H.R. 7House108th Congress (2003-2005)Passed House

Charitable Giving Act of 2003

Sponsored by Roy BluntRep. Roy Blunt (R-MO)
Introduced May 7, 2003

Legislative Activity

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21 earlier actions
SenateIntro Referral Latest Action

Read twice and referred to the Committee on Finance.

December 9, 2003

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HouseIntro Referral

Introduced in House

May 7, 2003

HouseIntro Referral

Referred to the Committee on Ways and Means, and in addition to the Committee on Education and the Workforce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.

May 7, 2003

HouseCommittee

Referred to the Subcommittee on Select Education.

June 20, 2003

HouseCommittee

Committee Consideration and Mark-up Session Held.

September 9, 2003

HouseCommittee

Ordered to be Reported (Amended) by Voice Vote.

September 9, 2003

HouseCommittee

Reported (Amended) by the Committee on Ways and Means. H. Rept. 108-270, Part I.

September 16, 2003

HouseIntro Referral

House Committee on Education and the Workforce Granted an extension for further consideration ending not later than Sept. 16, 2003.

September 16, 2003

HouseCommittee

Committee on Education and the Workforce discharged.

September 16, 2003

HouseCalendars

Placed on the Union Calendar, Calendar No. 157.

September 16, 2003

HouseFloor

Rules Committee Resolution H. Res. 370 Reported to House. Rule provides for consideration of H.R. 7 with 1 hour of general debate. Previous question shall be considered as ordered without intervening motions except motion to recommit with or without instructions. The amendment in the nature of a substitute recommended by the Committee on Ways and Means now printed in the bill, modified by the amendment printed in part A of the report of the Committee on Rules accompanying this resolution, shall be considered as adopted. The amendment printed in part B of the report of the Committee on Rules shall be considered as read, and shall be separately debatable for one hour equally divided and controlled by the proponent and an opponent. Measure will be considered read. A specified amendment is in order.

September 16, 2003 • 7:07 PM

HouseFloor

Rule H. Res. 370 passed House.

September 17, 2003 • 11:59 AM

HouseFloor

Considered under the provisions of rule H. Res. 370. (consideration: CR H8304-8356)

September 17, 2003 • 12:07 PM

HouseFloor

Rule provides for consideration of H.R. 7 with 1 hour of general debate. Previous question shall be considered as ordered without intervening motions except motion to recommit with or without instructions. The amendment in the nature of a substitute recommended by the Committee on Ways and Means now printed in the bill, modified by the amendment printed in part A of the report of the Committee on Rules accompanying this resolution, shall be considered as adopted. The amendment printed in part B of the report of the Committee on Rules shall be considered as read, and shall be separately debatable for one hour equally divided and controlled by the proponent and an opponent. Measure will be considered read. A specified amendment is in order.

September 17, 2003 • 12:07 PM

HouseFloor

DEBATE - The House proceeded with one hour of debate on H.R. 7, as amended.

September 17, 2003 • 12:09 PM

HouseFloor

DEBATE - Pursuant to the provisions of H. Res. 370, the House proceeded with one hour of debate on the Cardin amendment in the nature of a substitute.

September 17, 2003 • 1:18 PM

HouseFloor

Mr. Neal (MA) moved to recommit with instructions to Ways and Means. (consideration: CR H8345-8355; text: CR H8346-8354)

September 17, 2003 • 2:50 PM

HouseFloor

On motion to recommit with instructions Failed by recorded vote: 201 - 221 (Roll no. 507). (consideration: CR H8355)

September 17, 2003 • 3:16 PM

HouseFloor

Passed/agreed to in House: On passage Passed by the Yeas and Nays: 408 - 13 (Roll no. 508).

September 17, 2003 • 3:26 PM

HouseFloor

On passage Passed by the Yeas and Nays: 408 - 13 (Roll no. 508).

September 17, 2003 • 3:26 PM

HouseFloor

Motion to reconsider laid on the table Agreed to without objection.

September 17, 2003 • 3:26 PM

SenateIntro Referral

Received in the Senate.

September 17, 2003

SenateIntro Referral

Read twice and referred to the Committee on Finance.

December 9, 2003

Floor Debate

24 members

What members said about H.R. 7 on the floor

11 Republicans13 Democrats
Richard J. Durbin
Sen. Richard J. DurbinD-IL · Apr 8, 2003

Mr. President, I rise today to discuss the CARE Act and my concerns regarding the implementation of President Bush's faith- based initiative. Like many of my colleagues, I am a person of faith. I…

Michael B. Enzi
Sen. Michael B. EnziR-WY · Jul 31, 2003

Mr. President, I rise today to introduce a bill that will help bring about a more reliable system of medical justice for all Americans. Earlier this month, we had a robust debate on a critical…

Rick Santorum
Sen. Rick SantorumR-PA · Apr 8, 2003

Mr. President, I ask unanimous consent that the order for the quorum call be rescinded. Mr. President, I thank the Senator from Iowa, the chairman of the Finance Committee, for his kind words and his…

Jeff Bingaman
Sen. Jeff BingamanD-NM · Jul 31, 2003

Mr. President, I rise today with my colleague from Florida, Senator Graham, to introduce a very simple piece of legislation that would revoke President Bush's Executive Order 13233 and put back in…

Russell D. Feingold
Sen. Russell D. FeingoldD-WI · Jul 31, 2003

Mr. President, today I introduce the Library, Bookseller, and Personal Records Privacy Act. This bill would amend the Patriot Act to protect the privacy of law- abiding Americans. It would set…

Show 8 more
Jack Reed
Sen. Jack ReedD-RI · Apr 8, 2003

Mr. President, I commend Senators Grassley and Baucus for bringing this important legislation to the floor, but I particularly commend and thank Senators Santorum and Lieberman for their principled…

Orrin G. Hatch
Sen. Orrin G. HatchR-UT · Jul 31, 2003

Mr. President, I rise today in support of S. 1531, the John Marshall Commemorative Coin Act. This bill authorizes the Treasury Department to mint and issue coins bearing the likeness of Chief Justice…

Benjamin L. Cardin
Rep. Benjamin L. CardinD-MD-3 · Sep 17, 2003

Mr. Speaker, first let me compliment the gentleman from Missouri (Mr. Blunt), the sponsor of this legislation, and the gentleman from Tennessee (Mr. Ford) for reaching, I think, a fair compromise on…

Chuck Grassley
Sen. Chuck GrassleyR-IA · Apr 8, 2003

Mr. President, I ask unanimous consent that the Senate now return to legislative session and proceed to the consideration of S. 476, the CARE Act, as provided under the previous order. Mr. President,…

Mark E. Souder
Rep. Mark E. SouderR-IN-3 · Sep 17, 2003

Mr. Speaker, first I want to thank the gentleman from Missouri (Mr. Blunt) and the gentleman from Tennessee (Mr. Ford) for their leadership on this bill. It is something that I have long waited to…

Max Baucus
Sen. Max BaucusD-MT · Apr 8, 2003

Mr. President, I ask unanimous consent the order for the quorum call be rescinded. Mr. President, I thank the chairman of the Finance Committee, Senator Grassley, for the great job he has done in…

William M. Thomas
Rep. William M. ThomasR-CA-22 · Sep 17, 2003

Mr. Speaker, pursuant to House Resolution 370, I call up the bill (H.R. 7) to amend the Internal Revenue Code of 1986 to provide incentives for charitable contributions by individuals and businesses,…

Maria Cantwell
Sen. Maria CantwellD-WA · Jul 31, 2003

Mr. President, I rise today to re-introduce legislation critical to helping victims of identity theft. This legislation, the Identity Theft Victims Assistance Act, passed the Senate by unanimous…

Show 11 more
Roy Blunt
Rep. Roy BluntR-MO-7 · Sep 17, 2003

Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I am glad to be here to talk about this bill. This is a tax bill. It is a tax bill that really is an important step toward what we…

Frank R. Wolf
Rep. Frank R. WolfR-VA-10 · Sep 17, 2003

Mr. Speaker, I rise today in support of H.R. 7, the Charitable Giving Act. This legislation takes an important step to help further the efforts begun nearly 40 years when President Johnson declared…

Carl Levin
Sen. Carl LevinD-MI · Apr 8, 2003

Madam President, I congratulate Senators Santorum and Lieberman and everybody else who has had a voice and hand in shaping and crafting the CARE legislation before us. It makes a significant…

Evan Bayh
Sen. Evan BayhD-IN · Apr 8, 2003

Mr. President, I thank my colleague from Montana for his leadership, his friendship, and his devotion to this issue. I have listened with interest to his comments about the importance of ensuring…

Ben Nighthorse Campbell
Sen. Ben Nighthorse CampbellR-CO · Jul 31, 2003

Mr. President, I am pleased to be join by Senator Inouye in introducing the Tribal Government Tax Exempt Bond Fairness Act of 2003. This bill will assist Indian tribes raise capital in the private…

Bill Nelson
Sen. Bill NelsonD-FL · Apr 8, 2003

President, I ask unanimous consent that the order for the quorum call be rescinded. Mr. President, I wish to talk about the CARE Act. I rise to speak in favor of the Charity Aid Recovery and…

John McCain
Sen. John McCainR-AZ · Jul 31, 2003

Mr. President, I am proud to join Senator Kyl in introducing legislation that would rename the Veterans Administration medical center in Prescott, AZ after Bob Stump. In June of this year, Arizonans…

Christopher J. Dodd
Sen. Christopher J. DoddD-CT · Jul 31, 2003

Mr. President. I am pleased to rise today with my colleague Senator Lieberman to introduce legislation that would amend the Internal Revenue Code to exclude property tax abatements, provided by local…

Fortney Pete Stark
Rep. Fortney Pete StarkD-CA-13 · Sep 17, 2003

Mr. Speaker, will the gentlewoman yield? Mr. Speaker, I would ask, how much was the New York delegation asking, does the gentlewoman recall, for the help of the 9/ 11 victims? So that was over 10? So…

Judd Gregg
Sen. Judd GreggR-NH · Jul 31, 2003

Mr. President, today I am proud to introduce the Higher Education for Freedom Act. This bill will establish a competitive grant program making funds available to institutions of higher education,…

Lloyd Doggett
Rep. Lloyd DoggettD-TX-10 · Sep 17, 2003

Mr. Speaker, on January 29, 2002, President Bush stood at this podium, and he told this Congress and the Nation ``our budget will run a deficit that will be small and short term.'' He had hardly…

Bill Text

4 versions available

Reading Mode
Latest
Referred in SenateIssued December 9, 2003
        [Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7 Referred in Senate (RFS)]

1st Session
H. R. 7

_______________________________________________________________________

IN THE SENATE OF THE UNITED STATES

September 17, 2003

Received

December 9, 2003

Read twice and referred to the Committee on Finance

_______________________________________________________________________

AN ACT

To amend the Internal Revenue Code of 1986 to provide incentives for
charitable contributions by individuals and businesses, 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; ETC.

(a) Short Title.--This Act may be cited as the ``Charitable Giving
Act of 2003''.
(b) Amendment of 1986 Code.--Except as otherwise expressly
provided, whenever in this Act an amendment or repeal is expressed in
terms of an amendment to, or repeal of, a section or other provision,
the reference shall be considered to be made to a section or other
provision of the Internal Revenue Code of 1986.
(c) Table of Contents.--

Sec. 1. Short title; etc.
TITLE I--CHARITABLE GIVING INCENTIVES

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 plans for
charitable purposes.
Sec. 103. Increase in cap on corporate charitable contributions.
Sec. 104. Charitable deduction for contributions of food inventory.
Sec. 105. Reform of certain excise taxes related to 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.
Sec. 109. Charitable organizations permitted to make collegiate housing
and infrastructure grants.
Sec. 110. Conduct of certain games of chance not treated as unrelated
trade or business.
Sec. 111. Excise taxes exemption for blood collector organizations.
Sec. 112. Nonrecognition of gain on the sale of property used in
performance of an exempt function.
Sec. 113. Exemption of qualified 501(c)(3) bonds for nursing homes from
Federal guarantee prohibitions.
TITLE II--TAX REFORM AND IMPROVEMENTS RELATING TO CHARITABLE
ORGANIZATIONS AND PROGRAMS

Sec. 201. Suspension of tax-exempt status of terrorist organizations.
Sec. 202. Clarification of definition of church tax inquiry.
Sec. 203. Extension of declaratory judgment remedy to tax-exempt
organizations.
Sec. 204. Landowner incentives programs.
Sec. 205. Modifications to section 512(b)(13).
Sec. 206. Simplification of lobbying expenditure limitation.
Sec. 207. Pilot project for forest conservation activities.
TITLE III--OTHER PROVISIONS

Sec. 301. Compassion capital fund.
Sec. 302. Reauthorization of assets for independence demonstration.
Sec. 303. Sense of the Congress regarding corporate contributions to
faith-based organizations, etc.
Sec. 304. Maternity group homes.
Sec. 305. Authority of States to use 10 percent of their TANF funds to
carry out social services block grant
programs.

TITLE I--CHARITABLE GIVING INCENTIVES

SEC. 101. DEDUCTION FOR PORTION OF CHARITABLE CONTRIBUTIONS TO BE
ALLOWED TO INDIVIDUALS WHO DO NOT ITEMIZE DEDUCTIONS.

(a) In General.--Section 170 (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.--
``(1) In general.--In the case of an individual who does
not itemize deductions for a taxable year, there shall be taken
into account as a direct charitable deduction under section 63
an amount equal to the amount allowable under subsection (a)
for the taxable year for cash contributions (determined without
regard to any carryover), to the extent that such contributions
exceed $250 ($500 in the case of a joint return) but do not
exceed $500 ($1,000 in the case of a joint return).
``(2) Termination.--Paragraph (1) shall not apply to any
taxable year beginning after December 31, 2005.''.
(b) Direct Charitable Deduction.--
(1) In general.--Subsection (b) of section 63 (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 the
following new paragraph:
``(3) the direct charitable deduction.''.
(2) Definition.--Section 63 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 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 the following new
paragraph:
``(3) the direct charitable deduction.''.
(c) Study.--
(1) In general.--The Secretary of the Treasury shall study
the effect of the amendments made by this section on increased
charitable giving and taxpayer compliance, including a
comparison of taxpayer compliance between taxpayers who itemize
their charitable contributions and taxpayers who claim a direct
charitable deduction.
(2) Report.--Not later than December 31, 2006, the
Secretary of the Treasury shall report on the study required
under paragraph (1) to the Committee on Finance of the Senate
and the Committee on Ways and Means of the House of
Representatives.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2003.

SEC. 102. TAX-FREE DISTRIBUTIONS FROM INDIVIDUAL RETIREMENT PLANS FOR
CHARITABLE PURPOSES.

(a) In General.--Subsection (d) of section 408 (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 plan other than a plan described
in subsection (k) or (p) of section 408--
``(i) which is made on or after the date
that the individual for whose benefit the plan
is maintained has attained age 70\1/2\, and
``(ii) which is made directly by the
trustee--
``(I) to an organization described
in section 170(c), or
``(II) to a split-interest entity.
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 plan 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 have been
so includible if all amounts distributed from all
individual retirement plans were treated as 1 contract
under paragraph (2)(A) for purposes of determining the
inclusion of 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 beneficiary to whom is paid
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 beneficiary.
``(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 must
be 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 (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 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 deduction taken under
section 642(c) within such year,
``(B) the amount paid out within such year which
represents amounts for which deductions under section
642(c) have been taken in prior years,
``(C) the amount for which such 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 the purposes described in
section 642(c),
``(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 to a trust
for any taxable year if--
``(A) 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, or
``(B) the trust is 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) (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.
In addition to any penalty imposed on the trust
pursuant to this subparagraph, if the person required
to file such return knowingly fails to file the return,
such penalty shall also be imposed on such person who
shall be personally liable for such penalty.''.
(3) Confidentiality of noncharitable beneficiaries.--
Subsection (b) of section 6104 (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 distributions made after December 31, 2003.
(2) Subsection (b).--The amendments made by subsection (b)
shall apply to returns for taxable years beginning after
December 31, 2003.

SEC. 103. INCREASE IN CAP ON CORPORATE CHARITABLE CONTRIBUTIONS.

(a) In General.--Paragraph (2) of section 170(b) (relating to
corporations) is amended by striking ``10 percent'' and inserting ``the
applicable percentage''.
(b) Applicable Percentage.--Subsection (b) of section 170 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--
2004...................................         11
2005...................................         12
2006...................................         13
2007...................................         14
2008 through 2011......................         15
2012 and thereafter....................      20.''.
(c) Conforming Amendments.--
(1) Sections 512(b)(10) and 805(b)(2)(A) 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) 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, 2003.

SEC. 104. CHARITABLE DEDUCTION FOR CONTRIBUTIONS OF FOOD INVENTORY.

(a) In General.--Paragraph (3) of section 170(e) (relating to
special rule for certain contributions of inventory and other property)
is amended by redesignating subparagraph (C) as subparagraph (D) and by
inserting after subparagraph (B) the following new subparagraph:
``(C) Special rule for contributions of food
inventory.--
``(i) General rule.--In the case of a
charitable contribution of food from any trade
or business (or interest therein) of the
taxpayer, this paragraph shall be applied--
``(I) without regard to whether the
contribution is made by a C
corporation, and
``(II) only to food that is
apparently wholesome food.
``(ii) Limitation.--In the case of a
taxpayer other than a C corporation, the
aggregate amount of such contributions for any
taxable year which may be taken into account
under this section shall not exceed the
applicable percentage (within the meaning of
subsection (b)(3)) of the taxpayer's aggregate
net income for such taxable year from all
trades or businesses from which such
contributions were made for such year, computed
without regard to this section.
``(iii) Determination of fair market
value.--In the case of a qualified contribution
of apparently wholesome food to which this
paragraph applies 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 food shall be determined
by taking into account the price at which the
same or substantially the same food items (as
to both type and quality) are sold by the
taxpayer at the time of the contribution (or,
if not so sold at such time, in the recent
past).
``(iv) Apparently wholesome food.--For
purposes of this subparagraph, the term
`apparently wholesome food' has the meaning
given to 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 subparagraph.''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2003.

SEC. 105. REFORM OF CERTAIN EXCISE TAXES RELATED TO PRIVATE
FOUNDATIONS.

(a) Reduction of Tax on Net Investment Income.--Section 4940(a)
(relating to tax-exempt foundations) is amended by striking ``2
percent'' and inserting ``1 percent''.
(b) Repeal of Reduction in Tax Where Private Foundation Meets
Certain Distribution Requirements.--Section 4940 (relating to excise
tax based on investment income) is amended by striking subsection (e).
(c) Modification of Excise Tax on Self-Dealing.--The second
sentence of section 4941(a)(1) (relating to initial excise tax imposed
on self-dealer) is amended by striking ``5 percent'' and inserting ``25
percent''.
(d) Modification of Excise Tax on Failure To Distribute Income.--
(1) Certain administrative expenses not treated as
distributions.--Section 4942(g) is amended by striking
paragraph (4) and inserting the following new paragraphs:
``(4) Limitation on administrative expenses treated as
distributions.--
``(A) In general.--For purposes of paragraph
(1)(A), the following administrative expenses shall not
be treated as qualifying distributions:
``(i) Any administrative expense which is
not directly attributable to direct charitable
activities, grant selection activities, grant
monitoring and administration activities,
compliance with applicable Federal, State, or
local law, or furthering public accountability
of the private foundation.
``(ii) Any compensation paid to a
disqualified person to the extent that such
compensation exceeds an annual rate of
$100,000.
``(iii) Any expense incurred for
transportation by air unless such
transportation is regularly-scheduled
commercial air transportation.
``(iv) Any expense incurred for regularly-
scheduled commercial air transportation to the
extent that such expense exceeds the cost of
such transportation in coach-class
accommodations.
``(B) Adjustment for inflation.--In the case of a
taxable year beginning after December 31, 2004, the
$100,000 amount in subparagraph (A)(ii) 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,
determined by substituting `calendar year 2003'
for `calendar year 1992' in subparagraph (B)
thereof.
If any amount as increased under the preceding sentence
is not a multiple of $50, such amount shall be rounded
to the next lowest multiple of $50.
``(5) Regulations.--The Secretary shall prescribe such
regulations as may be necessary to carry out the purposes of
paragraph (4). Such regulations shall provide that
administrative expenses which are excluded from qualifying
distributions solely by reason of the limitations in paragraph
(4) shall not for such reason subject a private foundation to
any other excise taxes imposed by this subchapter.''.
(2) Disallowance not to apply to certain private
foundations.--
(A) In general.--Section 4942(j)(3) (defining
operating foundation) is amended--
(i) by striking ``(within the meaning of
paragraph (1) or (2) of subsection (g))'' each
place it appears, and
(ii) by adding at the end the following new
sentence: ``For purposes of this paragraph, the
term `qualifying distributions' means
qualifying distributions within the meaning of
paragraph (1) or (2) of subsection (g)
(determined without regard to subsection
(g)(4)).''.
(B) Conforming amendment.--Section 4942(f)(2)(C)(i)
is amended by inserting ``(determined without regard to
subsection (g)(4))'' after ``within the meaning of
subsection (g)(1)(A)''.
(e) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2003.

SEC. 106. EXCISE TAX ON UNRELATED BUSINESS TAXABLE INCOME OF CHARITABLE
REMAINDER TRUSTS.

(a) In General.--Subsection (c) of section 664 (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) Character of distributions and coordination
with distribution requirements.--The amounts taken into
account in determining unrelated business taxable
income (as defined in subparagraph (A)) shall not be
taken into account for purposes of--
``(i) subsection (b),
``(ii) determining the value of trust
assets under subsection (d)(2), and
``(iii) determining income under subsection
(d)(3).
``(D) 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, 2003.

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.--
(1) In general.--Clause (ii) of section 170(e)(4)(B)
(defining qualified research contributions) is amended by
inserting ``or assembled'' after ``constructed''.
(2) Conforming amendment.--Clause (iii) of section
170(e)(4)(B) is amended by inserting ``or assembling'' after
``construction''.
(b) Computer Technology and Equipment for Educational Purposes.--
(1) In general.--Clause (ii) of section 170(e)(6)(B) is
amended by inserting ``or assembled'' after ``constructed'' and
``or assembling'' after ``construction''.
(2) Special rule made permanent.--Section 170(e)(6) is
amended by striking subparagraph (G).
(3) Conforming amendments.--Subparagraph (D) of section
170(e)(6) is amended by inserting ``or assembled'' after
``constructed'' and ``or assembling'' after ``construction''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2003.

SEC. 108. ADJUSTMENT TO BASIS OF S CORPORATION STOCK FOR CERTAIN
CHARITABLE CONTRIBUTIONS.

(a) In General.--Paragraph (2) of section 1367(a) (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 pro rata 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, 2003.

SEC. 109. CHARITABLE ORGANIZATIONS PERMITTED TO MAKE COLLEGIATE HOUSING
AND INFRASTRUCTURE GRANTS.

(a) In General.--Section 501 (relating to exemption from tax on
corporations, certain trusts, etc.), as amended by section 201, is
further amended by redesignating subsection (q) as subsection (r) and
by inserting after subsection (p) the following new subsection:
``(q) Treatment of Organizations Making Collegiate Housing and
Infrastructure Improvement Grants.--
``(1) In general.--For purposes of subsection (c)(3) and
sections 170(c)(2)(B), 2055(a), and 2522(a)(2), an organization
shall not fail to be treated as organized and operated
exclusively for charitable or educational purposes solely
because such organization makes collegiate housing and
infrastructure grants to an organization described in
subsection (c)(7), so long as, at the time of the grant,
substantially all of the active members of the recipient
organization are full-time students at the college or
university with which such recipient organization is
associated.
``(2) Housing and infrastructure grants.--For purposes of
paragraph (1), collegiate housing and infrastructure grants are
grants to provide, improve, operate, or maintain collegiate
housing that may involve more than incidental social,
recreational, or private purposes, so long as such grants are
for purposes that would be permissible for a dormitory of the
college or university referred to in paragraph (1). A grant
shall not be treated as a collegiate housing and infrastructure
grant for purposes of paragraph (1) to the extent that such
grant is used to provide physical fitness equipment.
``(3) Grants to certain organizations holding title to
property, etc.--For purposes of this subsection, a collegiate
housing and infrastructure grant to an organization described
in subsection (c)(2) or (c)(7) holding title to property
exclusively for the benefit of an organization described in
subsection (c)(7) shall be considered a grant to the
organization described in subsection (c)(7) for whose benefit
such property is held.''.
(b) Effective Date.--The amendment made by this section shall apply
to grants made after December 31, 2003.

SEC. 110. CONDUCT OF CERTAIN GAMES OF CHANCE NOT TREATED AS UNRELATED
TRADE OR BUSINESS.

(a) In General.--Paragraph (1) of section 513(f) (relating to
certain bingo games) is amended to read as follows:
``(1) In general.--The term `unrelated trade or business'
does not include--
``(A) any trade or business which consists of
conducting bingo games, and
``(B) any trade or business which consists of
conducting qualified games of chance if the net
proceeds from such trade or business are paid or set
aside for payment for purposes described in section
170(c)(2)(B), for the promotion of social welfare (within the meaning
of section 501(c)(4)), or for a purpose for which State law
specifically authorizes the expenditure of such proceeds.''.
(b) Qualified Games of Chance.--Subsection (f) of section 513 is
amended by adding at the end the following new paragraph:
``(3) Qualified games of chance.--For purposes of paragraph
(1), the term `qualified game of chance' means any game of
chance (other than bingo) conducted by an organization if--
``(A) such organization is licensed pursuant to
State law to conduct such game,
``(B) only organizations which are organized as
nonprofit corporations or are exempt from tax under
section 501(a) may be so licensed to conduct such game
within the State, and
``(C) the conduct of such game does not violate
State or local law.''
(c) Clerical Amendment.--The subsection heading of section 513(f)
is amended by striking ``Bingo Games'' and inserting ``Games of
Chance''.
(d) Effective Date.-- The amendments made by this section shall
apply to games conducted after December 31, 2003.

SEC. 111. EXCISE TAXES EXEMPTION FOR BLOOD COLLECTOR ORGANIZATIONS.

(a) Exemption From Imposition of Special Fuels Tax.--Section
4041(g) (relating to other exemptions) is amended by striking ``and''
at the end of paragraph (3), by striking the period in paragraph (4)
and inserting ``; and'', and by inserting after paragraph (4) the
following new paragraph:
``(5) with respect to the sale of any liquid to a qualified
blood collector organization (as defined in section
7701(a)(48)) for such organization's exclusive use, or with
respect to the use by a qualified blood collector organization
of any liquid as a fuel.''.
(b) Exemption From Manufacturers Excise Tax.--
(1) In general.--Section 4221(a) (relating to certain tax-
free sales) is amended by striking ``or'' at the end of
paragraph (4), by adding ``or'' at the end of paragraph (5),
and by inserting after paragraph (5) the following new
paragraph:
``(6) to a qualified blood collector organization (as
defined in section 7701(a)(48)) for such organization's
exclusive use,''.
(2) Conforming amendments.--
(A) The second sentence of section 4221(a) is
amended by striking ``Paragraphs (4) and (5)'' and
inserting ``Paragraphs (4), (5), and (6)''.
(B) Section 6421(c) is amended by striking ``or
(5)'' and inserting ``(5), or (6)''.
(c) Exemption From Communication Excise Tax.--
(1) In general.--Section 4253 (relating to exemptions) is
amended by redesignating subsection (k) as subsection (l) and
inserting after subsection (j) the following new subsection:
``(k) Exemption for Qualified Blood Collector Organizations.--Under
regulations provided by the Secretary, no tax shall be imposed under
section 4251 on any amount paid by a qualified blood collector
organization (as defined in section 7701(a)(48)) for services or
facilities furnished to such organization.''.
(2) Conforming amendment.--Section 4253(l), as redesignated
by paragraph (1), is amended by striking ``or (j)'' and
inserting ``(j), or (k)''.
(d) Credit for Refund for Certain Taxes on Sales and Services.--
(1) Deemed overpayment.--
(A) In general.--Section 6416(b)(2) is amended by
redesignating subparagraphs (E) and (F) as
subparagraphs (F) and (G), respectively, and by
inserting after subparagraph (D) the following new
subparagraph:
``(E) sold to a qualified blood collector
organization (as defined in section 7701(a)(48)) for
such organization's exclusive use;''.
(B) Conforming amendments.--Section 6416(b)(2) is
amended--
(i) by striking ``Subparagraphs (C) and
(D)'' and inserting ``Subparagraphs (C), (D),
and (E)'', and
(ii) by striking ``(C), and (D)'' and
inserting ``(C), (D), and (E)''.
(2) Sales of tires.--Clause (ii) of section 6416(b)(4)(B)
is amended by inserting ``sold to a qualified blood collector
organization (as defined in section 7701(a)(48)) for its
exclusive use,'' after ``for its exclusive use,''.
(e) Definition of Qualified Blood Collector Organization.--Section
7701(a) is amended by inserting at the end the following new paragraph:
``(48) Qualified blood collector organization.--The term
`qualified blood collector organization' means an organization
which is--
``(A) described in section 501(c)(3) and exempt
from tax under section 501(a),
``(B) registered by the Food and Drug
Administration to collect blood, and
``(C) primarily engaged in the activity of the
collection of blood.''.
(f) Effective Date.--The amendments made by this section shall take
effect on January 1, 2004.

SEC. 112. NONRECOGNITION OF GAIN ON THE SALE OF PROPERTY USED IN
PERFORMANCE OF AN EXEMPT FUNCTION.

(a) In General.--Subparagraph (D) of section 512(a)(3) is amended
to read as follows:
``(D) Nonrecognition of gain.--
``(i) In general.--If property used
directly in the performance of the exempt
function of an organization described in
paragraph (7), (9), (17), or (20) of section
501(c) is sold by such organization, and within
a period beginning 1 year before the date of such sale, and ending 3
years (10 years, in the case of an organization described in section
501(c)(7)) after such date, other property is purchased and used by
such organization directly in the performance of its exempt function,
gain (if any) from such sale shall be recognized only to the extent
that such organization's sales price of the old property exceeds the
organization's cost of purchasing the other property.
``(ii) Statute of limitations.--If an
organization described in section 501(c)(7)
sells property on which gain is not recognized,
in whole or in part, by reason of clause (i),
then the statutory period for the assessment of
any deficiency attributable to such gain shall
not expire until the end of the 3-year period
beginning on the date that the Secretary is
notified by such organization (in such manner
as the Secretary may prescribe) that--
``(I) the organization has met the
requirements of clause (i) with respect
to gain which was not recognized,
``(II) the organization does not
intend to meet such requirements, or
``(III) the organization failed to
meet such requirements within the
prescribed period.
For the purposes of this clause, any deficiency
may be assessed before the expiration of such
3-year period notwithstanding the provisions of
any other law or rule of law which would
otherwise prevent such assessment.
``(iii) Destruction and loss.--For purposes
of this subparagraph, the destruction in whole
or in part, theft, seizure, requisition, or
condemnation of property, shall be treated as
the sale of such property, and rules similar to
the rules provided by subsections (b), (c),
(e), and (j) of section 1034 (as in effect on
the day before the date of the enactment of the
Taxpayer Relief Act of 1997) shall apply.''.
(b) Effective Date.--The amendment made by this section shall apply
with respect to the sale of any property for which the 3-year period
for offsetting gain by purchasing other property under subparagraph (D)
of section 512(a)(3) of the Internal Revenue Code (as in effect on the
day before the date of the enactment of this Act) had not expired as of
January 1, 2001.

SEC. 113. EXEMPTION OF QUALIFIED 501(C)(3) BONDS FOR NURSING HOMES FROM
FEDERAL GUARANTEE PROHIBITIONS.

(a) In General.--For purposes of section 149(b)(1) of the Internal
Revenue Code of 1986, any qualified 501(c)(3) bond (as defined in
section 145 of such Code) shall not be treated as federally guaranteed
solely because such bond is part of an issue supported by a letter of
credit, if such bond--
(1) is issued after December 31, 2003, and before the date
which is 1 year after the date of the enactment of this Act,
and
(2) is part of an issue 95 percent or more of the net
proceeds of which are to be used to finance 1 or more of the
following facilities primarily for the benefit of the elderly:
(A) Licensed nursing home facility.
(B) Licensed or certified assisted living facility.
(C) Licensed personal care facility.
(D) Continuing care retirement community.
(b) Limitation on Issuer.--Subsection (a) shall not apply to any
bond described in such subsection if the aggregate authorized face
amount of the issue of which such bond is a part, when increased by the
outstanding amount of such bonds issued by the issuer during the period
described in subsection (a)(1) exceeds $15,000,000.
(c) Limitation on Beneficiary.--Rules similar to the rules of
section 144(a)(10) of the Internal Revenue Code of 1986 shall apply for
purposes of this section, except that--
(1) ``$15,000,000'' shall be substituted for
``$40,000,000'' in subparagraph (A) thereof, and
(2) such rules shall be applied--
(A) only with respect to bonds described in this
section, and
(B) with respect to the aggregate authorized face
amount of all issues of such bonds which are allocable
to the beneficiary.
(d) Continuing Care Retirement Community.--For purposes of this
section, the term ``continuing care retirement community'' means a
community which provides, on the same campus, a consortium of
residential living options and support services to persons at least 60
years of age under a written agreement. For purposes of the preceding
sentence, the residential living options shall include independent
living units, nursing home beds, and either assisted living units or
personal care beds.

TITLE II--TAX REFORM AND IMPROVEMENTS RELATING TO CHARITABLE
ORGANIZATIONS AND PROGRAMS

SEC. 201. SUSPENSION OF TAX-EXEMPT STATUS OF TERRORIST ORGANIZATIONS.

(a) In General.--Section 501 (relating to exemption from tax on
corporations, certain trusts, etc.) is amended by redesignating
subsection (p) as subsection (q) and by inserting after subsection (o)
the following new subsection:
``(p) Suspension of Tax-Exempt Status of Terrorist Organizations.--
``(1) In general.--The exemption from tax under subsection
(a) with respect to any organization described in paragraph
(2), and the eligibility of any organization described in
paragraph (2) to apply for recognition of exemption under
subsection (a), shall be suspended during the period described
in paragraph (3).
``(2) Terrorist organizations.--An organization is
described in this paragraph if such organization is designated
or otherwise individually identified--
``(A) under section 212(a)(3)(B)(vi)(II) or 219 of
the Immigration and Nationality Act as a terrorist
organization or foreign terrorist organization,
``(B) in or pursuant to an Executive order which is
related to terrorism and issued under the authority of
the International Emergency Economic Powers Act or
section 5 of the United Nations Participation Act of
1945 for the purpose of imposing on such organization
an economic or other sanction, or
``(C) in or pursuant to an Executive order issued
under the authority of any Federal law if--
``(i) the organization is designated or
otherwise individually identified in or
pursuant to such Executive order as supporting
or engaging in terrorist activity (as defined
in section 212(a)(3)(B) of the Immigration and
Nationality Act) or supporting terrorism (as
defined in section 140(d)(2) of the Foreign
Relations Authorization Act, Fiscal Years 1988
and 1989); and
``(ii) such Executive order refers to this
subsection.
``(3) Period of suspension.--With respect to any
organization described in paragraph (2), the period of
suspension--
``(A) begins on the later of--
``(i) the date of the first publication of
a designation or identification described in
paragraph (2) with respect to such
organization, or
``(ii) the date of the enactment of this
subsection, and
``(B) ends on the first date that all designations
and identifications described in paragraph (2) with
respect to such organization are rescinded pursuant to
the law or Executive order under which such designation
or identification was made.
``(4) Denial of deduction.--No deduction shall be allowed
under section 170, 545(b)(2), 556(b)(2), 642(c), 2055,
2106(a)(2), or 2522 for any contribution to an organization
described in paragraph (2) during the period described in
paragraph (3).
``(5) Denial of administrative or judicial challenge of
suspension or denial of deduction.--Notwithstanding section
7428 or any other provision of law, no organization or other
person may challenge a suspension under paragraph (1), a
designation or identification described in paragraph (2), the
period of suspension described in paragraph (3), or a denial of
a deduction under paragraph (4) in any administrative or
judicial proceeding relating to the Federal tax liability of
such organization or other person.
``(6) Erroneous designation.--
``(A) In general.--If--
``(i) the tax exemption of any organization
described in paragraph (2) is suspended under
paragraph (1),
``(ii) each designation and identification
described in paragraph (2) which has been made
with respect to such organization is determined
to be erroneous pursuant to the law or
Executive order under which such designation or
identification was made, and
``(iii) the erroneous designations and
identifications result in an overpayment of
income tax for any taxable year by such
organization,
credit or refund (with interest) with respect to such
overpayment shall be made.
``(B) Waiver of limitations.--If the credit or
refund of any overpayment of tax described in
subparagraph (A)(iii) is prevented at any time by the
operation of any law or rule of law (including res
judicata), such credit or refund may nevertheless be
allowed or made if the claim therefor is filed before
the close of the 1-year period beginning on the date of
the last determination described in subparagraph
(A)(ii).
``(7) Notice of suspensions.--If the tax exemption of any
organization is suspended under this subsection, the Internal
Revenue Service shall update the listings of tax-exempt
organizations and shall publish appropriate notice to taxpayers
of such suspension and of the fact that contributions to such
organization are not deductible during the period of such
suspension.''.
(b) Effective Date.--The amendments made by this section shall
apply to designations made before, on, or after the date of the
enactment of this Act.

SEC. 202. CLARIFICATION OF DEFINITION OF CHURCH TAX INQUIRY.

Subsection (i) of section 7611 (relating to section not to apply to
criminal investigations, etc.) is amended by striking ``or'' at the end
of paragraph (4), by striking the period at the end of paragraph (5)
and inserting ``, or'', and by inserting after paragraph (5) the
following:
``(6) information provided by the Secretary related to the
standards for exemption from tax under this title and the
requirements under this title relating to unrelated business
taxable income.''.

SEC. 203. EXTENSION OF DECLARATORY JUDGMENT REMEDY TO TAX-EXEMPT
ORGANIZATIONS.

(a) In General.--Paragraph (1) of section 7428(a) (relating to
creation of remedy) is amended--
(1) in subparagraph (B) by inserting after ``509(a))'' the
following: ``or as a private operating foundation (as defined
in section 4942(j)(3))''; and
(2) by amending subparagraph (C) to read as follows:
``(C) with respect to the initial qualification or
continuing qualification of an organization as an
organization described in subsection (c) (other than paragraph (3)) or
(d) of section 501 which is exempt from tax under section 501(a), or''.
(b) Court Jurisdiction.--Subsection (a) of section 7428 is amended
in the material following paragraph (2) by striking ``United States Tax
Court, the United States Claims Court, or the district court of the
United States for the District of Columbia'' and inserting the
following: ``United States Tax Court (in the case of any such
determination or failure) or the United States Claims Court or the
district court of the United States for the District of Columbia (in
the case of a determination or failure with respect to an issue
referred to in subparagraph (A) or (B) of paragraph (1)),''.
(c) Effective Date.--The amendments made by this section shall
apply to pleadings filed with respect to determinations (or requests
for determinations) made after the date of the enactment of this Act.

SEC. 204. LANDOWNER INCENTIVES PROGRAMS.

(a) In General.--Subsection (a) of section 126 is amended by
redesignating paragraph (10) as paragraph (11) and by inserting after
paragraph (9) the following new paragraph:
``(10) Landowner initiatives programs to conserve
threatened, endangered, or imperiled species, or protect or
restore habitat carried out under--
``(A) the Fish and Wildlife Coordination Act (16
U.S.C. 661 et seq.),
``(B) the Fish and Wildlife Act of 1956 (16 U.S.C.
742f), or
``(C) section 6 of the Endangered Species Act (16
U.S.C. 11531 et seq.).''.
(b) Excludable Portion.--Subparagraph (A) of section 126(b)(1) is
amended by inserting after ``Secretary of Agriculture'' the following:
``(the Secretary of the Interior, in the case of the landowner
incentives programs described in subsection (a)(10) and the programs
described in subsection (a)(11) that are implemented by the Department
of the Interior)''.
(c) Effective Date.--The amendments made by this section shall
apply to amounts received after December 31, 2003, in taxable years
ending after such date.

SEC. 205. MODIFICATIONS TO SECTION 512(B)(13).

(a) In General.--Paragraph (13) of section 512(b) (relating to
special rules for certain amounts received from controlled entities) is
amended by redesignating subparagraph (E) as subparagraph (F) and by
inserting after subparagraph (D) the following new subparagraph:
``(E) Paragraph to apply only to excess payments.--
``(i) In general.--Subparagraph (A) shall
apply only to the portion of a specified
payment received or accrued by the controlling
organization that exceeds the amount which
would have been paid or accrued if such payment
met the requirements prescribed under section
482.
``(ii) Addition to tax for valuation
misstatements.--The tax imposed by this chapter
on the controlling organization shall be
increased by an amount equal to 20 percent of
the larger of--
``(I) such excess determined
without regard to any amendment or
supplement to a return of tax, or
``(II) such excess determined with
regard to all such amendments and
supplements.''.
(b) Effective Date.--
(1) In general.--The amendment made by this section shall
apply to payments received or accrued after December 31, 2003.
(2) Payments subject to binding contract transition rule.--
If the amendments made by section 1041 of the Taxpayer Relief
Act of 1997 did not apply to any amount received or accrued in
the first 2 taxable years beginning on or after the date of the
enactment of the Taxpayer Relief Act of 1997 under any contract
described in subsection (b)(2) of such section, such amendments
also shall not apply to amounts received or accrued under such
contract before January 1, 2001.

SEC. 206. SIMPLIFICATION OF LOBBYING EXPENDITURE LIMITATION.

(a) Repeal of Grassroots Expenditure Limit.--Paragraph (1) of
section 501(h) (relating to expenditures by public charities to
influence legislation) is amended to read as follows:
``(1) General rule.--In the case of an organization to
which this subsection applies, exemption from taxation under
subsection (a) shall be denied because a substantial part of
the activities of such organization consists of carrying on
propaganda, or otherwise attempting, to influence legislation,
but only if such organization normally makes lobbying
expenditures in excess of the lobbying ceiling amount for such
organization for each taxable year.''.
(b) Excess Lobbying Expenditures.--Section 4911(b) is amended to
read as follows:
``(b) Excess Lobbying Expenditures.--For purposes of this section,
the term `excess lobbying expenditures' means, for a taxable year, the
amount by which the lobbying expenditures made by the organization
during the taxable year exceed the lobbying nontaxable amount for such
organization for such taxable year.''.
(c) Conforming Amendments.--
(1) Section 501(h)(2) is amended by striking subparagraphs
(C) and (D).
(2) Section 4911(c) is amended by striking paragraphs (3)
and (4).
(3) Paragraph (1)(A) of section 4911(f) is amended by
striking ``limits of section 501(h)(1) have'' and inserting
``limit of section 501(h)(1) has''.
(4) Paragraph (1)(C) of section 4911(f) is amended by
striking ``limits of section 501(h)(1) are'' and inserting
``limit of section 501(h)(1) is''.
(5) Paragraphs (4)(A) and (4)(B) of section 4911(f) are
each amended by striking ``limits of section 501(h)(1)'' and
inserting ``limit of section 501(h)(1)''.
(6) Paragraph (8) of section 6033(b) (relating to certain
organizations described in section 501(c)(3)) is amended by
inserting ``and'' at the end of subparagraph (A) and by striking
subparagraphs (C) and (D).
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2003.

SEC. 207. PILOT PROJECT FOR FOREST CONSERVATION ACTIVITIES.

(a) Tax-Exempt Bond Financing.--
(1) In general.--For purposes of the Internal Revenue Code
of 1986, any qualified forest conservation bond shall be
treated as an exempt facility bond under section 142 of such
Code.
(2) Qualified forest conservation bond.--For purposes of
this section, the term ``qualified forest conservation bond''
means any bond issued as part of an issue if--
(A) 95 percent or more of the net proceeds (as
defined in section 150(a)(3) of such Code) of such
issue are to be used for qualified project costs,
(B) such bond is an obligation of the State of
Washington or any political subdivision thereof, and
(C) such bond is issued for a qualified
organization before December 31, 2006.
(3) Limitation on aggregate amount issued.--The maximum
aggregate face amount of bonds which may be issued under this
subsection shall not exceed $250,000,000.
(4) Qualified project costs.--For purposes of this
subsection, the term ``qualified project costs'' means the sum
of--
(A) the cost of acquisition by the qualified
organization from an unrelated person of forests and
forest land located in the State of Washington which at
the time of acquisition or immediately thereafter are
subject to a conservation restriction described in
subsection (c)(2),
(B) interest on the qualified forest conservation
bonds for the 3-year period beginning on the date of
issuance of such bonds, and
(C) credit enhancement fees which constitute
qualified guarantee fees (within the meaning of section
148 of such Code).
(5) Special rules.--In applying the Internal Revenue Code
of 1986 to any qualified forest conservation bond, the
following modifications shall apply:
(A) Section 146 of such Code (relating to volume
cap) shall not apply.
(B) For purposes of section 147(b) of such Code
(relating to maturity may not exceed 120 percent of
economic life), the land and standing timber acquired
with proceeds of qualified forest conservation bonds
shall have an economic life of 35 years.
(C) Subsections (c) and (d) of section 147 of such
Code (relating to limitations on acquisition of land
and existing property) shall not apply.
(D) Section 57(a)(5) of such Code (relating to tax-
exempt interest) shall not apply to interest on
qualified forest conservation bonds.
(6) Treatment of current refunding bonds.--Paragraphs
(2)(C) and (3) shall not apply to any bond (or series of bonds)
issued to refund a qualified forest conservation bond issued
before December 31, 2006, if--
(A) the average maturity date of the issue of which
the refunding bond is a part is not later than the
average maturity date of the bonds to be refunded by
such issue,
(B) the amount of the refunding bond does not
exceed the outstanding amount of the refunded bond, and
(C) the net proceeds of the refunding bond are used
to redeem the refunded bond not later than 90 days
after the date of the issuance of the refunding bond.
For purposes of subparagraph (A), average maturity shall be
determined in accordance with section 147(b)(2)(A) of such
Code.
(7) Effective date.--This subsection shall apply to
obligations issued on or after the date of enactment of this
Act.
(b) Items From Qualified Harvesting Activities Not Subject to Tax
or Taken Into Account.--
(1) In general.--Income, gains, deductions, losses, or
credits from a qualified harvesting activity conducted by a
qualified organization shall not be subject to tax or taken
into account under subtitle A of the Internal Revenue Code of
1986.
(2) Limitation.--The amount of income excluded from gross
income under paragraph (1) for any taxable year shall not
exceed the amount used by the qualified organization to make
debt service payments during such taxable year for qualified
forest conservation bonds.
(3) Qualified harvesting activity.--For purposes of
paragraph (1)--
(A) In general.--The term ``qualified harvesting
activity'' means the sale, lease, or harvesting, of
standing timber--
(i) on land owned by a qualified
organization which was acquired with proceeds
of qualified forest conservation bonds, and
(ii) pursuant to a qualified conservation
plan adopted by the qualified organization.
(B) Exceptions.--
(i) Cessation as qualified organization.--
The term ``qualified harvesting activity''
shall not include any sale, lease, or
harvesting for any period during which the
organization ceases to qualify as a qualified
organization.
(ii) Exceeding limits on harvesting.--The
term ``qualified harvesting activity'' shall
not include any sale, lease, or harvesting of
standing timber on land acquired with proceeds
of qualified forest conservation bonds to the extent that--
(I) the average annual area of
timber harvested from such land exceeds
2.5 percent of the total area of such
land, or
(II) the quantity of timber removed
from such land exceeds the quantity
which can be removed from such land
annually in perpetuity on a sustained-
yield basis with respect to such land.
The limitations under subclauses (I) and (II)
shall not apply to post-fire restoration and
rehabilitation or sanitation harvesting of
timber stands which are substantially damaged
by fire, windthrow, or other catastrophes, or
which are in imminent danger from insect or
disease attack.
(4) Termination.--This subsection shall not apply to any
qualified harvesting activity occurring after the date on which
there is no outstanding qualified forest conservation bond or
any such bond ceases to be a tax-exempt bond.
(5) Partial recapture of benefits if harvesting limit
exceeded.--If, as of the date that this subsection ceases to
apply under paragraph (4), the average annual area of timber
harvested from the land exceeds the requirement of paragraph
(3)(B)(ii)(I), the tax imposed by chapter 1 of such Code shall
be increased, under rules prescribed by the Secretary of the
Treasury, by the sum of the tax benefits attributable to such
excess and interest at the underpayment rate under section 6621
of such Code for the period of the underpayment.
(c) Definitions.--For purposes of this section--
(1) Qualified conservation plan.--The term ``qualified
conservation plan'' means a multiple land use program or plan
which--
(A) is designed and administered primarily for the
purposes of protecting and enhancing wildlife and fish,
timber, scenic attributes, recreation, and soil and
water quality of the forest and forest land,
(B) mandates that conservation of forest and forest
land is the single-most significant use of the forest
and forest land, and
(C) requires that timber harvesting be consistent
with--
(i) restoring and maintaining reference
conditions for the region's ecotype,
(ii) restoring and maintaining a
representative sample of young, mid, and late
successional forest age classes,
(iii) maintaining or restoring the
resources' ecological health for purposes of
preventing damage from fire, insect, or
disease,
(iv) maintaining or enhancing wildlife or
fish habitat, or
(v) enhancing research opportunities in
sustainable renewable resource uses.
(2) Conservation restriction.--The conservation restriction
described in this paragraph is a restriction which--
(A) is granted in perpetuity to an unrelated person
which is described in section 170(h)(3) of such Code
and which, in the case of a nongovernmental unit, is
organized and operated for conservation purposes,
(B) meets the requirements of clause (ii) or
(iii)(II) of section 170(h)(4)(A) of such Code,
(C) obligates the qualified organization to pay the
costs incurred by the holder of the conservation
restriction in monitoring compliance with such
restriction, and
(D) requires an increasing level of conservation
benefits to be provided whenever circumstances allow
it.
(3) Qualified organization.--The term ``qualified
organization'' means an organization--
(A) which is a nonprofit organization substantially
all the activities of which are charitable, scientific,
or educational, including acquiring, protecting,
restoring, managing, and developing forest lands and
other renewable resources for the long-term charitable,
educational, scientific and public benefit,
(B) more than half of the value of the property of
which consists of forests and forest land acquired with
the proceeds from qualified forest conservation bonds,
(C) which periodically conducts educational
programs designed to inform the public of
environmentally sensitive forestry management and
conservation techniques,
(D) which has at all times a board of directors--
(i) at least 20 percent of the members of
which represent the holders of the conservation
restriction described in paragraph (2),
(ii) at least 20 percent of the members of
which are public officials, and
(iii) not more than one-third of the
members of which are individuals who are or
were at any time within 5 years before the
beginning of a term of membership on the board,
an employee of, independent contractor with
respect to, officer of, director of, or held a
material financial interest in, a commercial
forest products enterprise with which the
qualified organization has a contractual or
other financial arrangement,
(E) the bylaws of which require at least two-thirds
of the members of the board of directors to vote
affirmatively to approve the qualified conservation
plan and any change thereto, and
(F) upon dissolution, is required to dedicate its
assets to--
(i) an organization described in section
501(c)(3) of such Code which is organized and
operated for conservation purposes, or
(ii) a governmental unit described in
section 170(c)(1) of such Code.
(4) Unrelated person.--The term ``unrelated person'' means
a person who is not a related person.
(5) Related person.--A person shall be treated as related
to another person if--
(A) such person bears a relationship to such other
person described in section 267(b) (determined without
regard to paragraph (9) thereof), or 707(b)(1), of such
Code, determined by substituting ``25 percent'' for
``50 percent'' each place it appears therein, and
(B) in the case such other person is a nonprofit
organization, if such person controls directly or
indirectly more than 25 percent of the governing body
of such organization.
(d) Report.--
(1) In general.--The Comptroller General of the United
States shall conduct a study on the pilot project for forest
conservation activities under this section. Such study shall
examine the extent to which forests and forest lands were
managed during the 5-year period beginning on the date of the
enactment of this Act to achieve the goals of such project.
(2) Submission of report to congress.--Not later than six
years after the date of the enactment of this Act, the
Comptroller General shall submit a report of such study to the
Committee on Ways and Means and the Committee on Resources of
the House of Representatives and the Committee on Finance and
the Committee on Energy and Natural Resources of the Senate.

TITLE III--OTHER PROVISIONS

SEC. 301. COMPASSION CAPITAL FUND.

Title IV of the Social Security Act (42 U.S.C. 601-679b) is amended
by adding at the end the following:

``PART F--COMPASSION CAPITAL FUND

``SEC. 481. SECRETARY'S FUND TO SUPPORT AND REPLICATE PROMISING SOCIAL
SERVICE PROGRAMS.

``(a) Grant Authority.--
``(1) In general.--The Secretary may make grants to support
any private entity that operates a promising social services
program.
``(2) Applications.--An entity desiring to receive a grant
under paragraph (1) shall submit to the Secretary an
application for the grant, which shall contain such information
as the Secretary may require.
``(b) Contract Authority, etc.--The Secretary may enter into a
grant, contract, or cooperative agreement with any entity under which
the entity would provide technical assistance to another entity to
operate a social service program that assists persons and families in
need, including by--
``(1) providing the other entity with--
``(A) technical assistance and information,
including legal assistance and other business
assistance;
``(B) information on capacity-building;
``(C) information and assistance in identifying and
using best practices for serving persons and families
in need; or
``(D) assistance in replicating programs with
demonstrated effectiveness in assisting persons and
families in need; or
``(2) supporting research on the best practices of social
service organizations.
``(c) Guidance and Technical Assistance.--The Secretary may use not
more than 25 percent of the amount appropriated under this section for
a fiscal year to provide guidance and technical assistance to States
and political subdivisions of States with respect to the implementation
of any social service program.
``(d) Social Services Program Defined.--In this section, the term
`social services program' means a program that provides benefits or
services of any kind to persons and families in need.
``(e) Limitations on Authorization of Appropriations.--To carry out
this section, there are authorized to be appropriated to the Secretary
$150,000,000 for fiscal year 2004, and such sums as may be necessary
for fiscal years 2005 through 2008.''.

SEC. 302. REAUTHORIZATION OF ASSETS FOR INDEPENDENCE DEMONSTRATION.

(a) In General.--Section 416 of the Assets for Independence Act
(title IV of Public Law 105-285; 42 U.S.C. 604 note) is amended by
striking ``and 2003'' and inserting ``2003, 2004, 2005, 2006, 2007, and
2008''.
(b) Removal of Economic Literacy Activities From Limitation on Use
of Amounts in the Reserve Fund.--Section 407(c)(3) of such Act (title
IV of Public Law 105-285; 42 U.S.C. 604 note) is amended by adding at
the end the following: ``The preceding sentences of this paragraph
shall not apply to amounts used by an entity for any activity described
in paragraph (1)(A).''.
(c) Eligibility Expanded To Include Individuals in Households With
Income Not Exceeding 50 Percent of Area Median Income.--Section
408(a)(1) of such Act (title IV of Public Law 105-285; 42 U.S.C. 604
note) is amended to read as follows:
``(1) Income test.--The adjusted gross income of the
household--
``(A) does not exceed 200 percent of the poverty
line (as determined by the Office of Management and
Budget) or the earned income amount described in
section 32 of the Internal Revenue Code of 1986 (taking
into account the size of the household); or
``(B) does not exceed 50 percent of the area median
income (as determined by the Secretary of Housing and
Urban Development) for the area in which the household
is located.''.
(d) Extension of Time for Account Holders To Access Federal
Funds.--Section 407(d) of such Act (title IV of Public Law 105-285; 42
U.S.C. 604 note) is amended--
(1) in the subsection heading, by striking ``When Project
Terminates''; and
(2) by striking ``upon'' and inserting ``on the date that
is 6 months after''.
(e) Verification of Postsecondary Education Expenses.--Section
404(8)(A) of such Act (title IV of Public Law 105-285; 42 U.S.C. 604
note) is amended in the 1st sentence by inserting ``or a vendor, but
only to the extent that the expenses are described in a document which
explains the educational items to be purchased, and the document and
the expenses are approved by the qualified entity'' before the period.
(f) Authority To Use Excess Interest To Fund Other Individual
Development Accounts.--Section 410 of such Act (title IV of Public Law
105-285; 42 U.S.C. 604 note) is amended--
(1) in subsection (a)(3)--
(A) by striking ``any interest that has accrued''
and inserting ``interest that has accrued during that
period''; and
(B) by striking the period and inserting ``, but
only to the extent that the amount of the interest does
not exceed the amount of interest that has accrued
during that period on amounts deposited in the account
by that individual.''; and
(2) by adding at the end the following:
``(f) Use of Excess Interest To Fund Other Individual Development
Accounts.--To the extent that a qualified entity has an amount that,
but for the limitation in subsection (a)(3), would be required by that
subsection to be deposited into the individual development account of
an individual or into a parallel account maintained by the qualified
entity, the qualified entity may deposit the amount into the individual
development account of any individual or into any such parallel account
maintained by the qualified entity.''.

SEC. 303. SENSE OF THE CONGRESS REGARDING CORPORATE CONTRIBUTIONS TO
FAITH-BASED ORGANIZATIONS, ETC.

(a) Findings.--The Congress finds as follows:
(1) America's community of faith has long played a leading
role in dealing with difficult societal problems that might
otherwise have gone unaddressed.
(2) President Bush has called upon Americans ``to revive
the spirit of citizenship . . . to marshal the compassion of
our people to meet the continuing needs of our Nation''.
(3) Although the work of faith-based organizations should
not be used by government as an excuse for backing away from
its historic and rightful commitment to help those who are
disadvantaged and in need, such organizations can and should be
seen as a valuable partner with government in meeting societal
challenges.
(4) Every day faith-based organizations in the United
States help people recover from drug and alcohol addiction,
provide food and shelter for the homeless, rehabilitate prison
inmates so that they can break free from the cycle of
recidivism, and teach people job skills that will allow them to
move from poverty to productivity.
(5) Faith-based organizations are often more successful in
dealing with difficult societal problems than government and
non-sectarian organizations.
(6) As President Bush has stated, ``It is not sufficient to
praise charities and community groups; we must support them.
And this is both a public obligation and a personal
responsibility.''.
(7) Corporate foundations contribute billions of dollars
each year to a variety of philanthropic causes.
(8) According to a study produced by the Capital Research
Center, the 10 largest corporate foundations in the United
States contributed $1,900,000,000 to such causes.
(9) According to the same study, faith-based organizations
only receive a small fraction of the contributions made by
corporations in the United States, and 6 of the 10 corporations
that give the most to philanthropic causes explicitly ban or
restrict contributions to faith-based organizations.
(b) Corporations Encouraged To Contribute to Faith-Based
Organizations.--The Congress calls on corporations in the United
States, in the words of the President, ``to give more and to give
better'' by making greater contributions to faith-based organizations
that are on the front lines battling some of the great societal
challenges of our day.
(c) Sense of the Congress.--It is the sense of Congress that--
(1) corporations in the United States are important
partners with government in efforts to overcome difficult
societal problems; and
(2) no corporation in the United States should adopt
policies that prohibit the corporation from contributing to an
organization that is successfully advancing a philanthropic
cause merely because such organization is faith based.

SEC. 304. MATERNITY GROUP HOMES.

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--
``(1) 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; and
``(2) pregnant women with--
``(A) information regarding the option of placing
children for adoption through licensed adoption service
providers;
``(B) assistance with prenatal care and child
birthing; and
``(C) pre- and post-placement adoption
counseling.''.

SEC. 305. AUTHORITY OF STATES TO USE 10 PERCENT OF THEIR TANF FUNDS TO
CARRY OUT SOCIAL SERVICES BLOCK GRANT PROGRAMS.

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.''.

Passed the House of Representatives September 17, 2003.

Attest:

JEFF TRANDAHL,

Clerk.