[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.
                                 <all>