[Congressional Record Volume 142, Number 64 (Thursday, May 9, 1996)]
[House]
[Pages H4775-H4786]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
ADOPTION PROMOTION AND STABILITY ACT OF 1996
Mr. ARCHER. Madam Speaker, pursuant to House Resolution 428, I call
up the bill (H.R. 3286) to help families defray adoption costs ,and to
promote the adoption of minority children, and ask for its immediate
consideration.
The Clerk read the title of the bill.
The SPEAKER pro tempore. Pursuant to House Resolution 428, the
amendment in the nature of a substitute printed in the bill is adopted.
The text of H.R. 3286, as amended, is as follows:
H.R. 3286
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 ``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 custody proceedings involving a child whose parents
do not maintain 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.
[[Page H4776]]
TITLE I--CREDIT FOR ADOPTION EXPENSES
SEC. 101. CREDIT FOR ADOPTION EXPENSES.
(a) In General.--Subpart A of part IV of subchapter 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 individual,
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 taxable years with respect to the
adoption of a child by the taxpayer shall not exceed $5,000.
``(2) Income limitation.--The amount allowable 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 so allowable (determined without regard to this
paragraph but with regard to paragraph (1)) as--
``(A) the amount (if any) by which the taxpayer'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 allowed 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 extent that funds for such expense
are received under any Federal, State, or local program. The
preceding sentence shall not apply to expenses 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.
``(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 taxable 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 surrogate parenting
arrangement.
``(2) Expenses for adoption of spouse's child not
eligible.--The term `qualified adoption expenses' shall not
include any expenses in connection 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 incapable 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 medical
conditions or physical, mental, or emotional handicaps)
because of which it is reasonable to conclude that such child
cannot be placed with adoptive parents without providing
adoption assistance.
``(e) Special Rules for Foreign Adoptions.--In the case of
a foreign adoption--
``(1) subsection (a) shall not apply to any qualified
adoption expense with respect to such adoption unless such
adoption becomes final, and
``(2) any such expense which is paid or incurred before the
taxable year in which such adoption becomes final shall be
taken into account under this section as if such expense were
paid or incurred during such year.
``(f) Married Couples Must File Joint Returns.--Rules
similar to the rules of paragraphs (2), (3), and (4) of
section 21(e) shall apply for purposes of this section.
``(g) Basis Adjustments.--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 expenditure shall be reduced by the amount of the
credit so allowed.
``(h) Regulations.--The Secretary shall prescribe such
regulations as may be appropriate to carry out this section
and section 137, including regulations which treat unmarried
individuals who pay or incur qualified adoption expenses with
respect to the same child as 1 taxpayer for purposes of
applying the dollar limitation in subsection (b)(1) of this
section and in section 137(b)(1).''.
(b) Exclusion of Amounts Received Under Employer's Adoption
Assistance Programs.--Part III of subchapter B of chapter 1
of such Code (relating to items specifically excluded from
gross income) is amended by redesignating section 137 as
section 138 and by inserting after section 136 the following
new section:
``SEC. 137. ADOPTION ASSISTANCE PROGRAMS.
``(a) In General.--Gross income of an employee does not
include amounts paid or expenses incurred by the employer for
qualified adoption expenses in connection with the adoption
of a child by an employee if such amounts are furnished
pursuant to an adoption assistance program.
``(b) Limitations.--
``(1) Dollar limitation.--The aggregate amount excludable
from gross income under subsection (a) for all taxable years
with respect to the adoption of a child by the taxpayer shall
not exceed $5,000.
``(2) Income limitation.--The amount excludable from gross
income 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 so excludable (determined without
regard to this paragraph but with regard to paragraph (1))
as--
``(A) the amount (if any) by which the taxpayer's adjusted
gross income exceeds $75,000, bears to
``(B) $40,000.
``(3) Determination of adjusted gross income.--For purposes
of paragraph (2), adjusted gross income shall be determined--
``(A) without regard to this section and sections 911, 931,
and 933, and
``(B) after the application of sections 86, 135, 219, and
469.
``(c) Adoption Assistance Program.--For purposes of this
section, an adoption assistance program is a plan of an
employer--
``(1) under which the employer provides employees with
adoption assistance, and
``(2) which meets requirements similar to the requirements
of paragraphs (2), (3), and (5) of section 127(b).
An adoption reimbursement program operated under section 1052
of title 10, United States Code (relating to armed forces) or
section 514 of title 14, United States Code (relating to
members of the Coast Guard) shall be treated as an adoption
assistance program for purposes of this section.
``(d) Qualified Adoption Expenses.--For purposes of this
section, the term `qualified adoption expenses' has the
meaning given such term by section 23(d).
``(e) Certain Rules To Apply.--Rules similar to the rules
of subsections (e) and (g) of section 23 shall apply for
purposes of this section.''.
(c) Conforming Amendments.--
(1) Sections 86(b)(2)(A) and 135(c)(4)(A) of such Code are
each amended by inserting ``137,'' before ``911''.
(2) Clause (i) of section 219(g)(3)(A) of such Code is
amended by inserting ``, 137,'' before ``and 911''.
(3) Clause (ii) of section 469(i)(3)(E) of such Code is
amended to read as follows:
``(ii) the amounts excludable from gross income under
sections 135 and 137,''.
(4) Subsection (a) of section 1016 of such Code is amended
by striking ``and'' at the end of paragraph (24), by striking
the period at the end of paragraph (25) and inserting ``,
and'', and by adding at the end the following new paragraph:
``(26) to the extent provided in sections 23(g) and
137(e).''
(5) The table of sections for subpart A of part IV of
subchapter A of chapter 1 of such Code is amended by
inserting after the item relating to section 22 the following
new item:
``Sec. 23. Adoption expenses.''.
(6) The table of sections for part III of subchapter B of
chapter 1 of such Code is amended by striking the item
relating to section 137 and inserting the following:
``Sec. 137. Adoption assistance programs.
``Sec. 138. Cross reference to other Acts.''.
(d) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
1996.
TITLE II--INTERETHNIC ADOPTION
SEC. 201. REMOVAL OF BARRIERS TO INTERETHNIC ADOPTION.
(a) State Plan Requirements.--Section 471(a) of the Social
Security Act (42 U.S.C 671(a)) is amended--
(1) by striking ``and'' at the end of paragraph (16);
(2) by striking the period at the end of paragraph (17) and
inserting ``; and''; and
(3) by adding at the end the following:
``(18) not later than January 1, 1997, provides that
neither the State nor any other entity in the State that
receives funds from the Federal Government and is involved in
adoption or foster care placements may--
``(A) deny to any person the opportunity to become an
adoptive or a foster parent, on the basis of the race, color,
or national origin of the person, or of the child, involved;
or
``(B) delay or deny the placement of a child for adoption
or into foster care, on the basis of the race, color, or
national origin of the adoptive or foster parent, or the
child, involved.''.
(b) Enforcement.--Section 474 of such Act (42 U.S.C. 674)
is amended by adding at the end the following:
``(d)(1) If a State's program operated under this part is
found, as a result of a review conducted under section 1123,
to have violated section 471(a)(18) during a quarter with
respect to
[[Page H4777]]
any person, then, notwithstanding subsection (a) of this
section and any regulations promulgated under section
1123(b)(3), the Secretary shall reduce the amount otherwise
payable to the State under this part, for the quarter and for
each subsequent quarter before the 1st quarter for which the
State program is found, as a result of such a review, not to
have violated section 471(a)(18) with respect to any person,
by--
``(A) 2 percent of such otherwise payable amount, in the
case of the 1st such finding with respect to the State;
``(B) 5 percent of such otherwise payable amount, in the
case of the 2nd such finding with respect to the State; or
``(C) 10 percent of such otherwise payable amount, in the
case of the 3rd or subsequent such finding with respect to
the State.
``(2) Any other entity which is in a State that receives
funds under this part and which violates section 471(a)(18)
during a quarter with respect to any person shall remit to
the Secretary all funds that were paid by the State to the
entity during the quarter from such funds.
``(3)(A) Any individual who is aggrieved by a violation of
section 471(a)(18) by a State or other entity may bring an
action seeking relief from the State or other entity in any
United States district court.
``(B) An action under this paragraph may not be brought
more than 2 years after the date the alleged violation
occurred.
``(4) This subsection shall not be construed to affect the
application of the Indian Child Welfare Act of 1978.''.
(c) Civil Rights.--
(1) Prohibited conduct.--A person or government that is
involved in adoption or foster care placements may not--
(A) deny to any individual the opportunity to become an
adoptive or a foster parent, on the basis of the race, color,
or national origin of the individual, or of the child,
involved; or
(B) delay or deny the placement of a child for adoption or
into foster care, on the basis of the race, color, or
national origin of the adoptive or foster parent, or the
child, involved.
(2) Enforcement.--Noncompliance with paragraph (1) is
deemed a violation of title VI of the Civil Rights Act of
1964.
(3) No effect on the indian child welfare act of 1978.--
This subsection shall not be construed to affect the
application of the Indian Child Welfare Act of 1978.
(d) Conforming Repeal.--Section 553 of the Howard M.
Metzenbaum Multiethnic Placement Act of 1994 (42 U.S.C.
5115a) is repealed.
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 CUSTODY PROCEEDINGS INVOLVING A
CHILD WHOSE PARENTS DO NOT MAINTAIN AFFILIATION
WITH THEIR INDIAN TRIBE.
Title I of the Indian Child Welfare Act of 1978 (25 U.S.C.
1911 et seq.) is amended by adding at the end the following:
``Sec. 114. (a) This title does not apply to any child
custody proceeding involving a child who does not reside or
is not domiciled within a reservation unless--
``(1) at least one of the child's biological parents is of
Indian descent; and
``(2) at least one of the child's biological parents
maintains significant social, cultural, or political
affiliation with the Indian tribe of which either parent is a
member.
``(b) The factual determination as to whether a biological
parent maintains significant social, cultural, or political
affiliation with the Indian tribe of which either parent is a
member shall be based on such affiliation as of the time of
the child custody proceeding.
``(c) The determination that this title does not apply
pursuant to subsection (a) is final, and, thereafter, this
title shall not be the basis for determining jurisdiction
over any child custody proceeding involving the child.''.
SEC. 302. MEMBERSHIP AND CHILD CUSTODY PROCEEDINGS.
Title I of the Indian Child Welfare Act of 1978 (25 U.S.C.
1911 et seq.), as amended by section 301 of this title, is
further amended by adding at the end the following:
``Sec. 115. (a) A person who attains the age of 18 years
before becoming a member of an Indian tribe may become a
member of an Indian tribe only upon the person's written
consent.
``(b) For the purposes of any child custody proceeding
involving an Indian child, membership in an Indian tribe
shall be effective from the actual date of admission to
membership in the Indian tribe and shall not be given
retroactive effect.''.
SEC. 303. EFFECTIVE DATE.
The amendments made by this title shall take effect on the
date of the enactment of this Act and shall apply with
respect to any child custody proceeding in which a final
decree has not been entered as of such date.
TITLE IV--REVENUE OFFSETS
SEC. 400. AMENDMENT OF 1986 CODE.
Except as otherwise expressly provided, whenever in this
title an amendment or repeal is expressed in terms of an
amendment to, or repeal of, a section or other provision, the
reference shall be considered to be made to a section or
other provision of the Internal Revenue Code of 1986.
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.
(a) In General.--Paragraph (1) of section 136(c) (defining
energy conservation measure) is amended by striking ``energy
demand--'' and all that follows and inserting ``energy demand
with respect to a dwelling unit.''
(b) Conforming Amendments.--
(1) Subsection (a) of section 136 is amended to read as
follows:
``(a) Exclusion.--Gross income shall not include the value
of any subsidy provided (directly or indirectly) by a public
utility to a customer for the purchase or installation of
any energy conservation measure.''
(2) Paragraph (2) of section 136(c) is amended--
(A) by striking subparagraph (A) and by redesignating
subparagraphs (B) and (C) as subparagraphs (A) and (B),
respectively, and
(B) by striking ``and special rules'' in the paragraph
heading.
(c) Effective Date.--The amendments made by this section
shall apply to amounts received after December 31, 1996,
unless received pursuant to a written binding contract in
effect on September 13, 1995, and at all times thereafter.
Subtitle B--Foreign Trust Tax Compliance
SEC. 411. IMPROVED INFORMATION REPORTING ON FOREIGN TRUSTS.
(a) In General.--Section 6048 (relating to returns as to
certain foreign trusts) is amended to read as follows:
``SEC. 6048. INFORMATION WITH RESPECT TO CERTAIN FOREIGN
TRUSTS.
``(a) Notice of Certain Events.--
``(1) General rule.--On or before the 90th day (or such
later day as the Secretary may prescribe) after any
reportable event, the responsible party shall provide written
notice of such event to the Secretary in accordance with
paragraph (2).
``(2) Contents of notice.--The notice required by paragraph
(1) shall contain such information as the Secretary may
prescribe, including--
``(A) the amount of money or other property (if any)
transferred to the trust in connection with the reportable
event, and
``(B) the identity of the trust and of each trustee and
beneficiary (or class of beneficiaries) of the trust.
``(3) Reportable event.--For purposes of this subsection--
``(A) In general.--The term `reportable event' means--
``(i) the creation of any foreign trust by a United States
person,
``(ii) the transfer of any money or property (directly or
indirectly) to a foreign trust by a United States person,
including a transfer by reason of death, and
``(iii) the death of a citizen or resident of the United
States if--
``(I) the decedent was treated as the owner of any portion
of a foreign trust under the rules of subpart E of part I of
subchapter J of chapter 1, or
``(II) any portion of a foreign trust was included in the
gross estate of the decedent.
``(B) Exceptions.--
``(i) Fair market value sales.--Subparagraph (A)(ii) shall
not apply to any transfer of property to a trust in exchange
for consideration of at least the fair market value of the
transferred property. For purposes of the preceding sentence,
consideration other than cash shall be taken into account at
its fair market value and the rules of section 679(a)(3)
shall apply.
``(ii) Deferred compensation and charitable trusts.--
Subparagraph (A) shall not apply with respect to a trust
which is--
``(I) described in section 402(b), 404(a)(4), or 404A, or
``(II) determined by the Secretary to be described in
section 501(c)(3).
``(4) Responsible party.--For purposes of this subsection,
the term `responsible party' means--
``(A) the grantor in the case of the creation of an inter
vivos trust,
``(B) the transferor in the case of a reportable event
described in paragraph (3)(A)(ii) other than a transfer by
reason of death, and
``(C) the executor of the decedent's estate in any other
case.
``(b) United States Grantor of Foreign Trust.--
``(1) In general.--If, at any time during any taxable year
of a United States person, such person is treated as the
owner of any portion of a foreign trust under the rules of
subpart E of part I of subchapter J of chapter 1, such person
shall be responsible to ensure that--
``(A) such trust makes a return for such year which sets
forth a full and complete accounting of all trust activities
and operations for the year, the name of the United States
agent for such trust, and such other information as the
Secretary may prescribe, and
``(B) such trust furnishes such information as the
Secretary may prescribe to each United States person (i) who
is treated as the owner of any portion of such trust or (ii)
who receives (directly or indirectly) any distribution from
the trust.
``(2) Trusts not having united states agent.--
``(A) In general.--If the rules of this paragraph apply to
any foreign trust, the determination of amounts required to
be taken into account with respect to such trust by a United
States person under the rules of subpart E of part I of
subchapter J of chapter 1 shall be determined by the
Secretary.
``(B) United states agent required.--The rules of this
paragraph shall apply to any foreign trust to which paragraph
(1) applies unless such trust agrees (in such manner, subject
to such conditions, and at such time as the Secretary shall
prescribe) to authorize a United States person to act as such
trust's limited agent solely for purposes of applying
sections 7602, 7603, and 7604 with respect to--
``(i) any request by the Secretary to examine records or
produce testimony related to the
[[Page H4778]]
proper treatment of amounts required to be taken into account
under the rules referred to in subparagraph (A), or
``(ii) any summons by the Secretary for such records or
testimony.
The appearance of persons or production of records by reason
of a United States person being such an agent shall not
subject such persons or records to legal process for any
purpose other than determining the correct treatment under
this title of the amounts required to be taken into account
under the rules referred to in subparagraph (A). A foreign
trust which appoints an agent described in this subparagraph
shall not be considered to have an office or a permanent
establishment in the United States, or to be engaged in a
trade or business in the United States, solely because of the
activities of such agent pursuant to this subsection.
``(C) Other rules to apply.--Rules similar to the rules of
paragraphs (2) and (4) of section 6038A(e) shall apply for
purposes of this paragraph.
``(c) Reporting by United States Beneficiaries of Foreign
Trusts.--
``(1) In general.--If any United States person receives
(directly or indirectly) during any taxable year of such
person any distribution from a foreign trust, such person
shall make a return with respect to such trust for such
year which includes--
``(A) the name of such trust,
``(B) the aggregate amount of the distributions so received
from such trust during such taxable year, and
``(C) such other information as the Secretary may
prescribe.
``(2) Inclusion in income if records not provided.--
``(A) In general.--If adequate records are not provided to
the Secretary to determine the proper treatment of any
distribution from a foreign trust, such distribution shall be
treated as an accumulation distribution includible in the
gross income of the distributee under chapter 1. To the
extent provided in regulations, the preceding sentence shall
not apply if the foreign trust elects to be subject to rules
similar to the rules of subsection (b)(2)(B).
``(B) Application of accumulation distribution rules.--For
purposes of applying section 668 in a case to which
subparagraph (A) applies, the applicable number of years for
purposes of section 668(a) shall be \1/2\ of the number of
years the trust has been in existence.
``(d) Special Rules.--
``(1) Determination of whether united states person makes
transfer or receives distribution.--For purposes of this
section, in determining whether a United States person makes
a transfer to, or receives a distribution from, a foreign
trust, the fact that a portion of such trust is treated as
owned by another person under the rules of subpart E of part
I of subchapter J of chapter 1 shall be disregarded.
``(2) Domestic trusts with foreign activities.--To the
extent provided in regulations, a trust which is a United
States person shall be treated as a foreign trust for
purposes of this section and section 6677 if such trust has
substantial activities, or holds substantial property,
outside the United States.
``(3) Time and manner of filing information.--Any notice or
return required under this section shall be made at such time
and in such manner as the Secretary shall prescribe.
``(4) Modification of return requirements.--The Secretary
is authorized to suspend or modify any requirement of this
section if the Secretary determines that the United States
has no significant tax interest in obtaining the required
information.''.
(b) Increased Penalties.--Section 6677 (relating to failure
to file information returns with respect to certain foreign
trusts) is amended to read as follows:
``SEC. 6677. FAILURE TO FILE INFORMATION WITH RESPECT TO
CERTAIN FOREIGN TRUSTS.
``(a) Civil Penalty.--In addition to any criminal penalty
provided by law, if any notice or return required to be filed
by section 6048--
``(1) is not filed on or before the time provided in such
section, or
``(2) does not include all the information required
pursuant to such section or includes incorrect information,
the person required to file such notice or return shall pay a
penalty equal to 35 percent of the gross reportable amount.
If any failure described in the preceding sentence continues
for more than 90 days after the day on which the Secretary
mails notice of such failure to the person required to pay
such penalty, such person shall pay a penalty (in addition to
the amount determined under the preceding sentence) of
$10,000 for each 30-day period (or fraction thereof) during
which such failure continues after the expiration of such 90-
day period. In no event shall the penalty under this
subsection with respect to any failure exceed the gross
reportable amount.
``(b) Special Rules for Returns Under Section 6048(b).--In
the case of a return required under section 6048(b)--
``(1) the United States person referred to in such section
shall be liable for the penalty imposed by subsection (a),
and
``(2) subsection (a) shall be applied by substituting `5
percent' for `35 percent'.
``(c) Gross Reportable Amount.--For purposes of subsection
(a), the term `gross reportable amount' means--
``(1) the gross value of the property involved in the event
(determined as of the date of the event) in the case of a
failure relating to section 6048(a),
``(2) the gross value of the portion of the trust's assets
at the close of the year treated as owned by the United
States person in the case of a failure relating to section
6048(b)(1), and
``(3) the gross amount of the distributions in the case of
a failure relating to section 6048(c).
``(d) Reasonable Cause Exception.--No penalty shall be
imposed by this section on any failure which is shown to be
due to reasonable cause and not due to willful neglect. The
fact that a foreign jurisdiction would impose a civil or
criminal penalty on the taxpayer (or any other person) for
disclosing the required information is not reasonable
cause.
``(e) Deficiency Procedures Not To Apply.--Subchapter B of
chapter 63 (relating to deficiency procedures for income,
estate, gift, and certain excise taxes) shall not apply in
respect of the assessment or collection of any penalty
imposed by subsection (a).''.
(c) Conforming Amendments.--
(1) Paragraph (2) of section 6724(d) is amended by striking
``or'' at the end of subparagraph (S), by striking the period
at the end of subparagraph (T) and inserting ``, or'', and by
inserting after subparagraph (T) the following new
subparagraph:
``(U) section 6048(b)(1)(B) (relating to foreign trust
reporting requirements).''.
(2) The table of sections for subpart B of part III of
subchapter A of chapter 61 is amended by striking the item
relating to section 6048 and inserting the following new
item:
``Sec. 6048. Information with respect to certain foreign trusts.''.
(3) The table of sections for part I of subchapter B of
chapter 68 is amended by striking the item relating to
section 6677 and inserting the following new item:
``Sec. 6677. Failure to file information with respect to certain
foreign trusts.''.
(d) Effective Dates.--
(1) Reportable events.--To the extent related to subsection
(a) of section 6048 of the Internal Revenue Code of 1986, as
amended by this section, the amendments made by this section
shall apply to reportable events (as defined in such section
6048) occurring after the date of the enactment of this Act.
(2) Grantor trust reporting.--To the extent related to
subsection (b) of such section 6048, the amendments made by
this section shall apply to taxable years of United States
persons beginning after December 31, 1995.
(3) Reporting by united states beneficiaries.--To the
extent related to subsection (c) of such section 6048, the
amendments made by this section shall apply to distributions
received after the date of the enactment of this Act.
SEC. 412. COMPARABLE PENALTIES FOR FAILURE TO FILE RETURN
RELATING TO TRANSFERS TO FOREIGN ENTITIES.
(a) In General.--Section 1494 is amended by adding at the
end the following new subsection:
``(c) Penalty.--In the case of any failure to file a return
required by the Secretary with respect to any transfer
described in section 1491, the person required to file such
return shall be liable for the penalties provided in section
6677 in the same manner as if such failure were a failure to
file a notice under section 6048(a).''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply to transfers after the date of the enactment of
this Act.
SEC. 413. MODIFICATIONS OF RULES RELATING TO FOREIGN TRUSTS
HAVING ONE OR MORE UNITED STATES BENEFICIARIES.
(a) Treatment of Trust Obligations, Etc.--
(1) Paragraph (2) of section 679(a) is amended by striking
subparagraph (B) and inserting the following:
``(B) Transfers at fair market value.--To any transfer of
property to a trust in exchange for consideration of at least
the fair market value of the transferred property. For
purposes of the preceding sentence, consideration other than
cash shall be taken into account at its fair market value.''.
(2) Subsection (a) of section 679 (relating to foreign
trusts having one or more United States beneficiaries) is
amended by adding at the end the following new paragraph:
``(3) Certain obligations not taken into account under fair
market value exception.--
``(A) In general.--In determining whether paragraph (2)(B)
applies to any transfer by a person described in clause (ii)
or (iii) of subparagraph (C), there shall not be taken into
account--
``(i) except as provided in regulations, any obligation of
a person described in subparagraph (C), and
``(ii) to the extent provided in regulations, any
obligation which is guaranteed by a person described in
subparagraph (C).
``(B) Treatment of principal payments on obligation.--
Principal payments by the trust on any obligation referred to
in subparagraph (A) shall be taken into account on and after
the date of the payment in determining the portion of the
trust attributable to the property transferred.
``(C) Persons described.--The persons described in this
subparagraph are--
``(i) the trust,
``(ii) any grantor or beneficiary of the trust, and
``(iii) any person who is related (within the meaning of
section 643(i)(2)(B)) to any grantor or beneficiary of the
trust.''.
(b) Exemption of Transfers to Charitable Trusts.--
Subsection (a) of section 679 is amended by striking
``section 404(a)(4) or 404A'' and inserting ``section
6048(a)(3)(B)(ii)''.
(c) Other Modifications.--Subsection (a) of section 679 is
amended by adding at the end the following new paragraphs:
``(4) Special rules applicable to foreign grantor who later
becomes a united states person.--
[[Page H4779]]
``(A) In general.--If a nonresident alien individual has a
residency starting date within 5 years after directly or
indirectly transferring property to a foreign trust, this
section and section 6048 shall be applied as if such
individual transferred to such trust on the residency
starting date an amount equal to the portion of such trust
attributable to the property transferred by such individual
to such trust in such transfer.
``(B) Treatment of undistributed income.--For purposes of
this section, undistributed net income for periods before
such individual's residency starting date shall be taken into
account in determining the portion of the trust which is
attributable to property transferred by such individual to
such trust but shall not otherwise be taken into account.
``(C) Residency starting date.--For purposes of this
paragraph, an individual's residency starting date is the
residency starting date determined under section
7701(b)(2)(A).
``(5) Outbound trust migrations.--If--
``(A) an individual who is a citizen or resident of the
United States transferred property to a trust which was not a
foreign trust, and
``(B) such trust becomes a foreign trust while such
individual is alive,
then this section and section 6048 shall be applied as if
such individual transferred to such trust on the date such
trust becomes a foreign trust an amount equal to the portion
of such trust attributable to the property previously
transferred by such individual to such trust. A rule similar
to the rule of paragraph (4)(B) shall apply for purposes of
this paragraph.''.
(d) Modifications Relating to Whether Trust Has United
States Beneficiaries.--Subsection (c) of section 679 is
amended by adding at the end the following new paragraph:
``(3) Certain united states beneficiaries disregarded.--A
beneficiary shall not be treated as a United States person in
applying this section with respect to any transfer of
property to foreign trust if such beneficiary first became a
United States person more than 5 years after the date of such
transfer.''.
(e) Technical Amendment.--Subparagraph (A) of section
679(c)(2) is amended to read as follows:
``(A) in the case of a foreign corporation, such
corporation is a controlled foreign corporation (as defined
in section 957(a)),''.
(f) Regulations.--Section 679 is amended by adding at the
end the following new subsection:
``(d) Regulations.--The Secretary shall prescribe such
regulations as may be necessary or appropriate to carry out
the purposes of this section.''.
(g) Effective Date.--The amendments made by this section
shall apply to transfers of property after February 6, 1995.
SEC. 414. FOREIGN PERSONS NOT TO BE TREATED AS OWNERS UNDER
GRANTOR TRUST RULES.
(a) General Rule.--
(1) Subsection (f) of section 672 (relating to special rule
where grantor is foreign person) is amended to read as
follows:
``(f) Subpart Not To Result in Foreign Ownership.--
``(1) In general.--Notwithstanding any other provision of
this subpart, this subpart shall apply only to the extent
such application results in an amount (if any) being
currently taken into account (directly or through 1 or more
entities) under this chapter in computing the income of a
citizen or resident of the United States or a domestic
corporation.
``(2) Exceptions.--
``(A) Certain revocable and irrevocable trusts.--Paragraph
(1) shall not apply to any portion of a trust if--
``(i) the power to revest absolutely in the grantor title
to the trust property to which such portion is attributable
is exercisable solely by the grantor without the approval or
consent of any other person or with the consent of a related
or subordinate party who is subservient to the grantor, or
``(ii) the only amounts distributable from such portion
(whether income or corpus) during the lifetime of the grantor
are amounts distributable to the grantor or the spouse of the
grantor.
``(B) Compensatory trusts.--Except as provided in
regulations, paragraph (1) shall not apply to any portion of
a trust distributions from which are taxable as compensation
for services rendered.
``(3) Special rules.--Except as otherwise provided in
regulations prescribed by the Secretary--
``(A) a controlled foreign corporation (as defined in
section 957) shall be treated as a domestic corporation for
purposes of paragraph (1), and
``(B) paragraph (1) shall not apply for purposes of
applying section 1296.
``(4) Recharacterization of purported gifts.--In the case
of any transfer directly or indirectly from a partnership or
foreign corporation which the transferee treats as a gift or
bequest, the Secretary may recharacterize such transfer in
such circumstances as the Secretary determines to be
appropriate to prevent the avoidance of the purposes of this
subsection.
``(5) Special rule where grantor is foreign person.--If--
``(A) but for this subsection, a foreign person would be
treated as the owner of any portion of a trust, and
``(B) such trust has a beneficiary who is a United States
person,
such beneficiary shall be treated as the grantor of such
portion to the extent such beneficiary or any member of such
beneficiary's family (within the meaning of section
267(c)(4)) has made (directly or indirectly) transfers of
property (other than in a sale for full and adequate
consideration) to such foreign person. For purposes of the
preceding sentence, any gift shall not be taken into account
to the extent such gift would be excluded from taxable gifts
under section 2503(b).
``(6) Regulations.--The Secretary shall prescribe such
regulations as may be necessary or appropriate to carry out
the purposes of this subsection, including regulations
providing that paragraph (1) shall not apply in appropriate
cases.''.
(2) The last sentence of subsection (c) of section 672 of
such Code is amended by inserting ``subsection (f) and''
before ``sections 674''.
(b) Credit for Certain Taxes.--
(1) Paragraph (2) of section 665(d) is amended by adding at
the end the following new sentence: ``Under rules or
regulations prescribed by the Secretary, in the case of any
foreign trust of which the settlor or another person would be
treated as owner of any portion of the trust under subpart E
but for section 672(f), the term `taxes imposed on the trust'
includes the allocable amount of any income, war profits, and
excess profits taxes imposed by any foreign country or
possession of the United States on the settlor or such other
person in respect of trust income.''.
(2) Paragraph (5) of section 901(b) is amended by adding at
the end the following new sentence: ``Under rules or
regulations prescribed by the Secretary, in the case of any
foreign trust of which the settlor or another person would be
treated as owner of any portion of the trust under subpart E
but for section 672(f), the allocable amount of any income,
war profits, and excess profits taxes imposed by any foreign
country or possession of the United States on the settlor or
such other person in respect of trust income.''.
(c) Distributions by Certain Foreign Trusts Through
Nominees.--
(1) Section 643 is amended by adding at the end the
following new subsection:
``(h) Distributions by Certain Foreign Trusts Through
Nominees.--For purposes of this part, any amount paid to a
United States person which is derived directly or indirectly
from a foreign trust of which the payor is not the grantor
shall be deemed in the year of payment to have been directly
paid by the foreign trust to such United States person.''.
(2) Section 665 is amended by striking subsection (c).
(d) Effective Date.--
(1) In general.--Except as provided by paragraph (2), the
amendments made by this section shall take effect on the date
of the enactment of this Act.
(2) Exception for certain trusts.--The amendments made by
this section shall not apply to any trust--
(A) which is treated as owned by the grantor under section
676 or 677 (other than subsection (a)(3) thereof) of the
Internal Revenue Code of 1986, and
(B) which is in existence on September 19, 1995.
The preceding sentence shall not apply to the portion of any
such trust attributable to any transfer to such trust after
September 19, 1995.
(e) Transitional Rule.--If--
(1) by reason of the amendments made by this section, any
person other than a United States person ceases to be treated
as the owner of a portion of a domestic trust, and
(2) before January 1, 1997, such trust becomes a foreign
trust, or the assets of such trust are transferred to a
foreign trust,
no tax shall be imposed by section 1491 of the Internal
Revenue Code of 1986 by reason of such trust becoming a
foreign trust or the assets of such trust being transferred
to a foreign trust.
SEC. 415. INFORMATION REPORTING REGARDING FOREIGN GIFTS.
(a) In General.--Subpart A of part III of subchapter A of
chapter 61 is amended by inserting after section 6039E the
following new section:
``SEC. 6039F. NOTICE OF LARGE GIFTS RECEIVED FROM FOREIGN
PERSONS.
``(a) In General.--If the value of the aggregate foreign
gifts received by a United States person (other than an
organization described in section 501(c) and exempt from tax
under section 501(a)) during any taxable year exceeds
$10,000, such United States person shall furnish (at such
time and in such manner as the Secretary shall prescribe)
such information as the Secretary may prescribe regarding
each foreign gift received during such year.
``(b) Foreign Gift.--For purposes of this section, the term
`foreign gift' means any amount received from a person other
than a United States person which the recipient treats as a
gift or bequest. Such term shall not include any qualified
transfer (within the meaning of section 2503(e)(2)) or any
distribution properly disclosed in a return under section
6048(c).
``(c) Penalty for Failure To File Information.--
``(1) In general.--If a United States person fails to
furnish the information required by subsection (a) with
respect to any foreign gift within the time prescribed
therefor (including extensions)--
``(A) the tax consequences of the receipt of such gift
shall be determined by the Secretary, and
``(B) such United States person shall pay (upon notice and
demand by the Secretary and in the same manner as tax) an
amount equal to 5 percent of the amount of such foreign gift
for each month for which the failure continues (not to exceed
25 percent of such amount in the aggregate).
``(2) Reasonable cause exception.--Paragraph (1) shall not
apply to any failure to report a foreign gift if the United
States person shows that the failure is due to reasonable
cause and not due to willful neglect.
``(d) Cost-of-Living Adjustment.--In the case of any
taxable year beginning after December 31, 1996, the $10,000
amount under subsection (a) shall be increased by an amount
[[Page H4780]]
equal to the product of such amount and the cost-of-living
adjustment for such taxable year under section 1(f)(3),
except that subparagraph (B) thereof shall be applied by
substituting `1995' for `1992'.
``(e) Regulations.--The Secretary shall prescribe such
regulations as may be necessary or appropriate to carry out
the purposes of this section.''.
(b) Clerical Amendment.--The table of sections for such
subpart is amended by inserting after the item relating to
section 6039E the following new item:
``Sec. 6039F. Notice of large gifts received from foreign persons.''.
(c) Effective Date.--The amendments made by this section
shall apply to amounts received after the date of the
enactment of this Act in taxable years ending after such
date.
SEC. 416. MODIFICATION OF RULES RELATING TO FOREIGN TRUSTS
WHICH ARE NOT GRANTOR TRUSTS.
(a) Modification of Interest Charge on Accumulation
Distributions.--Subsection (a) of section 668 (relating to
interest charge on accumulation distributions from foreign
trusts) is amended to read as follows:
``(a) General Rule.--For purposes of the tax determined
under section 667(a)--
``(1) Interest determined using underpayment rates.--The
interest charge determined under this section with respect to
any distribution is the amount of interest which would be
determined on the partial tax computed under section 667(b)
for the period described in paragraph (2) using the rates and
the method under section 6621 applicable to underpayments of
tax.
``(2) Period.--For purposes of paragraph (1), the period
described in this paragraph is the period which begins on the
date which is the applicable number of years before the date
of the distribution and which ends on the date of the
distribution.
``(3) Applicable number of years.--For purposes of
paragraph (2)--
``(A) In general.--The applicable number of years with
respect to a distribution is the number determined by
dividing--
``(i) the sum of the products described in subparagraph (B)
with respect to each undistributed income year, by
``(ii) the aggregate undistributed net income.
The quotient determined under the preceding sentence shall be
rounded under procedures prescribed by the Secretary.
``(B) Product described.--For purposes of subparagraph (A),
the product described in this subparagraph with respect to
any undistributed income year is the product of--
``(i) the undistributed net income for such year, and
``(ii) the sum of the number of taxable years between such
year and the taxable year of the distribution (counting in
each case the undistributed income year but not counting the
taxable year of the distribution).
``(4) Undistributed income year.--For purposes of this
subsection, the term `undistributed income year' means any
prior taxable year of the trust for which there is
undistributed net income, other than a taxable year during
all of which the beneficiary receiving the distribution was
not a citizen or resident of the United States.
``(5) Determination of undistributed net income.--
Notwithstanding section 666, for purposes of this subsection,
an accumulation distribution from the trust shall be treated
as reducing proportionately the undistributed net income for
undistributed income years.
``(6) Periods before 1996.--Interest for the portion of the
period described in paragraph (2) which occurs before January
1, 1996, shall be determined--
``(A) by using an interest rate of 6 percent, and
``(B) without compounding until January 1, 1996.''.
(b) Abusive Transactions.--Section 643(a) is amended by
inserting after paragraph (6) the following new paragraph:
``(7) Abusive transactions.--The Secretary shall prescribe
such regulations as may be necessary or appropriate to carry
out the purposes of this part, including regulations to
prevent avoidance of such purposes.''.
(c) Treatment of Loans From Trusts.--
(1) In general.--Section 643 (relating to definitions
applicable to subparts A, B, C, and D) is amended by adding
at the end the following new subsection:
``(i) Loans From Foreign Trusts.--For purposes of subparts
B, C, and D--
``(1) General rule.--Except as provided in regulations, if
a foreign trust makes a loan of cash or marketable securities
directly or indirectly to--
``(A) any grantor or beneficiary of such trust who is a
United States person, or
``(B) any United States person not described in
subparagraph (A) who is related to such grantor or
beneficiary,
the amount of such loan shall be treated as a distribution by
such trust to such grantor or beneficiary (as the case may
be).
``(2) Definitions and special rules.--For purposes of this
subsection--
``(A) Cash.--The term `cash' includes foreign currencies
and cash equivalents.
``(B) Related person.--
``(i) In general.--A person is related to another person if
the relationship between such persons would result in a
disallowance of losses under section 267 or 707(b). In
applying section 267 for purposes of the preceding sentence,
section 267(c)(4) shall be applied as if the family of an
individual includes the spouses of the members of the family.
``(ii) Allocation.--If any person described in paragraph
(1)(B) is related to more than one person, the grantor or
beneficiary to whom the treatment under this subsection
applies shall be determined under regulations prescribed by
the Secretary.
``(C) Exclusion of tax-exempts.--The term `United States
person' does not include any entity exempt from tax under
this chapter.
``(D) Trust not treated as simple trust.--Any trust which
is treated under this subsection as making a distribution
shall be treated as not described in section 651.
``(3) Subsequent transactions regarding loan principal.--If
any loan is taken into account under paragraph (1), any
subsequent transaction between the trust and the original
borrower regarding the principal of the loan (by way of
complete or partial repayment, satisfaction, cancellation,
discharge, or otherwise) shall be disregarded for purposes of
this title.''.
(2) Technical amendment.--Paragraph (8) of section 7872(f)
is amended by inserting ``, 643(i),'' before ``or 1274'' each
place it appears.
(d) Effective Dates.--
(1) Interest charge.--The amendment made by subsection (a)
shall apply to distributions after the date of the enactment
of this Act.
(2) Abusive transactions.--The amendment made by subsection
(b) shall take effect on the date of the enactment of this
Act.
(3) Loans from trusts.--The amendment made by subsection
(c) shall apply to loans of cash or marketable securities
made after September 19, 1995.
SEC. 417. RESIDENCE OF TRUSTS, ETC.
(a) Treatment as United States Person.--
(1) In general.--Paragraph (30) of section 7701(a) is
amended by striking ``and'' at the end of subparagraph (C)
and by striking subparagraph (D) and by inserting the
following new subparagraphs:
``(D) any estate (other than a foreign estate, within the
meaning of paragraph (31)), and
``(E) any trust if--
``(i) a court within the United States is able to exercise
primary supervision over the administration of the trust, and
``(ii) one or more United States fiduciaries have the
authority to control all substantial decisions of the
trust.''.
(2) Conforming amendment.--Paragraph (31) of section
7701(a) is amended to read as follows:
``(31) Foreign estate or trust.--
``(A) Foreign estate.--The term `foreign estate' means an
estate the income of which, from sources without the United
States which is not effectively connected with the conduct of
a trade or business within the United States, is not
includible in gross income under subtitle A.
``(B) Foreign trust.--The term `foreign trust' means any
trust other than a trust described in subparagraph (E) of
paragraph (30).''.
(3) Effective date.--The amendments made by this subsection
shall apply--
(A) to taxable years beginning after December 31, 1996, or
(B) at the election of the trustee of a trust, to taxable
years ending after the date of the enactment of this Act.
Such an election, once made, shall be irrevocable.
(b) Domestic Trusts Which Become Foreign Trusts.--
(1) In general.--Section 1491 (relating to imposition of
tax on transfers to avoid income tax) is amended by adding at
the end the following new flush sentence:
``If a trust which is not a foreign trust becomes a foreign
trust, such trust shall be treated for purposes of this
section as having transferred, immediately before becoming a
foreign trust, all of its assets to a foreign trust.''.
(2) Effective date.--The amendment made by this subsection
shall take effect on the date of the enactment of this Act.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Texas [Mr. Archer] and the gentlewoman from Connecticut [Mrs. Kennelly]
each will control 30 minutes.
The Chair recognizes the gentleman from Texas [Mr. Archer].
general leave
Mr. ARCHER. Madam Speaker, I ask unanimous consent that all Members
may have 5 legislative days within which to revise and extend their
remarks and include extraneous material on H.R. 3286.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Texas?
There was no objection.
Mr. ARCHER. Madam Speaker, I yield myself such time as I may consume.
Madam Speaker, today we are here to consider legislation that will
help thousands of children who are waiting to be adopted.
In America today, there is no reason why any child should be denied a
loving family. Unfortunately, there are almost 500,000 children
languishing in foster care. There is little hope for many of these
children when fewer than 1 in 10 will be available for adoption this
year.
There are many parents who want to adopt but can't, because they
either don't have the money to pay the adoption fees, or because a
Federal regulation says they will not be good parents because their
skin color is different from the child they want to adopt.
It's simply not right to deny a child the opportunity to grow up in a
loving home because the child parents are not wealthy or of a different
race.
[[Page H4781]]
For these reasons, I encourage my colleagues to support the Adoption
Promotion and Stability Act of 1996. This legislation will help not
only adopting parents economically with the $5,000 tax credit, but will
also put an end to the practice of delaying adoption, often for years,
until States can find racially matched parents for children waiting to
be adopted.
The committee provision on interethnic adoption is an excellent
complement to the tax credit in promoting adoption. Recent evidence
shows that more than 40 States have laws, regulations, or practices
that attempt to match adoptive children with families of the same race.
There are two obvious problems with this practice. First, it
discriminates against children. During this floor debate, we will show
that black children wait for adoptive placements for at least twice as
long as white children. Consider the statistical situation faced by
black children today: More than two-thirds of the children waiting to
be adopted are black but less than one-third of the families waiting to
be adopted are black but less than one-third of the families waiting to
adopt are black. Given these mathematical facts, it is certain that if
our society demands that children be matched by race with adoptive
parents, black children will continue to languish in foster care. Many
of them will never be adopted. This is truly an American tragedy.
The second problem with current practice is that it discriminates
against parents whose race differs from the child they want to adopt
because they may have to wait longer than other parents or may even by
denied an adoption. This discrimination is especially terrible when the
parent has served for a year or more as the child's foster parent. The
committee has been informed of many cases, including a widely known
case in my own State of Texas, in which foster parents who had formed a
loving bond with a child of another race were denied the opportunity to
adopt the child.
I can think of no better way to sum up the justification for our
policy on interracial adoption than by quoting Jessie Jackson. When
asked recently on television by someone arguing that black children
should be adopted only by black parents, Mr. Jackson simply asked his
debating opponent: What color is love?
Kids need love--the kind of love that can be provided only in a
stable family setting. All other considerations must give way to the
paramount goal of our policy--every child must live in a loving family.
Let's make adoption easier and help find loving homes for hundreds of
thousands of children in need.
I can't conclude without a reminder that the $5,000 adoption tax
credit is part of the Contract With America. Republicans remain
committed to fulfilling the promises we made to the American people,
one important step at a time, and I'm pleased we are being joined by
many of our Democrat colleagues.
Madam Speaker, there are many Members who have worked hard to bring
this important legislation to the floor. I would particularly like to
commend Representative Susan Molinari, the leader of our Adoption Task
Force, for all her good work on this bill, and Chairman Jim Bunning,
who championed this cause in the Ways and Means Committee.
With Mother's Day just around the corner, I can think of nothing
better than to allow thousands of women to become mothers for the first
time by adopting needy children. Children, families, and our country
will benefit greatly. Let's pass this important bill and make that
promise a reality.
Madam Speaker, finally, I wish to point out a typographical error
that occurred in the committee report--House Report 104-542, part 2--on
this legislation. I wish to clarify that on page 21, in the eighth line
after the heading ``Explanation of Provision,'' the phrase ``or
otherwise discriminate'' should not have appeared in the report, since
this language was stricken from the text of the bill.
Madam Speaker, I reserve the balance of my time.
Mrs. KENNELLY. Madam Speaker, I yield myself such time as I may
consume.
Madam Speaker, I am delighted, as so many have said before me, to
support this $5,000 tax credit for families adopting children. Adoption
costs can be really a great burden to a family who wants so much to
have that baby or that child, and this legislation before us tonight
makes that burden lighter. As has been said, this is a very good bill,
one we are all very, very happy to support.
I would like to take this opportunity, Madam Speaker, to read some
excerpts from the letter from our President of the United States, Bill
Clinton. The President says about this bill that we are debating
tonight:
I strongly support the adoption tax credit in this bill. It
will alleviate the significant barrier to adoptions and allow
middle class families for whom adoption may be prohibitively
expensive to adopt children to love and nurture. It will
encourage adoption for children with special needs. It will
put parents seeking to build a family through adoption on a
more equal footing with other families. I believe that the
bill is consistent with the administration's policy and my
longstanding goal to end the historical bias against
interracial adoptions which too often has meant interminable
waits for children to be matched with parents of the same
race.
I just wanted to mention, Madam Speaker, that the President has been
consistently a supporter of this legislation and made very clear how
pleased he is about bringing it to the floor this evening.
I want to say though, Madam Speaker, that we have to admit that
usually a healthy baby will be adopted, and this bill helps those
adoptions as far as adoption expenses go. But one of the other things
that this bill before us, this legislation, has done is to highlight
the fact that there are also at the same time 72 percent of those
children who are up for adoption, waiting for adoption in foster care,
and many of these children have emotional and physical problems, or
they have siblings and they all want to stay together and move to a new
family together, or they are older children.
So what happens is this bill does not help them, because many of
these children, if in fact adopted, the State will conduct that
adoption and they will not have the opportunity for a credit as we are
proposing tonight.
What I am saying, Madam Speaker, is, as the gentlewoman from Ohio
[Ms. Pryce] said this evening so often, this is a happy bill, this is a
good bill, marvelous legislation, a bill that we can all come together
and support. Having done that and congratulated ourselves for having
brought forth this very, very good piece of legislation, I think we
should also take this opportunity to commit ourselves to looking at
those children who are waiting for adoption in foster homes, who are
looking for families desperately to take them in and to love them, and
that we all, as we bring this bill forward, commit ourselves to
remembering those children, not just end tonight by passing this
legislation, but to continue to work toward making it possible for
these children to move to adoptive homes or in fact, as one of the
speakers said tonight, make it easier and more possible for the loving
foster care family to in fact adopt the children themselves.
Madam Speaker, I reserve the balance of my time.
Mr. ARCHER. Madam speaker, I yield myself such time as I may consume
in order to enter into a colloquy with the gentleman from Maryland [Mr.
Cardin].
Mr. CARDIN. Madam Speaker, will the gentleman yield?
Mr. ARCHER. I yield to the gentleman from Maryland.
Mr. CARDIN. Madam Speaker, I appreciate the chairman yielding.
Madam Speaker, I rise in support of the $5,000 adoption credit. I
would also like to engage the chairman in a colloquy about the
definition of qualified adoption expenses under this legislation.
The legislation provides that qualified adoption expenses are
reasonable and necessary adoption fees, court costs, attorneys fees,
and other expenses that are directly related to the legal adoption of
an eligible child. Is it your understanding that the legislation that
qualified adoption expenses includes any reasonable and necessary
expenses required by the State where the expenses occur as a condition
of the adoption?
Mr. ARCHER. Yes, the gentleman is correct. The credit would be
available
[[Page H4782]]
for all reasonable and necessary expenses required by a State as a
condition of the adoption. By way of example, expenses could include
the cost of construction, renovations, alterations, or purchases
specifically required by the State to meet the needs of a child as a
condition of the adoption.
Mr. CARDIN. I thank the gentleman.
Mr. ARCHER. Madam Speaker, I ask unanimous consent that I may yield
the remainder of my time to the gentleman from Kentucky [Mr. Bunning]
the chairman of the Subcommittee on Social Security, and that he be
allowed to allocate that time.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Texas?
There was no objection.
Mr. BUNNING of Kentucky. Madam Speaker, I yield myself such time as I
may consume.
Madam Speaker, I rise in heartfelt support for this bill. Passing it
today is the least we can do to help save some of the half million kids
who are stranded in foster care.
When it comes to matters involving family, I usually hold fast to the
position that Government should butt out and mind its own business.
But, making adoption simpler and more affordable is one instance in
which the Government can, and should, step in to make a difference.
I was pleased to see last weekend that the President endorsed our
bill. Even though he twice vetoed transracial adoption reform as part
of our welfare bill, and even though he previously sank the adoption
tax credit when he vetoed the balanced budget bill, we welcome him to
the fight.
Better late than never.
Last year when Congress was working on welfare reform, the President
called me about transracial adoption and offered to help any way he
could. I sincerely appreciated that, but, he could have really helped
by not vetoing welfare reform.
By signing this bill, the President can still make a difference for
kids who are stranded in foster care.
Better late then never.
Back in 1987 I know that Arkansas enacted a law that required race to
be used in making adoptions. Section 9-9-102 of the Arkansas Code says
that in placing a child of minority heritage, if the child cannot be
placed with relatives, the court shall give preference to ``a family
with the same racial or ethnic heritage as the child * * *.''
Now which Bill Clinton should we believe?
So I'm more than a little bit skeptical about the President's
endorsement of our bill. But I have read his letter of support, and I
am glad to see that he has converted.
Better late than never.
Madam Speaker, I think that many Members are aware that two of my
daughters have adopted children of different races. I can personally
attest to obstacles that they faced before bringing these children into
our family.
These kids were lucky. They ran the gauntlet. Today they are not
languishing in foster care, and our family is more blessed because of
it.
For these two children, it was better late than never.
But, Madam Speaker, unless we pass this bill today, tens of thousands
of kids will not escape the twilight of foster care. They will continue
to suffer from discrimination, victims of race-matching.
Unless we pass this bill, their day will never come.
For them we won't even be able to say better late than never. It will
always just be never.
The color of a child's skin should not be an impediment to adoption,
and it's wrong that this is used to deny children the embrace of a
loving home.
I urgently ask my colleagues for their vote on H.R. 3286.
Madam Speaker, I include for the Record chapter 9 of the Arkansas
Code of 1987:
9-9-102. Consideration of Child's Minority Race or Ethnic Heritage--
Religious Preference
(a) In all custodial placements by the Department of Human
Services in foster care or investigations conducted pursuant
to court order under Sec. 9-9-212, due consideration shall be
given to the child's minority race or minority ethnic
heritage.
(b) In the placement or adoption of a child of minority
racial or minority ethnic heritage, in reviewing the
placement, the court shall consider preference, and in
determining appropriate placement, the court shall give
preference, in the absence of good cause to the contrary, to:
(1) A relative or relatives of the child, or, if that would
be detrimental to the child or a relative is not available;
(2) A family with the same racial or ethnic heritage as the
child, or, if that is not feasible;
(3) A family of different racial or ethnic heritage from
the child, which family is knowledgeable and appreciative of
the child's racial or ethnic heritage.
(c) If the child's genetic parent or parents express a
preference for placing the child in a foster home or an
adoptive home of the same or a similar religious background
to that of the genetic parent or parents, in following the
preferences in subdivisions (b)(1) or (2) of this section,
the court shall place the child with a family that also meets
the genetic parent's religious preference. Only if no family
is available as described in subdivisions (b)(1) or (2) of
this section may the court give preference to a family
described in subdivision (b)(3) of this section that meets
the parent's religious preference.
{time} 2145
Madam Speaker, I reserve the balance of my time.
Mrs. KENNELLY. Madam Speaker, I yield such time as he may consume to
the gentleman from Maryland [Mr. Cardin].
Mr. CARDIN. Madam Speaker, the gentlewoman from Connecticut [Mrs.
Kennelly] has been one of the real champions in reforming our foster
care system and encouraging more adoptions.
Let me point out, I think people who have been watching this evening
will see that there is bipartisan cooperation tonight in moving
legislation that is very important to American families. This bill is
supported by both the Democrats and Republicans, and I wish we could do
that more on the floor of this House and get this type of working
relationship where we can produce legislation that is very important to
the American family.
This bill and the central part of this bill is to remove an
impediment to being adopted from many children who are in foster care,
and that impediment is a financial burden. It is very costly in our
system to adopt children. Many parents are not able to do that because
of the costs. So the central part of this bill is to remove that
financial burden, to reduce it significantly on the outset, to make it
possible for more children to be adopted.
Madam Speaker, I want to point out another feature of the bill, and
that is special needs adoptions which are much more difficult children
to place, that have disabilities, that are older, and it is more
difficult to place these children in permanent adoption circumstances.
This bill recognizes that and provides additional incentives for
special needs adoption.
So this legislation has been, I think, worked on in the right way in
our committee, in the Committee on Ways and Means, with input from many
different groups. It is an important bill, the central feature of which
I think will very much help to find more homes for children who are
currently in foster care. I urge my colleagues to support this
legislation.
Mr. BUNNING of Kentucky. Madam Speaker, I reserve the balance of my
time.
Mrs. KENNELLY. Madam Speaker, I yield myself such time as I may
consume.
Madam Speaker, I just want to set the record straight on something. I
began my remarks by mentioning that the President of the United States
had endorsed this bill, and it was mentioned that maybe he had come a
little late to the party. That is far from true.
I would like to make it known, and I think it is obviously already
part of the Record but I would like to say it tonight, that this
administration, Mr. Clinton's administration, has worked hard to
promote adoption in general and adoption of children with special needs
in particular.
First of all, when the President became President, he first
championed the Family and Medical Leave Act which enables parents to
take time off to adopt a child without losing their job or their health
insurance. We all, well, many of us strongly supported that.
The administration then supported the Multi-Ethnic Placement Act to
help increase the number of adoptions by prohibiting discriminations
based on ethnicity. We remain committed to that and enforcing the law
that is about to become law before us tonight.
[[Page H4783]]
I also would like to remind Members this evening that as part of our
1993 deficit reduction package, a provision was signed into law that
requires ERISA plans to provide the same health care coverage for
adopted children as for biological children of plan participants.
This administration has worked for Federal support for adoption of
children with special needs, and increased by 60 percent the number of
children with special needs who have been adopted with Federal
assistance.
So, Madam Speaker, I just really want to mention that the
administration, the Clinton administration, has been here from the
moment that Mr. Clinton became President of the United States.
I also want to take up one other issue, Madam Speaker, and that is my
concern about one of the revenue raisers in this legislation. This bill
would fully tax the subsidies provided by utility companies to
businesses taking steps to conserve energy.
I am familiar with the legislation that is being eliminated by this
bill because I happen to have been the author of it and worked on it
for some years, and I was astonished that during a time when we
are talking about the rising costs of energy, I do not think it makes
sense to eliminate incentives to promote energy conservation.
The President, in this letter that I have been referring to, did
mention that he was concerned about the same thing, and he suggested
that he would be more than willing to work with the conferees on this
bill as they eventually are appointed to see if another revenue raiser
could be found instead of this one. It was really very encouraging for
conservation.
Madam Speaker, I would like to end by saying that Democrats,
Republicans, anyone agrees that finding loving homes for needy children
is a goal that government should take every opportunity to pursue, and
in this regard, this bill does this tonight. I think everyone who has
been involved in this legislation is very pleased it is on the floor
tonight and that many more children will find loving homes.
Madam Speaker, I reserve the balance of my time.
Mr. BUNNING of Kentucky. Madam Speaker, I yield 3 minutes to the
gentleman from Alaska [Mr. Young].
(Mr. YOUNG of Alaska asked and was given permission to revise and
extend his remarks.)
Mr. YOUNG of Alaska. Madam Speaker, H.R. 3286 is intended to promote
family values, avoid prolonged unnecessary litigation in adoptions and
to get away from race-based tests in child placement decisions. I
support families, but title III of the bill is antiIndian family
legislation and fails to accomplish all three of these goals.
When the Resources Committee considered H.R. 3286, it voted on a
bipartisan basis to strike title III of the bill because it fails to
put an end to prolonged litigation over Indian child adoptions, will
create new impediments to protect abused and neglected Indian children,
and raises constitutional issues.
The Indian Child Welfare Act [ICWA] was enacted in 1978 to address a
long-standing problem unique to Indian children. At the time, at least
25 percent of all Indian children were either in foster homes, adoptive
homes, or boarding schools. Private and public welfare agencies were
removing Indian children from their homes at unprecedented rates. And
in many cases, where removal was warranted, agencies were ignoring
available homes in Native communities. Many of these Indian children
have grandparents, aunts and uncles who are willing and able to provide
good homes, but were denied placement because they didn't know the
children were in need of placement. As a result, Indian children were
being removed from their tribal communities in a process the Chairman
of the Select Committee on Indian Affairs called cultural genocide.
In my own region of interior Alaska, 80 percent of all Athabascan
Indian children removed from their homes were placed in nonrelative/
nonNative placements. Generally, the children came from remote villages
and were placed in strange urban settings. While that rate has dropped
to 40 percent today, still half of the children who were being removed
from their tribal communities had been placed in homes outside the
familiar environment of their villages and extended families.
It is difficult for me to explain the shock these children experience
when they are uprooted from their villages and families and thrust into
these unfamiliar surroundings. These children already suffer the
heartache of separation from their families, and the difficulties which
cause that breakup. ICWA remedies this situation and my message is that
ICWA works to keep families together, and that is something that is
worth saving.
I hear the concerns of the bill's sponsor over prolonged litigation
which ties up some adoptions. But ICWA is not the problem. Many of you
have heard of the Rost case. It is a tragic case. But it was caused by
an attorney who tried to cover up the natural parents' tribal
membership and purposefully avoided checking with the grandparents and
extended family of the children to see if the family was available to
adopt these children. The attorney in this case is now being sued for
malpractice by the natural parents, the adoptive parents, and the
Tribe. Unfortunately he inflicted untold sorrow on the Rosts, the
grandparents of the children, and, ultimately, on the children
themselves, as their fate remains in the courts.
Title III will actually compound the litigation problem. The proposed
amendments would exempt from ICWA protection Indian children whose
parents do not have social, cultural, and political ties to their
tribe. This will have two disastrous affects. First, State courts will
now have to hold hearings on whether an Indian child's parents have
social, cultural or political ties to their tribe. The only people to
benefit from this will be attorneys as they haggle over conflicting
facts, trying to apply a vague subjective test, while the children
languish in limbo.
Second, the amendments don't just apply to adoptions. ICWA is not the
Indian Child Adoption Act; it also applies to custody proceedings for
child abuse and neglect cases. Under ICWA, tribes often intervene in
these cases to protect abused and neglected Indian children.
For example, the tribes in my region of Alaska intervened in New York
to seek the return of an Indian child under ICWA. His mother was a
heroin addict who died of AIDS, and the child was later abused in
foster care. Today, that child is living with his extended family in a
Yukon River village, far from the ravages of social decay which took
his mother's life. In another case, an interior Yukon River village
intervened in North Carolina to rescue a young girl who was adopted out
to a family who sexually abused her, drove her into a mental hospital
and then tried to adopt her baby to repeat the cycle. In a third case,
another interior Athabascan tribe intervened in a Nevada case involving
a 7-month old baby, who was physically abused by its drug-addicted non-
Native mother. The baby languished in a Nevada receiving home with 20
other infants until the father's tribe was able to return the baby to
Alaska. today, the child is with tribally licensed nonNative foster
parents, who are specially trained to deal with drug-affected children,
and live near the extended family's village.
The rescue of these children could not occur without ICWA, and under
the proposed title III could not occur again, because in each case, the
parents of the children had severed their ties to the tribes. In each
case, however, the only hope that these children had for rescue was
their tribe.
I am sure that, if enacted, title III will ultimately make one or
more Indian children available for adoption. However, far more abused
and neglected Indian children will needlessly languish in foster care,
or worse yet, not receive needed child protection services while State
courts determine whether ICWA will apply and protect an innocent abused
or neglected child. This may be unintended harm, but it is harm all the
same.
Finally, title III raises constitutional problems which were
addressed in the original ICWA. In 1977, the Justice Department
commented that early drafts of ICWA employed race-based tests for
Indian status. Courts have generally held that distinctions based
solely on race are constitutionally impermissible. However, courts have
also held that distinctions based on tribal membership are based on the
sovereign political status of Indian tribes who
[[Page H4784]]
enjoy a government to government relationship with the Federal and
State governments. The distinctions within ICWA are constitutionally
permissible to the extent that they rely upon tribal membership or the
eligibility for tribal membership. Distinctions which rely solely upon
Indian descent and social and cultural ties to an Indian community are
constitutionally suspect as a racially based test. Title III employs
this latter category of tests, and may be constitutionally defective
and are inconsistent with the other portions of the bill.
Finally, title III of H.R. 3286 is one more example of the Federal
Government imposing its arbitrary will on our families without taking
any input or advise from the people most directly affected by the
decision. This bill is a response to lawyers and lobbyists from the
adoption industry which have caused the problem. I have heard from
countless tribes in the last 2 weeks, and not a single one has
supported this measure. And neither does the Attorney General of the
State of Nevada. We should listen to their message.
Therefore, I ask the Members of the House to support my amendment to
strike title III. Title III may be well intended, but it will hurt
children the rest of this bill is trying to help.
Mr. BUNNING of Kentucky. Madam Speaker, I yield 3 minutes to the
gentleman from New York [Mr. Solomon].
Mr. SOLOMON. Madam Speaker, if I could just say to the gentleman from
Alaska, my good friend, and he is one of my closest friends here
because he and I fight the battle of property rights time and time and
time again, and I just want to tell the gentleman how much I really
respect him, but I would just say to him that we do not want to disrupt
the 1978 legislation that the gentleman was so instrumental in passing.
It was a good piece of legislation.
The problem is that there have been problems that have arisen since
then. The gentleman has just spoken of several of them. All that we
want to do is try to improve the bill just a little bit to keep these
terrible situations from occurring.
I just have to say this, because my friend is so good as the chairman
of that committee, but the gentleman will always have a parochial
interest. We ran into that in the Committee on Agriculture where those
that serve on the Committee on Agriculture could never bring themselves
to bring about the end of subsidies for farmers in the agricultural
industry. The gentleman is in the same boat.
Madam Speaker, I understand that. But the truth of the matter is, if
we do not pass this legislation today, the status quo will remain for
another 2, 3, 4, 5 years, because the gentleman knows he will never be
able to get the legislation out of his committee. That is
understandable. If I were on the committee and had the same parochial
interests, I could not vote for it either.
So it is the question of doing it now. Let us improve it a little
bit. I have the deepest respect for the gentleman from Alaska. He is
one tremendous fighter, and he is out here fighting for his State and
for his interests.
Mr. YOUNG of Alaska. Madam Speaker, will the gentleman yield?
Mr. SOLOMON. I yield to the gentleman from Alaska.
Mr. YOUNG of Alaska. Madam Speaker, I understand that. The gentleman
should keep in mind, although I will admit there have been mistakes by
ICWA, this goes far beyond, as I have talked to the gentleman and the
other Members, it goes far beyond just ICWA. This goes into the concept
of the constitutionality of our responsibility to the American Indian
tribes, and it is our responsibility.
{time} 2200
When you transfer it to the State courts to make the decisions, then
I think, very frankly, you have gone too far. I suggested that to you.
I will argue that case tomorrow before the amendment because what you
have done is exceed ICWA. It gets into the whole concept of sovereignty
and the constitutional role of the Congress to the American Indian
tribes.
If you would strike that provision out of the bill, I would be much
more sympathetic to what you are trying to do.
Mr. SOLOMON. Reclaiming my time, Madam Speaker, let me say that once
the child has left the reservation, once they are then out into the
rest of the United States, that is the problem we are dealing with,
where a child has been given up by 2 parents, whether married or not,
to an adoptive family. Then they are off the reservation. Those are the
problems we need to deal with. It is not fair to years later take these
children away. That is what happens.
Mr. YOUNG of Alaska. Madam Speaker, if the gentleman will continue to
yield, I will agree with the gentleman. But that can be rectified by
taking away the authority of the State court making the decision who is
an Indian, who is not an Indian. That is the objection I have most of
all.
Mrs. KENNELLY. Madam Speaker, I reserve the balance of my time.
Mr. BUNNING of Kentucky. Madam Speaker, I yield 5 minutes to the
gentlewoman from Connecticut [Mrs. Johnson].
Mrs. JOHNSON of Connecticut. Madam Speaker, the gentleman from Texas,
Mr. Pete Geren, has raised a very important issue in regard to adoption
in recent weeks. While he is unable to be here tonight, he and I share
great concern about current IRS procedures which result in unnecessary
financial burdens on adopting families by making it difficult to claim
a dependent deduction for Federal income tax purposes for a newly
adopted child in a timely manner.
It is my understanding that the Internal Revenue Service has assured
us, Mr. Geren and I, that it is committed to working with the Committee
on Ways and Means and with my oversight subcommittee and with Mr. Geren
to develop as soon as possible an administrative solution that
minimizes these burdens on adoptive parents while balancing processing
and potential compliance considerations.
During our markup on H.R. 3286 in the Committee on Ways and Means,
Treasury Assistant Secretary Samuels said that both the IRS and
Treasury will work with our committee to develop appropriate
administrative solutions. I appreciate Mr. Geren's leadership on this
matter and the IRS's willingness to give this problem the immediate and
serious attention it deserves.
I would like to include for the Record a letter sent to the gentleman
from Texas, Mr. Pete Geren, by the Internal Revenue Service stating
their intent to solve this problem and any additional remarks he would
like to make thereto.
Department of the Treasury,
Internal Revenue Service,
Washington, DC, May 9, 1996.
Congressman Pete Geren,
House of Representatives,
Washington, DC.
Dear Congressman Geren: Jim Feroli of your office asked me
to address the issues you raised regarding the difficulties
that some adopting parents face in obtaining a Social
Security Number (``SSN'') for their adoptive child and thus
timely claiming the dependency exemption on their federal
income tax return. I understand that this situation occurs in
both foreign and domestic adoptions where the parents satisfy
all of the dependency support requirements of section 152 of
the Code but the adoption is not yet final.
Treasury and the IRS are currently looking into the SSN
difficulties faced by such adopting parents. As you may be
aware, Treasury Assistant Secretary Samuels told the House
Ways and Means Committee last week at the Adoption Credit
Bill mark-up that both IRS and Treasury will work with the
Committee to develop any appropriate administrative solutions
to minimize the burdens on adoptive parents while balancing
IRS returns processing and potential compliance
considerations. Nonetheless, I thought it would be helpful to
explain to you our current understanding of the SSN issue.
With regard to foreign adoptions, the Social Security
Administration (``SSA'') told me that they will issue an SSN
to adopting parents upon receipt of the Immigration and
Naturalization Service (``INS'') documentation required to
legally bring a foreign child into the United States. If the
adopting parents satisfy the support requirements for their
adoptive child but the child does not yet qualify for an SSN
(e.g., the parents do not have the appropriate INS
documentation), the adopting parents will soon be able to
obtain an Individual Taxpayer Identification Number
(``ITIN'') to claim the dependency exemption for the foreign
adoptive child. ITINs are a new taxpayer numbering system
that the IRS expects to implement by July 1996 for non-
resident aliens unable to obtain SSNs. Individuals eligible
to receive an SSN may not receive an ITIN.
With regard to domestic adoptions, the situation is more
complex because an adoptive child may have an SSN as a result
of actions taken by the child's birth parents, the state or
an adoption agency. We are currently trying to assess when
such SSNs are available
[[Page H4785]]
to the adopting parents and when they are not available
because of the privacy concerns of either the birth parents
or the adopting parents. We also understand from the SSA that
they will issue an SSN for a child to a state or an adoption
agency which is acting on behalf of the adopting parents, but
we have yet to confirm how often SSNs are issued in such
situations. We are thus currently assessing different
possibilities to resolve the potential problems adopting
parents have in the domestic context, and we will certainly
keep you informed of our progress.
I hope you find this information helpful. Please call me if
you have any questions.
Sincerely,
John M. Staples,
Assistant to the Commissioner.
Further, Madam Speaker, I would like to tell a small story. In the
fall of 1954, Bertha and Harry Holt, Oregon farmer, attended a
missionary conference in which they learned about the plight of Korea's
war orphans, especially those that had been fathered by American GI's.
The Holts, who already had 6 adolescent and young adult children, were
so moved by what they saw and heard that they decided to start sending
money to Korea to meet the needs of as many children as they could.
Over the months, they felt the tug of the plight of those children and
decided to adopt several biracial GI babies. In fact, they decided to
adopt not two or three but eight children.
At the time immigration law only allowed Americans to adopt two
children from overseas. So a special bill was needed. Though Senator
Neuberger introduced it promptly, no action was taken by the wee hours
of the closing night of that session.
All seemed lost, when Senate passage happened. And in the House
Representative Green had been promised the bill would be called up for
action as soon as it won Senate approval. But that Saturday morning,
the clerks could not find the bill and its accompanying report
anywhere.
Mrs. Green started digging. And with the help of Speaker Sam Rayburn,
they dug through the stacks of bills and reports that were flooding in
from the Senate and finally, late in the afternoon, she found the bill.
And before sundown it was passed and sent to the White House.
Several years later, haunted by the memory of the children who had
been left behind, the Holts established an orphanage in Korea. From
that humble beginning, the great tradition of intercountry adoption was
established. As important as the tax credit provided by this bill is
the provision related to transracial adoption, Madam Speaker, Harry
Holt would be horrified to learn that American children languish in
foster care in America today because they are of a different race than
waiting parents. Rev. Jesse Jackson asked the critical question about
transracial adoption, the question we should ask ours today: What is
the color of love? Indeed, Madam Speaker, what is the color of love?
I want to commend my colleague, the gentleman from Kentucky [Mr.
Bunning], the gentlewoman from New York [Ms. Molinari], and the
gentlewoman from Ohio [Ms. Pryce] for their leadership in fashioning
this legislation, and I urge my colleagues to support its passage.
Mrs. KENNELLY. Madam Speaker, I yield myself the balance of my time.
Madam Speaker, I rise today in support of providing a $5,000 tax
credit for families adopting children. The cost of adopting an infant
can exceed $15,000 when you add up the legal fees, court costs, and
charges assessed by adoption agencies. This is a heavy burden to bear
for middle-income Americans who want to start a family.
However, we should be honest and say that healthy babies will be
adopted with or without a tax credit. The children who are really
waiting to be adopted are those with special needs, usually meaning
they are older, or have emotional or physical problems, or represent a
minority. Special needs children represent 72 percent of foster care
children who are awaiting permanent adoption. Most of the benefits in
the bill before us would not go to families adopting these children
because their adoptions are conducted by the States, meaning there are
few costs for which to claim a tax deduction.
I also want to express my concern about one of the revenue raisers in
this legislation. The bill would fully tax the subsidies provided by
utilities companies to businesses taking steps to conserve energy.
During a time when we are all talking about the rising cost of energy,
I don't think it makes sense to eliminate incentives to promote energy
conservation. I understand the Clinton administration has offered to
work with Congress to find a different revenue offset to pay for the
bill, and I hope the majority will take the President up on that offer.
Madam Speaker, Democrats and Republicans agree that finding loving
homes for needy children is a goal the Government should take every
opportunity to pursue. In this regard, the bill before us is not
perfect, but we should not allow the perfect to become the enemy of the
good. I urge my colleagues to support this legislation to help promote
adoption.
Madam Speaker, I include for the Record the following
correspondence:
The White House,
Washington, May 6, 1996.
Dear Mr. Speaker: I am writing to express my strong support
for The Adoption Promotion and Stability Act of 1996. Today,
families seeking to adopt children face significant barriers,
including high adoption costs, complex regulations, and
outdated assumptions. I am committed to breaking down these
barriers and making adoption easier. Promoting adoption is
one of the most important things we can do to strengthen
American families and give more children what every child in
America deserves--loving parents and a healthy home. This
legislation will help children in need of adoptive homes to
be united with devoted parents.
This Administration worked hard to promote adoption in
general, and adoption of children with special needs in
particular. It championed the Family and Medical Leave Act
which enables parents to take time off to adopt a child
without losing their jobs or their health insurance. We
strongly supported the Multi-Ethnic Placement Act to help
increase the number of adoptions by prohibiting
discrimination based on race or ethnicity, and we remain
committed to enforcing that law vigorously. As part of our
1993 deficit reduction package, I signed into law a provision
that requires ERISA plans to provide the same health coverage
for adopted children as for biological children of plan
participants. We have worked to preserve Federal support for
adoption of children with special needs, and increased by 60
percent the number of children with special needs who have
been adopted with Federal adoption assistance.
But together we can and must do more. I strongly support
the adoption tax credit in this bill. It will alleviate a
significant barrier to adoption and allow middle class
families, for whom adoption may be prohibitively expensive,
to adopt children to love and nurture. It will encourage
adoption of children with special needs. It will put parents
seeking to build a family through adoption on a more equal
footing with other families.
I believe that the bill is consistent with the
Administration's policy and my longstanding goal to end the
historical bias against interracial adoptions, which too
often has meant interminable waits for children to be matched
with parents of the same race. The Administration also has
some concerns regarding some of the provisions used to offset
the cost of the bill and would like to work with the Congress
on these provisions. In addition, we need to ensure that
unnecessary provisions are not included in the legislation.
The Adoption Promotion and Stability Act is an important
first step toward meeting the challenge of removing barriers
to adoption. I look forward to working with you so that the
dreams of the waiting children in this country to have
permanent homes and loving families can become a reality.
Sincerely,
Bill Clinton.
Madam Speaker, I yield back the balance of my time.
Mr. BUNNING of Kentucky. Madam Speaker, I yield myself the balance of
my time, just to close, because we do not have anyone else to speak on
behalf of our side.
I would like to congratulate the gentlewoman from New York, Ms.
Molinari, the gentlewoman from Ohio, Ms. Pryce, and all others who have
participated in the Committee on Ways and Means, who participated in
the transracial adoption portion of this bill and congratulate them for
their very fine work in bringing this to the floor.
This is a happy day that we are doing this. This will advance
bipartisan support for adoption, for adoption tax credits, for adoption
of racial barriers to go down, in other words, that there be no racial
barriers in adoption. I am very pleased to support this legislation.
Madam Speaker, I yield back the balance of my time.
The SPEAKER pro tempore (Mrs. Morella). Pursuant to the order of the
House of today, further consideration of the bill will be postponed
until tomorrow.
[[Page H4786]]
SPECIAL ORDERS
The SPEAKER pro tempore. (Mr. Taylor of North Carolina). Under the
Speaker's announced policy of May 12, 1995, and under a previous order
of the House, the Following Members will be recognized for 5 minutes
each.
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