[Congressional Record Volume 149, Number 21 (Wednesday, February 5, 2003)]
[Senate]
[Pages S1978-S1979]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. FEINGOLD:
  S. 301. A bill to amend the Internal Revenue Code of 1986 to provide 
that reimbursements for costs of using passenger automobiles for 
charitable and other organizations are excluded from gross income, and 
for other purposes; to the Committee on Finance.

  Mr. FEINGOLD. Mr. President, I am pleased to reintroduce legislation 
today that would increase the mileage reimbursement rate for 
volunteers.
  Under current law, when volunteers use their cars for charitable 
purposes, the volunteers may be reimbursed up to 14 cents per mile for 
their donated services without triggering a tax consequence for either 
the organization or the volunteers. If the charitable organization 
reimburses any more than that, they are required to file an information 
return indicating the amount, and the volunteers must include the 
amount over 14 cents per mile in their taxable income. By contrast, the 
mileage reimbursement level currently permitted for businesses is 36 
cents per mile.
  At the time when government is asking volunteers and volunteer 
organizations to bear a greater burden of delivering essential 
services, the 14 cents per mile limit is posing a very real hardship on 
charitable organizations and other nonprofit groups. I have heard from 
a number of people in Wisconsin on the need to increase this 
reimbursement limit.
  At a listening session I held last summer, one organization, the 
Portage County Department on Aging, explained just how important 
volunteer drivers are to their ability to provide services to seniors 
in that county. The Department on Aging reported that in 2001, 54 
volunteer drivers delivered meals to homes and transported people to 
medical appointments, meal sites, and other essential services. The 
Department noted that their volunteer drivers provided 4,676 rides, and 
drove nearly 126,000 miles. They also delivered 9,385 home-delivered 
meals, and nearly two-thirds of the drivers logged more than 100 miles 
per month in providing these needed services. Together, volunteers 
donated over 5,200 hours last year, and as the Department notes, at the 
rate of minimum wage, that amounts to over $27,000, not including other 
benefits.
  As many of my colleagues know, the senior meals program is one of the 
most vital services provided under the Older Americans Act, and 
ensuring that meals can be delivered to seniors or that seniors can be 
taken to meal sites is an essential part of that program. 
Unfortunately, Federal support for the senior nutrition programs has 
stagnated in recent years. This has increased pressure on local 
programs to leverage more volunteer services to make up for lagging 
federal support. The 14 cents per mile reimbursement limit, though, 
increasingly poses a barrier to obtaining those contributions. Portage 
County reports that many of their volunteers cannot afford to offer 
their services under such a restriction. And if volunteers cannot be 
found, their services will have to be replaced by contracting with a 
provider, greatly increasing costs to the Department, costs that come 
directly out of the pot of funds available to pay for meals and other 
services.
  By contrast, businesses do not face this restrictive mileage 
reimbursement limit. The comparable mileage rate for someone who works 
for a business is currently 36 cents per mile. This disparity means 
that a business hired to deliver the same meals delivered by volunteers 
for Portage County may reimburse their employees over double the amount 
permitted the volunteer without a tax consequence.
  This doesn't make sense. The 14 cents per mile volunteer 
reimbursement limit is badly outdated. According to the Congressional 
Research Service, Congress first set a reimbursement rate of 12 cents 
per mile as part of the Deficit Reduction Act of 1984, and did not 
increase it until 1997, when the level was raised slightly, to 14 cents 
per mile, as part of the Taxpayer Relief Act of 1997.
  The bill I am introducing today is identical to a measure I 
introduced in the 107th Congress. It raises the limit on volunteer 
mileage reimbursement to the level permitted to businesses. It is 
essentially the same provision passed by the Senate as part of a tax 
bill passed in 1999 that was vetoed by President Clinton. At the time 
of the 1999 measure, the Joint Committee on Taxation, JCT, estimated 
that the mileage reimbursement provision would result in the loss of $1 
million over the five-year fiscal period from 1999 to 2004. The revenue 
loss was so small that the JCT did not make the estimate on a year by 
year basis.
  Though the revenue loss is small, it is vital that we do everything 
we can to move toward a balanced budget, and to that end I have 
included a provision to fully offset the cost of the measure and make 
it deficit neutral. The offset provision would impose a civil penalty 
of up to $5,000 on failure to report interest in foreign financial 
transactions. During the 107th Congress, that provision was included in 
the CARE Act legislation by the Senate Finance Committee.
  I urge my colleagues to support this measure. It will help ensure 
charitable organizations can continue to attract the volunteers that 
play such a critical role in helping to deliver services and

[[Page S1979]]

it will simplify the tax code both for nonprofit groups and the 
volunteers themselves.
  I ask unanimous consent that the text of the legislation be printed 
in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 301

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

     SECTION 1. MILEAGE REIMBURSEMENTS TO CHARITABLE VOLUNTEERS 
                   EXCLUDED FROM GROSS INCOME.

       (a) In General.--Part III of subchapter B of chapter 1 of 
     the Internal Revenue Code of 1986 is amended by inserting 
     after section 139 the following new section:

     ``SEC. 139A. MILEAGE REIMBURSEMENTS TO CHARITABLE VOLUNTEERS.

       ``(a) In General.--Gross income of an individual does not 
     include amounts received, from an organization described in 
     section 170(c), as reimbursement of operating expenses with 
     respect to use of a passenger automobile for the benefit of 
     such organization. The preceding sentence shall apply only to 
     the extent that such reimbursement would be deductible under 
     this chapter if section 274(d) were applied--
       ``(1) by using the standard business mileage rate 
     established under such section, and
       ``(2) as if the individual were an employee of an 
     organization not described in section 170(c).
       ``(b) No Double Benefit.--Subsection (a) shall not apply 
     with respect to any expenses if the individual claims a 
     deduction or credit for such expenses under any other 
     provision of this title.
       ``(c) Exemption From Reporting Requirements.--Section 6041 
     shall not apply with respect to reimbursements excluded from 
     income under subsection (a).''
       (b) Clerical Amendment.--The table of sections for part III 
     of subchapter B of chapter 1 of such Code is amended by 
     inserting after the item relating to section 139 and 
     inserting the following new item:

``Sec. 139A. Reimbursement for use of passenger automobile for 
              charity.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.

     SEC. 2. PENALTY ON FAILURE TO REPORT INTERESTS IN FOREIGN 
                   FINANCIAL ACCOUNTS.

       (a) In General.--Section 5321(a)(5) of title 31, United 
     States Code, is amended to read as follows:
       ``(5) Foreign financial agency transaction violation.--
       ``(A) Penalty authorized.--The Secretary of the Treasury 
     may impose a civil money penalty on any person who violates, 
     or causes any violation of, any provision of section 5314.
       ``(B) Amount of penalty.--
       ``(i) In general.--Except as provided in subparagraph (C), 
     the amount of any civil penalty imposed under subparagraph 
     (A) shall not exceed $5,000.
       ``(ii) Reasonable cause exception.--No penalty shall be 
     imposed under subparagraph (A) with respect to any violation 
     if--

       ``(I) such violation was due to reasonable cause, and
       ``(II) the amount of the transaction or the balance in the 
     account at the time of the transaction was properly reported.

       ``(C) Willful violations.--In the case of any person 
     willfully violating, or willfully causing any violation of, 
     any provision of section 5314--
       ``(i) the maximum penalty under subparagraph (B)(i) shall 
     be increased to the greater of--

       ``(I) $25,000, or
       ``(II) the amount (not exceeding $100,000) determined under 
     subparagraph (D), and

       ``(ii) subparagraph (B)(ii) shall not apply.
       ``(D) Amount.--The amount determined under this 
     subparagraph is--
       ``(i) in the case of a violation involving a transaction, 
     the amount of the transaction, or
       ``(ii) in the case of a violation involving a failure to 
     report the existence of an account or any identifying 
     information required to be provided with respect to an 
     account, the balance in the account at the time of the 
     violation.''
       (b) Effective Date.--The amendment made by this section 
     shall apply to violations occurring after the date of the 
     enactment of this Act.
                                 ______