[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7083 Received in Senate (RDS)]

  2d Session
                                H. R. 7083


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

           September 29 (legislative day, September 17), 2008

                                Received

_______________________________________________________________________

                                 AN ACT


 
To amend the Internal Revenue Code of 1986 to enhance charitable giving 
             and improve disclosure and tax administration.

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

SECTION 1. SHORT TITLE, ETC.

    (a) Short Title.--This Act may be cited as the ``Charity 
Enhancement Act of 2008''.
    (b) Amendment of 1986 Code.--Except as otherwise expressly 
provided, whenever in this Act an amendment or repeal is expressed in 
terms of an amendment to, or repeal of, a section or other provision, 
the reference shall be considered to be made to a section or other 
provision of the Internal Revenue Code of 1986.
    (c) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title, etc.
Sec. 2. Funds advised by certain public charities and governmental 
                            entities not treated as donor advised 
                            funds.
Sec. 3. Certain scholarship distributions from donor advised funds not 
                            treated as taxable distributions.
Sec. 4. Repeal of special written acknowledgment requirement for 
                            charitable contributions to donor advised 
                            funds.
Sec. 5. Reasonable compensation paid by supporting organizations to 
                            substantial contributors not treated as an 
                            excess benefit.
Sec. 6. Exception from holdings and payout requirements for 
                            longstanding, fully funded type III 
                            supporting organizations.
Sec. 7. Contributions by Indian tribal governments treated same as 
                            contributions by States.
Sec. 8. Electronic filing of exempt organization annual returns.
Sec. 9. Expansion of bad check penalty to electronic payments, etc.

SEC. 2. FUNDS ADVISED BY CERTAIN PUBLIC CHARITIES AND GOVERNMENTAL 
              ENTITIES NOT TREATED AS DONOR ADVISED FUNDS.

    (a) In General.--Subparagraph (B) of section 4966(d)(2) is amended 
by striking ``or'' at the end of clause (i), by striking the period at 
the end of clause (ii) and inserting ``, or'', and by adding at the end 
the following new clause:
                            ``(iii) if all contributions to such fund 
                        or account have been made, and all advisory 
                        privileges referred to in subparagraph (A)(iii) 
                        with respect to such fund or account have been 
                        exercised, by either--
                                    ``(I) one or more organizations 
                                described in clause (i), (ii), (iii), 
                                (iv), or (vi) of section 170(b)(1)(A) 
                                or section 509(a)(2), or
                                    ``(II) one or more entities 
                                described in section 170(c)(1).''.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after the date of the enactment of this 
Act.

SEC. 3. CERTAIN SCHOLARSHIP DISTRIBUTIONS FROM DONOR ADVISED FUNDS NOT 
              TREATED AS TAXABLE DISTRIBUTIONS.

    (a) In General.--Subsection (c) of section 4966 is amended by 
adding at the end the following new paragraph:
            ``(3) Exception for certain scholarship distributions.--
                    ``(A) In general.--The term `taxable distribution' 
                shall not include any qualified scholarship 
                distribution from a qualified scholarship fund.
                    ``(B) Qualified scholarship distribution.--The term 
                `qualified scholarship distribution' means any grant to 
                a natural person for travel, study, or other similar 
                purposes made from a donor advised fund if all such 
                grants meet the requirements of subsection 
                (d)(2)(B)(ii)(III).
                    ``(C) Qualified scholarship fund.--The term 
                `qualified scholarship fund' means any donor advised 
                fund if--
                            ``(i) the advisory privileges referred to 
                        in subsection (d)(2)(A)(iii) with respect to 
                        such fund are exercised solely by an 
                        organization described in paragraph (4) of 
                        section 501(c) and exempt from tax under 
                        section 501(a), and
                            ``(ii) substantially all of the 
                        distributions from such fund are qualified 
                        scholarship distributions.''.
    (b) Application of Tax on Prohibited Benefits to Qualified 
Scholarship Distributions.--Subsection (c) of section 4967 is amended 
by adding at the end the following new paragraph:
            ``(3) Qualified scholarship funds.--Each substantial 
        contributor (as defined in section 4958(c)(3)(C)) to a 
        qualified scholarship fund and each family member (within the 
        meaning of section 4958(f)(4)) of such person shall be treated 
        as a person described in subsection (d) with respect to such 
        fund.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to distributions made after the date of the enactment of this 
Act.

SEC. 4. REPEAL OF SPECIAL WRITTEN ACKNOWLEDGMENT REQUIREMENT FOR 
              CHARITABLE CONTRIBUTIONS TO DONOR ADVISED FUNDS.

    (a) In General.--Paragraph (18) of section 170(f) is amended--
            (1) by striking subparagraph (B),
            (2) by striking ``if--'' and all that follows through ``the 
        sponsoring organization (as defined in section 4966(d)(1))'' 
        and inserting ``if the sponsoring organization (as defined in 
        section 4966(d)(1)))'', and
            (3) by redesignating clauses (i) and (ii) of subparagraph 
        (A) (as in effect before amendment by paragraph (2)) as 
        subparagraphs (A) and (B) and by moving such subparagraphs 2 
        ems to the left.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after the date of the enactment of this 
Act.

SEC. 5. REASONABLE COMPENSATION PAID BY SUPPORTING ORGANIZATIONS TO 
              SUBSTANTIAL CONTRIBUTORS NOT TREATED AS AN EXCESS 
              BENEFIT.

    (a) In General.--Clause (ii) of section 4958(c)(3)(A) is amended to 
read as follows:
                            ``(ii) the term `excess benefit' includes, 
                        with respect to any transaction described in 
                        clause (i)--
                                    ``(I) in the case of any grant, 
                                loan, or similar payment, the amount of 
                                such grant, loan, or similar payment, 
                                and
                                    ``(II) in the case of any 
                                compensation or similar payment, the 
                                amount by which the value of the 
                                economic benefit provided exceeds the 
                                value of the consideration (including 
                                the performance of services) received 
                                for providing such benefit.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to amounts paid pursuant to transactions entered into after the date of 
the enactment of this Act.

SEC. 6. EXCEPTION FROM HOLDINGS AND PAYOUT REQUIREMENTS FOR 
              LONGSTANDING, FULLY FUNDED TYPE III SUPPORTING 
              ORGANIZATIONS.

    (a) Holdings Requirements.--Subsection (f) of section 4943 is 
amended by adding at the end the following new paragraph:
            ``(8) Exception for certain longstanding fully funded type 
        iii supporting organizations.--Paragraph (1) shall not apply to 
        any organization if--
                    ``(A) the organization was established before 
                January 1, 1970,
                    ``(B) the organization has not accepted any 
                substantial contributions after December 31, 1970,
                    ``(C) no donor to the organization was alive on 
                August 17, 2006, and
                    ``(D) no family member (within the meaning of 
                section 4958(f)(4)) of any donor is an organization 
                manager (as defined in section 4958(f)(2)).''.
    (b) Payout Requirements.--Section 1241(d)(1) of the Pension 
Protection Act of 2006 shall not apply to any organization described in 
section 4943(f)(8) of the Internal Revenue Code of 1986, as added by 
this section.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after the date of the enactment of this 
Act.

SEC. 7. CONTRIBUTIONS BY INDIAN TRIBAL GOVERNMENTS TREATED SAME AS 
              CONTRIBUTIONS BY STATES.

    (a) In General.--Section 7871(a) (relating to Indian tribal 
governments treated as States for certain purposes) is amended by 
striking ``and'' at the end of paragraph (6), by striking the period at 
the end of paragraph (7) and inserting ``; and'', and by adding at the 
end the following new paragraph:
            ``(8) for purposes of--
                    ``(A) determining support of an organization 
                described in section 170(b)(1)(A)(vi), and
                    ``(B) determining whether an organization is 
                described in paragraph (1) or (2) of section 509(a) for 
                purposes of section 509(a)(3).''.
    (b) Effective Date.--The amendments made by this section shall 
apply with respect to--
            (1) support received on or after the date of the enactment 
        of this Act, and
            (2) the determination of the status of any organization 
        with respect to any taxable year beginning after such date of 
        enactment.

SEC. 8. ELECTRONIC FILING OF EXEMPT ORGANIZATION ANNUAL RETURNS.

    (a) In General.--Subsection (d) of section 6104 (relating to public 
inspection of certain annual returns, reports, applications for 
exemption, and notices of status) is amended--
            (1) by redesignating the paragraph relating to disclosure 
        of reports by Internal Revenue Service as paragraph (7),
            (2) by redesignating the paragraph relating to application 
        to nonexempt charitable trusts and nonexempt private 
        foundations as paragraph (8), and
            (3) by adding at the end the following new paragraph:
            ``(9) Returns required on magnetic media, etc.--Any 
        organization (other than an organization exempt from tax under 
        section 527(a)) which--
                    ``(A) is required to make available information for 
                inspection under paragraph (1)(A), and
                    ``(B) would be required to file returns on magnetic 
                media or in other machine-readable form under 
                subsection (e) of section 6011 if such subsection were 
                applied by substituting `at least 5 returns' for `at 
                least 250 returns' in paragraph (2)(A) thereof,
        shall file the information referred to in clauses (i) and (ii) 
        of paragraph (1)(A) on such magnetic media or in other machine-
        readable form.''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to returns required to be filed for taxable years beginning after 
the date of the enactment of this Act.

SEC. 9. EXPANSION OF BAD CHECK PENALTY TO ELECTRONIC PAYMENTS, ETC.

    (a) In General.--Section 6657 (relating to bad checks) is amended 
by adding at the end the following: ``Except as otherwise provided by 
the Secretary, any authorization of a payment by commercially 
acceptable means (within the meaning of section 6311) shall be treated 
for purposes of this section in the same manner as a check.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to authorizations of payments made after December 31, 2005.

            Passed the House of Representatives September 27, 2008.

            Attest:

                                            LORRAINE C. MILLER,

                                                                 Clerk.