[Congressional Record Volume 143, Number 118 (Tuesday, September 9, 1997)]
[Extensions of Remarks]
[Page E1700]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




            LEGISLATION REGARDING DONATING FOOD TO THE NEEDY

                                 ______
                                 

                           HON. TONY P. HALL

                                of ohio

                    in the house of representatives

                       Tuesday, September 9, 1997

  Mr. HALL of Ohio. Mr. Speaker, I rise to join my colleague from 
California, Mr. Campbell, in introducing legislation to amend the 
Internal Revenue Code to remove a significant barrier that discourages 
businesses and farmers from donating wholesome food to the needy.
  Providing food to the poor can be a costly undertaking, especially 
with regard to perishable food. The food must be collected, packaged, 
transported, and distributed. However, businesses do not receive the 
same tax deduction for charitable donations of food as for other 
inventory. Food that is not sold through normal distribution channels 
is considered by the IRS to have no market value; and therefore, the 
deduction is limited only to cost of the raw materials. This means that 
it makes more ecoomic sense for businesses to discard the food than to 
donate it. The bill that we are introducing today will encourage 
donations by treating food as other inventory for tax purposes.
  Our bill is supported by industry and charitable organizations that 
deal with food including Second Harvest, the National Council of Chain 
Restaurants; the National Farmers Union; and Food Chain.
  Incentives for food donations is one of the topics that will be 
discussed at the National Summit on Food Recovery and Gleaning which is 
sponsored by the Department of Agriculture and several groups including 
the Congressional Hunger Center. The opening session will be held 10 
a.m. to 12 noon on Monday, September 15 at Mellon Auditorium 
(Constitution Avenue between 12th and 14th Streets, NW).
  The text of the bill follows:

                                 H.R.--

       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 ``Good Samaritan Tax Act''.

     SEC. 2. CHARITABLE DEDUCTION FOR CONTRIBUTIONS OF FOOD 
                   INVENTORY.

       (a) In General.--Subsection (e) of section 170 of the 
     Internal Revenue Code of 1986 (relating to certain 
     contributions of ordinary income and capital gain property) 
     is amended by adding at the end the following new paragraph:
       ``(7) Special rule for contributions of food inventory.--
       ``(A) Contributions by non-corporate taxpayers.--In the 
     case of a charitable contribution of food, paragraph (3) 
     shall be applied without regard to whether or not the 
     contribution is made by a corporation.
       ``(B) Determination of fair market value.--For purposes of 
     this section, in the case of a charitable contribution of 
     food which is a qualified contribution (within the meaning of 
     paragraph (3)) and which, solely by reason of internal 
     standards of the taxpayer, lack of market, or similar 
     circumstances, cannot or will not be sold, the fair market 
     value of such contribution shall be determined--
       ``(i) without regard to such internal standards, such lack 
     of market, or such circumstances, and
       ``(ii) if applicable, by taking into account the price at 
     which the same or similar food items are sold by the taxpayer 
     at the time of the contribution (or, if not so sold at such 
     time, in the recent past).''
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.

     

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