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

SECTION 1. TREATMENT OF CHARITABLE REMAINDER PET TRUSTS IN MANNER 
              SIMILAR TO CHARITABLE REMAINDER ANNUITY TRUSTS.

    (a) In General.--Subsection (a) of section 664 of the Internal 
Revenue Code of 1986 (relating to general rule) is amended--
            (1) by striking ``annuity trust and'' and inserting 
        ``annuity trust,'', and
            (2) by inserting ``, and a charitable remainder pet trust'' 
        before the period at the end.
    (b) Income Tax Treatment.--Subsections (a) and (c) of section 664 
of such Code (relating to exemption from income taxes) are both 
amended--
            (1) by striking ``annuity trust and'' and inserting 
        ``annuity trust,'', and
            (2) by inserting ``, and a charitable remainder pet trust'' 
        after ``unitrust''.
    (c) Charitable Remainder Pet Trust Defined.--Subsection (d) of 
section 664 of such Code (relating to definitions) is amended by adding 
at the end the following new paragraphs:
            ``(5) Charitable remainder pet trust.--For purposes of this 
        section--
                    ``(A) In general.--A charitable remainder pet trust 
                is a trust--
                            ``(i) from which a sum certain (which is 
                        not less than 5 percent nor more than 50 
                        percent of the initial net fair market value 
                        for all property placed in trust) is to be 
                        paid, not less often than annually, to a 
                        designated person or organization, or a 
                        successor designated person or organization, 
                        for the exclusive benefit (but allowing for 
                        payment of any income tax resulting from the 
                        payment) of one or more specified pets for a 
                        term of years (not in excess of 20 years), such 
                        payments to terminate at the earlier of the 
                        expiration of the term of years or the death of 
                        the last surviving specified pet,
                            ``(ii) from which no amount other than the 
                        payments described in clause (i) and the taxes 
                        imposed pursuant to subsection (c) may be paid 
                        to or for the use of any person other than an 
                        organization described in section 170(c),
                            ``(iii) following the termination of the 
                        payments described in clause (i), the remainder 
                        interest in the trust is to be transferred to, 
                        or for the use of, an organization described in 
                        section 170(c), and
                            ``(iv) the value (determined under section 
                        7520) of such remainder interest is at least 10 
                        percent of the initial fair market value of all 
                        property placed in the trust.
                    ``(B) Value of remainder interest.--For purposes of 
                determining the value of the remainder interest of a 
                charitable remainder pet trust, the pets' life 
                expectancy shall be disregarded.
                    ``(C) Pet.--A pet is any domesticated companion 
                animal (including a domesticated companion cat, dog, 
                rabbit, guinea pig, hamster, gerbil, ferret, mouse, 
                rat, bird, fish, reptile, or horse) which is living, 
                and owned or cared for by the taxpayer establishing the 
                trust, at the time of the creation of the trust.''.
    (d) Conforming Amendments.--
            (1) Sections 170(f)(2)(A), 2055(e)(2)(A), and 2522(c)(2)(A) 
        of such Code are each amended by striking ``charitable 
        remainder annuity trust or a charitable remainder unitrust'' 
        and inserting ``charitable remainder annuity trust, charitable 
        remainder unitrust, or charitable remainder pet trust''.
            (2) Sections 664(e) and 1361(e)(1)(B)(iii) of such Code are 
        both amended by striking ``charitable remainder annuity trust 
        or charitable remainder unitrust'' and inserting ``charitable 
        remainder annuity trust, charitable remainder unitrust, or 
        charitable remainder pet trust''.
            (3) Paragraphs (1) and (3) of section 664(f) of such Code 
        are both amended by striking ``paragraph (1)(A) or (2)(A)'' and 
        inserting ``paragraph (1)(A), (2)(A), or (5)(A)(i)''.
            (4) Section 2055(e)(3)(F) of such Code is amended by 
        inserting ``or pet (as defined in section 664(d)(5)(C))'' after 
        ``by reason of the death of any individual''.
            (5) Section 2652(c)(1)(C) of such Code is amended--
                    (A) in clause (i) by inserting ``within the meaning 
                of section 664'' before the comma at the end, and
                    (B) by striking ``or'' at the end of clause (ii), 
                by redesignating clause (iii) as clause (iv), and by 
                inserting after clause (ii) the following new clause:
                            ``(iii) a charitable remainder pet trust 
                        within the meaning of section 664, or''.
    (e) Effective Date.--The amendments made by this section shall 
apply to charitable remainder pet trusts created after the date of the 
enactment of this Act.

Summary: Amends the Internal Revenue Code to provide for the tax treatment of a charitable remainder pet trust as a charitable remainder annuity trust. Defines "charitable remainder pet trust" as a trust which pays a specified annual amount (for a maximum term of 20 years) for the care of domesticated companion animals living at the time of creation of the trust.