,i  #aacth ,,congress  #ast ,session    
,h4 ,r4 #dh  ,,in ,,the ,,house ,,of    
,,representatives  ,january #c1 #bjac   
,mr4 ,bishop of ,new ,york 7for himself 
and ,mr4 ,hanna7 introduced the         
following bill2 which was referred to   
the ,committee on ,ways and ,means  ,a  
,,bill  ,to amend the ,internal ,revenue
 ,code of #aihf to clarify that         
installment sales treatment shall not   
fail to apply to property acquired for  
conservation purposes by a ,state or    
local government or certain tax-exempt  
organizations merely because purchase   
funds are held in a sinking or similar  
fund pursuant to ,state law4  #a4 ,short
 title ,this ,act may be cited as the   
,open ,space ,preservation ,promotion   
,act of #bjac4  #b4 ,findings ,the      
,congress finds as follows3  7#a7 ,land 
conservation and farmland preservation  
is an important national goal that      
allows farmers to continue to farm on   
their land1 and allows communities to   
protect invaluable natural resources for

 future generations4  7#b7 ,farmland in 
metropolitan and frequently high-cost   
communities is estimated to account for 
one-third of all farms1 and #ah percent 
of this ,nation's farmland4  7#c7 ,in   
many urban fringe areas farmland is     
rapidly disappearing1 and the ,u4,s4    
,department of ,agriculture estimates   
that approximately #ie million acres of 
farmland will be taken over by sprawl   
and urban growth in the coming years4   
7#d7 ,farmers and landowners generally  
receive a significantly reduced payment 
for the sale of development rights and  
conservation easements than they would  
receive by selling the land to the      
private sector for development4 ,in many
 instances1 however1 these sales are    
treated the same under the tax code4    
7#e7 ,in areas where ,state law requires
 debt assumed by a municipality to be   
structured in the form of a sinking     
fund1 farmers and landowners may be     
discouraged from selling the development
 rights of their land for conservation  

purposes4 ,since sales to ,state and    
local governments will be in the form of
 a sinking fund1 a seller may not be    
able to pay capital gains taxes in full 
when the seller will not receive cash   
payments until a future date4  7#f7 ,in 
urban fringe areas1 many communities    
have made a concerted effort to purchase
 development rights to land4 ,the land  
remains private1 but the community gains
 by preserving open spaces and enjoying 
environmental benefits4 ,communities    
will greatly benefit by the ,federal    
,government taking steps to assist      
municipalities in the purchase of       
development rights4  #c4 ,use of sinking
 fund by ,state or local government not 
to prevent installment sales treatment  
7a7 ,in general ,paragraph 7#c7 of      
section #dec7;f7 of the ,internal       
,revenue ,code of #aihf 7relating to    
payment7 is amended to read as follows3 
7#c7 ,payment  7,a7 ,in general ,except 
as provided in paragraph 7#d71 the term 
payment does not include the receipt of 

evidences of indebtedness of the person 
acquiring the property 7whether or not  
payment of such indebtedness is         
guaranteed by another person74  7,b7    
,treatment of sinking and similar funds 
required by ,state law ,nothing in this 
section or the regulations thereunder   
shall be construed as treating a seller 
of property to a qualified organization 
7as defined in section #agj7;h77#c77 as 
receiving a payment by reason of the    
fact that some or all of the funds for  
such purchase are made 7as required by  
,state law7 to a sinking or similar fund
 if the property is being acquired by   
such organization exclusively for       
conservation purposes 7as defined in    
section #agj7;h77#d774  4  7b7          
,effective date ,the amendment made by  
this section shall take effect on the   
date of the enactment of this ,act4