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The conference committee report dispels any doubt which may
remain as to the correctness of our analysis. There it is stated
that
the conferees wish to clarify that while
prior approval of the taxpayer's particular
project by the Soil Conservation Service or
comparable State agency is not necessary to
qualify the expenditure under this provision,
there must be an overall plan for the
taxpayer's area that has been approved by
such an agency in effect at any time during
the taxable year. [H. Conf. Rept. 99-841,
1986-3 C.B. (Vol. 4) 110; emphasis added.]
The phrase "such an agency" unmistakably refers to the SCS or a
State agency comparable to the SCS, whose plan is in effect for
the taxpayer's area.
To the extent the partnerships make other arguments
regarding the meaning of "State" and "comparable State agency" as
used in the instant statute, we find the arguments wholly
unconvincing and unnecessary to discuss.
The partnerships are understandably aggrieved that, while
subject to U.S. income tax reporting, they are nevertheless
denied conservation deductions to which a similarly situated
owner of farmland located in the United States would be entitled.
We are convinced, nevertheless, that in order to discourage
overproduction of agricultural commodities as a result of
previously existing Federal income tax provisions, Congress found
it necessary to limit allowable conservation deductions to those
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