Savings for Working Families Act of 2003 - States as a purpose of this Act to provide for the establishment of individual development account programs that will provide individuals and families with limited means an opportunity to accumulate assets and to enter the financial mainstream. Provides procedures for opening and maintaining such an account and qualifying for matching funds.
Authorizes appropriations for the: (1) Savings for Working Families Act of 2003; and (2) administration of exempt organizations by the Internal Revenue Service.
Authorizes the Secretary of Health and Human Services to award grants to and enter into cooperative agreements to support nonprofit community-based organizations. Authorizes appropriations.
Prohibits requiring a nongovernmental social service organization to: (1) remove religious art, icons, or scripture; (2) alter its charter; or (3) alter religious qualifications for board membership.
Amends the Runaway and Homeless Youth Act to provide for maternity group homes and evaluation of such homes.
[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 272 Introduced in Senate (IS)]
108th CONGRESS
1st Session
S. 272
To provide incentives for charitable contributions by individuals and
businesses, to improve the public disclosure of activities of exempt
organizations, and to enhance the ability of low-income Americans to
gain financial security by building assets, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
January 30, 2003
Mr. Santorum (for himself, Mr. Lieberman, Mr. Grassley, Mr. Bayh, Mr.
Hatch, Ms. Landrieu, Mr. Smith, Mr. Nelson of Florida, Mr. Talent, Mr.
Lugar, Mr. Frist, and Mr. Miller) introduced the following bill; which
was read twice and referred to the Committee on Finance
_______________________________________________________________________
A BILL
To provide incentives for charitable contributions by individuals and
businesses, to improve the public disclosure of activities of exempt
organizations, and to enhance the ability of low-income Americans to
gain financial security by building assets, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; ETC.
(a) Short Title.--This Act may be cited as the ``Charity Aid,
Recovery, and Empowerment Act of 2003'' or the ``CARE Act of 2003''.
(b) Amendment of 1986 Code.--Except as otherwise expressly
provided, whenever in this Act 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.
(c) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; etc.
TITLE I--CHARITABLE GIVING INCENTIVES
Sec. 101. Deduction for portion of charitable contributions to be
allowed to individuals who do not itemize
deductions.
Sec. 102. Tax-free distributions from individual retirement accounts
for charitable purposes.
Sec. 103. Charitable deduction for contributions of food inventories.
Sec. 104. Charitable deduction for contributions of book inventories.
Sec. 105. Expansion of charitable contribution allowed for scientific
property used for research and for computer
technology and equipment used for
educational purposes.
Sec. 106. Modifications to encourage contributions of capital gain real
property made for conservation purposes.
Sec. 107. Exclusion of 25 percent of gain on sales or exchanges of land
or water interests to eligible entities for
conservation purposes.
Sec. 108. Tax exclusion for cost-sharing payments under Partners for
Fish and Wildlife Program.
Sec. 109. Adjustment to basis of S corporation stock for certain
charitable contributions.
Sec. 110. Enhanced deduction for charitable contribution of literary,
musical, artistic, and scholarly
compositions.
Sec. 111. Mileage reimbursements to charitable volunteers excluded from
gross income.
TITLE II--IMPROVE OVERSIGHT OF TAX-EXEMPT ORGANIZATIONS
Sec. 201. Disclosure of written determinations.
Sec. 202. Disclosure of Internet web site and name under which
organization does business.
Sec. 203. Modification to reporting capital transactions.
Sec. 204. Disclosure that Form 990 is publicly available.
Sec. 205. Disclosure to State officials of proposed actions related to
section 501(c) organizations.
Sec. 206. Expansion of penalties to preparers of Form 990.
Sec. 207. Notification requirement for entities not currently required
to file.
Sec. 208. Suspension of tax-exempt status of terrorist organizations.
TITLE III--OTHER CHARITABLE AND EXEMPT ORGANIZATION PROVISIONS
Sec. 301. Modification of excise tax on unrelated business taxable
income of charitable remainder trusts.
Sec. 302. Modifications to section 512(b)(13).
Sec. 303. Simplification of lobbying expenditure limitation.
Sec. 304. Expedited review process for certain tax-exemption
applications.
Sec. 305. Clarification of definition of church tax inquiry.
Sec. 306. Expansion of declaratory judgment remedy to tax-exempt
organizations.
Sec. 307. Definition of convention or association of churches.
Sec. 308. Payments by charitable organizations to victims of war on
terrorism.
Sec. 309. Modification of scholarship foundation rules.
Sec. 310. Treatment of certain hospital support organizations as
qualified organizations for purposes of
determining acquisition indebtedness.
TITLE IV--SOCIAL SERVICES BLOCK GRANT
Sec. 401. Restoration of funds for the Social Services Block Grant.
Sec. 402. Restoration of authority to transfer up to 10 percent of TANF
funds to the Social Services Block Grant.
Sec. 403. Requirement to submit annual report on State activities.
TITLE V--INDIVIDUAL DEVELOPMENT ACCOUNTS
Sec. 501. Short title.
Sec. 502. Purposes.
Sec. 503. Definitions.
Sec. 504. Structure and administration of qualified individual
development account programs.
Sec. 505. Procedures for opening and maintaining an individual
development account and qualifying for
matching funds.
Sec. 506. Deposits by qualified individual development account
programs.
Sec. 507. Withdrawal procedures.
Sec. 508. Certification and termination of qualified individual
development account programs.
Sec. 509. Reporting, monitoring, and evaluation.
Sec. 510. Authorization of appropriations.
Sec. 511. Matching funds for individual development accounts provided
through a tax credit for qualified
financial institutions.
Sec. 512. Account funds disregarded for purposes of certain means-
tested Federal programs.
TITLE VI--MANAGEMENT OF EXEMPT ORGANIZATIONS
Sec. 601. Authorization of appropriations.
TITLE VII--COMPASSION CAPITAL FUND
Sec. 701. Support for nonprofit community-based organizations;
Department of Health and Human Services.
Sec. 702. Support for nonprofit community-based organizations;
Corporation for National and Community
Service.
Sec. 703. Support for nonprofit community-based organizations;
Department of Justice.
Sec. 704. Support for nonprofit community-based organizations;
Department of Housing and Urban
Development.
Sec. 705. Coordination.
TITLE VIII--EQUAL TREATMENT FOR NONGOVERNMENTAL PROVIDERS
Sec. 801. Nongovernmental organizations.
TITLE IX--MATERNITY GROUP HOMES
Sec. 901. Maternity group homes.
TITLE I--CHARITABLE GIVING INCENTIVES
SEC. 101. DEDUCTION FOR PORTION OF CHARITABLE CONTRIBUTIONS TO BE
ALLOWED TO INDIVIDUALS WHO DO NOT ITEMIZE DEDUCTIONS.
(a) In General.--Section 170 (relating to charitable, etc.,
contributions and gifts) is amended by redesignating subsection (m) as
subsection (n) and by inserting after subsection (l) the following new
subsection:
``(m) Deduction for Individuals Not Itemizing Deductions.--In the
case of an individual who does not itemize deductions for any taxable
year, there shall be taken into account as a direct charitable
deduction under section 63 an amount equal to the amount allowable
under subsection (a) for the taxable year for cash contributions, but
only with respect to such contributions which exceed $250 ($500 in the
case of a joint return), but do not exceed $500 ($1,000 in the case of
a joint return).''.
(b) Direct Charitable Deduction.--
(1) In general.--Subsection (b) of section 63 (defining
taxable income) is amended by striking ``and'' at the end of
paragraph (1), by striking the period at the end of paragraph
(2) and inserting ``, and'', and by adding at the end the
following new paragraph:
``(3) the direct charitable deduction.''.
(2) Definition.--Section 63 is amended by redesignating
subsection (g) as subsection (h) and by inserting after
subsection (f) the following new subsection:
``(g) Direct Charitable Deduction.--For purposes of this section,
the term `direct charitable deduction' means that portion of the amount
allowable under section 170(a) which is taken as a direct charitable
deduction for the taxable year under section 170(m).''.
(3) Conforming amendment.--Subsection (d) of section 63 is
amended by striking ``and'' at the end of paragraph (1), by
striking the period at the end of paragraph (2) and inserting
``, and'', and by adding at the end the following new
paragraph:
``(3) the direct charitable deduction.''.
(c) Study.--
(1) In general.--The Secretary of the Treasury shall study
the effect of the amendments made by this section on increased
charitable giving and taxpayer compliance, including a comparison of
taxpayer compliance by those who itemize their charitable contributions
with those who claim a direct charitable deduction.
(2) Report.--By not later than December 31, 2004, the
Secretary of the Treasury shall report on the study required
under paragraph (1) to the Committee on Finance of the Senate
and the Committee on Ways and Means of the House of
Representatives.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2002, and before
January 1, 2005.
SEC. 102. TAX-FREE DISTRIBUTIONS FROM INDIVIDUAL RETIREMENT ACCOUNTS
FOR CHARITABLE PURPOSES.
(a) In General.--Subsection (d) of section 408 (relating to
individual retirement accounts) is amended by adding at the end the
following new paragraph:
``(8) Distributions for charitable purposes.--
``(A) In general.--No amount shall be includible in
gross income by reason of a qualified charitable
distribution.
``(B) Qualified charitable distribution.--For
purposes of this paragraph, the term `qualified
charitable distribution' means any distribution from an
individual retirement account--
``(i) which is made directly by the
trustee--
``(I) to an organization described
in section 170(c), or
``(II) to a split-interest entity,
and
``(ii) which is made on or after the date
that the individual for whose benefit the
account is maintained has attained--
``(I) in the case of any
distribution described in clause
(i)(I), age 70\1/2\, and
``(II) in the case of any
distribution described in clause
(i)(II), age 59\1/2\.
A distribution shall be treated as a qualified
charitable distribution only to the extent that the
distribution would be includible in gross income
without regard to subparagraph (A) and, in the case of
a distribution to a split-interest entity, only if no
person holds an income interest in the amounts in the
split-interest entity attributable to such distribution
other than one or more of the following: the individual
for whose benefit such account is maintained, the
spouse of such individual, or any organization
described in section 170(c).
``(C) Contributions must be otherwise deductible.--
For purposes of this paragraph--
``(i) Direct contributions.--A distribution
to an organization described in section 170(c)
shall be treated as a qualified charitable
distribution only if a deduction for the entire
distribution would be allowable under section
170 (determined without regard to subsection
(b) thereof and this paragraph).
``(ii) Split-interest gifts.--A
distribution to a split-interest entity shall
be treated as a qualified charitable
distribution only if a deduction for the entire
value of the interest in the distribution for
the use of an organization described in section
170(c) would be allowable under section 170
(determined without regard to subsection (b)
thereof and this paragraph).
``(D) Application of section 72.--Notwithstanding
section 72, in determining the extent to which a
distribution is a qualified charitable distribution,
the entire amount of the distribution shall be treated
as includible in gross income without regard to
subparagraph (A) to the extent that such amount does
not exceed the aggregate amount which would be so
includible if all amounts were distributed from all
individual retirement accounts otherwise taken into
account in determining the inclusion on such
distribution under section 72. Proper adjustments shall
be made in applying section 72 to other distributions
in such taxable year and subsequent taxable years.
``(E) Special rules for split-interest entities.--
``(i) Charitable remainder trusts.--
Notwithstanding section 664(b), distributions
made from a trust described in subparagraph
(G)(i) shall be treated as ordinary income in
the hands of the beneficiary to whom is paid
the annuity described in section 664(d)(1)(A)
or the payment described in section
664(d)(2)(A).
``(ii) Pooled income funds.--No amount
shall be includible in the gross income of a
pooled income fund (as defined in subparagraph
(G)(ii)) by reason of a qualified charitable
distribution to such fund, and all
distributions from the fund which are
attributable to qualified charitable
distributions shall be treated as ordinary
income to the beneficiary.
``(iii) Charitable gift annuities.--
Qualified charitable distributions made for a
charitable gift annuity shall not be treated as
an investment in the contract.
``(F) Denial of deduction.--Qualified charitable
distributions shall not be taken into account in
determining the deduction under section 170.
``(G) Split-interest entity defined.--For purposes
of this paragraph, the term `split-interest entity'
means--
``(i) a charitable remainder annuity trust
or a charitable remainder unitrust (as such
terms are defined in section 664(d)) which must be funded exclusively
by qualified charitable distributions,
``(ii) a pooled income fund (as defined in
section 642(c)(5)), but only if the fund
accounts separately for amounts attributable to
qualified charitable distributions, and
``(iii) a charitable gift annuity (as
defined in section 501(m)(5)).''.
(b) Modifications Relating to Information Returns by Certain
Trusts.--
(1) Returns.--Section 6034 (relating to returns by trusts
described in section 4947(a)(2) or claiming charitable
deductions under section 642(c)) is amended to read as follows:
``SEC. 6034. RETURNS BY TRUSTS DESCRIBED IN SECTION 4947(A)(2) OR
CLAIMING CHARITABLE DEDUCTIONS UNDER SECTION 642(C).
``(a) Trusts Described in Section 4947(a)(2).--Every trust
described in section 4947(a)(2) shall furnish such information with
respect to the taxable year as the Secretary may by forms or
regulations require.
``(b) Trusts Claiming a Charitable Deduction Under Section
642(c).--
``(1) In general.--Every trust not required to file a
return under subsection (a) but claiming a charitable, etc.,
deduction under section 642(c) for the taxable year shall
furnish such information with respect to such taxable year as
the Secretary may by forms or regulations prescribe, including:
``(A) the amount of the charitable, etc., deduction
taken under section 642(c) within such year,
``(B) the amount paid out within such year which
represents amounts for which charitable, etc.,
deductions under section 642(c) have been taken in
prior years,
``(C) the amount for which charitable, etc.,
deductions have been taken in prior years but which has
not been paid out at the beginning of such year,
``(D) the amount paid out of principal in the
current and prior years for charitable, etc., purposes,
``(E) the total income of the trust within such
year and the expenses attributable thereto, and
``(F) a balance sheet showing the assets,
liabilities, and net worth of the trust as of the
beginning of such year.
``(2) Exceptions.--Paragraph (1) shall not apply in the
case of a taxable year if all the net income for such year,
determined under the applicable principles of the law of
trusts, is required to be distributed currently to the
beneficiaries. Paragraph (1) shall not apply in the case of a
trust described in section 4947(a)(1).''.
(2) Increase in penalty relating to filing of information
return by split-interest trusts.--Paragraph (2) of section
6652(c) (relating to returns by exempt organizations and by
certain trusts) is amended by adding at the end the following
new subparagraph:
``(C) Split-interest trusts.--In the case of a
trust which is required to file a return under section
6034(a), subparagraphs (A) and (B) of this paragraph
shall not apply and paragraph (1) shall apply in the
same manner as if such return were required under
section 6033, except that--
``(i) the 5 percent limitation in the
second sentence of paragraph (1)(A) shall not
apply,
``(ii) in the case of any trust with gross
income in excess of $250,000, the first
sentence of paragraph (1)(A) shall be applied
by substituting `$100' for `$20', and the
second sentence thereof shall be applied by
substituting `$50,000' for `$10,000', and
``(iii) the third sentence of paragraph
(1)(A) shall be disregarded.
In addition to any penalty imposed on the trust
pursuant to this subparagraph, if the person required
to file such return knowingly fails to file the return,
such penalty shall also be imposed on such person who
shall be personally liable for such penalty.''.
(3) Confidentiality of noncharitable beneficiaries.--
Subsection (b) of section 6104 (relating to inspection of
annual information returns) is amended by adding at the end the
following new sentence: ``In the case of a trust which is
required to file a return under section 6034(a), this
subsection shall not apply to information regarding
beneficiaries which are not organizations described in section
170(c).''.
(c) Effective Dates.--
(1) Subsection (a).--The amendment made by subsection (a)
shall apply to distributions made after the date of the
enactment.
(2) Subsection (b).--The amendments made by subsection (b)
shall apply to returns for taxable years beginning after
December 31, 2003.
SEC. 103. CHARITABLE DEDUCTION FOR CONTRIBUTIONS OF FOOD INVENTORIES.
(a) In General.--Subsection (e) of section 170 (relating to certain
contributions of ordinary income and capital gain property) is amended
by adding at the end the following new paragraph:
``(7) Application of paragraph (3) to certain contributions
of food inventory.--For purposes of this section--
``(A) Extension to individuals.--In the case of a
charitable contribution of apparently wholesome food--
``(i) paragraph (3)(A) shall be applied
without regard to whether the contribution is
made by a C corporation, and
``(ii) in the case of a taxpayer other than
a C corporation, the aggregate amount of such
contributions from any trade or business (or
interest therein) of the taxpayer for any
taxable year which may be taken into account
under this section shall not exceed 10 percent
of the taxpayer's net income from any such
trade or business, computed without regard to
this section, for such taxable year.
``(B) Limitation on reduction.--In the case of a
charitable contribution of apparently wholesome food,
notwithstanding paragraph (3)(B), the amount of the
reduction determined under paragraph (1)(A) shall not
exceed the amount by which the fair market value of
such property exceeds twice the basis of such property.
``(C) Determination of basis.--If a taxpayer--
``(i) does not account for inventories
under section 471, and
``(ii) is not required to capitalize
indirect costs under section 263A,
the taxpayer may elect, solely for purposes of
paragraph (3)(B), to treat the basis of any apparently
wholesome food as being equal to 25 percent of the fair
market value of such food.
``(D) Determination of fair market value.--In the
case of a charitable contribution of apparently
wholesome food which is a qualified contribution
(within the meaning of paragraph (3), as modified by
subparagraph (A) of this paragraph) and which, solely
by reason of internal standards of the taxpayer or lack
of market, cannot or will not be sold, the fair market
value of such contribution shall be determined--
``(i) without regard to such internal
standards or such lack of market and
``(ii) by taking into account the price at
which the same or substantially the same food
items (as to both type and quality) are sold by
the taxpayer at the time of the contribution
(or, if not so sold at such time, in the recent
past).
``(E) Apparently wholesome food.--For purposes of
this paragraph, the term `apparently wholesome food'
has the meaning given such term by section 22(b)(2) of
the Bill Emerson Good Samaritan Food Donation Act (42
U.S.C. 1791(b)(2)), as in effect on the date of the
enactment of this paragraph.''.
(b) Effective Date.--The amendment made by this section shall apply
to contributions made after the date of the enactment of this Act.
SEC. 104. CHARITABLE DEDUCTION FOR CONTRIBUTIONS OF BOOK INVENTORIES.
(a) In General.--Section 170(e)(3) (relating to certain
contributions of ordinary income and capital gain property) is amended
by redesignating subparagraph (C) as subparagraph (D) and by inserting
after subparagraph (B) the following new subparagraph:
``(C) Special rule for contributions of book
inventory for educational purposes.--
``(i) Contributions of book inventory.--In
determining whether a qualified book
contribution is a qualified contribution,
subparagraph (A) shall be applied without
regard to whether--
``(I) the donee is an organization
described in the matter preceding
clause (i) of subparagraph (A), and
``(II) the property is to be used
by the donee solely for the care of the
ill, the needy, or infants.
``(ii) Amount of reduction.--
Notwithstanding subparagraph (B), the amount of
the reduction determined under paragraph (1)(A)
shall not exceed the amount by which the fair
market value of the contributed property (as
determined by the taxpayer using a bona fide
published market price for such book) exceeds
twice the basis of such property.
``(iii) Qualified book contribution.--For
purposes of this paragraph, the term `qualified
book contribution' means a charitable
contribution of books, but only if the
requirements of clauses (iv) and (v) are met.
``(iv) Identity of donee.--The requirement
of this clause is met if the contribution is to
an organization--
``(I) described in subclause (I) or
(III) of paragraph (6)(B)(i), or
``(II) described in section
501(c)(3) and exempt from tax under
section 501(a) (other than a private
foundation, as defined in section
509(a), which is not an operating
foundation, as defined in section
4942(j)(3)), which is organized
primarily to make books available to
the general public at no cost or to
operate a literacy program.
``(v) Certification by donee.--The
requirement of this clause is met if, in
addition to the certifications required by
subparagraph (A) (as modified by this
subparagraph), the donee certifies in writing
that--
``(I) the books are suitable, in
terms of currency, content, and
quantity, for use in the donee's
educational programs, and
``(II) the donee will use the books
in its educational programs.
``(vi) Bona fide published market price.--
For purposes of this subparagraph, the term
`bona fide published market price' means, with
respect to any book, a price--
``(I) determined using the same
printing and edition,
``(II) published within 7 years
preceding the contribution of such
book,
``(III) determined as a result of
an arm's length transaction, and
``(IV) for which such a book has
been customarily sold.''.
(b) Effective Date.--The amendments made by this section shall
apply to contributions made after the date of the enactment of this Act
SEC. 105. EXPANSION OF CHARITABLE CONTRIBUTION ALLOWED FOR SCIENTIFIC
PROPERTY USED FOR RESEARCH AND FOR COMPUTER TECHNOLOGY
AND EQUIPMENT USED FOR EDUCATIONAL PURPOSES.
(a) Scientific Property Used for Research.--
(1) In general.--Clause (ii) of section 170(e)(4)(B)
(defining qualified research contributions) is amended by
inserting ``or assembled'' after ``constructed''.
(2) Conforming amendment.--Clause (iii) of section
170(e)(4)(B) is amended by inserting ``or assembling'' after
``construction''.
(b) Computer Technology and Equipment for Educational Purposes.--
(1) In general.--Clause (ii) of section 170(e)(6)(B) is
amended by inserting ``or assembled'' after ``constructed'' and
``or assembling'' after ``construction''.
(2) Special rule made permanent.--Section 170(e)(6) is
amended by striking subparagraph (G).
(3) Conforming amendments.--Subparagraph (D) of section
170(e)(6) is amended by inserting ``or assembled'' after
``constructed'' and ``or assembling'' after ``construction''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2002.
SEC. 106. MODIFICATIONS TO ENCOURAGE CONTRIBUTIONS OF CAPITAL GAIN REAL
PROPERTY MADE FOR CONSERVATION PURPOSES.
(a) In General.--Section 170(h) (relating to qualified conservation
contribution) is amended by adding at the end the following new
paragraph:
``(7) Additional incentives for qualified conservation
contributions.--
``(A) In general.--In the case of any qualified
conservation contribution (as defined in paragraph (1))
made by an individual--
``(i) subparagraph (C) of subsection (b)(1)
shall not apply,
``(ii) except as provided in subparagraph
(B)(i), subsections (b)(1)(A) and (d)(1) shall
be applied separately with respect to such
contributions by treating references to 50
percent of the taxpayer's contribution base as
references to the amount of such percentage of
such base reduced by the amount of other
contributions allowable under subsection
(b)(1)(A), and
``(iii) subparagraph (A) of subsection
(d)(1) shall be applied--
``(I) by substituting `15
succeeding taxable years' for `5
succeeding taxable years', and
``(II) by applying clause (ii) to
each of the 15 succeeding taxable
years.
``(B) Special rules for eligible farmers and
ranchers.--
``(i) In general.--In the case of any such
contributions made by an eligible farmer or
rancher--
``(I) if the taxpayer is an
individual, subsections (b)(1)(A) and
(d)(1) shall be applied separately with
respect to such contributions by
substituting `the taxpayer's
contribution base reduced by the amount
of other contributions allowable under
subsection (b)(1)(A)' for `50 percent
of the taxpayer's contribution base'
each place it appears, and
``(II) if the taxpayer is a
corporation, subsections (b)(2) and
(d)(2) shall be applied separately with
respect to such contributions,
subsection (b)(2) shall be applied with
respect to such contributions as if
such subsection did not contain the
words `10 percent of' and as if
subparagraph (A) thereof read `the
deduction under this section for
qualified conservation contributions',
and rules similar to the rules of
subparagraph (A)(iii) shall apply for
purposes of subsection (d)(2).
``(ii) Definition.--For purposes of clause
(i), the term `eligible farmer or rancher'
means a taxpayer whose gross income from the
trade or business of farming (within the
meaning of section 2032A(e)(5)) is at least 51
percent of the taxpayer's gross income for the
taxable year, and, in the case of a C
corporation, the stock of which is not publicly
traded on a recognized exchange.''.
(b) Effective Date.--The amendment made by this section shall apply
to contributions made after the date of the enactment of this Act.
SEC. 107. EXCLUSION OF 25 PERCENT OF GAIN ON SALES OR EXCHANGES OF LAND
OR WATER INTERESTS TO ELIGIBLE ENTITIES FOR CONSERVATION
PURPOSES.
(a) In General.--Part III of subchapter B of chapter 1 (relating to
items specifically excluded from gross income) is amended by inserting
after section 121 the following new section:
``SEC. 121A. 25-PERCENT EXCLUSION OF GAIN ON SALES OR EXCHANGES OF LAND
OR WATER INTERESTS TO ELIGIBLE ENTITIES FOR CONSERVATION
PURPOSES.
``(a) Exclusion.--Gross income shall not include 25 percent of the
qualifying gain from a conservation sale of a long-held qualifying land
or water interest.
``(b) Qualifying Gain.--For purposes of this section--
``(1) In general.--The term `qualifying gain' means any
gain which would be recognized as long-term capital gain,
reduced by the amount of any long-term capital gain
attributable to disqualified improvements.
``(2) Disqualified improvement.--For purposes of paragraph
(1), the term `disqualified improvement' means any building,
structure, or other improvement, other than--
``(A) any improvement which is described in section
175(c)(1), determined--
``(i) without regard to the requirements
that the taxpayer be engaged in farming, and
``(ii) without taking into account
subparagraphs (A) and (B) thereof, or
``(B) any improvement which the Secretary
determines directly furthers conservation purposes.
``(3) Special rule for sales of stock.--If the long-held
qualifying land or water interest is 1 or more shares of stock
in a qualifying land or water corporation, the qualifying gain
is equal to the lesser of--
``(A) the qualifying gain determined under
paragraph (1), or
``(B) the product of--
``(i) the percentage of such corporation's
stock which is transferred by the taxpayer,
times
``(ii) the amount which would have been the
qualifying gain (determined under paragraph
(1)) if there had been a conservation sale by
such corporation of all of its interests in the
land and water for a price equal to the product
of the fair market value of such interests
times the ratio of--
``(I) the proceeds of the
conservation sale of the stock, to
``(II) the fair market value of the
stock which was the subject of the
conservation sale.
``(c) Conservation Sale.--For purposes of this section, the term
`conservation sale' means a sale or exchange which meets the following
requirements:
``(1) Transferee is an eligible entity.--The transferee of
the long-held qualifying land or water interest is an eligible
entity.
``(2) Qualifying letter of intent required.--At the time of
the sale or exchange, such transferee provides the taxpayer
with a qualifying letter of intent.
``(3) Nonapplication to certain sales.--The sale or
exchange is not made pursuant to an order of condemnation or
eminent domain.
``(4) Controlling interest in stock sale required.--In the
case of the sale or exchange of stock in a qualifying land or
water corporation, at the end of the taxpayer's taxable year in
which such sale or exchange occurs, the transferee's ownership
of stock in such corporation meets the requirements of section
1504(a)(2) (determined by substituting `90 percent' for `80
percent' each place it appears).
``(d) Long-Held Qualifying Land or Water Interest.--For purposes of
this section--
``(1) In general.--The term `long-held qualifying land or
water interest' means any qualifying land or water interest
owned by the taxpayer or a member of the taxpayer's family (as
defined in section 2032A(e)(2)) at all times during the 5-year
period ending on the date of the sale.
``(2) Qualifying land or water interest.--
``(A) In general.--The term `qualifying land or
water interest' means a real property interest which
constitutes--
``(i) a taxpayer's entire interest in land,
``(ii) a taxpayer's entire interest in
water rights,
``(iii) a qualified real property interest
(as defined in section 170(h)(2)), or
``(iv) stock in a qualifying land or water
corporation.
``(B) Entire interest.--For purposes of clause (i)
or (ii) of subparagraph (A)--
``(i) a partial interest in land or water
is not a taxpayer's entire interest if an
interest in land or water was divided in order
to create such partial interest in order to
avoid the requirements of such clause or
section 170(f)(3)(A), and
``(ii) a taxpayer's entire interest in
certain land does not fail to satisfy
subparagraph (A)(i) solely because the taxpayer
has retained an interest in other land, even if
the other land is contiguous with such certain
land and was acquired by the taxpayer along
with such certain land in a single conveyance.
``(e) Other Definitions.--For purposes of this section--
``(1) Eligible entity.--The term `eligible entity' means--
``(A) a governmental unit referred to in section
170(c)(1), or an agency or department thereof operated
primarily for 1 or more of the conservation purposes
specified in clause (i), (ii), or (iii) of section
170(h)(4)(A), or
``(B) an entity which is--
``(i) described in section 170(b)(1)(A)(vi)
or section 170(h)(3)(B), and
``(ii) organized and at all times operated
primarily for 1 or more of the conservation
purposes specified in clause (i), (ii), or
(iii) of section 170(h)(4)(A).
``(2) Qualifying letter of intent.--The term `qualifying
letter of intent' means a written letter of intent which
includes the following statement: `The transferee's intent is
that this acquisition will serve 1 or more of the conservation
purposes specified in clause (i), (ii), or (iii) of section
170(h)(4)(A) of the Internal Revenue Code of 1986, that the
transferee's use of the property so acquired will be consistent
with section 170(h)(5) of such Code, and that the use of the
property will continue to be consistent with such section, even
if ownership or possession of such property is subsequently
transferred to another person.'
``(3) Qualifying land or water corporation.--The term
`qualifying land or water corporation' means a C corporation
(as defined in section 1361(a)(2)) if, as of the date of the
conservation sale--
``(A) the fair market value of the corporation's
interests in land or water held by the corporation at
all times during the preceding 5 years equals or
exceeds 90 percent of the fair market value of all of
such corporation's assets, and
``(B) not more than 50 percent of the total fair
market value of such corporation's assets consists of
water rights or infrastructure related to the delivery
of water, or both.
``(f) Tax on Subsequent Transfers or Removals of Conservation
Restrictions.--
``(1) In general.--A tax is hereby imposed on any
subsequent--
``(A) transfer by an eligible entity of ownership
or possession, whether by sale, exchange, or lease, of
property acquired directly or indirectly in--
``(i) a conservation sale described in
subsection (a), or
``(ii) a transfer described in clause (i),
(ii), or (iii) of paragraph (4)(A), or
``(B) removal of a conservation restriction
contained in an instrument of conveyance of such
property.
``(2) Amount of tax.--The amount of tax imposed by
paragraph (1) on any transfer or removal shall be equal to the
sum of--
``(A) either--
``(i) 20 percent of the fair market value
(determined at the time of the transfer) of the
property the ownership or possession of which
is transferred, or
``(ii) 20 percent of the fair market value
(determined at the time immediately after the
removal) of the property upon which the
conservation restriction was removed, plus
``(B) the product of--
``(i) the highest rate of tax specified in
section 11, times
``(ii) any gain or income realized by the
transferor or person removing such restriction
as a result of the transfer or removal.
``(3) Liability.--The tax imposed by paragraph (1) shall be
paid--
``(A) on any transfer, by the transferor, and
``(B) on any removal of a conservation restriction
contained in an instrument of conveyance, by the person
removing such restriction.
``(4) Relief from liability.--The person (otherwise liable
for any tax imposed by paragraph (1)) shall be relieved of
liability for the tax imposed by paragraph (1)--
``(A) with respect to any transfer if--
``(i) the transferee is an eligible entity
which provides such person, at the time of
transfer, a qualifying letter of intent,
``(ii) the transferee is not an eligible
entity, it is established to the satisfaction
of the Secretary, that the transfer of
ownership or possession, as the case may be,
will be consistent with section 170(h)(5), and
the transferee provides such person, at the
time of transfer, a qualifying letter of
intent, or
``(iii) tax has previously been paid under
this subsection as a result of a prior transfer
of ownership or possession of the same
property, or
``(B) with respect to any removal of a conservation
restriction contained in an instrument of conveyance,
if it is established to the satisfaction of the
Secretary that the retention of the restriction was
impracticable or impossible and the proceeds continue
to be used in a manner consistent with 1 or more of the
conservation purposes specified in clause (i), (ii), or
(iii) of section 170(h)(4)(A).
``(5) Administrative provisions.--For purposes of subtitle
F, the taxes imposed by this subsection shall be treated as
excise taxes with respect to which the deficiency procedures of
such subtitle apply.
``(6) Reporting.--The Secretary may require such reporting
as may be necessary or appropriate to further the purpose under
this section that any conservation use be in perpetuity.''.
(b) Clerical Amendment.--The table of sections for part III of
subchapter B of chapter 1 is amended by inserting after the item
relating to section 121 the following new item:
``Sec. 121A. 25-percent exclusion of gain
on sales or exchanges of land
or water interests to eligible
entities for conservation
purposes.''.
(c) Effective Date.--The amendments made by this section shall
apply to sales or exchanges occurring after December 31, 2003.
SEC. 108. TAX EXCLUSION FOR COST-SHARING PAYMENTS UNDER PARTNERS FOR
FISH AND WILDLIFE PROGRAM.
(a) In General.--Section 126(a) (relating to certain cost-sharing
payments) is amended by redesignating paragraph (10) as paragraph (11)
and by inserting after paragraph (9) the following:
``(10) The Partners for Fish and Wildlife Program
authorized by the Fish and Wildlife Act of 1956 (16 U.S.C. 742a
et seq.).''
(b) Effective Date.--The amendments made by this section shall
apply to payments received after the date of the enactment of this Act.
SEC. 109. ADJUSTMENT TO BASIS OF S CORPORATION STOCK FOR CERTAIN
CHARITABLE CONTRIBUTIONS.
(a) In General.--Paragraph (2) of section 1367(a) (relating to
adjustments to basis of stock of shareholders, etc.) is amended by
adding at the end the following new flush sentence:
``The decrease under subparagraph (B) by reason of a charitable
contribution (as defined in section 170(c)) of property shall
be the amount equal to the shareholder's pro rata share of the
adjusted basis of such property.''.
(b) Effective Date.--The amendment made by this section shall apply
to contributions made after the date of the enactment of this Act.
SEC. 110. ENHANCED DEDUCTION FOR CHARITABLE CONTRIBUTION OF LITERARY,
MUSICAL, ARTISTIC, AND SCHOLARLY COMPOSITIONS.
(a) In General.--Subsection (e) of section 170 (relating to certain
contributions of ordinary income and capital gain property), as amended
by this Act, is amended by adding at the end the following new
paragraph:
``(8) Special rule for certain contributions of literary,
musical, artistic, or scholarly compositions.--
``(A) In general.--In the case of a qualified
artistic charitable contribution--
``(i) the amount of such contribution taken
into account under this section shall be the
fair market value of the property contributed
(determined at the time of such contribution),
and
``(ii) no reduction in the amount of such
contribution shall be made under paragraph (1).
``(B) Qualified artistic charitable contribution.--
For purposes of this paragraph, the term `qualified
artistic charitable contribution' means a charitable
contribution of any literary, musical, artistic, or
scholarly composition, or similar property, or the
copyright thereon (or both), but only if--
``(i) such property was created by the
personal efforts of the taxpayer making such
contribution no less than 18 months prior to
such contribution,
``(ii) the taxpayer--
``(I) has received a qualified
appraisal of the fair market value of
such property in accordance with the
regulations under this section, and
``(II) attaches to the taxpayer's
income tax return for the taxable year
in which such contribution was made a
copy of such appraisal,
``(iii) the donee is an organization
described in subsection (b)(1)(A),
``(iv) the use of such property by the
donee is related to the purpose or function
constituting the basis for the donee's
exemption under section 501 (or, in the case of
a governmental unit, to any purpose or function
described under section 501(c)),
``(v) the taxpayer receives from the donee
a written statement representing that the
donee's use of the property will be in
accordance with the provisions of clause (iv),
and
``(vi) the written appraisal referred to in
clause (ii) includes evidence of the extent (if
any) to which property created by the personal
efforts of the taxpayer and of the same type as
the donated property is or has been--
``(I) owned, maintained, and
displayed by organizations described in
subsection (b)(1)(A), and
``(II) sold to or exchanged by
persons other than the taxpayer, donee,
or any related person (as defined in
section 465(b)(3)(C)).
``(C) Maximum dollar limitation; no carryover of
increased deduction.--The increase in the deduction
under this section by reason of this paragraph for any
taxable year--
``(i) shall not exceed the artistic
adjusted gross income of the taxpayer for such
taxable year, and
``(ii) shall not be taken into account in
determining the amount which may be carried
from such taxable year under subsection (d).
``(D) Artistic adjusted gross income.--For purposes
of this paragraph, the term `artistic adjusted gross
income' means that portion of the adjusted gross income
of the taxpayer for the taxable year attributable to--
``(i) income from the sale or use of
property created by the personal efforts of the
taxpayer which is of the same type as the
donated property, and
``(ii) income from teaching, lecturing,
performing, or similar activity with respect to
property described in clause (i).
``(E) Paragraph not to apply to certain
contributions.--Subparagraph (A) shall not apply to any
charitable contribution of any letter, memorandum, or
similar property which was written, prepared, or
produced by or for an individual while the individual
is an officer or employee of any person (including any
government agency or instrumentality) unless such letter, memorandum,
or similar property is entirely personal.
``(F) Copyright treated as separate property for
partial interest rule.--In the case of a qualified
artistic charitable contribution, the tangible
literary, musical, artistic, or scholarly composition,
or similar property and the copyright on such work
shall be treated as separate properties for purposes of
this paragraph and subsection (f)(3).''.
(b) Effective Date.--The amendment made by this section shall apply
to contributions made after the date of the enactment of this Act.
SEC. 111. MILEAGE REIMBURSEMENTS TO CHARITABLE VOLUNTEERS EXCLUDED FROM
GROSS INCOME.
(a) In General.--Part III of subchapter B of chapter 1 is amended
by inserting after section 139 the following new section:
``SEC. 139A. MILEAGE REIMBURSEMENTS TO CHARITABLE VOLUNTEERS.
``(a) In General.--Gross income of an individual does not include
amounts received, from an organization described in section 170(c), as
reimbursement of operating expenses with respect to use of a passenger
automobile for the benefit of such organization. The preceding sentence
shall apply only to the extent that such reimbursement would be
deductible under this chapter if section 274(d) were applied--
``(1) by using the standard business mileage rate
established under such section, and
``(2) as if the individual were an employee of an
organization not described in section 170(c).
``(b) Application to Volunteer Services Only.--Subsection (a) shall
not apply with respect to any expenses relating to the performance of
services for compensation.
``(c) No Double Benefit.--A taxpayer may not claim a deduction or
credit under any other provision of this title with respect to the
expenses under subsection (a).
``(d) Exemption From Reporting Requirements.--Section 6041 shall
not apply with respect to reimbursements excluded from income under
subsection (a).''
(b) Clerical Amendment.--The table of sections for part III of
subchapter B of chapter 1 is amended by inserting after the item
relating to section 139 and inserting the following new item:
``Sec. 139A. Mileage reimbursements to
charitable volunteers.''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after the date of the enactment of
this Act.
TITLE II--IMPROVE OVERSIGHT OF TAX-EXEMPT ORGANIZATIONS
SEC. 201. DISCLOSURE OF WRITTEN DETERMINATIONS.
(a) In General.--Section 6110(l) (relating to section not to apply)
is amended by striking all matter before subparagraph (A) of paragraph
(2) and inserting the following:
``(l) Section Not To Apply.--
``(1) In general.--This section shall not apply to any
matter to which section 6104 or 6105 applies, except that this
section shall apply to any written determination and related
background file document relating to an organization described
under subsection (c) or (d) of section 501 (including any
written determination denying an organization tax-exempt status
under such subsection) or a political organization described in
section 527 which is not required to be disclosed by section
6104(a)(1)(A).
``(2) Additional matters.--This section shall not apply to
any--''.
(b) Effective Date.--The amendment made by this section shall apply
to written determinations issued after the date of the enactment of
this Act.
SEC. 202. DISCLOSURE OF INTERNET WEB SITE AND NAME UNDER WHICH
ORGANIZATION DOES BUSINESS.
(a) In General.--Section 6033 (relating to returns by exempt
organizations) is amended by redesignating subsection (h) as subsection
(i) and by inserting after subsection (g) the following new subsection:
``(h) Disclosure of Name Under Which Organization Does Business and
Its Internet Web Site.--Any organization which is subject to the
requirements of subsection (a) shall include on the return required
under subsection (a)--
``(1) any name under which such organization operates or
does business, and
``(2) the Internet web site address (if any) of such
organization.''.
(b) Effective Date.--The amendments made by this section shall
apply to returns filed after December 31, 2003.
SEC. 203. MODIFICATION TO REPORTING CAPITAL TRANSACTIONS.
(a) Requirement of Summary Report.--Section 6033(c) (relating to
additional provisions relating to private foundations) is amended by
adding at the end the following new sentence: ``Any information
included in an annual return regarding the gain or loss from the sale
or other disposition of property which is required to be furnished in
order to calculate the tax on net investment income shall also be
reported in summary form with a notice that detailed information is
available upon request by the public.''.
(b) Disclosure Requirement.--Section 6104(b) (relating to
inspection of annual information returns), as amended by this Act, is
amended by adding at the end the following new sentences: ``With
respect to any private foundation (as defined in section 509(a)), any
information regarding the gain or loss from the sale or other
disposition of property which is required to be furnished in order to
calculate the tax on net investment income but which is not in summary
form is not required to be made available to the public under this
subsection except upon the explicit request by a member of the public
to the Secretary.''.
(c) Public Inspection Requirement.--Section 6104(d) (relating to
public inspection of certain annual returns, applications for
exemptions, and notices of status) is amended by adding at the end the
following new paragraph:
``(9) Application to private foundation capital transaction
information.--With respect to any private foundation (as
defined in section 509(a)), any information regarding the gain
or loss from the sale or other disposition of property which is
required to be furnished in order to calculate the tax on net
investment income but which is not in summary form is not
required to be made available to the public under this
subsection except upon the explicit request by a member of the
public to the private foundation in the form and manner of a
request described in paragraph (1)(B).''.
(d) Effective Date.--The amendments made by this section shall
apply to returns filed after December 31, 2003.
SEC. 204. DISCLOSURE THAT FORM 990 IS PUBLICLY AVAILABLE.
(a) In General.--The Commissioner of the Internal Revenue shall
notify the public in appropriate publications or other materials of the
extent to which an exempt organization's Form 990, Form 990-EZ, or Form
990-PF is publicly available.
(b) Effective Date.--The amendments made by this section shall
apply to publications or other materials issued or revised after the
date of the enactment of this Act.
SEC. 205. DISCLOSURE TO STATE OFFICIALS OF PROPOSED ACTIONS RELATED TO
SECTION 501(C) ORGANIZATIONS.
(a) In General.--Subsection (c) of section 6104 is amended by
striking paragraph (2) and inserting the following new paragraphs:
``(2) Disclosure of proposed actions related to charitable
organizations.--
``(A) Specific notifications.--In the case of an
organization to which paragraph (1) applies, the
Secretary may disclose to the appropriate State
officer--
``(i) a notice of proposed refusal to
recognize such organization as an organization
described in section 501(c)(3) or a notice of
proposed revocation of such organization's
recognition as an organization exempt from
taxation,
``(ii) the issuance of a letter of proposed
deficiency of tax imposed under section 507 or
chapter 41 or 42, and
``(iii) the names, addresses, and taxpayer
identification numbers of organizations which
have applied for recognition as organizations
described in section 501(c)(3).
``(B) Additional disclosures.--Returns and return
information of organizations with respect to which
information is disclosed under subparagraph (A) may be
made available for inspection by or disclosed to an
appropriate State officer.
``(C) Procedures for disclosure.--Information may
be inspected or disclosed under subparagraph (A) or (B)
only--
``(i) upon written request by an
appropriate State officer, and
``(ii) for the purpose of, and only to the
extent necessary in, the administration of
State laws regulating such organizations.
Such information may only be inspected by or disclosed
to representatives of the appropriate State officer
designated as the individuals who are to inspect or to
receive the returns or return information under this
paragraph on behalf of such officer. Such
representatives shall not include any contractor or
agent.
``(D) Disclosures other than by request.--The
Secretary may make available for inspection or disclose
returns and return information of an organization to
which paragraph (1) applies to an appropriate State
officer of any State if the Secretary determines that
such inspection or disclosure may facilitate the
resolution of Federal or State issues relating to the
tax-exempt status of such organization.
``(3) Disclosure with respect to certain other exempt
organizations.--Upon written request by an appropriate State
officer, the Secretary may make available for inspection or
disclosure returns and return information of an organization
described in paragraph (2), (4), (6), (7), (8), (10), or (13)
of section 501(c) for the purpose of, and to the extent
necessary in, the administration of State laws regulating the
solicitation or administration of the charitable funds or
charitable assets of such organizations. Such information may
be inspected only by or disclosed only to representatives of
the appropriate State officer designated as the individuals who
are to inspect or to receive the returns or return information
under this paragraph on behalf of such officer. Such
representatives shall not include any contractor or agent.
``(4) Use in civil judicial and administrative
proceedings.--Returns and return information disclosed pursuant
to this subsection may be disclosed in civil administrative and
civil judicial proceedings pertaining to the enforcement of
State laws regulating such organizations in a manner prescribed
by the Secretary similar to that for tax administration
proceedings under section 6103(h)(4).
``(5) No disclosure if impairment.--Returns and return
information shall not be disclosed under this subsection, or in
any proceeding described in paragraph (4), to the extent that
the Secretary determines that such disclosure would seriously
impair Federal tax administration.
``(6) Definitions.--For purposes of this subsection--
``(A) Return and return information.--The terms
`return' and `return information' have the respective
meanings given to such terms by section 6103(b).
``(B) Appropriate state officer.--The term
`appropriate State officer' means--
``(i) the State attorney general,
``(ii) in the case of an organization to
which paragraph (1) applies, any other State
official charged with overseeing organizations
of the type described in section 501(c)(3), and
``(iii) in the case of an organization to
which paragraph (3) applies, the head of an
agency designated by the State attorney general
as having primary responsibility for overseeing
the solicitation of funds for charitable
purposes.''.
(b) Conforming Amendments.--
(1) Subsection (a) of section 6103 is amended--
(A) by inserting ``or any appropriate State officer
who has or had access to returns or return information
under section 6104(c)'' after ``this section'' in
paragraph (2), and
(B) by striking ``or subsection (n)'' in paragraph
(3) and inserting ``subsection (n), or section
6104(c)''.
(2) Subparagraph (A) of section 6103(p)(3) is amended by
inserting ``and section 6104(c)'' after ``section'' in the
first sentence.
(3) Paragraph (4) of section 6103(p) is amended--
(A) in the matter preceding subparagraph (A), by
striking ``(16) or any other person described in
subsection (l)(16)'' and inserting ``(16), any other
person described in subsection (l)(16), or any
appropriate State officer (as defined in section
6104(c))'', and
(B) in subparagraph (F), by striking ``or any other
person described in subsection (l)(16)'' and inserting
``any other person described in subsection (l)(16), or
any appropriate State officer (as defined in section
6104(c))''.
(4) The heading for paragraph (1) of section 6104(c) is
amended by inserting ``for charitable organizations''.
(5) Paragraph (2) of section 7213(a) is amended by
inserting ``or under section 6104(c)'' after ``6103''.
(6) Paragraph (2) of section 7213A(a) is amended by
inserting ``or 6104(c)'' after ``6103''.
(7) Paragraph (2) of section 7431(a) is amended by
inserting ``(including any disclosure in violation of section
6104(c))'' after ``6103''.
(c) Effective Date.--The amendments made by this section shall take
effect on the date of the enactment of this Act but shall not apply to
requests made before such date.
SEC. 206. EXPANSION OF PENALTIES TO PREPARERS OF FORM 990.
(a) In General.--Section 6695 (relating to other assessable
penalties with respect to the preparation of income tax returns for
other persons) is amended by adding at the end the following new
subsections:
``(h) Certain Omissions and Misrepresentations.--
``(1) In general.--Any person who prepares for compensation
any return under section 6033 who omits or misrepresents any
information with respect to such return which was known or
should have been known by such person shall pay a penalty of
$250 with respect to such return.
``(2) Exception for minor, inadvertent omissions.--
Paragraph (1) shall not apply to minor, inadvertent omissions.
``(3) Rules for determining return preparer.--For purposes
of this subsection and subsection (i), any reference to a
person who prepares for compensation a return under section
6033--
``(A) shall include any person who employs 1 or
more persons to prepare for compensation a return under
section 6033, and
``(B) shall not include any person who would be
described in clause (i), (ii), (iii), or (iv) of
section 7701(a)(36)(B) if such section referred to a
return under section 6033.
``(i) Willful or Reckless Conduct.--
``(1) In general.--Any person who prepares for compensation
any return under section 6033 who recklessly or intentionally
misrepresents any information or recklessly or intentionally
disregards any rule or regulation with respect to such return
shall pay a penalty of $1,000 with respect to such return.
``(2) Coordination with other penalties.--With respect to
any return, the amount of the penalty payable by any person by
reason of paragraph (1) shall be reduced by the amount of the
penalty paid by such person by reason of subsection (h) or
section 6694.''.
(b) Conforming Amendments.--
(1) The heading for section 6695 is amended by inserting
``and other'' after ``income tax''.
(2) The item relating to section 6695 in the table of
sections for part I of subchapter B of chapter 68 is amended by
inserting ``and other'' after ``income tax''.
(c) Effective Date.--The amendment made by this section shall apply
with respect to documents prepared after the date of the enactment of
this Act.
SEC. 207. NOTIFICATION REQUIREMENT FOR ENTITIES NOT CURRENTLY REQUIRED
TO FILE.
(a) In General.--Section 6033 (relating to returns by exempt
organizations), as amended by section 202(a), is amended by
redesignating subsection (i) as subsection (j) and by inserting after
subsection (h) the following new subsection:
``(i) Additional Notification Requirements.--
``(1) In general.--Any organization the gross receipts of
which in any taxable year result in such organization being
referred to in subsection (a)(2)(A)(ii) or (a)(2)(B)--
``(A) shall furnish annually information, at such
time and in such manner as the Secretary may by forms
or regulations prescribe, setting forth--
``(i) the legal name of the organization,
``(ii) any name under which such
organization operates or does business,
``(iii) the organization's mailing address
and Internet web site address (if any),
``(iv) the organization's taxpayer
identification number,
``(v) the name and address of a principal
officer, and
``(vi) evidence of the continuing basis for
the organization's exemption from the filing
requirements under subsection (a)(1), and
``(B) upon the termination of the existence of the
organization, shall furnish notice of such termination.
``(2) Penalty for Failure To Notify.--
``(A) In general.--If an organization described in
paragraph (1) fails to file 3 consecutive annual
notices required under such paragraph, such
organization's status as an organization exempt from
tax under section 501(a) shall be considered revoked on
and after the date set by the Secretary for the filing
of the third annual notice. The Secretary shall publish
and maintain a list of organizations the status of
which is so revoked.
``(B) Retroactive reinstatement if reasonable cause
shown for failure.--If upon reapplication for status as
an organization exempt from tax under section 501(a),
an organization described in subparagraph (A) can show
to the satisfaction of the Secretary evidence of
reasonable cause for the failure described in such
subparagraph, the organization's status shall be
effective from the date of the revocation under such
subparagraph.''.
(b) No Declaratory Judgment Relief.--Section 7428(b) (relating to
limitations) is amended by adding at the end the following new
paragraph:
``(4) Nonapplication for certain revocations.--No action
may be brought under this section with respect to any
revocation of status described in section 6033(i)(2)(A).''.
(c) No Inspection Requirement.--Section 6104(b) (relating to
inspection of annual information returns) is amended by inserting
``(other than subsection (i) thereof)'' after ``6033''.
(d) No Disclosure Requirement.--Section 6104(d)(3) (relating to
exceptions from disclosure requirements) is amended by redesignating
subparagraph (B) as subparagraph (C) and by inserting after
subparagraph (A) the following new subparagraph:
``(B) Nondisclosure of annual notices.--Paragraph
(1) shall not require the disclosure of any notice
required under section 6033(i)(1).''.
(e) No Monetary Penalty for Failure To Notify.--Section 6652(c)(1)
(relating to annual returns under section 6033 or 6012(a)(6)) is
amended by adding at the end the following new subparagraph:
``(E) No penalty for certain annual notices.--This
paragraph shall not apply with respect to any notice
required under section 6033(i)(1).''.
(f) Notice of Requirement by Secretary.--The Secretary of the
Treasury shall notify in a timely manner every organization described
in section 6033(i)(1) of the Internal Revenue Code of 1986 (as added by
this section) of the requirement under such section 6033(i)(1)--
(1) by mail, in the case of any organization the identity
and address of which is included in the list of exempt
organizations maintained by the Secretary, and
(2) by Internet or other means of outreach, in the case of
any other organization.
(g) Effective Date.--The amendments made by this section shall
apply to notices with respect to annual periods beginning after 2003.
SEC. 208. SUSPENSION OF TAX-EXEMPT STATUS OF TERRORIST ORGANIZATIONS.
(a) In General.--Section 501 of the Internal Revenue Code of 1986
(relating to exemption from tax on corporations, certain trusts, etc.)
is amended by redesignating subsection (p) as subsection (q) and by
inserting after subsection (o) the following new subsection:
``(p) Suspension of Tax-Exempt Status of Terrorist Organizations.--
``(1) In general.--The exemption from tax under subsection
(a) with respect to any organization described in paragraph
(2), and the eligibility of any organization described in
paragraph (2) to apply for recognition of exemption under
subsection (a), shall be suspended during the period described
in paragraph (3).
``(2) Terrorist organizations.--An organization is
described in this paragraph if such organization is designated
or otherwise individually identified--
``(A) under section 212(a)(3)(B)(vi)(II) or 219 of
the Immigration and Nationality Act as a terrorist
organization or foreign terrorist organization,
``(B) in or pursuant to an Executive order which is
related to terrorism and issued under the authority of
the International Emergency Economic Powers Act or
section 5 of the United Nations Participation Act of
1945 for the purpose of imposing on such organization
an economic or other sanction, or
``(C) in or pursuant to an Executive order issued
under the authority of any Federal law if--
``(i) the organization is designated or
otherwise individually identified in or
pursuant to such Executive order as supporting
or engaging in terrorist activity (as defined
in section 212(a)(3)(B) of the Immigration and
Nationality Act) or supporting terrorism (as
defined in section 140(d)(2) of the Foreign
Relations Authorization Act, Fiscal Years 1988
and 1989); and
``(ii) such Executive order refers to this
subsection.
``(3) Period of suspension.--With respect to any
organization described in paragraph (2), the period of
suspension--
``(A) begins on the date of the first publication
of a designation or identification described in
paragraph (2) with respect to such organization, and
``(B) ends on the first date that all designations
and identifications described in paragraph (2) with
respect to such organization are rescinded pursuant to
the law or Executive order under which such designation
or identification was made.
``(4) Denial of deduction.--No deduction shall be allowed
under section 170, 545(b)(2), 556(b)(2), 642(c), 2055,
2106(a)(2), or 2522 for any contribution to an organization
described in paragraph (2) during the period described in
paragraph (3).
``(5) Denial of administrative or judicial challenge of
suspension or denial of deduction.--Notwithstanding section
7428 or any other provision of law, no organization or other
person may challenge a suspension under paragraph (1), a
designation or identification described in paragraph (2), the
period of suspension described in paragraph (3), or a denial of
a deduction under paragraph (4) in any administrative or
judicial proceeding relating to the Federal tax liability of
such organization or other person.
``(6) Erroneous designation.--
``(A) In general.--If--
``(i) the tax exemption of any organization
described in paragraph (2) is suspended under
paragraph (1),
``(ii) each designation and identification
described in paragraph (2) which has been made
with respect to such organization is determined
to be erroneous pursuant to the law or
Executive order under which such designation or
identification was made, and
``(iii) the erroneous designations and
identifications result in an overpayment of
income tax for any taxable year by such
organization,
credit or refund (with interest) with respect to such
overpayment shall be made.
``(B) Waiver of limitations.--If the credit or
refund of any overpayment of tax described in
subparagraph (A)(iii) is prevented at any time by the
operation of any law or rule of law (including res
judicata), such credit or refund may nevertheless be
allowed or made if the claim therefor is filed before
the close of the 1-year period beginning on the date of
the last determination described in subparagraph
(A)(ii).
``(7) Notice of suspensions.--If the tax exemption of any
organization is suspended under this subsection, the Internal
Revenue Service shall update the listings of tax-exempt
organizations and shall publish appropriate notice to taxpayers
of such suspension and of the fact that contributions to such
organization are not deductible during the period of such
suspension.''.
(b) Effective Date.--The amendments made by this section shall take
effect on the date of the enactment of this Act.
TITLE III--OTHER CHARITABLE AND EXEMPT ORGANIZATION PROVISIONS
SEC. 301. MODIFICATION OF EXCISE TAX ON UNRELATED BUSINESS TAXABLE
INCOME OF CHARITABLE REMAINDER TRUSTS.
(a) In General.--Subsection (c) of section 664 (relating to
exemption from income taxes) is amended to read as follows:
``(c) Taxation of Trusts.--
``(1) Income tax.--A charitable remainder annuity trust and
a charitable remainder unitrust shall, for any taxable year,
not be subject to any tax imposed by this subtitle.
``(2) Excise tax.--
``(A) In general.--In the case of a charitable
remainder annuity trust or a charitable remainder
unitrust which has unrelated business taxable income
(within the meaning of section 512, determined as if
part III of subchapter F applied to such trust) for a
taxable year, there is hereby imposed on such trust or
unitrust an excise tax equal to the amount of such
unrelated business taxable income.
``(B) Certain rules to apply.--The tax imposed by
subparagraph (A) shall be treated as imposed by chapter
42 for purposes of this title other than subchapter E
of chapter 42.
``(C) Tax court proceedings.--For purposes of this
paragraph, the references in section 6212(c)(1) to
section 4940 shall be deemed to include references to
this paragraph.''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2002.
SEC. 302. MODIFICATIONS TO SECTION 512(B)(13).
(a) In General.--Paragraph (13) of section 512(b) (relating to
special rules for certain amounts received from controlled entities) is
amended by redesignating subparagraph (E) as subparagraph (F) and by
inserting after subparagraph (D) the following new subparagraph:
``(E) Paragraph to apply only to excess payments.--
``(i) In general.--Subparagraph (A) shall
apply only to the portion of a specified
payment received or accrued by the controlling
organization that exceeds the amount which
would have been paid or accrued if such payment
met the requirements prescribed under section
482.
``(ii) Addition to tax for valuation
misstatements.--The tax imposed by this chapter
on the controlling organization shall be
increased by an amount equal to 20 percent of
the larger of--
``(I) such excess determined
without regard to any amendment or
supplement to a return of tax, or
``(II) such excess determined with
regard to all such amendments and
supplements.''.
(b) Effective Date.--
(1) In general.--The amendment made by this section shall
apply to payments received or accrued after December 31, 2000.
(2) Payments subject to binding contract transition rule.--
If the amendments made by section 1041 of the Taxpayer Relief
Act of 1997 did not apply to any amount received or accrued in
the first 2 taxable years beginning on or after the date of the
enactment of the Taxpayer Relief Act of 1997 under any contract
described in subsection (b)(2) of such section, such amendments
also shall not apply to amounts received or accrued under such
contract before January 1, 2001.
SEC. 303. SIMPLIFICATION OF LOBBYING EXPENDITURE LIMITATION.
(a) Repeal of Grassroots Expenditure Limit.--Paragraph (1) of
section 501(h) (relating to expenditures by public charities to
influence legislation) is amended to read as follows:
``(1) General rule.--In the case of an organization to
which this subsection applies, exemption from taxation under
subsection (a) shall be denied because a substantial part of
the activities of such organization consists of carrying on
propaganda, or otherwise attempting, to influence legislation,
but only if such organization normally makes lobbying
expenditures in excess of the lobbying ceiling amount for such
organization for each taxable year.''.
(b) Excess Lobbying Expenditures.--Section 4911(b) is amended to
read as follows:
``(b) Excess Lobbying Expenditures.--For purposes of this section,
the term `excess lobbying expenditures' means, for a taxable year, the
amount by which the lobbying expenditures made by the organization
during the taxable year exceed the lobbying nontaxable amount for such
organization for such taxable year.''.
(c) Conforming Amendments.--
(1) Section 501(h)(2) is amended by striking subparagraphs
(C) and (D).
(2) Section 4911(c) is amended by striking paragraphs (3)
and (4).
(3) Paragraph (1)(A) of section 4911(f) is amended by
striking ``limits of section 501(h)(1) have'' and inserting
``limit of section 501(h)(1) has''.
(4) Paragraph (1)(C) of section 4911(f) is amended by
striking ``limits of section 501(h)(1) are'' and inserting
``limit of section 501(h)(1) is''.
(5) Paragraphs (4)(A) and (4)(B) of section 4911(f) are
each amended by striking ``limits of section 501(h)(1)'' and
inserting ``limit of section 501(h)(1)''.
(6) Paragraph (8) of section 6033(b) (relating to certain
organizations described in section 501(c)(3)) is amended by
inserting ``and'' at the end of subparagraph (A) and by
striking subparagraphs (C) and (D).
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2002.
SEC. 304. EXPEDITED REVIEW PROCESS FOR CERTAIN TAX-EXEMPTION
APPLICATIONS.
(a) In General.--The Secretary of the Treasury or the Secretary's
delegate (in this section, referred to as the ``Secretary'') shall
adopt procedures to expedite the consideration of applications for
exempt status under section 501(c)(3) of the Internal Revenue Code of
1986 filed after December 31, 2003, by any organization that--
(1) is organized and operated for the primary purpose of
providing social services;
(2) is seeking a contract or grant under a Federal, State,
or local program that provides funding for social services
programs;
(3) establishes that, under the terms and conditions of the
contract or grant program, an organization is required to
obtain such exempt status before the organization is eligible
to apply for a contract or grant;
(4) includes with its exemption application a copy of its
completed Federal, State, or local contract or grant
application; and
(5) meets such other criteria as the Secretary deems
appropriate for expedited consideration.
The Secretary may prescribe other similar circumstances in which such
organizations may be entitled to expedited consideration.
(b) Waiver of Application Fee for Exempt Status.--Any organization
that meets the conditions described in subsection (a) (without regard
to paragraph (3) of that subsection) is entitled to a waiver of any fee
for an application for exempt status under section 501(c)(3) of the
Internal Revenue Code of 1986 if the organization certifies that the
organization has had (or expects to have) average annual gross receipts
of not more than $50,000 during the preceding 4 years (or, in the case
of an organization not in existence throughout the preceding 4 years,
during such organization's first 4 years).
(c) Social Services Defined.--For purposes of this section--
(1) In general.--The term ``social services'' means
services directed at helping people in need, reducing poverty,
improving outcomes of low-income children, revitalizing low-
income communities, and empowering low-income families and low-
income individuals to become self-sufficient, including--
(A) child care services, protective services for
children and adults, services for children and adults
in foster care, adoption services, services related to
the management and maintenance of the home, day care
services for adults, and services to meet the special
needs of children, older individuals, and individuals
with disabilities (including physical, mental, or
emotional disabilities);
(B) transportation services;
(C) job training and related services, and
employment services;
(D) information, referral, and counseling services;
(E) the preparation and delivery of meals, and
services related to soup kitchens or food banks;
(F) health support services;
(G) literacy and mentoring programs;
(H) services for the prevention and treatment of
juvenile delinquency and substance abuse, services for
the prevention of crime and the provision of assistance
to the victims and the families of criminal offenders,
and services related to the intervention in, and
prevention of, domestic violence; and
(I) services related to the provision of assistance
for housing under Federal law.
(2) Exclusions.--The term does not include a program having
the purpose of delivering educational assistance under the
Elementary and Secondary Education Act of 1965 (20 U.S.C. 6301
et seq.) or under the Higher Education Act of 1965 (20 U.S.C.
1001 et seq.).
SEC. 305. CLARIFICATION OF DEFINITION OF CHURCH TAX INQUIRY.
Subsection (i) of section 7611 (relating to section not to apply to
criminal investigations, etc.) is amended by striking ``or'' at the end
of paragraph (4), by striking the period at the end of paragraph (5)
and inserting ``, or'', and by inserting after paragraph (5) the
following:
``(6) information provided by the Secretary related to the
standards for exemption from tax under this title and the
requirements under this title relating to unrelated business
taxable income.''.
SEC. 306. EXPANSION OF DECLARATORY JUDGMENT REMEDY TO TAX-EXEMPT
ORGANIZATIONS.
(a) In General.--Paragraph (1) of section 7428(a) (relating to
creation of remedy) is amended--
(1) in subparagraph (B) by inserting after ``509(a))'' the
following: ``or as a private operating foundation (as defined
in section 4942(j)(3))''; and
(2) by amending subparagraph (C) to read as follows:
``(C) with respect to the initial qualification or
continuing qualification of an organization as an
organization described in section 501(c) (other than
paragraph (3)) or 501(d) which is exempt from tax under
section 501(a), or''.
(b) Court Jurisdiction.--Subsection (a) of section 7428 is amended
in the material following paragraph (2) by striking ``United States Tax
Court, the United States Claims Court, or the district court of the
United States for the District of Columbia'' and inserting the
following: ``United States Tax Court (in the case of any such
determination or failure) or the United States Claims Court or the
district court of the United States for the District of Columbia (in
the case of a determination or failure with respect to an issue
referred to in subparagraph (A) or (B) of paragraph (1)),''.
(c) Effective Date.--The amendments made by this section shall
apply to pleadings filed with respect to determinations (or requests
for determinations) made after December 31, 2002.
SEC. 307. DEFINITION OF CONVENTION OR ASSOCIATION OF CHURCHES.
Section 7701 (relating to definitions) is amended by redesignating
subsection (n) as subsection (o) and by inserting after subsection (m)
the following new subsection:
``(n) Convention or Association of Churches.--For purposes of this
title, any organization which is otherwise a convention or association
of churches shall not fail to so qualify merely because the membership
of such organization includes individuals as well as churches or
because individuals have voting rights in such organization.''.
SEC. 308. PAYMENTS BY CHARITABLE ORGANIZATIONS TO VICTIMS OF WAR ON
TERRORISM.
(a) In General.--For purposes of the Internal Revenue Code of
1986--
(1) payments made by an organization described in section
501(c)(3) of such Code to a member of the Armed Forces of the
United States, or to an individual of such member's immediate
family by reason of the death, injury, wounding, or illness of
such member incurred as the result of the military response of
the United States to the terrorist attacks against the United
States on September 11, 2001, shall be treated as related to
the purpose or function constituting the basis for such
organization's exemption under section 501 of such Code if such
payments are made using an objective formula which is
consistently applied, and
(2) in the case of a private foundation (as defined in
section 509 of such Code), any payment described in paragraph
(1) shall not be treated as made to a disqualified person for
purposes of section 4941 of such Code.
(b) Effective Date.--This section shall apply to payments made
after the date of the enactment of this Act and before September 11,
2004.
SEC. 309. MODIFICATION OF SCHOLARSHIP FOUNDATION RULES.
In applying the limitations on the percentage of scholarship grants
which may be awarded after the date of the enactment of this Act, to
children of current or former employees under Revenue Procedure 76-47,
such percentage shall be increased to 35 percent of the eligible
applicants to be considered by the selection committee and to 20
percent of individuals eligible for the grants, but only if the
foundation awarding the grants demonstrates that, in addition to
meeting the other requirements of Revenue Procedure 76-47, it provides
a comparable number and aggregate amount of grants during the same
program year to individuals who are not such employees, children or
dependents of such employees, or affiliated with the employer of such
employees.
SEC. 310. TREATMENT OF CERTAIN HOSPITAL SUPPORT ORGANIZATIONS AS
QUALIFIED ORGANIZATIONS FOR PURPOSES OF DETERMINING
ACQUISITION INDEBTEDNESS.
(a) In General.--Subparagraph (C) of section 514(c)(9) (relating to
real property acquired by a qualified organization) is amended by
striking ``or'' at the end of clause (ii), by striking the period at
the end of clause (iii) and inserting ``; or'', and by adding at the
end the following new clause:
``(iv) a qualified hospital support
organization (as defined in
subparagraph (I)).''.
(b) Qualified Hospital Support Organizations.--Paragraph (9) of
section 514(c) is amended by adding at the end the following new
subparagraph:
``(I) Qualified hospital support organizations.--
For purposes of subparagraph (C)(iv), the term
`qualified hospital support organization' means, with
respect to any eligible indebtedness (including any
qualified refinancing of such eligible indebtedness), a
support organization (as defined in section 509(a)(3))
which supports a hospital described in section
119(d)(4)(B) and with respect to which--
``(i) more than half of the
organization's assets (by value) at any
time since its organization--
``(I) were acquired,
directly or indirectly, by
testamentary gift or devise,
and
``(II) consisted of real
property, and
``(ii) the fair market value of the
organization's real estate acquired,
directly or indirectly, by gift or
devise, exceeded 25 percent of the fair
market value of all investment assets
held by the organization immediately
prior to the time that the eligible
indebtedness was incurred.
For purposes of this subparagraph, the term `eligible
indebtedness' means indebtedness secured by real
property acquired by the organization, directly or
indirectly, by gift or devise, the proceeds of which
are used exclusively to acquire any leasehold interest
in such real property or for improvements on, or
repairs to, such real property. A determination under
clauses (i) and (ii) of this subparagraph shall be made
each time such an eligible indebtedness (or the
qualified refinancing of such an eligible indebtedness)
is incurred. For purposes of this subparagraph, a
refinancing of such an eligible indebtedness shall be
considered qualified if such refinancing does not
exceed the amount of the refinanced eligible
indebtedness immediately before the refinancing.''.
(c) Effective Date.--The amendments made by this section shall
apply to indebtedness incurred after December 31, 2003.
TITLE IV--SOCIAL SERVICES BLOCK GRANT
SEC. 401. RESTORATION OF FUNDS FOR THE SOCIAL SERVICES BLOCK GRANT.
(a) Findings.--Congress makes the following findings:
(1) On August 22, 1996, the Personal Responsibility and
Work Opportunity Reconciliation Act of 1996 (Public Law 104-
193; 110 Stat. 2105) was signed into law.
(2) In enacting that law, Congress authorized
$2,800,000,000 for fiscal year 2003 and each fiscal year
thereafter to carry out the Social Services Block Grant program
established under title XX of the Social Security Act (42
U.S.C. 1397 et seq.).
(b) Restoration of Funds.--Section 2003(c)(11) of the Social
Security Act (42 U.S.C. 1397b(c)(11)) is amended by inserting ``,
except that, with respect to fiscal year 2003, the amount shall be
$1,975,000,000, and with respect to fiscal year 2004, the amount shall
be $2,800,000,000'' after ``thereafter.''.
SEC. 402. RESTORATION OF AUTHORITY TO TRANSFER UP TO 10 PERCENT OF TANF
FUNDS TO THE SOCIAL SERVICES BLOCK GRANT.
(a) In General.--Section 404(d)(2) of the Social Security Act (42
U.S.C. 604(d)(2)) is amended to read as follows:
``(2) Limitation on amount transferable to title xx
programs.--A State may use not more than 10 percent of the
amount of any grant made to the State under section 403(a) for
a fiscal year to carry out State programs pursuant to title
XX.''.
(b) Effective Date.--The amendment made by subsection (a) applies
to amounts made available for fiscal year 2003 and each fiscal year
thereafter.
SEC. 403. REQUIREMENT TO SUBMIT ANNUAL REPORT ON STATE ACTIVITIES.
(a) In General.--Section 2006(c) of the Social Security Act (42
U.S.C. 1397e(c)) is amended by adding at the end the following: ``The
Secretary shall compile the information submitted by the States and
submit that information to Congress on an annual basis.''.
(b) Effective Date.--The amendment made by subsection (a) applies
to information submitted by States under section 2006 of the Social
Security Act (42 U.S.C. 1397e) with respect to fiscal year 2002 and
each fiscal year thereafter.
TITLE V--INDIVIDUAL DEVELOPMENT ACCOUNTS
SEC. 501. SHORT TITLE.
This title may be cited as the ``Savings for Working Families Act
of 2003''.
SEC. 502. PURPOSES.
The purposes of this title are to provide for the establishment of
individual development account programs that will--
(1) provide individuals and families with limited means an
opportunity to accumulate assets and to enter the financial
mainstream,
(2) promote education, homeownership, and the development
of small businesses,
(3) stabilize families and build communities, and
(4) support continued United States economic expansion.
SEC. 503. DEFINITIONS.
As used in this title:
(1) Eligible individual.--
(A) In general.--The term ``eligible individual''
means, with respect to any taxable year, an individual
who--
(i) has attained the age of 18 but not the
age of 61 as of the last day of such taxable
year,
(ii) is a citizen or lawful permanent
resident (within the meaning of section
7701(b)(6) of the Internal Revenue Code of
1986) of the United States as of the last day
of such taxable year,
(iii) was not a student (as defined in
section 151(c)(4) of such Code) for the
immediately preceding taxable year,
(iv) is not an individual with respect to
whom a deduction under section 151 of such Code
is allowable to another taxpayer for a taxable
year of the other taxpayer ending during the
immediately preceding taxable year of the
individual,
(v) is not a taxpayer described in
subsection (c), (d), or (e) of section 6402 of
such Code for the immediately preceding taxable
year,
(vi) is not a taxpayer described in section
1(d) of such Code for the immediately preceding
taxable year, and
(vii) is a taxpayer the modified adjusted
gross income of whom for the immediately
preceding taxable year does not exceed--
(I) $18,000, in the case of a
taxpayer described in section 1(c) of
such Code,
(II) $30,000, in the case of a
taxpayer described in section 1(b) of
such Code, and
(III) $38,000, in the case of a
taxpayer described in section 1(a) of
such Code.
(B) Inflation adjustment.--
(i) In general.--In the case of any taxable
year beginning after 2004, each dollar amount
referred to in subparagraph (A)(vii) 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) of
the Internal Revenue Code of 1986 for
the calendar year in which the taxable
year begins, by substituting ``2003''
for ``1992''.
(ii) Rounding.--If any amount as adjusted
under clause (i) is not a multiple of $50, such
amount shall be rounded to the nearest multiple
of $50.
(C) Modified adjusted gross income.--For purposes
of subparagraph (A)(v), the term ``modified adjusted
gross income'' means adjusted gross income--
(i) determined without regard to sections
86, 893, 911, 931, and 933 of the Internal
Revenue Code of 1986, and
(ii) increased by the amount of interest
received or accrued by the taxpayer during the
taxable year which is exempt from tax.
(2) Individual development account.--The term ``Individual
Development Account'' means an account established for an
eligible individual as part of a qualified individual
development account program, but only if the written governing
instrument creating the account meets the following
requirements:
(A) The owner of the account is the individual for
whom the account was established.
(B) No contribution will be accepted unless it is
in cash, and, except in the case of any qualified
rollover, contributions will not be accepted for the
taxable year in excess of $1,500 on behalf of any
individual.
(C) The trustee of the account is a qualified
financial institution.
(D) The assets of the account will not be
commingled with other property except in a common trust
fund or common investment fund.
(E) Except as provided in section 507(b), any
amount in the account may be paid out only for the
purpose of paying the qualified expenses of the account owner.
(3) Parallel account.--The term ``parallel account'' means
a separate, parallel individual or pooled account for all
matching funds and earnings dedicated to an Individual
Development Account owner as part of a qualified individual
development account program, the trustee of which is a
qualified financial institution.
(4) Qualified financial institution.--The term ``qualified
financial institution'' means any person authorized to be a
trustee of any individual retirement account under section
408(a)(2) of the Internal Revenue Code of 1986.
(5) Qualified individual development account program.--The
term ``qualified individual development account program'' means
a program established upon approval of the Secretary under
section 504 after December 31, 2002, under which--
(A) Individual Development Accounts and parallel
accounts are held in trust by a qualified financial
institution, and
(B) additional activities determined by the
Secretary, in consultation with the Secretary of Health
and Human Services, as necessary to responsibly develop
and administer accounts, including recruiting,
providing financial education and other training to
Account owners, and regular program monitoring, are
carried out by the qualified financial institution.
(6) Qualified expense distribution.--
(A) In general.--The term ``qualified expense
distribution'' means any amount paid (including through
electronic payments) or distributed out of an
Individual Development Account or a parallel account
established for an eligible individual if such amount--
(i) is used exclusively to pay the
qualified expenses of the Individual
Development Account owner or such owner's
spouse or dependents,
(ii) is paid by the qualified financial
institution--
(I) except as otherwise provided in
this clause, directly to the unrelated
third party to whom the amount is due,
(II) in the case of any qualified
rollover, directly to another
Individual Development Account and
parallel account, or
(III) in the case of a qualified
final distribution, directly to the
spouse, dependent, or other named
beneficiary of the deceased Account
owner, and
(iii) is paid after the Account owner has
completed a financial education course if
required under section 505(b).
(B) Qualified expenses.--
(i) In general.--The term ``qualified
expenses'' means any of the following expenses
approved by the qualified financial
institution:
(I) Qualified higher education
expenses.
(II) Qualified first-time homebuyer
costs.
(III) Qualified business
capitalization or expansion costs.
(IV) Qualified rollovers.
(V) Qualified final distribution.
(ii) Qualified higher education expenses.--
(I) In general.--The term
``qualified higher education expenses''
has the meaning given such term by
section 529(e)(3) of the Internal
Revenue Code of 1986, determined by
treating the Account owner, the owner's
spouse, or one or more of the owner's
dependents as a designated beneficiary,
and reduced as provided in section
25A(g)(2) of such Code.
(II) Coordination with other
benefits.--The amount of expenses which
may be taken into account for purposes
of section 135, 529, or 530 of such
Code for any taxable year shall be
reduced by the amount of any qualified
higher education expenses taken into
account as qualified expense
distributions during such taxable year.
(iii) Qualified first-time homebuyer
costs.--The term ``qualified first-time
homebuyer costs'' means qualified acquisition
costs (as defined in section 72(t)(8)(C) of the
Internal Revenue Code of 1986) with respect to
a principal residence (within the meaning of
section 121 of such Code) for a qualified
first-time homebuyer (as defined in section
72(t)(8)(D)(i) of such Code).
(iv) Qualified business capitalization or
expansion costs.--
(I) In general.--The term
``qualified business capitalization or
expansion costs'' means qualified
expenditures for the capitalization or
expansion of a qualified business
pursuant to a qualified business plan.
(II) Qualified expenditures.--The
term ``qualified expenditures'' means
expenditures normally associated with
starting or expanding a business and
included in a qualified business plan,
including costs for capital, plant, and
equipment, inventory expenses, and
attorney and accounting fees.
(III) Qualified business.--The term
``qualified business'' means any
business that does not contravene any law.
(IV) Qualified business plan.--The
term ``qualified business plan'' means
a business plan which has been approved
by the qualified financial institution
and which meets such requirements as
the Secretary may specify.
(v) Qualified rollovers.--The term
``qualified rollover'' means the complete
distribution of the amounts in an Individual
Development Account and parallel account to
another Individual Development Account and
parallel account established in another
qualified financial institution for the benefit
of the Account owner.
(vi) Qualified final distribution.--The
term ``qualified final distribution'' means, in
the case of a deceased Account owner, the
complete distribution of the amounts in the
Individual Development Account and parallel
account directly to the spouse, any dependent,
or other named beneficiary of the deceased.
(7) Secretary.--The term ``Secretary'' means the Secretary
of the Treasury.
SEC. 504. STRUCTURE AND ADMINISTRATION OF QUALIFIED INDIVIDUAL
DEVELOPMENT ACCOUNT PROGRAMS.
(a) Establishment of Qualified Individual Development Account
Programs.--Any qualified financial institution may apply to the
Secretary for approval to establish 1 or more qualified individual
development account programs which meet the requirements of this title
and for an allocation of the Individual Development Account limitation
under section 45G(i)(3) of the Internal Revenue Code of 1986 with
respect to such programs.
(b) Basic Program Structure.--
(1) In general.--All qualified individual development
account programs shall consist of the following 2 components
for each participant:
(A) An Individual Development Account to which an
eligible individual may contribute cash in accordance
with section 505.
(B) A parallel account to which all matching funds
shall be deposited in accordance with section 506.
(2) Tailored ida programs.--A qualified financial
institution may tailor its qualified individual development
account program to allow matching funds to be spent on 1 or
more of the categories of qualified expenses.
(3) No fees may be charged to idas.--A qualified financial
institution may not charge any fees to any Individual
Development Account or parallel account under a qualified
individual development account program.
(c) Coordination With Public Housing Agency Individual Savings
Accounts.--Section 3(e)(2) of the United States Housing Act of 1937 (42
U.S.C. 1437a(e)(2)) is amended by inserting ``or in any Individual
Development Account established under the Savings for Working Families
Act of 2003'' after ``subsection''.
(d) Tax Treatment of Parallel Accounts.--
(1) In general.--Chapter 77 (relating to miscellaneous
provisions) is amended by adding at the end the following new
section:
``SEC. 7525. TAX INCENTIVES FOR INDIVIDUAL DEVELOPMENT PARALLEL
ACCOUNTS.
``For purposes of this title--
``(1) any account described in section 504(b)(1)(B) of the
Savings for Working Families Act of 2003 shall be exempt from
taxation,
``(2) except as provided in section 45G, no item of income,
expense, basis, gain, or loss with respect to such an account
may be taken into account, and
``(3) any amount withdrawn from such an account shall not
be includible in gross income.''.
(2) Conforming amendment.--The table of sections for
chapter 77 is amended by adding at the end the following new
item:
``Sec. 7525. Tax incentives for
individual development parallel
accounts.''.
(e) Coordination of Certain Expenses.--Section 25A(g)(2) is amended
by striking ``and'' at the end of subparagraph (C), by striking the
period at the end of subparagraph (D) and inserting ``, and'', and by
adding at the end the following new subparagraph:
``(D) a qualified expense distribution with respect
to qualified higher education expenses from an
Individual Development Account or a parallel account
under section 507(a) of the Savings for Working
Families Act of 2003.''.
SEC. 505. PROCEDURES FOR OPENING AND MAINTAINING AN INDIVIDUAL
DEVELOPMENT ACCOUNT AND QUALIFYING FOR MATCHING FUNDS.
(a) Opening an Account.--An eligible individual may open an
Individual Development Account with a qualified financial institution
upon certification that such individual has never maintained any other
Individual Development Account (other than an Individual Development
Account to be terminated by a qualified rollover).
(b) Required Completion of Financial Education Course.--
(1) In general.--Before becoming eligible to withdraw funds
to pay for qualified expenses, owners of Individual Development
Accounts must complete 1 or more financial education courses
specified in the qualified individual development account
program.
(2) Standard and applicability of course.--The Secretary,
in consultation with representatives of qualified individual
development account programs and financial educators, shall not
later than January 1, 2004, establish minimum quality standards
for the contents of financial education courses and providers
of such courses described in paragraph (1) and a protocol to
exempt individuals from the requirement under paragraph (1) in
the case of hardship, lack of need, the attainment of age 65,
or a qualified final distribution.
(c) Proof of Status as an Eligible Individual.--Federal income tax
forms for the immediately preceding taxable year and any other evidence
of eligibility which may be required by a qualified financial
institution shall be presented to such institution at the time of the
establishment of the Individual Development Account and in any taxable
year in which contributions are made to the Account to qualify for
matching funds under section 506(b)(1)(A).
(d) Special Rule in the Case of Married Individuals.--For purposes
of this title, if, with respect to any taxable year, 2 married
individuals file a Federal joint income tax return, then not more than
1 of such individuals may be treated as an eligible individual with
respect to the succeeding taxable year.
SEC. 506. DEPOSITS BY QUALIFIED INDIVIDUAL DEVELOPMENT ACCOUNT
PROGRAMS.
(a) Parallel Accounts.--The qualified financial institution shall
deposit all matching funds for each Individual Development Account into
a parallel account at a qualified financial institution.
(b) Regular Deposits of Matching Funds.--
(1) In general.--Subject to paragraph (2), the qualified
financial institution shall deposit into the parallel account
with respect to each eligible individual the following amounts:
(A) A dollar-for-dollar match for the first $500
contributed by the eligible individual into an
Individual Development Account with respect to any
taxable year of such individual.
(B) Any matching funds provided by State, local, or
private sources in accordance with the matching ratio
set by those sources.
(2) Timing of deposits.--A deposit of the amounts described
in paragraph (1) shall be made into a parallel account--
(A) in the case of amounts described in paragraph
(1)(A), not later than 30 days after the end of the
calendar quarter during which the contribution
described in such paragraph was made, and
(B) in the case of amounts described in paragraph
(1)(B), not later than 2 business days after such
amounts were provided.
(3) Cross reference.--
For allowance of tax credit for
Individual Development Account subsidies, including matching funds, see
section 45G of the Internal Revenue Code of 1986.
(c) Deposit of Matching Funds Into Individual Development Account
of Individual Who Has Attained Age 65.--In the case of an Individual
Development Account owner who attains the age of 65, the qualified
financial institution shall deposit the funds in the parallel account
with respect to such individual into the Individual Development Account
of such individual on the later of--
(1) the day which is the 1-year anniversary of the deposit
of such funds in the parallel account, or
(2) the first business day of the taxable year of such
individual following the taxable year in which such individual
attained age 65.
(d) Uniform Accounting Regulations.--To ensure proper recordkeeping
and determination of the tax credit under section 45G of the Internal
Revenue Code of 1986, the Secretary shall prescribe regulations with
respect to accounting for matching funds in the parallel accounts.
(e) Regular Reporting of Accounts.--Any qualified financial
institution shall report the balances in any Individual Development
Account and parallel account of an individual on not less than an
annual basis to such individual.
SEC. 507. WITHDRAWAL PROCEDURES.
(a) Withdrawals for Qualified Expenses.--
(1) In general.--An Individual Development Account owner
may withdraw funds in order to pay qualified expense
distributions from such individual's--
(A) Individual Development Account, but only from
funds which have been on deposit in such Account for at
least 1 year, and
(B) parallel account, but only--
(i) from matching funds which have been on
deposit in such parallel account for at least 1
year,
(ii) from earnings in such parallel
account, after all matching funds described in
clause (i) have been withdrawn, and
(iii) to the extent such withdrawal does
not result in a remaining balance in such
parallel account which is less than the
remaining balance in the Individual Development
Account after such withdrawal.
(2) Procedure.--Upon receipt of a withdrawal request which
meets the requirements of paragraph (1), the qualified
financial institution shall directly transfer the funds
electronically to the distributees described in section
503(6)(A)(ii). If a distributee is not equipped to receive
funds electronically, the qualified financial institution may
issue such funds by paper check to the distributee.
(b) Withdrawals for Nonqualified Expenses.--An Individual
Development Account owner may withdraw any amount of funds from the
Individual Development Account for purposes other than to pay qualified
expense distributions, but if, after such withdrawal, the amount in the
parallel account of such owner (excluding earnings on matching funds)
exceeds the amount remaining in such Individual Development Account,
then such owner shall forfeit from the parallel account the lesser of
such excess or the amount withdrawn.
(c) Withdrawals From Accounts of Noneligible Individuals.--If the
individual for whose benefit an Individual Development Account is
established ceases to be an eligible individual, such account shall
remain an Individual Development Account, but such individual shall not
be eligible for any further matching funds under section 506(b)(1)(A)
for contributions which are made to the Account during any taxable year
when such individual is not an eligible individual.
(d) Effect of Pledging Account as Security.--If, during any taxable
year of the individual for whose benefit an Individual Development
Account is established, that individual uses the Account, the
individual's parallel account, or any portion thereof as security for a
loan, the portion so used shall be treated as a withdrawal of such
portion from the Individual Development Account for purposes other than
to pay qualified expenses.
SEC. 508. CERTIFICATION AND TERMINATION OF QUALIFIED INDIVIDUAL
DEVELOPMENT ACCOUNT PROGRAMS.
(a) Certification Procedures.--Upon establishing a qualified
individual development account program under section 504, a qualified
financial institution shall certify to the Secretary at such time and
in such manner as may be prescribed by the Secretary and accompanied by
any documentation required by the Secretary, that--
(1) the accounts described in subparagraphs (A) and (B) of
section 504(b)(1) are operating pursuant to all the provisions
of this title, and
(2) the qualified financial institution agrees to implement
an information system necessary to monitor the cost and
outcomes of the qualified individual development account
program.
(b) Authority To Terminate Qualified IDA Program.--If the Secretary
determines that a qualified financial institution under this title is
not operating a qualified individual development account program in
accordance with the requirements of this title (and has not implemented
any corrective recommendations directed by the Secretary), the
Secretary shall terminate such institution's authority to conduct the
program. If the Secretary is unable to identify a qualified financial
institution to assume the authority to conduct such program, then any
funds in a parallel account established for the benefit of any
individual under such program shall be deposited into the Individual
Development Account of such individual as of the first day of such
termination.
SEC. 509. REPORTING, MONITORING, AND EVALUATION.
(a) Responsibilities of Qualified Financial Institutions.--
(1) In general.--Each qualified financial institution that
operates a qualified individual development account program
under section 504 shall report annually to the Secretary within
90 days after the end of each calendar year on--
(A) the number of individuals making contributions
into Individual Development Accounts and the amounts
contributed,
(B) the amounts contributed into Individual
Development Accounts by eligible individuals and the
amounts deposited into parallel accounts for matching
funds,
(C) the amounts withdrawn from Individual
Development Accounts and parallel accounts, and the
purposes for which such amounts were withdrawn,
(D) the balances remaining in Individual
Development Accounts and parallel accounts, and
(E) such other information needed to help the
Secretary monitor the effectiveness of the qualified
individual development account program (provided in a
non-individually-identifiable manner).
(2) Additional reporting requirements.--Each qualified
financial institution that operates a qualified individual
development account program under section 504 shall report at
such time and in such manner as the Secretary may prescribe any
additional information that the Secretary requires to be
provided for purposes of administering and supervising the
qualified individual development account program. This
additional data may include, without limitation, identifying
information about Individual Development Account owners, their
Accounts, additions to the Accounts, and withdrawals from the
Accounts.
(b) Responsibilities of the Secretary.--
(1) Monitoring protocol.--Not later than 12 months after
the date of the enactment of this Act, the Secretary, in
consultation with the Secretary of Health and Human Services,
shall develop and implement a protocol and process to monitor
the cost and outcomes of the qualified individual development
account programs established under section 504.
(2) Annual reports.--For each year after 2003, the
Secretary shall submit a progress report to Congress on the
status of such qualified individual development account
programs. Such report shall, to the extent data are available,
include from a representative sample of qualified individual
development account programs information on--
(A) the characteristics of participants, including
age, gender, race or ethnicity, marital status, number
of children, employment status, and monthly income,
(B) deposits, withdrawals, balances, uses of
Individual Development Accounts, and participant
characteristics,
(C) the characteristics of qualified individual
development account programs, including match rate,
economic education requirements, permissible uses of
accounts, staffing of programs in full time employees,
and the total costs of programs, and
(D) process information on program implementation
and administration, especially on problems encountered
and how problems were solved.
(3) Reauthorization report on cost and outcomes of idas.--
(A) In general.--Not later than July 1, 2008, the
Secretary of the Treasury shall submit a report to
Congress and the chairmen and ranking members of the
Committee on Finance, the Committee on Banking,
Housing, and Urban Affairs, and the Committee on
Health, Education, Labor, and Pensions of the Senate
and the Committee on Ways and Means, the Committee on
Banking and Financial Services, and the Committee on
Education and the Workforce of the House of
Representatives, in which the Secretary shall--
(i) summarize the previously submitted
annual reports required under paragraph (2),
(ii) from a representative sample of
qualified individual development account
programs, include an analysis of--
(I) the economic, social, and
behavioral outcomes,
(II) the changes in savings rates,
asset holdings, and household debt, and
overall changes in economic stability,
(III) the changes in outlooks,
attitudes, and behavior regarding
savings strategies, investment,
education, and family,
(IV) the integration into the
financial mainstream, including
decreased reliance on alternative
financial services, and increase in
acquisition of mainstream financial
products, and
(V) the involvement in civic
affairs, including neighborhood schools
and associations,
associated with participation in qualified
individual development account programs,
(iii) from a representative sample of
qualified individual development account
programs, include a comparison of outcomes
associated with such programs with outcomes
associated with other Federal Government social
and economic development programs, including
asset building programs, and
(iv) make recommendations regarding the
reauthorization of the qualified individual
development account programs, including--
(I) recommendations regarding
reforms that will improve the cost and
outcomes of the such programs,
including the ability to help low
income families save and accumulate
productive assets,
(II) recommendations regarding the
appropriate levels of subsidies to
provide effective incentives to
financial institutions and Account
owners under such programs, and
(III) recommendations regarding how
such programs should be integrated into
other Federal poverty reduction, asset
building, and community development
policies and programs.
(B) Authorization.--There is authorized to be
appropriated $2,500,000, for carrying out the purposes
of this paragraph.
(4) Use of accounts in rural areas encouraged.--The
Secretary shall develop methods to encourage the use of
Individual Development Accounts in rural areas.
SEC. 510. AUTHORIZATION OF APPROPRIATIONS.
There is authorized to be appropriated to the Secretary $1,000,000
for fiscal year 2004 and for each fiscal year through 2011, for the
purposes of implementing this title, including the reporting,
monitoring, and evaluation required under section 509, to remain
available until expended.
SEC. 511. MATCHING FUNDS FOR INDIVIDUAL DEVELOPMENT ACCOUNTS PROVIDED
THROUGH A TAX CREDIT FOR QUALIFIED FINANCIAL
INSTITUTIONS.
(a) In General.--Subpart D of part IV of subchapter A of chapter 1
(relating to business related credits) is amended by adding at the end
the following new section:
``SEC. 45G. INDIVIDUAL DEVELOPMENT ACCOUNT INVESTMENT CREDIT.
``(a) Determination of Amount.--For purposes of section 38, the
individual development account investment credit determined under this
section with respect to any eligible entity for any taxable year is an
amount equal to the individual development account investment provided
by such eligible entity during the taxable year under an individual
development account program established under section 504 of the
Savings for Working Families Act of 2003.
``(b) Applicable Tax.--For the purposes of this section, the term
`applicable tax' means the excess (if any) of--
``(1) the tax imposed under this chapter (other than the
taxes imposed under the provisions described in subparagraphs
(C) through (Q) of section 26(b)(2)), over
``(2) the credits allowable under subpart B (other than
this section) and subpart D of this part.
``(c) Individual Development Account Investment.--For purposes of
this section, the term `individual development account investment'
means, with respect to an individual development account program in any
taxable year, an amount equal to the sum of--
``(1) the aggregate amount of dollar-for-dollar matches
under such program under section 506(b)(1)(A) of the Savings
for Working Families Act of 2003 for such taxable year, plus
``(2) $50 with respect to each Individual Development
Account maintained--
``(A) as of the end of such taxable year, but only
if such taxable year is within the 7-taxable-year
period beginning with the taxable year in which such
Account is opened, and
``(B) with a balance of not less than $100 (other
than the taxable year in which such Account is opened).
``(d) Eligible Entity.--For purposes of this section, except as
provided in regulations, the term `eligible entity' means a qualified
financial institution.
``(e) Other Definitions.--For purposes of this section, any term
used in this section and also in the Savings for Working Families Act
of 2003 shall have the meaning given such term by such Act.
``(f) Denial of Double Benefit.--
``(1) In general.--No deduction or credit (other than under
this section) shall be allowed under this chapter with respect
to any expense which--
``(A) is taken into account under subsection
(c)(1)(A) in determining the credit under this section,
or
``(B) is attributable to the maintenance of an
Individual Development Account.
``(2) Determination of amount.--Solely for purposes of
paragraph (1)(B), the amount attributable to the maintenance of
an Individual Development Account shall be deemed to be the
dollar amount of the credit allowed under subsection (c)(l)(B)
for each taxable year such Individual Development Account is
maintained.
``(g) Credit May Be Transferred.--
``(1) In general.--An eligible entity may transfer any
credit allowable to the eligible entity under subsection (a) to
any person other than to another eligible entity which is
exempt from tax under this title. The determination as to
whether a credit is allowable shall be made without regard to
the tax-exempt status of the eligible entity.
``(2) Consent required for revocation.--Any transfer under
paragraph (1) may be revoked only with the consent of the
Secretary.
``(h) Regulations.--The Secretary may prescribe such regulations as
may be necessary or appropriate to carry out this section, including
``(1) such regulations as necessary to insure that any
credit described in subsection (g)(1) is claimed once and not
retransferred by a transferee, and
``(2) regulations providing for a recapture of the credit
allowed under this section (notwithstanding any termination
date described in subsection (i)) in cases where there is a
forfeiture under section 507(b) of the Savings for Working
Families Act of 2003 in a subsequent taxable year of any amount
which was taken into account in determining the amount of such
credit.
``(i) Application of Section.--
``(1) In general.--This section shall apply to any
expenditure made in any taxable year ending after December 31,
2003, and beginning on or before January 1, 2011, with respect
to any Individual Development Account which--
``(A) is opened before January 1, 2011, and
``(B) as determined by the Secretary, when added to
all of the previously opened Individual Development
Accounts, does not exceed--
``(i) 100,000 Accounts if opened after
December 31, 2003, and before January 1, 2007,
``(ii) an additional 100,000 Accounts if
opened after December 31, 2006, and before
January 1, 2009, but only if, except as
provided in paragraph (4), the total number of
Accounts described in clause (i) are opened and
the Secretary determines that such Accounts are
being reasonably and responsibly administered,
and
``(iii) an additional 100,000 Accounts if
opened after December 31, 2008, and before
January 1, 2011, but only if the total number
of Accounts described in clauses (i) and (ii)
are opened and the Secretary makes a
determination described in paragraph (2).
Notwithstanding the preceding sentence, this section shall
apply to amounts which are described in subsection (c)(1)(A)
and which are timely deposited into a parallel account during
the 30-day period following the end of last taxable year
beginning before January 1, 2011.
``(2) Determination with respect to third group of
accounts.--A determination is described in this paragraph if
the Secretary determines that--
``(A) substantially all of the previously opened
Accounts have been reasonably and responsibly
administered prior to the date of the determination,
``(B) the individual development account programs
have increased net savings of participants in the
programs,
``(C) participants in the individual development
account programs have increased Federal income tax
liability and decreased utilization of Federal
assistance programs relative to similarly situated
individuals that did not participate in the individual
development account programs, and
``(D) the sum of the estimated increased Federal
tax liability and reduction of Federal assistance
program benefits to participants in the individual
development account programs is greater than the cost
of the individual development account programs to the
Federal government.
``(3) Determination of limitation.--The limitation on the
number of Individual Development Accounts under paragraph
(1)(B) shall be allocated by the Secretary among qualified
individual development account programs selected by the
Secretary and, in the case of the limitation under clause (iii)
of such paragraph, shall be equally divided among the States.
``(4) Special rule if smaller number of accounts are
opened.--For purposes of paragraph (1)(B)(ii)--
``(i) In general.--If less than 100,000
Accounts are opened before January 1, 2007,
such paragraph shall be applied by substituting
``applicable number of Accounts' for `100,000
Accounts'.
``(ii) Applicable number.--For purposes of
clause (i), the applicable number equals the
lesser of--
``(I) 75,000, or
``(II) 3 times the number of
Accounts opened before January 1,
2007.''.
(b) Credit Treated as Business Credit.--Section 38(b) (relating to
current year business credit) is amended by striking ``plus'' at the
end of paragraph (14), by striking the period at the end of paragraph
(15) and inserting ``, plus'', and by adding at the end the following
new paragraph:
``(16) the individual development account investment credit
determined under section 45G(a).''.
(c) No Carrybacks.--Subsection (d) of section 39 (relating to
carryback and carryforward of unused credits) is amended by adding at
the end the following:
``(11) No carryback of section 45g credit before effective
date.--No portion of the unused business credit for any taxable
year which is attributable to the individual development
account investment credit determined under section 45G may be
carried back to a taxable year ending before January 1,
2004.''.
(d) Conforming Amendment.--The table of sections for subpart C of
part IV of subchapter A of chapter 1 is amended by adding at the end
the following new item:
``Sec. 45G. Individual development
account investment credit.''.
(e) Effective Date.--The amendments made by this section shall
apply to taxable years ending after December 31, 2003.
SEC. 512. ACCOUNT FUNDS DISREGARDED FOR PURPOSES OF CERTAIN MEANS-
TESTED FEDERAL PROGRAMS.
Notwithstanding any other provision of Federal law (other than the
Internal Revenue Code of 1986) that requires consideration of 1 or more
financial circumstances of an individual, for the purpose of
determining eligibility to receive, or the amount of, any assistance or
benefit authorized by such provision to be provided to or for the
benefit of such individual, any amount (including earnings thereon) in
any Individual Development Account of such individual and any matching
deposit made on behalf of such individual (including earnings thereon)
in any parallel account shall be disregarded for such purpose with
respect to any period during which such individual maintains or makes
contributions into such Individual Development Account.
TITLE VI--MANAGEMENT OF EXEMPT ORGANIZATIONS
SEC. 601. AUTHORIZATION OF APPROPRIATIONS.
(a) In General.--There is authorized to be appropriated to the
Secretary of the Treasury $80,000,000 for each fiscal year to carry out
the administration of exempt organizations by the Internal Revenue
Service.
(b) Implementation of Section 527.--There is authorized to be
appropriated to the Secretary of the Treasury $3,000,000 to carry out
the provisions of Public Laws 106-230 and 107-276 relating to section
527 of the Internal Revenue Code of 1986.
TITLE VII--COMPASSION CAPITAL FUND
SEC. 701. SUPPORT FOR NONPROFIT COMMUNITY-BASED ORGANIZATIONS;
DEPARTMENT OF HEALTH AND HUMAN SERVICES.
(a) Support for Nongovernmental Organizations.--The Secretary of
Health and Human Services (referred to in this section as ``the
Secretary'') may award grants to and enter into cooperative agreements
with nongovernmental organizations, to--
(1) provide technical assistance for community-based
organizations, which may include--
(A) grant writing and grant management assistance,
which may include assistance provided through workshops
and other guidance;
(B) legal assistance with incorporation;
(C) legal assistance to obtain tax-exempt status;
and
(D) information on, and referrals to, other
nongovernmental organizations that provide expertise in
accounting, on legal issues, on tax issues, in program
development, and on a variety of other organizational
topics;
(2) provide information and assistance for community-based
organizations on capacity building;
(3) provide for community-based organizations information
on and assistance in identifying and using best practices for
delivering assistance to persons, families, and communities in
need;
(4) provide information on and assistance in utilizing
regional intermediary organizations to increase and strengthen
the capabilities of nonprofit community-based organizations;
(5) assist community-based organizations in replicating
social service programs of demonstrated effectiveness; and
(6) encourage research on the best practices of social
service organizations.
(b) Support for States.--The Secretary--
(1) may award grants to and enter into cooperative
agreements with States and political subdivisions of States to
provide seed money to establish State and local offices of
faith-based and community initiatives; and
(2) shall provide technical assistance to States and
political subdivisions of States in administering the
provisions of this Act.
(c) Applications.--To be eligible to receive a grant or enter into
a cooperative agreement under this section, a nongovernmental
organization, State, or political subdivision shall submit an
application to the Secretary at such time, in such manner, and
containing such information as the Secretary may require.
(d) Limitation.--In order to widely disburse limited resources, no
community-based organization (other than a direct recipient of a grant
or cooperative agreement from the Secretary) may receive more than 1
grant or cooperative agreement under this section for the same purpose.
(e) Authorization of Appropriations.--There are authorized to be
appropriated to carry out this section $85,000,000 for fiscal year
2003, and such sums as may be necessary for each of fiscal years 2004
through 2007.
(f) Definition.--In this section, the term ``community-based
organization'' means a nonprofit corporation or association that has--
(1) not more than 6 full-time equivalent employees who are
engaged in the provision of social services; or
(2) a current annual budget (current as of the date the
entity seeks assistance under this section) for the provision
of social services, compiled and adopted in good faith, of less
than $450,000.
SEC. 702. SUPPORT FOR NONPROFIT COMMUNITY-BASED ORGANIZATIONS;
CORPORATION FOR NATIONAL AND COMMUNITY SERVICE.
(a) Support for Nongovernmental Organizations.--The Corporation for
National and Community Service (referred to in this section as ``the
Corporation'') may award grants to and enter into cooperative
agreements with nongovernmental organizations and State Commissions on
National and Community Service established under section 178 of the
National and Community Service Act of 1990 (42 U.S.C. 12638), to--
(1) provide technical assistance for community-based
organizations, which may include--
(A) grant writing and grant management assistance,
which may include assistance provided through workshops
and other guidance;
(B) legal assistance with incorporation;
(C) legal assistance to obtain tax-exempt status;
and
(D) information on, and referrals to, other
nongovernmental organizations that provide expertise in
accounting, on legal issues, on tax issues, in program
development, and on a variety of other organizational
topics;
(2) provide information and assistance for community-based
organizations on capacity building;
(3) provide for community-based organizations information
on and assistance in identifying and using best practices for
delivering assistance to persons, families, and communities in
need;
(4) provide information on and assistance in utilizing
regional intermediary organizations to increase and strengthen
the capabilities of community-based organizations;
(5) assist community-based organizations in replicating
social service programs of demonstrated effectiveness; and
(6) encourage research on the best practices of social
service organizations.
(b) Applications.--To be eligible to receive a grant or enter into
a cooperative agreement under this section, a nongovernmental
organization, State Commission, State, or political subdivision shall
submit an application to the Corporation at such time, in such manner,
and containing such information as the Corporation may require.
(c) Limitation.--In order to widely disburse limited resources, no
community-based organization (other than a direct recipient of a grant
or cooperative agreement from the Secretary) may receive more than 1
grant or cooperative agreement under this section for the same purpose.
(d) Authorization of Appropriations.--There are authorized to be
appropriated to carry out this section $15,000,000 for fiscal year
2003, and such sums as may be necessary for each of fiscal years 2004
through 2007.
(e) Definition.--In this section, the term ``community-based
organization'' means a nonprofit corporation or association that has--
(1) not more than 6 full-time equivalent employees who are
engaged in the provision of social services; or
(2) a current annual budget (current as of the date the
entity seeks assistance under this section) for the provision
of social services, compiled and adopted in good faith, of less
than $450,000.
SEC. 703. SUPPORT FOR NONPROFIT COMMUNITY-BASED ORGANIZATIONS;
DEPARTMENT OF JUSTICE.
(a) Support for Nongovernmental Organizations.--The Attorney
General may award grants to and enter into cooperative agreements with
nongovernmental organizations, to--
(1) provide technical assistance for community-based
organizations, which may include--
(A) grant writing and grant management assistance,
which may include assistance provided through workshops
and other guidance;
(B) legal assistance with incorporation;
(C) legal assistance to obtain tax-exempt status;
and
(D) information on, and referrals to, other
nongovernmental organizations that provide expertise in
accounting, on legal issues, on tax issues, in program
development, and on a variety of other organizational
topics;
(2) provide information and assistance for community-based
organizations on capacity building;
(3) provide for community-based organizations information
on and assistance in identifying and using best practices for
delivering assistance to persons, families, and communities in
need;
(4) provide information on and assistance in utilizing
regional intermediary organizations to increase and strengthen
the capabilities of nonprofit community-based organizations;
(5) assist community-based organizations in replicating
social service programs of demonstrated effectiveness; and
(6) encourage research on the best practices of social
service organizations.
(b) Applications.--To be eligible to receive a grant or enter into
a cooperative agreement under this section, a nongovernmental
organization, State, or political subdivision shall submit an
application to the Attorney General at such time, in such manner, and
containing such information as the Attorney General may require.
(c) Limitation.--In order to widely disburse limited resources, no
community-based organization (other than a direct recipient of a grant
or cooperative agreement from the Attorney General) may receive more
than 1 grant or cooperative agreement under this section for the same
purpose.
(d) Authorization of Appropriations.--There are authorized to be
appropriated to carry out this section $35,000,000 for fiscal year
2003, and such sums as may be necessary for each of fiscal years 2004
through 2007.
(e) Definition.--In this section, the term ``community-based
organization'' means a nonprofit corporation or association that has--
(1) not more than 6 full-time equivalent employees who are
engaged in the provision of social services; or
(2) a current annual budget (current as of the date the
entity seeks assistance under this section) for the provision
of social services, compiled and adopted in good faith, of less
than $450,000.
SEC. 704. SUPPORT FOR NONPROFIT COMMUNITY-BASED ORGANIZATIONS;
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT.
(a) Support for Nongovernmental Organizations.--The Secretary of
Housing and Urban Development (referred to in this section ``the
Secretary'') may award grants to and enter into cooperative agreements
with nongovernmental organizations, to--
(1) provide technical assistance for community-based
organizations, which may include--
(A) grant writing and grant management assistance,
which may include assistance provided through workshops
and other guidance;
(B) legal assistance with incorporation;
(C) legal assistance to obtain tax-exempt status;
and
(D) information on, and referrals to, other
nongovernmental organizations that provide expertise in
accounting, on legal issues, on tax issues, in program
development, and on a variety of other organizational
topics;
(2) provide information and assistance for community-based
organizations on capacity building;
(3) provide for community-based organizations information
on and assistance in identifying and using best practices for
delivering assistance to persons, families, and communities in
need;
(4) provide information on and assistance in utilizing
regional intermediary organizations to increase and strengthen
the capabilities of community-based organizations;
(5) assist community-based organizations in replicating
social service programs of demonstrated effectiveness; and
(6) encourage research on the best practices of social
service organizations.
(b) Applications.--To be eligible to receive a grant or enter into
a cooperative agreement under this section, a nongovernmental
organization, State, or political subdivision shall submit an
application to the Secretary at such time, in such manner, and
containing such information as the Secretary may require.
(c) Limitation.--In order to widely disburse limited resources, no
community-based organization (other than a direct recipient of a grant
or cooperative agreement from the Secretary) may receive more than 1
grant or cooperative agreement under this section for the same purpose.
(d) Authorization of Appropriations.--There are authorized to be
appropriated to carry out this section $15,000,000 for fiscal year
2003, and such sums as may be necessary for each of fiscal years 2004
through 2007.
(e) Definition.--In this section, the term ``community-based
organization'' means a nonprofit corporation or association that has--
(1) not more than 6 full-time equivalent employees who are
engaged in the provision of social services; or
(2) a current annual budget (current as of the date the
entity seeks assistance under this section) for the provision
of social services, compiled and adopted in good faith, of less
than $450,000.
SEC. 705. COORDINATION.
The Secretary of Health and Human Services, the Corporation for
National and Community Service, the Attorney General, and the Secretary
of Housing and Urban Development shall coordinate their activities
under this title to ensure--
(1) nonduplication of activities under this title; and
(2) an equitable distribution of resources under this
title.
TITLE VIII--EQUAL TREATMENT FOR NONGOVERNMENTAL PROVIDERS
SEC. 801. NONGOVERNMENTAL ORGANIZATIONS.
(a) General Authority.--For any social service program, a
nongovernmental organization that is (or is applying to be) involved in
the delivery of social services for the program shall not be required--
(1) to alter or remove art, icons, scripture, or other
symbols, or to alter its name, because the symbols or name are
religious;
(2) to alter or remove provisions in its chartering
documents because the provisions are religious, except that no
such charter provisions shall affect the application to a
nongovernmental organization of any law that would
(notwithstanding this paragraph) apply to the nongovernmental
organization; or
(3) to alter or remove religious qualifications for
membership on its governing boards.
(b) Prior Experience.--A nongovernmental organization that has not
previously been awarded a contract, grant, or cooperative agreement
from an agency shall not, for that reason, be disadvantaged in a
competition to secure a contract, grant, or cooperative agreement to
deliver services under a social service program from the agency
administering the program.
(c) Intermediate Grantors.--
(1) In general.--An agency that administers a social
service program, and that is authorized to award grants or
cooperative agreements to nongovernmental organizations under
the program, may award to a nongovernmental organization
(referred to in this subsection as an ``intermediate grantor'')
a grant or cooperative agreement, the terms of which authorize
the intermediate grantor--
(A) to provide subgrants or subagreements to
nongovernmental providers (referred to individually in
this subsection as a ``subrecipient''), to deliver
social services for the program; and
(B) to manage the subgrants or subagreements.
(2) Responsibilities and rights of subrecipients.--
(A) Responsibilities.--Except for those
administrative responsibilities that the intermediate
grantor fully performs on behalf of the subrecipient,
the subrecipient shall have the same responsibilities
or duties with respect to the program as the
subrecipient would have if it were the intermediate
grantor.
(B) Rights.--The subrecipient shall have the same
rights or authorities under this section as the
subrecipient would have if it were the intermediate
grantor.
(3) Responsibilities and rights of agencies.--
(A) Responsibilities.--Nothing in this subsection
shall alter any of an agency's responsibilities or
duties with respect to the program, the intermediate
grantor, or the subrecipient.
(B) Rights.--Nothing in this subsection shall alter
any of an agency's rights or authorities with respect
to the program, the intermediate grantor, or the
subrecipient.
(d) Compliance.--To enforce the provisions of this section against
a Federal agency or official, a nongovernmental organization may bring
an action for injunctive relief in an appropriate United States
district court. To enforce the provisions of this section against a
State or local agency or official, a nongovernmental organization may
bring an action for injunctive relief in an appropriate State court of
general jurisdiction.
(e) Definitions.--In this section:
(1) Federal financial assistance.--The term ``Federal
financial assistance'' does not include a tax credit,
deduction, or exemption.
(2) Social service program.--
(A) In general.--The term ``social service
program'' means a program that--
(i) is administered by the Federal
Government, or by a State or local government
using Federal financial assistance; and
(ii) provides services directed at helping
people in need, reducing poverty, improving
outcomes of low-income children, revitalizing
low-income communities, and empowering low-
income families and low-income individuals to
become self-sufficient, including--
(I) child care services, protective
services for children and
adults, services for children and adults in foster care, adoption
services, services related to the management and maintenance of the
home, day care services for adults, and services to meet the special
needs of children, older individuals, and individuals with disabilities
(including physical, mental, or emotional disabilities);
(II) transportation services;
(III) job training and related
services, and employment services;
(IV) information, referral, and
counseling services;
(V) the preparation and delivery of
meals, and services related to soup
kitchens or food banks;
(VI) health support services;
(VII) literacy and mentoring
programs;
(VIII) services for the prevention
and treatment of juvenile delinquency
and substance abuse, services for the
prevention of crime and the provision
of assistance to the victims and the
families of criminal offenders, and
services related to the intervention
in, and prevention of, domestic
violence; and
(IX) services related to the
provision of assistance for housing
under Federal law.
(B) Exclusions.--The term does not include a
program having the purpose of delivering educational
assistance under the Elementary and Secondary Education
Act of 1965 (20 U.S.C. 6301 et seq.) or under the
Higher Education Act of 1965 (20 U.S.C. 1001 et seq.).
TITLE IX--MATERNITY GROUP HOMES
SEC. 901. MATERNITY GROUP HOMES.
(a) Permissible Use of Funds.--Section 322 of the Runaway and
Homeless Youth Act (42 U.S.C. 5714-2) is amended--
(1) in subsection (a)(1), by inserting ``(including
maternity group homes)'' after ``group homes''; and
(2) by adding at the end the following:
``(c) Maternity Group Home.--In this part, the term `maternity
group home' means a community-based, adult-supervised group home that
provides young mothers and their children with a supportive and
supervised living arrangement in which such mothers are required to
learn parenting skills, including child development, family budgeting,
health and nutrition, and other skills to promote their long-term
economic independence and the well-being of their children.''.
(b) Contract for Evaluation.--Part B of the Runaway and Homeless
Youth Act (42 U.S.C. 5701 et seq.) is amended by adding at the end the
following:
``SEC. 323. CONTRACT FOR EVALUATION.
``(a) In General.--The Secretary shall enter into a contract with a
public or private entity for an evaluation of the maternity group homes
that are supported by grant funds under this Act.
``(b) Information.--The evaluation described in subsection (a)
shall include the collection of information about the relevant
characteristics of individuals who benefit from maternity group homes
such as those that are supported by grant funds under this Act and what
services provided by those maternity group homes are most beneficial to
such individuals.
``(c) Report.--Not later than 2 years after the date on which the
Secretary enters into a contract for an evaluation under subsection
(a), and biennially thereafter, the entity conducting the evaluation
under this section shall submit to Congress a report on the status,
activities, and accomplishments of maternity group homes that are
supported by grant funds under this Act.''.
(c) Authorization of Appropriations.--Section 388 of the Runaway
and Homeless Youth Act (42 U.S.C. 5751) is amended--
(1) in subsection (a)(1)--
(A) by striking ``There'' and inserting the
following:
``(A) In general.--There'';
(B) in subparagraph (A), as redesignated, by
inserting ``and the purpose described in subparagraph
(B)'' after ``other than part E''; and
(C) by adding at the end the following:
``(B) Maternity group homes.--There is authorized
to be appropriated, for maternity group homes eligible
for assistance under section 322(a)(1)--
``(i) $33,000,000 for fiscal year 2003; and
``(ii) such sums as may be necessary for
fiscal year 2004.''; and
(2) in subsection (a)(2)(A), by striking ``paragraph (1)''
and inserting ``paragraph (1)(A)''.
<all>
Introduced in Senate
Sponsor introductory remarks on measure. (CR S1835-1836)
Read twice and referred to the Committee on Finance.
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