II
Calendar No. 454
104TH CONGRESS
2D SESSION
H. R. 3286
[Report No. 104–279]
[Report No. 104–288]
IN THE SENATE OF THE UNITED STATES
MAY 13, 1996
Received; read twice and referred to the Committee on Finance
MAY 23, 1996
Ordered, if and when reported by the Committee on Finance the bill then be
referred to the Committee on Indian Affairs for the purpose of consider-
ing title 3, for a period of 10 days of session, to report or be discharged
JUNE 13, 1996
Reported by Mr. ROTH, with amendments; referred to the Committee on
Indian Affairs pursuant to the order of May 23, 1996
[Omit the part struck through and insert the part printed in italic]
JUNE 24, 1996
Reported by Mr. MCCAIN, with an amendment
[Omit the part enclosed in boldface brackets]
AN ACT
To help families defray adoption costs, and to promote the
adoption of minority children.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
•HR 3286 RS2
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Adoption Promotion
and Stability Act of 1996’’.
SEC. 2. TABLE OF CONTENTS.
The table of contents of this Act is as follows:
Sec. 1. Short title.
Sec. 2. Table of contents.
TITLE I—CREDIT FOR ADOPTION EXPENSES
Sec. 101. Credit for adoption expenses.
TITLE II—INTERETHNIC ADOPTION
Sec. 201. Removal of barriers to interethnic adoption.
TITLE III—CHILD CUSTODY PROCEEDINGS AFFECTED BY THE
INDIAN CHILD WELFARE ACT OF 1978
Sec. 301. Inapplicability of the Indian Child Welfare Act of 1978 to child cus-
tody proceedings involving a child whose parents do not main-
tain affiliation with their Indian tribe.
Sec. 302. Membership and child custody proceedings.
Sec. 303. Effective date.
TITLE IV—REVENUE OFFSETS
Sec. 400. Amendment of 1986 Code.
Subtitle A—Exclusion for Energy Conservation Subsidies Limited to Subsidies
With Respect to Dwelling Units
Sec. 401. Exclusion for energy conservation subsidies limited to subsidies with
respect to dwelling units.
Subtitle B—Foreign Trust Tax Compliance
Sec. 411. Improved information reporting on foreign trusts.
Sec. 412. Comparable penalties for failure to file return relating to transfers to
foreign entities.
Sec. 413. Modifications of rules relating to foreign trusts having one or more
United States beneficiaries.
Sec. 414. Foreign persons not to be treated as owners under grantor trust
rules.
Sec. 415. Information reporting regarding foreign gifts.
Sec. 416. Modification of rules relating to foreign trusts which are not grantor
trusts.
Sec. 417. Residence of trusts, etc.
Sec. 401. Repeal of bad debt reserve method for thrift savings associations.
Sec. 402. Depreciation under income forecast method.
•HR 3286 RS2
TITLE I—CREDIT FOR ADOPTION
EXPENSES
SEC. 101. CREDIT FOR ADOPTION EXPENSES.
(a) IN GENERAL.—Subpart A of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of
1986 (relating to nonrefundable personal credits) is
amended by inserting after section 22 the following new
section:
‘‘SEC. 23. ADOPTION EXPENSES.
‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in-
dividual, there shall be allowed as a credit against the tax
imposed by this chapter for the taxable year the amount
of the qualified adoption expenses paid or incurred by the
taxpayer during such taxable year.
‘‘(b) LIMITATIONS.—
‘‘(1)
DOLLAR
LIMITATION.—The
aggregate
amount of qualified adoption expenses which may be
taken into account under subsection (a) for all tax-
able years with respect to the adoption of a child by
the taxpayer shall not exceed $5,000.
‘‘(2) INCOME LIMITATION.—The amount allow-
able as a credit under subsection (a) for any taxable
year shall be reduced (but not below zero) by an
amount which bears the same ratio to the amount
•HR 3286 RS2
so allowable (determined without regard to this
paragraph but with regard to paragraph (1)) as—
‘‘(A) the amount (if any) by which the tax-
payer’s
adjusted
gross
income
(determined
without regard to sections 911, 931, and 933)
exceeds $75,000, bears to
‘‘(B) $40,000.
‘‘(3) DENIAL OF DOUBLE BENEFIT.—
‘‘(A) IN GENERAL.—No credit shall be al-
lowed under subsection (a) for any expense for
which a deduction or credit is allowable under
any other provision of this chapter.
‘‘(B) GRANTS.—No credit shall be allowed
under subsection (a) for any expense to the ex-
tent that funds for such expense are received
under any Federal, State, or local program.
The preceding sentence shall not apply to ex-
penses for the adoption of a child with special
needs.
‘‘(C) REIMBURSEMENT.—No credit shall
be allowed under subsection (a) for any expense
to the extent that such expense is reimbursed
and the reimbursement is excluded from gross
income under section 137.
•HR 3286 RS2
‘‘(c) CARRYFORWARDS OF UNUSED CREDIT.—If the
credit allowable under subsection (a) for any taxable year
exceeds the limitation imposed by section 26(a) for such
taxable year reduced by the sum of the credits allowable
under this subpart (other than this section), such excess
shall be carried to the succeeding taxable year and added
to the credit allowable under subsection (a) for such tax-
able year. No credit may be carried forward under this
subsection to any taxable year following the fifth taxable
year after the taxable year in which the credit arose. For
purposes of the preceding sentence, credits shall be treated
as used on a first-in first-out basis.
‘‘(d) DEFINITIONS.—For purposes of this section—
‘‘(1) QUALIFIED
ADOPTION
EXPENSES.—The
term ‘qualified adoption expenses’ means reasonable
and necessary adoption fees, court costs, attorney
fees, and other expenses—
‘‘(A) which are directly related to, and the
principal purpose of which is for, the legal
adoption of an eligible child by the taxpayer,
and
‘‘(B) which are not incurred in violation of
State or Federal law or in carrying out any sur-
rogate parenting arrangement.
•HR 3286 RS2
‘‘(2) EXPENSES FOR ADOPTION OF SPOUSE’S
CHILD NOT ELIGIBLE.—The term ‘qualified adoption
expenses’ shall not include any expenses in connec-
tion with the adoption by an individual of a child
who is the child of such individual’s spouse.
‘‘(3)
ELIGIBLE
CHILD.—The
term
‘eligible
child’ means any individual—
‘‘(A) who has not attained age 18 as of the
time of the adoption, or
‘‘(B) who is physically or mentally incapa-
ble of caring for himself.
‘‘(4) CHILD WITH SPECIAL NEEDS.—The term
‘child with special needs’ means any child if—
‘‘(A) a State has determined that the child
cannot or should not be returned to the home
of his parents, and
‘‘(B) such State has determined that there
exists with respect to the child a specific factor
or condition (such as his ethnic background,
age, or membership in a minority or sibling
group, or the presence of factors such as medi-
cal conditions or physical, mental, or emotional
handicaps) because of which it is reasonable to
conclude that such child cannot be placed with