To direct the Commissioner of Internal Revenue to establish an earned income credit public awareness campaign to increase public awareness and educate Americans of the earned income credit.

Summary: Earned Income Credit Public Awareness Campaign Act - Directs the Commissioner of Internal Revenue to: (1) establish and carry out a national public awareness campaign to educate Americans of the availability of the earned income credit; and (2) make grants to State agencies to carry out earned income credit Statewide public awareness campaigns in conjunction with the national campaign.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Earned Income Credit Public 
Awareness Campaign Act''.

SEC. 2. FINDINGS.

    The Congress finds the following:
            (1) In 2001, the earned income credit provided over 
        $30,000,000,000 in tax relief to 18,500,000 low-income 
        taxpayers.
            (2) The earned income credit is the second largest program, 
        after Medicaid, that provides assistance to low-income 
        individuals combating poverty.
            (3) Data from the United States Census Bureau Current 
        Population Survey indicates that in 1999, the earned income 
        credit assisted 4,700,000 people, including 2,600,000 children 
        of low-income workers, to rise above the poverty line.
            (4) Each year, between 15 and 25 percent of those who are 
        eligible to receive the earned income credit fail to claim 
        their credit, either because they are unaware of it or cannot 
        obtain the assistance they may need to properly complete the 
        appropriate tax return.
            (5) Lack of education, language barriers, fear or 
        intimidation, limited financial resources, and unawareness of 
        the earned income credit all contribute to low-income families 
        and individuals not taking advantage of the credit.
            (6) The Taxpayer Advocate's Fiscal Year 2002 Annual Report 
        notes, ``The laws and regulations governing family status in 
        the Internal Revenue Code are numerous and complex. As a 
        result, taxpayers must often seek the service of paid tax 
        preparers to claim credits and benefits on returns. Low income 
        taxpayers are particularly susceptible to this need. They rely 
        extensively on paid preparers to assist in navigating the 
        intricacies of the Earned Income Tax Credit''.
            (7) 2002 Internal Revenue Service data indicates that 
        nearly 68 percent of earned income credit recipients pay 
        someone to prepare their tax returns, and fewer than 1 in 10 
        have their tax returns prepared for free by the Volunteer 
        Income Tax Assistance program.
            (8) An estimated $994,000,000 in earned income credit 
        refunds were paid by the taxpayer directly to tax preparers and 
        related businesses for costs associated with preparation, 
        filing, loans, and check cashing.
            (9) Many low-income families and individuals are 
        disproportionately disadvantaged in meeting the financial 
        obligation of hiring tax preparers and purchasing tax 
        preparation products.
            (10) According to the Taxpayer Advocate's Fiscal Year 2002 
        Annual Report, ``The Internal Revenue Service must undertake a 
        significant consumer education campaign so that low income 
        taxpayers are able to make informed choices between tax 
        preparers and tax preparation products''.
            (11) Increasing public awareness about the earned income 
        credit will lead to increased utilization of the credit by low-
        income families and individuals.

SEC. 3. EARNED INCOME TAX CREDIT AWARENESS CAMPAIGN.

    (a) Establishment of National Campaign.--The Commissioner of 
Internal Revenue (hereafter in this Act referred to as the 
``Commissioner'') shall establish and carry out a national public 
awareness campaign to educate Americans of the availability of the 
credit allowable under section 32 of the Internal Revenue Code of 1986 
(hereafter in this Act referred to as the ``earned income credit''.
    (b) Special Targeted Campaign.--In carrying out subsection (a), the 
Commissioner shall make special efforts to conduct outreach to--
            (1) low-income families and individuals;
            (2) students;
            (3) single parents;
            (4) businesses and corporations;
            (5) limited English proficient individuals;
            (6) transient workers; and
            (7) military personnel.
    (c) Educational Activities.--In carrying out subsection (a), the 
Commissioner shall make special efforts to--
            (1) produce and distribute educational materials to be 
        distributed nationwide to groups identified under subsection 
        (b);
            (2) conduct a targeted media campaign highlighting the 
        earned income tax credit;
            (3) encourage businesses and corporations to make available 
        and distribute educational materials produced under paragraph 
        (1) to their employees; and
            (4) make educational materials available to public 
        libraries, post offices, State agencies, and other public 
        locations where tax information and forms are readily available 
        or tax preparation services are offered.
    (d) Reports to Congress.--
            (1) Annual report.--Not later than 1 year after the date of 
        enactment of this Act, and annually thereafter, the 
        Commissioner shall submit to the Congress a report detailing 
        the activities carried out by the Commissioner under this 
        section and section 5 of this Act and recommendations for 
        amendments to this Act.

SEC. 4. EARNED INCOME TAX CREDIT STATE GRANT PROGRAM.

    (a) In General.--The Commissioner shall make grants to State 
agencies for the purposes of carrying out an earned income credit 
Statewide public awareness campaign in conjunction with the national 
campaign under section 3.
    (b) Allotments.--The Commission shall allot to each State for each 
fiscal year an amount which bears the same ratio to the amount 
appropriated to carry out subsection (a) for such fiscal year as the 
total amount of earned income credit claims made by residents in that 
State on returns filed during the second preceding fiscal year bears to 
the total amount of earned income credit claims on returns filed during 
such second preceding fiscal year.
    (c) Requirement of Matching Funds.--To be eligible to receive an 
allotment under this section, a State shall provide matching funds to a 
grant made available under this section.
    (d) Applications.--To be eligible to receive an allotment under 
this section, a State shall submit an application to the Commissioner 
at such time, in such manner, and containing such information as the 
Commissioner may require.
    (e) Accountability.--To be eligible to receive an allotment under 
this section, within 180 days of receiving an allotment, a State shall 
submit to the Commissioner a detailed report indicating steps taken by 
the State to implement subsection (a) of this section.
    (f) Funding.--No less than 25 percent and no more than 50 percent 
of the funds appropriated to carry out this Act shall be made available 
to carry out this section.

SEC. 5. AUTHORIZATION OF FUNDS.

    (a) In General.--There is authorized to be appropriated to the 
Internal Revenue Service $15,000,000 for each of fiscal years 2004 
through 2014.
    (b) Limitation of Administrative Expenses.--Not more than 3 percent 
of the funds appropriated to carry out this Act shall be spent on 
administrative costs of the Internal Revenue Service.