39–006 

113TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 2d Session 113–498 

FIGHTING HUNGER INCENTIVE ACT OF 2014 

JUNE 26, 2014.—Committed to the Committee of the Whole House on the State of 

the Union and ordered to be printed 

Mr. CAMP, from the Committee on Ways and Means, 

submitted the following 

R E P O R T 

together with 

DISSENTING VIEWS 

[To accompany H.R. 4719] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Ways and Means, to whom was referred the 

bill (H.R. 4719) to amend the Internal Revenue Code of 1986 to 

permanently extend and expand the charitable deduction for contributions of food inventory, having considered the same, report favorably thereon with an amendment and recommend that the bill 

as amended do pass. 

CONTENTS 

Page 

I. SUMMARY AND BACKGROUND ............................................................... 3 

A. Purpose and Summary ..................................................................... 3 

B. Background and Need for Legislation ............................................. 3 

C. Legislative History ............................................................................ 4 

II. EXPLANATION OF THE BILL ................................................................... 4 

A. Extension and Expansion of Charitable Deduction for Contributions of Food Inventory (sec. 170 of the Code) ............................. 4 

III. VOTES OF THE COMMITTEE .................................................................... 7 

IV. BUDGET EFFECTS OF THE BILL ............................................................ 7 

A. Committee Estimate of Budgetary Effects ...................................... 7 

B. Statement Regarding New Budget Authority and Tax Expenditures Budget Authority .................................................................. 8 

C. Cost Estimate Prepared by the Congressional Budget Office ....... 8 

D. Macroeconomic Impact Analysis ...................................................... 9 

V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF 

THE HOUSE .............................................................................................. 9 

A. Committee Oversight Findings and Recommendations ................. 9 


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B. Statement of General Performance Goals and Objectives ............. 9 

C. Information Relating to Unfunded Mandates ................................ 10 

D. Applicability of House Rule XXI 5(b) .............................................. 10 

E. Tax Complexity Analysis .................................................................. 10 

F. Congressional Earmarks, Limited Tax Benefits, and Limited 

Tariff Benefits ................................................................................. 10 

G. Duplication of Federal Programs ..................................................... 10 

H. Disclosure of Directed Rule Makings .............................................. 11 

VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED 11 

VII. DISSENTING VIEWS ................................................................................... 14 

The amendment is as follows: 

Strike all after the enacting clause and insert the following: 

SECTION 1. SHORT TITLE. 

This Act may be cited as the ‘‘Fighting Hunger Incentive Act of 2014’’. 

SEC. 2. EXTENSION AND EXPANSION OF CHARITABLE DEDUCTION FOR CONTRIBUTIONS OF 

FOOD INVENTORY. 

(a) PERMANENT EXTENSION.—Section 170(e)(3)(C) of the Internal Revenue Code of 

1986 is amended by striking clause (iv). 

(b) INCREASE IN LIMITATION.—Section 170(e)(3)(C) of such Code, as amended by 

subsection (a), is amended by striking clause (ii), by redesignating clause (iii) as 

clause (iv), and by inserting after clause (i) the following new clauses: 

‘‘(ii) LIMITATION.—The aggregate amount of such contributions for 

any taxable year which may be taken into account under this section 

shall not exceed— 

‘‘(I) in the case of any taxpayer other than a C corporation, 15 

percent 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, 

and 

‘‘(II) in the case of a C corporation, 15 percent of taxable income 

(as defined in subsection (b)(2)(C)). 

‘‘(iii) RULES RELATED TO LIMITATION.— ‘‘(I) CARRYOVER.—If such aggregate amount exceeds the limitation imposed under clause (ii), such excess shall be treated (in a 

manner consistent with the rules of subsection (d)) as a charitable 

contribution described in clause (i) in each of the 5 succeeding 

years in order of time. 

‘‘(II) COORDINATION WITH OVERALL CORPORATE LIMITATION.—In 

the case of any charitable contribution allowable under clause 

(ii)(II), subsection (b)(2)(A) shall not apply to such contribution, but 

the limitation imposed by such subsection shall be reduced (but not 

below zero) by the aggregate amount of such contributions. For 

purposes of subsection (b)(2)(B), such contributions shall be treated 

as allowable under subsection (b)(2)(A).’’. 

(c) DETERMINATION OF BASIS FOR CERTAIN TAXPAYERS.—Section 170(e)(3)(C) of 

such Code, as amended by subsections (a) and (b), is amended by adding at the end 

the following new clause: 

‘‘(v) DETERMINATION OF BASIS FOR CERTAIN TAXPAYERS.—If a taxpayer— 

‘‘(I) does not account for inventories under section 471, and 

‘‘(II) is not required to capitalize indirect costs under section 

263A, 

the taxpayer may elect, solely for purposes of subparagraph (B), to 

treat the basis of any apparently wholesome food as being equal to 25 

percent of the fair market value of such food.’’. 

(d) DETERMINATION OF FAIR MARKET VALUE.—Section 170(e)(3)(C) of such Code, 

as amended by subsections (a), (b), and (c), is amended by adding at the end the 

following new clause: 

‘‘(vi) DETERMINATION OF FAIR MARKET VALUE.—In the case of any 

such contribution of apparently wholesome food which cannot or will 

not be sold solely by reason of internal standards of the taxpayer, lack 

of market, or similar circumstances, or by reason of being produced by 

the taxpayer exclusively for the purposes of transferring the food to an 

organization described in subparagraph (A), the fair market value of 

such contribution shall be determined— 

‘‘(I) without regard to such internal standards, such lack of market, such circumstances, or such exclusive purpose, and 


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‘‘(II) 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).’’. 

(e) EFFECTIVE DATE.— 

(1) IN GENERAL.—Except as otherwise provided in this subsection, the amendments made by this section shall apply to contributions made after December 

31, 2013, in taxable years ending after such date. 

(2) LIMITATION; APPLICABILITY TO C CORPORATIONS.—The amendments made 

by subsection (b) shall apply to contributions made in taxable years beginning 

after December 31, 2013. 

I. SUMMARY AND BACKGROUND 

A. PURPOSE AND SUMMARY

H.R. 4719, reported by the Committee on Ways and Means, provides that contributions of food inventory by pass-through businesses may qualify for an enhanced deduction, which is currently 

available to C corporations. A similar temporary provision expired 

for taxable years beginning after December 31, 2013. H.R. 4719 increases the limitation on deductible contributions of food inventory 

to 15 percent of the taxpayer’s adjusted gross income (15 percent 

of taxable income in the case of a C corporation) per year. 

In addition, H.R. 4719 provides a special basis rule for passthrough businesses that do not maintain inventories, under which 

such businesses could treat their basis in the contributed food as 

equal to 25 percent of the fair market value of such food. H.R. 4719 

establishes a rule to determine the fair market value of contributed 

food inventory that cannot or will not be sold by the business because of internal standards, lack of market or similar circumstances or because it was produced exclusively for the purpose 

of transferring it to a charitable organization. 

B. BACKGROUND AND NEED FOR LEGISLATION

While the Committee continues actively to pursue comprehensive 

tax reform as a critical means of promoting economic growth and 

job creation, the Committee also believes that it is important to 

provide individuals and small businesses permanent, immediate 

tax relief to encourage faster economic growth and job creation, 

while fostering charitable giving. By restoring and making permanent the enhanced deduction for donations of food inventory by 

pass-through businesses, like S corporations, H.R. 4719 makes the 

enhanced deduction available to all types of businesses, not just C 

corporations. Accordingly, H.R. 4719 provides an important incentive for food-service companies like restaurants to donate, rather 

than discard, surplus wholesome food inventory to charitable organizations that help children and families in need. Recognizing that 

donated food inventory must be properly saved, packaged, labeled 

and kept refrigerated or frozen until it is delivered to the charitable organization, H.R. 4719 encourages food-service companies to 

incur and offset these costs through the enhanced deduction. According to testimony received by the Committee, the enhanced deduction for food inventory has been a vital incentive to support 

community food pantries and other tax-exempt organizations that 

work to fight hunger in local communities across the nation. 


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1Sec. 170. 

2Sec. 170(b)(1). The contribution base is the adjusted gross income determined without regard 

net operating loss carrybacks. 3Sec. 170(b)(2). 

4Sec. 170(e)(1)(A). 

C. LEGISLATIVE HISTORY

Background 

H.R. 4719 was introduced on May 22, 2014, and was referred to 

the Committee on Ways and Means. 

Committee action 

The Committee on Ways and Means marked up H.R. 4719, the 

Fighting Hunger Incentive Act of 2014, on May 29, 2014, and ordered the bill, as amended, favorably reported (with a quorum 

being present). 

Committee hearings 

The need for permanent rules regarding the charitable deduction 

for contributions of food inventory was discussed at no fewer than 

two hearings during the 112th and 113th Congresses: • Select Revenue Measures Subcommittee Hearing on Certain Expiring Tax Provisions (April 26, 2012); and • Full Committee Hearing on Tax Reform and Charitable 

Contributions (February 14, 2013). 

II. EXPLANATION OF THE BILL 

A. EXTENSION AND EXPANSION OF CHARITABLE DEDUCTION FOR

CONTRIBUTIONS OF FOOD INVENTORY (SEC. 170 OF THE CODE) 

PRESENT LAW

Charitable contributions in general 

In general, an income tax deduction is permitted for charitable 

contributions, subject to certain limitations that depend on the type 

of taxpayer, the property contributed, and the donee organization.1

In the case of an individual, the deduction is limited to various percentages of the contribution base, depending on the donee and the 

property contributed. In the case of a corporation,2 the deduction 

generally is limited to ten percent of the taxable income (with 

modifications).3 Contributions in excess of these limitations may be 

carried forward for up to five taxable years. 

Charitable contributions of cash are deductible in the amount 

contributed. Subject to several exceptions, contributions of property 

are deductible at the fair market value of the property. One exception provides that the amount of the charitable contribution is reduced by the amount of any gain which would not have been longterm capital gain if the property contributed had been sold by the 

taxpayer at its fair market value at the time of the contribution.4

General rules regarding contributions of inventory 

As a result of the exception described above, a taxpayer’s deduction for charitable contributions of inventory generally is limited to 

the taxpayer’s basis (typically, cost) in the inventory, or, if less, the 

fair market value of the inventory. 


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5Sec. 170(e)(3). 

6Sec. 170(e)(3)(A)(iv). 

7Lucky Stores Inc. v. Commissioner, 105 T.C. 420 (1995) (holding that the value of surplus 

bread inventory donated to charity was the full retail price of the bread rather than half the 

retail price, as the IRS asserted). 8Sec. 170(e)(3)(C). 

9The ten-percent limitation does not affect the application of the generally applicable percentage limitations. For example, if ten percent of a sole proprietor’s net income from the proprietor’s trade or business is greater than 50 percent of the proprietor’s contribution base which 

otherwise limits the deduction, the available deduction for the taxable year (with respect to contributions to public charities) is 50 percent of the proprietor’s contribution base. Consistent with 

present law, these contributions may be carried forward because they exceed the 50 percent limitation. Contributions of food inventory by a taxpayer that is not a C corporation that exceed 

Continued 

However, for certain contributions of inventory, a C corporation 

may claim an enhanced deduction equal to the lesser of (1) basis 

plus one-half of the item’s appreciation (i.e., basis plus one-half of 

fair market value in excess of basis) or (2) two times basis.5 To be 

eligible for the enhanced deduction, the contributed property generally must be inventory of the taxpayer and must be contributed 

to a charitable organization described in section 501(c)(3) (except 

for private nonoperating foundations), and the donee must (1) use 

the property consistent with the donee’s exempt purpose solely for 

the care of the ill, the needy, or infants; (2) not transfer the property in exchange for money, other property, or services; and (3) provide the taxpayer a written statement that the donee’s use of the 

property will be consistent with such requirements. In the case of 

contributed property subject to the Federal Food, Drug, and Cosmetic Act, as amended, the property must satisfy the applicable requirements of such Act on the date of transfer and for 180 days 

prior to the transfer.6

To claim the enhanced deduction, the taxpayer must establish 

that the fair market value of the donated item exceeds basis. The 

valuation of food inventory has been the subject of disputes between taxpayers and the IRS.7

Temporary rule expanding and modifying the enhanced deduction 

for contributions of food inventory 

Under a temporary provision, any taxpayer engaged in a trade 

or business, whether or not a C corporation, is eligible to claim the 

enhanced deduction for donations of food inventory.8 For taxpayers 

other than C corporations, the total deduction for donations of food 

inventory in a taxable year generally may not exceed ten percent 

of the taxpayer’s net income for such taxable year from all sole proprietorships, S corporations, or partnerships (or other non C corporations) from which contributions of apparently wholesome food 

are made. For example, if a taxpayer is a sole proprietor, a shareholder in an S corporation, and a partner in a partnership, and 

each business makes charitable contributions of food inventory, the 

taxpayer’s deduction for donations of food inventory is limited to 

ten percent of the taxpayer’s net income from the sole proprietorship and the taxpayer’s interests in the S corporation and partnership. However, if only the sole proprietorship and the S corporation 

made charitable contributions of food inventory, the taxpayer’s deduction would be limited to ten percent of the net income from the 

trade or business of the sole proprietorship and the taxpayer’s interest in the S corporation, but not the taxpayer’s interest in the 

partnership.9


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the ten-percent limitation but do not exceed the 50 percent limitation may not be carried forward. 

Under the temporary provision, the enhanced deduction for food 

is available only for food that qualifies as ‘‘apparently wholesome 

food.’’ Apparently wholesome food is defined as food intended for 

human consumption that meets all quality and labeling standards 

imposed by Federal, State, and local laws and regulations even 

though the food may not be readily marketable due to appearance, 

age, freshness, grade, size, surplus, or other conditions. 

The provision does not apply to contributions made after December 31, 2013. 

REASONS FOR CHANGE

The Committee believes that charitable organizations benefit 

from charitable contributions of food inventory by non C corporations and that the enhanced deduction is a useful incentive for the 

making of such contributions. Accordingly, the Committee believes 

it is appropriate to make permanent the special rule for charitable 

contributions of food inventory by all taxpayers engaged in a trade 

or business. 

EXPLANATION OF PROVISION

The provision reinstates and makes permanent the enhanced deduction for contributions of food inventory. 

The provision also modifies the enhanced deduction for food inventory contributions by: (1) increasing the charitable percentage 

limitation for food inventory contributions and clarifying the carryover and coordination rules for these contributions; (2) including a 

presumption concerning the tax basis of food inventory donated by 

certain businesses; and (3) including presumptions that may be 

used when valuing donated food inventory. 

First, the ten-percent limitation described above applicable to 

taxpayers other than C corporations is increased to 15 percent. For 

C corporations, these contributions are made subject to a limitation 

of 15 percent of taxable income (as modified). The general ten-percent limitation for a C corporation does not apply to these contributions, but the ten-percent limitation applicable to other contributions is reduced by the amount of these contributions. Qualifying 

food inventory contributions in excess of these 15-percent limitations may be carried forward and treated as qualifying food inventory contributions in each of the five succeeding years in order of 

time. 

Second, if the taxpayer does not account for inventory under section 471 and is not required to capitalize indirect costs under section 263A, the taxpayer may elect, solely for computing the enhanced deduction for food inventory, to treat the basis of any apparently wholesome food as being equal to 25 percent of the fair 

market value of such food. 

Third, in the case of any contribution of apparently wholesome 

food which cannot or will not be sold solely by reason of internal 

standards of the taxpayer, lack of market, or similar circumstances, 

or by reason of being produced by the taxpayer exclusively for the 

purposes of transferring the food to an organization described in 

section 501(c)(3), the fair market value of such contribution shall 


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be determined (1) without regard to such internal standards, such 

lack of market or similar circumstances, or such exclusive purpose, 

and (2) 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 contributions (or, if not so sold 

at such time, in the recent past). 

EFFECTIVE DATE

The provision is generally effective for contributions made after 

December 31, 2013, in taxable years ending after that date. The increase in the percentage limit and the related carryover and coordination rules are effective for contributions made in taxable years 

beginning after December 31, 2013. 

III. VOTES OF THE COMMITTEE 

In compliance with clause 3(b) of rule XIII of the Rules of the 

House of Representatives, the following statement is made concerning the vote of the Committee on Ways and Means in its consideration of H.R. 4719, the Fighting Hunger Incentive Act of 2014, 

on May 29, 2014. 

The bill, H.R. 4719, was ordered favorably reported as amended 

by a roll call vote of 23 yeas to 13 nays (with a quorum being 

present). The vote was as follows: 

Representative Yea Nay Present Representative Yea Nay Present 

Mr. Camp .............................. X ........... ............. Mr. Levin .............................. ........... X .............

Mr. Johnson ........................... X ........... ............. Mr. Rangel ........................... ........... X .............

Mr. Brady .............................. X ........... ............. Mr. McDermott ..................... ........... X .............

Mr. Ryan ............................... X ........... ............. Mr. Lewis .............................. ........... ........... .............

Mr. Nunes ............................. X ........... ............. Mr. Neal ............................... ........... X .............

Mr. Tiberi .............................. X ........... ............. Mr. Becerra .......................... ........... ........... .............

Mr. Reichert .......................... X ........... ............. Mr. Doggett .......................... ........... X .............

Mr. Boustany ......................... X ........... ............. Mr. Thompson ...................... ........... X .............

Mr. Roskam ........................... X ........... ............. Mr. Larson ............................ ........... X .............

Mr. Gerlach ........................... X ........... ............. Mr. Blumenauer ................... ........... X .............

Mr. Price ............................... X ........... ............. Mr. Kind ............................... ........... X .............

Mr. Buchanan ....................... X ........... ............. Mr. Pascrell .......................... ........... X .............

Mr. Smith .............................. X ........... ............. Mr. Crowley .......................... ........... ........... .............

Mr. Schock ............................ X ........... ............. Ms. Schwartz ........................ ........... X .............

Ms. Jenkins ........................... X ........... ............. Mr. Davis .............................. ........... X .............

Mr. Paulsen ........................... X ........... ............. Ms. Sanchez ......................... ........... X .............

Mr. Marchant ........................ X 

Ms. Black .............................. X 

Mr. Reed ............................... X 

Mr. Young ............................. X 

Mr. Kelly ................................ X 

Mr. Griffin ............................. X 

Mr. Renacci ........................... X 

IV. BUDGET EFFECTS OF THE BILL 

A. COMMITTEE ESTIMATE OF BUDGETARY EFFECTS

In compliance with clause 3(d) of rule XIII of the Rules of the 

House of Representatives, the following statement is made concerning the effects on the budget of the bill, H.R. 4719, as reported. 

The bill, as reported, is estimated to have the following effect on 

Federal budget receipts for fiscal years 2014–2024: 


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FISCAL YEARS 

[Millions of dollars] 

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2014–19 2014–24 

¥16 ¥205 ¥163 ¥169 ¥175 ¥181 ¥188 ¥194 ¥201 ¥208 ¥215 ¥909 ¥1,915 

B. STATEMENT REGARDING NEW BUDGET AUTHORITY AND TAX

EXPENDITURES BUDGET AUTHORITY

In compliance with clause 3(c)(2) of rule XIII of the Rules of the 

House of Representatives, the Committee states that the bill involves no new or increased budget authority. The Committee further states that the revenue-reducing tax provisions involve increased tax expenditures. (See amounts in table in Part IV.A., 

above.) 

C. COST ESTIMATE PREPARED BY THE CONGRESSIONAL BUDGET

OFFICE

In compliance with clause 3(c)(3) of rule XIII of the Rules of the 

House of Representatives, requiring a cost estimate prepared by 

the CBO, the following statement by CBO is provided. 

U.S. CONGRESS, 

CONGRESSIONAL BUDGET OFFICE, 

Washington, DC, June 5, 2014. 

Hon. DAVE CAMP, Chairman, Committee on Ways and Means, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 4719, the Fighting Hunger Incentive Act of 2014. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Logan Timmerhoff. 

Sincerely, 

DOUGLAS W. ELMENDORF. 

Enclosure. 

H.R. 4719—Fighting Hunger Incentive Act of 2014 

H.R. 4719 would amend the Internal Revenue Code to permanently extend and expand certain expired provisions that provided 

an enhanced tax deduction for businesses that donated their food 

inventory to charitable organizations. The enhanced deduction for 

food inventory contributions expired after December 31, 2013, and 

applied to sole proprietors, partnerships, and other businesses not 

organized as C corporations (which are already permanently allowed an enhanced deduction under more general provisions of current law). H.R. 4719 would also expand the maximum deduction for 

all businesses by allowing deductions of food inventory donations 

up to 15 percent of the net income of the donating organization, an 

increase from the 10 percent allowed permanently under current 

law for C corporations and allowed previously for other businesses. 

In addition, the bill would allow certain businesses to make alternative assumptions about the cost basis and fair market value of 

donated food inventory. 


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The staff of the Joint Committee on Taxation (JCT) estimates 

that enacting H.R. 4719 would reduce revenues, thus increasing 

federal budget deficits, by about $1.9 billion over the 2014–2024 period. 

The Statutory Pay-As-You-Go Act of 2010 establishes budget-reporting and enforcement procedures for legislation affecting direct 

spending and revenues. Enacting H.R. 4719 would result in revenue losses in each year beginning in 2014. The estimated increases in the deficit are shown in the following table. 

JCT has determined that the bill contains no intergovernmental 

or private-sector mandates as defined in the Unfunded Mandates 

Reform Act. 

The CBO staff contact for this estimate is Logan Timmerhoff. 

The estimate was approved by David Weiner, Assistant Director for 

Tax Analysis. 

CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR H.R. 4719, AS ORDERED REPORTED BY THE 

HOUSE COMMITTEE ON WAYS AND MEANS ON MAY 29, 2014 

By fiscal year, in millions of dollars— 

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2014– 

2019 

2014– 

2024 

NET INCREASE IN THE DEFICIT 

Statutory Pay-As-You-Go Effects 16 205 163 169 175 181 188 194 201 208 215 909 1,915 

Source: Staff of the Joint Committee on Taxation. 

D. MACROECONOMIC IMPACT ANALYSIS

In compliance with clause 3(h)(2) of rule XIII of the Rules of the 

House of Representatives, the following statement is made by the 

Joint Committee on Taxation with respect to the provisions of the 

bill amending the Internal Revenue Code of 1986: the effects of the 

bill on economic activity are so small as to be incalculable within 

the context of a model of the aggregate economy. 

V. OTHER MATTERS TO BE DISCUSSED UNDER THE 

RULES OF THE HOUSE 

A. COMMITTEE OVERSIGHT FINDINGS AND RECOMMENDATIONS

With respect to clause 3(c)(1) of rule XIII of the Rules of the 

House of Representatives (relating to oversight findings), the Committee advises that it was as a result of the Committee’s review of 

the provisions of H.R. 4719 that the Committee concluded that it 

is appropriate to report the bill, as amended, favorably to the 

House of Representatives with the recommendation that the bill do 

pass. 

B. STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES

With respect to clause 3(c)(4) of rule XIII of the Rules of the 

House of Representatives, the Committee advises that the bill contains no measure that authorizes funding, so no statement of general performance goals and objectives for which any measure authorizes funding is required. 


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C. INFORMATION RELATING TO UNFUNDED MANDATES

This information is provided in accordance with section 423 of 

the Unfunded Mandates Reform Act of 1995 (Pub. L. No. 104–4). 

The Committee has determined that the bill does not contain 

Federal mandates on the private sector. The Committee has determined that the bill does not impose a Federal intergovernmental 

mandate on State, local, or tribal governments. 

D. APPLICABILITY OF HOUSE RULE XXI 5(b) 

Rule XXI 5(b) of the Rules of the House of Representatives provides, in part, that ‘‘A bill or joint resolution, amendment, or conference report carrying a Federal income tax rate increase may not 

be considered as passed or agreed to unless so determined by a 

vote of not less than three-fifths of the Members voting, a quorum 

being present.’’ The Committee has carefully reviewed the bill, and 

states that the bill does not involve any Federal income tax rate 

increases within the meaning of the rule. 

E. TAX COMPLEXITY ANALYSIS

Section 4022(b) of the Internal Revenue Service Restructuring 

and Reform Act of 1998 (the ‘‘IRS Reform Act’’) requires the staff 

of the Joint Committee on Taxation (in consultation with the Internal Revenue Service and the Treasury Department) to provide a 

tax complexity analysis. The complexity analysis is required for all 

legislation reported by the Senate Committee on Finance, the 

House Committee on Ways and Means, or any committee of conference if the legislation includes a provision that directly or indirectly amends the Internal Revenue Code and has widespread applicability to individuals or small businesses. 

Pursuant to clause 3(h)(1) of rule XIII of the Rules of the House 

of Representatives, the staff of the Joint Committee on Taxation 

has determined that a complexity analysis is not required under 

section 4022(b) of the IRS Reform Act because the bill contains no 

provisions that amend the Code and that have ‘‘widespread applicability’’ to individuals or small businesses, within the meaning of 

the rule. 

F. CONGRESSIONAL EARMARKS, LIMITED TAX BENEFITS, AND

LIMITED TARIFF BENEFITS

With respect to clause 9 of rule XXI of the Rules of the House 

of Representatives, the Committee has carefully reviewed the provisions of the bill, and states that the provisions of the bill do not 

contain any congressional earmarks, limited tax benefits, or limited 

tariff benefits within the meaning of the rule. 

G. DUPLICATION OF FEDERAL PROGRAMS

In compliance with Sec. 3(j)(2) of H. Res. 5 (113th Congress), the 

Committee states that no provision of the bill establishes or reauthorizes: (1) a program of the Federal Government known to be duplicative of another Federal program, (2) a program included in any 

report from the Government Accountability Office to Congress pursuant to section 21 of Public Law 111–139, or (3) a program related 

to a program identified in the most recent Catalog of Federal DoVerDate Mar 15 2010 05:53 Jul 01, 2014 Jkt 039006 PO 00000 Frm 00010 Fmt 6659 Sfmt 6602 E:\HR\OC\HR498.XXX HR498

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mestic Assistance, published pursuant to the Federal Program Information Act (Public Law 95–220, as amended by Public Law 98– 

169). 

H. DISCLOSURE OF DIRECTED RULE MAKINGS

In compliance with Sec. 3(k) of H. Res. 5 (113th Congress), the 

following statement is made concerning directed rule makings: The 

Committee estimates that the bill requires no directed rule makings within the meaning of such section. 

VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS 

REPORTED 

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italic, 

existing law in which no change is proposed is shown in roman): 

INTERNAL REVENUE CODE OF 1986 

* * * * * * * 

Subtitle A—Income Taxes 

* * * * * * * 

CHAPTER 1—NORMAL TAXES AND SURTAXES 

* * * * * * * 

Subchapter B—Computation of Taxable Income 

* * * * * * * 

PART VI—ITEMIZED DEDUCTIONS FOR INDIVIDUALS 

AND CORPORATIONS 

* * * * * * * 

SEC. 170. CHARITABLE, ETC., CONTRIBUTIONS AND GIFTS. 

(a) * * * 

* * * * * * * 

(e) CERTAIN CONTRIBUTIONS OF ORDINARY INCOME AND CAPITAL

GAIN PROPERTY.— 

(1) * * * 

* * * * * * * 

(3) SPECIAL RULE FOR CERTAIN CONTRIBUTIONS OF INVENTORY

AND OTHER PROPERTY.— 

(A) * * * 

* * * * * * * 

(C) SPECIAL RULE FOR CONTRIBUTIONS OF FOOD INVENTORY.— 

(i) * * * 


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ø(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 10 

percent 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.¿ 

(ii) LIMITATION.—The aggregate amount of such contributions for any taxable year which may be taken 

into account under this section shall not exceed— 

(I) in the case of any taxpayer other than a C 

corporation, 15 percent 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, and 

(II) in the case of a C corporation, 15 percent of 

taxable income (as defined in subsection (b)(2)(C)). 

(iii) RULES RELATED TO LIMITATION.— 

(I) CARRYOVER.—If such aggregate amount exceeds the limitation imposed under clause (ii), such 

excess shall be treated (in a manner consistent 

with the rules of subsection (d)) as a charitable 

contribution described in clause (i) in each of the 

5 succeeding years in order of time. 

(II) COORDINATION WITH OVERALL CORPORATE

LIMITATION.—In the case of any charitable contribution allowable under clause (ii)(II), subsection 

(b)(2)(A) shall not apply to such contribution, but 

the limitation imposed by such subsection shall be 

reduced (but not below zero) by the aggregate 

amount of such contributions. For purposes of subsection (b)(2)(B), such contributions shall be treated as allowable under subsection (b)(2)(A). 

ø(iii)¿ (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. 

ø(iv) TERMINATION.—This subparagraph shall not 

apply to contributions made after December 31, 2013.¿ 

(v) DETERMINATION OF BASIS FOR CERTAIN TAXPAYERS.—If a taxpayer— 

(I) does not account for inventories under section 

471, and 

(II) is not required to capitalize indirect costs 

under section 263A, 

the taxpayer may elect, solely for purposes of subparagraph (B), to treat the basis of any apparently wholesome food as being equal to 25 percent of the fair market value of such food. 


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(vi) DETERMINATION OF FAIR MARKET VALUE.—In the 

case of any such contribution of apparently wholesome 

food which cannot or will not be sold solely by reason 

of internal standards of the taxpayer, lack of market, 

or similar circumstances, or by reason of being produced by the taxpayer exclusively for the purposes of 

transferring the food to an organization described in 

subparagraph (A), the fair market value of such contribution shall be determined— 

(I) without regard to such internal standards, 

such lack of market, such circumstances, or such 

exclusive purpose, and 

(II) 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). 

* * * * * * * 


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VII. DISSENTING VIEWS 

The six bills approved by the Republicans at the markup would 

add $304 billion to the deficit. Combined with the $310 billion that 

the six bills approved by Republicans on the Committee in April 

added to the deficit, Republicans have added $614 billion to the 

deficit in two short months—and there does not appear to be an 

end in sight. Even though some of these bills were introduced individually with some bipartisan support, the opposition to these bills 

was based on the position that these tax provisions should not be 

made permanent by adding to the deficit without any revenue offset. 

To put the combined cost ($614 billion) into context, it is 25 percent more than the entire projected federal deficit this year and 

$86 billion more than total non-defense domestic discretionary 

spending (e.g., medical research, education, veterans’ pensions and 

health care, transportation, etc.) will be in 2014. It is almost seven 

times what we spend annually on education, job training, and social services. It is ten times more than we spend on veterans. And, 

it is eleven times more than we spend on medical research and 

public health. 

Public charities and private foundations serve an important role 

in our society. We all support the good works of the charitable community and strive to provide charities with the resources they need 

to carry out their charitable mission. The markup was not to debate the good works of charities across this country, or the merits 

of H.R. 4719 which makes permanent the enhanced charitable deduction for contributions of food inventory for non-C corporations. 

We found it hypocritical that the Republicans would make permanent a provision that was repealed in Chairman Camp’s Tax Reform Act of 2014 discussion draft (the ‘‘Republican tax reform 

plan’’). Section 1403 of the Republican tax reform plan repealed the 

enhanced deduction for charitable contributions of food inventory. 

We also found it hypocritical that, four months ago, Republicans 

let emergency unemployment insurance expire for more than 1.3 

million Americans by arguing that an adequate offset had yet to be 

proposed. In early April, the Senate came to a bipartisan agreement on an offset after months of painstaking negotiations. Yet 

House Republicans still refuse to act. 

Finally, we also opposed the manner in which Republicans were 

proceeding—selecting 10 to make permanent without any offset 

from the approximately 60 tax provisions that expired last year. 

This approach was both fiscally irresponsible and fundamentally 

hypocritical. 

The consideration of this bill should have been part of the consideration of all the expired tax provisions commonly referred to as 

‘‘tax extenders.’’ The Republicans did not take up other tax extendVerDate Mar 15 2010 05:53 Jul 01, 2014 Jkt 039006 PO 00000 Frm 00014 Fmt 6604 Sfmt 6604 E:\HR\OC\HR498.XXX HR498

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ers that also are important to Democratic Committee Members. 

Left to an uncertain fate are provisions like the Work Opportunity 

Tax Credit, the New Markets Tax Credit, and the renewable energy tax credits, as well as the long-term status of the Earned Income Tax Credit, the Child Tax Credit, and the American Opportunity Tax Credit. 

SANDER M. LEVIN, 

Ranking Member. 

Æ 


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