DC Watch Home
Council Period 12
Council Period 13
A BILL IN THE COUNCIL OF THE DISTRICT OF COLUMBIA
Councilmember Adrian Fenty introduced the following
bill, which was referred to the Committee on Finance and Revenue.
To amend Title 47 of the District of Columbia Official Code to exclude
from gross income amounts received on account of unlawful discrimination
and to allow income averaging for backpay and frontpay awards received on
account of claims arising from unlawful discrimination.
BE IT ENACTED BY THE COUNCIL OF THE DISTRICT OF COLUMBIA, That this act
may be cited as the "Civil Rights Tax Fairness Act of 2001 ".
Sec. 2. Title 47 of the District of Columbia Official Code is amended
(a) Section 47-1803.2 is amended by adding a new subparagraph (Q) to
read as follows:
(b) A new section 47-1804 is added to read as follows:
"(Q) The amount received by a claimant, excluding backpay,
frontpay, or punitive damages, whether by suit or agreement and whether
as lump sums or periodic payments, on account of a claim of unlawful
"(c) For the purposes of this section the term:
"(a) GENERAL RULE - If employment discrimination backpay or
frontpay is received during a taxable year, the tax imposed for such
taxable year shall not exceed the sum of the tax which would be so
imposed if no:
"(1) Amount of backpay or frontpay were included in gross
income for such year; and
"(2) Deduction were allowed for such year for expenses
(otherwise allowable as a deduction to the taxpayer for such year) in
connection with making or prosecuting any claim of unlawful
discrimination by or on behalf of the taxpayer, plus the product of
"(i) Number of years in the backpay period and frontpay
"(ii) Amount by which the tax determined under paragraph (1)
would increase if the amount on which such tax is determined were
increased by the average annual net backpay and frontpay amount.
Sec. 3. The section shall apply to amounts received in taxable years
beginning on January 1, 2001.
"(1) "Employment discrimination backpay or frontpay"
means backpay or frontpay receivable (whether as lump sums or periodic
payments) on account of a claim of unlawful employment discrimination.
"(2) "Backpay" and "Frontpay" mean amounts
includible in gross income in the taxable year as compensation which is
"(A) In the case of backpay, to services performed, or that
would have been performed but for a claimed violation of law, as an
employee, former employee, or prospective employee before such taxable
year for the taxpayer's employer, former employer, or prospective
"(B) In the case of frontpay, to employment that would have
been performed but for a claimed violation of law, in a taxable year
or taxable years following the taxable year, and which are:
"(i) Ordered, recommended, or approved by any government entity
to satisfy a claim for violation of law; or
"(ii) Received from the settlement of such a claim.
"(3) "Backpay period" means the period during which
services are performed (or would have been performed) to which backpay
is attributable. If such period is not equal to a whole number of
taxable years, such period shall be increased to the next highest number
of whole taxable years.
"(4) "Frontpay period" means the period of foregone
employment to which frontpay is attributable. If such period is not
equal to a whole number of taxable years, such period shall be increased
to the next highest number of whole taxable years.
"(5)"Average annual net backpay and frontpay amount"
means the amount equal to the excess of employment discrimination
backpay and frontpay, over the amount of deductions that would have been
allowable but for subsection (a)(1)(B) divided by the number of years in
the backpay period and frontpay period.
Sec. 4. Fiscal impact statement.
The Council adopts the fiscal impact statement in the committee report
as the fiscal impact statement required by section 602(c)(3) of the
District of Columbia Home Rule Act, approved December 24, 1973 (87 Stat.
813; D.C. Official Code § 1-206.02(c)(3)).
Sec. 5. This act shall take effect following approval by the Mayor (or
in the event of veto by the Mayor, action by the Council to override the
veto), approval by the Financial Responsibility and Management Assistance
Authority as provided in section 203(a) of the District of Columbia
Financial Responsibility and Management Assistance Act of 1995, approved
April 17, 1995 (109 Stat. 116; D.C. Official Code §47-392.03(a)), a
30-day period of Congressional review as provided in section 602(c)(1) of
the District of Columbia Home Rule Act, approved December 24, 1973
(87 Stat. 813; D.C. Official Code §1-206.02(c)(1)), and publication in
the District of Columbia Register.