II 

111TH CONGRESS 

1ST SESSION S. 2728 

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. 

IN THE SENATE OF THE UNITED STATES 

NOVEMBER 4, 2009 

Mr. BURR (for himself, Mrs. HAGAN, and Mr. WICKER) introduced the 

following bill; which was read twice and referred to the Committee on Finance 

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. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. ESTATE TAX VALUATION OF CERTAIN HIS4 TORIC PROPERTY. 

5 (a) IN GENERAL.—Part III of subchapter A of chap6 ter 11 of the Internal Revenue Code of 1986 (relating to 

7 gross estate) is amended by inserting after section 2032A 

8 the following new section: 


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1 ‘‘SEC. 2032B. VALUATION OF CERTAIN HISTORIC PROP2 ERTY. 

3 ‘‘(a) VALUE BASED ON NET EARNINGS OF HISTORIC

4 PROPERTY.—If— 

5 ‘‘(1) the decedent was (at the time of his death) 

6 a citizen or resident of the United States, and 

7 ‘‘(2) the executor executes an agreement which 

8 meets the requirements of subsection (c), 

9 then, for the purposes of this chapter, the value of quali10 fied historic property shall be based on the net earnings 

11 (as defined in subsection (b)(3)) derived from such prop12 erty. 

13 ‘‘(b) DEFINITIONS AND SPECIAL RULES.—For pur14 poses of this section— 

15 ‘‘(1) QUALIFIED HISTORIC PROPERTY.—The 

16 term ‘qualified historic property’ means— 

17 ‘‘(A) any building (and its structural com18 ponents)— 

19 ‘‘(i) which is designated as a National 

20 Historic Landmark under section 101 of 

21 the National Historic Preservation Act at 

22 the time of the decedent’s death and for a 

23 continuous period of at least 25 years prior 

24 to the decedent’s death, and 

25 ‘‘(ii) which was originally used for res26 idential or farming purposes, 


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1 ‘‘(B) any other real property to the extent 

2 reasonably necessary for ingress, egress, public 

3 enjoyment, and visitation of the property de4 scribed in subparagraph (A) (but not including 

5 any real property used primarily for the sale, 

6 production, or manufacturing of products or for 

7 lodging purposes), and 

8 ‘‘(C) personal property included within, or 

9 associated with, property described in subpara10 graph (A) or (B) if such personal property— 

11 ‘‘(i) is held by the decedent holding 

12 such building, 

13 ‘‘(ii) has been so included within, or 

14 associated with, such property so described 

15 throughout the 25-year period ending on 

16 the date of the decedent’s death, and 

17 ‘‘(iii) is covered by the agreement re18 ferred to in subsection (a)(2) which covers 

19 such building, 

20 owned by the decedent throughout the 25-year pe21 riod ending on the date of the decedent’s death. 

22 ‘‘(2) TREATMENT OF HISTORIC PROPERTY

23 HELD BY A CORPORATION.—In the case of a cor24 poration all of the stock in which was held on the 

25 date of the decedent’s death by the decedent or 


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1 members of the decedent’s family (as defined in sec2 tion 2032A(e)(2))— 

3 ‘‘(A) stock in such corporation shall be 

4 treated for purposes of this section as qualified 

5 historic property to the extent that the value of 

6 such stock is attributable to qualified historic 

7 property held by such corporation, but 

8 ‘‘(B) the requirements of subsection (c) 

9 shall be met only if each member of the dece10 dent’s family holding such stock on such date 

11 signs the agreement referred to in subsection 

12 (a)(2). 

13 ‘‘(3) NET EARNINGS.—The term ‘net earnings’ 

14 means income derived from qualified historic prop15 erty (determined without regard to any interest, de16 preciation, or tax expense) times 7. 

17 ‘‘(4) DETERMINATION OF TIME PERIODS.—In 

18 determining the period for which the decedent has 

19 held any property or stock, there shall be included 

20 the period for which such property or stock was held 

21 by members of the decedent’s family (as defined in 

22 section 2032A(e)(2)). 

23 ‘‘(c) REQUIREMENTS FOR AGREEMENT.— 


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1 ‘‘(1) IN GENERAL.—For purposes of subsection 

2 (a)(2), an agreement meets the requirements of this 

3 subsection if— 

4 ‘‘(A) such agreement is a written agree5 ment signed by each person in being who has 

6 an interest (whether or not in possession) in the 

7 building described in subsection (b)(1)(A), 

8 ‘‘(B) such agreement provides that the 

9 only activities carried on at such building are 

10 activities which are substantially related (aside 

11 from the need for income or funds or the use 

12 made of the profits derived) to— 

13 ‘‘(i) the public visitation of such build14 ing and the property described in sub15 section (b)(1)(B) with respect to such 

16 property), and 

17 ‘‘(ii) the maintenance and preserva18 tion of such building and property for such 

19 public visitation, and 

20 ‘‘(C) such agreement provides that such 

21 building will be open to the public for a period 

22 of at least 25 years beginning on the date on 

23 which the return of the tax imposed by this 

24 chapter is filed. 


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1 ‘‘(2) OPEN TO THE PUBLIC.—For the purposes 

2 of paragraph (1)(C)— 

3 ‘‘(A) a property shall be treated as being 

4 open to the public for any year if— 

5 ‘‘(i) a substantial portion of the prop6 erty is open for public visitation for at 

7 least 8 hours per day and 6 days per week 

8 during at least any 40 weeks of such year, 

9 ‘‘(ii) the executor notifies the State 

10 historic agency that the property is open 

11 and available for public visitation, 

12 ‘‘(iii) public access to the property is 

13 achievable without undue and deliberate 

14 difficulty or cost purposely intended to dis15 courage the visitation of the property, 

16 ‘‘(iv) 1 or more of the signatories to 

17 the agreement or professional or trained 

18 volunteer staff representing such signato19 ries are available to facilitate the visitation 

20 of the property through at least 2 methods 

21 and practices common to the tourism in22 dustry, including telephone, website, mail23 ing address, or ticket booth, and 


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1 ‘‘(v) there is an ongoing effort to en2 sure the general public is aware that the 

3 property is available for visitation, and 

4 ‘‘(B) the 25-year period referred to in such 

5 paragraph shall be suspended during reasonable 

6 periods of renovation. 

7 Communication under subparagraph (A)(v) shall not 

8 necessarily require expenditure of monies for adver9 tising, but should include periodic contact with 

10 groups such as State and local historic agencies and 

11 tourism boards. 

12 ‘‘(d) TAX TREATMENT OF DISPOSITIONS AND FAIL13 URE TO COMPLY WITH AGREEMENT.— 

14 ‘‘(1) IMPOSITION OF ADDITIONAL ESTATE

15 TAX.—If, during the 25-year period referred to in 

16 subsection (c)(1)(C)— 

17 ‘‘(A) any person signing the written agree18 ment referred to in subsection (a)(2) disposes 

19 of any interest in the building subject to such 

20 agreement, or 

21 ‘‘(B) there is a violation of any provision 

22 of such agreement (as determined under regula23 tions prescribed by the Secretary), 

24 then there is hereby imposed an additional estate 

25 tax. 


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1 ‘‘(2) EXCEPTION FOR CERTAIN TRANSFEREES

2 WHO AGREE TO BE BOUND BY AGREEMENT.—No tax 

3 shall be imposed under paragraph (1) by reason of 

4 any disposition if the person acquiring such inter5 est— 

6 ‘‘(A) is a qualified organization (as defined 

7 in section 170 (b)(1)(A)) or is a member of the 

8 family (as defined in section 2032A(e)(2)) of 

9 the person disposing of such interest, and 

10 ‘‘(B) agrees to be bound by the agreement 

11 referred to in subsection (a)(2) and to be liable 

12 for any tax under this subsection in the same 

13 manner as the person disposing of such inter14 est. 

15 ‘‘(3) AMOUNT OF ADDITIONAL TAX.—The 

16 amount of the additional tax imposed by paragraph 

17 (1) with respect to any property shall be an amount 

18 equal to the excess of— 

19 ‘‘(A) what would (but for subsection (a)) 

20 have been the tax imposed by section 2001 (re21 duced by the credits allowable), over 

22 ‘‘(B) the tax imposed by section 2001 (as 

23 so reduced). 

24 ‘‘(4) DUE DATE.—The additional tax imposed 

25 by this subsection shall be due and payable on the 


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1 day which is 9 months after the date of the disposi2 tion or violation referred to in paragraph (1). 

3 ‘‘(5) LIABILITY FOR TAX.—Any person signing 

4 the agreement referred to in subsection (a)(2) (other 

5 than the executor) shall be personally liable for the 

6 additional tax imposed by this subsection. If more 

7 than 1 person is liable under this subsection, all 

8 such persons shall be jointly and severally liable. 

9 ‘‘(6) CERTAIN OTHER RULES TO APPLY.—Rules 

10 similar to the rules of sections 1016(c), 2013(f), and 

11 2032A(f) shall apply for purposes of this sub12 section.’’. 

13 (b) COORDINATION WITH GIFT TAX.—Section 2512 

14 of the Internal Revenue Code of 1986 (relating to valu15 ation of gifts) is amended by adding at the end the fol16 lowing new subsection: 

17 ‘‘(c) For the purposes of this chapter, the value of 

18 qualified historic property (as defined in section 

19 2032B(b)(1)) transferred for less than an adequate and 

20 full consideration shall be valued under section 2032B.’’. 

21 (c) TECHNICAL AMENDMENTS.— 

22 (1) Subparagraph (A) of section 2056A(b)(10) 

23 of the Internal Revenue Code of 1986 is amended by 

24 inserting ‘‘2032B,’’ after ‘‘2032A,’’. 


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1 (2) The table of sections for part III of sub2 chapter A of chapter 11 of such Code is amended by 

3 inserting after the item relating to section 2032A 

4 the following new item: 

‘‘Sec. 2032B. Valuation of certain historic property.’’. 

5 (d) EFFECTIVE DATE.—The amendments made by 

6 this section shall apply with respect to the estates of dece7 dents dying after the date of the enactment of this Act. 

8 Notwithstanding the preceding sentence, for the purposes 

9 of section 901 of the Economic Growth and Tax Reconcili10 ation Act of 2001, the amendments made by this section 

11 shall be treated as being enacted before the date of the 

12 enactment of such Act. 

Æ 


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