S.Amdt. 2966

1. Inserts new text after title VI

   Inserts

   In H.R. 4 · Reported to Senate

   (c) Effective Date.--This section and the amendments made by this section take effect on the date of enactment of this Act and apply to proposals to conduct a waiver, experimental, pilot, or demonstration project affecting the medicaid program under title XIX of the Social Security Act or the State children's health insurance program under title XXI of such Act, and to any proposals to amend such projects, that are approved or extended on or after such date of enactment.

   Inserted: TITLE __FOOD BANK DONATIONS

   Inserted: SEC. __01. CHARITABLE DEDUCTION FOR CONTRIBUTIONS OF FOOD INVENTORY.

   Inserted: (a) In General.--Subsection (e) of section 170 of the Internal Revenue Code of 1986 (relating to certain contributions of ordinary income and capital gain property) is amended by adding at the end the following new paragraph:

   Inserted: "(7) Special rule for contributions of food inventory.--For purposes of this section--

   Inserted: "(A) Contributions by non-corporate taxpayers.--In the case of a charitable contribution of food by a taxpayer, paragraph (3)(A) shall be applied without regard to whether or not the contribution is made by a corporation.

   Inserted: "(B) Limit on reduction.--In the case of a charitable contribution of food which is a qualified contribution (within the meaning of paragraph (3)(A), as modified by subparagraph (A) of this paragraph)--

   Inserted: "(i) paragraph (3)(B) shall not apply, and

   Inserted: "(ii) the reduction under paragraph (1)(A) for such contribution shall be no greater than the amount (if any) by which the amount of such contribution exceeds twice the basis of such food.

   Inserted: "(C) Determination of basis.--For purposes of this paragraph, if a taxpayer uses the cash method of accounting, the basis of any qualified contribution of such taxpayer shall be deemed to be 50 percent of the fair market value of such contribution.

   Inserted: "(D) Determination of fair market value.--In the case of a charitable contribution of 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, lack of market, or similar circumstances, or which is produced by the taxpayer exclusively for the purposes of transferring the food to an organization described in paragraph (3)(A), cannot or will not be sold, the fair market value of such contribution shall be determined--

   Inserted: "(i) without regard to such internal standards, such lack of market, such circumstances, or such exclusive purpose, and

   Inserted: "(ii) if applicable, by taking into account the price at which the same or similar food items are sold by the taxpayer at the time of the contribution (or, if not so sold at such time, in the recent past).".

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   Inserted: (b) Effective Date.--The amendment made by subsection (a) shall apply to taxable years beginning after December 31, 2003.

   Inserted: SEC. __02. TIME SENSITIVE GOODS MOVEMENT.

   Inserted: (a) In General.--The Secretary shall enter into a contract or grant agreement with a nongovernmental organization described in subsection (b)(1) to establish and maintain a program for the tracking, collection, and delivery of time sensitive goods.

   Inserted: (b) Definitions.--For purposes of this section--

   Inserted: (1) Nongovernmental organization.--The nongovernmental organization referred to in subsection (a) shall be a national nonprofit charitable organization selected by the Secretary on a competitive basis and shall--

   Inserted: (A) have several years experience in gathering information from virtually all of the States regarding time sensitive goods;

   Inserted: (B) have several years working experience with transport providers such as trucking companies in creating, coordinating, and maintaining transfer systems designed to assist, at the national level, the delivery of time sensitive goods to appropriate nationwide coordination centers;

   Inserted: (C) agree to contribute in-kind resources towards implementing this section and agree to provide services and information free of charge; and

   Inserted: (D) be capable of and experienced in working with major domestic food manufacturers and processors, grocery chains and stores, food warehouse operators, transport providers such as trucking companies, and public food assistance agencies.

   Inserted: (2) Time sensitive goods.--The term "tine sensitive goods" meand raw materials or finished goods that are nearing the end of their useful life.

   Inserted: (3) Secretary.--The term "Secretary" means the Secretary of the Treasury.

   Inserted: (c) Program Requirements.--The Secretary shall ensure that funds allocated under this section are used for--

   Inserted: (1) the development and maintenance of a computerized system for the tracking of time sensitive goods;

   Inserted: (2) capital and operating costs associated with the collection and transportation of time sensitive goods; and

   Inserted: (3) capital and operating costs associated with the storage and distribution of time sensitive goods.

   Inserted: (d) Audits.--The Secretary shall establish fair and reasonable auditing procedures regarding the expenditures of funds to carry out this section.

   Inserted: (e) Funding.--From amounts resulting from the amendments made by section __04, there is authorized to be appropriated and hereby appropriated to the Secretary $10,000,000 in each of fiscal years 2005 through 2010 to implement this section. The nongovernmental organization may contract with and provide funds to 1 additional nonprofit organization which the Secretary determines meets the requirements set forth in subsection (b)(1) to carry out some of the functions required by this section.

   Inserted: SEC. __03. SERVICE INSTITUTIONS.

   Inserted: (a) Operating Expenses.--Section 13(b)(1) of the Richard B. Russell National School Lunch Act (42 U.S.C. 1761(b)(1)) is amended by striking subparagraph (A) and inserting the following:

   Inserted: "(A) In general.--A payment to a service institution shall be equal to the maximum amount for food service under subparagraphs (B) and (C).".

   Inserted: (b) Administrative Costs.--Section 13(b) of the Richard B. Russell National School Lunch Act (42 U.S.C. 1761(b)) is amended by striking paragraph (3) and inserting the following:

   Inserted: "(3) Administrative costs.--Payment to a service institution for administrative costs shall be equal to the maximum allowable levels determined by the Secretary under the study required under paragraph (4).".

   Inserted: (c) Conforming Amendment.--Section 18 of the Richard B. Russell National School Lunch Act (42 U.S.C. 1769) is amended by striking subsection (f).

   Inserted: SEC. __04. LIMITATIONS ON DEDUCTION FOR CHARITABLE CONTRIBUTIONS OF PATENTS AND SIMILAR PROPERTY.

   Inserted: (a) Deduction Allowed Only to the Extent of Basis.--Section 170(e)(1)(B) (relating to certain contributions of ordinary income and capital gain property) is amended by striking "or" at the end of clause (i), by adding "or" at the end of clause (ii), and by inserting after clause (ii) the following new clause: "(iii) of any patent, copyright, trademark, trade name, trade secret, know-how, software, or similar property, or applications or registrations of such property,".

   Inserted: (b) Treatment of Contributions Where Donor Receives Interest.--Section 170(e) is amended by adding at the end the following new paragraph:

   Inserted: "(7) Special rules for contributions of patents and similar property where donor receives interest.--

   Inserted: "(A) Disallowance of deduction.--No deduction shall be allowed under this section with respect to a contribution of property described in paragraph (1)(B)(iii) if the taxpayer after the contribution has any interest in the property other than a qualified interest.

   Inserted: "(B) Contributions with qualified interest.--If a taxpayer after a contribution of property described in paragraph (1)(B)(iii) has a qualified interest in the property--

   Inserted: "(i) any payment pursuant to the qualified interest shall be treated as ordinary income and shall be includible in gross income of the taxpayer for the taxable year in which the payment is received by the taxpayer, and

   Inserted: "(ii) subsection (f)(3) and section 1011(b) shall not apply to the transfer of the property from the taxpayer to the donee.

   Inserted: "(C) Qualified interest.--For purposes of this paragraph--

   Inserted: "(i) In general.--The term 'qualified interest' means, with respect to any taxpayer, a right to receive from the donee a percentage (not greater than 50 percent) of any royalty payment received by the donee with respect to property described in paragraph (1)(B)(iii) (other than copyrights which are described in section 1221(a)(3) or 1231(b)(1)(C)) contributed by the taxpayer to the donee.

   Inserted: "(ii) Secretarial authority.--

   Inserted: "(I) In general.--Except as provided in subclause (II), the Secretary may by regulation or other administrative guidance treat as a qualified interest the right to receive other payments from the donee, but only if the donee does not possess a right to receive any payment (whether royalties or otherwise) from a third party with respect to the contributed property.

   Inserted: "(II) Exceptions.--The Secretary may not treat as a qualified interest the right to receive any payment which provides a benefit to the donor which is greater than the benefit retained by the donee or the right to receive any portion of the proceeds from the sale of the property contributed.

   Inserted: "(iii) Limitation.--An interest shall be treated as a qualified interest under this subparagraph only if the taxpayer has no right to receive any payment described in clause (i) or (ii)(I) after the earlier of the date on which the legal life of the contributed property expires or the date which is 20 years after the date of the contribution.".

   Inserted: (c) Reporting Requirements.--

   Inserted: (1) In general.--Section 6050L(a) (relating to returns regarding certain dispositions of donated property) is amended--

   Inserted: (A) by striking "If" and inserting:

   Inserted: "(1) Dispositions of donated property.--If",

   Inserted: (B) by redesignating paragraphs (1) through (5) as subparagraphs (A) through (E), respectively, and

   Inserted: (C) by adding at the end the following new paragraph:

   Inserted: "(2) Payments of qualified interests.--Each donee of property described in section 170(e)(1)(B)(iii) which makes a payment to a donor pursuant to a qualified interest (as defined in section 170(e)(7)) during any calendar year shall make a return (in accordance with forms and regulations prescribed by the Secretary) showing--

   Inserted: "(A) the name, address, and TIN of the payor and the payee with respect to such a payment,

   Inserted: "(B) a description, and date of contribution, of the property to which the qualified interest relates,

   Inserted: "(C) the dates and amounts of any royalty payments received by the donee with respect to such property,

   Inserted: "(D) the date and the amount of the payment pursuant to the qualified interest, and

   Inserted: "(E) a description of the terms of the qualified interest.".

   Inserted: (2) Conforming amendments.--

   Inserted: (A) The heading for section 6050L is amended by striking "CERTAIN DISPOSITIONS OF".

   Inserted: (B) The item relating to section 6050L in the table of sections for subpart B of part III of subchapter A of chapter 61 is amended by striking "certain dispositions of".

   Inserted: (d) Anti-Abuse Rules.--The Secretary of the Treasury may prescribe such regulations or other administrative guidance as may be necessary or appropriate to prevent the avoidance of the purposes of section 170(e)(1)(B)(iii) of the Internal Revenue Code of 1986 (as added by subsection (a)), including preventing--

   Inserted: (1) the circumvention of the reduction of the charitable deduction by embedding or bundling the patent or similar property as part of a charitable contribution of property that includes the patent or similar property,

   Inserted: (2) the manipulation of the basis of the property to increase the amount of the charitable deduction through the use of related persons, pass-thru entities, or other intermediaries, or through the use of any provision of law or regulation (including the consolidated return regulations), and

   Inserted: (3) a donor from changing the form of the patent or similar property to property of a form for which different deduction rules would apply.

   Inserted: (e) Effective Date.--The amendments made by this section shall apply to contributions made after the date of the enactment of this Act.

   Original wording

   After title VI insert the following:

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As printed