[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3599 Introduced in House (IH)]
107th CONGRESS
1st Session
H. R. 3599
To promote charitable giving, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
December 20, 2001
Mr. Souder (for himself, Mr. Scott, Mr. Green of Wisconsin, Mr.
Edwards, Mr. Nadler, and Mr. Kirk) introduced the following bill; which
was referred to the Committee on Ways and Means, and in addition to the
Committee on Education and the Workforce, for a period to be
subsequently determined by the Speaker, in each case for consideration
of such provisions as fall within the jurisdiction of the committee
concerned
_______________________________________________________________________
A BILL
To promote charitable giving, 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 ``The Charitable
Giving and Compassion Assistance Act of 2001''.
(b) Table of Contents.--The table of contents is as follows:
Sec. 1. Short title; table of contents.
TITLE I--CHARITABLE GIVING INCENTIVES PACKAGE
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. Increase in cap on corporate charitable contributions.
Sec. 104. Charitable deduction for contributions of food and book
inventories.
Sec. 105. Reform of excise tax on net investment income of private
foundations.
Sec. 106. Excise tax on unrelated business taxable income of charitable
remainder trusts.
Sec. 107. Adjustment to basis of S corporation stock for certain
charitable contributions.
TITLE II--INDIVIDUAL DEVELOPMENT ACCOUNTS
Sec. 201. Short title.
Sec. 202. Findings and purposes.
Sec. 203. Definitions.
Sec. 204. Structure and administration of qualified individual
development account programs.
Sec. 205. Procedures for opening and maintaining an individual
development account and qualifying for
matching funds.
Sec. 206. Deposits by qualified individual development account
programs.
Sec. 207. Withdrawal procedures.
Sec. 208. Certification and termination of qualified individual
development account programs.
Sec. 209. Reporting, monitoring, and evaluation.
Sec. 210. Authorization of appropriations.
Sec. 211. Account funds disregarded for purposes of certain means-
tested Federal programs.
Sec. 212. Matching funds for individual development accounts provided
through a tax credit for qualified
financial institutions.
TITLE III--EZ PASS RECOGNITION OF SECTION 501(C)(3) STATUS
Sec. 301. Ez pass recognition of section 501(c)(3) status.
TITLE IV--GRANTS FOR PROGRAMS FOR MENTORING CHILDREN OF INCARCERATED
PARENTS
Sec. 401. Grants for programs for mentoring children of incarcerated
parents.
TITLE V--MATERNITY GROUP HOMES
Sec. 501. Maternity group homes.
TITLE VI--COMPASSION CAPITAL FUND
Sec. 601. Support for nonprofit community-based organizations;
Department of Health and Human Services.
Sec. 602. Support for nonprofit community-based organizations;
Corporation for National and Community
Service.
Sec. 603. Support for nonprofit community-based organizations;
Department of Justice.
Sec. 604. Support for nonprofit community-based organizations;
Department of Housing and Urban
Development.
Sec. 605. Prohibition on use of funds.
TITLE I--CHARITABLE GIVING INCENTIVES PACKAGE
SEC. 101. DEDUCTION FOR PORTION OF 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 his deductions for the
taxable year, there shall be taken into account as a direct charitable
deduction under section 63 an amount equal to the lesser of--
``(1) the amount allowable under subsection (a) for the
taxable year for cash contributions, or
``(2) $500 ($1,000 in the case of a joint return).''.
(b) Direct Charitable Deduction.--
(1) In general.--Subsection (b) of section 63 of the
Internal Revenue Code of 1986 (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 thereof the following new
paragraph:
``(3) the direct charitable deduction.''.
(2) Definition.--Section 63 of such Code is amended by
redesignating subsection (g) as subsection (h) and by inserting
after subsection (f) the following new subsection:
``(g) Direct Charitable Deduction.--For purposes of this section,
the term `direct charitable deduction' means that portion of the amount
allowable under section 170(a) which is taken as a direct charitable
deduction for the taxable year under section 170(m).''.
(3) Conforming amendment.--Subsection (d) of section 63 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 direct charitable deduction.''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2001.
SEC. 102. TAX-FREE DISTRIBUTIONS FROM INDIVIDUAL RETIREMENT ACCOUNTS
FOR CHARITABLE PURPOSES.
(a) In General.--Subsection (d) of section 408 of the Internal
Revenue Code of 1986 (relating to individual retirement accounts) is
amended by adding at the end the following new paragraph:
``(8) Distributions for charitable purposes.--
``(A) In general.--No amount shall be includible in
gross income by reason of a qualified charitable
distribution.
``(B) Qualified charitable distribution.--For
purposes of this paragraph, the term `qualified
charitable distribution' means any distribution from an
individual retirement account--
``(i) which is made directly by the
trustee--
``(I) to an organization described
in section 170(c), or
``(II) to a split-interest entity,
and
``(ii) which is made on or after the date
that the individual for whose benefit the
account is maintained has attained--
``(I) age 65 in the case of a
distribution described in clause
(i)(I), or
``(II) age 59\1/2\ in the case of
distribution described in clause
(i)(II).
A distribution shall be treated as a qualified
charitable distribution only to the extent that the
distribution would be includible in gross income
without regard to subparagraph (A) and, in the case of
a distribution to a split-interest entity, only if no
person holds an income interest in the amounts in the
split-interest entity attributable to such distribution
other than one or more of the following: the individual
for whose benefit such account is maintained, the
spouse of such individual, or any organization
described in section 170(c).
``(C) Contributions must be otherwise deductible.--
For purposes of this paragraph--
``(i) Direct contributions.--A distribution
to an organization described in section 170(c)
shall be treated as a qualified charitable
distribution only if a deduction for the entire
distribution would be allowable under section
170 (determined without regard to subsection
(b) thereof and this paragraph).
``(ii) Split-interest gifts.--A
distribution to a split-interest entity shall
be treated as a qualified charitable
distribution only if a deduction for the entire
value of the interest in the distribution for
the use of an organization described in section
170(c) would be allowable under section 170
(determined without regard to subsection (b)
thereof and this paragraph).
``(D) Application of section 72.--Notwithstanding
section 72, in determining the extent to which a
distribution is a qualified charitable distribution,
the entire amount of the distribution shall be treated
as includible in gross income without regard to
subparagraph (A) to the extent that such amount does
not exceed the aggregate amount which would be so
includible if all amounts were distributed from all
individual retirement accounts otherwise taken into
account in determining the inclusion on such
distribution under section 72. Proper adjustments shall
be made in applying section 72 to other distributions
in such taxable year and subsequent taxable years.
``(E) Special rules for split-interest entities.--
``(i) Charitable remainder trusts.--
Distributions made from an individual
retirement account to a trust described in
subparagraph (G)(i) shall be treated as income
described in section 664(b)(1) except to the
extent that the beneficiary of the individual
retirement account notifies the trustee of the
trust of the amount which is not allocable to
income under subparagraph (D).
``(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.
``(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)),
``(ii) a pooled income fund (as defined in
section 642(c)(5)), 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 of the Internal Revenue Code of
1986 (relating to returns by trusts described in section
4947(a)(2) or claiming charitable deductions under section
642(c)) is amended to read as follows:
``SEC. 6034. RETURNS BY TRUSTS DESCRIBED IN SECTION 4947(A)(2) OR
CLAIMING CHARITABLE DEDUCTIONS UNDER SECTION 642(C).
``(a) Trusts Described in Section 4947(a)(2).--Every trust
described in section 4947(a)(2) shall furnish such information with
respect to the taxable year as the Secretary may by forms or
regulations require.
``(b) Trusts Claiming a Charitable Deduction Under Section
642(c).--
``(1) In general.--Every trust not required to file a
return under subsection (a) but claiming a charitable, etc.,
deduction under section 642(c) for the taxable year shall
furnish such information with respect to such taxable year as
the Secretary may by forms or regulations prescribe, including:
``(A) the amount of the charitable, etc., deduction
taken under section 642(c) within such year,
``(B) the amount paid out within such year which
represents amounts for which charitable, etc.,
deductions under section 642(c) have been taken in
prior years,
``(C) the amount for which charitable, etc.,
deductions have been taken in prior years but which has
not been paid out at the beginning of such year,
``(D) the amount paid out of principal in the
current and prior years for charitable, etc., purposes,
``(E) the total income of the trust within such
year and the expenses attributable thereto, and
``(F) a balance sheet showing the assets,
liabilities, and net worth of the trust as of the
beginning of such year.
``(2) Exceptions.--Paragraph (1) shall not apply in the
case of a taxable year if all the net income for such year,
determined under the applicable principles of the law of
trusts, is required to be distributed currently to the
beneficiaries. Paragraph (1) shall not apply in the case of a
trust described in section 4947(a)(1).''.
(2) Increase in penalty relating to filing of information
return by split-interest trusts.--Paragraph (2) of section
6652(c) of such Code (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.
If the person required to file such return knowingly
fails to file the return, such person shall be
personally liable for the penalty imposed pursuant to
this subparagraph.''.
(3) Confidentiality of noncharitable beneficiaries.--
Subsection (b) of section 6104 of such Code (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 taxable years beginning after December 31, 2001.
(2) Subsection (b).--The amendments made by subsection (b)
shall apply to returns for taxable years beginning after
December 31, 2001.
SEC. 103. INCREASE IN CAP ON CORPORATE CHARITABLE CONTRIBUTIONS.
(a) In General.--Paragraph (2) of section 170(b) of the Internal
Revenue Code of 1986 (relating to corporations) is amended by striking
``10 percent'' and inserting ``the applicable percentage''.
(b) Applicable Percentage.--Subsection (b) of section 170 of the
Internal Revenue Code of 1986 is amended by adding at the end the
following new paragraph:
``(3) Applicable percentage defined.--For purposes of
paragraph (2), the applicable percentage shall be determined in
accordance with the following table:
``For taxable years beginning
The applicable
in calendar year--
percentage is--
2001 through 2005...................... 15
2006................................... 17
2007................................... 19
2008................................... 21
2009................................... 23
2010 and thereafter.................... 25.''.
(c) Conforming Amendments.--
(1) Sections 512(b)(10) and 805(b)(2)(A) of the Internal
Revenue Code of 1986 are each amended by striking ``10
percent'' each place it occurs and inserting ``the applicable
percentage (determined under section 170(b)(3))''.
(2) Sections 545(b)(2) and 556(b)(2) of such Code are each
amended by striking ``10-percent limitation'' and inserting
``applicable percentage limitation''.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2000.
SEC. 104. CHARITABLE DEDUCTION FOR CONTRIBUTIONS OF FOOD AND BOOK
INVENTORIES.
(a) Food Inventory.--Subsection (e) of section 170 of the Internal
Revenue Code of 1986 (relating to certain contributions of ordinary
income and capital gain property) is amended by adding at the end the
following new paragraph:
``(7) Special rule for contributions of food inventory.--
For purposes of this section--
``(A) In general.--In the case of a charitable
contribution of food by a taxpayer, paragraph (3)(A)
shall be applied without regard to whether or not the
contribution is made by a corporation.
``(B) Limit on reduction.--In the case of a
charitable contribution of food which is a qualified
contribution (within the meaning of paragraph (3)(A),
as modified by subparagraph (A) of this paragraph)--
``(i) paragraph (3)(B) shall not apply, and
``(ii) the reduction under paragraph (1)(A)
for such contribution shall be no greater than
the amount (if any) by which the amount of such
contribution exceeds twice the basis of such
food.
``(C) Determination of basis.--For purposes of this
paragraph, if a taxpayer uses the cash method of
accounting, the basis of any qualified contribution of
such taxpayer shall be deemed to be 50 percent of the
fair market value of such contribution.
``(D) Determination of fair market value.--In the
case of a charitable contribution of food which is a
qualified contribution (within the meaning of paragraph
(3), as modified by subparagraphs (A) and (B) of this
paragraph) and which, solely by reason of internal
standards of the taxpayer, lack of market, or similar
circumstances, or which is produced by the taxpayer
exclusively for the purposes of transferring the food
to an organization described in paragraph (3)(A),
cannot or will not be sold, the fair market value of
such contribution shall be determined--
``(i) without regard to such internal
standards, such lack of market, such
circumstances, or such exclusive purpose, and
``(ii) if applicable, by taking into
account the price at which the same or similar
food items are sold by the taxpayer at the time
of the contribution (or, if not so sold at such
time, in the recent past).''.
(b) Book Inventory.--Section 170(e)(3) of the Internal Revenue Code
of 1986 (relating to certain contributions of ordinary income and
capital gain property) is amended by redesignating subparagraph (C) as
subparagraph (D) and by inserting after subparagraph (B) the following
new subparagraph:
``(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 or not--
``(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) Qualified book contribution.--For
purposes of this paragraph, the term `qualified
book contribution' means a charitable
contribution of books, but only 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) which is organized
primarily to make books available to
the general public at no cost or to
operate a literacy program.''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2001.
SEC. 105. REFORM OF EXCISE TAX ON NET INVESTMENT INCOME OF PRIVATE
FOUNDATIONS.
(a) In General.--Subsection (a) of section 4940 of the Internal
Revenue Code of 1986 (relating to excise tax based on investment
income) is amended by striking ``2 percent'' and inserting ``1
percent''.
(b) Repeal of Reduction in Tax Where Private Foundation Meets
Certain Distribution Requirements.--Section 4940 of the Internal
Revenue Code of 1986 is amended by striking subsection (e).
(c) Exclusion of Administrative Costs From Qualifying
Distributions.--Section 4942(g)(1)(A) of the Internal Revenue Code of
1986 (defining qualifying distributions) is amended by striking
``(including that portion of reasonable and necessary administrative
expenses)''.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2001.
SEC. 106. EXCISE TAX ON UNRELATED BUSINESS TAXABLE INCOME OF CHARITABLE
REMAINDER TRUSTS.
(a) In General.--Subsection (c) of section 664 of the Internal
Revenue Code of 1986 (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 that 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) Character of distributions and coordination
with distribution requirements.--The amounts taken into
account in determining unrelated business taxable
income (as defined in subparagraph (A)) shall not be
taken into account for purposes of--
``(i) subsection (b),
``(ii) determining the value of trust
assets under subsection (d)(2), and
``(iii) determining income under subsection
(d)(3).
``(D) 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, 2001.
SEC. 107. ADJUSTMENT TO BASIS OF S CORPORATION STOCK FOR CERTAIN
CHARITABLE CONTRIBUTIONS.
(a) In General.--Paragraph (1) of section 1367(a) of the Internal
Revenue Code of 1986 (relating to adjustments to basis of stock of
shareholders, etc.) is amended by striking ``and'' at the end of
subparagraph (B), by striking the period at the end of subparagraph (C)
and inserting ``, and'', and by adding at the end the following new
subparagraph:
``(D) the excess of the amount of the shareholder's
deduction for any charitable contribution made by the S
corporation over the shareholder's proportionate share
of the adjusted basis of the property contributed.''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2001.
TITLE II--INDIVIDUAL DEVELOPMENT ACCOUNTS
SEC. 201. SHORT TITLE.
This title may be cited as the ``Savings for Working Families Act
of 2001''.
SEC. 202. FINDINGS AND PURPOSES.
(a) Findings.--Congress makes the following findings:
(1) For the vast majority of households the pathway to the
economic mainstream and financial security is not through
spending and consumption, but through saving, investing, and
the accumulation of assets. Assets promote economic household
stability, decrease economic strain on households, promote
educational attainment, decrease marital dissolution, decrease
the risk of intergenerational poverty transmission, increase
health and satisfaction among adults, increase property values,
decrease residential mobility, increase property maintenance,
and increase local civic involvement.
(2) One-third of all Americans have no assets available for
investment and another 20 percent have only negligible assets.
Assets are distributed far more unevenly than income. Whereas
the top 20 percent of American households earn over 43 percent
of all income, such households hold over 68 percent of net
worth and almost 87 percent of net financial assets. Moreover,
asset poverty and wealth gaps are even higher among minority
households by a ratio of more than 11 to 1. Up to 20 percent of
all households are unbanked and do not have access to the basic
financial tools that make asset accumulation possible.
(3) Public policy has contributed to large asset gaps in
the United States. Traditional public assistance programs based
on income and consumption have rarely been successful in
supporting the transition to economic self-sufficiency. Tax
policy, through $288,000,000,000 in annual tax incentives, has
helped lay the foundation for the great American middle class,
but only for some citizens. Fully 90 percent of such current
tax benefits accrue to households earning more than $50,000 per
year, roughly half of all American households. Lacking an
income tax liability, low-income working families cannot take
advantage of asset development incentives. Moreover, low-income
families seeking public assistance must first spend down their
assets and face severe asset limits once on assistance.
(4) Individual Development Accounts, or IDAs, have proven
to be successful in helping low-income working families save
and accumulate assets. In one national demonstration project,
2,378 low-income families saved a total of $834,442 in one year
which generated another $1,644,510 in private matching funds.
Thus far, IDA savings have been used to purchase long-term,
high-return assets, including homes, post-secondary education
and training, and small businesses. Presently, about 10,000
IDAs are in existence in the United States, held by a very
small fraction of the at least 70 million Americans who are
asset poor.
(5) Therefore, the Federal Government should support,
through the tax code, a significant expansion of Individual
Development Accounts so that millions of low-income working
families across the country can save, accumulate assets, and
move their lives forward, and thus make positive contributions
to the economic and social well-being of the United States, as
well as to its future.
(b) Purposes.--The purposes of this Act 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. 203. DEFINITIONS.
As used in this Act:
(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 years but
not the age of 61 as of the last day of such
taxable year;
(ii) is a citizen or legal resident 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 the Internal Revenue Code
of 1986) 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; and
(v) is a taxpayer the 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) or
1(d) 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 2003, each dollar amount
referred to in subparagraph (A)(v) 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 ``2002''
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.
(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 sole owner of the account is the individual
for whom the account was established.
(B) No contribution will be accepted unless it is
in cash.
(C) The holder 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 207(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 sole owner of which is a
qualified financial institution, a qualified nonprofit
organization, or an Indian tribe.
(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.--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 204.
(5) Qualified nonprofit organization.--The term ``qualified
nonprofit organization'' means--
(A) 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;
(B) any community development financial institution
certified by the Community Development Financial
Institution Fund;
(C) any credit union chartered under Federal or
State law; or
(D) 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)).
(6) 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.
(7) Qualified individual development account program.--The
term ``qualified individual development account program'' means
a program established under section 204 under which--
(A) Individual Development Accounts and parallel
accounts are held 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, a
qualified nonprofit organization, or an Indian tribe.
(8) 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 and 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, as approved by the
qualified financial institution, qualified
nonprofit organization, or Indian tribe;
(ii) is paid by the qualified financial
institution, qualified nonprofit organization,
or Indian tribe--
(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 distributions
for working capital under a qualified
business plan (as defined in
subparagraph (B)(iv)(IV)), directly to
the account owner;
(III) in the case of any qualified
rollover, directly to another
Individual Development Account and
parallel account; or
(IV) 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 205(b).
(B) Qualified expenses.--
(i) In general.--The term ``qualified
expenses'' means any of the following:
(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''
means qualified higher education
expenses (as defined in section
529(e)(3) of the Internal Revenue Code
of 1986) incurred while attending an
eligible educational institution.
(II) Eligible educational
institution.--The term ``eligible
educational institution'' means an
institution of higher education which
meets the definition of an institution
of higher education under section
101(a) of the Higher Education Act of
1965 (42 U.S.C. 1001(a)) (as in effect on the date of the enactment of
this Act) or the definition of a postsecondary vocational institution
under section 102(c) of such Act (42 U.S.C. 1002(c)) (as so in effect)
and which is eligible to participate in programs under title IV of such
Act (42 U.S.C. 1070 et seq.).
(III) Coordination with other
benefits.--The amount of qualified
higher education expenses for any
taxable year shall be reduced as
provided in section 25A(g)(2) of the
Internal Revenue Code of 1986 and may
not be taken into account for purposes
of determining qualified higher
education expenses under section 135,
529, or 530 of such Code.
(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 included in a qualified
business plan, including capital,
plant, equipment, working capital,
inventory expenses, attorney and
accounting fees, and other costs
normally associated with starting or
expanding a business.
(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,
qualified nonprofit organization, or
Indian tribe 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 an
Individual Development Account and parallel
account directly to the spouse, any dependent,
or other named beneficiary of the deceased.
(9) Secretary.--The term ``Secretary'' means the Secretary
of the Treasury.
SEC. 204. STRUCTURE AND ADMINISTRATION OF QUALIFIED INDIVIDUAL
DEVELOPMENT ACCOUNT PROGRAMS.
(a) Establishment of Qualified Individual Development Account
Programs.--Any qualified financial institution, qualified nonprofit
organization, or Indian tribe may establish 1 or more qualified
individual development account programs which meet the requirements of
this Act.
(b) Basic Program Structure.--
(1) In general.--All qualified individual development
account programs shall consist of the following 2 components:
(A) An Individual Development Account to which an
eligible individual may contribute cash in accordance
with section 205.
(B) A parallel account to which all matching funds
shall be deposited in accordance with section 206.
(2) Tailored ida programs.--A qualified financial
institution, a qualified nonprofit organization, or an Indian
tribe 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 2001'' after ``subsection''.
(d) Tax Treatment of Parallel Accounts.--Any account described in
subparagraph (B) of subsection (b)(1) is exempt from taxation under the
Internal Revenue Code of 1986.
SEC. 205. 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,
a qualified nonprofit organization, or an Indian tribe 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
matching funds to pay for qualified expenses, owners of
Individual Development Accounts must complete a financial
education course offered by a qualified financial institution,
a qualified nonprofit organization, an Indian tribe, or a
government entity.
(2) Standard and applicability of course.--The Secretary,
in consultation with representatives of qualified individual
development account programs and financial educators, shall
establish minimum quality standards for the contents of
financial education courses and providers of such courses
offered under 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 61, or a
qualified final distribution.
(c) Proof of Status as an Eligible Individual.--Federal income tax
forms from the immediately preceding taxable year shall be presented to
the qualified financial institution, qualified nonprofit organization,
or Indian tribe 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
206(b)(1)(A).
(d) Direct Deposits.--The Secretary may, under regulations, provide
for the direct deposit of any portion (not less than $1) of any
overpayment of Federal tax of an individual as a contribution to the
Individual Development Account of such individual.
SEC. 206. DEPOSITS BY QUALIFIED INDIVIDUAL DEVELOPMENT ACCOUNT
PROGRAMS.
(a) Parallel Accounts.--The qualified financial institution,
qualified nonprofit organization, or Indian tribe 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, qualified nonprofit organization, or
Indian tribe shall not less than quarterly (or upon a
withdrawal request which meets the requirements of section
207(a)(1), if necessary) deposit into the parallel account with
respect to each eligible individual the following:
(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.
(B) Any matching funds provided by State, local, or
private sources in accordance to the matching ratio set
by those sources.
(2) Inflation adjustment.--
(A) In general.--In the case of any taxable year
beginning after 2003, the dollar amount referred to in
paragraph (1)(A) 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 ``2002'' for ``1992''.
(B) Rounding.--If any amount as adjusted under
subparagraph (A) is not a multiple of $20, such amount
shall be rounded to the nearest multiple of $20.
(3) Cross reference.--
For allowance of tax credit for
Individual Development Account subsidies, including matching funds, see
section 45G of the Internal Revenue Code of 1986.
(c) Deposit of Matching Funds Into Individual Development Account
of Individual Who Has Attained Age 61.--In the case of an Individual
Development Account owner who attains the age of 61, the qualified
financial institution, qualified nonprofit organization, or Indian
tribe which holds the parallel account for such individual shall
deposit the funds in such parallel account 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 day of the taxable year of such individual
following the taxable year in which such individual attained
age 61.
(d) Uniform Accounting Regulations.--To ensure proper recordkeeping
and determination of the tax credit under section 45G of the Internal
Revenue Code of 1986, the Secretary shall prescribe regulations with
respect to accounting for matching funds in the parallel accounts.
(e) Regular Reporting of Accounts.--Any qualified financial
institution, qualified nonprofit organization, or Indian tribe 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. 207. WITHDRAWAL PROCEDURES.
(a) Withdrawals for Qualified Expenses.--
(1) In general.--An Individual Development Account owner
may withdraw funds in order to pay qualified expenses of such
individual or such individual's spouse or dependents from such
individual's--
(A) Individual Development Account, and
(B) parallel account, but only--
(i) from funds which have been on deposit
in such parallel account for at least 1 year,
and
(ii) if 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, qualified nonprofit organization, or
Indian tribe shall directly transfer the funds electronically
to the distributees described in section 203(8)(A)(ii). If a
distributee is not equipped to receive funds electronically,
the qualified financial institution, qualified nonprofit
organization, or Indian tribe may issue such funds by paper
check to the distributee.
(b) Withdrawals for Nonqualified Expenses.--An Individual
Development Account owner may unilaterally withdraw any amount of funds
from the Individual Development Account for purposes other than to pay
qualified expenses, but shall forfeit an equal amount of matching funds
from the individual's parallel account by doing so.
(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 206(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 or any portion
thereof as security for a loan, the portion so used shall be treated as
a withdrawal of such portion for purposes other than to pay qualified
expenses, and such individual shall forfeit a proportionate amount of
matching funds from the individual's parallel account.
(e) Tax Treatment of Matching Funds.--Any amount withdrawn from a
parallel account shall not be includible in the account holder's gross
income.
SEC. 208. CERTIFICATION AND TERMINATION OF QUALIFIED INDIVIDUAL
DEVELOPMENT ACCOUNT PROGRAMS.
(a) Certification Procedures.--Upon establishing a qualified
individual development account program under section 204, a qualified
financial institution, a qualified nonprofit organization, or an Indian
tribe shall certify to the Secretary on forms 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 204(b)(1) are operating pursuant to all the provisions
of this Act; and
(2) the qualified financial institution, qualified
nonprofit organization, or Indian tribe 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, a qualified
nonprofit organization, or an Indian tribe under this Act is not
operating a qualified individual development account program in
accordance with the requirements of this Act (and has not implemented
any corrective recommendations directed by the Secretary), the
Secretary shall terminate such institution's, nonprofit organization's,
or Indian tribe's authority to conduct the program. If the Secretary is
unable to identify a qualified financial institution, a qualified
nonprofit organization, or an Indian tribe 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. 209. REPORTING, MONITORING, AND EVALUATION.
(a) Responsibilities of Qualified Financial Institutions, Qualified
Nonprofit Organizations, and Indian Tribes.--
(1) In general.--Each qualified financial institution,
qualified nonprofit organization, or Indian tribe that operates
a qualified individual development account program under
section 204 shall report annually to the Secretary within 90
days after the end of each calendar year on--
(A) the number of eligible individuals making
contributions into Individual Development Accounts;
(B) the amounts contributed into Individual
Development Accounts and deposited into parallel
accounts for matching funds;
(C) the amounts withdrawn from Individual
Development Accounts and parallel accounts, and the
purposes for which such amounts were withdrawn;
(D) the balances remaining in Individual
Development Accounts and parallel accounts; and
(E) such other information needed to help the
Secretary monitor the cost and outcomes of the
qualified individual development account program
(provided in a non-individually-identifiable manner).
(2) Additional reporting requirements.--Each qualified
financial institution, qualified nonprofit organization, or
Indian tribe that operates a qualified individual development
account program under section 204 shall report at such time and
in such manner as the Secretary may prescribe any additional
information that the Secretary requires to be provided for
purposes of administering and supervising the qualified
individual development account program. This additional data
may include, without limitation, identifying information about
Individual Development Account holders, their Accounts,
additions to the Accounts, and withdrawals from the Accounts.
(b) Responsibilities of the Secretary.--
(1) Monitoring protocol.--Not later than 12 months after
the date of the enactment of this Act, the Secretary, in
consultation with the Secretary of Health and Human Services,
shall develop and implement a protocol and process to monitor
the cost and outcomes of the qualified individual development
account programs established under section 204.
(2) Annual reports.--In each year after the date of the
enactment of this Act, the Secretary shall submit a progress
report to Congress on the status of such qualified individual
development account programs. Such report shall 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.
SEC. 210. AUTHORIZATION OF APPROPRIATIONS.
There is authorized to be appropriated to the Secretary $1,000,000
for fiscal year 2003 and for each fiscal year through 2009, for the
purposes of implementing this Act, including the reporting, monitoring,
and evaluation required under section 209, to remain available until
expended.
SEC. 211. ACCOUNT FUNDS DISREGARDED FOR PURPOSES OF CERTAIN MEANS-
TESTED FEDERAL PROGRAMS.
Notwithstanding any other provision of Federal law that requires
consideration of 1 or more financial circumstances of an individual,
for the purposes 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, an amount equal to
the sum of--
(1) all amounts (including earnings thereon) in any
Individual Development Account; plus
(2) the matching deposits made on behalf of such individual
(including earnings thereon) in any parallel account,
shall be disregarded for such purposes.
SEC. 212. 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
of the Internal Revenue Code of 1986 (relating to business related
credits) is amended by adding at the end the following new section:
``SEC. 45G. INDIVIDUAL DEVELOPMENT ACCOUNT INVESTMENT CREDIT.
``(a) Determination of Amount.--For purposes of section 38, the
individual development account investment credit determined under this
section with respect to any eligible entity for any taxable year is an
amount equal to the individual development account investment provided
by such eligible entity during the taxable year under an individual
development account program established under section 204 of the
Savings for Working Families Act of 2001.
``(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.--
``(1) In general.--For purposes of this section, the term
`individual development account investment' means, with respect
to an individual development account program of a qualified
financial institution in any taxable year, an amount equal to
the sum of--
``(A) the aggregate amount of dollar-for-dollar
matches under such program under section 206(b)(1)(A)
of the Savings for Working Families Act of 2001 for
such taxable year, plus
``(B) $50 with respect to each Individual
Development Account maintained as of the end of such
taxable year, with a balance of not less than $100
(other than the taxable year in which such Account is
opened).
``(2) Inflation adjustment.--
``(A) In general.--In the case of any taxable year
beginning after 2003, the $50 amount referred to in
paragraph (1)(B) 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) for the
calendar year in which the taxable year begins,
by substituting `2002' for `1992'.
``(B) Rounding.--If any amount as adjusted under
subparagraph (A) is not a multiple of $5, such amount
shall be rounded to the nearest multiple of $5.
``(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 2001 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) Regulations.--The Secretary may prescribe such regulations as
may be necessary or appropriate to carry out this section, including--
``(1) regulations allowing taxpayers other than qualified
financial institutions to claim credits under this section, and
``(2) regulations providing for a recapture of the credit
allowed under this section (notwithstanding any termination
date described in subsection (h)) in cases where there is a
forfeiture under section 207(b) of the Savings for Working
Families Act of 2001 in a subsequent taxable year of any amount
which was taken into account in determining the amount of such
credit.
``(h) Application of Section.--
``(1) In general.--This section shall apply to any
expenditure made in any taxable year beginning after December
31, 2002, and before January 1, 2010, with respect to any
Individual Development Account which--
``(A) is opened before January 1, 2008, and
``(B) as determined by the Secretary, when added to
all previously opened Individual Development Accounts,
does not exceed 900,000 Accounts.
``(2) Determination of Limitation.--The limitation on the
number of Individual Development Accounts under paragraph
(1)(B) shall be allocated by the Secretary among qualified
individual development account programs selected by the
Secretary.''.
(b) Credit Treated as Business Credit.--Section 38(b) of the
Internal Revenue Code of 1986 (relating to current year business
credit) is amended by striking ``plus'' at the end of paragraph (14),
by striking the period at the end of paragraph (15) and inserting ``,
plus'', and by adding at the end the following new paragraph:
``(16) the individual development account investment credit
determined under section 45G(a).''.
(c) No Carrybacks.--Subsection (d) of section 39 of the Internal
Revenue Code of 1986 (relating to carryback and carryforward of unused
credits) is amended by adding at the end the following:
``(11) No carryback of section 45g credit before effective
date.--No portion of the unused business credit for any taxable
year which is attributable to the individual development
account investment credit determined under section 45G may be
carried back to a taxable year ending before January 1,
2003.''.
(d) Conforming Amendment.--The table of sections for subpart C of
part IV of subchapter A of chapter 1 of the Internal Revenue Code of
1986 is amended by adding at the end the following new item:
``Sec. 45G. Individual development
account investment credit.''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years ending after December 31, 2002.
TITLE III--EZ PASS RECOGNITION OF SECTION 501(c)(3) STATUS
SEC. 301. EZ PASS RECOGNITION OF SECTION 501(C)(3) STATUS.
(a) In General.--The Secretary of the Treasury (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 (and waive any fees
relating to such applications) by any qualified organization which--
(1) is organized for the primary purpose of providing
social services to the poor and the needy; and
(2) meets such other criteria as the Secretary deems
appropriate for expedited consideration.
(b) Guidance and Referrals.--
(1) Guidance.--The Secretary shall--
(A) develop model articles of incorporation, model
bylaws, and model applications for exempt status under
section 501(c)(3) of the Internal Revenue Code of 1986,
and
(B) provide such models to qualified organizations
described in subsection (a) and such other
organizations as the Secretary considers appropriate.
(2) Referrals.--The Secretary shall provide to qualified
organizations the names of nongovernmental organizations
(including those awarded assistance under title VI) that
provide legal assistance with incorporation or legal assistance
to obtain tax-exempt status.
(c) Qualified Organization.--For purposes of this section, the term
``qualified organization'' means a nonprofit corporation or association
which, on the date of application, has--
(1) not more than 6 full-time equivalent, social service
employees, or
(2) an annual social service budget, compiled and adopted
in good faith, of less than $450,000.
(d) Social Service Program Defined.--For purposes of this section,
the term ``social service program'' includes all programs having the
primary purpose of delivering social services or health care, with
Federal, State, or local financial assistance where nongovernmental
providers of social services or health care are involved in the
delivery thereof, and regardless of whether the Federal, State, or
local financial assistance to the nongovernmental providers is pursuant
to a contract, or a grant or cooperative agreement, or pursuant to
indirect means of aid such as individual grants or child-care
certificates.
TITLE IV--GRANTS FOR PROGRAMS FOR MENTORING CHILDREN OF INCARCERATED
PARENTS
SEC. 401. GRANTS FOR PROGRAMS FOR MENTORING CHILDREN OF INCARCERATED
PARENTS.
Subpart 2 of part B of title IV (42 U.S.C. 629 et seq.) is amended
by adding at the end the following:
``SEC. 436. GRANTS FOR PROGRAMS FOR MENTORING CHILDREN OF INCARCERATED
PARENTS.
``(a) Findings and Purpose.--
``(1) Findings.--Congress makes the following findings:
``(A) In the period between 1991 and 1999, the
number of children with a parent incarcerated in a
Federal or State correctional facility increased by
more than 100 percent, from approximately 900,000 to
approximately 2,000,000. In 1999, 2.1 percent of all
children in the United States had a parent in a Federal
or State correctional facility.
``(B) Prior to incarceration, 64 percent of female
prisoners and 44 percent of male prisoners in State
facilities lived with their children.
``(C) Nearly 90 percent of the children of
incarcerated fathers live with their mothers, and 79
percent of the children of incarcerated mothers live
with a grandparent or other relative. Only 10 percent
of incarcerated mothers and 2 percent of incarcerated
fathers in State facilities report that their child or
children are in foster care.
``(D) Parental arrest and confinement lead to
stress, trauma, stigmatization, and separation problems
for children. These problems are coupled with existing
problems that include poverty, violence, parental
substance abuse, high-crime environments, intrafamilial
abuse, child abuse and neglect, multiple care givers,
or prior separations. As a result, children of an
incarcerated parent often exhibit a broad variety of
behavioral, emotional, health, and educational problems
that are often compounded by the pain of separation.
``(E) Empirical research demonstrates that
mentoring is a potent force for improving children's
behavior across all risk behaviors affecting health.
Quality, one-on-one relationships that provide young
people with caring role models for future success have
profound, life-changing potential. Done right,
mentoring markedly advances youths' life prospects. A
widely cited 1995 study by Public/Private Ventures
measured the impact of one Big Brothers Big Sisters
program and found significant effects in the lives of
youth-cutting first-time drug use by almost half and
first-time alcohol use by about a third, reducing
school absenteeism by half, cutting assaultive behavior
by a third, improving parental and peer relationships,
giving youth greater confidence in their school work,
and improving academic performance.
``(2) Purpose.--The purpose of this section is to authorize
the Secretary to make competitive grants to local governments
in areas with substantial numbers of children of incarcerated
parents to support the establishment or expansion and operation
of programs using a network of public and private community
entities to provide mentoring services for children of
incarcerated parents.
``(b) Definitions.--In this section:
``(1) Children of incarcerated parents.--The term `children
of incarcerated parents' means a child, 1 or both of whose
parents are incarcerated in a Federal or State correctional
facility. Such term shall be deemed to include any child who is
in an ongoing mentoring relationship in a program under this
section at the time of the release of the child's parent or
parents from a correctional facility, for purposes of continued
participation in the program.
``(2) Mentoring.--The term `mentoring' means a structured,
managed program in which children are appropriately matched
with screened and trained adult volunteers for one-on-one
relationships, involving meetings and activities on a regular
basis, intended to meet, in part, the child's need for
involvement with a caring and supportive adult who provides a
positive role model.
``(3) Mentoring services.--The term `mentoring services'
means those services and activities that support a structured,
managed program of mentoring, including the management by
trained personnel of outreach to, and screening of, eligible
children; outreach to, education and training of, and liaison
with sponsoring local organizations; screening and training of
adult volunteers; matching of children with suitable adult
volunteer mentors; support and oversight of the mentoring
relationship; and establishment of goals and evaluation of
outcomes for mentored children.
``(c) Program Authorized.--From the amount appropriated under
subsection (g) for a fiscal year that remains after the application of
subsection (g)(2), the Secretary shall make grants under this section
for each of fiscal years 2002 through 2006 to local governments in
areas that have significant numbers of children of incarcerated parents
and that submit applications meeting the requirements of this section,
including--
``(1) two-thirds of such amount in grants in amounts of up
to $5,000,000 each; and
``(2) one-third of such amount in grants in amounts of up
to $10,000,000 each.
``(d) Application Requirements.--In order to be eligible for a
grant under this section, the mayor or other chief executive officer of
a city, council of governments, or other unit of local government shall
submit to the Secretary an application containing the following:
``(1) Program design.--A description of the proposed local
program, including--
``(A) a list of local public and private
organizations and entities that will participate in the
mentoring network;
``(B) the name, description, and qualifications of
the entity that will coordinate and oversee the
activities of the mentoring network;
``(C) the number of mentor-child matches proposed
to be established and maintained annually under the
program;
``(D) such information as the Secretary may require
concerning the methods to be used to recruit, screen
support, and oversee individuals participating as
mentors (which methods shall include criminal
background checks on such individuals), and to evaluate
outcomes for participating children, including
information necessary to demonstrate compliance with
requirements established by the Secretary for the program; and
``(E) such other information as the Secretary may
require.
``(2) Community consultation; coordination with other
programs.--A demonstration that, in developing and implementing
the program, the local government will, to the extent feasible
and appropriate--
``(A) consult with public and private community
entities, and including, as appropriate, Indian tribal
organizations and urban Indian organizations, and with
family members of potential clients;
``(B) coordinate the programs and activities under
the program with other Federal, State, and local
programs serving children and youth; and
``(C) consult with appropriate Federal, State, and
local corrections, workforce development, and substance
abuse and mental health agencies.
``(3) Equal access for local service providers.--An
assurance that public and private entities and community
organizations, including Indian organizations, will be eligible
to participate in the program on an equal basis.
``(4) Supplementation assurance.--An assurance that Federal
funds provided to the local government under this section will
not be used to supplant Federal or non-Federal funds for
existing services and activities that promote the purpose of
this section.
``(5) Biennial program report.--An agreement that the local
government will submit to the Secretary, after the second year
of funding of a program under this section and every second
year thereafter, a report containing the following:
``(A) A description of the grant requirements used
by the local government to award grant funds.
``(B) The measurable goals and outcomes expected by
the programs receiving assistance under the local
government program (and in later reports, the extent to
which such goals and outcomes were achieved).
``(C) A description of the services provided by
programs receiving assistance under the local
government program.
``(D) The number of children and families served.
``(E) Such other such information as the Secretary
may require.
``(6) Records, reports, and audits.--An agreement that the
local government will maintain such records, make such reports,
and cooperate with such reviews or audits as the Secretary may
find necessary for purposes of oversight of project activities
and expenditures.
``(7) Evaluation.--An agreement that the local government
will cooperate fully with the Secretary's ongoing and final
evaluation of the program under the plan, by means including
providing the Secretary with access to the program and program-
related records and documents, staff, and grantees receiving
funding under the plan.
``(8) Extent of local-state cooperation.--A statement as to
whether, and the extent to which, the State government has
undertaken to provide support to and to cooperate with the
local program.
``(e) Federal Share.--
``(1) In general.--A grant for a program under this section
shall be available to pay a percentage share of the costs of
the program up to--
``(A) 80 percent for the first fiscal year for
which the grant is awarded;
``(B) 60 percent for the second such fiscal year;
``(C) 40 percent for the third such fiscal year;
and
``(D) 20 percent for each succeeding fiscal year.
``(2) Non-federal share.--The non-Federal share of the cost
of projects under this section may be in cash or in kind. In
determining the amount of the non-Federal share, the Secretary
may attribute fair market value to goods, services, and
facilities contributed from non-Federal sources.
``(f) Considerations in Awarding Grants.--In awarding grants under
this section, the Secretary shall take into consideration--
``(1) the experience, qualifications, and capacity of local
and tribal governments and networks of organizations to
effectively carry out a mentoring program under this section;
``(2) the comparative severity of need for mentoring
services in given local areas, taking into consideration data
on the numbers of children (and in particular of low-income
children) with an incarcerated parent (or parents) in such
areas;
``(3) whether, and the extent to which, the State
government has undertaken to support and cooperate with the
local mentoring program;
``(4) evidence of consultation with existing youth and
family service programs, as appropriate; and
``(5) any other factors the Secretary may deem significant
with respect to the need for or the potential success of
carrying out a mentoring program under this section.
``(g) Authorization of Appropriations; Reservation of Certain
Amounts.--
``(1) Authorization.--There are authorized to be
appropriated to carry out this section--
``(A) $67,000,000 for fiscal year 2002; and
``(B) such sums as may be necessary for each of
fiscal years 2003 through 2006.
``(2) Reservation.--The Secretary shall reserve 2.5 percent
of the amount appropriated for each fiscal year under paragraph
(1) for expenditure by the Secretary for research, technical
assistance, and evaluation related to programs carried out
under this section.''.
TITLE V--MATERNITY GROUP HOMES
SEC. 501. MATERNITY GROUP HOMES.
(a) Permissible Use of Funds.--Section 322 of the Runaway and
Homeless Youth Act (42 U.S.C. 5714-2) is amended--
(1) in subsection (a)(1), by inserting ``(including
maternity group homes)'' after ``group homes''; and
(2) by adding at the end the following:
``(c) Maternity group home.--In this part, the term `maternity
group home' means a community-based, adult-supervised group home that
provides young mothers and their children with a supportive and
supervised living arrangement in which such mothers are required to
learn parenting skills, including child development, family budgeting,
health and nutrition, and other skills to promote their long-term
economic independence and the well-being of their children.''.
(b) Part B of the Runaway and Homeless Youth Act (42 U.S.C. 5701 et
seq.) is amended by adding at the end the following:
``SEC. 323. CONTRACT FOR EVALUATION.
``(a) In General.--The Secretary shall enter into a contract with a
public or private entity for an evaluation of the maternity group homes
that are supported by grant funds under this Act.
``(b) Information.--The evaluation described in subsection (a)
shall include the collection of information about the relevant
characteristics of individuals who benefit from maternity group homes
such as those that are supported by grant funds under this Act and what
services provided by those maternity group homes are most beneficial to
such individuals.
``(c) Report.--Not later than 2 years after the date on which the
Secretary enters into a contract for an evaluation under subsection
(a), and biennially thereafter, the entity conducting the evaluation
under this section shall submit to Congress a report on the status,
activities, and accomplishments of maternity group homes that are
supported by grant funds under this Act.''.
(c) Authorization of Appropriations.--Section 388 of the Runaway
and Homeless Youth Act (42 U.S.C. 5751) is amended--
(1) in subsection(a)(1)--
(A) by striking ``There'' and inserting the
following:
``(A) In general.--There'';
(B) in subparagraph (A), as redesignated, by
inserting ``and the purpose described in subparagraph
(B)'' after ``other than part E''; and
(C) by adding at the end the following:
``(B) Maternity group homes.--There is authorized
to be appropriated, for maternity group homes eligible
for assistance under section 322(a)(1)--
``(i) $33,000,000 for fiscal year 2002; and
``(ii) such sums as may be necessary for
fiscal year 2003.''; and
(2) in subsection (a)(2)(A), by striking ``paragraph (1)''
and inserting ``paragraph (1)(A)''.
TITLE VI--COMPASSION CAPITAL FUND
SEC. 601. 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) 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 $89,000,000 for fiscal year
2002, and such sums as may be necessary for each of fiscal years 2003
through 2006.
(e) Definition.--In this section, the term ``community-based
organization'' means a nonprofit corporation or association that has--
(1) not more than 4 full-time equivalent positions for
employees who are engaged in the provision of social services;
or
(2) an annual budget for the provision of social services,
compiled and adopted in good faith, of less than $300,000.
SEC. 602. 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
2002, and such sums as may be necessary for each of fiscal years 2003
through 2006.
(e) Definition.--In this section, the term ``community-based
organization'' means a nonprofit corporation or association that has--
(1) not more than 4 full-time equivalent positions for
employees who are engaged in the provision of social services;
or
(2) an annual budget for the provision of social services,
compiled and adopted in good faith, of less than $300,000.
SEC. 603. 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 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 $35,000,000 for fiscal year
2002, and such sums as may be necessary for each of fiscal years 2003
through 2006.
(e) Definition.--In this section, the term ``community-based
organization'' means a nonprofit corporation or association that has--
(1) not more than 4 full-time equivalent positions for
employees who are engaged in the provision of social services;
or
(2) an annual budget for the provision of social services,
compiled and adopted in good faith, of less than $300,000.
SEC. 604. 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
2002, and such sums as may be necessary for each of fiscal years 2003
through 2006.
(e) Definition.--In this section, the term ``community-based
organization'' means a nonprofit corporation or association that has--
(1) not more than 4 full-time equivalent positions for
employees who are engaged in the provision of social services;
or
(2) an annual budget for the provision of social services,
compiled and adopted in good faith, of less than $300,000.
SEC. 605. PROHIBITION ON USE OF FUNDS.
Funds made available under this title may not be used to provide
social services.
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