[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 811 Introduced in Senate (IS)]







106th CONGRESS
  1st Session
                                 S. 811

 To amend the Internal Revenue Code of 1986 to expand alternatives for 
families with children, to establish incentives to improve the quality 
           and supply of child care, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             April 15, 1999

   Mr. Jeffords (for himself, Ms. Landrieu, Mr. Dodd, and Mr. Kohl) 
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 expand alternatives for 
families with children, to establish incentives to improve the quality 
           and supply of child care, 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; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Tax Relief for 
Families With Children Act''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Definitions.
            TITLE I--TAX BENEFITS FOR FAMILIES WITH CHILDREN

Sec. 101. Expansion of dependent care tax credit.
Sec. 102. Increase in child tax credit.
Sec. 103. Expansion of dependent care assistance program.
Sec. 104. Mutually exclusive use of dependent care tax credit, child 
                            tax credit, and dependent care assistance 
                            program for each dependent.
Sec. 105. Expansion of home office deduction to include use of office 
                            for dependent care.
Sec. 106. Inclusion of child care costs in child support orders.
       TITLE II--ACTIVITIES TO IMPROVE THE QUALITY OF CHILD CARE

Sec. 201. Allowance of credit for employer expenses for child care 
                            assistance.
Sec. 202. Charitable contributions of scientific equipment, computer 
                            technology and equipment, and other 
                            services to child care providers and to 
                            elementary and secondary schools.

SEC. 2. DEFINITIONS.

    In this Act:
            (1) Child care credentialing or accreditation entity.--The 
        term ``child care credentialing or accreditation entity'' means 
        a nonprofit private organization or public agency that--
                    (A) is recognized by a State agency, a tribal 
                organization, or a national organization that serves as 
                a peer review panel on the standards and procedures of 
                public and private child care or school accrediting 
                bodies; and
                    (B) accredits a facility or credentials an 
                individual to provide child care on the basis of--
                            (i) an accreditation or credentialing 
                        instrument based on peer-validated research;
                            (ii) compliance with applicable State and 
                        local licensing requirements, or standards 
                        described in section 658E(c)(2)(E)(ii) of the 
                        Child Care and Development Block Grant Act (42 
                        U.S.C. 9858c(c)(2)(E)(ii)), as appropriate, for 
                        the facility or individual;
                            (iii) outside monitoring of the facility or 
                        individual; and
                            (iv) criteria that provide assurances of--
                                    (I) compliance with age-appropriate 
                                health and safety standards at the 
                                facility or by the individual;
                                    (II) use of developmentally 
                                appropriate educational activities, as 
                                an integral part of the child care 
                                program carried out at the facility or 
                                by the individual; and
                                    (III) use of ongoing staff 
                                development or training activities for 
                                the staff of the facility or the 
                                individual, including related skills-
                                based testing.
            (2) State; tribal organization.--The terms ``State'' and 
        ``tribal organization'' have the meaning given the term in 
        section 658P of the Child Care and Development Block Grant Act 
        (42 U.S.C. 9858n).

            TITLE I--TAX BENEFITS FOR FAMILIES WITH CHILDREN

SEC. 101. EXPANSION OF DEPENDENT CARE TAX CREDIT.

    (a) Dollar Limit on Creditable Employment-Related Expenses 
Increased.--Section 21(c) of the Internal Revenue Code of 1986 
(relating to dollar limit on amount creditable) is amended--
            (1) by striking ``$2,400'' in paragraph (1) and inserting 
        ``$3,600'', and
            (2) by striking ``$4,800'' in paragraph (2) and inserting 
        ``$6,000''.
    (b) Percentage of Employment-Related Expenses Increased.--Section 
21(a)(2) of the Internal Revenue Code of 1986 (defining applicable 
percentage) is amended to read as follows:
            ``(2) Applicable percentage defined.--For purposes of 
        paragraph (1), the term `applicable percentage' means 40 
        percent reduced (but not below 10 percent) by 1 percentage 
        point for each $2,000 (or fraction thereof) by which the 
        taxpayers's adjusted gross income for the taxable year exceeds 
        $50,000.''.
    (c) Employment-Related Expenses Expanded To Include Transportation 
Costs and Costs of Educational Programs.--Section 21(b)(2)(A) of the 
Internal Revenue Code of 1986 (defining employment-related expenses) is 
amended--
            (1) by striking ``and'' at the end of clause (i),
            (2) by striking the period at the end of clause (ii) and 
        inserting ``(including expenses for educational activities 
        provided during such care), and'', and
            (3) by adding at the end the following:
                            ``(iii) expenses for transportation--
                                    ``(I) related to such services or 
                                care, and
                                    ``(II) provided by a person not 
                                described in subsection (e)(6).''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2000.

SEC. 102. INCREASE IN CHILD TAX CREDIT.

    (a) In General.--Section 24(a) of the Internal Revenue Code of 1986 
(relating to allowance of credit) is amended by striking ``$500 ($400 
in the case of taxable years beginning in 1998)'' and inserting 
``$900''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2000.

SEC. 103. EXPANSION OF DEPENDENT CARE ASSISTANCE PROGRAM.

    (a) Dollar Limit Increased.--Section 129(a)(2)(A) of the Internal 
Revenue Code of 1986 (relating to limitation of exclusion) is amended 
to read as follows:
                    ``(A) Dollar limitation.--
                            ``(i) In general.--The amount which may be 
                        excluded under paragraph (1) for dependent care 
                        assistance with respect to dependent care 
                        services provided during a taxable year shall 
                        not exceed--
                                    ``(I) in the case of dependent care 
                                services provided for 1 qualifying 
                                individual described in section 
                                21(b)(1), $5,000, and
                                    ``(II) in the case of dependent 
                                care services provided for 2 or more 
                                qualifying individuals so described, 
                                $7,000.
                            ``(ii) Amounts for married individuals 
                        filing separate returns.--In the case of a 
                        separate return by a married individual, the 
                        amount applicable under clause (i) shall be 
                        one-half of the amount specified.''.
    (b) Payments for Infant Care, Including Stay-at-Home Care, 
Allowed.--
            (1) In general.--Section 129(e)(1) of the Internal Revenue 
        Code of 1986 (relating to definitions and special rules) is 
        amended to read as follows:
            ``(1) Dependent care assistance.--The term `dependent care 
        assistance' means--
                    ``(A) the payment of, or provision of, those 
                services which if paid for by the employee would be 
                considered employment-related expenses under section 
                21(b)(2) (relating to expenses for household and 
                dependent care services necessary for gainful 
                employment), and
                    ``(B) any payment to the employee or any individual 
                described in subsection (c)(2) from amounts contributed 
                to the employee's account during the 9-month period 
                ending with the birth of a qualifying individual 
                described in section 21(b)(1)(A), if paid during a 
                period ending 1 year after such birth.''.
            (2) Conforming amendment.--Section 125 of such Code 
        (relating to cafeteria plans) is amended by redesignating 
        subsections (h) and (i) as subsections (i) and (j) and by 
        inserting after subsection (g) the following:
    ``(h) Allowance of Carryovers of Certain Unused Dependent Care 
Assistance to Later Taxable Years.--For purposes of this title--
            ``(1) a plan or other arrangement shall not fail to be 
        treated as a cafeteria plan or flexible spending or similar 
        arrangement, and
            ``(2) no amount shall be required to be included in gross 
        income by reason of this section or any other provision of this 
        chapter,
solely because under such plan or other arrangement any dependent care 
assistance described in section 129(e)(1)(B) which is unused as of the 
close of a taxable year may be carried forward to the succeeding 
taxable year.''.
    (c) Payments to Certain Related Individuals for Routine Care 
Allowed.--Section 129(c) of the Internal Revenue Code of 1986 (relating 
to payments to related individuals) is amended by adding at the end the 
following flush sentence:
``The preceding sentence shall not apply to any amount paid or incurred 
to any individual otherwise described in paragraph (1) if such amount 
is paid or incurred for care of a qualifying individual during the 
period ending with the first day of State mandatory schooling of such 
qualifying individual.''.
    (d) Dependent Care Assistance Program for Federal Employees.--
Subpart G of part III of title 5, United States Code, is amended by 
inserting after chapter 87 the following:

            ``CHAPTER 88--DEPENDENT CARE ASSISTANCE PROGRAM

``Sec. 8801. Definitions
    ``(a) For the purpose of this chapter, `employee' means--
            ``(1) an employee as defined by section 2105 of this title;
            ``(2) a Member of Congress as defined by section 2106 of 
        this title;
            ``(3) a Congressional employee as defined by section 2107 
        of this title;
            ``(4) the President;
            ``(5) a justice or judge of the United States appointed to 
        hold office during good behavior (i) who is in regular active 
        judicial service, or (ii) who is retired from regular active 
        service under section 371(b) or 372(a) of title 28, United 
        States Code, or (iii) who has resigned the judicial office 
        under section 371(a) of title 28 with the continued right 
        during the remainder of his lifetime to receive the salary of 
        the office at the time of his resignation;
            ``(6) an individual first employed by the government of the 
        District of Columbia before October 1, 1987;
            ``(7) an individual employed by Gallaudet College;
            ``(8) an individual employed by a county committee 
        established under section 590h(b) of title 16;
            ``(9) an individual appointed to a position on the office 
        staff of a former President under section 1(b) of the Act of 
        August 25, 1958 (72 Stat. 838); and
            ``(10) an individual appointed to a position on the office 
        staff of a former President, or a former Vice President under 
        section 4 of the Presidential Transition Act of 1963, as 
        amended (78 Stat. 153), who immediately before the date of such 
        appointment was an employee as defined under any other 
        paragraph of this subsection;
but does not include--
            ``(A) an employee of a corporation supervised by the Farm 
        Credit Administration if private interests elect or appoint a 
        member of the board of directors;
            ``(B) an individual who is not a citizen or national of the 
        United States and whose permanent duty station is outside the 
        United States, unless the individual was an employee for the 
        purpose of this chapter on September 30, 1979, by reason of 
        service in an Executive agency, the United States Postal 
        Service, or the Smithsonian Institution in the area which was 
        then known as the Canal Zone; or
            ``(C) an employee excluded by regulation of the Office of 
        Personnel Management under section 8716(b) of this title.
    ``(b) For the purpose of this chapter, `dependent care assistance 
program' has the meaning given such term by section 129(d) of the 
Internal Revenue Code of 1986.
``Sec. 8802. Dependent care assistance program
    ``The Office of Personnel Management shall establish and maintain a 
dependent care assistance program for the benefit of employees.''.
    (e) Effective Date.--The amendments made by this section apply to 
taxable years beginning after December 31, 2000.

SEC. 104. MUTUALLY EXCLUSIVE USE OF DEPENDENT CARE TAX CREDIT, CHILD 
              TAX CREDIT, AND DEPENDENT CARE ASSISTANCE PROGRAM FOR 
              EACH DEPENDENT.

    (a) Election To Apply Dependent Care Tax Credit.--
            (1) In general.--Section 21 of the Internal Revenue Code of 
        1986 (relating to expenses for household and dependent care 
        services necessary for gainful employment) is amended by 
        redesignating subsection (f) as subsection (g) and by inserting 
        after subsection (e) the following:
    ``(f) Election To Have Section Apply.--
            ``(1) In general.--No credit shall be allowed under 
        subsection (a) for a taxable year with respect to any 
        qualifying individual unless the taxpayer elects to have this 
        section apply with respect to such individual for such year.
            ``(2) Coordination with child tax credit and dependent care 
        assistance exclusion.--If the taxpayer elects to apply this 
        section with respect to a qualifying individual for the taxable 
        year, such individual may not be considered--
                    ``(A) a qualifying child for purposes of section 24 
                for such year, or
                    ``(B) a qualifying individual for purposes of 
                section 129 for such year.''.
            (2) Conforming amendment.--Section 21(c) of such Code, as 
        amended by section 101(a), is amended by striking the last 
        sentence.
    (b) Election To Apply Child Tax Credit.--Section 24 of the Internal 
Revenue Code of 1986 (relating to child tax credit) is amended by 
adding at the end the following:
    ``(g) Election To Have Section Apply.--
            ``(1) In general.--No credit shall be allowed under 
        subsection (a) for a taxable year with respect to any 
        qualifying child unless the taxpayer elects to have this 
        section apply with respect to such child for such year.
            ``(2) Coordination with dependent care tax credit and 
        dependent care assistance exclusion.--If the taxpayer elects to 
        apply this section with respect to a qualifying child for the 
        taxable year, such child may not be considered a qualifying 
        individual for purposes of section 21 or 129 for such year.''.
    (c) Election To Apply Dependent Care Assistance Exclusion.--Section 
129 of the Internal Revenue Code of 1986 (dependent care assistance 
programs) is amended by adding at the end the following:
    ``(f) Election To Have Section Apply.--
            ``(1) In general.--No exclusion shall be allowed under 
        subsection (a) for a taxable year with respect to any 
        qualifying individual unless the taxpayer elects to have this 
        section apply with respect to such individual for such year.
            ``(2) Coordination with dependent care tax credit and child 
        tax credit.--If the taxpayer elects to apply this section with 
        respect to a qualifying individual for the taxable year, such 
        individual may not be considered--
                    ``(A) a qualifying individual for purposes of 
                section 21 for such year, or
                    ``(B) a qualifying child for purposes of section 24 
                for such year.''.
    (d) Effective Date.--The amendments made by this section apply to 
taxable years beginning after December 31, 2000.

SEC. 105. EXPANSION OF HOME OFFICE DEDUCTION TO INCLUDE USE OF OFFICE 
              FOR DEPENDENT CARE.

    (a) In General.--Section 280A(c)(1) of the Internal Revenue Code of 
1986 (relating to certain business use) is amended by adding at the end 
the following: ``A portion of a dwelling unit and the exclusive use of 
such portion otherwise described in this paragraph shall not fail to be 
so described if such portion is also used by the taxpayer during such 
exclusive use to care for a dependent of the taxpayer.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 1999.

SEC. 106. INCLUSION OF CHILD CARE COSTS IN CHILD SUPPORT ORDERS.

    (a) In General.--Section 466(a) of the Social Security Act (42 
U.S.C. 666(a)) is amended by inserting after paragraph (19) the 
following:
            ``(20) Child care costs.--Procedures under which any child 
        support order enforced under this part shall include an 
        equitable division between the custodial and noncustodial 
        parents of any costs of providing child care services in any 
        case where the custodial parent is employed or is actively 
        seeking employment.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to child support orders enforced or otherwise modified by a court 
on and after the date of enactment of this Act.

       TITLE II--ACTIVITIES TO IMPROVE THE QUALITY OF CHILD CARE

SEC. 201. ALLOWANCE OF CREDIT FOR EMPLOYER EXPENSES FOR CHILD CARE 
              ASSISTANCE.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to business related 
credits) is amended by adding at the end the following new section:

``SEC. 45D. EMPLOYER-PROVIDED CHILD CARE CREDIT.

    ``(a) Allowance of Credit.--For purposes of section 38, the 
employer-provided child care credit determined under this section for 
the taxable year is an amount equal to 40 percent of the qualified 
child care expenditures of the taxpayer for such taxable year.
    ``(b) Dollar Limitation.--The credit allowable under subsection (a) 
for any taxable year shall not exceed $150,000 ($250,000 in the case of 
qualified child care expenditures with respect to 3 or more qualified 
child care facilities each located in a different jurisdiction of State 
or local government).
    ``(c) Definitions.--For purposes of this section--
            ``(1) Qualified child care expenditure.--The term 
        `qualified child care expenditure' means any amount paid or 
        incurred--
                    ``(A) to acquire, construct, rehabilitate, or 
                expand property--
                            ``(i) which is to be used as part of a 
                        qualified child care facility of the taxpayer,
                            ``(ii) with respect to which a deduction 
                        for depreciation (or amortization in lieu of 
                        depreciation) is allowable, and
                            ``(iii) which does not constitute part of 
                        the principal residence (within the meaning of 
                        section 121) of the taxpayer or any employee of 
                        the taxpayer,
                    ``(B) for the operating costs of a qualified child 
                care facility of the taxpayer, including costs related 
                to the training of employees, to scholarship programs, 
                and to the providing of increased compensation to 
                employees with higher levels of child care training,
                    ``(C) under a contract with a qualified child care 
                facility to provide child care services to employees of 
                the taxpayer,
                    ``(D) under a contract to provide child care 
                resource and referral services to employees of the 
                taxpayer, or
                    ``(E) for the costs of seeking accreditation from a 
                child care credentialing or accreditation entity (as 
                defined in section 2 of the Tax Relief for Families 
                With Children Act) with respect to a qualified child 
                care facility.
            ``(2) Qualified child care facility.--
                    ``(A) In general.--The term `qualified child care 
                facility' means a facility--
                            ``(i) the principal use of which is to 
                        provide child care assistance, and
                            ``(ii) which meets the requirements of all 
                        applicable laws and regulations of the State or 
                        local government in which it is located, 
                        including, but not limited to, the licensing of 
                        the facility as a child care facility.
                Clause (i) shall not apply to a facility which is the 
                principal residence (within the meaning of section 121) 
                of the operator of the facility.
                    ``(B) Special rules with respect to a taxpayer.--A 
                facility shall not be treated as a qualified child care 
                facility with respect to a taxpayer unless--
                            ``(i) enrollment in the facility is open to 
                        employees of the taxpayer during the taxable 
                        year,
                            ``(ii) the facility is not the principal 
                        trade or business of the taxpayer unless at 
                        least 30 percent of the enrollees of such 
                        facility are dependents of employees of the 
                        taxpayer, and
                            ``(iii) the use of such facility (or the 
                        eligibility to use such facility) does not 
                        discriminate in favor of employees of the 
                        taxpayer who are highly compensated employees 
                        (within the meaning of section 414(q)).
    ``(d) Recapture of Acquisition and Construction Credit.--
            ``(1) In general.--If, as of the close of any taxable year, 
        there is a recapture event with respect to any qualified child 
        care facility of the taxpayer, then the tax of the taxpayer 
        under this chapter for such taxable year shall be increased by 
        an amount equal to the product of--
                    ``(A) the applicable recapture percentage, and
                    ``(B) the aggregate decrease in the credits allowed 
                under section 38 for all prior taxable years which 
                would have resulted if the qualified child care 
                expenditures of the taxpayer described in subsection 
                (c)(1)(A) with respect to such facility had been zero.
            ``(2) Applicable recapture percentage.--
                    ``(A) In general.--For purposes of this subsection, 
                the applicable recapture percentage shall be determined 
                from the following table:

  
                                                         The applicable
  
                                                              recapture
            ``If the recapture event occurs in:
                                                         percentage is:
                Years 1-3............................          100     
                Year 4...............................           85     
                Year 5...............................           70     
                Year 6...............................           55     
                Year 7...............................           40     
                Year 8...............................           25     
                Years 9 and 10.......................           10     
                Years 11 and thereafter..............            0.    
                    ``(B) Years.--For purposes of subparagraph (A), 
                year 1 shall begin on the first day of the taxable year 
                in which the qualified child care facility is placed in 
                service by the taxpayer.
            ``(3) Recapture event defined.--For purposes of this 
        subsection, the term `recapture event' means--
                    ``(A) Cessation of operation.--The cessation of the 
                operation of the facility as a qualified child care 
                facility.
                    ``(B) Change in ownership.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), the disposition of a taxpayer's 
                        interest in a qualified child care facility 
                        with respect to which the credit described in 
                        subsection (a) was allowable.
                            ``(ii) Agreement to assume recapture 
                        liability.--Clause (i) shall not apply if the 
                        person acquiring such interest in the facility 
                        agrees in writing to assume the recapture 
                        liability of the person disposing of such 
                        interest in effect immediately before such 
                        disposition. In the event of such an 
                        assumption, the person acquiring the interest 
                        in the facility shall be treated as the 
                        taxpayer for purposes of assessing any 
                        recapture liability (computed as if there had 
                        been no change in ownership).
            ``(4) Special rules.--
                    ``(A) Tax benefit rule.--The tax for the taxable 
                year shall be increased under paragraph (1) only with 
                respect to credits allowed by reason of this section 
                which were used to reduce tax liability. In the case of 
                credits not so used to reduce tax liability, the 
                carryforwards and carrybacks under section 39 shall be 
                appropriately adjusted.
                    ``(B) No credits against tax.--Any increase in tax 
                under this subsection shall not be treated as a tax 
imposed by this chapter for purposes of determining the amount of any 
credit under subpart A, B, or D of this part.
                    ``(C) No recapture by reason of casualty loss.--The 
                increase in tax under this subsection shall not apply 
                to a cessation of operation of the facility as a 
                qualified child care facility by reason of a casualty 
                loss to the extent such loss is restored by 
                reconstruction or replacement within a reasonable 
                period established by the Secretary.
    ``(e) Special Rules.--For purposes of this section--
            ``(1) Aggregation rules.--All persons which are treated as 
        a single employer under subsections (a) and (b) of section 52 
        shall be treated as a single taxpayer.
            ``(2) Pass-thru in the case of estates and trusts.--Under 
        regulations prescribed by the Secretary, rules similar to the 
        rules of subsection (d) of section 52 shall apply.
            ``(3) Allocation in the case of partnerships or joint 
        ventures.--In the case of partnerships or joint ventures, the 
        credit shall be allocated among partners or members of the 
        joint venture under regulations prescribed by the Secretary.
    ``(f) No Double Benefit.--
            ``(1) Reduction in basis.--For purposes of this subtitle--
                    ``(A) In general.--If a credit is determined under 
                this section with respect to any property by reason of 
                expenditures described in subsection (c)(1)(A), the 
                basis of such property shall be reduced by the amount 
                of the credit so determined.
                    ``(B) Certain dispositions.--If during any taxable 
                year there is a recapture amount determined with 
                respect to any property the basis of which was reduced 
                under subparagraph (A), the basis of such property 
                (immediately before the event resulting in such 
                recapture) shall be increased by an amount equal to 
                such recapture amount. For purposes of the preceding 
                sentence, the term `recapture amount' means any 
                increase in tax (or adjustment in carrybacks or 
                carryovers) determined under subsection (d).
            ``(2) Other deductions and credits.--No deduction or credit 
        shall be allowed under any other provision of this chapter with 
        respect to the amount of the credit determined under this 
        section.
    ``(g) Termination.--This section shall not apply to taxable years 
beginning after December 31, 2002.''
    (b) Conforming Amendments.--
            (1) Section 38(b) of the Internal Revenue Code of 1986 is 
        amended--
                    (A) by striking out ``plus'' at the end of 
                paragraph (11),
                    (B) by striking out the period at the end of 
                paragraph (12), and inserting a comma and ``plus'', and
                    (C) by adding at the end the following new 
                paragraph:
            ``(13) the employer-provided child care credit determined 
        under section 45D.''
            (2) The table of sections for subpart D of part IV of 
        subchapter A of chapter 1 of such Code is amended by adding at 
        the end the following new item:

                              ``Sec. 45D. Employer-provided child care 
                                        credit.''
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1999.

SEC. 202. CHARITABLE CONTRIBUTIONS OF SCIENTIFIC EQUIPMENT, COMPUTER 
              TECHNOLOGY AND EQUIPMENT, AND OTHER SERVICES TO CHILD 
              CARE PROVIDERS AND TO ELEMENTARY AND SECONDARY SCHOOLS.

    (a) Scientific Equipment.--
            (1) In general.--Subparagraph (B) of section 170(e)(4) of 
        the Internal Revenue Code of 1986 (relating to special rule for 
        contributions of scientific property used for research) is 
        amended to read as follows:
                    ``(B) Qualified research, child care, or education 
                contribution.--For purposes of this paragraph, the term 
                `qualified research, child care, or education 
                contribution' means a charitable contribution by a 
                corporation of tangible personal property described in 
                paragraph (1) of section 1221, but only if--
                            ``(i) the contribution is to--
                                    ``(I) an organization described in 
                                section 501(c)(3) and exempt from 
                                taxation under section 501(a) which is 
                                a child care facility in compliance 
                                with all applicable laws and 
                                regulations of the State or unit of 
                                local government in which such facility 
                                is located on the date of such 
                                contribution,
                                    ``(II) an organization described in 
                                section 501(c)(3) and exempt from 
                                taxation under section 501(a) which is 
                                a professional or educational support 
                                entity for such a child care facility,
                                    ``(III) an educational organization 
                                described in subsection (b)(1)(A)(ii),
                                    ``(IV) a governmental unit 
                                described in subsection (c)(1), or
                                    ``(V) an organization described in 
                                section 41(e)(6)(B),
                            ``(ii) the contribution is made not later 
                        than 3 years after the date the taxpayer 
                        acquired the property (or in the case of 
                        property constructed by the taxpayer, the date 
                        the construction of the property is 
                        substantially completed),
                            ``(iii) the property is scientific 
                        equipment or apparatus substantially all of the 
                        use of which by the donee is for--
                                    ``(I) research or experimentation 
                                (within the meaning of section 174), or 
for research training, in the United States in physical or biological 
sciences,
                                    ``(II) activities designed to 
                                enhance or support the educational or 
                                developmental achievement of children 
                                or youth, or
                                    ``(III) in the case of an 
                                organization described in subclause 
                                (I), (II), (III), or (IV) of clause 
                                (i), use within the United States for 
                                educational purposes or support 
                                activities related to the purpose or 
                                function of the organization,
                            ``(iv) the original use of the property is 
                        by donor or the donee,
                            ``(v) the property is not transferred by 
                        the donee in exchange for money, other 
                        property, or services, except for shipping, 
                        installation, and transfer costs, and
                            ``(vi) the taxpayer receives from the donee 
                        a written statement representing that its use 
                        and disposition of the property will be in 
                        accordance with the provisions of clauses (iv) 
                        and (v).''.
            (2) Conforming amendments.--
                    (A) Paragraph (4)(A) of section 170(e) of such Code 
                is amended by striking ``qualified research 
                contribution'' each place it appears and inserting 
                ``qualified research, child care, or education 
                contribution''.
                    (B) The heading for section 170(e)(4) of such Code 
                is amended by inserting ``, child care, or education'' 
                after ``research''.
    (b) Expansion of Rules Relating To Contributions of Computer 
Technology and Equipment to Certain Child Care Providers.--
            (1) In general.--Section 170(e)(6)(B)(i) of the Internal 
        Revenue Code of 1986 (defining qualified elementary or 
        secondary educational contribution) is amended by striking 
        ``or'' at the end of subclause (I), by adding ``or'' at the end 
        of subclause (II), and by inserting after subclause (II) the 
        following:
                                    ``(III) an entity described in 
                                subclause (I) or (II) of paragraph 
                                (4)(B)(i).''.
            (2) Conforming amendments.--
                    (A) Section 170(e)(6)(B)(ii) of such Code is 
                amended by striking ``2 years'' and inserting ``3 
                years''.
                    (B) Section 170(e)(6)(B)(iv) of such Code is 
                amended by striking ``grades K-12'' and inserting 
                ``grades preschool-12''.
                    (C) Section 170(e)(6) of such Code is amended by 
                striking ``qualified elementary or secondary'' each 
                place it appears and inserting ``qualified child care, 
                elementary, or secondary''.
                    (D) The heading for section 170(e)(6)(B) of such 
                Code is amended by striking ``qualified elementary or 
                secondary'' and inserting ``qualified child care, 
                elementary, or secondary''.
                    (E) The heading for section 170(e)(6) of such Code 
                is amended by striking ``elementary or secondary'' and 
                inserting ``child care or elementary or secondary''.
    (c) Donations to Charity for Refurbishing.--
            (1) Scientific equipment.--Section 170(e)(4) of the 
        Internal Revenue Code of 1986 is amended by adding at the end 
        the following:
                    ``(E) Donations to charity for refurbishing.--For 
                purposes of this paragraph, a charitable contribution 
                by a corporation shall be treated as a qualified 
                research, child care, or education contribution if--
                            ``(i) such contribution is a contribution 
                        of property described in subparagraph (B)(iii) 
                        to an organization described in section 
                        501(c)(3) and exempt from taxation under 
                        section 501(a),
                            ``(ii) such organization repairs and 
                        refurbishes the property and donates the 
                        property to an organization described in 
                        subparagraph (B)(i), and
                            ``(iii) the taxpayer receives from the 
                        organization to whom the taxpayer contributed 
                        the property a written statement representing 
                        that its use of the property (and any use by 
                        the organization to which it donates the 
                        property) meets the requirements of this 
                        paragraph.''.
            (2) Computer technology and equipment.--Section 170(e)(6) 
        of the Internal Revenue Code of 1986 is amended by 
        redesignating subparagraphs (E) and (F) as subparagraphs (F) 
        and (G), respectively, and by inserting after subparagraph (D) 
        the following:
                    ``(E) Donations to charity for refurbishing.--For 
                purposes of this paragraph, a charitable contribution 
                by a corporation shall be treated as a qualified child 
                care, elementary, or secondary educational contribution 
                if--
                            ``(i) such contribution is a contribution 
                        of computer technology or equipment to an 
                        organization described in section 501(c)(3) and 
                        exempt from taxation under section 501(a),
                            ``(ii) such organization repairs and 
                        refurbishes the property and donates the 
                        property to an organization described in 
                        subparagraph (B)(i), and
                            ``(iii) the taxpayer receives from the 
                        organization to whom the taxpayer contributed 
                        the property a written statement representing 
                        that its use of the property (and any use by 
                        the organization to which it donates the 
                        property) meets the requirements of this 
                        paragraph.''.
    (d) Corporate Donations of Services.--Section 170 of the Internal 
Revenue Code of 1986 is amended by redesignating subsection (m) as 
subsection (n) and by inserting after subsection (l) the following:
    ``(m) Treatment of the Donation of Certain Services.--
            ``(1) In general.--For purposes of this section, 50 percent 
        of the fair market value of charitable services contributed by 
        a corporation shall be treated as a charitable contribution.
            ``(2) Charitable services.--
                    ``(A) In general.--For purposes of paragraph (1), 
                the term `charitable services' means transportation 
                services, qualified employee volunteer time, and the 
                use of facilities and equipment--
                            ``(i) provided by the taxpayer to a donee 
                        described in subsection (e)(6)(B)(i), and
                            ``(ii) for which the taxpayer receives from 
                        the donee a written statement representing that 
                        the charitable services are not in exchange for 
                        money, other property, or services.
                    ``(B) Qualified employee volunteer time.--For the 
                purpose of this subsection, the term `qualified 
                employee volunteer time' means time--
                            ``(i) volunteered to the donee by an 
                        employee of the taxpayer during the employee's 
                        normal working hours, and
                            ``(ii) the value of which is based on the 
                        usual wage rate of the employee.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1999.
                                 <all>