I
107TH CONGRESS
1ST SESSION
H. R. 2339
To amend the Internal Revenue Code of 1986 to provide a refundable credit
against tax with respect to education and training of developmentally
disabled children.
IN THE HOUSE OF REPRESENTATIVES
JUNE 27, 2001
Mr. ENGLISH (for himself, Mr. DOYLE, Mr. SMITH of New Jersey, Mr. HORN,
Mr. SHOWS, Ms. BROWN of Florida, Mr. BLAGOJEVICH, Mr. KING, Mr.
SPENCE, Mr. TIAHRT, Mr. FOSSELLA, Mrs. ROUKEMA, and Mr. GREEN-
WOOD) 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 provide
a refundable credit against tax with respect to education
and training of developmentally disabled children.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. REFUNDABLE CREDIT FOR CHILD DISABILITY
EDUCATION AND TRAINING EXPENSES.
(a) IN GENERAL.—Subpart C of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of
1986 (relating to refundable personal credits) is amended
by redesignating section 35 as section 36 and inserting
after section 34 the following new section:
‘‘SEC. 35. CHILD DISABILITY EDUCATION AND TRAINING EX-
PENSES.
‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in-
dividual, there shall be allowed as a credit against the tax
imposed by this subtitle for the taxable year an amount
equal to the amount paid or incurred by the taxpayer dur-
ing the taxable year for qualified child disability expenses.
‘‘(b) LIMITATIONS.—
‘‘(1) MAXIMUM DOLLAR AMOUNT.—The amount
allowed as a credit under subsection (a) to the tax-
payer for the taxable year shall not exceed $2,000.
‘‘(2) LIMITATION BASED ON ADJUSTED GROSS
INCOME.—
‘‘(A) IN
GENERAL.—The amount of the
credit allowable under subsection (a) (after ap-
plication of paragraph (1)) shall be reduced
(but not below zero) by $500 for each $1,000
(or fraction thereof) by which the taxpayer’s
modified 
adjusted 
gross 
income 
exceeds
$150,000.
‘‘(B) MODIFIED
ADJUSTED
GROSS
IN-
COME.—For purposes of subparagraph (A), the
term ‘modified adjusted gross income’ means
adjusted gross income increased by any amount
excluded from gross income under section 911,
931, or 933.
‘‘(C) COST-OF-LIVING ADJUSTMENT.—
‘‘(i) IN GENERAL.—In the case of any
taxable year beginning in a calendar year
after 2002, the $150,000 amount under
subparagraph (A) shall be increased by an
amount equal to—
‘‘(I) such dollar amount, multi-
plied by
‘‘(II) the cost-of-living adjust-
ment determined under section 1(f)(3)
for the calendar year in which the tax-
able year begins, determined by sub-
stituting ‘calendar year 2001’ for ‘cal-
endar year 1992’ in subparagraph (B)
thereof.
‘‘(ii) 
ROUNDING
RULES.—If 
any
amount after adjustment under clause (i)
is not a multiple of $1,000, such amount
shall be rounded to the next lower multiple
of $1,000.
‘‘(c) QUALIFIED CHILD DISABILITY EXPENSES.—
For purposes of this section—
‘‘(1) IN GENERAL.—The term ‘qualified child
disability expenses’ means amounts paid for services
and equipment related to education and training of
a qualified child of the taxpayer in connection with
a developmental disability of such child, including—
‘‘(A) behavioral therapy,
‘‘(B) speech therapy,
‘‘(C) occupational therapy,
‘‘(D) physical therapy,
‘‘(E) auditory therapy,
‘‘(F) assistive communication technology,
and
‘‘(G) such other services as the Secretary
may, in consultation with the Secretary of
Health and Human Services and the Secretary
of Education, provide by regulation.
‘‘(2) DEVELOPMENTAL DISABILITY.—The term
‘developmental disability’ has the same meaning
given the term in section 102 of the Developmental
Disabilities Assistance and Bill of Rights Act of
2000 (Public Law 106–402; 114 Stat. 1682).
‘‘(3) QUALIFIED CHILD.—The term ‘qualified
child’ means any individual if—
‘‘(A) the taxpayer is allowed a deduction
under section 151 with respect to such indi-
vidual for the taxable year,
‘‘(B) such individual has not attained the
age of 18 as of the close of the calendar year
in which the taxable year of the taxpayer be-
gins, and
‘‘(C) such individual bears a relationship to
the taxpayer described in section 32(c)(3)(B).
‘‘(d) VERIFICATION REQUIREMENTS.—
‘‘(1) EXPENSES MUST BE SUBSTANTIATED.—
Qualified child disability expenses to which sub-
section (a) applies may be taken into account under
this section only if the taxpayer substantiates such
expense in such form as the Secretary may pre-
scribe.
‘‘(2) 
IDENTIFICATION
REQUIREMENT.—No
credit shall be allowed under this section with re-
spect to any qualified child unless the taxpayer in-
cludes the name and taxpayer identification number
of such qualified child on the return of tax for the
taxable year.
‘‘(e) SPECIAL RULES.—
‘‘(1) 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 allowed 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.
‘‘(2) MARRIED COUPLES MUST FILE JOINT RE-
TURNS.—Rules similar to the rules of paragraphs
(2), (3), and (4) of section 21(e) shall apply for pur-
poses of this section.
‘‘(3) BASIS
ADJUSTMENT.—For purposes of
this subtitle, if a credit is allowed under this section
for any expenditure with respect to any property, the
increase in the basis of such property which would
(but for this subsection) result from such expendi-
ture shall be reduced by the amount of the credit so
allowed.’’.
(b) CONFORMING AMENDMENTS.—
(1) Paragraph (2) of section 1324(b) of title
31, United States Code, is amended by inserting be-
fore the period ‘‘, or from section 35 of such Code’’.
(2) The table of sections for subpart C of part
IV of subchapter A of chapter 1 of the Internal Rev-
enue Code of 1986 is amended by striking the last
item and inserting the following new items:
‘‘Sec. 35. Child disability expenses.
‘‘Sec. 36. Overpayments of tax.’’.
(3) Section 1016(a) of such Code is amended
by striking ‘‘and’’ at the end of paragraph (26), by
striking the period at the end of paragraph (27) and
inserting ‘‘, and’’, and by adding at the end the fol-
lowing:
‘‘(28) in the case of property with respect to
which a credit was allowed under section 35, to the
extent provided in section 35(e)(3).’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 2001.
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