[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 1924 Introduced in Senate (IS)]
107th CONGRESS
2d Session
S. 1924
To promote charitable giving, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
February 8, 2002
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) introduced the following bill; which was read twice and
referred to the Committee on Finance
_______________________________________________________________________
A BILL
To promote charitable giving, and for other purposes.
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.
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,
``(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 calendar year--
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.''.
(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
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 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.--
(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.
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.
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.
(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)''.
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