SECTION 1. ESTATE TAX VALUATION OF CERTAIN HISTORIC PROPERTY.

    (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 2032A the following new section:

``SEC. 2032B. VALUATION OF CERTAIN HISTORIC PROPERTY.

    ``(a) Value Based on Net Earnings of Historic Property.--If--
            ``(1) the decedent was (at the time of his death) a citizen 
        or resident of the United States, and
            ``(2) the executor executes an agreement which meets the 
        requirements of subsection (c),
then, for the purposes of this chapter, the value of qualified historic 
property shall be based on the net earnings (as defined in subsection 
(b)(3)) derived from such property.
    ``(b) Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Qualified historic property.--The term `qualified 
        historic property' means--
                    ``(A) any building (and its structural 
                components)--
                            ``(i) which is designated as a National 
                        Historic Landmark under section 101 of the 
                        National Historic Preservation Act at the time 
                        of the decedent's death and for a continuous 
                        period of at least 25 years prior to the 
                        decedent's death, and
                            ``(ii) which was originally used for 
                        residential or farming purposes,
                    ``(B) any other real property to the extent 
                reasonably necessary for ingress, egress, public 
                enjoyment, and visitation of the property described in 
                subparagraph (A) (but not including any real property 
                used primarily for the sale, production, or 
                manufacturing of products or for lodging purposes), and
                    ``(C) personal property included within, or 
                associated with, property described in subparagraph (A) 
                or (B) if such personal property--
                            ``(i) is held by the decedent holding such 
                        building,
                            ``(ii) has been so included within, or 
                        associated with, such property so described 
                        throughout the 25-year period ending on the 
                        date of the decedent's death, and
                            ``(iii) is covered by the agreement 
                        referred to in subsection (a)(2) which covers 
                        such building,
        owned by the decedent throughout the 25-year period ending on 
        the date of the decedent's death.
            ``(2) Treatment of historic property held by a 
        corporation.--In the case of a corporation all of the stock in 
        which was held on the date of the decedent's death by the 
        decedent or members of the decedent's family (as defined in 
        section 2032A(e)(2))--
                    ``(A) stock in such corporation shall be treated 
                for purposes of this section as qualified historic 
                property to the extent that the value of such stock is 
                attributable to qualified historic property held by 
                such corporation, but
                    ``(B) the requirements of subsection (c) shall be 
                met only if each member of the decedent's family 
                holding such stock on such date signs the agreement 
                referred to in subsection (a)(2).
            ``(3) Net earnings.--The term `net earnings' means income 
        derived from qualified historic property (determined without 
        regard to any interest, depreciation, or tax expense) times 7.
            ``(4) Determination of time periods.--In determining the 
        period for which the decedent has held any property or stock, 
        there shall be included the period for which such property or 
        stock was held by members of the decedent's family (as defined 
        in section 2032A(e)(2)).
    ``(c) Requirements for Agreement.--
            ``(1) In general.--For purposes of subsection (a)(2), an 
        agreement meets the requirements of this subsection if--
                    ``(A) such agreement is a written agreement signed 
                by each person in being who has an interest (whether or 
                not in possession) in the building described in 
                subsection (b)(1)(A),
                    ``(B) such agreement provides that the only 
                activities carried on at such building are activities 
                which are substantially related (aside from the need 
                for income or funds or the use made of the profits 
                derived) to--
                            ``(i) the public visitation of such 
                        building and the property described in 
                        subsection (b)(1)(B) with respect to such 
                        property), and
                            ``(ii) the maintenance and preservation of 
                        such building and property for such public 
                        visitation, and
                    ``(C) such agreement provides that such building 
                will be open to the public for a period of at least 25 
                years beginning on the date on which the return of the 
                tax imposed by this chapter is filed.
            ``(2) Open to the public.--For the purposes of paragraph 
        (1)(C)--
                    ``(A) a property shall be treated as being open to 
                the public for any year if--
                            ``(i) a substantial portion of the property 
                        is open for public visitation for at least 8 
                        hours per day and 6 days per week during at 
                        least any 40 weeks of such year,
                            ``(ii) the executor notifies the State 
                        historic agency that the property is open and 
                        available for public visitation,
                            ``(iii) public access to the property is 
                        achievable without undue and deliberate 
                        difficulty or cost purposely intended to 
                        discourage the visitation of the property,
                            ``(iv) 1 or more of the signatories to the 
                        agreement or professional or trained volunteer 
                        staff representing such signatories are 
                        available to facilitate the visitation of the 
                        property through at least 2 methods and 
                        practices common to the tourism industry, 
                        including telephone, website, mailing address, 
                        or ticket booth, and
                            ``(v) there is an ongoing effort to ensure 
                        the general public is aware that the property 
                        is available for visitation, and
                    ``(B) the 25-year period referred to in such 
                paragraph shall be suspended during reasonable periods 
                of renovation.
        Communication under subparagraph (A)(v) shall not necessarily 
        require expenditure of monies for advertising, but should 
        include periodic contact with groups such as State and local 
        historic agencies and tourism boards.
    ``(d) Tax Treatment of Dispositions and Failure To Comply With 
Agreement.--
            ``(1) Imposition of additional estate tax.--If, during the 
        25-year period referred to in subsection (c)(1)(C)--
                    ``(A) any person signing the written agreement 
                referred to in subsection (a)(2) disposes of any 
                interest in the building subject to such agreement, or
                    ``(B) there is a violation of any provision of such 
                agreement (as determined under regulations prescribed 
                by the Secretary),
        then there is hereby imposed an additional estate tax.
            ``(2) Exception for certain transferees who agree to be 
        bound by agreement.--No tax shall be imposed under paragraph 
        (1) by reason of any disposition if the person acquiring such 
        interest--
                    ``(A) is a qualified organization (as defined in 
                section 170 (b)(1)(A)) or is a member of the family (as 
                defined in section 2032A(e)(2)) of the person disposing 
                of such interest, and
                    ``(B) agrees to be bound by the agreement referred 
                to in subsection (a)(2) and to be liable for any tax 
                under this subsection in the same manner as the person 
                disposing of such interest.
            ``(3) Amount of additional tax.--The amount of the 
        additional tax imposed by paragraph (1) with respect to any 
        property shall be an amount equal to the excess of--
                    ``(A) what would (but for subsection (a)) have been 
                the tax imposed by section 2001 (reduced by the credits 
                allowable), over
                    ``(B) the tax imposed by section 2001 (as so 
                reduced).
            ``(4) Due date.--The additional tax imposed by this 
        subsection shall be due and payable on the day which is 9 
        months after the date of the disposition or violation referred 
        to in paragraph (1).
            ``(5) Liability for tax.--Any person signing the agreement 
        referred to in subsection (a)(2) (other than the executor) 
        shall be personally liable for the additional tax imposed by 
        this subsection. If more than 1 person is liable under this 
        subsection, all such persons shall be jointly and severally 
        liable.
            ``(6) Certain other rules to apply.--Rules similar to the 
        rules of sections 1016(c), 2013(f), and 2032A(f) shall apply 
        for purposes of this subsection.''.
    (b) Coordination With Gift Tax.--Section 2512 of the Internal 
Revenue Code of 1986 (relating to valuation of gifts) is amended by 
adding at the end the following new subsection:
    ``(c) For the purposes of this chapter, the value of qualified 
historic property (as defined in section 2032B(b)(1)) transferred for 
less than an adequate and full consideration shall be valued under 
section 2032B.''.
    (c) Technical Amendments.--
            (1) Subparagraph (A) of section 2056A(b)(10) of the 
        Internal Revenue Code of 1986 is amended by inserting 
        ``2032B,'' after ``2032A,''.
            (2) The table of sections for part III of subchapter A of 
        chapter 11 of such Code is amended by inserting after the item 
        relating to section 2032A the following new item:

``Sec. 2032B. Valuation of certain historic property.''.
    (d) Effective Date.--The amendments made by this section shall 
apply with respect to the estates of decedents dying after the date of 
the enactment of this Act. Notwithstanding the preceding sentence, for 
the purposes of section 901 of the Economic Growth and Tax 
Reconciliation Act of 2001, the amendments made by this section shall 
be treated as being enacted before the date of the enactment of such 
Act.
Amends the Internal Revenue Code to allow decedent estates to base the value of qualified historic property on the net earnings of such property for estate and gift tax purposes. Defines "qualified historic property" as any building designated as a national historic landmark for at least 25 years prior to the death of a decedent and originally used for residential or farming purposes.
A bill to amend the Internal Revenue Code of 1986 to provide that the value of certain historic property shall be determined using an income approach in determining the taxable estate of a decedent.