[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[S. 1079 Introduced in Senate (IS)]

  1st Session
                                S. 1079

To amend the Internal Revenue Code of 1986 to provide a tax credit for 
charitable contributions to organizations providing poverty assistance, 
      to allow taxpayers who do not itemize to deduct charitable 
                 contributions, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                July 27 (legislative day, July 10), 1995

   Mr. Coats 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 a tax credit for 
charitable contributions to organizations providing poverty assistance, 
      to allow taxpayers who do not itemize to deduct charitable 
                 contributions, 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.

    This Act may be cited as the ``Comprehensive Charity Reform Act''.

SEC. 2. CREDIT FOR CHARITABLE CONTRIBUTIONS TO CERTAIN PRIVATE 
              CHARITIES PROVIDING ASSISTANCE TO THE POOR.

    (a) In General.--Subpart A of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to nonrefundable 
personal credits) is amended by inserting after section 22 the 
following new section:

``SEC. 23. CREDIT FOR CERTAIN CHARITABLE CONTRIBUTIONS.

    ``(a) In General.--In the case of an individual, there shall be 
allowed as a credit against the tax imposed by this chapter for the 
taxable year an amount equal to the qualified charitable contributions 
which are paid by the taxpayer during the taxable year.
    ``(b) Limitation.--The credit allowed by subsection (a) for the 
taxable year shall not exceed $500 ($1,000 in the case of a joint 
return under section 6013).
    ``(c) Qualified Charitable Contribution.--For purposes of this 
section, the term `qualified charitable contribution' means any 
charitable contribution (as defined in section 170(c)) made in cash to 
a qualified charity but only if the amount of each such contribution, 
and the recipient thereof, are identified on the return for the taxable 
year during which such contribution is made.
    ``(d) Qualified Charity.--
            ``(1) In general.--For purposes of this section, the term 
        `qualified charity' means, with respect to the taxpayer, any 
        organization which is described in section 501(c)(3) and exempt 
        from tax under section 501(a), and--
                    ``(A) which, upon request by the organization, is 
                certified by the Secretary as meeting the requirements 
                of paragraphs (2) and (3), or
                    ``(B)(i) which is organized to solicit and collect 
                gifts and grants which, by agreement, are distributed 
                to qualified charities described in subparagraph (A),
                    ``(ii) with respect to which at least 85 percent of 
                the funds so collected are distributed to qualified 
                charities described in subparagraph (A), and
                    ``(iii) which meets the requirements of paragraph 
                (5).
            ``(2) Charity must primarily assist the poor.--An 
        organization meets the requirements of this paragraph only if 
        the Secretary reasonably expects that the predominant activity 
        of such organization will be the providing of services to 
        individuals and families which are designed to prevent or 
        alleviate poverty among such individuals and families.
            ``(3) Minimum expense requirement.--
                    ``(A) In general.--An organization meets the 
                requirements of this paragraph only if the Secretary 
                reasonably expects that the annual poverty program 
                expenses of such organization will not be less than 70 
                percent of the annual aggregate expenses of such 
                organization.
                    ``(B) Poverty program expense.--For purposes of 
                subparagraph (A)--
                            ``(i) In general.--The term `poverty 
                        program expense' means any expense in providing 
                        program services referred to in paragraph (2).
                            ``(ii) Exceptions.--Such term shall not 
                        include--
                                    ``(I) any management or general 
                                expense,
                                    ``(II) any expense for the purpose 
                                of influencing legislation (as defined 
                                in section 4911(d)),
                                    ``(III) any expense primarily for 
                                the purpose of fundraising, and
                                    ``(IV) any expense for a legal 
                                service provided on behalf of any 
                                individual referred to in paragraph 
                                (2).
            ``(4) Election to treat poverty programs as separate 
        organization.--
                    ``(A) In general.--An organization may elect to 
                treat one or more programs operated by it as a separate 
                organization for purposes of this section.
                    ``(B) Effect of election.--If an organization 
                elects the application of this paragraph, the 
                organization, in accordance with regulations, shall--
                            ``(i) maintain separate accounting for 
                        revenues and expenses of programs with respect 
                        to which the election was made,
                            ``(ii) ensure that contributions to which 
                        this section applies be used only for such 
                        programs, and
                            ``(iii) provide for the proportional 
                        allocation of management, general, and 
                        fundraising expenses to such programs to the 
                        extent not allocable to a specific program.
                    ``(C) Reporting requirements.--An organization 
                shall not be required to file any return under section 
                6033 with respect to any programs treated as a separate 
                organization under this paragraph, except that if the 
                organization is otherwise required to file such a 
                return, such organization shall include on such return 
                the percentages described in the last sentence of 
                section 6033(b) which are determined with respect to 
                such separate organization.
            ``(5) Additional requirements for solicitation 
        organizations.--The requirements of this paragraph are met if 
        the organization--
                    ``(A) maintains separate accounting for revenues 
                and expenses, and
                    ``(B) makes available to the public its 
                administrative and fundraising costs and information as 
                to the organizations receiving funds from it and the 
                amount of such funds.
    ``(e) Coordination With Deduction for Charitable Contributions.--
            ``(1) Credit in lieu of deduction.--The credit provided by 
        subsection (a) for any qualified charitable contribution shall 
        be in lieu of any deduction otherwise allowable under this 
        chapter for such contribution.
            ``(2) Election to have section not apply.--A taxpayer may 
        elect for any taxable year to have this section not apply.''
    (b) Returns.--
            (1) Qualified charities required to provide copies of 
        annual return.--Subsection (e) of section 6104 of such Code 
        (relating to public inspection of certain annual returns and 
        applications for exemption) is amended by adding at the end the 
        following new paragraph:
            ``(3) Qualified charities required to provide copies of 
        annual return.--
                    ``(A) In general.--Every qualified charity (as 
                defined in section 23(d)) shall, upon request of an 
                individual made at an office where such organization's 
                annual return filed under section 6033 is required 
                under paragraph (1) to be available for inspection, 
                provide a copy of such return to such individual 
                without charge other than a reasonable fee for any 
                reproduction and mailing costs. If the request is made 
                in person, such copies shall be provided immediately 
                and, if made other than in person, shall be provided 
                within 30 days.
                    ``(B) Period of availability.--Subparagraph (A) 
                shall apply only during the 3-year period beginning on 
                the filing date (as defined in paragraph (1)(D) of the 
                return requested).''
            (2) Additional information.--Section 6033(b) of such Code 
        is amended by adding at the end the following new flush 
        sentence:
``Each qualified charity (as defined in section 23(d)) to which this 
subsection otherwise applies shall also furnish each of the percentages 
determined by dividing the following categories of the organization's 
expenses for the year by its total expenses for the year: program 
services; management and general; fundraising; and payments to 
affiliates.''
    (c) Clerical Amendment.--The table of sections for subpart A of 
part IV of subchapter A of chapter 1 of such Code is amended by 
inserting after the item relating to section 22 the following new item:

                              ``Sec. 23. Credit for certain charitable 
                                        contributions.''
    (d) Effective Date.--The amendments made by this section shall 
apply to contributions made after the 90th day after the date of the 
enactment of this Act in taxable years ending after such date.
SEC. 3. DEDUCTION FOR CHARITABLE CONTRIBUTIONS TO BE ALLOWED TO 
              INDIVIDUALS WHO DO NOT ITEMIZE DEDUCTIONS.

    (a) In General.--Section 170 of the Internal Revenue Code of 1986 
(relating to charitable, etc., contributions and gifts) is amended by 
redesignating subsection (m) as subsection (n) and by inserting after 
subsection (l) the following new subsection:
    ``(m) Deduction for Individuals Not Itemizing Deductions.--In the 
case of an individual who does not itemize deductions for the taxable 
year, the amount allowable under subsection (a) for the taxable year 
shall be taken into account as a direct charitable deduction under 
section 63.''
    (b) Direct Charitable Deduction.--
            (1) In general.--Subsection (b) of section 63 of such Code 
        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 thereof the following new 
        paragraph:
            ``(3) the deduction for charitable contributions under 
        section 170(m).''
            (2) Conforming amendment.--Subsection (d) of section 63 of 
        such Code 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 deduction for charitable contributions under 
        section 170(m).''
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1995.

SEC. 4. CHARITABLE CONTRIBUTION DEDUCTION NOT SUBJECT TO OVERALL 
              LIMITATION ON ITEMIZED DEDUCTIONS.

    (a) In General.--Subsection (c) of section 68 of the Internal 
Revenue Code of 1986 (relating to overall limitation on itemized 
deductions) is amended by striking ``and'' at the end of paragraph (2), 
by striking the period at the end of paragraph (3) and inserting ``, 
and'', and by adding at the end thereof the following new paragraph:
            ``(4) the deduction under section 170 (relating to 
        charitable, etc., contributions and gifts).''
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to taxable years beginning after December 31, 1995.

SEC. 5. CHARITABLE CONTRIBUTIONS MADE BEFORE FILING OF RETURN.

    (a) In General.--Subsection (a) of section 170 of the Internal 
Revenue Code of 1986 is amended by adding at the end the following new 
paragraph:
            ``(4) Time when contributions deemed made.--The taxpayer 
        may elect to treat any charitable contribution which is made 
        not later than the time prescribed by law for filing the return 
        for the taxable year (not including extensions thereof) as 
        being made on the last day of such taxable year. Such an 
        election, once made, shall be irrevocable.''
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1994.

SEC. 6. FINANCIAL ACCOUNTABILITY REPORTING REQUIREMENT FOR GOVERNMENTAL 
              POVERTY AND WELFARE PROGRAMS.

    (a) In General.--Each applicable welfare program shall publish in 
the Federal Register and other publications generally available to the 
public within a reasonable period of time following the end of a fiscal 
year the following information for the fiscal year:
            (1) Information required to be included on a return under 
        section 6033 of the Internal Revenue Code of 1986 by an 
        organization described in section 501(c)(3) of such Code, 
        including expenses for program services, administrative and 
        general costs, and fundraising.
            (2) The percentages determined by dividing the following 
        categories of the program's expenses for the year by its total 
        expenses for the year: program services; management and 
        general; and fundraising.
    (b) Additional Availability.--Each applicable welfare program shall 
make the information described in subsection (a) available at its 
principal office and at any of its regional or district offices. Upon 
request of an individual made at any such office, the program shall 
provide a copy of the information to such individual without charge 
other than a reasonable fee for any reproduction and mailing costs. 
Such request shall be met within 30 days (or immediately if made in 
person).
    (c) Applicable Welfare Program.--For purposes of this section, an 
applicable welfare program is a Federal, State, or local welfare or 
public assistance program for which Federal funds are appropriated.

SEC. 7. STANDARDS FOR DETERMINING SUCCESS OF GOVERNMENTAL WELFARE 
              PROGRAMS.

    (a) In General.--The Comptroller General of the United States shall 
conduct a study with respect to applicable welfare programs to develop 
standards to determine--
            (1) whether such programs meet the needs for which the 
        programs were established, and
            (2) if such programs meet such needs, whether they do so in 
        a cost-effective manner.
For purposes of this subsection, the term ``applicable welfare 
program'' has the meaning given such term by section 6(c).
    (b) Report.--Not later than 1 year after the date of the enactment 
of this Act, the Comptroller General of the United States shall report 
to the Congress the results of the study conducted under subsection 
(a), including the standards described therein.
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