I

107TH CONGRESS

1ST SESSION H. R. 1796

To amend the Internal Revenue Code of 1986 to treat charitable remainder

pet trusts in a similar manner as charitable remainder annuity trusts

and charitable remainder unitrusts.

IN THE HOUSE OF REPRESENTATIVES

MAY 10, 2001

Mr. BLUMENAUER introduced the following bill; which was referred to the

Committee on Ways and Means

A BILL

To amend the Internal Revenue Code of 1986 to treat charitable remainder pet trusts in a similar manner as charitable remainder annuity trusts and charitable remainder

unitrusts.

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

3 SECTION 1. AMENDMENT OF 1986 CODE.

4 Except as otherwise expressly provided, whenever in

5 this Act an amendment or repeal is expressed in terms

6 of an amendment to, or repeal of, a section or other provi7 sion, the reference shall be considered to be made to a
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1 section or other provision of the Internal Revenue Code

2 of 1986.

3 SEC. 2. CHARITABLE REMAINDER PET TRUSTS.

4 (a) CHARITABLE REMAINDER PET TRUST DE5 FINED.—Section 664(d) is amended by adding at the end

6 the following new paragraphs:

7 ‘‘(5) CHARITABLE REMAINDER PET TRUST.—

8 For purposes of this section, a charitable remainder

9 pet trust is a trust—

10 ‘‘(A) from which a sum certain is to be

11 paid, not less often than annually, for the exclu12 sive benefit of one or more pets (as defined in

13 paragraph (6)) for a term of years (not in ex14 cess of 20 years) or for the life or lives of such

15 pet or pets,

16 ‘‘(B) from which no amount other than the

17 payments described in subparagraph (A) and

18 the taxes imposed pursuant to subsection (c)

19 may be paid to or for the use of any person

20 other than an organization described in section

21 170(c),

22 ‘‘(C) following the termination of the pay23 ments described in subparagraph (A), the re24 mainder interest in the trust is to be trans-
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1 ferred to, or for the use of, an organization de2 scribed in section 170(c), and

3 ‘‘(D) the value (determined under section

4 7520) of such remainder interest is at least 10

5 percent of the initial fair market value of all

6 property placed in the trust.

7 ‘‘(6) PET.—For purposes of a charitable re8 mainder pet trust, a pet is any domesticated com9 panion animal (including a domesticated companion

10 cat, dog, rabbit, guinea pig, hamster, gerbil, ferret,

11 mouse, rat, bird, fish, reptile, or horse) which is liv12 ing, and owned or cared for by the taxpayer estab13 lishing the trust, at the time of the creation of the

14 trust.’’.

15 (b) TAX ON ANNUITY DISTRIBUTIONS FROM CHARI16 TABLE REMAINDER PET TRUSTS.—Section 664(c) is

17 amended by inserting ‘‘, and except, in the case of a chari18 table remainder pet trust, that any distribution during

19 such year for the benefit of a pet (as defined in subsection

20 (d)) shall be taxable income of the trust for such year,

21 to the extent of the income of the trust for the year and

22 undistributed income of the trust for prior years after ‘‘ap23 plied to such trust)’’.

24 (c) CONFORMING AMENDMENTS.—
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1 (1) Section 170(f)(2)(A), section 2055(e)(2)(A),

2 and section 2522(c)(2)(A) are amended by striking

3 ‘‘charitable remainder annuity trust or a charitable

4 remainder unitrust’’ and inserting ‘‘charitable re5 mainder annuity trust, charitable remainder

6 unitrust, or charitable remainder pet trust’’.

7 (2) Subsections (a) and (c) of section 664 are

8 amended by striking ‘‘charitable remainder annuity

9 trust and a charitable remainder unitrust’’ and in10 serting ‘‘charitable remainder annuity trust, chari11 table remainder unitrust, and charitable remainder

12 pet trust’’.

13 (3) Section 664(e) and section

14 1361(e)(1)(B)(iii) are amended by striking ‘‘chari15 table remainder annuity trust or charitable remain16 der unitrust’’ and inserting ‘‘charitable remainder

17 annuity trust, charitable remainder unitrust, or

18 charitable remainder pet trust’’.

19 (4) Paragraphs (1) and (3) of section 664(f)

20 are amended by striking ‘‘(1)(A) or (2)(A)’’ and in21 serting ‘‘(1)(A), (2)(A), or (5)(A)’’.

22 (5) Section 2055(e)(2)(F) is amended by insert23 ing ‘‘or pet (as defined in section 664(d))’’ after ‘‘by

24 reason of the death of any individual’’.

25 (6) Section 2652(c)(1)(C) is amended—
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1 (A) in clause (ii) by striking ‘‘within the

2 meaning of section 664, or’’ and inserting ‘‘,’’;

3 (B) by redesignating clause (iii) as clause

4 (iv); and

5 (C) by inserting after clause (ii) the fol6 lowing new clause:

7 ‘‘(iii) a charitable remainder pet trust

8 within the meaning of section 664, or’’.

9 (d) EFFECTIVE DATE.—The amendments made

10 by this section shall apply to charitable remainder

11 pet trusts created after the date of the enactment of

12 this Act.

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