Charitable Conservation Easement Program Integrity Act of 2020

II 116TH CONGRESS 2D SESSION S. 5019 To amend the Internal Revenue Code of 1986 to limit the charitable deduction for certain qualified conservation contributions. IN THE SENATE OF THE UNITED STATES DECEMBER 15, 2020 Mr. DAINES (for himself, Ms. STABENOW, Mr. GRASSLEY, and Mr. WYDEN) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend the Internal Revenue Code of 1986 to limit the charitable deduction for certain qualified conservation contributions. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Charitable Conserva- 4 tion Easement Program Integrity Act of 2020’’. 5 VerDate Sep 11 2014 01:12 Dec 29, 2020 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S5019.IS S5019 pamtmann on DSKBC07HB2PROD with BILLS 2 •S 5019 IS SEC. 2. LIMITATION ON DEDUCTION FOR QUALIFIED CON- 1 SERVATION CONTRIBUTIONS MADE BY PASS- 2 THROUGH ENTITY. 3 (a) IN GENERAL.—Section 170(h) of the Internal 4 Revenue Code of 1986 is amended by adding at the end 5 the following new paragraph: 6 ‘‘(7) LIMITATION ON DEDUCTION FOR QUALI- 7 FIED CONSERVATION CONTRIBUTIONS MADE BY 8 PASS-THROUGH ENTITY.— 9 ‘‘(A) IN GENERAL.—In the case of any 10 qualified conservation contribution of any part- 11 nership (whether directly or as a distributive 12 share of such contribution of another partner- 13 ship), no amount of such contribution may be 14 taken into account under this section by any 15 partner of such partnership as a distributive 16 share of such contribution if the aggregate 17 amount so taken into account by such partner 18 for the taxable year would (but for this para- 19 graph) exceed 2.5 times the portion of the ad- 20 justed basis of such partner’s interest in such 21 partnership (determined immediately before 22 such contribution and without regard to section 23 752) which is allocable (under rules similar to 24 the rules of section 755) to the qualified real 25 VerDate Sep 11 2014 01:12 Dec 29, 2020 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S5019.IS S5019 pamtmann on DSKBC07HB2PROD with BILLS 3 •S 5019 IS property interest with respect to which such 1 contribution is made. 2 ‘‘(B) EXCEPTION FOR CONTRIBUTIONS 3 OUTSIDE 3-YEAR HOLDING PERIOD.—Subpara- 4 graph (A) shall not apply to a partner’s dis- 5 tributive share of a qualified conservation con- 6 tribution if such contribution is made— 7 ‘‘(i) at least 3 years after the date the 8 partnership acquired the entirety of the 9 qualified real property interest with respect 10 to which such contribution is made, 11 ‘‘(ii) at least 3 years after the date 12 the partner acquired the partner’s entire 13 interest in the partnership with respect to 14 which such distributive share is deter- 15 mined, and 16 ‘‘(iii) if the interest in the partnership 17 making such contribution is held through 1 18 or more partnerships, at least 3 years after 19 each such partnership acquired the entirety 20 of the interest in any such partnership 21 with respect to which such distributive 22 share is determined. 23 ‘‘(C) EXCEPTION FOR FAMILY PARTNER- 24 SHIPS.—Subparagraph (A) shall not apply with 25 VerDate Sep 11 2014 01:12 Dec 29, 2020 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S5019.IS S5019 pamtmann on DSKBC07HB2PROD with BILLS 4 •S 5019 IS respect to any qualified conservation contribu- 1 tion made by any partnership if substantially all 2 of the partnership interests in such partnership 3 are held, directly or indirectly, by individuals 4 who are members of the same family (within 5 the meaning of section 529(e)(2)). 6 ‘‘(D) APPLICATION TO OTHER PASS- 7 THROUGH ENTITIES.—Except as may be other- 8 wise provided by the Secretary, the rules of this 9 paragraph shall apply to S corporations and 10 other pass-through entities in the same manner 11 as such rules apply to partnerships. 12 ‘‘(E) REGULATIONS.—The Secretary shall 13 prescribe such regulations or other guidance as 14 may be necessary to carry out, and prevent the 15 avoidance of, the purposes of this paragraph, 16 including, in the case of tiered partnerships, 17 such reporting to the Secretary and among such 18 partnerships as the Secretary determines appro- 19 priate.’’. 20 (b) EFFECTIVE DATE.— 21 (1) IN GENERAL.—Except as provided in para- 22 graph (2), the amendment made by this section shall 23 apply to contributions made in taxable years ending 24 after December 23, 2016. 25 VerDate Sep 11 2014 01:12 Dec 29, 2020 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S5019.IS S5019 pamtmann on DSKBC07HB2PROD with BILLS 5 •S 5019 IS (2) CERTIFIED HISTORIC STRUCTURES.—In the 1 case of contributions the conservation purpose (as 2 defined in section 170(h)(4) of the Internal Revenue 3 Code of 1986) of which is the preservation of a cer- 4 tified historic structure (as defined in section 5 170(h)(4)(C) of such Code), the amendment made 6 by this section shall apply to contributions made in 7 taxable years beginning after December 31, 2018. 8 (3) NO INFERENCE.—No inference is intended 9 as to the appropriate treatment of contributions 10 made in taxable years ending on or before the date 11 specified in paragraph (1) or (2), whichever is appli- 12 cable, or as to any activity not described in section 13 170(h)(7) of the Internal Revenue Code of 1986, as 14 added by this section. 15 Æ VerDate Sep 11 2014 01:12 Dec 29, 2020 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6301 E:\BILLS\S5019.IS S5019 pamtmann on DSKBC07HB2PROD with BILLS