[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7 Engrossed in House (EH)]

  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
107th CONGRESS
  1st Session
                                 H. R. 7

_______________________________________________________________________

                                 AN ACT


 
 To provide incentives for charitable contributions by individuals and 
 businesses, to improve the effectiveness and efficiency of government 
 program delivery to individuals and families in need, and to enhance 
   the ability of low-income Americans to gain financial security by 
                            building assets.

    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 ``Community 
Solutions 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 inventory.
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. Expansion of charitable contribution allowed for scientific 
                            property used for research and for computer 
                            technology and equipment used for 
                            educational purposes.
Sec. 108. Adjustment to basis of S corporation stock for certain 
                            charitable contributions.
                TITLE II--EXPANSION OF CHARITABLE CHOICE

Sec. 201. Provision of assistance under government programs by 
                            religious and community organizations.
               TITLE III--INDIVIDUAL DEVELOPMENT ACCOUNTS

Sec. 301. Additional qualified entities eligible to conduct projects 
                            under the Assets for Independence Act.
Sec. 302. Increase in limitation on net worth.
Sec. 303. Change in limitation on deposits for an individual.
Sec. 304. Elimination of limitation on deposits for a household.
Sec. 305. Extension of program.
Sec. 306. Conforming amendments.
Sec. 307. Applicability.
 TITLE IV--CHARITABLE DONATIONS LIABILITY REFORM FOR IN-KIND CORPORATE 
                             CONTRIBUTIONS

Sec. 401. Charitable donations liability reform for in-kind corporate 
                            contributions.

             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.--
            ``(1) In general.--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--
                    ``(A) the amount allowable under subsection (a) for 
                the taxable year for cash contributions, or
                    ``(B) the applicable amount.
            ``(2) Applicable amount.--For purposes of paragraph (1), 
        the applicable amount shall be determined as follows:

                ``For taxable years
                                                         The applicable
                  beginning in:
                                                           amount is:  
                    2002 and 2003..........................        $25 
                    2004, 2005, 2006.......................        $50 
                    2007, 2008, 2009.......................        $75 
                    2010 and thereafter....................       $100.
        In the case of a joint return, the applicable amount is twice 
        the applicable amount determined under the preceding table.''.
    (b) Direct Charitable Deduction.--
            (1) In general.--Subsection (b) of section 63 of such Code 
        is amended by striking ``and'' at the end of paragraph (1), by 
        striking the period at the end of paragraph (2) and inserting 
        ``, and'', and by adding at the end thereof the following new 
        paragraph:
            ``(3) the 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 on or after the date 
                        that the individual for whose benefit the 
                        account is maintained has attained age 70\1/2\, 
                        and
                            ``(ii) which is made directly by the 
                        trustee--
                                    ``(I) to an organization described 
                                in section 170(c), or
                                    ``(II) to a split-interest entity.
                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)(ii)(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)(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 such Code (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 such 
Code 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--
                    2002 through 2007......................         11 
                    2008...................................         12 
                    2009...................................         13 
                    2010 and thereafter....................      15.''.
    (c) Conforming Amendments.--
            (1) Sections 512(b)(10) and 805(b)(2)(A) of such Code 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, 2001.

SEC. 104. CHARITABLE DEDUCTION FOR CONTRIBUTIONS OF FOOD INVENTORY.

    (a) In General.--Paragraph (3) of section 170(e) of the Internal 
Revenue Code of 1986 (relating to special rule for certain 
contributions of inventory and other property) is amended by 
redesignating subparagraph (C) as subparagraph (D) and by inserting 
after subparagraph (B) the following new subparagraph:
                    ``(C) Special rule for contributions of food 
                inventory.--
                            ``(i) General rule.--In the case of a 
                        charitable contribution of food, this paragraph 
                        shall be applied--
                                    ``(I) without regard to whether the 
                                contribution is made by a C 
                                corporation, and
                                    ``(II) only for food that is 
                                apparently wholesome food.
                            ``(ii) Determination of fair market 
                        value.--In the case of a qualified contribution 
                        of apparently wholesome food to which this 
                        paragraph applies and which, solely by reason 
                        of internal standards of the taxpayer or lack 
                        of market, cannot or will not be sold, the fair 
                        market value of such food shall be determined 
                        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).
                            ``(iii) Apparently wholesome food.--For 
                        purposes of this subparagraph, the term 
                        `apparently wholesome food' shall have the 
                        meaning given to such term by section 22(b)(2) 
                        of the Bill Emerson Good Samaritan Food 
                        Donation Act (42 U.S.C. 1791(b)(2)), as in 
                        effect on the date of the enactment of this 
                        subparagraph.''.
    (b) Effective Date.--The amendment made by subsection (a) 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 such Code is 
amended by striking subsection (e).
    (c) 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 subsection (a) shall 
apply to taxable years beginning after December 31, 2001.

SEC. 107. EXPANSION OF CHARITABLE CONTRIBUTION ALLOWED FOR SCIENTIFIC 
              PROPERTY USED FOR RESEARCH AND FOR COMPUTER TECHNOLOGY 
              AND EQUIPMENT USED FOR EDUCATIONAL PURPOSES.

    (a) Scientific Property Used for Research.--Clause (ii) of section 
170(e)(4)(B) of the Internal Revenue Code of 1986 (defining qualified 
research contributions) is amended by inserting ``or assembled'' after 
``constructed''.
    (b) Computer Technology and Equipment for Educational Purposes.--
Clause (ii) of section 170(e)(6)(B) of such Code is amended by 
inserting ``or assembled'' after ``constructed'' and ``or assembling'' 
after ``construction''.
    (c) Conforming Amendment.--Subparagraph (D) of section 170(e)(6) of 
such Code is amended by inserting ``or assembled'' after 
``constructed'' and ``or assembling'' after ``construction''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2001.

SEC. 108. ADJUSTMENT TO BASIS OF S CORPORATION STOCK FOR CERTAIN 
              CHARITABLE CONTRIBUTIONS.

    (a) In General.--Paragraph (1) of section 1367(a) of such Code 
(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--EXPANSION OF CHARITABLE CHOICE

SEC. 201. PROVISION OF ASSISTANCE UNDER GOVERNMENT PROGRAMS BY 
              RELIGIOUS AND COMMUNITY ORGANIZATIONS.

    Title XXIV of the Revised Statutes of the United States is amended 
by inserting after section 1990 (42 U.S.C. 1994) the following:

``SEC. 1991. CHARITABLE CHOICE.

    ``(a) Short Title.--This section may be cited as the `Charitable 
Choice Act of 2001'.
    ``(b) Purposes.--The purposes of this section are--
            ``(1) to enable assistance to be provided to individuals 
        and families in need in the most effective and efficient 
        manner;
            ``(2) to supplement the Nation's social service capacity by 
        facilitating the entry of new, and the expansion of existing, 
        efforts by religious and other community organizations in the 
        administration and distribution of government assistance under 
        the government programs described in subsection (c)(4);
            ``(3) to prohibit discrimination against religious 
        organizations on the basis of religion in the administration 
        and distribution of government assistance under such programs;
            ``(4) to allow religious organizations to participate in 
        the administration and distribution of such assistance without 
        impairing the religious character and autonomy of such 
        organizations; and
            ``(5) to protect the religious freedom of individuals and 
        families in need who are eligible for government assistance, 
        including expanding the possibility of their being able to 
        choose to receive services from a religious organization 
        providing such assistance.
    ``(c) Religious Organizations Included as Providers; Disclaimers.--
            ``(1) In general.--
                    ``(A) Inclusion.--For any program described in 
                paragraph (4) that is carried out by the Federal 
                Government, or by a State or local government with 
                Federal funds, the government shall consider, on the 
                same basis as other nongovernmental organizations, 
                religious organizations to provide the assistance under 
                the program, and the program shall be implemented in a 
                manner that is consistent with the establishment clause 
                and the free exercise clause of the first amendment to 
                the Constitution.
                    ``(B) Discrimination prohibited.--Neither the 
                Federal Government, nor a State or local government 
                receiving funds under a program described in paragraph 
                (4), shall discriminate against an organization that 
                provides assistance under, or applies to provide 
                assistance under, such program on the basis that the 
                organization is religious or has a religious character.
            ``(2) Funds not aid to religion.--Federal, State, or local 
        government funds or other assistance that is received by a 
        religious organization for the provision of services under this 
        section constitutes aid to individuals and families in need, 
        the ultimate beneficiaries of such services, and not support 
        for religion or the organization's religious beliefs or 
        practices. Notwithstanding the provisions in this paragraph, 
        title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d et 
        seq.) shall apply to organizations receiving assistance funded 
        under any program described in subsection (c)(4).
            ``(3) Funds not endorsement of religion.--The receipt by a 
        religious organization of Federal, State, or local government 
        funds or other assistance under this section is not an 
        endorsement by the government of religion or of the 
        organization's religious beliefs or practices.
            ``(4) Programs.--For purposes of this section, a program is 
        described in this paragraph--
                    ``(A) if it involves activities carried out using 
                Federal funds--
                            ``(i) related to the prevention and 
                        treatment of juvenile delinquency and the 
                        improvement of the juvenile justice system, 
                        including programs funded under the Juvenile 
                        Justice and Delinquency Prevention Act of 1974 
                        (42 U.S.C. 5601 et seq.);
                            ``(ii) related to the prevention of crime 
                        and assistance to crime victims and offenders' 
                        families, including programs funded under title 
                        I of the Omnibus Crime Control and Safe Streets 
                        Act of 1968 (42 U.S.C. 3701 et seq.);
                            ``(iii) related to the provision of 
                        assistance under Federal housing statutes, 
                        including the Community Development Block Grant 
                        Program established under title I of the 
                        Housing and Community Development Act of 1974 
                        (42 U.S.C. 5301 et seq.);
                            ``(iv) under subtitle B or D of title I of 
                        the Workforce Investment Act of 1998 (29 U.S.C. 
                        2801 et seq.);
                            ``(v) under the Older Americans Act of 1965 
                        (42 U.S.C. 3001 et seq.);
                            ``(vi) related to the intervention in and 
                        prevention of domestic violence, including 
                        programs under the Child Abuse Prevention and 
                        Treatment Act (42 U.S.C. 5101 et seq.) or the 
                        Family Violence Prevention and Services Act (42 
                        U.S.C. 10401 et seq.);
                            ``(vii) related to hunger relief 
                        activities; or
                            ``(viii) under the Job Access and Reverse 
                        Commute grant program established under section 
                        3037 of the Federal Transit Act of 1998 (49 
                        U.S.C. 5309 note); or
                    ``(B)(i) if it involves activities to assist 
                students in obtaining the recognized equivalents of 
                secondary school diplomas and activities relating to 
                nonschool hours programs, including programs under--
                            ``(I) chapter 3 of subtitle A of title II 
                        of the Workforce Investment Act of 1998 (Public 
                        Law 105-220); or
                            ``(II) part I of title X of the Elementary 
                        and Secondary Education Act (20 U.S.C. 6301 et 
                        seq.); and
                    ``(ii) except as provided in subparagraph (A) and 
                clause (i), does not include activities carried out 
                under Federal programs providing education to children 
                eligible to attend elementary schools or secondary 
                schools, as defined in section 14101 of the Elementary 
                and Secondary Education Act of 1965 (20 U.S.C. 8801).
    ``(d) Organizational Character and Autonomy.--
            ``(1) In general.--A religious organization that provides 
        assistance under a program described in subsection (c)(4) shall 
        have the right to retain its autonomy from Federal, State, and 
        local governments, including such organization's control over 
        the definition, development, practice, and expression of its 
        religious beliefs.
            ``(2) Additional safeguards.--Neither the Federal 
        Government, nor a State or local government with Federal funds, 
        shall require a religious organization, in order to be eligible 
        to provide assistance under a program described in subsection 
        (c)(4), to--
                    ``(A) alter its form of internal governance or 
                provisions in its charter documents; or
                    ``(B) remove religious art, icons, scripture, or 
                other symbols, or to change its name, because such 
                symbols or names are of a religious character.
    ``(e) Employment Practices.--A religious organization's exemption 
provided under section 702 of the Civil Rights Act of 1964 (42 U.S.C. 
2000e-1) regarding employment practices shall not be affected by its 
participation in, or receipt of funds from, programs described in 
subsection (c)(4), and any provision in such programs that is 
inconsistent with or would diminish the exercise of an organization's 
autonomy recognized in section 702 or in this section shall have no 
effect. Nothing in this section alters the duty of a religious 
organization to comply with the nondiscrimination provisions of title 
VII of the Civil Rights Act of 1964 in the use of funds from programs 
described in subsection (c)(4).
    ``(f) Effect on Other Laws.--Nothing in this section shall alter 
the duty of a religious organization receiving assistance or providing 
services under any program described in subsection (c)(4) to comply 
with the nondiscrimination provisions in title VI of the Civil Rights 
Act of 1964 (42 U.S.C. 2000d et seq.) (prohibiting discrimination on 
the basis of race, color, and national origin), title IX of the 
Education Amendments of 1972 (20 U.S.C. 1681-1688) (prohibiting 
discrimination in education programs or activities on the basis of sex 
and visual impairment), section 504 of the Rehabilitation Act of 1973 
(29 U.S.C. 794) (prohibiting discrimination against otherwise qualified 
disabled individuals), and the Age Discrimination Act of 1975 (42 
U.S.C. 6101-6107) (prohibiting discrimination on the basis of age).
    ``(g) Rights of Beneficiaries of Assistance.--
            ``(1) In general.--If an individual described in paragraph 
        (3) has an objection to the religious character of the 
        organization from which the individual receives, or would 
        receive, assistance funded under any program described in 
        subsection (c)(4), the appropriate Federal, State, or local 
        governmental entity shall provide to such individual (if 
        otherwise eligible for such assistance) within a reasonable 
        period of time after the date of such objection, assistance 
        that--
                    ``(A) is an alternative that is accessible to the 
                individual and unobjectionable to the individual on 
                religious grounds; and
                    ``(B) has a value that is not less than the value 
                of the assistance that the individual would have 
                received from such organization.
            ``(2) Notice.--The appropriate Federal, State, or local 
        governmental entity shall guarantee that notice is provided to 
        the individuals described in paragraph (3) of the rights of 
        such individuals under this section.
            ``(3) Individual described.--An individual described in 
        this paragraph is an individual who receives or applies for 
        assistance under a program described in subsection (c)(4).
    ``(h) Nondiscrimination Against Beneficiaries.--
            ``(1) Grants and cooperative agreements.--A religious 
        organization providing assistance through a grant or 
        cooperative agreement under a program described in subsection 
        (c)(4) shall not discriminate in carrying out the program 
        against an individual described in subsection (g)(3) on the 
        basis of religion, a religious belief, or a refusal to hold a 
        religious belief.
            ``(2) Indirect forms of assistance.--A religious 
        organization providing assistance through a voucher, 
        certificate, or other form of indirect assistance under a 
        program described in subsection (c)(4) shall not deny an 
        individual described in subsection (g)(3) admission into such 
        program on the basis of religion, a religious belief, or a 
        refusal to hold a religious belief.
    ``(i) Accountability.--
            ``(1) In general.--Except as provided in paragraphs (2) and 
        (3), a religious organization providing assistance under any 
        program described in subsection (c)(4) shall be subject to the 
        same regulations as other nongovernmental organizations to 
        account in accord with generally accepted accounting principles 
        for the use of such funds and its performance of such programs.
            ``(2) Limited audit.--
                    ``(A) Grants and cooperative agreements.--A 
                religious organization providing assistance through a 
                grant or cooperative agreement under a program 
                described in subsection (c)(4) shall segregate 
                government funds provided under such program into a 
                separate account or accounts. Only the separate 
                accounts consisting of funds from the government shall 
                be subject to audit by the government.
                    ``(B) Indirect forms of assistance.--A religious 
                organization providing assistance through a voucher, 
                certificate, or other form of indirect assistance under 
                a program described in subsection (c)(4) may segregate 
                government funds provided under such program into a 
                separate account or accounts. If such funds are so 
                segregated, then only the separate accounts consisting 
                of funds from the government shall be subject to audit 
                by the government.
            ``(3) Self audit.--A religious organization providing 
        services under any program described in subsection (c)(4) shall 
        conduct annually a self audit for compliance with its duties 
        under this section and submit a copy of the self audit to the 
        appropriate Federal, State, or local government agency, along 
        with a plan to timely correct variances, if any, identified in 
        the self audit.
    ``(j) Limitations on Use of Funds; Voluntariness.--No funds 
provided through a grant or cooperative agreement to a religious 
organization to provide assistance under any program described in 
subsection (c)(4) shall be expended for sectarian instruction, worship, 
or proselytization. If the religious organization offers such an 
activity, it shall be voluntary for the individuals receiving services 
and offered separate from the program funded under subsection (c)(4). A 
certificate shall be separately signed by religious organizations, and 
filed with the government agency that disburses the funds, certifying 
that the organization is aware of and will comply with this subsection.
    ``(k) Effect on State and Local Funds.--If a State or local 
government contributes State or local funds to carry out a program 
described in subsection (c)(4), the State or local government may 
segregate the State or local funds from the Federal funds provided to 
carry out the program or may commingle the State or local funds with 
the Federal funds. If the State or local government commingles the 
State or local funds, the provisions of this section shall apply to the 
commingled funds in the same manner, and to the same extent, as the 
provisions apply to the Federal funds.
    ``(l) Indirect Assistance.--When consistent with the purpose of a 
program described in subsection (c)(4), the Secretary of the department 
administering the program may direct the disbursement of some or all of 
the funds, if determined by the Secretary to be feasible and efficient, 
in the form of indirect assistance. For purposes of this section, 
`indirect assistance' constitutes assistance in which an organization 
receiving funds through a voucher, certificate, or other form of 
disbursement under this section receives such funding only as a result 
of the private choices of individual beneficiaries and no government 
endorsement of any particular religion, or of religion generally, 
occurs.
    ``(m) Treatment of Intermediate Grantors.--If a nongovernmental 
organization (referred to in this subsection as an `intermediate 
grantor'), acting under a grant or other agreement with the Federal 
Government, or a State or local government with Federal funds, is given 
the authority under the agreement to select nongovernmental 
organizations to provide assistance under the programs described in 
subsection (c)(4), the intermediate grantor shall have the same duties 
under this section as the government when selecting or otherwise 
dealing with subgrantors, but the intermediate grantor, if it is a 
religious organization, shall retain all other rights of a religious 
organization under this section.
    ``(n) Compliance.--A party alleging that the rights of the party 
under this section have been violated by a State or local government 
may bring a civil action for injunctive relief pursuant to section 1979 
against the State official or local government agency that has 
allegedly committed such violation. A party alleging that the rights of 
the party under this section have been violated by the Federal 
Government may bring a civil action for injunctive relief in Federal 
district court against the official or government agency that has 
allegedly committed such violation.
    ``(o) Training and Technical Assistance for Small Nongovernmental 
Organizations.--
            ``(1) In general.--From amounts made available to carry out 
        the purposes of the Office of Justice Programs (including any 
        component or unit thereof, including the Office of Community 
        Oriented Policing Services), funds are authorized to provide 
        training and technical assistance, directly or through grants 
        or other arrangements, in procedures relating to potential 
        application and participation in programs identified in 
        subsection (c)(4) to small nongovernmental organizations, as 
        determined by the Attorney General, including religious 
        organizations, in an amount not to exceed $50 million annually.
            ``(2) Types of assistance.--Such assistance may include--
                    ``(A) assistance and information relative to 
                creating an organization described in section 501(c)(3) 
                of the Internal Revenue Code of 1986 to operate 
                identified programs;
                    ``(B) granting writing assistance which may include 
                workshops and reasonable guidance;
                    ``(C) information and referrals to other 
                nongovernmental organizations that provide expertise in 
                accounting, legal issues, tax issues, program 
                development, and a variety of other organizational 
                areas; and
                    ``(D) information and guidance on how to comply 
                with Federal nondiscrimination provisions including, 
                but not limited to, title VI of the Civil Rights Act of 
                1964 (42 U.S.C. 2000d et seq.), title VII of the Civil 
                Rights Act of 1964 (42 U.S.C. 2000e et seq.), the Fair 
                Housing Act, as amended (42 U.S.C. 3601 et seq.), title 
                IX of the Education Amendments of 1972 (20 U.S.C. 1681-
                1688), section 504 of the Rehabilitation Act of 1973 
                (29 U.S.C. 694), and the Age Discrimination Act of 1975 
                (42 U.S.C. 6101-6107).
            ``(3) Reservation of funds.--An amount of no less than 
        $5,000,000 shall be reserved under this section. Small 
        nongovernmental organizations may apply for these funds to be 
        used for assistance in providing full and equal integrated 
        access to individuals with disabilities in programs under this 
        title.
            ``(4) Priority.--In giving out the assistance described in 
        this subsection, priority shall be given to small 
        nongovernmental organizations serving urban and rural 
        communities.''.

               TITLE III--INDIVIDUAL DEVELOPMENT ACCOUNTS

SEC. 301. ADDITIONAL QUALIFIED ENTITIES ELIGIBLE TO CONDUCT PROJECTS 
              UNDER THE ASSETS FOR INDEPENDENCE ACT.

    Section 404(7)(A)(iii)(I)(aa) of the Assets for Independence Act 
(42 U.S.C. 604 note) is amended to read as follows:
                                            ``(aa) a federally insured 
                                        credit union; or''.

SEC. 302. INCREASE IN LIMITATION ON NET WORTH.

    Section 408(a)(2)(A) of the Assets for Independence Act (42 U.S.C. 
604 note) is amended by striking ``$10,000'' and inserting ``$20,000''.

SEC. 303. CHANGE IN LIMITATION ON DEPOSITS FOR AN INDIVIDUAL.

    Section 410(b) of the Assets for Independence Act (42 U.S.C. 604 
note) is amended to read as follows:
    ``(b) Limitation on Deposits for an Individual.--Not more than $500 
from a grant made under section 406(b) shall be provided per year to 
any one individual during the project.''.

SEC. 304. ELIMINATION OF LIMITATION ON DEPOSITS FOR A HOUSEHOLD.

    Section 410 of the Assets for Independence Act (42 U.S.C. 604 note) 
is amended by striking subsection (c) and redesignating subsections (d) 
and (e) as subsections (c) and (d), respectively.

SEC. 305. EXTENSION OF PROGRAM.

    Section 416 of the Assets for Independence Act (42 U.S.C. 604 note) 
is amended by striking ``2001, 2002, and 2003'' and inserting ``and 
2001, and $50,000,000 for each of fiscal years 2002 through 2008''.

SEC. 306. CONFORMING AMENDMENTS.

    (a) Amendments to Text.--The text of each of the following 
provisions of the Assets for Independence Act (42 U.S.C. 604 note) is 
amended by striking ``demonstration'' each place it appears:
            (1) Section 403.
            (2) Section 404(2).
            (3) Section 405(a).
            (4) Section 405(b).
            (5) Section 405(c).
            (6) Section 405(d).
            (7) Section 405(e).
            (8) Section 405(g).
            (9) Section 406(a).
            (10) Section 406(b).
            (11) Section 407(b)(1)(A).
            (12) Section 407(c)(1)(A).
            (13) Section 407(c)(1)(B).
            (14) Section 407(c)(1)(C).
            (15) Section 407(c)(1)(D).
            (16) Section 407(d).
            (17) Section 408(a).
            (18) Section 408(b).
            (19) Section 409.
            (20) Section 410(e).
            (21) Section 411.
            (22) Section 412(a).
            (23) Section 412(b)(2).
            (24) Section 412(c).
            (25) Section 413(a).
            (26) Section 413(b).
            (27) Section 414(a).
            (28) Section 414(b).
            (29) Section 414(c).
            (30) Section 414(d)(1).
            (31) Section 414(d)(2).
    (b) Amendments to Subsection Headings.--The heading of each of the 
following provisions of the Assets for Independence Act (42 U.S.C. 604 
note) is amended by striking ``Demonstration'':
            (1) Section 405(a).
            (2) Section 406(a).
            (3) Section 413(a).
    (c) Amendments to Section Headings.--The headings of sections 406 
and 411 of the Assets for Independence Act (42 U.S.C. 604 note) are 
amended by striking ``DEMONSTRATION''.

SEC. 307. APPLICABILITY.

    (a) In General.--The amendments made by this title shall apply to 
funds provided before, on or after the date of the enactment of this 
Act.
    (b) Prior Amendments.--The amendments made by title VI of the 
Departments of Labor, Health and Human Services, and Education, and 
Related Agencies Appropriations Act, 2001 (as enacted into law by 
Public Law 106-554) shall apply to funds provided before, on or after 
the date of the enactment of such Act.

 TITLE IV--CHARITABLE DONATIONS LIABILITY REFORM FOR IN-KIND CORPORATE 
                             CONTRIBUTIONS

SEC. 401. CHARITABLE DONATIONS LIABILITY REFORM FOR IN-KIND CORPORATE 
              CONTRIBUTIONS.

    (a) Definitions.--For purposes of this section:
            (1) Aircraft.--The term ``aircraft'' has the meaning 
        provided that term in section 40102(6) of title 49, United 
        States Code.
            (2) Business entity.--The term ``business entity'' means a 
        firm, corporation, association, partnership, consortium, joint 
        venture, or other form of enterprise.
            (3) Equipment.--The term ``equipment'' includes mechanical 
        equipment, electronic equipment, and office equipment.
            (4) Facility.--The term ``facility'' means any real 
        property, including any building, improvement, or appurtenance.
            (5) Gross negligence.--The term ``gross negligence'' means 
        voluntary and conscious conduct by a person with knowledge (at 
        the time of the conduct) that the conduct is likely to be 
        harmful to the health or well-being of another person.
            (6) Intentional misconduct.--The term ``intentional 
        misconduct'' means conduct by a person with knowledge (at the 
        time of the conduct) that the conduct is harmful to the health 
        or well-being of another person.
            (7) Motor vehicle.--The term ``motor vehicle'' has the 
        meaning provided that term in section 30102(6) of title 49, 
        United States Code.
            (8) Nonprofit organization.--The term ``nonprofit 
        organization'' means--
                    (A) any organization described in section 501(c)(3) 
                of the Internal Revenue Code of 1986 and exempt from 
                tax under section 501(a) of such Code; or
                    (B) any not-for-profit organization organized and 
                conducted for public benefit and operated primarily for 
                charitable, civic, educational, religious, welfare, or 
                health purposes.
            (9) State.--The term ``State'' means each of the several 
        States, the District of Columbia, the Commonwealth of Puerto 
        Rico, the Virgin Islands, Guam, American Samoa, the Northern 
        Mariana Islands, any other territory or possession of the 
        United States, or any political subdivision of any such State, 
        territory, or possession.
    (b) Liability.--
            (1) Liability of business entities that donate equipment to 
        nonprofit organizations.--
                    (A) In general.--Subject to subsection (c), a 
                business entity shall not be subject to civil liability 
                relating to any injury or death that results from the 
                use of equipment donated by a business entity to a 
                nonprofit organization.
                    (B) Application.--This paragraph shall apply with 
                respect to civil liability under Federal and State law.
            (2) Liability of business entities providing use of 
        facilities to nonprofit organizations.--
                    (A) In general.--Subject to subsection (c), a 
                business entity shall not be subject to civil liability 
                relating to any injury or death occurring at a facility 
                of the business entity in connection with a use of such 
                facility by a nonprofit organization, if--
                            (i) the use occurs outside of the scope of 
                        business of the business entity;
                            (ii) such injury or death occurs during a 
                        period that such facility is used by the 
                        nonprofit organization; and
                            (iii) the business entity authorized the 
                        use of such facility by the nonprofit 
                        organization.
                    (B) Application.--This paragraph shall apply--
                            (i) with respect to civil liability under 
                        Federal and State law; and
                            (ii) regardless of whether a nonprofit 
                        organization pays for the use of a facility.
            (3) Liability of business entities providing use of a motor 
        vehicle or aircraft.--
                    (A) In general.--Subject to subsection (c), a 
                business entity shall not be subject to civil liability 
                relating to any injury or death occurring as a result 
                of the operation of aircraft or a motor vehicle of a 
                business entity loaned to a nonprofit organization for 
                use outside of the scope of business of the business 
                entity, if--
                            (i) such injury or death occurs during a 
                        period that such motor vehicle or aircraft is 
                        used by a nonprofit organization; and
                            (ii) the business entity authorized the use 
                        by the nonprofit organization of motor vehicle 
                        or aircraft that resulted in the injury or 
                        death.
                    (B) Application.--This paragraph shall apply--
                            (i) with respect to civil liability under 
                        Federal and State law; and
                            (ii) regardless of whether a nonprofit 
                        organization pays for the use of the aircraft 
                        or motor vehicle.
    (c) Exceptions.--Subsection (b) shall not apply to an injury or 
death that results from an act or omission of a business entity that 
constitutes gross negligence or intentional misconduct.
    (d) Superseding Provision.--
            (1) In general.--Subject to paragraph (2) and subsection 
        (e), this title preempts the laws of any State to the extent 
        that such laws are inconsistent with this title, except that 
        this title shall not preempt any State law that provides 
        additional protection for a business entity for an injury or 
        death described in a paragraph of subsection (b) with respect 
        to which the conditions specified in such paragraph apply.
            (2) Limitation.--Nothing in this title shall be construed 
        to supersede any Federal or State health or safety law.
    (e) Election of State Regarding Nonapplicability.--A provision of 
this title shall not apply to any civil action in a State court against 
a business entity in which all parties are citizens of the State if 
such State enacts a statute--
            (1) citing the authority of this section;
            (2) declaring the election of such State that such 
        provision shall not apply to such civil action in the State; 
        and
            (3) containing no other provisions.
    (f) Effective Date.--This section shall apply to injuries (and 
deaths resulting therefrom) occurring on or after the date of the 
enactment of this Act.

            Passed the House of Representatives July 19, 2001.

            Attest:

                                                                 Clerk.
107th CONGRESS

  1st Session

                                H. R. 7

_______________________________________________________________________

                                 AN ACT

 To provide incentives for charitable contributions by individuals and 
 businesses, to improve the effectiveness and efficiency of government 
 program delivery to individuals and families in need, and to enhance 
   the ability of low-income Americans to gain financial security by 
                            building assets.