[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 393 Introduced in Senate (IS)]







107th CONGRESS
  1st Session
                                 S. 393

  To amend the Internal Revenue Code of 1986 to encourage charitable 
     contributions to public charities for use in medical research.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           February 27, 2001

  Mr. Frist (for himself and Mr. Torricelli) introduced the following 
  bill; which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
  To amend the Internal Revenue Code of 1986 to encourage charitable 
     contributions to public charities for use in medical research.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Paul Coverdell Medical Research 
Investment Act of 2001''.

SEC. 2. INCREASE IN LIMITATION ON CHARITABLE DEDUCTION FOR 
              CONTRIBUTIONS FOR MEDICAL RESEARCH.

    (a) In General.--Paragraph (1) of section 170(b) of the Internal 
Revenue Code of 1986 (relating to percentage limitations) is amended by 
adding at the end the following new subparagraph:
                    ``(G) Special limitation with respect to certain 
                contributions for medical research.--
                            ``(i) In general.--Any medical research 
                        contribution shall be allowed to the extent 
                        that the aggregate of such contributions does 
                        not exceed the lesser of--
                                    ``(I) 80 percent of the taxpayer's 
                                contribution base for any taxable year, 
                                or
                                    ``(II) the excess of 80 percent of 
                                the taxpayer's contribution base for 
                                the taxable year over the amount of 
                                charitable contributions allowable 
                                under subparagraphs (A) and (B) 
                                (determined without regard to 
                                subparagraph (C)).
                            ``(ii) Carryover.--If the aggregate amount 
                        of contributions described in clause (i) 
                        exceeds the limitation of such clause, such 
                        excess shall be treated (in a manner consistent 
                        with the rules of subsection (d)(1)) as a 
                        medical research contribution in each of the 10 
                        succeeding taxable years in order of time.
                            ``(iii) Treatment of capital gain 
                        property.--In the case of any medical research 
                        contribution of capital gain property (as 
                        defined in subparagraph (C)(iv)), subsection 
                        (e)(1) shall apply to such contribution.
                            ``(iv) Medical research contribution.--For 
                        purposes of this subparagraph, the term 
                        `medical research contribution' means a 
                        charitable contribution--
                                    ``(I) to an organization described 
                                in clauses (ii), (iii), (v), or (vi) of 
                                subparagraph (A), and
                                    ``(II) which is designated for the 
                                use of conducting medical research.
                            ``(v) Medical research.--For purposes of 
                        this subparagraph, the term `medical research' 
                        has the meaning given such term under the 
                        regulations promulgated under subparagraph 
                        (A)(ii), as in effect on the date of the 
                        enactment of this subparagraph.''.
    (b) Conforming Amendments.--
            (1) Section 170(b)(1)(A) of the Internal Revenue Code of 
        1986 is amended in the matter preceding clause (i) by inserting 
        ``(other than a medical research contribution)'' after 
        ``contribution''.
            (2) Section 170(b)(1)(B) of such Code is amended by 
        inserting ``or a medical research contribution'' after 
        ``applies''.
            (3) Section 170(b)(1)(C)(i) of such Code is amended by 
        striking ``subparagraph (D)'' and inserting ``subparagraph (D) 
        or (G)''.
            (4) Section 170(b)(1)(D)(i) of such Code is amended--
                    (A) in the matter preceding subclause (I), by 
                inserting ``or a medical research contribution'' after 
                ``applies'', and
                    (B) in the second sentence, by inserting ``(other 
                than medical research contributions)'' before the 
                period.
            (5) Section 545(b)(2) of such Code is amended by striking 
        ``and (D)'' and inserting ``(D), and (G)''.
            (6) Section 556(b)(2) of such Code is amended by striking 
        ``and (D)'' and inserting ``(D), and (G)''.
    (c) Effective Date.--The amendments made by this section shall 
apply--
            (1) to contributions made in taxable years beginning after 
        December 31, 2001, and
            (2) to contributions made on or before December 31, 2001, 
        but only to the extent that a deduction would be allowed under 
        section 170 of the Internal Revenue Code of 1986 for taxable 
        years beginning after December 31, 2000, had section 
        170(b)(1)(G) of such Code (as added by this section) applied to 
        such contributions when made.

SEC. 3. TREATMENT OF CERTAIN INCENTIVE STOCK OPTIONS.

    (a) AMT Adjustments.--Section 56(b)(3) of the Internal Revenue Code 
of 1986 (relating to treatment of incentive stock options) is amended--
            (1) by striking ``Section 421'' and inserting the 
        following:
                    ``(A) In general.--Except as provided in 
                subparagraph (B), section 421'', and
            (2) by adding at the end the following new subparagraph:
                    ``(B) Exception for certain medical research 
                stock.--
                            ``(i) In general.--This paragraph shall not 
                        apply in the case of a medical research stock 
                        transfer.
                            ``(ii) Medical research stock transfer.--
                        For purposes of clause (i), the term `medical 
                        research stock transfer' means a transfer--
                                    ``(I) of stock which is traded on 
                                an established securities market,
                                    (II) of stock which is acquired 
                                pursuant to the exercise of an 
                                incentive stock option within the same 
                                taxable year as such transfer occurs, 
                                and
                                    ``(III) which is a medical research 
                                contribution (as defined in section 
                                170(b)(1)(G)(iv)).''.
    (b) Nonrecognition of Certain Incentive Stock Options.--Section 
422(c) of the Internal Revenue Code of 1986 (relating to special rules) 
is amended by adding at the end the following new paragraph:
            ``(8) Medical research contributions.--For purposes of this 
        section and section 421, the transfer of a share of stock which 
        is a medical research stock transfer (as defined in section 
        56(b)(3)(B)) shall be treated as meeting the requirements of 
        subsection (a)(1).''.
    (c) Effective Date.--The amendments made by this section shall 
apply to transfers of stock made after the date of the enactment of 
this Act.
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