II

107TH CONGRESS

1ST SESSION S. 1300

To amend the Internal Revenue Code of 1986 to encourage foundational

and corporate charitable giving.

IN THE SENATE OF THE UNITED STATES

AUGUST 1, 2001

Mr. SANTORUM (for himself and Mr. LIEBERMAN) introduced the following

bill; which was read twice and referred to the Committee on Finance

A BILL

To amend the Internal Revenue Code of 1986 to encourage

foundational and corporate charitable giving.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Foundational and Cor5 porate Charitable Giving Incentives Act of 2001’’.

6 SEC. 2. REPEAL OF EXCISE TAX ON NET INVESTMENT IN7 COME OF TAX-EXEMPT FOUNDATIONS.

8 (a) REPEAL.—Subsection (a) of section 4940 of the

9 Internal Revenue Code of 1986 (relating to excise tax

10 based on investment income) is repealed.
2

•S 1300 IS

1 (b) CONFORMING AMENDMENTS.—

2 (1) Section 4940 of the Internal Revenue Code

3 of 1986 is amended—

4 (A) by redesignating subsections (b), (c),

5 and (d) as subsections (a), (b), and (c), respec6 tively,

7 (B) by striking subsection (e), and

8 (C) in subsection (a), as redesignated by

9 paragraph (1), by striking ‘‘(A) the tax imposed

10 under subsection (a) (computed as if such sub11 section applied to such private foundation for

12 the taxable year),’’ and inserting ‘‘(A) an

13 amount equal to 2 percent of the net invest14 ment income of such foundation for the taxable

15 year,’’.

16 (2) Section 4942(f)(3)(A) of such Code is

17 amended by striking ‘‘section 4940(c)(3)(B)’’ and

18 inserting ‘‘section 4940(b)(3)(B)’’.

19 (3) Section 4945(d)(4)(A) of such Code is

20 amended by striking ‘‘section 4940(d)(2)’’ and in21 serting ‘‘section 4940(c)(2)’’.

22 (4) Section 4948(a) of such Code is amended

23 by striking ‘‘section 4940(c)(2)’’ and inserting ‘‘sec24 tion 4940(b)(2)’’.
3

•S 1300 IS

1 (c) EFFECTIVE DATE.—The amendments made by

2 this section shall apply to taxable years beginning after

3 December 31, 2001.

4 SEC. 3. S CORPORATION CHARITABLE CONTRIBUTIONS IN5 CENTIVE.

6 (a) STOCK BASIS ADJUSTMENT.—Paragraph (1) of

7 section 1367(a) of the Internal Revenue Code of 1986 (re8 lating to adjustments to basis of stock of shareholders,

9 etc.) is amended by striking ‘‘and’’ at the end of subpara10 graph (B), by striking the period at the end of subpara11 graph (C) and inserting ‘‘, and’’, and by adding at the

12 end the following new subparagraph:

13 ‘‘(D) the excess of the deductions for char14 itable contributions over the basis of the prop15 erty contributed.’’.

16 (b) EFFECTIVE DATE.—The amendments made by

17 this section shall apply to taxable years beginning after

18 December 31, 2001.

19 SEC. 4. HIGHER LIMITATION ON CORPORATE CHARITABLE

20 CONTRIBUTIONS.

21 (a) IN GENERAL.—Paragraph (2) of section 170(b)

22 of the Internal Revenue Code of 1986 (relating to percent23 age limitations) is amended by striking ‘‘10 percent’’ and

24 inserting ‘‘25 percent’’.
4

•S 1300 IS

1 (b) EFFECTIVE DATE.—The amendment made by

2 this section shall apply to taxable years beginning after

3 December 31, 2001.

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