating paragraph (2) as paragraph (3) and by inserting
after paragraph (1) the following new paragraph:
``(2) any transfer which, if made inter vivos by an
individual, would be treated as a deduction under section 2524
(relating to gift of farm and conservation land), or''.
(2) Applicable rules.--Subsection (b) of section 2611 of
such Code is amended by adding at the end the following flush
sentence:
``For purposes of paragraph (2), rules similar to the rules of section
2524 shall apply.''.
(e) Effective Date.--The amendments made by this section shall
apply to estates of decedents dying, gifts made, and generation-
skipping transfers after December 31, 2012.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Ways and Means.
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