S.439 - Incentivizing Readiness and Environmental Protection Integration Sales Act of 2025 (119th Congress)
Summary
S.439, the "Incentivizing Readiness and Environmental Protection Integration Sales Act of 2025," aims to amend the Internal Revenue Code of 1986. The amendment excludes from gross income any gain from the sale of qualified real property interests acquired under the Readiness and Environmental Protection Integration (REPI) program. This program is administered by the Department of Defense under section 2684a of title 10, United States Code.
The bill defines "qualified real property interest" and "qualified organization" and sets limitations on the exclusion, particularly for pass-through entities. It also includes an exception for family partnerships or family pass-through entities.
The bill's effective date is for taxable years beginning after the date of enactment.
Expected Effects
The bill will incentivize landowners to sell qualified real property interests to qualified organizations for REPI purposes by providing a tax benefit. This could lead to increased land conservation and protection of military readiness activities.
It may also simplify land transactions related to military readiness and environmental protection. The exclusion of gains from gross income could reduce the tax burden on sellers, making these transactions more attractive.
Potential Benefits
- Land Conservation: Encourages the preservation of land near military bases, benefiting environmental protection efforts.
- Military Readiness: Helps maintain buffer zones around military installations, ensuring continued training and operational capabilities.
- Tax Incentives: Provides a tax break for landowners who sell property for REPI purposes, potentially increasing participation in the program.
- Streamlined Transactions: Simplifies the financial aspects of land acquisition for REPI, potentially speeding up the process.
- Support for Family Farms: Includes an exception for family partnerships, acknowledging the unique circumstances of these entities.
Most Benefited Areas:
Potential Disadvantages
- Potential for Abuse: The tax exclusion could be exploited by some individuals or entities to avoid paying taxes on real estate gains.
- Complexity: The definitions of "qualified real property interest" and "qualified organization" may introduce complexity and potential for disputes.
- Limited Scope: The benefits are limited to specific real property interests sold for REPI purposes, excluding other potentially beneficial conservation efforts.
- Revenue Loss: The tax exclusion could result in a decrease in federal tax revenue, potentially impacting other government programs.
- Unintended Consequences: The 3-year holding period exception for pass-through entities may create unintended market distortions.
Most Disadvantaged Areas:
Constitutional Alignment
The bill appears to align with the General Welfare Clause (Article I, Section 8) of the U.S. Constitution, as it aims to promote both national defense (military readiness) and environmental protection, which can be argued to contribute to the overall well-being of the nation.
Congress has the power to lay and collect taxes (Article I, Section 8), and this bill modifies the Internal Revenue Code, which falls under that power. The bill does not appear to infringe upon any specific individual rights or liberties protected by the Constitution or its amendments.
The bill's focus on military readiness also aligns with the constitutional mandate to provide for the common defense (Article I, Section 8).
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).