II

106TH CONGRESS

2D SESSION S. 2456

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

to provide assistance to adoptive parents of special needs children, and

for other purposes.

IN THE SENATE OF THE UNITED STATES

APRIL 25, 2000

Ms. LANDRIEU 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 to provide assistance to adoptive parents of special needs children, 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. EXPANSION OF ADOPTION CREDIT.

4 (a) SPECIAL NEEDS ADOPTION.—

5 (1) CREDIT AMOUNT.—Paragraph (1) of section

6 23(a) of the Internal Revenue Code of 1986 (relat7 ing to allowance of credit) is amended to read as fol8 lows:
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1 ‘‘(1) IN GENERAL.—In the case of an indi2 vidual, there shall be allowed as a credit against the

3 tax imposed by this chapter—

4 ‘‘(A) in the case of a special needs adop5 tion, $10,000, or

6 ‘‘(B) in the case of any other adoption, the

7 amount of the qualified adoption expenses paid

8 or incurred by the taxpayer.’’.

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

10 of such Code (relating to year credit allowed) is

11 amended by adding at the end the following new

12 flush sentence:

13 ‘‘In the case of a special needs adoption, the credit

14 allowed under paragraph (1) shall be allowed for the

15 taxable year in which the adoption becomes final.’’.

16 (3) DOLLAR LIMITATION.—Section 23(b)(1) of

17 such Code is amended—

18 (A) by striking ‘‘subsection (a)’’ and in19 serting ‘‘subsection (a)(1)(B)’’, and

20 (B) by striking ‘‘($6,000, in the case of a

21 child with special needs)’’.

22 (4) DEFINITION OF SPECIAL NEEDS ADOP23 TION.—Section 23(d) of such Code (relating to defi24 nitions) is amended by adding at the end the fol25 lowing new paragraph:
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1 ‘‘(4) SPECIAL NEEDS ADOPTION.—The term

2 ‘special needs adoption’ means the final adoption of

3 an individual during the taxable year who is an eligi4 ble child and who is a child with special needs.’’.

5 (5) DEFINITION OF CHILD WITH SPECIAL

6 NEEDS.—Section 23(d)(3) of such Code (defining

7 child with special needs) is amended to read as fol8 lows:

9 ‘‘(3) CHILD WITH SPECIAL NEEDS.—The term

10 ‘child with special needs’ means any child if a State

11 has determined that the child’s ethnic background,

12 age, membership in a minority or sibling groups,

13 medical condition or physical impairment, or emo14 tional handicap makes some form of adoption assist15 ance necessary.’’.

16 (b) INCREASE IN INCOME LIMITATIONS.—Section

17 23(b)(2) of the Internal Revenue Code of 1986 (relating

18 to income limitation) is amended—

19 (1) in subparagraph (A)—

20 (A) by striking ‘‘$75,000’’ and inserting

21 ‘‘$63,550 ($105,950 in the case of a joint re22 turn)’’, and

23 (B) by striking ‘‘$40,000’’ and inserting

24 ‘‘the applicable amount’’, and
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1 (2) by adding at the end the following new sub2 paragraph:

3 ‘‘(C) APPLICABLE AMOUNT.—For purposes

4 of subparagraph (A), the applicable amount,

5 with respect to any taxpayer, for the taxable

6 year shall be an amount equal to the excess

7 of—

8 ‘‘(i) the maximum taxable income

9 amount for the 31 percent bracket under

10 the table contained in section 1 relating to

11 such taxpayer and in effect for the taxable

12 year, over

13 ‘‘(ii) the dollar amount in effect with

14 respect to the taxpayer for the taxable year

15 under subparagraph (A)(i).

16 ‘‘(D) COST-OF-LIVING ADJUSTMENT.—

17 ‘‘(i) IN GENERAL.—In the case of a

18 taxable year beginning after 2001, each

19 dollar amount under subparagraph (A)(i)

20 shall be increased by an amount equal to—

21 ‘‘(I) such dollar amount, multi22 plied by

23 ‘‘(II) the cost-of-living adjust24 ment determined under section

25 1(f )(3) for the calendar year in which
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1 the taxable year begins, determined by

2 substituting ‘calendar year 2000’ for

3 ‘calendar year 1992’ in subparagraph

4 (B) thereof.

5 ‘‘(ii) ROUNDING RULES.—If any

6 amount after adjustment under clause (i)

7 is not a multiple of $1,000, such amount

8 shall be rounded to the next lower multiple

9 of $1,000.’’.

10 (c) ADOPTION CREDIT MADE PERMANENT.—Sub11 clauses (A) and (B) of section 23(d)(2) of the Internal

12 Revenue Code of 1986 (defining eligible child) are amend13 ed to read as follows:

14 ‘‘(A) who has not attained age 18, or

15 ‘‘(B) who is physically or mentally incapa16 ble of caring for himself.’’.

17 (d) CONFORMING AMENDMENTS.—

18 (1) Section 23(a)(2) of the Internal Revenue

19 Code of 1986 is amended by striking ‘‘(1)’’ and in20 serting ‘‘(1)(B)’’.

21 (2) Section 23(b)(3) of such Code is amended

22 by striking ‘‘(a)’’ each place it appears and inserting

23 ‘‘(a)(1)(B)’’.
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1 (e) EFFECTIVE DATE.—The amendments made by

2 this section shall apply to taxable years beginning after

3 December 31, 2000.

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