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






                                                  Union Calendar No. 81
107th CONGRESS
  1st Session
                                 H. R. 7

                  [Report No. 107-138, Parts I and II]

 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.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 29, 2001

Mr. Watts of Oklahoma (for himself, Mr. Hall of Ohio, and Mr. Hastert) 
 introduced the following bill; which was referred to the Committee on 
Ways and Means, and in addition to the Committee on the Judiciary, 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

                             July 12, 2001

      Reported from the Committee on the Judiciary with amendments
  [Omit the part struck through and insert the part printed in italic]

                             July 16, 2001

 Additional sponsors: Mr. Pitts, Mr. Kolbe, Mrs. Northup, Mr. Green of 
 Wisconsin, Mr. Bachus, Mr. Tiahrt, Mr. Barr of Georgia, Mr. Brown of 
South Carolina, Mr. Smith of New Jersey, Mr. Crenshaw, Mr. Ehrlich, Mr. 
 Lewis of Kentucky, Mr. Leach, Mr. English, Mr. Hyde, Mr. Chabot, Mr. 
Smith of Texas, Mr. Gillmor, Mr. Hefley, Mr. Radanovich, Mr. Pickering, 
Ms. Hart, Mr. Blunt, Mr. Tancredo, Mrs. Roukema, Mr. Keller, Mr. Barton 
 of Texas, Mr. DeMint, Mr. Peterson of Pennsylvania, Mr. Sessions, Mr. 
  Schrock, Mr. Grucci, Mr. Kingston, Mr. Hall of Texas, Mr. Wolf, Mr. 
Calvert, Mr. Norwood, Mr. Wicker, Mr. Shows, Mr. Latham, Mr. Camp, and 
                              Mr. Ramstad

                             July 16, 2001

   Reported from the Committee on Ways and Means with an amendment, 
   committed to the Committee of the Whole House on the State of the 
                    Union, and ordered to be printed
 [Strike out all after the enacting clause and insert the part printed 
                           in boldface roman]

_______________________________________________________________________

                                 A BILL


 
 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. Charitable deduction for contributions of food inventory.
Sec. 104. Charitable donations liability reform for in-kind corporate 
                            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. Purposes.
Sec. 302. Definitions.
Sec. 303. Structure and administration of qualified individual 
                            development account programs.
Sec. 304. Procedures for opening and maintaining an individual 
                            development account and qualifying for 
                            matching funds.
Sec. 305. Deposits by qualified individual development account 
                            programs.
Sec. 306. Withdrawal procedures.
Sec. 307. Certification and termination of qualified individual 
                            development account programs.
Sec. 308. Reporting, monitoring, and evaluation.
Sec. 309. Authorization of appropriations.
Sec. 310. Account funds disregarded for purposes of certain means-
                            tested Federal programs.
Sec. 311. Matching funds for individual development accounts provided 
                            through a tax credit for qualified 
                            financial institutions.

             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, or
            ``(2) the amount of the standard deduction.''
    (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 the date of the enactment of 
this Act.

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 from an individual retirement account to 
                an organization described in section 170(c).
                    ``(B) Special rules relating to charitable 
                remainder trusts, pooled income funds, and charitable 
                gift annuities.--
                            ``(i) In general.--No amount shall be 
                        includible in gross income by reason of a 
                        qualified charitable distribution from an 
                        individual retirement account--
                                    ``(I) to a charitable remainder 
                                annuity trust or a charitable remainder 
                                unitrust (as such terms are defined in 
                                section 664(d)),
                                    ``(II) to a pooled income fund (as 
                                defined in section 642(c)(5)), or
                                    ``(III) for the issuance of a 
                                charitable gift annuity (as defined in 
                                section 501(m)(5)).
                        The preceding sentence shall apply only if no 
                        person holds an income interest in the amounts 
                        in the trust, fund, or annuity 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).
                            ``(ii) Determination of inclusion of 
                        amounts distributed.--In determining the amount 
                        includible in the gross income of any person by 
                        reason of a payment or distribution from a 
                        trust referred to in clause (i)(I) or a 
                        charitable gift annuity (as so defined), the 
                        portion of any qualified charitable 
                        distribution to such trust or for such annuity 
                        which would (but for this subparagraph) have 
                        been includible in gross income--
                                    ``(I) shall be treated as income 
                                described in section 664(b)(1), and
                                    ``(II) shall not be treated as an 
                                investment in the contract.
                            ``(iii) No inclusion for distribution to 
                        pooled income fund.--No amount shall be 
                        includible in the gross income of a pooled 
                        income fund (as so defined) by reason of a 
                        qualified charitable distribution to such fund.
                    ``(C) 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 59\1/2\, 
                        and
                            ``(ii) which is made directly from the 
                        account to--
                                    ``(I) an organization described in 
                                section 170(c), or
                                    ``(II) a trust, fund, or annuity 
                                referred to in subparagraph (B).
                    ``(D) Denial of deduction.--The amount allowable as 
                a deduction under section 170 to the taxpayer for the 
                taxable year shall be reduced (but not below zero) by 
                the sum of the amounts of the qualified charitable 
                distributions during such year which would be 
                includible in the gross income of the taxpayer for such 
                year but for this paragraph.''
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

SEC. 103. CHARITABLE DEDUCTION FOR CONTRIBUTIONS OF FOOD INVENTORY.

    (a) In General.--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) Contributions by non-corporate taxpayers.--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) Effective Date.--The amendment made by subsection (a) shall 
apply to taxable years beginning after December 31, 2001.

<DELETED>SEC. 104. CHARITABLE DONATIONS LIABILITY REFORM FOR IN-KIND 
              CORPORATE CONTRIBUTIONS.</DELETED>

<DELETED>    (a) Definitions.--For purposes of this section:</DELETED>
        <DELETED>    (1) Aircraft.--The term ``aircraft'' has the 
        meaning provided that term in section 40102(6) of title 49, 
        United States Code.</DELETED>
        <DELETED>    (2) Business entity.--The term ``business entity'' 
        means a firm, corporation, association, partnership, 
        consortium, joint venture, or other form of 
        enterprise.</DELETED>
        <DELETED>    (3) Equipment.--The term ``equipment'' includes 
        mechanical equipment, electronic equipment, and office 
        equipment.</DELETED>
        <DELETED>    (4) Facility.--The term ``facility'' means any 
        real property, including any building, improvement, or 
        appurtenance.</DELETED>
        <DELETED>    (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.</DELETED>
        <DELETED>    (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.</DELETED>
        <DELETED>    (7) Motor vehicle.--The term ``motor vehicle'' has 
        the meaning provided that term in section 30102(6) of title 49, 
        United States Code.</DELETED>
        <DELETED>    (8) Nonprofit organization.--The term ``nonprofit 
        organization'' means--</DELETED>
                <DELETED>    (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</DELETED>
                <DELETED>    (B) any not-for-profit organization 
                organized and conducted for public benefit and operated 
                primarily for charitable, civic, educational, 
                religious, welfare, or health purposes.</DELETED>
        <DELETED>    (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.</DELETED>
<DELETED>    (b) Liability.--</DELETED>
        <DELETED>    (1) Liability of business entities that donate 
        equipment to nonprofit organizations.--</DELETED>
                <DELETED>    (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.</DELETED>
                <DELETED>    (B) Application.--This paragraph shall 
                apply with respect to civil liability under Federal and 
                State law.</DELETED>
        <DELETED>    (2) Liability of business entities providing use 
        of facilities to nonprofit organizations.--</DELETED>
                <DELETED>    (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--
                </DELETED>
                        <DELETED>    (i) the use occurs outside of the 
                        scope of business of the business 
                        entity;</DELETED>
                        <DELETED>    (ii) such injury or death occurs 
                        during a period that such facility is used by 
                        the nonprofit organization; and</DELETED>
                        <DELETED>    (iii) the business entity 
                        authorized the use of such facility by the 
                        nonprofit organization.</DELETED>
                <DELETED>    (B) Application.--This paragraph shall 
                apply--</DELETED>
                        <DELETED>    (i) with respect to civil 
                        liability under Federal and State law; 
                        and</DELETED>
                        <DELETED>    (ii) regardless of whether a 
                        nonprofit organization pays for the use of a 
                        facility.</DELETED>
        <DELETED>    (3) Liability of business entities providing use 
        of a motor vehicle or aircraft.--</DELETED>
                <DELETED>    (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--</DELETED>
                        <DELETED>    (i) such injury or death occurs 
                        during a period that such motor vehicle or 
                        aircraft is used by a nonprofit organization; 
                        and</DELETED>
                        <DELETED>    (ii) the business entity 
                        authorized the use by the nonprofit 
                        organization of motor vehicle or aircraft that 
                        resulted in the injury or death.</DELETED>
                <DELETED>    (B) Application.--This paragraph shall 
                apply--</DELETED>
                        <DELETED>    (i) with respect to civil 
                        liability under Federal and State law; 
                        and</DELETED>
                        <DELETED>    (ii) regardless of whether a 
                        nonprofit organization pays for the use of the 
                        aircraft or motor vehicle.</DELETED>
        <DELETED>    (4) Liability of business entities providing tours 
        of facilities.--</DELETED>
                <DELETED>    (A) In general.--Subject to subsection 
                (c), a business entity shall not be subject to civil 
                liability relating to any injury to, or death of an 
                individual occurring at a facility of the business 
                entity, if--</DELETED>
                        <DELETED>    (i) such injury or death occurs 
                        during a tour of the facility in an area of the 
                        facility that is not otherwise accessible to 
                        the general public; and</DELETED>
                        <DELETED>    (ii) the business entity 
                        authorized the tour.</DELETED>
                <DELETED>    (B) Application.--This paragraph shall 
                apply--</DELETED>
                        <DELETED>    (i) with respect to civil 
                        liability under Federal and State law; 
                        and</DELETED>
                        <DELETED>    (ii) regardless of whether an 
                        individual pays for the tour.</DELETED>
<DELETED>    (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, 
including any misconduct that--</DELETED>
        <DELETED>    (1) constitutes a crime of violence (as that term 
        is defined in section 16 of title 18, United States Code) or 
        act of international terrorism (as that term is defined in 
        section 2331 of title 18, United States Code) for which the 
        defendant has been convicted in any court;</DELETED>
        <DELETED>    (2) constitutes a hate crime (as that term is used 
        in the Hate Crime Statistics Act (28 U.S.C. 534 
        note));</DELETED>
        <DELETED>    (3) involves a sexual offense, as defined by 
        applicable State law, for which the defendant has been 
        convicted in any court; or</DELETED>
        <DELETED>    (4) involves misconduct for which the defendant 
        has been found to have violated a Federal or State civil rights 
        law.</DELETED>
<DELETED>    (d) Superseding Provision.--</DELETED>
        <DELETED>    (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.</DELETED>
        <DELETED>    (2) Limitation.--Nothing in this title shall be 
        construed to supersede any Federal or State health or safety 
        law.</DELETED>
<DELETED>    (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--</DELETED>
        <DELETED>    (1) citing the authority of this 
        section;</DELETED>
        <DELETED>    (2) declaring the election of such State that such 
        provision shall not apply to such civil action in the State; 
        and</DELETED>
        <DELETED>    (3) containing no other provisions.</DELETED>
<DELETED>    (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.</DELETED>

SEC. 104. 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.

      <DELETED>TITLE II--EXPANSION OF CHARITABLE CHOICE</DELETED>

<DELETED>SEC. 201. PROVISION OF ASSISTANCE UNDER GOVERNMENT PROGRAMS BY 
              RELIGIOUS AND COMMUNITY ORGANIZATIONS.</DELETED>

<DELETED>    Title XXIV of the Revised Statutes is amended by inserting 
after section 1990 (42 U.S.C. 1994) the following:</DELETED>

<DELETED>``SEC. 1994A. CHARITABLE CHOICE.</DELETED>

<DELETED>    ``(a) Short Title.--This section may be cited as the 
`Charitable Choice Act of 2001'.</DELETED>
<DELETED>    ``(b) Purposes.--The purposes of this section are--
</DELETED>
        <DELETED>    ``(1) to provide assistance to individuals and 
        families in need in the most effective and efficient 
        manner;</DELETED>
        <DELETED>    ``(2) to prohibit discrimination against religious 
        organizations on the basis of religion in the administration 
        and distribution of government assistance under the government 
        programs described in subsection (c)(4);</DELETED>
        <DELETED>    ``(3) to allow religious organizations to assist 
        in the administration and distribution of such assistance 
        without impairing the religious character of such 
        organizations; and</DELETED>
        <DELETED>    ``(4) to protect the religious freedom of 
        individuals and families in need who are eligible for 
        government assistance, including expanding the possibility of 
        choosing to receive services from a religious organization 
        providing such assistance.</DELETED>
<DELETED>    ``(c) Religious Organizations Included as NonGovernmental 
Providers.--</DELETED>
        <DELETED>    ``(1) In general.--</DELETED>
                <DELETED>    ``(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, if the program is implemented in a manner 
                that is consistent with the Establishment Clause and 
                the Free Exercise Clause of the first amendment to the 
                Constitution.</DELETED>
                <DELETED>    ``(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 has a religious character.</DELETED>
        <DELETED>    ``(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 aid 
        to the religious organization.</DELETED>
        <DELETED>    ``(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 
        and should not be perceived as an endorsement by the government 
        of religion or the organization's religious beliefs or 
        practices.</DELETED>
        <DELETED>    ``(4) Programs.--For purposes of this section, a 
        program is described in this paragraph--</DELETED>
                <DELETED>    ``(A) if it involves activities carried 
                out using Federal funds--</DELETED>
                        <DELETED>    ``(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.);</DELETED>
                        <DELETED>    ``(ii) related to the prevention 
                        of crime, including programs funded under title 
                        I of the Omnibus Crime Control and Safe Streets 
                        Act of 1968 (42 U.S.C. 3701 et seq.);</DELETED>
                        <DELETED>    ``(iii) under the Federal housing 
                        laws;</DELETED>
                        <DELETED>    ``(iv) under title I of the 
                        Workforce Investment Act of 1998 (29 U.S.C. 
                        2801 et seq.)</DELETED>
                        <DELETED>    ``(v) under the Older Americans 
                        Act of 1965 (42 U.S.C. 3001 et seq.);</DELETED>
                        <DELETED>    ``(vi) under the Child Care 
                        Development Block Grant Act of 1990 (42 U.S.C. 
                        9858 et seq.);</DELETED>
                        <DELETED>    ``(vii) under 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.);</DELETED>
                        <DELETED>    ``(viii) related to the 
                        intervention in and prevention of domestic 
                        violence;</DELETED>
                        <DELETED>    ``(ix) related to hunger relief 
                        activities; or</DELETED>
                        <DELETED>    ``(x) 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</DELETED>
                <DELETED>    ``(B)(i) if it involves activities to 
                assist students in obtaining the recognized equivalents 
                of secondary school diplomas and activities relating to 
                non-school-hours programs; and</DELETED>
                <DELETED>    ``(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).</DELETED>
<DELETED>    ``(d) Organizational Character and Autonomy.--</DELETED>
        <DELETED>    ``(1) In general.--A religious organization that 
        provides assistance under a program described in subsection 
        (c)(4) shall 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.</DELETED>
        <DELETED>    ``(2) Additional safeguards.--Neither the Federal 
        Government nor a State or local government shall require a 
        religious organization in order to be eligible to provide 
        assistance under a program described in subsection (c)(4)--
        </DELETED>
                <DELETED>    ``(A) to alter its form of internal 
                governance; or</DELETED>
                <DELETED>    ``(B) to remove religious art, icons, 
                scripture, or other symbols because they are 
                religious.</DELETED>
<DELETED>    ``(e) Employment Practices.--</DELETED>
        <DELETED>    ``(1) In general.--In order to aid in the 
        preservation of its religious character, a religious 
        organization that provides assistance under a program described 
        in subsection (c)(4) may, notwithstanding any other provision 
        of law, require that its employees adhere to the religious 
        practices of the organization.</DELETED>
        <DELETED>    ``(2) Title vii exemption.--The exemption of a 
        religious organization provided under section 702 or 703(e)(2) 
        of the Civil Rights Act of 1964 (42 U.S.C. 2000e-1, 2000e-
        2(e)(2)) regarding employment practices shall not be affected 
        by the religious organization's provision of assistance under, 
        or receipt of funds from, a program described in subsection 
        (c)(4).</DELETED>
        <DELETED>    ``(3) Effect on other laws.--Nothing in this 
        section alters the duty of a religious organization 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. 1681-1686) (prohibiting discrimination in educational 
        institutions 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).</DELETED>
<DELETED>    ``(f) Rights of Beneficiaries of Assistance.--</DELETED>
        <DELETED>    ``(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--</DELETED>
                <DELETED>    ``(A) is an alternative, including a 
                nonreligious alternative, that is accessible to the 
                individual; and</DELETED>
                <DELETED>    ``(B) has a value that is not less than 
                the value of the assistance that the individual would 
                have received from such organization.</DELETED>
        <DELETED>    ``(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.</DELETED>
        <DELETED>    ``(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).</DELETED>
<DELETED>    ``(g) Nondiscrimination Against Beneficiaries.--</DELETED>
        <DELETED>    ``(1) Grants and contracts.--A religious 
        organization providing assistance through a grant or contract 
        under a program described in subsection (c)(4) shall not 
        discriminate, in carrying out the program, against an 
        individual described in subsection (f)(3)on the basis of 
        religion, a religious belief, or a refusal to hold a religious 
        belief..</DELETED>
        <DELETED>    ``(2) Indirect forms of disbursement.--A religious 
        organization providing assistance through a voucher, 
        certificate, or other form of indirect disbursement under a 
        program described in subsection (c)(4) shall not discriminate, 
        in carrying out the program, against an individual described in 
        subsection (f)(3) on the basis of religion, a religious belief, 
        or a refusal to hold a religious belief.</DELETED>
<DELETED>    ``(h) Accountability.--</DELETED>
        <DELETED>    ``(1) In general.--Except as provided in paragraph 
        (2), 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 provided under such 
        program.</DELETED>
        <DELETED>    ``(2) Limited audit.--Such organization shall 
        segregate government funds provided under such program into a 
        separate account or accounts. Only the government funds shall 
        be subject to audit by the government.</DELETED>
<DELETED>    ``(i) Limitations on Use of Funds for Certain Purposes.--
No funds provided through a grant or contract to a religious 
organization to provide assistance under any program described in 
subsection (c)(4) shall be expended for sectarian worship, instruction, 
or proselytization. A certificate shall be signed by such organizations 
and filed with the government agency that disbursed the funds that 
gives assurance the organization will comply with this 
subsection.</DELETED>
<DELETED>    ``(j) 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.</DELETED>
<DELETED>    ``(k) Treatment of Intermediate Contractors.--If a 
nongovernmental organization (referred to in this subsection as an 
`intermediate contractor'), acting under a contract or other agreement 
with the Federal Government or a State or local government, is given 
the authority under the contract or agreement to select nongovernmental 
organizations to provide assistance under the programs described in 
subsection (c)(4), the intermediate contractor shall have the same 
duties under this section as the government when selecting or otherwise 
dealing with subcontractors, but the intermediate contractor, if it is 
a religious organization, shall retain all other rights of a religious 
organization under this section.</DELETED>
<DELETED>    ``(l) 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 pursuant to section 1979 against 
the official or 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 appropriate relief in Federal district court against the 
official or government agency that has allegedly committed such 
violation.''.</DELETED>

                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 USC 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. PURPOSES.

    The purposes of this title 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 United States economic expansion.

SEC. 302. DEFINITIONS.

    As used in this title:
            (1) Eligible individual.--
                    (A) In general.--The term ``eligible individual'' 
                means an individual who--
                            (i) has attained the age of 18 years but 
                        not the age of 61;
                            (ii) is a citizen or legal resident of the 
                        United States;
                            (iii) is not a student (as defined in 
                        section 151(c)(4)); and
                            (iv) is a taxpayer the adjusted gross 
                        income of whom for the preceding taxable year 
                        does not exceed--
                                    (I) $20,000, in the case of a 
                                taxpayer described in section 1(c) or 
                                1(d) of the Internal Revenue Code of 
                                1986;
                                    (II) $25,000, 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 2002, each dollar amount 
                        referred to in subparagraph (A)(iv) 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 ``2001'' 
                                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 306(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).
                    (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 contractual affiliates, qualified nonprofit 
                organizations, or Indian tribes to carry out an 
                individual development account program established 
                under section 303.
            (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; or
                    (C) any credit union chartered under Federal or 
                State law.
            (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 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 303 under which--
                    (A) Individual Development Accounts and parallel 
                accounts are held by a qualified financial institution; 
                and
                    (B) additional activities determined by the 
                Secretary 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 as 
                        required under section 304(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'' 
                                has the meaning given such term by 
                                section 72(t)(7) of the Internal 
                                Revenue Code of 1986, determined by 
                                treating postsecondary vocational 
                                educational schools as eligible 
                                educational institutions.
                                    (II) Postsecondary vocational 
                                education school.--The term 
                                ``postsecondary vocational educational 
                                school'' means an area vocational 
                                education school (as defined in 
                                subparagraph (C) or (D) of section 
                                521(4) of the Carl D. Perkins 
                                Vocational and Applied Technology 
                                Education Act (20 U.S.C. 2471(4))) 
                                which is in any State (as defined in 
                                section 521(33) of such Act), as such 
                                sections are in effect on the date of 
                                the enactment of this Act.
                                    (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 such Code and may not be taken into 
account for purposes of determining qualified higher education expenses 
under section 135 or 530 of the Internal Revenue Code of 1986.
                            (iii) Qualified first-time homebuyer 
                        costs.--The term ``qualified first-time 
                        homebuyer costs'' means qualified acquisition 
                        costs (as defined in section 72(t)(8) of such 
                        Code without regard to subparagraph (B) 
                        thereof) 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) 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, qualified 
                        nonprofit organization, or Indian tribe 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. 303. 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 title.
    (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 304.
                    (B) A parallel account to which all matching funds 
                shall be deposited in accordance with section 305.
            (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) 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. 304. 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 maintains no 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) because of 
        hardship or lack of need.
    (c) Status as an Eligible Individual.--Federal income tax forms 
from the preceding taxable year (or in the absence of such forms, such 
documentation as specified by the Secretary proving the eligible 
individual's adjusted gross income and the status of the individual as 
an eligible individual) 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 305(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. 305. 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, a qualified nonprofit 
organization, or an Indian tribe.
    (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 proper 
        withdrawal request under section 306, 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 2002, 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 ``2001'' 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 30B 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 first day of the 
succeeding taxable year of such individual.
    (d) Uniform Accounting Regulations.--To ensure proper recordkeeping 
and determination of the tax credit under section 30B 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. 306. WITHDRAWAL PROCEDURES.

    (a) Withdrawals for Qualified Expenses.--To withdraw money from an 
individual's Individual Development Account to pay qualified expenses 
of such individual or such individual's spouse or dependents, the 
qualified financial institution, qualified nonprofit organization, or 
Indian tribe shall directly transfer such funds from the Individual 
Development Account, and, if applicable, from the parallel account 
electronically to the distributees described in section 302(8)(A)(ii). 
If the 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 a proportionate amount of 
matching funds from the individual's parallel account by doing so, 
unless such withdrawn funds are recontributed to such Account by 
September 30 following the withdrawal.
    (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 305(b)(1)(A) 
during the period--
            (1) beginning on the first day of the taxable year of such 
        individual following the beginning of such ineligibility, and
            (2) ending on the last day of the taxable year of such 
        individual in which such ineligibility ceases.
    (d) Tax Treatment of Matching Funds.--Any amount withdrawn from a 
parallel account shall not be includible in an eligible individual's 
gross income.
    (e) Withdrawal Liability Rests Only With Eligible Individuals.--
Nothing in this title may be construed to impose liability on a 
qualified financial institution, a qualified nonprofit organization, or 
an Indian tribe for non-compliance with the requirements of this title 
related to withdrawals from Individual Development Accounts.

SEC. 307. CERTIFICATION AND TERMINATION OF QUALIFIED INDIVIDUAL 
              DEVELOPMENT ACCOUNT PROGRAMS.

    (a) Certification Procedures.--Upon establishing a qualified 
individual development account program under section 303, 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 303(b)(1) are operating pursuant to all the provisions 
        of this title; 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 title is not 
operating a qualified individual development account program in 
accordance with the requirements of this title (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. 308. REPORTING, MONITORING, AND EVALUATION.

    (a) Responsibilities of Qualified Financial Institutions, Qualified 
Nonprofit Organizations, and Indian Tribes.--Each qualified financial 
institution, qualified nonprofit organization, or Indian tribe that 
operates a qualified individual development account program under 
section 303 shall report annually to the Secretary within 90 days after 
the end of each calendar year on--
            (1) the number of eligible individuals making contributions 
        into Individual Development Accounts;
            (2) the amounts contributed into Individual Development 
        Accounts and deposited into parallel accounts for matching 
        funds;
            (3) the amounts withdrawn from Individual Development 
        Accounts and parallel accounts, and the purposes for which such 
        amounts were withdrawn;
            (4) the balances remaining in Individual Development 
        Accounts and parallel accounts; and
            (5) 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).
    (b) Responsibilities of the Secretary.--
            (1) Monitoring protocol.--Not later than 12 months after 
        the date of the enactment of this Act, the Secretary shall 
        develop and implement a protocol and process to monitor the 
        cost and outcomes of the qualified individual development 
        account programs established under section 303.
            (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) information on program implementation and 
                administration, especially on problems encountered and 
                how problems were solved.

SEC. 309. AUTHORIZATION OF APPROPRIATIONS.

    There is authorized to be appropriated to the Secretary $1,000,000 
for fiscal year 2002 and for each fiscal year through 2008, for the 
purposes of implementing this title, including the reporting, 
monitoring, and evaluation required under section 308, to remain 
available until expended.

SEC. 310. 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. 311. MATCHING FUNDS FOR INDIVIDUAL DEVELOPMENT ACCOUNTS PROVIDED 
              THROUGH A TAX CREDIT FOR QUALIFIED FINANCIAL 
              INSTITUTIONS.

    (a) In General.--Subpart B of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to other credits) is 
amended by inserting after section 30A the following new section:

``SEC. 30B. INDIVIDUAL DEVELOPMENT ACCOUNT INVESTMENT CREDIT FOR 
              QUALIFIED FINANCIAL INSTITUTIONS.

    ``(a) Determination of Amount.--There shall be allowed as a credit 
against the applicable tax for the taxable year an amount equal to the 
individual development account investment provided by an eligible 
entity during the taxable year under an individual development account 
program established under section 303 of the Community Solutions 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 305(b)(1)(A) 
                of the Community Solutions Act of 2001 for such taxable 
                year, plus
                    ``(B) an amount equal to the sum of--
                            ``(i) with respect to each Individual 
                        Development Account opened during such taxable 
                        year, $100, plus
                            ``(ii) with respect to each Individual 
                        Development Account maintained during such 
                        taxable year, $30.
            ``(2) Inflation adjustment.--
                    ``(A) In general.--In the case of any taxable year 
                beginning after 2002, each dollar 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 `2001' 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, the term 
`eligible entity' means a qualified financial institution, or 1 or more 
contractual affiliates of such an institution as defined by the 
Secretary in regulations.
    ``(e) Other Definitions.--For purposes of this section, any term 
used in this section and also in the Community Solutions Act shall have 
the meaning given such term by such Act.
    ``(f) Denial of Double Benefit.--No deduction or credit (other than 
under this section) shall be allowed under this chapter with respect to 
any expense which is taken into account under subsection (c)(1)(A) in 
determining the credit under this section.
    ``(g) Regulations.--The Secretary may prescribe such regulations as 
may be necessary or appropriate to carry out this section, including 
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 306(b) of the 
Community Solutions 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.--This section shall apply to any 
expenditure made in any taxable year beginning after December 31, 2001, 
and before January 1, 2009, with respect to any Individual Development 
Account opened before January 1, 2007.''.
    (b) Conforming Amendment.--The table of sections for subpart B of 
part IV of subchapter A of chapter 1 is amended by inserting after the 
item relating to section 30A the following new item:

``Sec. 30B. Individual development account investment credit for 
                            qualified financial institutions.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2001.

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 donations liability reform for in-kind corporate 
                            contributions.
Sec. 105. Charitable deduction for contributions of food inventory.
Sec. 106. Reform of excise tax on net investment income of private 
                            foundations.
Sec. 107. Excise tax on unrelated business taxable income of charitable 
                            remainder trusts.
Sec. 108. Expansion of charitable contribution allowed for scientific 
                            property used for research and for computer 
                            technology and equipment used for 
                            educational purposes.
Sec. 109. 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 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 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.
            (4) Liability of business entities providing tours of 
        facilities.--
                    (A) In general.--Subject to subsection (c), a 
                business entity shall not be subject to civil liability 
                relating to any injury to, or death of an individual 
                occurring at a facility of the business entity, if--
                            (i) such injury or death occurs during a 
                        tour of the facility in an area of the facility 
                        that is not otherwise accessible to the general 
                        public; and
                            (ii) the business entity authorized the 
                        tour.
                    (B) Application.--This paragraph shall apply--
                            (i) with respect to civil liability under 
                        Federal and State law; and
                            (ii) regardless of whether an individual 
                        pays for the tour.
    (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, including any 
misconduct that--
            (1) constitutes a crime of violence (as that term is 
        defined in section 16 of title 18, United States Code) or act 
        of international terrorism (as that term is defined in section 
        2331 of title 18, United States Code) for which the defendant 
        has been convicted in any court;
            (2) constitutes a hate crime (as that term is used in the 
        Hate Crime Statistics Act (28 U.S.C. 534 note));
            (3) involves a sexual offense, as defined by applicable 
        State law, for which the defendant has been convicted in any 
        court; or
            (4) involves misconduct for which the defendant has been 
        found to have violated a Federal or State civil rights law.
    (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.

SEC. 105. 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. 106. 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. 107. 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. 108. 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. 109. 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 is amended by inserting after 
section 1990 (42 U.S.C. 1994) the following:

``SEC. 1994A. 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 provide assistance to individuals and families in 
        need in the most effective and efficient manner;
            ``(2) to prohibit discrimination against religious 
        organizations on the basis of religion in the administration 
        and distribution of government assistance under the government 
        programs described in subsection (c)(4);
            ``(3) to allow religious organizations to assist in the 
        administration and distribution of such assistance without 
        impairing the religious character of such organizations; and
            ``(4) to protect the religious freedom of individuals and 
        families in need who are eligible for government assistance, 
        including expanding the possibility of choosing to receive 
        services from a religious organization providing such 
        assistance.
    ``(c) Religious Organizations Included as Non-Governmental 
Providers.--
            ``(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, if the program is 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 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 aid to the 
        religious organization.
            ``(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 and should 
        not be perceived as an endorsement by the government of 
        religion or 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, 
                        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) under the Federal housing laws;
                            ``(iv) under 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) under the Child Care Development 
                        Block Grant Act of 1990 (42 U.S.C. 9858 et 
                        seq.);
                            ``(vii) under 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.);
                            ``(viii) related to the intervention in and 
                        prevention of domestic violence;
                            ``(ix) related to hunger relief activities; 
                        or
                            ``(x) 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 
                non-school-hours programs; 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 
        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 shall require a 
        religious organization in order to be eligible to provide 
        assistance under a program described in subsection (c)(4)--
                    ``(A) to alter its form of internal governance; or
                    ``(B) to remove religious art, icons, scripture, or 
                other symbols because they are religious.
    ``(e) Employment Practices.--
            ``(1) In general.--In order to aid in the preservation of 
        its religious character, a religious organization that provides 
        assistance under a program described in subsection (c)(4) may, 
        notwithstanding any other provision of law, require that its 
        employees adhere to the religious practices of the 
        organization.
            ``(2) Title vii exemption.--The exemption of a religious 
        organization provided under section 702 or 703(e)(2) of the 
        Civil Rights Act of 1964 (42 U.S.C. 2000e-1, 2000e-2(e)(2)) 
regarding employment practices shall not be affected by the religious 
organization's provision of assistance under, or receipt of funds from, 
a program described in subsection (c)(4).
            ``(3) Effect on other laws.--Nothing in this section alters 
        the duty of a religious organization 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. 1681-1686) (prohibiting discrimination in educational 
        institutions 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).
    ``(f) 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, including a nonreligious 
                alternative, that is accessible to the individual; 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).
    ``(g) Nondiscrimination Against Beneficiaries.--
            ``(1) Grants and contracts.--A religious organization 
        providing assistance through a grant or contract under a 
        program described in subsection (c)(4) shall not discriminate, 
        in carrying out the program, against an individual described in 
        subsection (f)(3)on the basis of religion, a religious belief, 
        or a refusal to hold a religious belief.
            ``(2) Indirect forms of disbursement.--A religious 
        organization providing assistance through a voucher, 
        certificate, or other form of indirect disbursement under a 
        program described in subsection (c)(4) shall not discriminate, 
        in carrying out the program, against an individual described in 
        subsection (f)(3) on the basis of religion, a religious belief, 
        or a refusal to hold a religious belief.
    ``(h) Accountability.--
            ``(1) In general.--Except as provided in paragraph (2), 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 provided under such program.
            ``(2) Limited audit.--Such organization shall segregate 
        government funds provided under such program into a separate 
        account or accounts. Only the government funds shall be subject 
        to audit by the government.
    ``(i) Limitations on Use of Funds for Certain Purposes.--No funds 
provided through a grant or contract to a religious organization to 
provide assistance under any program described in subsection (c)(4) 
shall be expended for sectarian worship, instruction, or 
proselytization. A certificate shall be signed by such organizations 
and filed with the government agency that disbursed the funds that 
gives assurance the organization will comply with this subsection.
    ``(j) 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.
    ``(k) Treatment of Intermediate Contractors.--If a nongovernmental 
organization (referred to in this subsection as an `intermediate 
contractor'), acting under a contract or other agreement with the 
Federal Government or a State or local government, is given the 
authority under the contract or agreement to select nongovernmental 
organizations to provide assistance under the programs described in 
subsection (c)(4), the intermediate contractor shall have the same 
duties under this section as the government when selecting or otherwise 
dealing with subcontractors, but the intermediate contractor, if it is 
a religious organization, shall retain all other rights of a religious 
organization under this section.
    ``(l) 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 pursuant to section 1979 against the official 
or 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 
appropriate relief in Federal district court against the official or 
government agency that has allegedly committed such violation.''.

               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.




                                                  Union Calendar No. 81

107th CONGRESS

  1st Session

                                H. R. 7

                  [Report No. 107-138, Parts I and II]

_______________________________________________________________________

                                 A BILL

 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.

_______________________________________________________________________

                             July 12, 2001

      Reported from the Committee on the Judiciary with amendments

                             July 16, 2001

   Reported from the Committee on Ways and Means with an amendment, 
   committed to the Committee of the Whole House on the State of the 
                    Union, and ordered to be printed