SECTION 1. EXCLUSION FROM ESTATE FOR REAL PROPERTY SUBJECT TO 
              ENDANGERED SPECIES CONSERVATION AGREEMENT.

    (a) In General.--Part IV of subchapter A of chapter 11 of the 
Internal Revenue Code of 1986 (relating to taxable estate) is amended 
by adding at the end the following new section:

``SEC. 2057. CERTAIN REAL PROPERTY SUBJECT TO ENDANGERED SPECIES 
              CONSERVATION AGREEMENT.

    ``(a) General Rule.--For purposes of the tax imposed by section 
2001, the value of the taxable estate shall be determined by deducting 
from the value of the gross estate an amount equal to the adjusted 
value of real property included in the gross estate which is subject to 
an endangered species conservation agreement.
    ``(b) Property Subject to an Endangered Species Conservation 
Agreement.--For purposes of this section--
            ``(1) In general.--Real property shall be treated as 
        subject to an endangered species conservation agreement if--
                    ``(A) each person who has an interest in such 
                property (whether or not in possession) has entered 
                into--
                            ``(i) an endangered species conservation 
                        agreement with respect to such property, and
                            ``(ii) a written agreement with the 
                        Secretary consenting to the application of 
                        subsection (d), and
                    ``(B) the executor of the decedent's estate--
                            ``(i) elects the application of this 
                        section, and
                            ``(ii) files with the Secretary such 
                        endangered species conservation agreement.
            ``(2) Adjusted value.--The adjusted value of any real 
        property shall be its value for purposes of this chapter, 
        reduced by any amount deductible under section 2053(a)(4) with 
        respect to the property.
    ``(c) Endangered Species Conservation Agreement.--For purposes of 
this section--
            ``(1) In general.--The term `endangered species 
        conservation agreement' means a written agreement entered into 
        with the Secretary of the Interior or the Secretary of 
        Commerce--
                    ``(A) which commits each person who signed such 
                agreement to carry out on the real property activities 
                or practices not otherwise required by law or to 
                refrain from carrying out on such property activities 
                or practices that could otherwise be lawfully carried 
                out,
                    ``(B) which is certified by such Secretary as 
                assisting in the conservation of any species which is--
                            ``(i) designated by such Secretary as an 
                        endangered or threatened species under the 
                        Endangered Species Act of 1973 (16 U.S.C. 1531 
                        et seq.),
                            ``(ii) proposed for such designation, or
                            ``(iii) officially identified by such 
                        Secretary as a candidate for possible future 
                        protection as an endangered or threatened 
                        species, and
                    ``(C) which applies to at least one-half of the 
                total area of the property.
            ``(2) Annual certification to the secretary by the 
        secretary of the interior or the secretary of commerce of the 
        status of endangered species conservation agreements.--If the 
        executor elects the application of this section, the executor 
        shall promptly give written notice of such election to the 
        Secretary of the Interior or the Secretary of Commerce. The 
        Secretary of the Interior or the Secretary of Commerce shall 
        thereafter annually certify to the Secretary that the 
        endangered species conservation agreement applicable to any 
        property for which such election has been made remains in 
        effect and is being satisfactorily complied with.
    ``(d) Recapture of Tax Benefit in Certain Cases.--
            ``(1) Disposition of interest or material breach.--
                    ``(A) In general.--Except as provided in 
                subparagraph (C), an additional tax in the amount 
                determined under subparagraph (B) shall be imposed on 
                any person on the earlier of--
                            ``(i) the disposition by such person of any 
                        interest in property subject to an endangered 
                        species conservation agreement (other than a 
                        disposition described in subparagraph (C)),
                            ``(ii) the failure by such person to comply 
                        with the terms of the endangered species 
                        conservation agreement, or
                            ``(iii) the termination of the endangered 
                        species conservation agreement.
                    ``(B) Amount of additional tax.--The amount of the 
                additional tax imposed by subparagraph (A) shall be an 
                amount that bears the same ratio to the fair market 
                value of the real property at the time of the event 
                described in subparagraph (A) as the ratio of the 
                amount by which the estate tax liability was reduced by 
                virtue of this section bore to the fair market value of 
                such property at the time the executor filed the 
                agreement under subsection (b)(1). For purposes of this 
                subparagraph, the term `estate tax liability' means the 
                tax imposed by section 2001 reduced by the credits 
                allowable against such tax.
                    ``(C) Exception if transferee assumes obligations 
                of transferor.--Subparagraph (A)(i) shall not apply if 
                the transferor and the transferee of the property enter 
                into a written agreement pursuant to which the 
                transferee agrees--
                            ``(i) to assume the obligations imposed on 
                        the transferor under the endangered species 
                        conservation agreement,
                            ``(ii) to assume personal liability for any 
                        tax imposed under subparagraph (A) with respect 
                        to any future event described in subparagraph 
                        (A), and
                            ``(iii) to notify the Secretary of the 
                        Treasury and the Secretary of the Interior or 
                        the Secretary of Commerce that the transferee 
                        has assumed such obligations and liability.
                If a transferee enters into an agreement described in 
                clauses (i), (ii), and (iii), such transferee shall be 
                treated as signatory to the endangered species 
                conservation agreement the transferor entered into.
            ``(2) Due date of additional tax.--The additional tax 
        imposed by paragraph (1) shall become due and payable on the 
        day that is 6 months after the date of the disposition referred 
        to in paragraph (1)(A)(i) or, in the case of an event described 
        in clause (ii) or (iii) of paragraph (1)(A), on April 15 of the 
        calendar year following any year in which the Secretary of the 
        Interior or the Secretary of Commerce fails to provide the 
        certification required under subsection (c)(2).
    ``(e) Statute of Limitations.--If a taxpayer incurs a tax liability 
pursuant to subsection (d)(1)(A), then--
            ``(1) the statutory period for the assessment of any 
        additional tax imposed by subsection (d)(1)(A) shall not expire 
        before the expiration of 3 years from the date the Secretary is 
        notified (in such manner as the Secretary may by regulation 
        prescribe) of the incurring of such tax liability, and
            ``(2) such additional tax may be assessed before the 
        expiration of such 3-year period notwithstanding the provisions 
        of any other law or rule of law that would otherwise prevent 
        such assessment.
    ``(f) Election and Filing of Agreement.--The election under this 
section shall be made on the return of the tax imposed by section 2001. 
Such election, and the filing under subsection (a) of an endangered 
species conservation agreement, shall be made in such manner as the 
Secretary shall by regulation provide.
    ``(g) Application of This Section to Interests in Partnerships, 
Corporations, and Trusts.--The Secretary shall prescribe regulations 
setting forth the application of this section in the case of an 
interest in a partnership, corporation, or trust which, with respect to 
a decedent, is an interest in a closely held business (within the 
meaning of paragraph (1) of section 6166(b)). For purposes of the 
preceding sentence, an interest in a discretionary trust all the 
beneficiaries of which are heirs of the decedent shall be treated as a 
present interest.''
    (b) Clerical Amendment.--The table of sections for part IV of 
subchapter A of chapter 11 of the Internal Revenue Code of 1986 is 
amended by adding at the end the following new item:

``Sec. 2057. Certain real property subject to endangered species 
                            conservation agreement.''
    (c) Effective Date.--The amendments made by this section shall 
apply to estates of decedents dying after the date of the enactment of 
this Act.
Amends the Internal Revenue Code to allow a deduction from the value of the gross estate of a decedent of an amount equal to the adjusted value of real property included in a gross estate which is subject to an endangered species conservation agreement.  Provides for recapture of the benefit in certain cases.
A bill to amend the Internal Revenue Code of 1986 to allow a deduction from the gross estate of a decedent in an amount equal to the value of real property subject to an endangered species conservation agreement.