I 
108TH CONGRESS 
1ST SESSION H. R. 1155
To amend the Internal Revenue Code of 1986 to exclude from gross income 
amounts received on account of claims based on certain unlawful dis-
crimination and to allow income averaging for backpay and frontpay 
awards received on account of such claims, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 6, 2003
Ms. PRYCE of Ohio (for herself, Mrs. BIGGERT, Mr. CRANE, Mr. FOLEY, Mrs. 
JOHNSON of Connecticut, Mr. SENSENBRENNER, Mr. BECERRA, Mr. 
LEWIS of Georgia, Mr. MATSUI, and Mr. VAN HOLLEN) 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 exclude 
from gross income amounts received on account of claims 
based on certain unlawful discrimination and to allow 
income averaging for backpay and frontpay awards re-
ceived on account of such claims, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Civil Rights Tax Relief 
Act of 2003’’.
SEC. 2. EXCLUSION FROM GROSS INCOME FOR AMOUNTS 
RECEIVED ON ACCOUNT OF CERTAIN UNLAW-
FUL DISCRIMINATION. 
(a) IN GENERAL.—Part III of subchapter B of chap-
ter 1 of the Internal Revenue Code of 1986 (relating to 
items specifically excluded from gross income) is amended 
by redesignating section 140 as section 140A and by in-
serting after section 139 the following new section: 
‘‘SEC. 140. AMOUNTS RECEIVED ON ACCOUNT OF CERTAIN 
UNLAWFUL DISCRIMINATION. 
‘‘(a) IN GENERAL.—
‘‘(1) EXCLUSION.—Gross income does not in-
clude amounts received by a claimant (whether by 
suit or agreement and whether as lump sums or 
periodic payments) on account of a claim of unlawful 
discrimination. 
‘‘(2) AMOUNTS COVERED.—For purposes of 
paragraph (1), the term ‘amounts’ does not in-
clude—
‘‘(A) backpay or frontpay, as defined in 
section 1302(b), or 
‘‘(B) punitive damages. 
‘‘(b) UNLAWFUL DISCRIMINATION DEFINED.—For 
purposes of this section, the term ‘unlawful discrimination’ 
means an act that is unlawful under any of the following:
‘‘(1) Section 302 of the Civil Rights Act of 
1991 (2 U.S.C. 1202). 
‘‘(2) Section 201, 202, 203, 204, 205, 206, or 
207 of the Congressional Accountability Act of 1995 
(2 U.S.C. 1311, 1312, 1313, 1314, 1315, 1316, or 
1317). 
‘‘(3) The National Labor Relations Act (29 
U.S.C. 151 et seq.) 
‘‘(4) The Fair Labor Standards Act of 1938 
(29 U.S.C. 201 et seq.). 
‘‘(5) Section 4 or 15 of the Age Discrimination 
in Employment Act of 1967 (29 U.S.C. 623 or 
633a). 
‘‘(6) Section 501 or 504 of the Rehabilitation 
Act of 1973 (29 U.S.C. 791 or 794). 
‘‘(7) Section 510 of the Employee Retirement 
Income Security Act of 1974 (29 U.S.C. 1140). 
‘‘(8) Title IX of the Education Amendments of 
1972 (29 U.S.C. 1681 et seq.). 
‘‘(9) The Employee Polygraph Protection Act of 
1988 (29 U.S.C. 201 et seq.). 
‘‘(10) The Worker Adjustment and Retraining 
Notification Act (29 U.S.C. 2102 et seq.). 
‘‘(11) Section 105 of the Family and Medical 
Leave Act of 1993 (29 U.S.C. 2615).
‘‘(12) Chapter 43 of title 38, United States 
Code (relating to employment and reemployment 
rights of members of the uniformed services). 
‘‘(13) Section 1977, 1979, or 1980 of the Re-
vised Statutes (42 U.S.C. 1981, 1983, or 1985). 
‘‘(14) Section 703, 704, or 717 of the Civil 
Rights Act of 1964 (42 U.S.C. 2000e–2, 2000e–3, 
or 2000e–16). 
‘‘(15) Section 804 or 805 of the Fair Housing 
Act (42 U.S.C. 3604 or 3605). 
‘‘(16) Section 102, 202, 302, or 503 of the 
Americans with Disabilities Act of 1990 (42 U.S.C. 
12112, 12132, 12182, or 12203). 
‘‘(17) Any provision of Federal law (popularly 
known as whistleblower protection provisions) pro-
hibiting the discharge of an employee, the discrimi-
nation against an employee, or any other form of re-
taliation or reprisal against an employee for assert-
ing rights or taking other actions permitted under 
Federal law. 
‘‘(18) Any provision of State or local law, or 
common law claims permitted under Federal, State, 
or local law, providing for the enforcement of civil 
rights or prohibiting the discharge of an employee, 
the discrimination against an employee, or any other
form of retaliation or reprisal against an employee 
for asserting rights or taking other actions per-
mitted by law.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for part III of subchapter B of chapter 1 of such Code 
is amended by striking the last item and inserting the fol-
lowing:
‘‘Sec. 140. Amounts received on account of certain unlawful dis-
crimination. 
‘‘Sec. 140. Cross references to other Acts.’’
(c) EFFECTIVE DATE.—The amendment made by 
this section shall apply to damages received in taxable 
years beginning after December 31, 2002. 
SEC. 3. LIMITATION ON TAX BASED ON INCOME AVER-
AGING FOR BACKPAY AND FRONTPAY RE-
CEIVED ON ACCOUNT OF CERTAIN UNLAW-
FUL EMPLOYMENT DISCRIMINATION. 
(a) IN GENERAL.—Part I of subchapter Q of chapter 
1 of the Internal Revenue Code of 1986 (relating to in-
come averaging) is amended by adding at the end the fol-
lowing new section:
‘‘SEC. 1302. INCOME FROM BACKPAY AND FRONTPAY RE-
CEIVED ON ACCOUNT OF CERTAIN UNLAW-
FUL EMPLOYMENT DISCRIMINATION. 
‘‘(a) GENERAL RULE.—If employment discrimination 
backpay or frontpay is received by a taxpayer during a
taxable year, the tax imposed by this chapter for such tax-
able year shall not exceed the sum of—
‘‘(1) the tax which would be so imposed if—
‘‘(A) no amount of such backpay or 
frontpay were included in gross income for such 
year, and 
‘‘(B) no deduction were allowed for such 
year for expenses (otherwise allowable as a de-
duction to the taxpayer for such year) in con-
nection with making or prosecuting any claim 
of unlawful employment discrimination by or on 
behalf of the taxpayer, plus 
‘‘(2) the product of—
‘‘(A) the number of years in the backpay 
period and frontpay period, and 
‘‘(B) the amount by which the tax deter-
mined under paragraph (1) would increase if 
the amount on which such tax is determined 
were increased by the average annual net back-
pay and frontpay amount. 
‘‘(b) DEFINITIONS.—For purposes of this section—
‘‘(1) EMPLOYMENT DISCRIMINATION BACKPAY 
OR FRONTPAY.—The term ‘employment discrimina-
tion backpay or frontpay’ means backpay or 
frontpay receivable (whether as lump sums or peri-