CARE Act of 2005 - Amends Internal Revenue Code provisions relating to charitable giving, including to: (1) allow nonitemizing taxpayers to claim a tax deduction for charitable contributions; (2) permit tax-free distributions from individual retirement accounts for charitable purposes; (3) expand the tax deductions for charitable contributions of food and book inventories; (4) allow an increased tax deduction for charitable contributions of literary, musical, artistic, and scholarly compositions; and (5) exclude from gross income reimbursements to volunteers for the charitable use of an automobile. Revises various disclosure and oversight requirements relating to tax-exempt organizations.
Restores and increases funding for the Social Services Block Grant Program.
Savings for Working Families Act of 2005 - Allows certain low income individuals to establish individual development accounts (IDAs) to accumulate assets for homeownership, education, business startup, and other purposes. Allows an investment tax credit for contributions to an IDA.
Authorizes the Secretary of Health and Human Services, the Corporation for National and Community Service, the U.S. Attorney General, and the Secretary of Housing and Urban Development to award grants to, and enter into cooperative agreements with, nongovernmental organizations to assist nonprofit community-based organizations in delivering social services.
Requires the Secretary of Health and Human Services to contract for an evaluation of maternity group homes under the Runaway and Homeless Youth Act.
[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 1780 Introduced in Senate (IS)]
109th CONGRESS
1st Session
S. 1780
To amend the Internal Revenue Code of 1986 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
September 28, 2005
Mr. Santorum (for himself, Mr. Lieberman, Mr. Frist, Mr. Hatch, Mr.
Lugar, Mr. Smith, Mr. Inouye, Mr. Coleman, and Mr. Bunning) introduced
the following bill; which was read twice and referred to the Committee
on Finance
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 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; AMENDMENT OF 1986 CODE; TABLE OF CONTENTS.
(a) Short Title.--This title may be cited as the ``CARE Act of
2005''.
(b) Amendment of 1986 Code.--Except as otherwise expressly
provided, whenever in this title an amendment or repeal is expressed in
terms of an amendment to, or repeal of, a section or other provision,
the reference shall be considered to be made to a section or other
provision of the Internal Revenue Code of 1986.
(c) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; amendment of 1986 Code; table of contents.
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. Modification of charitable deduction for contributions of
food inventories.
Sec. 104. Modification of charitable deduction for contributions of
book inventories.
Sec. 105. Modifications to encourage contributions of capital gain real
property made for conservation purposes.
Sec. 106. Exclusion of 25 percent of gain on sales or exchanges of land
or water interests to eligible entities for
conservation purposes.
Sec. 107. Adjustment to basis of S corporation stock for certain
charitable contributions.
Sec. 108. Enhanced deduction for charitable contribution of literary,
musical, artistic, and scholarly
compositions.
Sec. 109. Mileage reimbursements to charitable volunteers excluded from
gross income.
Sec. 110. Extension of enhanced deduction for inventory to include
public schools.
TITLE II--PROPOSALS IMPROVING THE 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.
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 and families of astronauts killed
in the line of duty.
Sec. 309. Modification of scholarship foundation rules.
Sec. 310. Treatment of certain hospital support organizations as
qualified organizations for purposes of
determining acquisition indebtedness.
Sec. 311. Matching grants to low-income taxpayer clinics for return
preparation.
Sec. 312. Exemption of qualified 501(c)(3) bonds for nursing homes from
Federal guarantee prohibitions.
Sec. 313. Excise taxes exemption for blood collector organizations.
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--MATERNITY GROUP HOMES
Sec. 801. 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 (o) as
subsection (p) and by inserting after subsection (n) the following new
subsection:
``(o) 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, to
the extent that such contributions 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(o).''.
(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 between taxpayers who itemize
their charitable contributions and taxpayers who claim a direct
charitable deduction.
(2) Report.--By not later than December 31, 2006, 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, 2004, and before
January 1, 2007.
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--
``(I) in the case of any
distribution described in clause
(i)(I), the date that the individual
for whose benefit the account is
maintained has attained age 70\1/2\,
and
``(II) in the case of any
distribution described in clause
(i)(II), the date that such individual
has attained 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 have been
so includible if all amounts were distributed from all
individual retirement accounts treated as 1 contract
under paragraph (2)(A) for purposes of 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 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 deduction taken under
section 642(c) within such year,
``(B) the amount paid out within such year which
represents amounts for which deductions under section
642(c) have been taken in prior years,
``(C) the amount for which such 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 the purposes described in
section 642(c),
``(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 to a trust
for any taxable year if--
``(A) 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, or
``(B) the trust is 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--
(A) described in section 408(d)(8)(B)(i)(I) of the
Internal Revenue Code of 1986, as added by this
section, made after the date of the enactment of this
Act, and
(B) described in section 408(d)(8)(B)(i)(II) of
such Code, as so added, made after December 31, 2004.
(2) Subsection (b).--The amendments made by subsection (b)
shall apply to returns for taxable years beginning after
December 31, 2004.
SEC. 103. MODIFICATION OF CHARITABLE DEDUCTION FOR CONTRIBUTIONS OF
FOOD INVENTORIES.
(a) In General.--Subparagraph (C) of section 170(e)(3) (relating to
special rule for certain contributions of inventory and other
property), as added by section 305 of the Katrina Emergency Tax Relief
Act of 2005, is amended to read as follows:
``(C) Special rule for contributions of food
inventory.--
``(i) General rule.--In the case of a
charitable contribution of food from any trade
or business of the taxpayer, this paragraph
shall be applied--
``(I) without regard to whether the
contribution is made by a C
corporation, and
``(II) only to food that is
apparently wholesome food.
``(ii) Limitation.--In the case of a
taxpayer other than a C corporation, the
aggregate amount of such contributions for any
taxable year which may be taken into account
under this section shall not exceed 10 percent
of the taxpayer's aggregate net income for such
taxable year from all trades or businesses from
which such contributions were made for such
year, computed without regard to this section.
``(iii) Limitation on reduction.--In the
case of any such contribution, 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 apparently wholesome food exceeds
twice the basis of such food.
``(iv) 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
subparagraph (B), to treat the basis of any
apparently wholesome food as being equal to 25
percent of the fair market value of such food.
``(v) Determination of fair market value.--
In the case of any such contribution of
apparently wholesome food 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).
``(vi) Apparently wholesome food.--For
purposes of this subparagraph, the term
`apparently wholesome food' has the meaning
given to 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 subparagraph.''.
(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. MODIFICATION OF CHARITABLE DEDUCTION FOR CONTRIBUTIONS OF
BOOK INVENTORIES.
(a) In General.--Subparagraph (D) of section 170(e)(3) (relating to
special rule for certain contributions of inventory and other
property), as added by section 305 of the Katrina Emergency Tax Relief
Act of 2005, is amended to read as follows:
``(D) 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) determined in the usual
market in which such a book has been
customarily sold by the taxpayer, and
``(III) for which the taxpayer can
demonstrate to the satisfaction of the
Secretary that the taxpayer customarily
sold such books in arm's length
transactions within 7 years preceding
the contribution of such a book.''.
(b) Effective Date.--The amendment made by this section shall apply
to contributions made after the date of the enactment of this Act.
SEC. 105. 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 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 by a taxpayer who is an eligible
farmer or rancher for the taxable year in which
such contributions are made--
``(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. 106. 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) in any case where 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 the date of the enactment
of this Act.
SEC. 107. 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. 108. 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. 109. 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 139A the following new section:
``SEC. 139B. 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 the expenses which are reimbursed
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 139A the following new item:
``Sec. 139B. 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.
SEC. 110. EXTENSION OF ENHANCED DEDUCTION FOR INVENTORY TO INCLUDE
PUBLIC SCHOOLS.
(a) In General.--Subparagraph (A) of section 170(e)(3) (relating to
special rule for certain contributions of inventory and other property)
is amended by striking ``to an organization which is described in'' and
all that follows through the end of clause (i) and inserting ``to a
qualified organization, but only if--
``(i) the property is to be used by the
donee solely for the care of the ill, the
needy, or infants and, in the case of--
``(I) an organization described in
section 501(c)(3) (other than an
organization described in subclause
(II)), the use of the property by the
donee is related to the purpose or
function constituting the basis for its
exemption under section 501, and
``(II) an organization described in
subsection (b)(1)(A)(ii), the use of
the property by the donee is related to
educational purposes and such property
is not computer technology or equipment
(as defined in paragraph (6)(F)(i));''.
(b) Qualified Organization.--Paragraph (3) of section 170(e) of
such Code, as amended by this Act, is amended by redesignating
subparagraph (D) as subparagraph (E) and by inserting after
subparagraph (C) the following new subparagraph:
``(D) Qualified organization.--For purposes of this
paragraph, the term `qualified organization' means--
``(i) an organization which is described in
section 501(c)(3) and is exempt 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)), and
``(ii) an educational organization
described in subsection (b)(1)(A)(ii).''.
(c) Effective Date.--The amendments made by this section shall
apply to contributions made after December 31, 2004.
TITLE II--PROPOSALS IMPROVING THE 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, 2004.
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 stock or securities which are listed on an
established securities market 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 sentence: ``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 stock or securities which are listed on an established
securities market 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--
(1) by redesignating paragraph (6) (relating to disclosure
of reports by Internal Revenue Service) as paragraph (7),
(2) by redesignating paragraph (6) (relating to application
to nonexempt charitable trusts and nonexempt private
foundations) as paragraph (8), and
(3) 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 stock or
securities which are listed on an established securities market
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, 2004.
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 a person other than the appropriate State officer if
such person is an officer or employee of the State and
is designated by the appropriate State official to
receive the returns or return information under this
paragraph on behalf of the appropriate State officer.
``(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
only be inspected by or disclosed to a person other than the
appropriate State officer if such person is an officer or
employee of the State and is designated by the appropriate
State official to receive the returns or return information
under this paragraph on behalf of the appropriate State
officer.
``(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) Subparagraph (A) of section 6103(p)(3) is amended by
inserting ``and section 6104(c)'' after ``section'' in the
first sentence.
(2) Paragraph (4) of section 6103(p) is amended--
(A) in the matter preceding subparagraph (A), by
inserting ``, or any appropriate State officer (as
defined in section 6104(c)),'' before ``or any other
person'',
(B) in subparagraph (F)(i), by inserting ``or any
appropriate State officer (as defined in section
6104(c)),'' before ``or any other person'', and
(C) in the matter following subparagraph (F), by
inserting ``, an appropriate State officer (as defined
in section 6104(c)),'' after ``including an agency''
each place it appears.
(3) The heading for paragraph (1) of section 6104(c) is
amended by inserting ``for charitable organizations'' after
``rule''.
(4) Paragraph (2) of section 7213(a) is amended by
inserting ``or under section 6104(c)'' after ``6103''.
(5) Paragraph (2) of section 7213A(a) is amended by
inserting ``or 6104(c)'' after ``6103''.
(6) 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 amendments 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 this Act, is amended by redesignating
subsection (i) as subsection (j) and by inserting after subsection (h)
the following new subsection:
``(i) Additional Notification Requirements.--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)--
``(1) shall furnish annually, at such time and in such
manner as the Secretary may by forms or regulations prescribe,
information setting forth--
``(A) the legal name of the organization,
``(B) any name under which such organization
operates or does business,
``(C) the organization's mailing address and
Internet web site address (if any),
``(D) the organization's taxpayer identification
number,
``(E) the name and address of a principal officer,
and
``(F) evidence of the continuing basis for the
organization's exemption from the filing requirements
under subsection (a)(1), and
``(2) upon the termination of the existence of the
organization, shall furnish notice of such termination.''.
(b) Loss of Exempt Status for Failure To File Return or Notice.--
Section 6033 (relating to returns by exempt organizations), as amended
by subsection (a), is amended by redesignating subsection (j) as
subsection (k) and by inserting after subsection (i) the following new
subsection:
``(j) Loss of Exempt Status for Failure To File Return or Notice.--
``(1) In general.--If an organization described in
subsection (a)(1) or (i) fails to file an annual return or
notice required under either subsection for 3 consecutive
years, 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 return or notice. The Secretary shall publish and
maintain a list of any organization the status of which is so
revoked.
``(2) Application necessary for reinstatement.--Any
organization the tax-exempt status of which is revoked under
paragraph (1) must apply in order to obtain reinstatement of
such status regardless of whether such organization was
originally required to make such an application.
``(3) Retroactive reinstatement if reasonable cause shown
for failure.--If upon application for reinstatement of status
as an organization exempt from tax under section 501(a), an
organization described in paragraph (1) can show to the
satisfaction of the Secretary evidence of reasonable cause for
the failure described in such paragraph, the organization's
exempt status may, in the discretion of the Secretary, be
reinstated effective from the date of the revocation under such
paragraph.''.
(c) 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(j)(1).''.
(d) No Inspection Requirement.--Section 6104(b) (relating to
inspection of annual information returns) is amended by inserting
``(other than subsection (i) thereof)'' after ``6033''.
(e) 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).''.
(f) 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).''.
(g) Secretarial Outreach Requirements.--
(1) Notice requirement.--The Secretary of the Treasury
shall notify in a timely manner every organization described in
section 6033(i) of the Internal Revenue Code of 1986 (as added
by this section) of the requirement under such section 6033(i)
and of the penalty established under section 6033(j)--
(A) 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
(B) by Internet or other means of outreach, in the
case of any other organization.
(2) Loss of status penalty for failure to file return.--The
Secretary of the Treasury shall publicize in a timely manner in
appropriate forms and instructions and through other
appropriate means, the penalty established under section
6033(j) of such Code for the failure to file a return under
section 6033(a)(1) of such Code.
(h) Effective Date.--The amendments made by this section shall
apply to notices and returns with respect to annual periods beginning
after 2004.
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, 2004.
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, 2004.
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, 2004, 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, 2004.
SEC. 307. DEFINITION OF CONVENTION OR ASSOCIATION OF CHURCHES.
Section 7701 (relating to definitions) is amended by redesignating
subsection (o) as subsection (p) and by inserting after subsection (n)
the following new subsection:
``(o) 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 AND FAMILIES OF ASTRONAUTS KILLED IN THE LINE
OF DUTY.
(a) In General.--For purposes of the Internal Revenue Code of
1986--
(1) any payment made by an organization described in
section 501(c)(3) of such Code to--
(A) 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, or
(B) an individual of an astronaut's immediate
family by reason of the death of such astronaut
occurring in the line of duty after December 31, 2002,
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 payment is 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 Dates.--This section shall apply to--
(1) payments described in subsection (a)(1)(A) made after
the date of the enactment of this Act and before September 11,
2005, and
(2) payments described in subsection (a)(1)(B) made after
December 31, 2002.
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, 2004.
SEC. 311. MATCHING GRANTS TO LOW-INCOME TAXPAYER CLINICS FOR RETURN
PREPARATION.
(a) In General.--Chapter 77 (relating to miscellaneous provisions)
is amended by inserting after section 7526 the following new section:
``SEC. 7526A. RETURN PREPARATION CLINICS FOR LOW-INCOME TAXPAYERS.
``(a) In General.--The Secretary may, subject to the availability
of appropriated funds, make grants to provide matching funds for the
development, expansion, or continuation of qualified return preparation
clinics.
``(b) Definitions.--For purposes of this section--
``(1) Qualified return preparation clinic.--
``(A) In general.--The term `qualified return
preparation clinic' means a clinic which--
``(i) does not charge more than a nominal
fee for its services (except for reimbursement
of actual costs incurred), and
``(ii) operates programs which assist low-
income taxpayers in preparing and filing their
Federal income tax returns, including schedules
reporting sole proprietorship or farm income.
``(B) Assistance to low-income taxpayers.--A clinic
is treated as assisting low-income taxpayers under
subparagraph (A)(ii) if at least 90 percent of the
taxpayers assisted by the clinic have incomes which do
not exceed 250 percent of the poverty level, as
determined in accordance with criteria established by
the Director of the Office of Management and Budget.
``(2) Clinic.--The term `clinic' includes--
``(A) a clinical program at an eligible educational
institution (as defined in section 529(e)(5)) which
satisfies the requirements of paragraph (1) through
student assistance of taxpayers in return preparation
and filing, and
``(B) an organization described in section 501(c)
and exempt from tax under section 501(a) which
satisfies the requirements of paragraph (1).
``(c) Special Rules and Limitations.--
``(1) Aggregate limitation.--Unless otherwise provided by
specific appropriation, the Secretary shall not allocate more
than $10,000,000 per year (exclusive of costs of administering
the program) to grants under this section.
``(2) Other applicable rules.--Rules similar to the rules
under paragraphs (2) through (5) of section 7526(c) shall apply
with respect to the awarding of grants to qualified return
preparation clinics.''.
(b) Clerical Amendment.--The table of sections for chapter 77 is
amended by inserting after the item relating to section 7526 the
following new item:
``Sec. 7526A. Return preparation clinics
for low-income taxpayers.''.
(c) Effective Date.--The amendments made by this section shall
apply to grants made after the date of the enactment of this Act.
SEC. 312. EXEMPTION OF QUALIFIED 501(C)(3) BONDS FOR NURSING HOMES FROM
FEDERAL GUARANTEE PROHIBITIONS.
(a) In General.--Section 149(b)(3) (relating to exceptions) is
amended by adding at the end the following new subparagraph:
``(E) Exception for qualified 501(c)(3) bonds for
nursing homes.--
``(i) In general.--Paragraph (1) shall not
apply to any qualified 501(c)(3) bond issued
before the date which is 1 year after the date
of the enactment of this subparagraph for the
benefit of an organization described in section
501(c)(3), if such bond is part of an issue the
proceeds of which are used to finance 1 or more
of the following facilities primarily for the
benefit of the elderly:
``(I) Licensed nursing home
facility.
``(II) Licensed or certified
assisted living facility.
``(III) Licensed personal care
facility.
``(IV) Continuing care retirement
community.
``(ii) Limitation.--With respect to any
calendar year, clause (i) shall not apply to
any bond described in such clause if the
aggregate authorized face amount of the issue
of which such bond is a part when increased by
the outstanding amount of such bonds issued by
the issuer for such calendar year exceeds
$15,000,000.
``(iii) Continuing care retirement
community.--For purposes of this subparagraph,
the term `continuing care retirement community'
means a community which provides, on the same
campus, a continuum of residential living
options and support services to persons at
least 60 years of age under a written
agreement. For purposes of the preceding
sentence, the residential living options shall
include independent living units, nursing home
beds, and either assisted living units or
personal care beds.''.
(b) Effective Date.--The amendment made by this section shall apply
to bonds issued after the date of the enactment of this Act.
SEC. 313. EXCISE TAXES EXEMPTION FOR BLOOD COLLECTOR ORGANIZATIONS.
(a) Exemption From Imposition of Special Fuels Tax.--Section
4041(g) (relating to other exemptions) is amended by striking ``and''
at the end of paragraph (3), by striking the period in paragraph (4)
and inserting ``; and'', and by inserting after paragraph (4) the
following new paragraph:
``(5) with respect to the sale of any liquid to a qualified
blood collector organization (as defined in section
7701(a)(49)) for such organization's exclusive use, or with
respect to the use by a qualified blood collector organization
of any liquid as a fuel.''.
(b) Exemption From Manufacturers Excise Tax.--
(1) In general.--Section 4221(a) (relating to certain tax-
free sales) is amended by striking ``or'' at the end of
paragraph (4), by adding ``or'' at the end of paragraph (5),
and by inserting after paragraph (5) the following new
paragraph:
``(6) to a qualified blood collector organization (as
defined in section 7701(a)(49)) for such organization's
exclusive use,''.
(2) Conforming amendments.--
(A) The second sentence of section 4221(a) is
amended by striking ``Paragraphs (4) and (5)'' and
inserting ``Paragraphs (4), (5), and (6)''.
(B) Section 6421(c) is amended by striking ``or
(5)'' and inserting ``(5), or (6)''.
(c) Exemption From Communication Excise Tax.--
(1) In general.--Section 4253 (relating to exemptions) is
amended by redesignating subsection (k) as subsection (l) and
inserting after subsection (j) the following new subsection:
``(k) Exemption for Qualified Blood Collector Organizations.--Under
regulations provided by the Secretary, no tax shall be imposed under
section 4251 on any amount paid by a qualified blood collector
organization (as defined in section 7701(a)) for services or facilities
furnished to such organization.''.
(2) Conforming amendment.--Section 4253(l), as redesignated
by paragraph (1), is amended by striking ``or (j)'' and
inserting ``(j), or (k)''.
(d) Credit for Refund for Certain Taxes on Sales and Services.--
(1) Deemed overpayment.--
(A) In general.--Section 6416(b)(2) is amended by
redesignating subparagraphs (E) and (F) as
subparagraphs (F) and (G), respectively, and by
inserting after subparagraph (D) the following new
subparagraph:
``(E) sold to a qualified blood collector
organization's (as defined in section 7701(a)(49)) for
such organization's exclusive use;''.
(B) Conforming amendments.--Section 6416(b)(2) is
amended--
(i) by striking ``Subparagraphs (C) and
(D)'' and inserting ``Subparagraphs (C), (D),
and (E)'', and
(ii) by striking ``(C), and (D)'' and
inserting ``(C), (D), and (E)''.
(2) Sales of tires.--Clause (ii) of section 6416(b)(4)(B)
is amended by inserting ``sold to a qualified blood collector
organization (as defined in section 7701(a)(49)),'' after ``for
its exclusive use,''.
(e) Definition of Qualified Blood Collector Organization.--Section
7701(a) is amended by inserting at the end the following new paragraph:
``(49) Qualified blood collector organization.--For
purposes of this title, the term `qualified blood collector
organization' means an organization which is--
``(A) described in section 501(c)(3) and exempt
from tax under section 501(a),
``(B) registered by the Food and Drug
Administration to collect blood, and
``(C) primarily engaged in the activity of the
collection of blood.''.
(f) Effective Date.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply with respect to
excise taxes imposed on sales or uses occurring on or after
October 1, 2004.
(2) Refund of gasoline tax.--For purposes of section
6421(c) of the Internal Revenue Code of 1986 and any other
provision that allows for a refund or a payment in respect of
an excise tax payable at a level before the sale to a qualified
blood collector organization, the amendments made by this
section shall apply with respect to sales to a qualified
collector organization on or after October 1, 2004.
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 2006, the amount shall be
$1,975,000,000, and with respect to fiscal year 2007, 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 2006 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 2005 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 2005''.
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) $20,000, 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) $40,000, 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 2005, 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 ``2004''
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.--
(A) In general.--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.
(B) Rule of construction.--
(i) In general.--Nothing in this paragraph
shall be construed as preventing a person
described in subparagraph (A) from
collaborating with 1 or more qualified
nonprofit organizations or Indian tribes to
carry out an individual development account
program established under section 504.
(ii) Qualified nonprofit organization.--The
term ``qualified nonprofit organization''
means--
(I) any organization described in
section 501(c)(3) of the Internal
Revenue Code of 1986 and exempt from
taxation under section 501(a) of such
Code,
(II) any community development
financial institution certified by the
Community Development Financial
Institution Fund,
(III) any credit union chartered
under Federal or State law, or
(IV) any public housing agency as
defined in section 3(b)(6) of the
United States Housing Act of 1937 (42
U.S.C. 1437a(b)(6)).
(iii) Indian tribe.--The term ``Indian
tribe'' means any Indian tribe as defined in
section 4(12) of the Native American Housing
Assistance and Self-Determination Act of 1996
(25 U.S.C. 4103(12), and includes any tribally
designated housing entity (as defined in
section 4(21) of such Act (25 U.S.C. 4103(21)),
tribal subsidiary, subdivision, or other wholly
owned tribal entity.
(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, 2004, 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
(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.
(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 2005'' 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. 7529. 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 2005 shall be exempt from
taxation,
``(2) except as provided in section 45N, 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. 7529. 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 2005.''.
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, 2006, 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 45N 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 45N 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.--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--
(1) the number of individuals making contributions into
Individual Development Accounts and the amounts contributed,
(2) the amounts contributed into Individual Development
Accounts by eligible individuals and the amounts deposited into
parallel accounts for matching funds,
(3) the amounts withdrawn from Individual Development
Accounts and parallel accounts, and the purposes for which such
amounts were withdrawn,
(4) the balances remaining in Individual Development
Accounts and parallel accounts, and
(5) 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).
(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 2007, 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) 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.
(a) In General.--There is authorized to be appropriated to the
Secretary $1,000,000 for fiscal year 2007 and for each fiscal year
through 2014, for the purposes of implementing this Act, including the
reporting, monitoring, and evaluation required under section 9, to
remain available until expended.
(b) Grants.--There is authorized to be appropriated to the
Secretary $20,000,000--
(1) to make grants to qualified nonprofit organizations and
Indian tribes to help defray the administrative costs
associated with the operation of individual development account
programs, including the required financial education courses,
and
(2) to provide technical assistance to qualified nonprofit
organizations and Indian tribes in meeting such program
requirements.
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. 45N. 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 2005.
``(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 2005 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 2005 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 2005 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,
2006, and beginning on or before January 1, 2014, with respect
to any Individual Development Account which--
``(A) is opened before January 1, 2012, and
``(B) as determined by the Secretary, when added to
all of the previously opened Individual Development
Accounts, does not exceed 900,000 Accounts.
Notwithstanding the preceding sentence, this section shall
apply to amounts which are described in subsection (c)(1) 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, 2014.
``(2) Determination of limitation.--The limitation on the
number of Individual Development Accounts under paragraph
(1)(B) shall be allocated by the Secretary among eligible
individuals as such individuals open such Accounts under
qualified individual development account programs, except that,
in the case of 300,000 Accounts, such limitation shall be
equally allocated among the States.''.
(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 (25), by striking the period at the end of paragraph
(26) and inserting ``, plus'', and by adding at the end the following
new paragraph:
``(27) the individual development account investment credit
determined under section 45N(a).''.
(c) 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. 45N. Individual development
account investment credit.''.
(d) Report Regarding Account Maintenance Fees.--The Secretary of
the Treasury shall study the adequacy of the amount specified in
section 45N(c)(2) of the Internal Revenue Code of 1986 (as added by
this section). Not later than December 31, 2010, the Secretary of the
Treasury shall report the findings of the study described in the
preceding sentence to Congress.
(e) Effective Date.--The amendments made by this section shall
apply to taxable years ending after December 31, 2006.
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
2006, and such sums as may be necessary for each of fiscal years 2007
through 2009.
(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
2006, and such sums as may be necessary for each of fiscal years 2007
through 2009.
(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
2006, and such sums as may be necessary for each of fiscal years 2007
through 2009.
(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
2006, and such sums as may be necessary for each of fiscal years 2007
through 2009.
(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--MATERNITY GROUP HOMES
SEC. 801. MATERNITY GROUP HOMES.
(a) 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.''.
(b) 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 2006; and
``(ii) such sums as may be necessary for
fiscal year 2007.''; 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 S10597-10598)
Read twice and referred to the Committee on Finance.
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