text: SECTION 1. REFUNDABLE CREDIT FOR CHILD DISABILITY EDUCATION AND 
                TRAINING EXPENSES.
  
      (a) In General.--Subpart C of part IV of subchapter A of chapter 1 
  of the Internal Revenue Code of 1986 (relating to refundable personal 
  credits) is amended by redesignating section 35 as section 36 and 
  inserting after section 34 the following new section:
  
  ``SEC. 35. CHILD DISABILITY EDUCATION AND TRAINING EXPENSES.
  
      ``(a) Allowance of Credit.--In the case of an individual, there 
  shall be allowed as a credit against the tax imposed by this subtitle 
  for the taxable year an amount equal to the amount paid or incurred by 
  the taxpayer during the taxable year for qualified child disability 
  expenses.
      ``(b) Limitations.--
              ``(1) Maximum dollar amount.--The amount allowed as a 
          credit under subsection (a) to the taxpayer for the taxable 
          year shall not exceed $3,000.
              ``(2) Limitation based on adjusted gross income.--
                      ``(A) In general.--The amount of the credit 
                  allowable under subsection (a) (after application of 
                  paragraph (1)) shall be reduced (but not below zero) by 
                  $500 for each $1,000 (or fraction thereof) by which the 
                  taxpayer's modified adjusted gross income exceeds 
                  $150,000.
                      ``(B) Modified adjusted gross income.--For purposes 
                  of subparagraph (A), the term `modified adjusted gross 
                  income' means adjusted gross income increased by any 
                  amount excluded from gross income under section 911, 
                  931, or 933.
                      ``(C) Cost-of-living adjustment.--
                              ``(i) In general.--In the case of any 
                          taxable year beginning in a calendar year after 
                          2002, the $150,000 amount under subparagraph 
                          (A) shall be increased by an amount equal to--
                                      ``(I) such dollar amount, 
                                  multiplied by
                                      ``(II) the cost-of-living 
                                  adjustment determined under section 
                                  1(f)(3) for the calendar year in which 
                                  the taxable year begins, determined by 
                                  substituting `calendar year 2001' for 
                                  `calendar year 1992' in subparagraph 
                                  (B) thereof.
                              ``(ii) Rounding rules.--If any amount after 
                          adjustment under clause (i) is not a multiple 
                          of $1,000, such amount shall be rounded to the 
                          next lower multiple of $1,000.
      ``(c) Qualified Child Disability Expenses.--For purposes of this 
  section--
              ``(1) In general.--The term `qualified child disability 
          expenses' means amounts paid for services and equipment related 
          to education and training of a qualified child of the taxpayer 
          in connection with a developmental disability of such child, 
          including--
                      ``(A) behavioral therapy,
                      ``(B) speech therapy,
                      ``(C) occupational therapy,
                      ``(D) physical therapy,
                      ``(E) auditory therapy,
                      ``(F) assistive communication technology, and
                      ``(G) such other services as the Secretary may, in 
                  consultation with the Secretary of Health and Human 
                  Services and the Secretary of Education, provide by 
                  regulation.
              ``(2) Developmental disability.--The term `developmental 
          disability' has the same meaning given the term in section 102 
          of the Developmental Disabilities Assistance and Bill of Rights 
          Act of 2000 (Public Law 106-402; 114 Stat. 1682).
              ``(3) Qualified child.--The term `qualified child' means 
          any individual if--
                      ``(A) the taxpayer is allowed a deduction under 
                  section 151 with respect to such individual for the 
                  taxable year,
                      ``(B) such individual has not attained the age of 
                  18 as of the close of the calendar year in which the 
                  taxable year of the taxpayer begins, and
                      ``(C) such individual bears a relationship to the 
                  taxpayer described in section 32(c)(3)(B).
      ``(d) Verification Requirements.--
              ``(1) Expenses must be substantiated.--Qualified child 
          disability expenses to which subsection (a) applies may be 
          taken into account under this section only if the taxpayer 
          substantiates such expense in such form as the Secretary may 
          prescribe.
              ``(2) Identification requirement.--No credit shall be 
          allowed under this section with respect to any qualified child 
          unless the taxpayer includes the name and taxpayer 
          identification number of such qualified child on the return of 
          tax for the taxable year.
      ``(e) Special Rules.--
              ``(1) Denial of double benefit.--
                      ``(A) In general.--No credit shall be allowed under 
                  subsection (a) for any expense for which a deduction or 
                  credit is allowed under any other provision of this 
                  chapter.
                      ``(B) Grants.--No credit shall be allowed under 
                  subsection (a) for any expense to the extent that funds 
                  for such expense are received under any Federal, State, 
                  or local program.
              ``(2) 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.
              ``(3) Basis adjustment.--For purposes of this subtitle, if 
          a credit is allowed under this section for any expenditure with 
          respect to any property, the increase in the basis of such 
          property which would (but for this subsection) result from such 
          expenditure shall be reduced by the amount of the credit so 
          allowed.''.
      (b) Conforming Amendments.--
              (1) Paragraph (2) of section 1324(b) of title 31, United 
          States Code, is amended by inserting before the period ``, or 
          from section 35 of such Code''.
              (2) The table of sections for subpart C of part IV of 
          subchapter A of chapter 1 of the Internal Revenue Code of 1986 
          is amended by striking the last item and inserting the 
          following new items:
  
                                ``Sec. 35. Child disability expenses.
                                ``Sec. 36. Overpayments of tax.''.
              (3) Section 1016(a) of such Code is amended by striking 
          ``and'' at the end of paragraph (26), by striking the period at 
          the end of paragraph (27) and inserting ``, and'', and by 
          adding at the end the following:
              ``(28) in the case of property with respect to which a 
          credit was allowed under section 35, to the extent provided in 
          section 35(e)(3).''.
      (c) Effective Date.--The amendments made by this section shall 
  apply to taxable years beginning after December 31, 2001.
target: Amends the Internal Revenue Code to allow a tax credit for up to $3,000 of the amount paid or incurred by the taxpayer during the taxable year for qualified child disability expenses for services and equipment related to education and training of a child of the taxpayer with a developmental disability, including behavioral therapy, speech therapy, occupational therapy, physical therapy, auditory therapy, assistive communication technology, and other related services. Phases out the credit by $500 increments per $1,000 of modified adjusted gross income over $150,000.
feat_title: A bill to amend the Internal Revenue Code of 1986 to provide a refundable credit against tax with respect to education and training of developmentally disabled children.