II

107TH CONGRESS

1ST SESSION S. 148

To amend the Internal Revenue Code of 1986 to expand the adoption credit,

and for other purposes.

IN THE SENATE OF THE UNITED STATES

JANUARY 23, 2001

Mr. CRAIG (for himself, Ms. LANDRIEU, Mr. JOHNSON, and Mr. STEVENS)

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 expand

the adoption credit, and for other purposes.

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

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Hope for Children

5 Act’’.

6 SEC. 2. EXPANSION OF ADOPTION CREDIT AND ADOPTION

7 ASSISTANCE PROGRAMS.

8 (a) IN GENERAL.—
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1 (1) ADOPTION CREDIT.—Section 23(a)(1) of

2 the Internal Revenue Code of 1986 (relating to al3 lowance of credit) is amended to read as follows:

4 ‘‘(1) IN GENERAL.—In the case of an indi5 vidual, there shall be allowed as a credit against the

6 tax imposed by this chapter—

7 ‘‘(A) in the case of an adoption of a child

8 other than a child with special needs, the

9 amount of the qualified adoption expenses paid

10 or incurred by the taxpayer, and

11 ‘‘(B) in the case of an adoption of a child

12 with special needs, $10,000.’’.

13 (2) ADOPTION ASSISTANCE PROGRAMS.—Sec14 tion 137(a) of such Code (relating to adoption as15 sistance programs) is amended to read as follows:

16 ‘‘(a) IN GENERAL.—Gross income of an employee

17 does not include amounts paid or expenses incurred by the

18 employer for adoption expenses in connection with the

19 adoption of a child by an employee if such amounts are

20 furnished pursuant to an adoption assistance program.

21 The amount of the exclusion shall be—

22 ‘‘(1) in the case of an adoption of a child other

23 than a child with special needs, the amount of the

24 qualified adoption expenses paid or incurred by the

25 taxpayer, and
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1 ‘‘(2) in the case of an adoption of a child with

2 special needs, $10,000.’’.

3 (b) DOLLAR LIMITATIONS.—

4 (1) DOLLAR AMOUNT OF ALLOWED EX5 PENSES.—

6 (A) ADOPTION EXPENSES.—Section

7 23(b)(1) of the Internal Revenue Code of 1986

8 (relating to allowance of credit) is amended—

9 (i) by striking ‘‘$5,000’’ and inserting

10 ‘‘$10,000’’,

11 (ii) by striking ‘‘($6,000, in the case

12 of a child with special needs)’’, and

13 (iii) by striking ‘‘subsection (a)’’ and

14 inserting ‘‘subsection (a)(1)(A)’’.

15 (B) ADOPTION ASSISTANCE PROGRAMS.—

16 Section 137(b)(1) of such Code (relating to dol17 lar limitations for adoption assistance pro18 grams) is amended—

19 (i) by striking ‘‘$5,000’’ and inserting

20 ‘‘$10,000’’, and

21 (ii) by striking ‘‘($6,000, in the case

22 of a child with special needs)’’, and

23 (iii) by striking ‘‘subsection (a)’’ and

24 inserting ‘‘subsection (a)(1)’’.

25 (2) PHASE-OUT LIMITATION.—
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1 (A) ADOPTION EXPENSES.—Clause (i) of

2 section 23(b)(2)(A) of such Code (relating to

3 income limitation) is amended by striking

4 ‘‘$75,000’’ and inserting ‘‘$150,000’’.

5 (B) ADOPTION ASSISTANCE PROGRAMS.—

6 Section 137(b)(2)(A) of such Code (relating to

7 income limitation) is amended by striking

8 ‘‘$75,000’’ and inserting ‘‘$150,000’’.

9 (c) YEAR CREDIT ALLOWED.—Section 23(a)(2) of

10 the Internal Revenue Code of 1986 (relating to year credit

11 allowed) is amended by adding at the end the following

12 new flush sentence:

13 ‘‘In the case of the adoption of a child with special

14 needs, the credit allowed under paragraph (1) shall

15 be allowed for the taxable year in which the adoption

16 becomes final.’’.

17 (d) REPEAL OF SUNSET PROVISIONS.—

18 (1) CHILDREN WITHOUT SPECIAL NEEDS.—

19 Paragraph (2) of section 23(d) of the Internal Rev20 enue Code of 1986 (relating to definition of eligible

21 child) is amended to read as follows:

22 ‘‘(2) ELIGIBLE CHILD.—The term ‘eligible

23 child’ means any individual who—

24 ‘‘(A) has not attained age 18, or
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1 ‘‘(B) is physically or mentally incapable of

2 caring for himself.’’.

3 (2) ADOPTION ASSISTANCE PROGRAMS.—Sec4 tion 137 of such Code (relating to adoption assist5 ance programs) is amended by striking subsection

6 (f).

7 (e) ADJUSTMENT OF DOLLAR AND INCOME LIMITA8 TIONS FOR INFLATION.—

9 (1) ADOPTION CREDIT.—Section 23 of the In10 ternal Revenue Code of 1986 (relating to adoption

11 expenses) is amended by redesignating subsection

12 (h) as subsection (i) and by inserting after sub13 section (g) the following new subsection:

14 ‘‘(h) ADJUSTMENTS FOR INFLATION.—In the case of

15 a taxable year beginning after December 31, 2002, each

16 of the dollar amounts in subsection (a)(1)(B) and para17 graphs (1) and (2)(A)(i) of subsection (b) shall be in18 creased by an amount equal to—

19 ‘‘(1) such dollar amount, multiplied by

20 ‘‘(2) the cost-of-living adjustment determined

21 under section 1(f)(3) for the calendar year in which

22 the taxable year begins, determined by substituting

23 ‘calendar year 2001’ for ‘calendar year 1992’ in sub24 paragraph (B) thereof.’’.
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1 (2) ADOPTION ASSISTANCE PROGRAMS.—Sec2 tion 137 of such Code (relating to adoption assist3 ance programs), as amended by subsection (d), is

4 amended by adding at the end the following new

5 subsection:

6 ‘‘(f) ADJUSTMENTS FOR INFLATION.—In the case of

7 a taxable year beginning after December 31, 2002, each

8 of the dollar amounts in subsection (a)(2) and paragraphs

9 (1) and (2)(A) of subsection (b) shall be increased by an

10 amount equal to—

11 ‘‘(1) such dollar amount, multiplied by

12 ‘‘(2) the cost-of-living adjustment determined

13 under section 1(f)(3) for the calendar year in which

14 the taxable year begins, determined by substituting

15 ‘calendar year 2001’ for ‘calendar year 1992’ in sub16 paragraph (B) thereof.’’.

17 (f) LIMITATION BASED ON AMOUNT OF TAX.—

18 (1) IN GENERAL.—Section 23(c) of the Internal

19 Revenue Code of 1986 (relating to carryforwards of

20 unused credit) is amended by striking ‘‘the limita21 tion imposed’’ and all that follows through

22 ‘‘1400C)’’ and inserting ‘‘the applicable tax limita23 tion’’.

24 (2) APPLICABLE TAX LIMITATION.—Section

25 23(d) of such Code (relating to definitions) is
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1 amended by adding at the end the following new

2 paragraph:

3 ‘‘(4) APPLICABLE TAX LIMITATION.—The term

4 ‘applicable tax limitation’ means the sum of—

5 ‘‘(A) the taxpayer’s regular tax liability for

6 the taxable year, reduced (but not below zero)

7 by the sum of the credits allowed by sections

8 21, 22, 24 (other than the amount of the in9 crease under subsection (d) thereof), 25, and

10 25A, and

11 ‘‘(B) the tax imposed by section 55 for

12 such taxable year.’’.

13 (3) CONFORMING AMENDMENTS.—

14 (A) Section 26(a) of such Code (relating to

15 limitation based on amount of tax) is amended

16 by inserting ‘‘(other than section 23)’’ after ‘‘al17 lowed by this subpart’’.

18 (B) Section 53(b)(1) of such Code (relat19 ing to minimum tax credit) is amended by in20 serting ‘‘reduced by the aggregate amount

21 taken into account under section 23(d)(3)(B)

22 for all such prior taxable years,’’ after ‘‘1986,’’.
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1 (g) EFFECTIVE DATE.—The amendments made by

2 this section shall apply to taxable years beginning after

3 December 31, 2001.

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