EXCLUSION FOR FOSTER CARE PAYMENTS TO APPLY TO PAYMENTS BY QUALIFIED PLACEMENT AGENCIES.

SEC. 404. EXCLUSION FOR FOSTER CARE PAYMENTS TO APPLY TO PAYMENTS BY QUALIFIED PLACEMENT AGENCIES. (a) In General.—The matter preceding subparagraph (B) of section 131(b)(1) (defining qualified foster care payment) is amended to read as follows: “(1) In general.—The term ‘qualified foster care payment’ means any payment made pursuant to a foster care program of a State or political subdivision thereof— “(A) which is paid by— “(i) a State or political subdivision thereof, or “(ii) a qualified foster care placement agency, and”. (b) Qualified Foster Individuals To Include Individuals Placed by Qualified Placement Agencies.—Subparagraph (B) of section 131(b)(2) (defining qualified foster individual) is amended to read as follows: “(B) a qualified foster care placement agency.”. (c) Qualified Foster Care Placement Agency Defined.—Subsection (b) of section 131 is amended by redesignating paragraph 116 STAT. 42 (3) as paragraph (4) and by inserting after paragraph (2) the following new paragraph: “(3) Qualified foster care placement agency.—The term ‘qualified foster care placement agency’ means any placement agency which is licensed or certified by— “(A) a State or political subdivision thereof, or “(B) an entity designated by a State or political subdivision thereof, for the foster care program of such State or political subdivision to make foster care payments to providers of foster care.”. (d) Effective Date.—The amendments made by this section shall apply to taxable years beginning after December 31, 2001.