[Congressional Record Volume 141, Number 123 (Thursday, July 27, 1995)]
[Senate]
[Pages S10822-S10827]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. FEINGOLD:
  S. 1078. A bill to amend the Consolidated Farm and Rural Development 
Act to require the Secretary of Agriculture to make tourist and other 
recreational businesses located in rural communities eligible for loans 
under the business and industry loan program, and for other purposes; 
to the Committee on Agriculture, Nutrition, and Forestry.


                  RURAL COMMUNITY TOURISM ACT OF 1995

   Mr. FEINGOLD. Mr. President, I rise today to introduce S. 
1078, the Rural Community Tourism Act of 1995, and discuss an issue of 
importance to rural America and, in particular, to the economy of rural 
Wisconsin. This legislation would amend current law to allow the 
Secretary of Agriculture to promote tourism and recreation in rural 
communities. Specifically, it would amend the Consolidated Farm and 
Rural Development Act to require the Secretary of Agriculture to make 
tourist and other recreational-type businesses located in rural 
communities eligible for guaranteed loans under the Rural Business and 
Cooperative Development Service's [RBCDS] Business and Industry [B&I] 
Loan Guarantee Program within 90 days after the enactment of this 
legislation. This is an issue that I became aware of and especially 
interested in after a constituent approached me last year at my Rusk 
County listening session held in Ladysmith, WI, to express his 
frustration at a problem tourist resort owners were having in securing 
financing for rural development. The constituent owns a tourist lodge 
in northern Wisconsin and was interested in obtaining funding from the 
RBCDS's B&I Program. The B&I program was established by the Rural 
Development Act of 1972 with the aim of improving America's rural 
economy by creating, developing, or financing business, industry, and 
employment in rural America. After inquiring about obtaining such 
funding, the constituent was informed that tourist resorts were 
prohibited from receiving funding under the B&I program.
  That did not make too much sense to me especially since tourism can 
certainly play a significant role in the development of rural areas, so 
I contacted the agency about the program. When the B&I program was 
first established in 1972, no restrictions were placed on guaranteeing 
loans to tourist or other recreational-type businesses located in rural 
communities. However, on July 6, 1983, the Rural Development 
Administration revised its internal lending policy relative to the B&I 
Program and placed restrictions on the program's regulations by 
prohibiting such funding to tourist or recreation facilities.
  I was advised that the agency was currently reviewing their loan 
guarantee policy. I urged them to consider changing their internal 
lending policy to allow guaranteed business and industry loans to be 
made to recreational-type businesses located in rural areas. In fact, a 
General Accounting Office report released in July 1992, on the patterns 
of use in the B&I Program came to the same conclusion. It suggests that 
the underutilization of the program is due, in part, to the 
restrictions placed on using B&I funds for activities related to 
tourism, and recommends revising the B&I Program regulations to allow 
the selective use of loan guarantees for these activities.
  By all indications, the agency seems to be leaning in favor of making 
this change to the B&I Program--a change that would reflect the kind of 
rural development needs in communities such as those in northern 
Wisconsin, and indeed in communities across rural America. Although my 
office has been in regular contact with the agency about this policy 
change, I am told that they are still reviewing it--almost a year after 
we first contacted them about this matter. However, rural America and, 
in particular, rural Wisconsin communities simply do not have the 
luxury to wait until Federal agencies finally decide to act.
  Mr. President, rural America is at a crossroads in terms of 
converting from traditional resource-based economies which are becoming 
less economically viable, to other types of activities which also make 
a substantial contribution to better living in these areas. Tourism can 
certainly play a major role in improving the quality of life in many 
rural communities and, in fact, rural tourism should be recognized for 
what it truly is--a legitimate means to enhance economic development 
in, and the competitiveness of, rural America. Nationally, tourism is a 
$400 billion a year industry, and is a $5.6 billion industry in 
Wisconsin alone.
  Tourism can, and does, create jobs which help to improve the economic 
climate in rural communities and provide lasting community benefits. 
However, without economic assistance to help stimulate growth in rural 
development, successful transition to tourism may prove difficult.
  Mr. President, I urge my colleagues to support this noncontroversial 
legislation. I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1078

       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 ``Rural Community Tourism Act 
     of 1995''.

     SEC. 2. LOANS FOR TOURISM IN RURAL COMMUNITIES.

       The first sentence of section 310B(a) of the Consolidated 
     Farm and Rural Development Act (7 U.S.C. 1932(a)) is 
     amended--
       (1) by striking ``and (3)'' and inserting ``(3)''; and
       (2) by inserting before the period at the end the 
     following: ``, and (4) promoting the planning, development, 
     or financing of tourist or recreational businesses located in 
     rural communities''.

     SEC. 3. REGULATIONS.

       To carry out paragraph (4) of section 310B(a) of the 
     Consolidated Farm and Rural Development Act (7 U.S.C. 
     1932(a)) (as amended by section 2), the Secretary of 
     Agriculture shall publish--
       (1) interim final regulations not later than 45 days after 
     the date of enactment of this Act; and
       (2) final regulations not later than 90 days after the date 
     of enactment of this Act.
                                 ______

      By Mr. COATS:
  S. 1079. A bill to amend the Internal Revenue Code of 1986 to provide 
a tax credit for charitable contributions to organizations providing 
poverty assistance, to allow taxpayers who do not itemize to deduct 
charitable contributions, and for other purposes; to the Committee on 
Finance.


                  the comprehensive charity reform act

  Mr. COATS. Mr. President, I rise today to introduce the Comprehensive 
Charity Reform Act. This legislation is designed to expand the ability 
of private and religious charities to serve the poor by making it 
easier for taxpayers to make donations to these organizations. It is an 
important, urgently needed reform, but it also symbolizes a broader 
point.
  The Congress is currently focused on the essential task of clearing 
away the ruins of the Great Society. Centralized, bureaucratic 
antipoverty programs have failed--and that failure has had a human 
cost. It is measured in broken homes and violent streets. Our current 
system has undermined families and fostered dependence.
  This is undeniable. But while our Great Society illusions have ended, 
the suffering of many of our people has not. Indifference to that fact 
is not an 

[[Page S 10823]]
option. We cannot retreat into the cocoon of our affluence. We cannot 
accept the survival of the fittest. No society can live without hope--
hope that its suffering and anguish are not endless.
  Mr. President, I was recently invited to attend a session designed to 
address some of the problems of homelessness and despair that was 
conducted by a mission organization here in Washington, DC. It is just 
blocks from the Federal effort at dealing with homelessness--the John 
L. Young Center, which has been the subject of extraordinary 
controversy, drug dealing, crime, management problems, and the subject 
of numerous investigative reports in some of our local media.
   The Federal project stands in stark contrast to an organization 
called the Gospel Mission, a shelter and drug treatment center for 
homeless men in the same neighborhood.
  At the Gospel Mission, I think we have seen the shape of hope. It is 
not found in the ivory towers of academia. It is not found in the 
marble temples of official Washington. I found it 5 blocks from here, 
in a place so distant from Congress it is almost another world.
  The Reverend John Woods came to a desolate Washington neighborhood in 
1990 to take over the Gospel Mission, a shelter and drug treatment 
center for homeless men. The day he arrived, he found crack cocaine 
being processed in the backyard. A few days later, the local gang fired 
shots into his office to scare him away. Instead of leaving, he hung a 
sign on the door extending this invitation: ``If you haven't got a 
friend in the world you can find one here. Come in.''
  The Gospel Mission is a place that offers unconditional love, but 
accepts no excuses. Men in rehabilitation are given random drug tests. 
If they violate the rules, they are told to leave the program. But the 
success of the mission comes down to something simple: It does more 
than provide a meal and treat an addiction, it offers spiritual 
challenge and renewal.
  Listen to one addict who came to Reverend Woods after failing in 
several governmental rehabilitation programs: ``Those programs 
generally take addictions from you, but don't place anything within 
you. I needed a spiritual lifting. People like Reverend Woods are like 
God walking into your life. Not only am I drug-free, but more than 
that, I can be a person again.''
  Reverand Wood's success is particularly clear compared to Government 
approaches. The Gospel Mission has a 12-month rehabilitation rate of 66 
percent, while a once heralded Government program just 3 blocks away 
rehabilitates less than 10 percent of those it serves--while spending 
20 times as much as Reverend Woods.
  This is just one example. It is important, not because it is rare, 
but because it is common. It takes place in every community, in places 
distant from the centers of Government. But it is the only compassion 
that consistently works--a war on poverty that marches from victory to 
victory. It makes every new deal, new frontier, and new covenant look 
small in comparison--a war against poverty that is not directed out of 
a Federal agency but by many individuals, by organizations, by 
communities, gathered together asking, How can we help in a more 
effective way?
  Several months ago, I asked a question: How can we get resources into 
the hands of these private and religious institutions where individuals 
are actually being helped? And how can we do this without either 
undermining their work with restrictions or offending the first 
amendment?
  This legislation is an answer. It is composed of six elements, 
designed to increase both the depth of charitable giving to poverty 
relief, and the breadth of charitable giving more generally:
  First, a $500 charity tax credit--$1,000 for married taxpayers filing 
jointly--which will provide more generous tax benefits to taxpayers who 
decide to donate a portion of their tax liability to charities that 
focus on fighting or preventing poverty.
  Second, I am advocating an above-the-line deduction for charitable 
contributions made by nonitemizing taxpayers. Significant amounts of 
funds are donated each year by those who do not itemize on their tax 
return and, therefore, do not take the charitable deduction available 
to them if they do itemize. I think those people ought to be encouraged 
and rewarded for their contributions.
  So I am in this legislation expanding the base for charitable giving 
with an above the line for those who do not itemize.
  Third, I want to remove the 3 percent floor on itemized deductions 
that currently exists in the Tax Code for taxpayers of a certain income 
level and higher because I think we ought to do everything we can to 
encourage private contributions to charity.
   Fourth, I ask for an extension of the deadline for all charitable 
giving until April 15 to encourage giving up to the very date of 
filing.
  Fifth, we are requiring that any Government poverty assistance 
program disclose the percentage of funds it actually spends on the poor 
rather than on administrative costs. Taxpayers will be able to see 
exactly how their tax dollars are actually being spent and compare that 
expenditure with operations, organizations, community service, outreach 
programs, and nonprofit programs. This will allow us to measure the 
actual assistance that reaches the poor through our Government spending 
on anti-poverty programs and compare it with private programs.
  Finally, we have a provision that instructs the General Accounting 
Office to develop standards to determine the success rates and cost 
effectiveness of Government welfare programs.
  Mr. President, the purpose of the legislation is twofold. First, we 
want to take a small portion of the welfare spending in America and 
give it through the Tax Code to private and religious institutions that 
effectively provide individuals with hope, dignity, help and 
independence. Without eliminating a public safety net, we want to focus 
some attention and resources where we believe it can make a difference.
  Second, Mr. President, I would like to promote an ethic of giving in 
America. When individuals make these contributions to effective 
charities, it is a form of involvement beyond writing a check to the 
Federal Government. It encourages a new definition of citizenship in 
which men and women examine and support the programs in their own 
communities that serve the poor.
  I hope that my colleagues will take a careful look at this new 
approach to compassion. It is important not only for us to spread 
authority and resources within the levels of Government, but I think we 
need to spread these resources to things beyond Government, the 
institutions that cannot only feed the body but can touch the soul.
  Mr. President, we have had a nearly three-decade-long experiment with 
Government compassion. As I said, many programs that have been enacted 
by Congress were well intended, in an effort to reach out to people in 
need. But we have seen the bankruptcy of many of those programs in the 
lives of the individuals who were the recipients of those programs. We 
see a litany of broken families and broken homes, of hopeless people, 
of taxpayer funds eaten up in administrative costs, put into programs 
that are simply not making a difference in the lives of the people for 
whom they were intended.
  We have also had the example of the contrast--local churches, local 
nonprofit charitable organizations. I could start naming a whole list 
of organizations that have said we are not going to wait for a 
Government program or Government bureaucrat to describe how we should 
reach out to those in our community that are in need. We are going to 
roll up our sleeves and design a program. And whether it is providing 
free medical care through a doctors' association or health clinic, 
whether it is providing food through a nutrition effort, or a food 
center, whether it is providing help to a welfare family or others in 
need, we have seen the effectiveness of these programs. We have seen 
rehabilitation rates for substance and drug abusers and others that far 
exceed those that the Federal Government programs can offer. We have 
seen this offered at a cost far less than what the taxpayers provide in 
Government programs.
  Can private charity replace Government? I am not suggesting that 
Federal, State and local governments will not have to be involved in 
poverty relief. But private initiates can offer a 

[[Page S 10824]]
viable alternative that the Government can at least encourage. I 
believe a charity credit will go a long way toward nurturing and 
encouraging those private efforts that I think are going to be more and 
more important as we begin to reform and reduce the scope of the 
Government involvement, because government alone simply has not worked 
for the well being of our people.
  Mr. President, I ask unanimous consent that additional material 
describing and explaining this proposal be included in the Record along 
with the text of the bill itself.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 1079

       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 ``Comprehensive Charity Reform 
     Act''.

     SEC. 2. CREDIT FOR CHARITABLE CONTRIBUTIONS TO CERTAIN 
                   PRIVATE CHARITIES PROVIDING ASSISTANCE TO THE 
                   POOR.

       (a) In General.--Subpart A of part IV of subchapter A of 
     chapter 1 of the Internal Revenue Code of 1986 (relating to 
     nonrefundable personal credits) is amended by inserting after 
     section 22 the following new section:

     ``SEC. 23. CREDIT FOR CERTAIN CHARITABLE CONTRIBUTIONS.

       ``(a) In General.--In the case of an individual, there 
     shall be allowed as a credit against the tax imposed by this 
     chapter for the taxable year an amount equal to the qualified 
     charitable contributions which are paid by the taxpayer 
     during the taxable year.
       ``(b) Limitation.--The credit allowed by subsection (a) for 
     the taxable year shall not exceed $500 ($1,000 in the case of 
     a joint return under section 6013).
       ``(c) Qualified Charitable Contribution.--For purposes of 
     this section, the term `qualified charitable contribution' 
     means any charitable contribution (as defined in section 
     170(c)) made in cash to a qualified charity but only if the 
     amount of each such contribution, and the recipient thereof, 
     are identified on the return for the taxable year during 
     which such contribution is made.
       ``(d) Qualified Charity.--
       ``(1) In general.--For purposes of this section, the term 
     `qualified charity' means, with respect to the taxpayer, any 
     organization which is described in section 501(c)(3) and 
     exempt from tax under section 501(a), and--
       ``(A) which, upon request by the organization, is certified 
     by the Secretary as meeting the requirements of paragraphs 
     (2) and (3), or
       ``(B)(i) which is organized to solicit and collect gifts 
     and grants which, by agreement, are distributed to qualified 
     charities described in subparagraph (A),
       ``(ii) with respect to which at least 85 percent of the 
     funds so collected are distributed to qualified charities 
     described in subparagraph (A), and
       ``(iii) which meets the requirements of paragraph (5).
       ``(2) Charity must primarily assist the poor.--An 
     organization meets the requirements of this paragraph only if 
     the Secretary reasonably expects that the predominant 
     activity of such organization will be the providing of 
     services to individuals and families which are designed to 
     prevent or alleviate poverty among such individuals and 
     families.
       ``(3) Minimum expense requirement.--
       ``(A) In general.--An organization meets the requirements 
     of this paragraph only if the Secretary reasonably expects 
     that the annual poverty program expenses of such organization 
     will not be less than 70 percent of the annual aggregate 
     expenses of such organization.
       ``(B) Poverty program expense.--For purposes of 
     subparagraph (A)--
       ``(i) In general.--The term `poverty program expense' means 
     any expense in providing program services referred to in 
     paragraph (2).
       ``(ii) Exceptions.--Such term shall not include--

       ``(I) any management or general expense,
       ``(II) any expense for the purpose of influencing 
     legislation (as defined in section 4911(d)),
       ``(III) any expense primarily for the purpose of 
     fundraising, and
       ``(IV) any expense for a legal service provided on behalf 
     of any individual referred to in paragraph (2).

       ``(4) Election to treat poverty programs as separate 
     organization.--
       ``(A) In general.--An organization may elect to treat one 
     or more programs operated by it as a separate organization 
     for purposes of this section.
       ``(B) Effect of election.--If an organization elects the 
     application of this paragraph, the organization, in 
     accordance with regulations, shall--
       ``(i) maintain separate accounting for revenues and 
     expenses of programs with respect to which the election was 
     made,
       ``(ii) ensure that contributions to which this section 
     applies be used only for such programs, and
       ``(iii) provide for the proportional allocation of 
     management, general, and fundraising expenses to such 
     programs to the extent not allocable to a specific program.
       ``(C) Reporting requirements.--An organization shall not be 
     required to file any return under section 6033 with respect 
     to any programs treated as a separate organization under this 
     paragraph, except that if the organization is otherwise 
     required to file such a return, such organization shall 
     include on such return the percentages described in the last 
     sentence of section 6033(b) which are determined with respect 
     to such separate organization.
       ``(5) Additional requirements for solicitation 
     organizations.--The requirements of this paragraph are met if 
     the organization--
       ``(A) maintains separate accounting for revenues and 
     expenses, and
       ``(B) makes available to the public its administrative and 
     fundraising costs and information as to the organizations 
     receiving funds from it and the amount of such funds.
       ``(e) Coordination With Deduction for Charitable 
     Contributions.--
       ``(1) Credit in lieu of deduction.--The credit provided by 
     subsection (a) for any qualified charitable contribution 
     shall be in lieu of any deduction otherwise allowable under 
     this chapter for such contribution.
       ``(2) Election to have section not apply.--A taxpayer may 
     elect for any taxable year to have this section not apply.''
       (b) Returns.--
       (1) Qualified charities required to provide copies of 
     annual return.--Subsection (e) of section 6104 of such Code 
     (relating to public inspection of certain annual returns and 
     applications for exemption) is amended by adding at the end 
     the following new paragraph:
       ``(3) Qualified charities required to provide copies of 
     annual return.--
       ``(A) In general.--Every qualified charity (as defined in 
     section 23(d)) shall, upon request of an individual made at 
     an office where such organization's annual return filed under 
     section 6033 is required under paragraph (1) to be available 
     for inspection, provide a copy of such return to such 
     individual without charge other than a reasonable fee for any 
     reproduction and mailing costs. If the request is made in 
     person, such copies shall be provided immediately and, if 
     made other than in person, shall be provided within 30 days.
       ``(B) Period of availability.--Subparagraph (A) shall apply 
     only during the 3-year period beginning on the filing date 
     (as defined in paragraph (1)(D) of the return requested).''
       (2) Additional information.--Section 6033(b) of such Code 
     is amended by adding at the end the following new flush 
     sentence:

     ``Each qualified charity (as defined in section 23(d)) to 
     which this subsection otherwise applies shall also furnish 
     each of the percentages determined by dividing the following 
     categories of the organization's expenses for the year by its 
     total expenses for the year: program services; management and 
     general; fundraising; and payments to affiliates.''
       (c) Clerical Amendment.--The table of sections for subpart 
     A of part IV of subchapter A of chapter 1 of such Code is 
     amended by inserting after the item relating to section 22 
     the following new item:

``Sec. 23. Credit for certain charitable contributions.''

       (d) Effective Date.--The amendments made by this section 
     shall apply to contributions made after the 90th day after 
     the date of the enactment of this Act in taxable years ending 
     after such date.
     SEC. 3. DEDUCTION FOR 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 deductions 
     for the taxable year, the amount allowable under subsection 
     (a) for the taxable year shall be taken into account as a 
     direct charitable deduction under section 63.''
       (b) Direct Charitable Deduction.--
       (1) In general.--Subsection (b) of section 63 of such Code 
     is amended by striking ``and'' at the end of paragraph (1), 
     by striking the period at the end of paragraph (2) and 
     inserting ``, and'', and by adding at the end thereof the 
     following new paragraph:
       ``(3) the deduction for charitable contributions under 
     section 170(m).''
       (2) 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 the 
     following new paragraph:
       ``(3) the deduction for charitable contributions under 
     section 170(m).''
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1995.

     SEC. 4. CHARITABLE CONTRIBUTION DEDUCTION NOT SUBJECT TO 
                   OVERALL LIMITATION ON ITEMIZED DEDUCTIONS.

       (a) In General.--Subsection (c) of section 68 of the 
     Internal Revenue Code of 1986 (relating to overall limitation 
     on itemized deductions) is amended by striking ``and'' at the 
     end of paragraph (2), by striking the period at the end of 
     paragraph (3) and inserting ``, and'', and by adding at the 
     end thereof the following new paragraph:

[[Page S 10825]]

       ``(4) the deduction under section 170 (relating to 
     charitable, etc., contributions and gifts).''
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to taxable years beginning after December 31, 
     1995.

     SEC. 5. CHARITABLE CONTRIBUTIONS MADE BEFORE FILING OF 
                   RETURN.

       (a) In General.--Subsection (a) of section 170 of the 
     Internal Revenue Code of 1986 is amended by adding at the end 
     the following new paragraph:
       ``(4) Time when contributions deemed made.--The taxpayer 
     may elect to treat any charitable contribution which is made 
     not later than the time prescribed by law for filing the 
     return for the taxable year (not including extensions 
     thereof) as being made on the last day of such taxable year. 
     Such an election, once made, shall be irrevocable.''
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1994.

     SEC. 6. FINANCIAL ACCOUNTABILITY REPORTING REQUIREMENT FOR 
                   GOVERNMENTAL POVERTY AND WELFARE PROGRAMS.

       (a) In General.--Each applicable welfare program shall 
     publish in the Federal Register and other publications 
     generally available to the public within a reasonable period 
     of time following the end of a fiscal year the following 
     information for the fiscal year:
       (1) Information required to be included on a return under 
     section 6033 of the Internal Revenue Code of 1986 by an 
     organization described in section 501(c)(3) of such Code, 
     including expenses for program services, administrative and 
     general costs, and fundraising.
       (2) The percentages determined by dividing the following 
     categories of the program's expenses for the year by its 
     total expenses for the year: program services; management and 
     general; and fundraising.
       (b) Additional Availability.--Each applicable welfare 
     program shall make the information described in subsection 
     (a) available at its principal office and at any of its 
     regional or district offices. Upon request of an individual 
     made at any such office, the program shall provide a copy of 
     the information to such individual without charge other than 
     a reasonable fee for any reproduction and mailing costs. Such 
     request shall be met within 30 days (or immediately if made 
     in person).
       (c) Applicable Welfare Program.--For purposes of this 
     section, an applicable welfare program is a Federal, State, 
     or local welfare or public assistance program for which 
     Federal funds are appropriated.

     SEC. 7. STANDARDS FOR DETERMINING SUCCESS OF GOVERNMENTAL 
                   WELFARE PROGRAMS.

       (a) In General.--The Comptroller General of the United 
     States shall conduct a study with respect to applicable 
     welfare programs to develop standards to determine--
       (1) whether such programs meet the needs for which the 
     programs were established, and
       (2) if such programs meet such needs, whether they do so in 
     a cost-effective manner.

     For purposes of this subsection, the term ``applicable 
     welfare program'' has the meaning given such term by section 
     6(c).
       (b) Report.--Not later than 1 year after the date of the 
     enactment of this Act, the Comptroller General of the United 
     States shall report to the Congress the results of the study 
     conducted under subsection (a), including the standards 
     described therein.
                                                                    ____

                    Comprehensive Charity Reform Act


                     section i. Charity tax credit

       Provides a $500 tax credit ($1,000 for married persons 
     filing jointly) for taxpayers who make charitable 
     contributions to organizations focused on fighting or 
     alleviating poverty.
       Organizations must spend 70% of their total expenses on 
     poverty program expenses in order to qualify for the credit.
       Multi-faceted organizations or churches that might not be 
     entirely focused on poverty have the flexibility to elect to 
     treat a poverty program as a separate organization provided 
     that 70% of the program's aggregate expenses go toward 
     poverty program services.
       Organizations that take the election must maintain separate 
     accounting for the program, ensure that contributions are 
     only used for the program, and provide information regarding 
     the allocation of funds.
       Organizations that are organized for the purpose of 
     soliciting and collecting funds can raise funds on behalf of 
     qualified charities provided that at least 85% of the funds 
     collected go directly to qualified charities and these 
     organization comply with the reporting requirements in the 
     bill.
       Organizations that currently file tax form 990 must make 
     their returns available to the public. In addition, these 
     organizations must break down their program services; 
     management and general; fundraising; and payments to 
     affiliates as a percentage of total expense.
       Taxpayers must take the credit in lieu of a deduction for 
     the same contribution.


  section ii. deduction for charitable contributions for non-itemizers

       Allows individuals who do not itemize on their taxes to 
     take a deduction for all charitable contributions.


       section iii. remove charitable contributions from 3% floor

       Allows individuals to exclude charitable donations from the 
     overall limitation on itemized deductions (the 3% floor).


section iv. extend the deadline for charitable donations until april 15

       Extends the deadline for making tax-deductible charitable 
     donations until April 15th.


     section v. financial accountability reporting requirement for 
               governmental poverty and welfare programs

       Requires that any government poverty assistance program 
     that receive federal funds make available to the public an 
     accounting of their budget broken down on a percentage basis 
     of program services, administrative, general, and fundraising 
     costs so that taxpayers will be able to see how their tax 
     dollars are actually being spent.


   section vi. gao standards for determining success of governmental 
                            welfare programs

       Instructs the GAO to develop standards to determine the 
     success rates and cost effectiveness of government welfare 
     programs.
       The ``Comprehensive Charity Reform Act'' has several 
     elements.


                           charity tax credit

       The charity tax credit recognizes that society has a 
     responsibility to help the most needy. Organizations that 
     focus on providing poverty relief can elect to receive 
     special treatment under the tax code for some of their 
     contributions. Reform of antipoverty efforts should not just 
     focus on federal, state, and local government programs but on 
     encouraging the antipoverty efforts of private charities who 
     often times have a much better success rate. The charity tax 
     credit will allow taxpayers to choose for themselves who 
     should receive a portion of their tax dollars--traditional 
     government programs OR nonprofit charities who generally are 
     more efficient and have a much better sense for what their 
     local population needs.
       As the current welfare debate shows we as a society are 
     tired of the government monopoly in this area. The welfare 
     system we have today is expensive, bureaucratic, impersonal 
     and generic.
       Private nonprofit and religious organizations take a 
     holistic approach to rehabilitating a person who has 
     temporarily found themselves in a very difficult situation. 
     The emphasis here is on temporary--antipoverty assistance is 
     not intended to be a way of life but rather a tool by which 
     to change behavior and encourage personal responsibility for 
     one's own life.
       The charity tax credit will empower all taxpayers to take a 
     role in how poverty relief efforts are structured. Currently, 
     only about 28% of taxpayers itemize their tax returns and 
     therefore, are eligible for favorable tax treatment for 
     charitable giving. This bill will allow all taxpayers, 
     whether they itemize or not, to receive a dollar for dollar 
     credit for contributing to poverty fighting organizations. 
     Inspiring more taxpayers to contribute to charities, will 
     make people more aware of antipoverty efforts in their 
     community, and may inspire them to volunteer their time as 
     well.
       This legislation would allow nonprofit poverty fighting 
     organizations to qualify for charity tax credit contributions 
     provided that these organizations spend at least 70% of their 
     total expenses on program services focused on poverty 
     efforts. Multi-faceted organizations or churches that might 
     not be entirely focused on poverty have the flexibility to 
     elect to treat a poverty program as a separate organization 
     provided that 70% of the program's expenses go toward poverty 
     program services. Organizations that take the election must 
     maintain separate accounting for the program, ensure that 
     contributions are only used for the program and provide 
     information regarding the allocation of funds.
       Determining what constitutes poverty fighting or 
     alleviating poverty, is not intended to require soup kitchens 
     or homeless shelters to ask for income statements from 
     individuals seeking assistance from these types of programs. 
     The Secretary in drafting regulations can use common sense 
     discretion in determining if a program or organization 
     focuses on poverty relief. Obviously, if an individual is 
     standing in line for food then that person is poor and needs 
     assistance.
       In addition, qualified charities who currently file IRS 
     form 990 must take their annual returns available to the 
     public and calculate the breakdown of program services, 
     management and general costs, fundraising expenditures and 
     payment to affiliates as a percentage of total expenses. 
     Nonprofits are already reporting this information on the IRS 
     tax form 990. A great effort has been made to ensure that the 
     reporting requirements necessary for enactment of this 
     legislation would comport with the current requirements. And, 
     the legislation does not expend the current scope of which 
     nonprofits must file 990s. However, it will require that 
     organizations that are currently exempt from filing the 990 
     such as churches to file the appropriate financial 
     information about the poverty fighting program that is 
     eligible for charity tax credit funds. However, it is 
     important to emphasize that organizations do not 
     automatically qualify for this treatment they must decide for 
     themselves that they want to participate in the charity tax 
     credit program and therefore adhere to the requirements of 
     the program.


                  above the line charity tax deduction

       For taxpayers who do not itemize deductions on their tax 
     returns (non-itemizers), this bill allows those taxpayers to 
     deduct their charitable contributions before determining 
     their Adjusted Gross Income (AGI). 

[[Page S 10826]]
     The most recent figures available (1992) find that non-itemizers 
     account for over 70% of those who file tax returns--81 
     million taxpayers. Of this group, 95% have incomes less than 
     $50,000. According to figures from a group which tracks such 
     information, Independent Sector, low and middle income 
     Americans, give as a percentage of income, 30% more to 
     charity than the average American.
       While donations to charity are primarily motivated by 
     altruistic concerns, it is clear that nonitemizers who give 
     to charity are sensitive to tax considerations. Experience 
     from the period of time when nonitemizers were permitted to 
     take a charitable deduction exemplifies this point. In 1985, 
     nonitemizers could deduct 50% of their contributions and, 
     according to the IRS, they gave $9.5 billion. In 1986, when 
     taxpayers could deduct a full 100% of their contributions, 
     they gave $13.4 billion--a 40% increase.
       The loss of this tax incentive translated into nonitemizers 
     giving significantly less to charity than itemizers. Clearly, 
     we should empower everyone--not just people of means to give 
     back
      to their community through charitable donations.


         charitable contributions not subject to itemized limit

       This bill would remove charitable contributions from what 
     is known as the ``3% floor.'' The 3% floor was enacted as 
     part of the 1990 tax bill and was intended to reduce the 
     amount of itemized deductions for those earning in excess of 
     $100,000 (this figure was indexed and will be $114,700 for 
     1995). For these taxpayers, itemized deductions (including 
     charitable contributions) are reduced by 3% of adjusted gross 
     income in excess of the threshold amount. By taking 
     charitable contributions out of this formula we offer 
     individuals in this category a greater incentive to give.


                extension of charitable giving deadline

       This bill extends the deadline for making tax-deductible 
     charitable donations until April 15th. Most taxpayers start 
     taking note of allowable deductions when they start to fill 
     out their tax returns, only to realize all too late that they 
     could have given more to charity in the previous year and 
     lower their tax liability. Current law already allows 
     deductions for contributions to IRAs and Keogh plans up until 
     filing time. By extending similar treatment to charitable 
     contributions we can (1) assist with taxpayer's planning (2) 
     increase the incentive for taxpayers facing penalties for 
     underwitholding, and (3) help advertise the value of 
     charitable giving tax incentive. We can also encourage those 
     whose giving is curtailed at the end of the year by the 
     holiday cash crunch.


financial accountability reporting requirement for governmental poverty 
                          and welfare programs

       This section of the bill requires that all poverty/welfare 
     assistance government programs (federal, state, and local) 
     that receive any federal funding to disclose and make 
     available to the public how the program dollars are spent by 
     outlining as a percentage of total expenses program services, 
     administrative, general costs and fundraising (if 
     applicable). With billions dollars being spent on government 
     poverty fighting programs, taxpayers deserve to know exactly 
     where their dollars are going. All too often key figures are 
     buried in the trenches never to see the light of day.


             gao standards for government welfare programs

       In order to hold government welfare programs more 
     accountable for the taxpayer dollars they are spending, this 
     legislation instructs the GAO to develop success and cost 
     effectiveness standards. This will enable taxpayers as well 
     as elected officials to evaluate if the government programs 
     are actually accomplishing their stated purpose and doing so 
     in a cost effective manner.


                               conclusion

       I believe this legislation will make great strides in 
     ensuring that nonprofit private organizations take a much 
     greater role in caring for our society's ailments. It is time 
     that we recognize that government is not the answer to our 
     social failings--its clearly too big and too bureaucratic to 
     address these concerns. However, smaller private nonprofit 
     organizations and religious organizations can have a 
     tremendous influence the way we care for the downtrodden of 
     our society.
                                 ______

      By Mr. STEVENS (for himself, Mr. Pryor, and Mr. Roth):
  S. 1080. A bill to amend chapter 84 of title 5, United States Code, 
to provide additional investment funds for the thrift savings plan; to 
the Committee on Governmental Affairs.


            THE THRIFT SAVINGS INVESTMENT FUNDS ACT OF 1995

  Mr. STEVENS. Mr. President, the thrift savings plan, TSP, was created 
in 1986 as one of three tiers of a new Federal employees' retirement 
system. I was the original sponsor of the Senate bills which led up to 
the passage of this landmark legislation. From all accounts, the TSP 
has proven to be a valuable retirement tool for all Federal employees.
  Current law limits TSP investments to three options--the Government 
securities investment (G) fund, the common stock index investment (C) 
fund, and the fixed income investment (F) fund. This limitation was the 
result of a compromise in conference--the Senate-passed bill allowed 
additional funds at the discretion of the Federal Retirement Thrift 
Investment Board.
  For some time now, Federal employee participants in the TSP have 
requested additional investment opportunities. In 1992, the Board began 
to look into the possibility of expanding into additional funds. As a 
result of that review, the Board recently recommended the addition to 
two funds--a small capitalization stock index investment fund and an 
international stock index investment fund.
  Today I introduce legislation to authorize these two additional 
investment funds for the thrift savings plan. I am pleased to note that 
Senators Pryor and Roth have agreed to cosponsor this bill. I ask 
unanimous consent that the text of the bill and a section-by-section 
analysis prepared by the Federal Retirement Thrift Investment Board be 
reprinted in the Record.
  Mr. President, I congratulate the Federal Retirement Thrift 
Investment Board for their decision to increase the investment 
opportunities for Federal employee investors and urge them to move 
quickly with their computer redesign program so that these new funds, 
once approved by Congress, can be available as soon as possible.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:
                                S. 1080
       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 ``Thrift Savings Investment 
     Funds Act of 1995''.

     SEC. 2. ADDITIONAL INVESTMENT FUNDS FOR THE THRIFT SAVINGS 
                   PLAN.

       Section 8438 of title 5, United States Code, is amended--
       (1) in subsection (a)--
       (A) by redesignating paragraphs (5) through (8) as 
     paragraphs (6) through (9), respectively;
       (B) by inserting after paragraph (4) the following new 
     paragraph:
       ``(5) the term `International Stock Index Investment Fund' 
     means the International Stock Index Investment Fund 
     established under subsection (b)(1)(E);'';
       (C) in paragraph (8) (as redesignated by subparagraph (A) 
     of this paragraph) by striking out ``and'' at the end 
     thereof;
       (D) in paragraph (9) (as redesignated by subparagraph (A) 
     of this paragraph)--
       (i) by striking out ``paragraph (7)(D)'' in each place it 
     appears and inserting in each such place ``paragraph 
     (8)(D)''; and
       (ii) by striking out the period and inserting in lieu 
     thereof a semicolon and ``and''; and
       (E) by adding at the end thereof the following new 
     paragraph:
       ``(10) the term `Small Capitalization Stock Index 
     Investment Fund' means the Small Capitalization Stock Index 
     Investment Fund established under subsection (b)(1)(D).''; 
     and
       (2) in subsection (b)--
       (A) in paragraph (1)--
       (i) in subparagraph (B) by striking out ``and'' at the end 
     thereof;
       (ii) in subparagraph (C) by striking out the period and 
     inserting in lieu thereof a semicolon; and
       (iii) by adding at the end thereof the following new 
     subparagraphs:
       ``(D) a Small Capitalization Stock Index Investment Fund as 
     provided in paragraph (3); and
       ``(E) an International Stock Index Investment Fund as 
     provided in paragraph (4).''; and
       (B) by adding at the end thereof the following new 
     paragraphs:
       ``(3)(A) The Board shall select an index which is a 
     commonly recognized index comprised of common stock the 
     aggregate market value of which represents the United States 
     equity markets excluding the common stocks included in the 
     Common Stock Index Investment Fund.
       ``(B) The Small Capitalization Stock Index Investment Fund 
     shall be invested in a portfolio designed to replicate the 
     performance of the index in subparagraph (A). The portfolio 
     shall be designed such that, to the extent practicable, the 
     percentage of the Small Capitalization Stock Index Investment 
     Fund that is invested in each stock is the same as the 
     percentage determined by dividing the aggregate market value 
     of all shares of that stock by the aggregate market value of 
     all shares of all stocks included in such index.
       ``(4)(A) The Board shall select an index which is a 
     commonly recognized index comprised of stock the aggregate 
     market value of which is a reasonably complete representation 
     of the international equity markets excluding the United 
     States equity markets.
       ``(B) The International Stock Index Investment Fund shall 
     be invested in a portfolio designed to replicate the 
     performance of the index in subparagraph (A). The portfolio 

[[Page S 10827]]
     shall be designed such that, to the extent practicable, the percentage 
     of the International Stock Index Investment Fund that is 
     invested in each stock is the same as the percentage 
     determined by dividing the aggregate market value of all 
     shares of that stock by the aggregate market value of all 
     shares of all stocks included in such index.''.

     SEC. 3. ACKNOWLEDGEMENT OF INVESTMENT RISK.

       Section 8439(d) of title 5, United States Code, is amended 
     by striking out ``Each employee, Member, former employee, or 
     former Member who elects to invest in the Common Stock Index 
     Investment Fund or the Fixed Income Investment Fund described 
     in paragraphs (1) and (3),'' and inserting in lieu thereof 
     ``Each employee, Member, former employee, or former Member 
     who elects to invest in the Common Stock Index Investment 
     Fund, the Fixed Income Investment Fund, the International 
     Stock Index Investment Fund, or the Small Capitalization 
     Stock Index Investment Fund, defined in paragraphs (1), (3), 
     (5), and (10),''.

     SEC. 4. EFFECTIVE DATE.

       This Act shall take effect on the date of enactment of this 
     Act, and the Funds established under this Act shall be 
     offered for investment at the earliest practicable election 
     period (described in section 8432(b) of title 5, United 
     States Code) as determined by the Executive Director in 
     regulations.
                                                                    ____

                      Section-by-Section Analysis

       The proposed legislation would add two new investment funds 
     to those currently offered by the Thrift Savings Fund: a 
     Small Capitalization Stock Index Fund and an International 
     Stock Index Investment Fund.
       Section 1 of the proposed legislation designates its title 
     as the ``Thrift Savings Investment Funds Act of 1995.''
       Section 2 of the proposed legislation makes changes to 
     section 8438 of title 5, U.S.C., which are necessary to 
     authorize the addition of the two new investment funds. The 
     legislation generally tracks the language currently found in 
     section 8438 with respect to the Common Stock Index 
     Investment Fund, to which the two new funds bear the greatest 
     resemblance. Like that fund, the two new funds are required 
     to be index funds which invest in indices that represent 
     certain defined sectors of the equity markets.
       Subsection (1) of section 2 adds the two new funds to the 
     list of definitions found in subsection (a) of section 8438.
       Subsection (2)(A) of section 2 makes changes necessary to 
     add the two new funds to the list of those the Federal 
     Retirement Thrift Investment Board is authorized to establish 
     by subsection (b)(1) of section 8438. This is consistent with 
     the statutory treatment of the current investment funds. That 
     is, the Board is given the responsibility to choose indices 
     and establish investment funds that fall within the 
     parameters for each fund as set forth in the statute.
       Subsection (2)(B) of section 2 adds two new paragraphs to 
     section 8438(b) which describe the parameters of the two new 
     investment funds.
       New paragraph (3) of section 8438(b) describes the 
     requirements for the Small Capitalization Stock Index 
     Investment Fund. Under subparagraph (A) of paragraph (3), the 
     Board must choose a commonly recognized index that represents 
     the market value of the United States equity markets, but 
     excluding that portion of the equity markets represented by 
     the common stocks included in the Common Stock Index 
     Investment Fund. It is intended, therefore, that the Small 
     Capitalization Stock Index Investment Fund will be designed 
     to replicate the performance of an index representing small 
     capitalization stocks not held in the Common Stock Index 
     Investment Fund. Subparagraph (B) of paragraph (3) requires 
     the Board to invest the fund in a portfolio designed to 
     replicate the performance of the index established in 
     subparagraph (A).
       New paragraph (4) of section 8438(b) describes the 
     requirements for the International Stock Index Investment 
     Fund. Under subparagraph (A) of paragraph (4), the Board must 
     choose a commonly recognized index that is a reasonably 
     complete representation of the international equity markets. 
     The term ``international equity markets'' excludes the United 
     States equity markets, which are represented by the other 
     funds. Subparagraph (B) of paragraph (4) requires the Board 
     to invest the fund in a portfolio designed to replicate the 
     performance of the index established in subparagraph (A).
       Section 3 of the proposed legislation amends section 
     8439(d) of title 5, U.S.C., to add a reference to the two new 
     investment funds in the section requiring that each Thrift 
     Savings Plan participant who invests in one of the enumerated 
     funds sign an acknowledgement stating that he or she 
     understands that the investment is made at the participant's 
     own risk, that the Government will not protect the 
     participant against any loss on such investment, and that a 
     return on the investment is not guaranteed by the Government. 
     As is the case with the Common Stock Index Investment Fund 
     and the Fixed Income Investment Fund, the Small 
     Capitalization Stock Index Investment Fund and the 
     International Stock Index Investment Fund each carry the risk 
     that an investment therein may lose value. Therefore, it is 
     appropriate to require the participant to sign the same 
     acknowledgement of risk statement prior to investing in 
     either of these funds.
       Section 4 provides that the amendments made by this 
     legislation will become effective immediately. The additional 
     funds will be offered to participants for investment in the 
     soonest practicable TSP election period as determined by the 
     Executive Director in regulations. By law, election periods 
     are conducted every six months. The Board has recently 
     determined to develop an entirely new computer software 
     system, entailing uncertain lead times for procurement 
     decisions and development processes. The new system's 
     development will dictate the timeframe for the offering of 
     new funds, which will be coordinated with its implementation.
                                 ______

      By Mr. DODD (for himself, and Mr. Lieberman):
  S. 1082. A bill to require the Secretary of the Treasury to mint 
coins in commemoration of the bicentennial of the Old State House of 
Connecticut; to the Committee on Banking, Housing, and Urban Affairs.

                          ____________________