[Congressional Record Volume 148, Number 10 (Friday, February 8, 2002)]
[Senate]
[Pages S546-S556]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
By 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):
S. 1924. A bill to promote charitable giving, and for other purposes;
to the Committee on Finance.
Mr. LIEBERMAN. Mr. President, I am truly proud to join Senators
Santorum, Bayh, Brownback, Bill Nelson, Cochran, Carnahan, Lugar,
Clinton and Hatch in introducing the Charity Aid, Recovery, and
Empowerment, or CARE, Act. This important bill responds to a
significant problem facing our nation: the social service needs of far
too many of our fellow citizens continue to go unmet, and we in
Congress must do more to bring additional resources to people in need
and to assist and empower the community and charitable groups seeking
to serve them.
A little over a year ago, Senator Santorum and I stood with President
Bush as he unveiled his Faith-based and Community Initiative. At the
time, I embraced the plan's worthy goals, to strengthen our
partnerships with charitable organizations and help them help more
people in need, but I cautioned that the devil truly would be in the
details.
As it turned out, those details, particularly as they related to
creating a larger, lawful space for faith-based groups at the public
policy table, proved more than devilish when it came to translating our
outline into legislation. It would not be an exaggeration to say that
many people had lost faith in ever seeing anything remotely resembling
a faith-based and community initiative.
But after many months of discussion, debate, and disappointments, I
am proud to report that we have finally reached a balanced, bipartisan
agreement, one that avoids the controversies that have to date bogged
down the President's plan in Congress, and that advances our common
interest in turning the growing good will in our country into more good
works in our communities. The truly bipartisan and diverse group of
cosponsors who join me today testify to that.
That good will is an unmistakable outgrowth of the September 11
attacks. I have never seen our country more united or more committed to
our common values, to freedom and tolerance, faith and family,
responsibility and community. With this bill, we hope to harness that
renewed American spirit to help make our country as good as our values,
and to help restore hope to people and places it has too often gone
missing.
We start by acknowledging that, in the wake of September 11 and the
weakened economy, there is an ongoing and consequential charity crunch.
With so much of our generosity focused on relief efforts, contributions
to other groups have dropped markedly and resources have dwindled
considerably, severely constraining the ability of many vital charities
to meet rising demands. A survey released this week by the Association
of Fundraising Professionals found that 44 percent of charities are
experiencing shortfalls in contributions.
This bill is designed in part to respond directly to that charity
crunch with a targeted two-year strategy to help leverage new public
and private funding for the nation's non-profits. It would create a
series of new tax incentives, including a meaningful deduction for non-
itemizers, to spur more charitable giving. And it would substantially
increase Federal funding for the Social Services Block Grant program,
which underwrites a broad range of critical programs, by more than $1
billion.
But this is not a short-term or short-sighted proposal. The CARE Act
employs a number of other tools to help empower community and faith-
based groups over the long haul and expand their capabilities, by
providing new forms of technical assistance that will make it easier
for smaller grassroots organizations to qualify for Federal aid. And it
builds on a proposal that Senator Santorum and I have long advocated to
expand the use of innovative Individual Development Accounts, IDAs, to
help low-income working families save and build assets and attain self-
sufficiency.
As you can tell, this is not just a faith-based bill. It is a civil
society bill. It is aimed at strengthening support for the broad range
of community, civic, and philanthropic groups, including the
religiously-affiliated, that are strengthening our social fabric. It
contains none of the troubling charitable choice provisions that were
in the House bill, H.R. 7, that undermined or preempted civil rights
laws and raised constitutional concerns.
What it does do, though, is to take some common-sense, narrowly-
targeted steps to knock down specific, documented barriers preventing
many smaller faith-based social service providers from fairly competing
for Federal funding. There's just no good reason to disqualify an
otherwise qualified faith-based group just because they have a cross on
their wall or a mezuzah on their door, or because they have a religious
name in their title, or they have praise for God in their mission
statement.
In moving forward with this bill, we as Democrats and Republicans
recognize that while charities are not a replacement for government,
government cannot do it all, either. In fact, there are some things
that government cannot do at all, like repairing the human spirit. That
is why it is so important for us to partner with the agents of civil
society, who, as we saw again and again after September 11, can fill in
those holes and fill up our hearts.
And that is why I am so pleased with this proposal, and proud of the
work we have done together to make it viable. In the end, the Good
Lord, not the devil, is in the details. I want to thank the President
for his leadership and his cooperation, and to thank my friend Senator
Santorum for his steadfast faith in that process. This is one CARE
package that will, I am confident, deliver a lot of good to a lot of
people, and which I believe a lot of Democrats and Republicans will
eagerly support.
People in need and the groups that help them are waiting for our
help. The CARE Act will bring it to them. I urge my colleagues to join
us in supporting it. I ask unanimous consent that the text of the bill
be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
S. 1924
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.
[[Page S547]]
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,
[[Page S548]]
``(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 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.''.
[[Page S549]]
(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
[[Page S550]]
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
[[Page S551]]
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.--
[[Page S552]]
(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.
[[Page S553]]
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.
[[Page S554]]
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.
[[Page S555]]
(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)''.
____
The Charity Aid, Recovery and Empowerment, (``CARE'') Act of 2002--
Section-by-Section Summary
overview
The Lieberman-Santorum CARE Act aims to tap into America's
renewed spirit of unity, community and responsibility in the
wake of September 11th to better respond to pressing social
problems and ultimately help more people in need. To do so,
it would leverage new support and resources for a broad range
of community and faith-based groups--including those that are
already working cooperatively with government to provide
critical services and improve people's lives, and those who
want to become part of that partnership.
This diverse universe of charitable organizations--which
proved once again after the terrorist attacks how effective
they are in meeting real human needs--is uniquely American
and forms the backbone of our civil society. The CARE Act
would strengthen that backbone through a broad array of tools
and strategies--(1) tax incentives to spur more private
charitable giving; (2) innovative programs to promote savings
and economic self-sufficiency for low-income families; (3)
technical assistance to help smaller social services
providers do more good works; (4) narrowly-targeted efforts
to remove unfair barriers facing faith-based groups in
competing fairly for federal aid; and (5) additional federal
funding for essential social service programs.
title i: charitable giving incentives
This section offers a series of targeted tax incentives to
spur additional charitable giving and thereby bring increased
resources to organizations helping those in need. Among other
things, these provisions would:
Create a charitable tax deduction of up to $400 for
individual taxpayers and $800 for couples who do not itemize
on their tax returns;
Allow IRA holders to make charitable contributions from
their accounts;
Provide an enhanced deduction for donations of food and
books to charitable organizations;
Reduce and simplfy the excise tax on foundations from 2
percent to 1 percent to encourage greater social investments;
Raise the contributions cap for subchapter C corporations
and expand incentives for S corporations to increase
corporate charitable giving; and
Modify the unrelated business income tax for charitable
remainder trusts.
These provisions are designed to respond to the immediate
challenges facing charities in the wake of the September 11th
attacks and the weakened economy, which have put a
significant drain on resources. These provisions, which are
effective through 2003, have not been officially scored by
the Joint Tax Committee, but are estimated to cost between
$8 billion and $10 billion.
title ii: individual development accounts
This section encompasses the bipartisan legislation that
Senators Lieberman and Santorum have introduced to expand the
use of Individual Development Accounts (IDAs) to encourage
low-income working families to save and build assets. IDAs
are special savings accounts that offer matching
contributions from the sponsoring bank or community
organization, on the condition that the proceeds go to buying
a home, starting or expanding a small business, or to pay for
post-secondary education--the assets necessary to provide
stability and self-sufficiency.
Initial IDA demonstrations around the country have proven
successful in changing the lives of account holders and
reducing their dependency on governmental and other social
services. The CARE Act aims to build on these successes and
increase the availability of IDAs, by significantly reducing
the cost for banks and community organizations to offer these
innovative accounts. Specifically, it would provide a dollar-
for-dollar tax credit to offset the matching contributions up
to $500 per account. This incentive, which is estimated to
cost $1.7 billion over the next 10 years, could help create
as many as 900,000 new accounts over that time.
title iii: equal treatment for non-governmental providers
This section addresses a recurring complaint of small
faith-based organizations--that certain government agencies
have refused to consider grant applicants with religious
names or those who use facilities containing religious art or
icons--with a narrowly-tailored solution. Specifically, it
states that an applicant may not be disqualified from
competing for government grants and contracts simply because
the applicant imposes religious criteria for membership on
its governing board, because the applicant's chartering
provisions contain religious language, because the applicant
has a religious name, or because the applicant uses
facilities containing religious art, icons scriptures or
other symbols. These provisions do not relieve any applicant
from meeting all other grant criteria or address the issues
of preemption or civil rights laws.
This section also addresses another problem many smaller
community and faith-based grassroots organizations face in
obtaining federal funding. These organizations often do not
have the capacity or resources to seek and administer a
government grant or contract, even though they may be best
positioned to deliver the services. To help them overcome
this hurdle, this section authorizes government agencies to
give grants or enter into cooperative agreements with larger
and more experienced organizations, who then will be
authorized to award subcontracts or subgrants to smaller
grassroots organizations, with whom they will work to
administer the grant.
title iv: 501(c)(3) EZ Pass
This section would make it easier for many charitable
groups to obtain a 501(c)(3) designation, and thereby make it
easier to qualify for Federal grants and contracts. 501(c)(3)
status confirms that an organization is a tax-exempt charity,
eligible to receive tax-exempt donations. Although any group
that applies for that status can hold itself out as a
501(c)(3) once it sends the IRS its application, a number of
government programs won't consider applications from any
group that hasn't yet received approval of its application
from the IRS--a process that sometimes can take several
months.
To help facilitate that process, the bill requires the IRS
to expedite the 501(c)(3) application of any group that needs
that status to apply for a government grant or contract. And,
in a effort to help the smallest of these groups, it requires
the IRS to waive the application fee for groups whose annual
revenues don't exceed $50,000.
[[Page S556]]
title v: Compassion capital fund
To help small community and faith-based organizations
better partner with the government and serve communities in
need, the bill creates a Compassion Capital Fund and
authorizes four agencies to distribute its resources. HHS,
DOJ, HUD and the Corporation for National and Community
Service will collectively have over $150 million to offer
technical assistance to community-based organizations for
activities such as writing and managing grants, assistance in
incorporating and gaining tax-exempt status, information on
capacity building and help researching and replicating model
social service programs.
title VI: social services Block Grant
This section would increase Federal funding for the Social
Services Block Grant (SSBG), which most charitable
organizations agree is a critically important and effective
program for meeting the needs of disadvantaged communities
and families. SSBG provides flexible funds to states for such
vital programs as Meals on Wheels, child and elderly
protective services, and support services for the disabled.
Over the last five years, however, the program has seen its
funding reduced by more than $1 billion.
The bill aims to restore funding for SSBG over the next two
years to its authorized level as dictated in the 1996 welfare
reform law. It would first increase the funding level to
$1.975 billion for fiscal year 2003; the program is currently
funded at $1.7 billion. It would then raise the funding level
to its full authorized level--$2.8 billion--for fiscal year
2004. This would represent an increase of $275 million for
the coming fiscal year, and more than $800 million for the
following year.
title vii: maternity group homes
This section is designed to advance one of the key goals of
welfare reform--helping teenage mothers achieve self-
sufficiency--by strengthening federal support for locally-run
maternity group home programs. The 1996 welfare reform law
requires that minors live at home under adult supervision or
in one of these maternity group homes in order to receive
benefits. Teenagers who are provided the opportunity to live
in these homes are more likely to continue their education or
receive job training, less likely to have a second teenage
pregnancy, and more likely to find gainful employment that
allows them to leave welfare. To help give more teenage
mothers this kind of opportunity, the bill creates a separate
funding stream for maternity group home programs and
authorizes $33 million in additional funding.
______