[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[S. 657 Introduced in Senate (IS)]

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104th CONGRESS
  1st Session
                                 S. 657

 To amend the Internal Revenue Code of 1986 to repeal the 1993 Federal 
  income tax rate increases on trusts established for the benefit of 
   individuals with disabilities or for college education costs of a 
                              beneficiary.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

               March 31 (legislative day, March 27), 1995

 Mr. Domenici introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
 To amend the Internal Revenue Code of 1986 to repeal the 1993 Federal 
  income tax rate increases on trusts established for the benefit of 
   individuals with disabilities or for college education costs of a 
                              beneficiary.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Persons With Disabilities Trusts Tax 
Rate Restoration Act''.

SEC. 2. REPEAL OF 1993 RATE INCREASES ON TRUSTS FOR INDIVIDUALS WHO ARE 
              DISABLED OR FOR COLLEGE EDUCATIONS.

    (a) In General.--Section 1(e) of the Internal Revenue Code of 1986 
(relating to tax imposed on estates and trusts) is amended to read as 
follows:
    ``(e) Estates and Trusts.--
            ``(1) In general.--Except as provided in paragraph (2), 
        there is hereby imposed on the taxable income of--
                    ``(A) every estate, and
                    ``(B) every trust,
        taxable under this subsection a tax determined in accordance 
        with the following table:

``If taxable income is:             The tax is:
    Not over $1,500................
                                        15% of taxable income.
    Over $1,500 but not over $3,500
                                        $225, plus 28% of the excess 
                                                over $1,500.
    Over $3,500 but not over $5,500
                                        $785, plus 31% of the excess 
                                                over $3,500.
    Over $5,500 but not over $7,500
                                        $1,405, plus 36% of the excess 
                                                over $5,500.
    Over $7,500....................
                                        $2,125, plus 39.6% of the 
                                                excess over $7,500.
            ``(2) Special rule for certain trusts.--
                    ``(A) In general.--There is hereby imposed on the 
                taxable income of an eligible trust taxable under this 
                subsection a tax determined in accordance with the 
                following table:

``If taxable income is:             The tax is:
    Not over $3,300................
                                        15% of taxable income.
    Over $3,300 but not over $9,900
                                        $495, plus 28% of the excess 
                                                over $3,300.
    Over $9,900....................
                                        $2,343, plus 31% of the excess 
                                                over $9,900.
                    ``(B) Eligible trust.--For purposes of subparagraph 
                (A), the term `eligible trust' means a trust which is 
                established exclusively for the purpose of providing 
                reasonable amounts for--
                            (i) the support and maintenance of 1 or 
                        more beneficiaries each of whom is an 
                        individual who is mentally ill or has a 
                        disability (within the meaning of section 3(2) 
                        of the Americans With Disabilities Act of 1990 
                        (42 U.S.C. 12102(2)) at the time the trust is 
                        established,
                            (ii) the support and maintenance of 1 or 
                        more beneficiaries each of whom is under 21 
                        years of age and whose custodial parent or 
                        parents are deceased, or
                            (iii) the payment of qualified higher 
                        education expenses (as defined in section 
                        135(c)(2)) of the grantor's children or 
                        grandchildren.
                A trust shall not fail to meet the requirements of this 
                subparagraph merely because the corpus of the trust may 
                revert to the grantor or a member of the grantor's 
                family upon the death of the beneficiary.''
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1994.
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