Text: H.R.5475 — 111th Congress (2009-2010)All Information (Except Text)

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Introduced in House (05/28/2010)


111th CONGRESS
2d Session
H. R. 5475


To amend the Internal Revenue Code of 1986 to exempt certain farmland from the estate tax, and for other purposes.


IN THE HOUSE OF REPRESENTATIVES

May 28, 2010

Mr. Thompson of California (for himself, Mr. Salazar, Mr. McCarthy of California, Mr. Blumenauer, Mr. Cardoza, Mr. Costa, Mr. Farr, Mr. Manzullo, Mr. Ellsworth, Mrs. Capps, Mr. Kratovil, Mr. Cuellar, Mr. Kind, Ms. Eshoo, Mr. Radanovich, Mr. Conaway, Mr. Garamendi, Mr. Berry, Ms. Matsui, Ms. Herseth Sandlin, Mr. Simpson, and Mr. Minnick) 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 exempt certain farmland from the estate tax, 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 “Family Farm Estate Tax Relief Act of 2010”.

SEC. 2. Exclusion from gross estate of certain farmland so long as farmland use continues.

(a) In general.—Part III of subchapter A of chapter 11 of the Internal Revenue Code of 1986 (relating to gross estate) is amended by inserting after section 2033 the following new section:

“SEC. 2033A. Exclusion of certain farmland so long as use as farmland continues.

“(a) In general.—In the case of an estate of a decedent to which this section applies, the value of the gross estate shall not include the adjusted value of qualified farmland included in the estate.

“(b) Estates to which section applies.—This section shall apply to an estate if—

“(1) the executor elects the application of this section and files an agreement referred to in section 2032A(d)(2), and

“(2) the decedent was (at the date of the decedent’s death) a citizen or resident of the United States.

“(c) Definitions.—For purposes of this section—

“(1) QUALIFIED FARMLAND.—The term ‘qualified farmland’ means any real property which—

“(A) is located in the United States,

“(B) is used as a farm for farming purposes (within the meaning of section 2032A(e)),

“(C) was acquired from or passed from the decedent to a qualified heir of the decedent and which, on the date of the decedent’s death, was being so used by the decedent or a member of the decedent’s family, and

“(D) is property designated in the agreement filed under subsection (b)(1).

“(2) OTHER TERMS.—Any other term used in this section which is also used in section 2032A shall have the same meaning given such term by section 2032A.

“(d) Tax treatment of dispositions and failures To use for farming purposes.—

“(1) IMPOSITION OF RECAPTURE TAX.—If, at any time after the decedent’s death and before the death of the qualified heir—

“(A) the qualified heir disposes of any interest in qualified farmland (other than by a disposition to a member of his family), or

“(B) the qualified heir ceases to use the real property which was acquired (or passed) from the decedent as a farm for farming purposes,

then, there is hereby imposed a recapture tax.

“(2) AMOUNT OF RECAPTURE TAX, ETC.—

“(A) IN GENERAL.—Except as provided in subparagraph (B), rules similar to the rules of section 2032A(c) (other than paragraph (2)(E) thereof) with respect to the additional estate tax shall apply for purposes of this subsection with respect to the recapture tax.

“(B) ADJUSTMENT OF RECAPTURE TAX TO REFLECT INCREASE IN VALUE OF FARMLAND.—The amount of the recapture tax otherwise determined under rules described in subparagraph (A) shall be increased by the percentage (if any) by which the value of the interest in the qualified farmland at the time of the imposition of such tax is greater than the adjusted value of such farmland included in the estate.

“(e) Application of other rules.—Rules similar to the rules of subsections (d), (e) (other than paragraph (13) thereof), (f), (g), (h), and (i) of section 2032A shall apply for purposes of this section.”.

(b) Application of lien.—Section 6324B of the Internal Revenue Code of 1986 (relating to special lien for additional estate tax attributable to farm, etc., valuation) is amended by adding at the end the following new subsection:

“(e) Application to qualified farmland.—

“(1) IN GENERAL.—In the case of any interest in qualified farmland (within the meaning of section 2033A(c)(1)), this section shall apply in the same manner as such section applies to qualified real property.

“(2) FORM AND CONTENT.—In addition to any form and content otherwise required by the Secretary with respect to a notice of lien filed against qualified farmland, such notice shall include a statement that such lien is imposed solely for purposes of the estate tax exclusion granted with respect to such qualified farmland under section 2033A.”.

(c) Woodlands subject to management plan.—Paragraph (2) of section 2032A(c) of such Code is amended by adding at the end the following new subparagraph:

“(F) EXCEPTION FOR WOODLANDS SUBJECT TO FOREST STEWARDSHIP PLAN.—

“(i) IN GENERAL.—Subparagraph (E) shall not apply to any disposition or severance of standing timber on a qualified woodland that is made pursuant to a forest stewardship plan developed under the Cooperative Forestry Assistance Act of 1978 (16 U.S.C. 2103a) or an equivalent plan approved by the State Forester.

“(ii) COMPLIANCE WITH FOREST STEWARDSHIP PLAN.—Clause (i) shall not apply if, during the 10-year period under paragraph (1), the qualified heir fails to comply with such forest stewardship plan or equivalent plan.”.

(d) Certain conservation transactions not treated as dispositions.—Paragraph (8) of section 2032A(c) of such Code is amended to read as follows:

“(8) CERTAIN CONSERVATION TRANSACTIONS NOT TREATED AS DISPOSITIONS.—

“(A) QUALIFIED CONSERVATION CONTRIBUTIONS.—A qualified conservation contribution by gift or otherwise shall not be deemed a disposition under subsection (c)(1)(A).

“(B) QUALIFIED CONSERVATION EASEMENT SOLD TO QUALIFIED ORGANIZATION.—A sale of a qualified conservation easement to a qualified organization shall not be deemed a disposition under subsection (c)(1)(A).

“(C) DEFINITIONS.—For purposes of this paragraph—

“(i) the terms ‘qualified conservation contribution’ and ‘qualified organization’ have the meanings given such terms by section 170(h), and

“(ii) the term ‘qualified conservation easement’ has the meaning given such term by section 2031(c)(8).”.

(e) Clerical amendment.—The table of sections for part III of subchapter A of chapter 11 of the Internal Revenue Code of 1986 is amended by inserting after the item relating to section 2033 the following new item:


“Sec. 2033A. Exclusion of certain farmland so long as use as farmland continues.”.

(f) Effective date.—The amendments made by this section shall apply to estates of decedents dying after the date of the enactment of this Act.

SEC. 3. 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 the Internal Revenue Code of 1986 (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 the date of the enactment of this Act.