[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 1924 Introduced in Senate (IS)]







107th CONGRESS
  2d Session
                                S. 1924

         To promote charitable giving, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            February 8, 2002

Mr. Lieberman (for himself, Mr. Santorum, Mr. Bayh, Mr. Brownback, Mr. 
Nelson of Florida, Mr. Cochran, Mrs. Carnahan, Mr. Lugar, Mrs. Clinton, 
and Mr. Hatch) introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
         To promote charitable giving, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Charity Aid, 
Recovery, and Empowerment Act of 2002'' or the ``CARE Act of 2002''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
             TITLE I--CHARITABLE GIVING INCENTIVES PACKAGE

Sec. 101. Deduction for portion of charitable contributions to be 
                            allowed to individuals who do not itemize 
                            deductions.
Sec. 102. Tax-free distributions from individual retirement accounts 
                            for charitable purposes.
Sec. 103. Increase in cap on corporate charitable contributions.
Sec. 104. Charitable deduction for contributions of food and book 
                            inventories and bonds.
Sec. 105. Reform of excise tax on net investment income of private 
                            foundations.
Sec. 106. Excise tax on unrelated business taxable income of charitable 
                            remainder trusts.
Sec. 107. Expansion of charitable contribution allowed for scientific 
                            property used for research and for computer 
                            technology and equipment used for 
                            educational purposes.
Sec. 108. Adjustment to basis of S corporation stock for certain 
                            charitable contributions.
               TITLE II--INDIVIDUAL DEVELOPMENT ACCOUNTS

Sec. 201. Short title.
Sec. 202. Purposes.
Sec. 203. Definitions.
Sec. 204. Structure and administration of qualified individual 
                            development account programs.
Sec. 205. Procedures for opening and maintaining an individual 
                            development account and qualifying for 
                            matching funds.
Sec. 206. Deposits by qualified individual development account 
                            programs.
Sec. 207. Withdrawal procedures.
Sec. 208. Certification and termination of qualified individual 
                            development account programs.
Sec. 209. Reporting, monitoring, and evaluation.
Sec. 210. Authorization of appropriations.
Sec. 211. Account funds disregarded for purposes of certain means-
                            tested Federal programs.
Sec. 212. Matching funds for individual development accounts provided 
                            through a tax credit for qualified 
                            financial institutions.
        TITLE III--EQUAL TREATMENT FOR NONGOVERNMENTAL PROVIDERS

Sec. 301. Nongovernmental organizations.
       TITLE IV--EZ PASS RECOGNITION OF SECTION 501(c)(3) STATUS

Sec. 401. EZ pass recognition of section 501(c)(3) status and waiver of 
                            application fee for exempt status for 
                            certain organizations providing social 
                            services for the poor and needy.
                    TITLE V--COMPASSION CAPITAL FUND

Sec. 501. Support for nonprofit community-based organizations; 
                            Department of Health and Human Services.
Sec. 502. Support for nonprofit community-based organizations; 
                            Corporation for National and Community 
                            Service.
Sec. 503. Support for nonprofit community-based organizations; 
                            Department of Justice.
Sec. 504. Support for nonprofit community-based organizations; 
                            Department of Housing and Urban 
                            Development.
Sec. 505. Coordination.
                 TITLE VI--SOCIAL SERVICES BLOCK GRANT

Sec. 601. Restoration of authority to transfer up to 10 percent of TANF 
                            funds to the Social Services Block Grant.
Sec. 602. Restoration of funds for the Social Services Block Grant.
Sec. 603. Requirement to submit annual report on State activities.
                    TITLE VII--MATERNITY GROUP HOMES

Sec. 701. Maternity group homes.

             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 any 
taxable year beginning after December 31, 2001, and before January 1, 
2004, there shall be taken into account as a direct charitable 
deduction under section 63 an amount equal to the lesser of--
            ``(1) the amount allowable under subsection (a) for the 
        taxable year for cash contributions, or
            ``(2) $400 ($800 in the case of a joint return).''.
    (b) Direct Charitable Deduction.--
            (1) In general.--Subsection (b) of section 63 of the 
        Internal Revenue Code of 1986 (defining taxable income) is 
        amended by striking ``and'' at the end of paragraph (1), by 
        striking the period at the end of paragraph (2) and inserting 
        ``, and'', and by adding at the end thereof the following new 
        paragraph:
            ``(3) the direct charitable deduction.''.
            (2) Definition.--Section 63 of such Code is amended by 
        redesignating subsection (g) as subsection (h) and by inserting 
        after subsection (f) the following new subsection:
    ``(g) Direct Charitable Deduction.--For purposes of this section, 
the term `direct charitable deduction' means that portion of the amount 
allowable under section 170(a) which is taken as a direct charitable 
deduction for the taxable year under section 170(m).''.
            (3) Conforming amendment.--Subsection (d) of section 63 of 
        such Code is amended by striking ``and'' at the end of 
        paragraph (1), by striking the period at the end of paragraph 
        (2) and inserting ``, and'', and by adding at the end thereof 
        the following new paragraph:
            ``(3) the direct charitable deduction.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2001.

SEC. 102. TAX-FREE DISTRIBUTIONS FROM INDIVIDUAL RETIREMENT ACCOUNTS 
              FOR CHARITABLE PURPOSES.

    (a) In General.--Subsection (d) of section 408 of the Internal 
Revenue Code of 1986 (relating to individual retirement accounts) is 
amended by adding at the end the following new paragraph:
            ``(8) Distributions for charitable purposes.--
                    ``(A) In general.--No amount shall be includible in 
                gross income by reason of a qualified charitable 
                distribution.
                    ``(B) Qualified charitable distribution.--For 
                purposes of this paragraph, the term `qualified 
                charitable distribution' means any distribution from an 
                individual retirement account--
                            ``(i) which is made directly by the 
                        trustee--
                                    ``(I) to an organization described 
                                in section 170(c), or
                                    ``(II) to a split-interest entity, 
                                and
                            ``(ii) which is made on or after the date 
                        that the individual for whose benefit the 
                        account is maintained has attained age 67.
                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.--
                        Notwithstanding section 664(b), distributions 
                        made from a trust described in subparagraph 
                        (G)(i) shall be treated as ordinary income in 
                        the hands of the recipient of the annuity 
                        described in section 664(d)(1)(A) or the 
                        payment described in section 664(d)(2)(A).
                            ``(ii) Pooled income funds.--No amount 
                        shall be includible in the gross income of a 
                        pooled income fund (as defined in subparagraph 
                        (G)(ii)) by reason of a qualified charitable 
                        distribution to such fund, and all 
                        distributions from the fund which are 
                        attributable to qualified charitable 
                        distributions shall be treated as ordinary 
                        income to the recipient.
                            ``(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)) which is 
                        funded exclusively by qualified charitable 
                        distributions,
                            ``(ii) a pooled income fund (as defined in 
                        section 642(c)(5)), but only if the fund 
                        accounts separately for amounts attributable to 
                        qualified charitable distributions, and
                            ``(iii) a charitable gift annuity (as 
                        defined in section 501(m)(5)).''.
    (b) Modifications Relating to Information Returns by Certain 
Trusts.--
            (1) Returns.--Section 6034 of the Internal Revenue Code of 
        1986 (relating to returns by trusts described in section 
        4947(a)(2) or claiming charitable deductions under section 
        642(c)) is amended to read as follows:

``SEC. 6034. RETURNS BY TRUSTS DESCRIBED IN SECTION 4947(A)(2) OR 
              CLAIMING CHARITABLE DEDUCTIONS UNDER SECTION 642(C).

    ``(a) Trusts Described in Section 4947(a)(2).--Every trust 
described in section 4947(a)(2) shall furnish such information with 
respect to the taxable year as the Secretary may by forms or 
regulations require.
    ``(b) Trusts Claiming a Charitable Deduction Under Section 
642(c).--
            ``(1) In general.--Every trust not required to file a 
        return under subsection (a) but claiming a charitable, etc., 
        deduction under section 642(c) for the taxable year shall 
        furnish such information with respect to such taxable year as 
        the Secretary may by forms or regulations prescribe, including:
                    ``(A) the amount of the charitable, etc., deduction 
                taken under section 642(c) within such year,
                    ``(B) the amount paid out within such year which 
                represents amounts for which charitable, etc., 
                deductions under section 642(c) have been taken in 
                prior years,
                    ``(C) the amount for which charitable, etc., 
                deductions have been taken in prior years but which has 
                not been paid out at the beginning of such year,
                    ``(D) the amount paid out of principal in the 
                current and prior years for charitable, etc., purposes,
                    ``(E) the total income of the trust within such 
                year and the expenses attributable thereto, and
                    ``(F) a balance sheet showing the assets, 
                liabilities, and net worth of the trust as of the 
                beginning of such year.
            ``(2) Exceptions.--Paragraph (1) shall not apply in the 
        case of a taxable year if all the net income for such year, 
        determined under the applicable principles of the law of 
        trusts, is required to be distributed currently to the 
        beneficiaries. Paragraph (1) shall not apply in the case of a 
        trust described in section 4947(a)(1).''.
            (2) Increase in penalty relating to filing of information 
        return by split-interest trusts.--Paragraph (2) of section 
        6652(c) of such Code (relating to returns by exempt 
        organizations and by certain trusts) is amended by adding at 
        the end the following new subparagraph:
                    ``(C) Split-interest trusts.--In the case of a 
                trust which is required to file a return under section 
                6034(a), subparagraphs (A) and (B) of this paragraph 
                shall not apply and paragraph (1) shall apply in the 
                same manner as if such return were required under 
                section 6033, except that--
                            ``(i) the 5 percent limitation in the 
                        second sentence of paragraph (1)(A) shall not 
                        apply,
                            ``(ii) in the case of any trust with gross 
                        income in excess of $250,000, the first 
                        sentence of paragraph (1)(A) shall be applied 
                        by substituting `$100' for `$20', and the 
                        second sentence thereof shall be applied by 
                        substituting `$50,000' for `$10,000', and
                            ``(iii) the third sentence of paragraph 
                        (1)(A) shall be disregarded.
                If the person required to file such return knowingly 
                fails to file the return, such person shall be 
                personally liable for the penalty imposed pursuant to 
                this subparagraph.''.
            (3) Confidentiality of noncharitable beneficiaries.--
        Subsection (b) of section 6104 of such Code (relating to 
        inspection of annual information returns) is amended by adding 
        at the end the following new sentence: ``In the case of a trust 
        which is required to file a return under section 6034(a), this 
        subsection shall not apply to information regarding 
        beneficiaries which are not organizations described in section 
        170(c).''.
    (c) Effective Dates.--
            (1) Subsection (a).--The amendment made by subsection (a) 
        shall apply to taxable years beginning after December 31, 2001, 
        and before January 1, 2004.
            (2) Subsection (b).--The amendments made by subsection (b) 
        shall apply to returns for taxable years beginning after 
        December 31, 2001.

SEC. 103. INCREASE IN CAP ON CORPORATE CHARITABLE CONTRIBUTIONS.

    (a) In General.--Paragraph (2) of section 170(b) of the Internal 
Revenue Code of 1986 (relating to corporations) is amended by striking 
``10 percent'' and inserting ``the applicable percentage''.
    (b) Applicable Percentage.--Subsection (b) of section 170 of the 
Internal Revenue Code of 1986 is amended by adding at the end the 
following new paragraph:
            ``(3) Applicable percentage defined.--For purposes of 
        paragraph (2), the applicable percentage shall be determined in 
        accordance with the following table:

                ``For taxable years beginning
                                                         The applicable
                  in calendar year--
                                                        percentage is--
                    2002...................................         13 
                    2003...................................         15 
                    2004 and thereafter....................      10.''.
    (c) Conforming Amendments.--
            (1) Sections 512(b)(10) and 805(b)(2)(A) of the Internal 
        Revenue Code of 1986 are each amended by striking ``10 
        percent'' each place it occurs and inserting ``the applicable 
        percentage (determined under section 170(b)(3))''.
            (2) Sections 545(b)(2) and 556(b)(2) of such Code are each 
        amended by striking ``10-percent limitation'' and inserting 
        ``applicable percentage limitation''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2001.

SEC. 104. CHARITABLE DEDUCTION FOR CONTRIBUTIONS OF FOOD AND BOOK 
              INVENTORIES AND BONDS.

    (a) Food Inventory.--Subsection (e) of section 170 of the Internal 
Revenue Code of 1986 (relating to certain contributions of ordinary 
income and capital gain property) is amended by adding at the end the 
following new paragraph:
            ``(7) Special rule for contributions of food inventory.--
        For purposes of this section--
                    ``(A) In general.--In the case of a charitable 
                contribution of apparently wholesome food by a 
                taxpayer--
                            ``(i) paragraph (3)(A) shall be applied 
                        without regard to whether or not the 
                        contribution is made by a C corporation, and
                            ``(ii) in the case of a taxpayer other than 
                        a C corporation, the total deductions under 
                        subsection (a) with respect to such 
                        contributions for any taxable year shall not 
                        exceed the applicable percentage under 
                        subsection (b)(2) of the taxpayer's net income 
                        from the trade or business, computed without 
                        regard to this section.
                    ``(B) Limit on reduction.--In the case of a 
                charitable contribution of apparently  wholesome food 
which is a qualified contribution (within the meaning of paragraph 
(3)(A), as modified by subparagraph (A) of this paragraph), the amount 
of the reduction determined under paragraph (3)(B) shall not exceed the 
amount determined under clause (ii) thereof (computed without taking 
into account the amount determined under clause (i) thereof).
                    ``(C) Determination of basis.--For purposes of this 
                paragraph, if a taxpayer--
                            ``(i) does not account for inventories 
                        under section 471, and
                            ``(ii) is not required to capitalize 
                        indirect costs under section 263A,
                the taxpayer may elect, solely for purposes of 
                paragraph (3)(B)(ii), to treat the basis of any 
                qualified contribution of such taxpayer as being equal 
                to 25 percent of the fair market value of such 
                contribution.
                    ``(D) Determination of fair market value.--In the 
                case of a charitable contribution of apparently 
                wholesome 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 
                or lack of market, cannot or will not be sold, the fair 
                market value of such contribution shall be determined--
                            ``(i) without regard to such internal 
                        standards or such lack of market and
                            ``(ii) by taking into account the price at 
                        which the same or substantially the same 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).
                    ``(E) Apparently wholesome food.--For purposes of 
                this paragraph, the term `apparently wholesome food' 
                has the meaning given 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 paragraph.
    (b) Book Inventory.--Section 170(e)(3) of the Internal Revenue Code 
of 1986 (relating to certain contributions of ordinary income and 
capital gain property) is amended by redesignating subparagraph (C) as 
subparagraph (D) and by inserting after subparagraph (B) the following 
new subparagraph:
                    ``(D) Special rule for contributions of book 
                inventory for educational purposes.--
                            ``(i) Contributions of book inventory.--In 
                        determining whether a qualified book 
                        contribution is a qualified contribution, 
                        subparagraph (A) shall be applied without 
                        regard to whether or not--
                                    ``(I) the donee is an organization 
                                described in the matter preceding 
                                clause (i) of subparagraph (A), and
                                    ``(II) the property is to be used 
                                by the donee solely for the care of the 
                                ill, the needy, or infants.
                            ``(ii) Qualified book contribution.--For 
                        purposes of this paragraph, the term `qualified 
                        book contribution' means a charitable 
                        contribution of books, but only if the 
                        requirements of clauses (iii) and (iv) are met.
                            ``(iii) Identity of donee.--The requirement 
                        of this clause is met if the contribution is to 
                        an organization--
                                    ``(I) described in subclause (I) or 
                                (III) of paragraph (6)(B)(i), or
                                    ``(II) described in section 
                                501(c)(3) and exempt from tax under 
                                section 501(a) (other than a private 
                                foundation (as defined in section 
                                509(a)) which is not an operating 
                                foundation defined in section 
                                4942(j)(3)) which is organized 
                                primarily to make books available to 
                                the general public at no cost or to 
                                operate a literacy program.
                            ``(iv) Certification by donee.--The 
                        requirement of this clause is met if the donee 
                        certifies in writing that--
                                    ``(I) the books are suitable, in 
                                terms of currency, content, and 
                                quantity, for use in the donee's 
                                educational programs, and
                                    ``(II) the donee will use the books 
                                in its educational programs and will 
                                not transfer the books in exchange for 
                                money, property, or services.''.
    (c) Bonds.--Section 170(e)(5) of the Internal Revenue Code of 1986 
(relating to special rule for contributions of stock for which market 
quotations are readily available) is amended--
            (1) by striking ``stock.'' in subparagraph (A) and 
        inserting ``stock or qualified appreciated bonds.'',
            (2) by adding at the end the following new subparagraph:
                    ``(D) Qualified appreciated bonds.--
                            ``(i) In general.--For purposes of this 
                        paragraph, the term `qualified appreciated 
                        bonds' means United States Treasury securities 
                        and such other debt instruments as may be 
                        prescribed by the Secretary in regulations.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2001, and before 
January 1, 2004.

SEC. 105. REFORM OF EXCISE TAX ON NET INVESTMENT INCOME OF PRIVATE 
              FOUNDATIONS.

    (a) In General.--Subsection (a) of section 4940 of the Internal 
Revenue Code of 1986 (relating to excise tax based on investment 
income) is amended by striking ``2 percent'' and inserting ``1 percent 
(2 percent for any taxable year beginning after December 31, 2003)''.
    (b) Temporary Repeal of Reduction In Tax Where Private Foundation 
Meets Certain Distribution Requirements.--Section 4940(e) of the 
Internal Revenue Code of 1986 is amended by inserting ``beginning after 
December 31, 2003'' after ``any taxable year''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2001.

SEC. 106. EXCISE TAX ON UNRELATED BUSINESS TAXABLE INCOME OF CHARITABLE 
              REMAINDER TRUSTS.

    (a) In General.--Subsection (c) of section 664 of the Internal 
Revenue Code of 1986 (relating to exemption from income taxes) is 
amended to read as follows:
    ``(c) Taxation of Trusts.--
            ``(1) Income tax.--A charitable remainder annuity trust and 
        a charitable remainder unitrust shall, for any taxable year, 
        not be subject to any tax imposed by this subtitle.
            ``(2) Excise tax.--
                    ``(A) In general.--In the case of a charitable 
                remainder annuity trust or a charitable remainder 
                unitrust that has unrelated business taxable income 
                (within the meaning of section 512, determined as if 
                part III of subchapter F applied to such trust) for a 
                taxable year, there is hereby imposed on such trust or 
                unitrust an excise tax equal to the amount of such 
                unrelated business taxable income.
                    ``(B) Certain rules to apply.--The tax imposed by 
                subparagraph (A) shall be treated as imposed by chapter 
                42 for purposes of this title other than subchapter E 
                of chapter 42.
                    ``(C) Tax court proceedings.--For purposes of this 
                paragraph, the references in section 6212(c)(1) to 
                section 4940 shall be deemed to include references to 
                this paragraph.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2001.

SEC. 107. 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 the Internal Revenue Code of 
1986 is amended by inserting ``or assembled'' after ``constructed'' and 
``or assembling'' after ``construction''.
    (c) Conforming Amendment.--Subparagraph (D) of section 170(e)(6) of 
the Internal Revenue Code of 1986 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, and before 
January 1, 2004.

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

    (a) In General.--Paragraph (2) of section 1367(a) of the Internal 
Revenue Code of 1986 (relating to adjustments to basis of stock of 
shareholders, etc.) is amended by adding at the end the following new 
flush sentence:
        ``The decrease under subparagraph (B) by reason of a charitable 
        contribution (as defined in section 170(c)) of property shall 
        be the amount equal to the shareholder's proportionate share of 
        the adjusted basis of such property.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2001.

               TITLE II--INDIVIDUAL DEVELOPMENT ACCOUNTS

SEC. 201. SHORT TITLE.

    This title may be cited as the ``Savings for Working Families Act 
of 2002''.

SEC. 202. 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 continued United States economic expansion.

SEC. 203. DEFINITIONS.

    As used in this title:
            (1) Eligible individual.--
                    (A) In general.--The term ``eligible individual'' 
                means, with respect to any taxable year, an individual 
                who--
                            (i) has attained the age of 18 years but 
                        not the age of 61 as of the last day of such 
                        taxable year,
                            (ii) is a citizen or legal resident of the 
                        United States as of the last day of such 
                        taxable year,
                            (iii) was not a student (as defined in 
                        section 151(c)(4) of the Internal Revenue Code 
                        of 1986) for the immediately preceding taxable 
                        year,
                            (iv) is not an individual with respect to 
                        whom a deduction under section 151 of such Code 
                        is allowable to another taxpayer for a taxable 
                        year of the other taxpayer ending during the 
                        immediately preceding taxable year of the 
                        individual, and
                            (v) is a taxpayer the modified adjusted 
                        gross income of whom for the immediately 
                        preceding taxable year does not exceed--
                                    (I) $20,000, in the case of a 
                                taxpayer described in section 1(c) of 
                                such Code,
                                    (II) $30,000, in the case of a 
                                taxpayer described in section 1(b) of 
                                such Code,
                                    (III) $40,000, in the case of a 
                                taxpayer described in section 1(a) of 
                                such Code, and
                                    (IV) zero in the case of a taxpayer 
                                described in section 1(d) of such Code.
                    (B) Inflation adjustment.--
                            (i) In general.--In the case of any taxable 
                        year beginning after 2003, each dollar amount 
                        referred to in subparagraph (A)(v) shall be 
                        increased by an amount equal to--
                                    (I) such dollar amount, multiplied 
                                by
                                    (II) the cost-of-living adjustment 
                                determined under section (1)(f)(3) of 
                                the Internal Revenue Code of 1986 for 
                                the calendar year in which the taxable 
                                year begins, by substituting ``2002'' 
                                for ``1992''.
                            (ii) Rounding.--If any amount as adjusted 
                        under clause (i) is not a multiple of $50, such 
                        amount shall be rounded to the nearest multiple 
                        of $50.
                    (C) Modified adjusted gross income.--For purposes 
                of subparagraph (A)(v), the term ``modified adjusted 
                gross income'' means adjusted gross income--
                            (i) determined without regard to sections 
                        86, 893, 911, 931, and 933 of the Internal 
                        Revenue Code of 1986, and
                            (ii) increased by the amount of interest 
                        received or accrued by the taxpayer during the 
                        taxable year which is exempt from tax.
            (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 owner of the account is the individual for 
                whom the account was established.
                    (B) No contribution will be accepted unless it is 
                in cash.
                    (C) The holder of the account is a qualified 
                financial institution.
                    (D) The assets of the account will not be 
                commingled with other property except in a common trust 
                fund or common investment fund.
                    (E) Except as provided in section 207(b), any 
                amount in the account may be paid out only for the 
                purpose of paying the qualified expenses of the account 
                owner.
            (3) Parallel account.--The term ``parallel account'' means 
        a separate, parallel individual or pooled account for all 
        matching funds and earnings dedicated to an Individual 
        Development Account owner as part of a qualified individual 
        development account program, the sole owner of which is a 
        qualified financial institution, a qualified nonprofit 
        organization, or an Indian tribe.
            (4) Qualified financial institution.--
                    (A) In general.--The term ``qualified financial 
                institution'' means any person authorized to be a 
                trustee of any individual retirement account under 
                section 408(a)(2) of the Internal Revenue Code of 1986.
                    (B) Rule of construction.--Nothing in this 
                paragraph shall be construed as preventing a person 
                described in subparagraph (A) from collaborating with 1 
                or more qualified nonprofit organizations or Indian 
                tribes to carry out an individual development account 
                program established under section 204.
            (5) Qualified nonprofit organization.--The term ``qualified 
        nonprofit organization'' means--
                    (A) any organization described in section 501(c)(3) 
                of the Internal Revenue Code of 1986 and exempt from 
                taxation under section 501(a) of such Code,
                    (B) any community development financial institution 
                certified by the Community Development Financial 
                Institution Fund,
                    (C) any credit union chartered under Federal or 
                State law, or
                    (D) any public housing agency as defined in section 
                3(b)(6) of the United States Housing Act of 1937 (42 
                U.S.C. 1437a(b)(6)).
            (6) Indian tribe.--The term ``Indian tribe'' means any 
        Indian tribe as defined in section 4(12) of the Native American 
        Housing Assistance and Self-Determination Act of 1996 (25 
U.S.C. 4103(12), and includes any tribally designated housing entity 
(as defined in section 4(21) of such Act (25 U.S.C. 4103(21)), tribal 
subsidiary, subdivision, or other wholly owned tribal entity.
            (7) Qualified individual development account program.--The 
        term ``qualified individual development account program'' means 
        a program established under section 204 after December 31, 
        2001, under which--
                    (A) Individual Development Accounts and parallel 
                accounts are held by a qualified financial institution, 
                and
                    (B) additional activities determined by the 
                Secretary, in consultation with the Secretary of Health 
                and Human Services, as necessary to responsibly develop 
                and administer accounts, including recruiting, 
                providing financial education and other training to 
                Account owners, and regular program monitoring, are 
                carried out by the qualified financial institution, a 
                qualified nonprofit organization, or an Indian tribe.
            (8) Qualified expense distribution.--
                    (A) In general.--The term ``qualified expense 
                distribution'' means any amount paid (including through 
                electronic payments) or distributed out of an 
                Individual Development Account and a parallel account 
                established for an eligible individual if such amount--
                            (i) is used exclusively to pay the 
                        qualified expenses of the Individual 
                        Development Account owner or such owner's 
                        spouse or dependents,
                            (ii) is paid by the qualified financial 
                        institution, qualified nonprofit organization, 
                        or Indian tribe--
                                    (I) except as otherwise provided in 
                                this clause, directly to the unrelated 
                                third party to whom the amount is due,
                                    (II) in the case of distributions 
                                for working capital under a qualified 
                                business plan (as defined in 
                                subparagraph (B)(iv)(IV)), directly to 
                                the Account owner,
                                    (III) in the case of any qualified 
                                rollover, directly to another 
                                Individual Development Account and 
                                parallel account, or
                                    (IV) in the case of a qualified 
                                final distribution, directly to the 
                                spouse, dependent, or other named 
                                beneficiary of the deceased Account 
                                owner, and
                            (iii) is paid after the Account owner has 
                        completed a financial education course if 
                        required under section 205(b).
                    (B) Qualified expenses.--
                            (i) In general.--The term ``qualified 
                        expenses'' means any of the following expenses 
                        approved by the qualified financial 
                        institution, qualified nonprofit organization, 
                        or Indian tribe:
                                    (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 529(e)(3) of the Internal 
                                Revenue Code of 1986, determined by 
                                treating the Account owner, the owner's 
                                spouse, or one or more of the owner's 
                                dependents as a designated beneficiary, 
                                and reduced as provided in section 
                                25A(g)(2) of such Code.
                                    (II) Coordination with other 
                                benefits.--The amount of expenses which 
                                may be taken into account for purposes 
                                of section 135, 529, or 530 of such 
                                Code for any taxable year shall be 
                                reduced by the amount of any qualified 
                                higher education expenses taken into 
                                account as qualified expense 
                                distributions during such taxable year.
                            (iii) Qualified first-time homebuyer 
                        costs.--The term ``qualified first-time 
                        homebuyer costs'' means qualified acquisition 
                        costs (as defined in section 72(t)(8)(C) of the 
                        Internal Revenue Code of 1986) with respect to 
                        a principal residence (within the meaning of 
                        section 121 of such Code) for a qualified 
                        first-time homebuyer (as defined in section 
                        72(t)(8)(D)(i) of such Code).
                            (iv) Qualified business capitalization or 
                        expansion costs.--
                                    (I) In general.--The term 
                                ``qualified business capitalization or 
                                expansion costs'' means qualified 
                                expenditures for the capitalization or 
                                expansion of a qualified business 
                                pursuant to a qualified business plan.
                                    (II) Qualified expenditures.--The 
                                term ``qualified expenditures'' means 
                                expenditures included in a qualified 
                                business plan, including capital, 
                                plant, equipment, working capital, 
                                inventory expenses, attorney and 
                                accounting fees, and other costs 
                                normally associated with starting or 
                                expanding a business.
                                    (III) Qualified business.--The term 
                                ``qualified business'' means  any 
business that does not contravene any law.
                                    (IV) Qualified business plan.--The 
                                term ``qualified business plan'' means 
                                a business plan which has been approved 
                                by the qualified financial institution, 
                                qualified nonprofit organization, or 
                                Indian tribe and which meets such 
                                requirements as the Secretary may 
                                specify.
                            (v) Qualified rollovers.--The term 
                        ``qualified rollover'' means the complete 
                        distribution of the amounts in an Individual 
                        Development Account and parallel account to 
                        another Individual Development Account and 
                        parallel account established in another 
                        qualified financial institution for the benefit 
                        of the Account owner.
                            (vi) Qualified final distribution.--The 
                        term ``qualified final distribution'' means, in 
                        the case of a deceased Account owner, the 
                        complete distribution of the amounts in the 
                        Individual Development Account and parallel 
                        account directly to the spouse, any dependent, 
                        or other named beneficiary of the deceased.
            (9) Secretary.--The term ``Secretary'' means the Secretary 
        of the Treasury.

SEC. 204. STRUCTURE AND ADMINISTRATION OF QUALIFIED INDIVIDUAL 
              DEVELOPMENT ACCOUNT PROGRAMS.

    (a) Establishment of Qualified Individual Development Account 
Programs.--Any qualified financial institution, qualified nonprofit 
organization, or Indian tribe may establish 1 or more qualified 
individual development account programs which meet the requirements of 
this 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 205.
                    (B) A parallel account to which all matching funds 
                shall be deposited in accordance with section 206.
            (2) Tailored ida programs.--A qualified financial 
        institution, a qualified nonprofit organization, or an Indian 
        tribe may tailor its qualified individual development account 
        program to allow matching funds to be spent on 1 or more of the 
        categories of qualified expenses.
    (c) Coordination With Public Housing Agency Individual Savings 
Accounts.--Section 3(e)(2) of the United States Housing Act of 1937 (42 
U.S.C. 1437a(e)(2)) is amended by inserting ``or in any Individual 
Development Account established under the Savings for Working Families 
Act of 2002'' after ``subsection''.
    (d) Tax Treatment of Parallel Accounts.--
            (1) In general.--Chapter 77 of the Internal Revenue Code of 
        1986 (relating to miscellaneous provisions) is amended by 
        adding at the end the following new section:

``SEC. 7525. TAX INCENTIVES FOR INDIVIDUAL DEVELOPMENT PARALLEL 
              ACCOUNTS.

    ``For purposes of this title--
            ``(1) any account described in section 204(b)(1)(B) of the 
        Savings for Working Families Act of 2002 shall be exempt from 
        taxation,
            ``(2) except as provided in section 45G, no item of income, 
        expense, basis, gain, or loss with respect to such an account 
        may be taken into account, and
            ``(3) any amount withdrawn from such an account shall not 
        be includible in gross income.''.
            (2) Conforming amendment.--The table of sections for 
        chapter 77 of such Code is amended by adding at the end the 
        following new item:

                              ``Sec. 7525. Tax incentives for 
                                        individual development parallel 
                                        accounts.''.

SEC. 205. PROCEDURES FOR OPENING AND MAINTAINING AN INDIVIDUAL 
              DEVELOPMENT ACCOUNT AND QUALIFYING FOR MATCHING FUNDS.

    (a) Opening an Account.--An eligible individual may open an 
Individual Development Account with a qualified financial institution, 
a qualified nonprofit organization, or an Indian tribe upon 
certification that such individual has never maintained any other 
Individual Development Account (other than an Individual Development 
Account to be terminated by a qualified rollover).
    (b) Required Completion of Financial Education Course.--
            (1) In general.--Before becoming eligible to withdraw 
        matching funds to pay for qualified expenses, owners of 
        Individual Development Accounts must complete a financial 
        education course offered by a qualified financial institution, 
        a qualified nonprofit organization, an Indian tribe, or a 
        government entity.
            (2) Standard and applicability of course.--The Secretary, 
        in consultation with representatives of qualified individual 
        development account programs and financial educators, shall 
        establish minimum quality standards for the contents of 
        financial education courses and providers of such courses 
        offered under paragraph (1) and a protocol to exempt 
        individuals from the requirement under paragraph (1) in the 
        case of hardship, lack of need, the attainment of age 61, or a 
        qualified final distribution.
    (c) Proof of Status as an Eligible Individual.--Federal income tax 
forms for the immediately preceding taxable year shall be presented to 
the qualified financial institution, qualified nonprofit organization, 
or Indian tribe at the time of the establishment of the Individual 
Development Account and in any taxable year in which contributions are 
made to the Account to qualify for matching funds under section 
206(b)(1)(A).
    (d) Direct Deposits.--The Secretary may, under regulations, provide 
for the direct deposit of any portion (not less than $1) of any 
overpayment of Federal tax of an individual as a contribution to the 
Individual Development Account of such individual.

SEC. 206. DEPOSITS BY QUALIFIED INDIVIDUAL DEVELOPMENT ACCOUNT 
              PROGRAMS.

    (a) Parallel Accounts.--The qualified financial institution, 
qualified nonprofit organization, or Indian tribe shall deposit all 
matching funds for each Individual Development Account into a parallel 
account at a qualified financial institution.
    (b) Regular Deposits of Matching Funds.--
            (1) In general.--Subject to paragraph (2), the qualified 
        financial institution, qualified nonprofit organization, or 
        Indian tribe shall deposit into the parallel account with 
        respect to each eligible individual the following amounts:
                    (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 of such individual.
                    (B) Any matching funds provided by State, local, or 
                private sources in accordance to the matching ratio set 
                by those sources.
            (2) Inflation adjustment.--
                    (A) In general.--In the case of any taxable year 
                beginning after 2003, the dollar amount referred to in 
                paragraph (1)(A) shall be increased by an amount equal 
                to--
                            (i) such dollar amount, multiplied by
                            (ii) the cost-of-living adjustment 
                        determined under section (1)(f)(3) of the 
                        Internal Revenue Code of 1986 for the calendar 
                        year in which the taxable year begins, by 
                        substituting ``2002'' for ``1992''.
                    (B) Rounding.--If any amount as adjusted under 
                subparagraph (A) is not a multiple of $20, such amount 
                shall be rounded to the nearest multiple of $20.
            (3) Timing of deposits.--A deposit of the amounts described 
        in paragraph (1) shall be made into a parallel account--
                    (A) in the case of amounts described in paragraph 
                (1)(A), not later than 30 days after the end of the 
                calendar quarter during which the contribution 
                described in such paragraph was made, and
                    (B) in the case of amounts described in paragraph 
                (1)(B), not later than 2 business days after such 
                amounts were provided.
            (4) Cross reference.--

                                For allowance of tax credit for 
Individual Development Account subsidies, including matching funds, see 
section 45G of the Internal Revenue Code of 1986.
    (c) Deposit of Matching Funds Into Individual Development Account 
of Individual Who Has Attained Age 61.--In the case of an Individual 
Development Account owner who attains the age of 61, the qualified 
financial institution, qualified nonprofit organization, or Indian 
tribe which owns the parallel account with respect to such individual 
shall deposit the funds in such parallel account into the Individual 
Development Account of such individual on the later of--
            (1) the day which is the 1-year anniversary of the deposit 
        of such funds in the parallel account, or
            (2) the first business day of the taxable year of such 
        individual following the taxable year in which such individual 
        attained age 61.
    (d) Uniform Accounting Regulations.--To ensure proper recordkeeping 
and determination of the tax credit under section 45G of the Internal 
Revenue Code of 1986, the Secretary shall prescribe regulations with 
respect to accounting for matching funds in the parallel accounts.
    (e) Regular Reporting of Accounts.--Any qualified financial 
institution, qualified nonprofit organization, or Indian tribe shall 
report the balances in any Individual Development Account and parallel 
account of an individual on not less than an annual basis to such 
individual.

SEC. 207. WITHDRAWAL PROCEDURES.

    (a) Withdrawals for Qualified Expenses.--
            (1) In general.--An Individual Development Account owner 
        may withdraw funds in order to pay qualified expense 
        distributions from such individual's--
                    (A) Individual Development Account, and
                    (B) parallel account, but only--
                            (i) from matching funds which have been on 
                        deposit in such parallel account for at least 1 
                        year,
                            (ii) from earnings in such parallel 
                        account, after all matching funds described in 
                        clause (i) have been withdrawn, and
                            (iii) to the extent such withdrawal does 
                        not result in a remaining balance in such 
                        parallel account which is less than the 
                        remaining balance in the Individual Development 
                        Account after such withdrawal.
            (2) Procedure.--Upon receipt of a withdrawal request which 
        meets the requirements of paragraph (1), the qualified 
        financial institution, qualified nonprofit organization, or 
        Indian tribe shall directly transfer the funds electronically 
        to the distributees described in section 203(8)(A)(ii). If a 
        distributee is not equipped to receive funds electronically, 
        the qualified financial institution, qualified nonprofit 
        organization, or Indian tribe may issue such funds by paper 
        check to the distributee.
    (b) Withdrawals for Nonqualified Expenses.--An Individual 
Development Account owner may withdraw any amount of funds from the 
Individual Development Account for purposes other than to pay qualified 
expense distributions, but if, after such withdrawal, the amount in the 
parallel account of such owner (excluding earnings on matching funds) 
exceeds the amount remaining in such Individual Development Account, 
then such owner shall forfeit from the parallel account the lesser of 
such excess or the amount withdrawn.
    (c) Withdrawals From Accounts of Noneligible Individuals.--If the 
individual for whose benefit an Individual Development Account is 
established ceases to be an eligible individual, such account shall 
remain an Individual Development Account, but such individual shall not 
be eligible for any further matching funds under section 206(b)(1)(A) 
for contributions which are made to the Account during any taxable year 
when such individual is not an eligible individual.
    (d) Effect of Pledging Account as Security.--If, during any taxable 
year of the individual for whose benefit an Individual Development 
Account is established, that individual uses the Account or any portion 
thereof as security for a loan, the portion so used shall be treated as 
a withdrawal of such portion for purposes other than to pay qualified 
expenses, and such individual shall forfeit an equal amount of matching 
funds from the individual's parallel account.

SEC. 208. CERTIFICATION AND TERMINATION OF QUALIFIED INDIVIDUAL 
              DEVELOPMENT ACCOUNT PROGRAMS.

    (a) Certification Procedures.--Upon establishing a qualified 
individual development account program under section 204, a qualified 
financial institution, a qualified nonprofit organization, or an Indian 
tribe shall certify to the Secretary on forms prescribed by the 
Secretary and accompanied by any documentation required by the 
Secretary, that--
            (1) the accounts described in subparagraphs (A) and (B) of 
        section 204(b)(1) are operating pursuant to all the provisions 
        of this 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. 209. REPORTING, MONITORING, AND EVALUATION.

    (a) Responsibilities of Qualified Financial Institutions, Qualified 
Nonprofit Organizations, and Indian Tribes.--
            (1) In general.--Each qualified financial institution, 
        qualified nonprofit organization, or Indian tribe that operates 
        a qualified individual development account program under 
        section 204 shall report annually to the Secretary within 90 
        days after the end of each calendar year on--
                    (A) the number of eligible individuals making 
                contributions into Individual Development Accounts,
                    (B) the amounts contributed into Individual 
                Development Accounts and deposited into parallel 
                accounts for matching funds,
                    (C) the amounts withdrawn from Individual 
                Development Accounts and parallel accounts, and the 
                purposes for which such amounts were withdrawn,
                    (D) the balances remaining in Individual 
                Development Accounts and parallel accounts, and
                    (E) such other information needed to help the 
                Secretary monitor the cost and outcomes of the 
                qualified individual development account program 
                (provided in a non-individually-identifiable manner).
            (2) Additional reporting requirements.--Each qualified 
        financial institution, qualified nonprofit organization, or 
        Indian tribe that operates a qualified individual development 
        account program under section 204 shall report at such time and 
        in such manner as the Secretary may prescribe any additional 
information that the Secretary requires to be provided for purposes of 
administering and supervising the qualified individual development 
account program. This additional data may include, without limitation, 
identifying information about Individual Development Account holders, 
their Accounts, additions to the Accounts, and withdrawals from the 
Accounts.
    (b) Responsibilities of the Secretary.--
            (1) Monitoring protocol.--Not later than 12 months after 
        the date of the enactment of this Act, the Secretary, in 
        consultation with the Secretary of Health and Human Services, 
        shall develop and implement a protocol and process to monitor 
        the cost and outcomes of the qualified individual development 
        account programs established under section 204.
            (2) Annual reports.--In each year after the date of the 
        enactment of this Act, the Secretary shall submit a progress 
        report to Congress on the status of such qualified individual 
        development account programs. Such report shall, to the extent 
        data is available, include from a representative sample of 
        qualified individual development account programs information 
        on--
                    (A) the characteristics of participants, including 
                age, gender, race or ethnicity, marital status, number 
                of children, employment status, and monthly income,
                    (B) deposits, withdrawals, balances, uses of 
                Individual Development Accounts, and participant 
                characteristics,
                    (C) the characteristics of qualified individual 
                development account programs, including match rate, 
                economic education requirements, permissible uses of 
                accounts, staffing of programs in full time employees, 
                and the total costs of programs, and
                    (D) process information on program implementation 
                and administration, especially on problems encountered 
                and how problems were solved.
            (3) Reauthorization report on cost and outcomes of idas.--
                    (A) In general.--Not later than July 1, 2008, the 
                Secretary of the Treasury shall submit a report to 
                Congress and the chairmen and ranking members of the 
                Committee on Finance, the Committee on Banking, 
                Housing, and Urban Affairs, and the Committee on 
                Health, Education, Labor, and Pensions of the Senate 
                and the Committee on Ways and Means, the Committee on 
                Banking and Financial Services, and the Committee on 
                Education and the Workforce of the House of 
                Representatives, in which the Secretary shall--
                            (i) summarize the previously submitted 
                        annual reports required under paragraph (2),
                            (ii) from a representative sample of 
                        qualified individual development account 
                        programs, include an analysis of--
                                    (I) the economic, social, and 
                                behavioral outcomes,
                                    (II) the changes in savings rates, 
                                asset holdings, and household debt, and 
                                overall changes in economic stability,
                                    (III) the changes in outlooks, 
                                attitudes, and behavior regarding 
                                savings strategies, investment, 
                                education, and family,
                                    (IV) the integration into the 
                                financial mainstream, including 
                                decreased reliance on alternative 
                                financial services, and increase in 
                                acquisition of mainstream financial 
                                products, and
                                    (V) the involvement in civic 
                                affairs, including neighborhood schools 
                                and associations,
                        associated with participation in qualified 
                        individual development account programs,
                            (iii) from a representative sample of 
                        qualified individual development account 
                        programs, include a comparison of outcomes 
                        associated with such programs with outcomes 
                        associated with other Federal Government social 
                        and economic development programs, including 
                        asset building programs, and
                            (iv) make recommendations regarding the 
                        reauthorization of the qualified individual 
                        development account programs, including--
                                    (I) recommendations regarding 
                                reforms that will improve the cost and 
                                outcomes of the such programs, 
                                including the ability to help low 
                                income families save and accumulate 
                                productive assets,
                                    (II) recommendations regarding the 
                                appropriate levels of subsidies to 
                                provide effective incentives to 
                                financial institutions and Account 
                                holders under such programs, and
                                    (IV) recommendations regarding how 
                                such programs should be integrated into 
                                other Federal poverty reduction, asset 
                                building, and community development 
                                policies and programs.
                    (B) Authorization.--There is authorized to be 
                appropriated $2,500,000, for carrying out the purposes 
                of this paragraph.

SEC. 210. AUTHORIZATION OF APPROPRIATIONS.

    There is authorized to be appropriated to the Secretary $1,000,000 
for fiscal year 2003 and for each fiscal year through 2009, for the 
purposes of implementing this title, including the reporting, 
monitoring, and evaluation required under section 209, to remain 
available until expended.

SEC. 211. ACCOUNT FUNDS DISREGARDED FOR PURPOSES OF CERTAIN MEANS-
              TESTED FEDERAL PROGRAMS.

    Notwithstanding any other provision of Federal law that requires 
consideration of 1 or more financial circumstances of an individual, 
for the purposes of determining eligibility to receive, or the amount 
of, any assistance or benefit authorized by such provision to be 
provided to or for the benefit of such individual, an amount shall be 
disregarded for such purposes equal to the sum of--
            (1) the lesser of--
                    (A) all amounts (including earnings thereon) in any 
                Individual Development Account of such individual, or
                    (B) an amount equal to $1,000 times the number of 
                years (including the year in which such determination 
                is made) that such Account (including any predecessor 
                Account) has been open, plus
            (2) the matching deposits made on behalf of such individual 
        (including earnings thereon) in any parallel account.

SEC. 212. MATCHING FUNDS FOR INDIVIDUAL DEVELOPMENT ACCOUNTS PROVIDED 
              THROUGH A TAX CREDIT FOR QUALIFIED FINANCIAL 
              INSTITUTIONS.

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

``SEC. 45G. INDIVIDUAL DEVELOPMENT ACCOUNT INVESTMENT CREDIT.

    ``(a) Determination of Amount.--For purposes of section 38, the 
individual development account investment credit determined under this 
section with respect to any eligible entity for any taxable year is an 
amount equal to the individual development account investment provided 
by such eligible entity during the taxable year under an individual 
development account program established under section 204 of the 
Savings for Working Families Act of 2002.
    ``(b) Applicable Tax.--For the purposes of this section, the term 
`applicable tax' means the excess (if any) of--
            ``(1) the tax imposed under this chapter (other than the 
        taxes imposed under the provisions described in subparagraphs 
        (C) through (Q) of section 26(b)(2)), over
            ``(2) the credits allowable under subpart B (other than 
        this section) and subpart D of this part.
    ``(c) Individual Development Account Investment.--
            ``(1) In general.--For purposes of this section, the term 
        `individual development account investment' means, with respect 
        to an individual development account program of a qualified 
        financial institution in any taxable year, an amount equal to 
        the sum of--
                    ``(A) the aggregate amount of dollar-for-dollar 
                matches under such program under section 206(b)(1)(A) 
                of the Savings for Working Families Act of 2002 for 
                such taxable year, plus
                    ``(B) $50 with respect to each Individual 
                Development Account maintained as of the end of such 
                taxable year, with a balance of not less than $100 
                (other than the taxable year in which such Account is 
                opened).
            ``(2) Inflation adjustment.--
                    ``(A) In general.--In the case of any taxable year 
                beginning after 2003, the $50 amount referred to in 
                paragraph (1)(B) shall be increased by an amount equal 
                to--
                            ``(i) such dollar amount, multiplied by
                            ``(ii) the cost-of-living adjustment 
                        determined under section (1)(f)(3) for the 
                        calendar year in which the taxable year begins, 
                        by substituting `2002' for `1992'.
                    ``(B) Rounding.--If any amount as adjusted under 
                subparagraph (A) is not a multiple of $5, such amount 
                shall be rounded to the nearest multiple of $5.
    ``(d) Eligible Entity.--For purposes of this section, except as 
provided in regulations, the term `eligible entity' means a qualified 
financial institution.
    ``(e) Other Definitions.--For purposes of this section, any term 
used in this section and also in the Savings for Working Families Act 
of 2002 shall have the meaning given such term by such Act.
    ``(f) Denial of Double Benefit.--
            ``(1) In general.--No deduction or credit (other than under 
        this section) shall be allowed under this chapter with respect 
        to any expense which--
                    ``(A) is taken into account under subsection 
                (c)(1)(A) in determining the credit under this section, 
                or
                    ``(B) is attributable to the maintenance of an 
                Individual Development Account.
            ``(2) Determination of amount.--Solely for purposes of 
        paragraph (1)(B), the amount attributable to the maintenance of 
        an Individual Development Account shall be deemed to be the 
        dollar amount of the credit allowed under subsection (c)(l)(B) 
        for each taxable year such Individual Development Account is 
        maintained.
    ``(g) Regulations.--The Secretary may prescribe such regulations as 
may be necessary or appropriate to carry out this section, including--
            ``(1) regulations allowing taxpayers other than qualified 
        financial institutions to claim credits under this section, and
            ``(2) regulations providing for a recapture of the credit 
        allowed under this section (notwithstanding any termination 
        date described in subsection (h)) in cases where there is a 
        forfeiture under section 207(b) of the Savings for Working 
        Families Act of 2002 in a subsequent taxable year of any amount 
        which was taken into account in determining the amount of such 
        credit.
    ``(h) Application of Section.--
            ``(1) In general.--This section shall apply to any 
        expenditure made in any taxable year ending after December 31, 
        2002, and beginning on or before January 1, 2010, with respect 
        to any Individual Development Account which--
                    ``(A) is opened before January 1, 2008, and
                    ``(B) as determined by the Secretary, when added to 
                all previously opened Individual Development Accounts, 
                does not exceed 900,000 Accounts.
        Notwithstanding the preceding sentence, this section shall 
        apply to amounts which are described in subsection (c)(1)(A) 
        and which are timely deposited into a parallel account during 
        the 30-day period following the end of last taxable year 
        beginning before January 1, 2010.
            ``(2) Determination of Limitation.--The limitation on the 
        number of Individual Development Accounts under paragraph 
        (1)(B) shall be allocated by the Secretary among qualified 
        individual development account programs selected by the 
        Secretary.''.
    (b) Credit Treated as Business Credit.--Section 38(b) of the 
Internal Revenue Code of 1986 (relating to current year business 
credit) is amended by striking ``plus'' at the end of paragraph (14), 
by striking the period at the end of paragraph (15) and inserting ``, 
plus'', and by adding at the end the following new paragraph:
            ``(16) the individual development account investment credit 
        determined under section 45G(a).''.
    (c) No Carrybacks.--Subsection (d) of section 39 of the Internal 
Revenue Code of 1986 (relating to carryback and carryforward of unused 
credits) is amended by adding at the end the following:
            ``(11) No carryback of section 45g credit before effective 
        date.--No portion of the unused business credit for any taxable 
        year which is attributable to the individual development 
        account investment credit determined under section 45G may be 
        carried back to a taxable year ending before January 1, 
        2003.''.
    (d) Conforming Amendment.--The table of sections for subpart C of 
part IV of subchapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by adding at the end the following new item:

                              ``Sec. 45G. Individual development 
                                        account investment credit.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after December 31, 2002.

        TITLE III--EQUAL TREATMENT FOR NONGOVERNMENTAL PROVIDERS

SEC. 301. NONGOVERNMENTAL ORGANIZATIONS.

    (a) General Authority.--For any social service program, a 
nongovernmental organization that is (or is applying to be) involved in 
the delivery of social services for the program shall not be required--
            (1) to alter or remove art, icons, scripture, or other 
        symbols, or to alter its name, because the symbols or name are 
        religious;
            (2) to alter or remove provisions in its chartering 
        documents because the provisions are religious, except that no 
        such charter provisions shall affect the application to a 
        nongovernmental organization of any law that would 
        (notwithstanding this paragraph) apply to the nongovernmental 
        organization; or
            (3) to alter or remove religious qualifications for 
        membership on its governing boards.
    (b) Prior Experience.--A nongovernmental organization that has not 
previously been awarded a contract, grant, or cooperative agreement 
from an agency shall not, for that reason, be disadvantaged in a 
competition to secure a contract, grant, or cooperative agreement to 
deliver services under a social service program from the agency 
administering the program.
    (c) Intermediate Grantors.--
            (1) In general.--An agency that administers a social 
        service program, and that is authorized to award grants or 
        cooperative agreements to nongovernmental organizations under 
        the program, may award to a nongovernmental organization 
        (referred to in this subsection as an ``intermediate grantor'') 
        a grant or cooperative agreement, the terms of which authorize 
        the intermediate grantor--
                    (A) to award contracts or subgrants to 
                nongovernmental providers, to administer and deliver 
                social services for the program; and
                    (B) to administer the contracts or subgrants.
            (2) Responsibilities.--Except for those administrative 
        responsibilities that the intermediate grantor fully performs 
        on behalf of the recipient of such a contract or subgrant, the 
        recipient of the contract or subgrant shall have the same 
        responsibilities with respect to the program as the recipient 
        would have if it were the intermediate grantor.
            (3) Rights.--The recipient of a contract or subgrant from 
        an intermediate grantor shall have the same rights under this 
        section as the recipient would have if it were the intermediate 
        grantor.
    (d) Compliance.--To enforce the provisions of this section against 
a Federal agency or official, a nongovernmental organization may bring 
an action for injunctive relief in an appropriate United States 
district court. To enforce the provisions of this section against a 
State or local agency or official, a nongovernmental organization may 
bring an action for injunctive relief in an appropriate State court of 
general jurisdiction.
    (e) Definitions.--In this section:
            (1) Federal financial assistance.--The term ``Federal 
        financial assistance'' does not include a tax credit, 
        deduction, or exemption.
            (2) Social service program.--
                    (A) In general.--The term ``social service 
                program'' means a program that--
                            (i) is administered by the Federal 
                        Government, or by a State or local government 
                        using Federal financial assistance; and
                            (ii) provides services directed at helping 
                        people in need, reducing poverty, improving 
                        outcomes of low-income children, revitalizing 
                        low-income communities, and  empowering low-
income families and low-income individuals to become self-sufficient, 
including--
                                    (I) child care services, protective 
                                services for children and adults, 
                                services for children and adults in 
                                foster care, adoption services, 
                                services related to the management and 
                                maintenance of the home, day care 
                                services for adults, and services to 
                                meet the special needs of children, 
                                older individuals, and individuals with 
                                disabilities (including physical, 
                                mental, or emotional disabilities);
                                    (II) transportation services;
                                    (III) job training and related 
                                services, and employment services;
                                    (IV) information, referral, and 
                                counseling services;
                                    (V) the preparation and delivery of 
                                meals, and services related to soup 
                                kitchens or food banks;
                                    (VI) health support services;
                                    (VII) literacy and mentoring 
                                programs;
                                    (VIII) services for the prevention 
                                and treatment of juvenile delinquency 
                                and substance abuse, services for the 
                                prevention of crime and the provision 
                                of assistance to the victims and the 
                                families of criminal offenders, and 
                                services related to the intervention 
                                in, and prevention of, domestic 
                                violence; and
                                    (IX) services related to the 
                                provision of assistance for housing 
                                under Federal law.
                    (B) Exclusions.--The term does not include a 
                program having the purpose of delivering educational 
                assistance under the Elementary and Secondary Education 
                Act of 1965 (20 U.S.C. 6301 et seq.) or under the 
                Higher Education Act of 1965 (20 U.S.C. 1001 et seq.).

       TITLE IV--EZ PASS RECOGNITION OF SECTION 501(c)(3) STATUS

SEC. 401. EZ PASS RECOGNITION OF SECTION 501(C)(3) STATUS AND WAIVER OF 
              APPLICATION FEE FOR EXEMPT STATUS FOR CERTAIN 
              ORGANIZATIONS PROVIDING SOCIAL SERVICES FOR THE POOR AND 
              NEEDY.

    (a) In General.--The Secretary of the Treasury or the Secretary's 
delegate (in this section, referred to as the ``Secretary'') shall 
adopt procedures to expedite the consideration of applications for 
exempt status under section 501(c)(3) of the Internal Revenue Code of 
1986 by any organization that--
            (1) is organized and operated for the primary purpose of 
        providing social services;
            (2) is seeking a contract or grant under a Federal, State, 
        or local program that provides funding for social services 
        programs;
            (3) establishes that, under the terms and conditions of the 
        contract or grant program, an organization is required to 
        obtain such exempt status before the organization is eligible 
        to apply for a contract or grant;
            (4) includes with its exemption application a copy of its 
        completed Federal, State, or local contract or grant 
        application; and
            (5) meets such other criteria as the Secretary deems 
        appropriate for expedited consideration.
The Secretary may prescribe other similar circumstances in which such 
organizations may be entitled to expedited consideration.
    (b) Waiver of Application Fee for Exempt Status.--Any organization 
that meets the conditions described in subsection (a) (without regard 
to paragraph (3) of that subsection) is entitled to a waiver of any fee 
for an application for exempt status under section 501(c)(3) of the 
Internal Revenue Code of 1986 if the organization certifies that the 
organization has had (or expects to have) average annual gross receipts 
of not more than $50,000 during the preceding 4 years (or during such 
organization's first 4 years).
    (c) Social Services Defined.--For purposes of this section, the 
term ``social services'' means services described in subparagraph 
(A)(ii) of section 301(e)(2) (except as described in subparagraph (B) 
of that section).

                    TITLE V--COMPASSION CAPITAL FUND

SEC. 501. SUPPORT FOR NONPROFIT COMMUNITY-BASED ORGANIZATIONS; 
              DEPARTMENT OF HEALTH AND HUMAN SERVICES.

    (a) Support for Nongovernmental Organizations.--The Secretary of 
Health and Human Services (referred to in this section as ``the 
Secretary'') may award grants to and enter into cooperative agreements 
with nongovernmental organizations, to--
            (1) provide technical assistance for community-based 
        organizations, which may include--
                    (A) grant writing and grant management assistance, 
                which may include assistance provided through workshops 
                and other guidance;
                    (B) legal assistance with incorporation;
                    (C) legal assistance to obtain tax-exempt status; 
                and
                    (D) information on, and referrals to, other 
                nongovernmental organizations that provide expertise in 
                accounting, on legal issues, on tax issues, in program 
                development, and on a variety of other organizational 
                topics;
            (2) provide information and assistance for community-based 
        organizations on capacity building;
            (3) provide for community-based organizations information 
        on and assistance in identifying and using best practices for 
        delivering assistance to persons, families, and communities in 
        need;
            (4) provide information on and assistance in utilizing 
        regional intermediary organizations to increase and strengthen 
        the capabilities of nonprofit community-based organizations;
            (5) assist community-based organizations in replicating 
        social service programs of demonstrated effectiveness; and
            (6) encourage research on the best practices of social 
        service organizations.
    (b) Support for States.--The Secretary--
            (1) may award grants to and enter into cooperative 
        agreements with States and political subdivisions of States to 
        provide seed money to establish State and local offices of 
        faith-based and community initiatives; and
            (2) shall provide technical assistance to States and 
        political subdivisions of States in administering the 
        provisions of this Act.
    (c) Applications.--To be eligible to receive a grant or enter into 
a cooperative agreement under this section, a nongovernmental 
organization, State, or political subdivision shall submit an 
application to the Secretary at such time, in such manner, and 
containing such information as the Secretary may require.
    (d) Limitation.--In order to widely disburse limited resources, no 
community-based organization (other than a direct recipient of a grant 
or cooperative agreement from the Secretary) may receive more than 1 
grant or cooperative agreement under this section for the same purpose.
    (e) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section $85,000,000 for fiscal year 
2003, and such sums as may be necessary for each of fiscal years 2004 
through 2007.
    (f) Definition.--In this section, the term ``community-based 
organization'' means a nonprofit corporation or association that has--
            (1) not more than 6 full-time equivalent employees who are 
        engaged in the provision of social services; or
            (2) a current annual budget (current as of the date the 
        entity seeks assistance under this section) for the provision 
        of social services, compiled and adopted in good faith, of less 
        than $450,000.

SEC. 502. SUPPORT FOR NONPROFIT COMMUNITY-BASED ORGANIZATIONS; 
              CORPORATION FOR NATIONAL AND COMMUNITY SERVICE.

    (a) Support for Nongovernmental Organizations.--The Corporation for 
National and Community Service (referred to in this section as ``the 
Corporation'') may award grants to and enter into cooperative 
agreements with nongovernmental organizations and State Commissions on 
National and Community Service established under section 178 of the 
National and Community Service Act of 1990 (42 U.S.C. 12638), to--
            (1) provide technical assistance for community-based 
        organizations, which may include--
                    (A) grant writing and grant management assistance, 
                which may include assistance provided through workshops 
                and other guidance;
                    (B) legal assistance with incorporation;
                    (C) legal assistance to obtain tax-exempt status; 
                and
                    (D) information on, and referrals to, other 
                nongovernmental organizations that provide expertise in 
                accounting, on legal issues, on tax issues, in program 
                development, and on a variety of other organizational 
                topics;
            (2) provide information and assistance for community-based 
        organizations on capacity building;
            (3) provide for community-based organizations information 
        on and assistance in identifying and using best practices for 
        delivering assistance to persons, families, and communities in 
        need;
            (4) provide information on and assistance in utilizing 
        regional intermediary organizations to increase and strengthen 
        the capabilities of community-based organizations;
            (5) assist community-based organizations in replicating 
        social service programs of demonstrated effectiveness; and
            (6) encourage research on the best practices of social 
        service organizations.
    (b) Applications.--To be eligible to receive a grant or enter into 
a cooperative agreement under this section, a nongovernmental 
organization, State Commission, State, or political subdivision shall 
submit an application to the Corporation at such time, in such manner, 
and containing such information as the Corporation may require.
    (c) Limitation.--In order to widely disburse limited resources, no 
community-based organization (other than a direct recipient of a grant 
or cooperative agreement from the Secretary) may receive more than 1 
grant or cooperative agreement under this section for the same purpose.
    (d) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section $15,000,000 for fiscal year 
2003, and such sums as may be necessary for each of fiscal years 2004 
through 2007.
    (e) Definition.--In this section, the term ``community-based 
organization'' means a nonprofit corporation or association that has--
            (1) not more than 6 full-time equivalent employees who are 
        engaged in the provision of social services; or
            (2) a current annual budget (current as of the date the 
        entity seeks assistance under this section) for the provision 
        of social services, compiled and adopted in good faith, of less 
        than $450,000.

SEC. 503. SUPPORT FOR NONPROFIT COMMUNITY-BASED ORGANIZATIONS; 
              DEPARTMENT OF JUSTICE.

    (a) Support for Nongovernmental Organizations.--The Attorney 
General may award grants to and enter into cooperative agreements with 
nongovernmental organizations, to--
            (1) provide technical assistance for community-based 
        organizations, which may include--
                    (A) grant writing and grant management assistance, 
                which may include assistance provided through workshops 
                and other guidance;
                    (B) legal assistance with incorporation;
                    (C) legal assistance to obtain tax-exempt status; 
                and
                    (D) information on, and referrals to, other 
                nongovernmental organizations that provide expertise in 
                accounting, on legal issues, on tax issues, in program 
                development, and on a variety of other organizational 
                topics;
            (2) provide information and assistance for community-based 
        organizations on capacity building;
            (3) provide for community-based organizations information 
        on and assistance in identifying and using best practices for 
        delivering assistance to persons, families, and communities in 
        need;
            (4) provide information on and assistance in utilizing 
        regional intermediary organizations to increase and strengthen 
        the capabilities of nonprofit community-based organizations;
            (5) assist community-based organizations in replicating 
        social service programs of demonstrated effectiveness; and
            (6) encourage research on the best practices of social 
        service organizations.
    (b) Applications.--To be eligible to receive a grant or enter into 
a cooperative agreement under this section, a nongovernmental 
organization, State, or political subdivision shall submit an 
application to the Attorney General at such time, in such manner, and 
containing such information as the Attorney General may require.
    (c) Limitation.--In order to widely disburse limited resources, no 
community-based organization (other than a direct recipient of a grant 
or cooperative agreement from the Attorney General) may receive more 
than 1 grant or cooperative agreement under this section for the same 
purpose.
    (d) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section $35,000,000 for fiscal year 
2003, and such sums as may be necessary for each of fiscal years 2004 
through 2007.
    (e) Definition.--In this section, the term ``community-based 
organization'' means a nonprofit corporation or association that has--
            (1) not more than 6 full-time equivalent employees who are 
        engaged in the provision of social services; or
            (2) a current annual budget (current as of the date the 
        entity seeks assistance under this section) for the provision 
        of social services, compiled and adopted in good faith, of less 
        than $450,000.

SEC. 504. SUPPORT FOR NONPROFIT COMMUNITY-BASED ORGANIZATIONS; 
              DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT.

    (a) Support for Nongovernmental Organizations.--The Secretary of 
Housing and Urban Development (referred to in this section ``the 
Secretary'') may award grants to and enter into cooperative agreements 
with nongovernmental organizations, to--
            (1) provide technical assistance for community-based 
        organizations, which may include--
                    (A) grant writing and grant management assistance, 
                which may include assistance provided through workshops 
                and other guidance;
                    (B) legal assistance with incorporation;
                    (C) legal assistance to obtain tax-exempt status; 
                and
                    (D) information on, and referrals to, other 
                nongovernmental organizations that provide expertise in 
                accounting, on legal issues, on tax issues, in program 
                development, and on a variety of other organizational 
                topics;
            (2) provide information and assistance for community-based 
        organizations on capacity building;
            (3) provide for community-based organizations information 
        on and assistance in identifying and using best practices for 
        delivering assistance to persons, families, and communities in 
        need;
            (4) provide information on and assistance in utilizing 
        regional intermediary organizations to increase and strengthen 
        the capabilities of community-based organizations;
            (5) assist community-based organizations in replicating 
        social service programs of demonstrated effectiveness; and
            (6) encourage research on the best practices of social 
        service organizations.
    (b) Applications.--To be eligible to receive a grant or enter into 
a cooperative agreement under this section, a nongovernmental 
organization, State, or political subdivision shall submit an 
application to the Secretary at such time, in such manner, and 
containing such information as the Secretary may require.
    (c) Limitation.--In order to widely disburse limited resources, no 
community-based organization (other than a direct recipient of a grant 
or cooperative agreement from the Secretary) may receive more than 1 
grant or cooperative agreement under this section for the same purpose.
    (d) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section $15,000,000 for fiscal year 
2003, and such sums as may be necessary for each of fiscal years 2004 
through 2007.
    (e) Definition.--In this section, the term ``community-based 
organization'' means a nonprofit corporation or association that has--
            (1) not more than 6 full-time equivalent employees who are 
        engaged in the provision of social services; or
            (2) a current annual budget (current as of the date the 
        entity seeks assistance under this section) for the provision 
        of social services, compiled and adopted in good faith, of less 
        than $450,000.

SEC. 505. COORDINATION.

    The Secretary of Health and Human Services, the Corporation for 
National and Community Service, the Attorney General, and the Secretary 
of Housing and Urban Development shall coordinate their activities 
under this title to ensure--
            (1) nonduplication of activities under this title; and
            (2) an equitable distribution of resources under this 
        title.

                 TITLE VI--SOCIAL SERVICES BLOCK GRANT

SEC. 601. RESTORATION OF AUTHORITY TO TRANSFER UP TO 10 PERCENT OF TANF 
              FUNDS TO THE SOCIAL SERVICES BLOCK GRANT.

    (a) In General.--Section 404(d)(2) of the Social Security Act (42 
U.S.C. 604(d)(2)) is amended to read as follows:
            ``(2) Limitation on amount transferable to title xx 
        programs.--A State may use not more than 10 percent of the 
        amount of any grant made to the State under section 403(a) for 
        a fiscal year to carry out State programs pursuant to title 
        XX.''.
    (b) Effective Date.--The amendment made by subsection (a) applies 
to amounts made available for fiscal year 2003 and each fiscal year 
thereafter.

SEC. 602. RESTORATION OF FUNDS FOR THE SOCIAL SERVICES BLOCK GRANT.

    (a) Findings.--Congress makes the following findings:
            (1) On August 22, 1996, the Personal Responsibility and 
        Work Opportunity Reconciliation Act of 1996 (Public Law 104-
        193; 110 Stat. 2105) was signed into law.
            (2) In enacting that law, Congress authorized 
        $2,800,000,000 for fiscal year 2003 and each fiscal year 
        thereafter to carry out the Social Services Block Grant program 
        established under title XX of the Social Security Act (42 
        U.S.C. 1397 et seq.).
    (b) Restoration of Funds.--Section 2003(c) of the Social Security 
Act (42 U.S.C. 1397b(c)) is amended--
            (1) in paragraph (10), by striking ``and'' at the end;
            (2) in paragraph (11), by striking `` and each fiscal year 
        thereafter.'' and inserting a semicolon; and
            (3) by adding at the end the following:
            ``(12) $1,975,000,000 for the fiscal year 2003; and
            ``(13) $2,800,000,000 for the fiscal year 2004.''.

SEC. 603. REQUIREMENT TO SUBMIT ANNUAL REPORT ON STATE ACTIVITIES.

    (a) In General.--Section 2006(c) of the Social Security Act (42 
U.S.C. 1397e(c)) is amended by adding at the end the following: ``The 
Secretary shall compile the information submitted by the States and 
submit that information to Congress on an annual basis.''.
    (b) Effective Date.--The amendment made by subsection (a) applies 
to information submitted by States under section 2006 of the Social 
Security Act (42 U.S.C. 1397e) with respect to fiscal year 2002 and 
each fiscal year thereafter.

                    TITLE VII--MATERNITY GROUP HOMES

SEC. 701. MATERNITY GROUP HOMES.

    (a) Permissible Use of Funds.--Section 322 of the Runaway and 
Homeless Youth Act (42 U.S.C. 5714-2) is amended--
            (1) in subsection (a)(1), by inserting ``(including 
        maternity group homes)'' after ``group homes''; and
            (2) by adding at the end the following:
    ``(c) Maternity Group Home.--In this part, the term `maternity 
group home' means a community-based, adult-supervised group home that 
provides young mothers and their children with a supportive and 
supervised living arrangement in which such mothers are required to 
learn parenting skills, including child development, family budgeting, 
health and nutrition, and other skills to promote their long-term 
economic independence and the well-being of their children.''.
    (b) Contract for Evaluation.--Part B of the Runaway and Homeless 
Youth Act (42 U.S.C. 5701 et seq.) is amended by adding at the end the 
following:

``SEC. 323. CONTRACT FOR EVALUATION.

    ``(a) In General.--The Secretary shall enter into a contract with a 
public or private entity for an evaluation of the maternity group homes 
that are supported by grant funds under this Act.
    ``(b) Information.--The evaluation described in subsection (a) 
shall include the collection of information about the relevant 
characteristics of individuals who benefit from maternity group homes 
such as those that are supported by grant funds under this Act and what 
services provided by those maternity group homes are most beneficial to 
such individuals.
    ``(c) Report.--Not later than 2 years after the date on which the 
Secretary enters into a contract for an evaluation under subsection 
(a), and biennially thereafter, the entity conducting the evaluation 
under this section shall submit to Congress a report on the status, 
activities, and accomplishments of maternity group homes that are 
supported by grant funds under this Act.''.
    (c) Authorization of Appropriations.--Section 388 of the Runaway 
and Homeless Youth Act (42 U.S.C. 5751) is amended--
            (1) in subsection(a)(1)--
                    (A) by striking ``There'' and inserting the 
                following:
                    ``(A) In general.--There'';
                    (B) in subparagraph (A), as redesignated, by 
                inserting ``and the purpose described in subparagraph 
                (B)'' after ``other than part E''; and
                    (C) by adding at the end the following:
                    ``(B) Maternity group homes.--There is authorized 
                to be appropriated, for maternity group homes eligible 
                for assistance under section 322(a)(1)--
                            ``(i) $33,000,000 for fiscal year 2003; and
                            ``(ii) such sums as may be necessary for 
                        fiscal year 2004.''; and
            (2) in subsection (a)(2)(A), by striking ``paragraph (1)'' 
        and inserting ``paragraph (1)(A)''.
                                 <all>