II 

109TH CONGRESS 

1ST SESSION S. 1780 

To amend the Internal Revenue Code of 1986 to provide incentives for 

charitable contributions by individuals and businesses, to improve the 

public disclosure of activities of exempt organizations, and to enhance 

the ability of low-income Americans to gain financial security by building 

assets, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

SEPTEMBER 28, 2005 

Mr. SANTORUM (for himself, Mr. LIEBERMAN, Mr. FRIST, Mr. HATCH, Mr. 

LUGAR, Mr. SMITH, Mr. INOUYE, Mr. COLEMAN, and Mr. BUNNING) 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 provide 

incentives for charitable contributions by individuals and 

businesses, to improve the public disclosure of activities 

of exempt organizations, and to enhance the ability of 

low-income Americans to gain financial security by building assets, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 
2 

•S 1780 IS 

1 SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE; 

2 TABLE OF CONTENTS. 

3 (a) SHORT TITLE.—This title may be cited as the 

4 ‘‘CARE Act of 2005’’. 

5 (b) AMENDMENT OF 1986 CODE.—Except as other6 wise expressly provided, whenever in this title an amend7 ment or repeal is expressed in terms of an amendment 

8 to, or repeal of, a section or other provision, the reference 

9 shall be considered to be made to a section or other provi10 sion of the Internal Revenue Code of 1986. 

11 (c) TABLE OF CONTENTS.—The table of contents for 

12 this Act is as follows: 

Sec. 1. Short title; amendment of 1986 Code; table of contents. 

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 accounts for charitable purposes. 

Sec. 103. Modification of charitable deduction for contributions of food inventories. 

Sec. 104. Modification of charitable deduction for contributions of book inventories. 

Sec. 105. Modifications to encourage contributions of capital gain real property 

made for conservation purposes. 

Sec. 106. Exclusion of 25 percent of gain on sales or exchanges of land or 

water interests to eligible entities for conservation purposes. 

Sec. 107. Adjustment to basis of S corporation stock for certain charitable contributions. 

Sec. 108. Enhanced deduction for charitable contribution of literary, musical, 

artistic, and scholarly compositions. 

Sec. 109. Mileage reimbursements to charitable volunteers excluded from gross 

income. 

Sec. 110. Extension of enhanced deduction for inventory to include public 

schools. 

TITLE II—PROPOSALS IMPROVING THE OVERSIGHT OF TAXEXEMPT ORGANIZATIONS 

Sec. 201. Disclosure of written determinations. 
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Sec. 202. Disclosure of Internet web site and name under which organization 

does business. 

Sec. 203. Modification to reporting capital transactions. 

Sec. 204. Disclosure that Form 990 is publicly available. 

Sec. 205. Disclosure to State officials of proposed actions related to section 

501(c) organizations. 

Sec. 206. Expansion of penalties to preparers of Form 990. 

Sec. 207. Notification requirement for entities not currently required to file. 

TITLE III—OTHER CHARITABLE AND EXEMPT ORGANIZATION 

PROVISIONS 

Sec. 301. Modification of excise tax on unrelated business taxable income of 

charitable remainder trusts. 

Sec. 302. Modifications to section 512(b)(13). 

Sec. 303. Simplification of lobbying expenditure limitation. 

Sec. 304. Expedited review process for certain tax-exemption applications. 

Sec. 305. Clarification of definition of church tax inquiry. 

Sec. 306. Expansion of declaratory judgment remedy to tax-exempt organizations. 

Sec. 307. Definition of convention or association of churches. 

Sec. 308. Payments by charitable organizations to victims of war on terrorism 

and families of astronauts killed in the line of duty. 

Sec. 309. Modification of scholarship foundation rules. 

Sec. 310. Treatment of certain hospital support organizations as qualified organizations for purposes of determining acquisition indebtedness. 

Sec. 311. Matching grants to low-income taxpayer clinics for return preparation. 

Sec. 312. Exemption of qualified 501(c)(3) bonds for nursing homes from Federal guarantee prohibitions. 

Sec. 313. Excise taxes exemption for blood collector organizations. 

TITLE IV—SOCIAL SERVICES BLOCK GRANT 

Sec. 401. Restoration of funds for the Social Services Block Grant. 

Sec. 402. Restoration of authority to transfer up to 10 percent of TANF funds 

to the Social Services Block Grant. 

Sec. 403. Requirement to submit annual report on State activities. 

TITLE V—INDIVIDUAL DEVELOPMENT ACCOUNTS 

Sec. 501. Short title. 

Sec. 502. Purposes. 

Sec. 503. Definitions. 

Sec. 504. Structure and administration of qualified individual development account programs. 

Sec. 505. Procedures for opening and maintaining an individual development 

account and qualifying for matching funds. 

Sec. 506. Deposits by qualified individual development account programs. 

Sec. 507. Withdrawal procedures. 

Sec. 508. Certification and termination of qualified individual development account programs. 

Sec. 509. Reporting, monitoring, and evaluation. 

Sec. 510. Authorization of appropriations. 

Sec. 511. Matching funds for individual development accounts provided through 

a tax credit for qualified financial institutions. 
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Sec. 512. Account funds disregarded for purposes of certain means-tested Federal programs. 

TITLE VI—MANAGEMENT OF EXEMPT ORGANIZATIONS 

Sec. 601. Authorization of appropriations. 

TITLE VII—COMPASSION CAPITAL FUND 

Sec. 701. Support for nonprofit community-based organizations; Department of 

Health and Human Services. 

Sec. 702. Support for nonprofit community-based organizations; Corporation 

for National and Community Service. 

Sec. 703. Support for nonprofit community-based organizations; Department of 

Justice. 

Sec. 704. Support for nonprofit community-based organizations; Department of 

Housing and Urban Development. 

Sec. 705. Coordination. 

TITLE VIII—MATERNITY GROUP HOMES 

Sec. 801. Maternity group homes. 

1 TITLE I—CHARITABLE GIVING 

2 INCENTIVES 

3 SEC. 101. DEDUCTION FOR PORTION OF CHARITABLE CON4 TRIBUTIONS TO BE ALLOWED TO INDIVID5 UALS WHO DO NOT ITEMIZE DEDUCTIONS. 

6 (a) IN GENERAL.—Section 170 (relating to chari7 table, etc., contributions and gifts) is amended by redesig8 nating subsection (o) as subsection (p) and by inserting 

9 after subsection (n) the following new subsection: 

10 ‘‘(o) DEDUCTION FOR INDIVIDUALS NOT ITEMIZING

11 DEDUCTIONS.—In the case of an individual who does not 

12 itemize deductions for any taxable year, there shall be 

13 taken into account as a direct charitable deduction under 

14 section 63 an amount equal to the amount allowable under 

15 subsection (a) for the taxable year for cash contributions, 

16 to the extent that such contributions exceed $250 ($500 
5 

•S 1780 IS 

1 in the case of a joint return) but do not exceed $500 

2 ($1,000 in the case of a joint return).’’. 

3 (b) DIRECT CHARITABLE DEDUCTION.— 

4 (1) IN GENERAL.—Subsection (b) of section 63 

5 (defining taxable income) is amended by striking 

6 ‘‘and’’ at the end of paragraph (1), by striking the 

7 period at the end of paragraph (2) and inserting ‘‘, 

8 and’’, and by adding at the end the following new 

9 paragraph: 

10 ‘‘(3) the direct charitable deduction.’’. 

11 (2) DEFINITION.—Section 63 is amended by re12 designating subsection (g) as subsection (h) and by 

13 inserting after subsection (f) the following new sub14 section: 

15 ‘‘(g) DIRECT CHARITABLE DEDUCTION.—For pur16 poses of this section, the term ‘direct charitable deduction’ 

17 means that portion of the amount allowable under section 

18 170(a) which is taken as a direct charitable deduction for 

19 the taxable year under section 170(o).’’. 

20 (3) CONFORMING AMENDMENT.—Subsection (d) 

21 of section 63 is amended by striking ‘‘and’’ at the 

22 end of paragraph (1), by striking the period at the 

23 end of paragraph (2) and inserting ‘‘, and’’, and by 

24 adding at the end the following new paragraph: 

25 ‘‘(3) the direct charitable deduction.’’. 
6 

•S 1780 IS 

1 (c) STUDY.— 

2 (1) IN GENERAL.—The Secretary of the Treas3 ury shall study the effect of the amendments made 

4 by this section on increased charitable giving and 

5 taxpayer compliance, including a comparison of tax6 payer compliance between taxpayers who itemize 

7 their charitable contributions and taxpayers who 

8 claim a direct charitable deduction. 

9 (2) REPORT.—By not later than December 31, 

10 2006, the Secretary of the Treasury shall report on 

11 the study required under paragraph (1) to the Com12 mittee on Finance of the Senate and the Committee 

13 on Ways and Means of the House of Representa14 tives. 

15 (d) EFFECTIVE DATE.—The amendments made by 

16 this section shall apply to taxable years beginning after 

17 December 31, 2004, and before January 1, 2007. 

18 SEC. 102. TAX-FREE DISTRIBUTIONS FROM INDIVIDUAL RE19 TIREMENT ACCOUNTS FOR CHARITABLE 

20 PURPOSES. 

21 (a) IN GENERAL.—Subsection (d) of section 408 (re22 lating to individual retirement accounts) is amended by 

23 adding at the end the following new paragraph: 

24 ‘‘(8) DISTRIBUTIONS FOR CHARITABLE PUR25 POSES.— 
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•S 1780 IS 

1 ‘‘(A) IN GENERAL.—No amount shall be 

2 includible in gross income by reason of a quali3 fied charitable distribution. 

4 ‘‘(B) QUALIFIED CHARITABLE DISTRIBU5 TION.—For purposes of this paragraph, the 

6 term ‘qualified charitable distribution’ means 

7 any distribution from an individual retirement 

8 account— 

9 ‘‘(i) which is made directly by the 

10 trustee— 

11 ‘‘(I) to an organization described 

12 in section 170(c), or 

13 ‘‘(II) to a split-interest entity, 

14 and 

15 ‘‘(ii) which is made on or after— 

16 ‘‘(I) in the case of any distribu17 tion described in clause (i)(I), the 

18 date that the individual for whose 

19 benefit the account is maintained has 

attained age 701 20 ⁄2, and 

21 ‘‘(II) in the case of any distribu22 tion described in clause (i)(II), the 

23 date that such individual has attained 

age 591 24 ⁄2. 
8 

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1 A distribution shall be treated as a qualified 

2 charitable distribution only to the extent that 

3 the distribution would be includible in gross in4 come without regard to subparagraph (A) and, 

5 in the case of a distribution to a split-interest 

6 entity, only if no person holds an income inter7 est in the amounts in the split-interest entity 

8 attributable to such distribution other than one 

9 or more of the following: the individual for 

10 whose benefit such account is maintained, the 

11 spouse of such individual, or any organization 

12 described in section 170(c). 

13 ‘‘(C) CONTRIBUTIONS MUST BE OTHER14 WISE DEDUCTIBLE.—For purposes of this para15 graph— 

16 ‘‘(i) DIRECT CONTRIBUTIONS.—A dis17 tribution to an organization described in 

18 section 170(c) shall be treated as a quali19 fied charitable distribution only if a deduc20 tion for the entire distribution would be al21 lowable under section 170 (determined 

22 without regard to subsection (b) thereof 

23 and this paragraph). 

24 ‘‘(ii) SPLIT-INTEREST GIFTS.—A dis25 tribution to a split-interest entity shall be 
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•S 1780 IS 

1 treated as a qualified charitable distribu2 tion only if a deduction for the entire value 

3 of the interest in the distribution for the 

4 use of an organization described in section 

5 170(c) would be allowable under section 

6 170 (determined without regard to sub7 section (b) thereof and this paragraph). 

8 ‘‘(D) APPLICATION OF SECTION 72.—Not9 withstanding section 72, in determining the ex10 tent to which a distribution is a qualified chari11 table distribution, the entire amount of the dis12 tribution shall be treated as includible in gross 

13 income without regard to subparagraph (A) to 

14 the extent that such amount does not exceed 

15 the aggregate amount which would have been so 

16 includible if all amounts were distributed from 

17 all individual retirement accounts treated as 1 

18 contract under paragraph (2)(A) for purposes 

19 of determining the inclusion on such distribu20 tion under section 72. Proper adjustments shall 

21 be made in applying section 72 to other dis22 tributions in such taxable year and subsequent 

23 taxable years. 

24 ‘‘(E) SPECIAL RULES FOR SPLIT-INTEREST

25 ENTITIES.— 
10 

•S 1780 IS 

1 ‘‘(i) CHARITABLE REMAINDER

2 TRUSTS.—Notwithstanding section 664(b), 

3 distributions made from a trust described 

4 in subparagraph (G)(i) shall be treated as 

5 ordinary income in the hands of the bene6 ficiary to whom is paid the annuity de7 scribed in section 664(d)(1)(A) or the pay8 ment described in section 664(d)(2)(A). 

9 ‘‘(ii) POOLED INCOME FUNDS.—No 

10 amount shall be includible in the gross in11 come of a pooled income fund (as defined 

12 in subparagraph (G)(ii)) by reason of a 

13 qualified charitable distribution to such 

14 fund, and all distributions from the fund 

15 which are attributable to qualified chari16 table distributions shall be treated as ordi17 nary income to the beneficiary. 

18 ‘‘(iii) CHARITABLE GIFT ANNU19 ITIES.—Qualified charitable distributions 

20 made for a charitable gift annuity shall not 

21 be treated as an investment in the con22 tract. 

23 ‘‘(F) DENIAL OF DEDUCTION.—Qualified 

24 charitable distributions shall not be taken into 
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•S 1780 IS 

1 account in determining the deduction under sec2 tion 170. 

3 ‘‘(G) SPLIT-INTEREST ENTITY DEFINED.— 

4 For purposes of this paragraph, the term ‘split5 interest entity’ means— 

6 ‘‘(i) a charitable remainder annuity 

7 trust or a charitable remainder unitrust 

8 (as such terms are defined in section 

9 664(d)) which must be funded exclusively 

10 by qualified charitable distributions, 

11 ‘‘(ii) a pooled income fund (as defined 

12 in section 642(c)(5)), but only if the fund 

13 accounts separately for amounts attrib14 utable to qualified charitable distributions, 

15 and 

16 ‘‘(iii) a charitable gift annuity (as de17 fined in section 501(m)(5)).’’. 

18 (b) MODIFICATIONS RELATING TO INFORMATION RE19 TURNS BY CERTAIN TRUSTS.— 

20 (1) RETURNS.—Section 6034 (relating to re21 turns by trusts described in section 4947(a)(2) or 

22 claiming charitable deductions under section 642(c)) 

23 is amended to read as follows: 
12 

•S 1780 IS 

1 ‘‘SEC. 6034. RETURNS BY TRUSTS DESCRIBED IN SECTION 

2 4947(a)(2) OR CLAIMING CHARITABLE DEDUC3 TIONS UNDER SECTION 642(c). 

4 ‘‘(a) TRUSTS DESCRIBED IN SECTION 4947(a)(2).— 

5 Every trust described in section 4947(a)(2) shall furnish 

6 such information with respect to the taxable year as the 

7 Secretary may by forms or regulations require. 

8 ‘‘(b) TRUSTS CLAIMING A CHARITABLE DEDUCTION

9 UNDER SECTION 642(c).— 

10 ‘‘(1) IN GENERAL.—Every trust not required to 

11 file a return under subsection (a) but claiming a de12 duction under section 642(c) for the taxable year 

13 shall furnish such information with respect to such 

14 taxable year as the Secretary may by forms or regu15 lations prescribe, including— 

16 ‘‘(A) the amount of the deduction taken 

17 under section 642(c) within such year, 

18 ‘‘(B) the amount paid out within such year 

19 which represents amounts for which deductions 

20 under section 642(c) have been taken in prior 

21 years, 

22 ‘‘(C) the amount for which such deductions 

23 have been taken in prior years but which has 

24 not been paid out at the beginning of such year, 
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•S 1780 IS 

1 ‘‘(D) the amount paid out of principal in 

2 the current and prior years for the purposes de3 scribed in section 642(c), 

4 ‘‘(E) the total income of the trust within 

5 such year and the expenses attributable thereto, 

6 and 

7 ‘‘(F) a balance sheet showing the assets, li8 abilities, and net worth of the trust as of the 

9 beginning of such year. 

10 ‘‘(2) EXCEPTIONS.—Paragraph (1) shall not 

11 apply to a trust for any taxable year if— 

12 ‘‘(A) all the net income for such year, de13 termined under the applicable principles of the 

14 law of trusts, is required to be distributed cur15 rently to the beneficiaries, or 

16 ‘‘(B) the trust is described in section 

17 4947(a)(1).’’. 

18 (2) INCREASE IN PENALTY RELATING TO FIL19 ING OF INFORMATION RETURN BY SPLIT-INTEREST

20 TRUSTS.—Paragraph (2) of section 6652(c) (relating 

21 to returns by exempt organizations and by certain 

22 trusts) is amended by adding at the end the fol23 lowing new subparagraph: 

24 ‘‘(C) SPLIT-INTEREST TRUSTS.—In the 

25 case of a trust which is required to file a return 
14 

•S 1780 IS 

1 under section 6034(a), subparagraphs (A) and 

2 (B) of this paragraph shall not apply and para3 graph (1) shall apply in the same manner as if 

4 such return were required under section 6033, 

5 except that— 

6 ‘‘(i) the 5 percent limitation in the 

7 second sentence of paragraph (1)(A) shall 

8 not apply, 

9 ‘‘(ii) in the case of any trust with 

10 gross income in excess of $250,000, the 

11 first sentence of paragraph (1)(A) shall be 

12 applied by substituting ‘$100’ for ‘$20’, 

13 and the second sentence thereof shall be 

14 applied by substituting ‘$50,000’ for 

15 ‘$10,000’, and 

16 ‘‘(iii) the third sentence of paragraph 

17 (1)(A) shall be disregarded. 

18 In addition to any penalty imposed on the trust 

19 pursuant to this subparagraph, if the person re20 quired to file such return knowingly fails to file 

21 the return, such penalty shall also be imposed 

22 on such person who shall be personally liable 

23 for such penalty.’’. 

24 (3) CONFIDENTIALITY OF NONCHARITABLE

25 BENEFICIARIES.—Subsection (b) of section 6104 
15 

•S 1780 IS 

1 (relating to inspection of annual information re2 turns) is amended by adding at the end the fol3 lowing new sentence: ‘‘In the case of a trust which 

4 is required to file a return under section 6034(a), 

5 this subsection shall not apply to information re6 garding beneficiaries which are not organizations de7 scribed in section 170(c).’’. 

8 (c) EFFECTIVE DATES.— 

9 (1) SUBSECTION (a).—The amendment made 

10 by subsection (a) shall apply to distributions— 

11 (A) described in section 408(d)(8)(B)(i)(I) 

12 of the Internal Revenue Code of 1986, as added 

13 by this section, made after the date of the en14 actment of this Act, and 

15 (B) described in section 

16 408(d)(8)(B)(i)(II) of such Code, as so added, 

17 made after December 31, 2004. 

18 (2) SUBSECTION (b).—The amendments made 

19 by subsection (b) shall apply to returns for taxable 

20 years beginning after December 31, 2004. 

21 SEC. 103. MODIFICATION OF CHARITABLE DEDUCTION FOR 

22 CONTRIBUTIONS OF FOOD INVENTORIES. 

23 (a) IN GENERAL.—Subparagraph (C) of section 

24 170(e)(3) (relating to special rule for certain contributions 

25 of inventory and other property), as added by section 305 
16 

•S 1780 IS 

1 of the Katrina Emergency Tax Relief Act of 2005, is 

2 amended to read as follows: 

3 ‘‘(C) SPECIAL RULE FOR CONTRIBUTIONS

4 OF FOOD INVENTORY.— 

5 ‘‘(i) GENERAL RULE.—In the case of 

6 a charitable contribution of food from any 

7 trade or business of the taxpayer, this 

8 paragraph shall be applied— 

9 ‘‘(I) without regard to whether 

10 the contribution is made by a C cor11 poration, and 

12 ‘‘(II) only to food that is appar13 ently wholesome food. 

14 ‘‘(ii) LIMITATION.—In the case of a 

15 taxpayer other than a C corporation, the 

16 aggregate amount of such contributions for 

17 any taxable year which may be taken into 

18 account under this section shall not exceed 

19 10 percent of the taxpayer’s aggregate net 

20 income for such taxable year from all 

21 trades or businesses from which such con22 tributions were made for such year, com23 puted without regard to this section. 

24 ‘‘(iii) LIMITATION ON REDUCTION.— 

25 In the case of any such contribution, not-
17 

•S 1780 IS 

1 withstanding subparagraph (B), the 

2 amount of the reduction determined under 

3 paragraph (1)(A) shall not exceed the 

4 amount by which the fair market value of 

5 the apparently wholesome food exceeds 

6 twice the basis of such food. 

7 ‘‘(iv) DETERMINATION OF BASIS.—If 

8 a taxpayer— 

9 ‘‘(I) does not account for inven10 tories under section 471, and 

11 ‘‘(II) is not required to capitalize 

12 indirect costs under section 263A, 

13 the taxpayer may elect, solely for purposes 

14 of subparagraph (B), to treat the basis of 

15 any apparently wholesome food as being 

16 equal to 25 percent of the fair market 

17 value of such food. 

18 ‘‘(v) DETERMINATION OF FAIR MAR19 KET VALUE.—In the case of any such con20 tribution of apparently wholesome food 

21 which, solely by reason of internal stand22 ards of the taxpayer or lack of market, 

23 cannot or will not be sold, the fair market 

24 value of such contribution shall be deter25 mined— 
18 

•S 1780 IS 

1 ‘‘(i) without regard to such inter2 nal standards or such lack of market 

3 and 

4 ‘‘(ii) by taking into account the 

5 price at which the same or substan6 tially the same food items (as to both 

7 type and quality) are sold by the tax8 payer at the time of the contribution 

9 (or, if not so sold at such time, in the 

10 recent past). 

11 ‘‘(vi) APPARENTLY WHOLESOME

12 FOOD.—For purposes of this subpara13 graph, the term ‘apparently wholesome 

14 food’ has the meaning given to such term 

15 by section 22(b)(2) of the Bill Emerson 

16 Good Samaritan Food Donation Act (42 

17 U.S.C. 1791(b)(2)), as in effect on the 

18 date of the enactment of this subpara19 graph.’’. 

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

21 this section shall apply to contributions made after the 

22 date of the enactment of this Act. 
19 

•S 1780 IS 

1 SEC. 104. MODIFICATION OF CHARITABLE DEDUCTION FOR 

2 CONTRIBUTIONS OF BOOK INVENTORIES. 

3 (a) IN GENERAL.—Subparagraph (D) of section 

4 170(e)(3) (relating to special rule for certain contributions 

5 of inventory and other property), as added by section 305 

6 of the Katrina Emergency Tax Relief Act of 2005, is 

7 amended to read as follows: 

8 ‘‘(D) SPECIAL RULE FOR CONTRIBUTIONS

9 OF BOOK INVENTORY FOR EDUCATIONAL PUR10 POSES.— 

11 ‘‘(i) CONTRIBUTIONS OF BOOK INVEN12 TORY.—In determining whether a qualified 

13 book contribution is a qualified contribu14 tion, subparagraph (A) shall be applied 

15 without regard to whether— 

16 ‘‘(I) the donee is an organization 

17 described in the matter preceding 

18 clause (i) of subparagraph (A), and 

19 ‘‘(II) the property is to be used 

20 by the donee solely for the care of the 

21 ill, the needy, or infants. 

22 ‘‘(ii) AMOUNT OF REDUCTION.—Not23 withstanding subparagraph (B), the 

24 amount of the reduction determined under 

25 paragraph (1)(A) shall not exceed the 

26 amount by which the fair market value of 
20 

•S 1780 IS 

1 the contributed property (as determined by 

2 the taxpayer using a bona fide published 

3 market price for such book) exceeds twice 

4 the basis of such property. 

5 ‘‘(iii) QUALIFIED BOOK CONTRIBU6 TION.—For purposes of this paragraph, 

7 the term ‘qualified book contribution’ 

8 means a charitable contribution of books, 

9 but only if the requirements of clauses (iv) 

10 and (v) are met. 

11 ‘‘(iv) IDENTITY OF DONEE.—The re12 quirement of this clause is met if the con13 tribution is to an organization— 

14 ‘‘(I) described in subclause (I) or 

15 (III) of paragraph (6)(B)(i), or 

16 ‘‘(II) described in section 

17 501(c)(3) and exempt from tax under 

18 section 501(a) (other than a private 

19 foundation, as defined in section 

20 509(a), which is not an operating 

21 foundation, as defined in section 

22 4942(j)(3)), which is organized pri23 marily to make books available to the 

24 general public at no cost or to operate 

25 a literacy program. 
21 

•S 1780 IS 

1 ‘‘(v) CERTIFICATION BY DONEE.—The 

2 requirement of this clause is met if, in ad3 dition to the certifications required by sub4 paragraph (A) (as modified by this sub5 paragraph), the donee certifies in writing 

6 that— 

7 ‘‘(I) the books are suitable, in 

8 terms of currency, content, and quan9 tity, for use in the donee’s educational 

10 programs, and 

11 ‘‘(II) the donee will use the books 

12 in its educational programs. 

13 ‘‘(vi) BONA FIDE PUBLISHED MARKET

14 PRICE.—For purposes of this subpara15 graph, the term ‘bona fide published mar16 ket price’ means, with respect to any book, 

17 a price— 

18 ‘‘(I) determined using the same 

19 printing and edition, 

20 ‘‘(II) determined in the usual 

21 market in which such a book has been 

22 customarily sold by the taxpayer, and 

23 ‘‘(III) for which the taxpayer can 

24 demonstrate to the satisfaction of the 

25 Secretary that the taxpayer custom-
22 

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1 arily sold such books in arm’s length 

2 transactions within 7 years preceding 

3 the contribution of such a book.’’. 

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

5 this section shall apply to contributions made after the 

6 date of the enactment of this Act. 

7 SEC. 105. MODIFICATIONS TO ENCOURAGE CONTRIBU8 TIONS OF CAPITAL GAIN REAL PROPERTY 

9 MADE FOR CONSERVATION PURPOSES. 

10 (a) IN GENERAL.—Section 170(h) (relating to quali11 fied conservation contribution) is amended by adding at 

12 the end the following new paragraph: 

13 ‘‘(7) ADDITIONAL INCENTIVES FOR QUALIFIED

14 CONSERVATION CONTRIBUTIONS.— 

15 ‘‘(A) IN GENERAL.—In the case of any 

16 qualified conservation contribution (as defined 

17 in paragraph (1)) made by an individual— 

18 ‘‘(i) subparagraph (C) of subsection 

19 (b)(1) shall not apply, 

20 ‘‘(ii) except as provided in subpara21 graph (B)(i), subsections (b)(1)(A) and 

22 (d)(1) shall be applied separately with re23 spect to such contributions by treating ref24 erences to 50 percent of the taxpayer’s 

25 contribution base as references to the 
23 

•S 1780 IS 

1 amount of such base reduced by the 

2 amount of other contributions allowable 

3 under subsection (b)(1)(A), and 

4 ‘‘(iii) subparagraph (A) of subsection 

5 (d)(1) shall be applied— 

6 ‘‘(I) by substituting ‘15 suc7 ceeding taxable years’ for ‘5 suc8 ceeding taxable years’, and 

9 ‘‘(II) by applying clause (ii) to 

10 each of the 15 succeeding taxable 

11 years. 

12 ‘‘(B) SPECIAL RULES FOR ELIGIBLE FARM13 ERS AND RANCHERS.— 

14 ‘‘(i) IN GENERAL.—In the case of any 

15 such contributions by a taxpayer who is an 

16 eligible farmer or rancher for the taxable 

17 year in which such contributions are 

18 made— 

19 ‘‘(I) if the taxpayer is an indi20 vidual, subsections (b)(1)(A) and 

21 (d)(1) shall be applied separately with 

22 respect to such contributions by sub23 stituting ‘the taxpayer’s contribution 

24 base reduced by the amount of other 

25 contributions allowable under sub-
24 

•S 1780 IS 

1 section (b)(1)(A)’ for ‘50 percent of 

2 the taxpayer’s contribution base’ each 

3 place it appears, and 

4 ‘‘(II) if the taxpayer is a corpora5 tion, subsections (b)(2) and (d)(2) 

6 shall be applied separately with re7 spect to such contributions, subsection 

8 (b)(2) shall be applied with respect to 

9 such contributions as if such sub10 section did not contain the words ‘10 

11 percent of’ and as if subparagraph 

12 (A) thereof read ‘the deduction under 

13 this section for qualified conservation 

14 contributions’, and rules similar to the 

15 rules of subparagraph (A)(iii) shall 

16 apply for purposes of subsection 

17 (d)(2). 

18 ‘‘(ii) DEFINITION.—For purposes of 

19 clause (i), the term ‘eligible farmer or 

20 rancher’ means a taxpayer whose gross in21 come from the trade or business of farm22 ing (within the meaning of section 

23 2032A(e)(5)) is at least 51 percent of the 

24 taxpayer’s gross income for the taxable 

25 year, and, in the case of a C corporation, 
25 

•S 1780 IS 

1 the stock of which is not publicly traded on 

2 a recognized exchange.’’. 

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

4 this section shall apply to contributions made after the 

5 date of the enactment of this Act. 

6 SEC. 106. EXCLUSION OF 25 PERCENT OF GAIN ON SALES 

7 OR EXCHANGES OF LAND OR WATER INTER8 ESTS TO ELIGIBLE ENTITIES FOR CONSERVA9 TION PURPOSES. 

10 (a) IN GENERAL.—Part III of subchapter B of chap11 ter 1 (relating to items specifically excluded from gross 

12 income) is amended by inserting after section 121 the fol13 lowing new section: 

14 ‘‘SEC. 121A. 25-PERCENT EXCLUSION OF GAIN ON SALES OR 

15 EXCHANGES OF LAND OR WATER INTERESTS 

16 TO ELIGIBLE ENTITIES FOR CONSERVATION 

17 PURPOSES. 

18 ‘‘(a) EXCLUSION.—Gross income shall not include 25 

19 percent of the qualifying gain from a conservation sale of 

20 a long-held qualifying land or water interest. 

21 ‘‘(b) QUALIFYING GAIN.—For purposes of this sec22 tion— 

23 ‘‘(1) IN GENERAL.—The term ‘qualifying gain’ 

24 means any gain which would be recognized as long25 term capital gain, reduced by the amount of any 
26 

•S 1780 IS 

1 long-term capital gain attributable to disqualified 

2 improvements. 

3 ‘‘(2) DISQUALIFIED IMPROVEMENT.—For pur4 poses of paragraph (1), the term ‘disqualified im5 provement’ means any building, structure, or other 

6 improvement, other than— 

7 ‘‘(A) any improvement which is described 

8 in section 175(c)(1), determined— 

9 ‘‘(i) without regard to the require10 ments that the taxpayer be engaged in 

11 farming, and 

12 ‘‘(ii) without taking into account sub13 paragraphs (A) and (B) thereof, or 

14 ‘‘(B) any improvement which the Secretary 

15 determines directly furthers conservation pur16 poses. 

17 ‘‘(3) SPECIAL RULE FOR SALES OF STOCK.—If 

18 the long-held qualifying land or water interest is 1 

19 or more shares of stock in a qualifying land or water 

20 corporation, the qualifying gain is equal to the lesser 

21 of— 

22 ‘‘(A) the qualifying gain determined under 

23 paragraph (1), or 

24 ‘‘(B) the product of— 
27 

•S 1780 IS 

1 ‘‘(i) the percentage of such corpora2 tion’s stock which is transferred by the 

3 taxpayer, times 

4 ‘‘(ii) the amount which would have 

5 been the qualifying gain (determined under 

6 paragraph (1)) if there had been a con7 servation sale by such corporation of all of 

8 its interests in the land and water for a 

9 price equal to the product of the fair mar10 ket value of such interests times the ratio 

11 of— 

12 ‘‘(I) the proceeds of the conserva13 tion sale of the stock, to 

14 ‘‘(II) the fair market value of the 

15 stock which was the subject of the 

16 conservation sale. 

17 ‘‘(c) CONSERVATION SALE.—For purposes of this 

18 section, the term ‘conservation sale’ means a sale or ex19 change which meets the following requirements: 

20 ‘‘(1) TRANSFEREE IS AN ELIGIBLE ENTITY.— 

21 The transferee of the long-held qualifying land or 

22 water interest is an eligible entity. 

23 ‘‘(2) QUALIFYING LETTER OF INTENT RE24 QUIRED.—At the time of the sale or exchange, such 
28 

•S 1780 IS 

1 transferee provides the taxpayer with a qualifying 

2 letter of intent. 

3 ‘‘(3) NONAPPLICATION TO CERTAIN SALES.— 

4 The sale or exchange is not made pursuant to an 

5 order of condemnation or eminent domain. 

6 ‘‘(4) CONTROLLING INTEREST IN STOCK SALE

7 REQUIRED.—In the case of the sale or exchange of 

8 stock in a qualifying land or water corporation, at 

9 the end of the taxpayer’s taxable year in which such 

10 sale or exchange occurs, the transferee’s ownership 

11 of stock in such corporation meets the requirements 

12 of section 1504(a)(2) (determined by substituting 

13 ‘90 percent’ for ‘80 percent’ each place it appears). 

14 ‘‘(d) LONG-HELD QUALIFYING LAND OR WATER IN15 TEREST.—For purposes of this section— 

16 ‘‘(1) IN GENERAL.—The term ‘long-held quali17 fying land or water interest’ means any qualifying 

18 land or water interest owned by the taxpayer or a 

19 member of the taxpayer’s family (as defined in sec20 tion 2032A(e)(2)) at all times during the 5-year pe21 riod ending on the date of the sale. 

22 ‘‘(2) QUALIFYING LAND OR WATER INTER23 EST.— 
29 

•S 1780 IS 

1 ‘‘(A) IN GENERAL.—The term ‘qualifying 

2 land or water interest’ means a real property 

3 interest which constitutes— 

4 ‘‘(i) a taxpayer’s entire interest in 

5 land, 

6 ‘‘(ii) a taxpayer’s entire interest in 

7 water rights, 

8 ‘‘(iii) a qualified real property interest 

9 (as defined in section 170(h)(2)), or 

10 ‘‘(iv) stock in a qualifying land or 

11 water corporation. 

12 ‘‘(B) ENTIRE INTEREST.—For purposes of 

13 clause (i) or (ii) of subparagraph (A)— 

14 ‘‘(i) a partial interest in land or water 

15 is not a taxpayer’s entire interest if an in16 terest in land or water was divided in order 

17 to create such partial interest in order to 

18 avoid the requirements of such clause or 

19 section 170(f)(3)(A), and 

20 ‘‘(ii) a taxpayer’s entire interest in 

21 certain land does not fail to satisfy sub22 paragraph (A)(i) solely because the tax23 payer has retained an interest in other 

24 land, even if the other land is contiguous 

25 with such certain land and was acquired by 
30 

•S 1780 IS 

1 the taxpayer along with such certain land 

2 in a single conveyance. 

3 ‘‘(e) OTHER DEFINITIONS.—For purposes of this 

4 section— 

5 ‘‘(1) ELIGIBLE ENTITY.—The term ‘eligible en6 tity’ means— 

7 ‘‘(A) a governmental unit referred to in 

8 section 170(c)(1), or an agency or department 

9 thereof operated primarily for 1 or more of the 

10 conservation purposes specified in clause (i), 

11 (ii), or (iii) of section 170(h)(4)(A), or 

12 ‘‘(B) an entity which is— 

13 ‘‘(i) described in section 

14 170(b)(1)(A)(vi) or section 170(h)(3)(B), 

15 and 

16 ‘‘(ii) organized and at all times oper17 ated primarily for 1 or more of the con18 servation purposes specified in clause (i), 

19 (ii), or (iii) of section 170(h)(4)(A). 

20 ‘‘(2) QUALIFYING LETTER OF INTENT.—The 

21 term ‘qualifying letter of intent’ means a written let22 ter of intent which includes the following statement: 

23 ‘The transferee’s intent is that this acquisition will 

24 serve 1 or more of the conservation purposes speci25 fied in clause (i), (ii), or (iii) of section 170(h)(4)(A) 
31 

•S 1780 IS 

1 of the Internal Revenue Code of 1986, that the 

2 transferee’s use of the property so acquired will be 

3 consistent with section 170(h)(5) of such Code, and 

4 that the use of the property will continue to be con5 sistent with such section, even if ownership or pos6 session of such property is subsequently transferred 

7 to another person.’ 

8 ‘‘(3) QUALIFYING LAND OR WATER CORPORA9 TION.—The term ‘qualifying land or water corpora10 tion’ means a C corporation (as defined in section 

11 1361(a)(2)) if, as of the date of the conservation 

12 sale— 

13 ‘‘(A) the fair market value of the corpora14 tion’s interests in land or water held by the cor15 poration at all times during the preceding 5 

16 years equals or exceeds 90 percent of the fair 

17 market value of all of such corporation’s assets, 

18 and 

19 ‘‘(B) not more than 50 percent of the total 

20 fair market value of such corporation’s assets 

21 consists of water rights or infrastructure re22 lated to the delivery of water, or both. 

23 ‘‘(f) TAX ON SUBSEQUENT TRANSFERS OR REMOV24 ALS OF CONSERVATION RESTRICTIONS.— 
32 

•S 1780 IS 

1 ‘‘(1) IN GENERAL.—A tax is hereby imposed on 

2 any subsequent— 

3 ‘‘(A) transfer by an eligible entity of own4 ership or possession, whether by sale, exchange, 

5 or lease, of property acquired directly or indi6 rectly in— 

7 ‘‘(i) a conservation sale described in 

8 subsection (a), or 

9 ‘‘(ii) a transfer described in clause (i), 

10 (ii), or (iii) of paragraph (4)(A), or 

11 ‘‘(B) removal of a conservation restriction 

12 contained in an instrument of conveyance of 

13 such property. 

14 ‘‘(2) AMOUNT OF TAX.—The amount of tax im15 posed by paragraph (1) on any transfer or removal 

16 shall be equal to the sum of— 

17 ‘‘(A) either— 

18 ‘‘(i) 20 percent of the fair market 

19 value (determined at the time of the trans20 fer) of the property the ownership or pos21 session of which is transferred, or 

22 ‘‘(ii) 20 percent of the fair market 

23 value (determined at the time immediately 

24 after the removal) of the property upon 
33 

•S 1780 IS 

1 which the conservation restriction was re2 moved, plus 

3 ‘‘(B) the product of— 

4 ‘‘(i) the highest rate of tax specified 

5 in section 11, times 

6 ‘‘(ii) any gain or income realized by 

7 the transferor or person removing such re8 striction as a result of the transfer or re9 moval. 

10 ‘‘(3) LIABILITY.—The tax imposed by para11 graph (1) shall be paid— 

12 ‘‘(A) on any transfer, by the transferor, 

13 and 

14 ‘‘(B) on any removal of a conservation re15 striction contained in an instrument of convey16 ance, by the person removing such restriction. 

17 ‘‘(4) RELIEF FROM LIABILITY.—The person 

18 (otherwise liable for any tax imposed by paragraph 

19 (1)) shall be relieved of liability for the tax imposed 

20 by paragraph (1)— 

21 ‘‘(A) with respect to any transfer if— 

22 ‘‘(i) the transferee is an eligible entity 

23 which provides such person, at the time of 

24 transfer, a qualifying letter of intent, 
34 

•S 1780 IS 

1 ‘‘(ii) in any case where the transferee 

2 is not an eligible entity, it is established to 

3 the satisfaction of the Secretary, that the 

4 transfer of ownership or possession, as the 

5 case may be, will be consistent with section 

6 170(h)(5), and the transferee provides 

7 such person, at the time of transfer, a 

8 qualifying letter of intent, or 

9 ‘‘(iii) tax has previously been paid 

10 under this subsection as a result of a prior 

11 transfer of ownership or possession of the 

12 same property, or 

13 ‘‘(B) with respect to any removal of a con14 servation restriction contained in an instrument 

15 of conveyance, if it is established to the satis16 faction of the Secretary that the retention of 

17 the restriction was impracticable or impossible 

18 and the proceeds continue to be used in a man19 ner consistent with 1 or more of the conserva20 tion purposes specified in clause (i), (ii), or (iii) 

21 of section 170(h)(4)(A). 

22 ‘‘(5) ADMINISTRATIVE PROVISIONS.—For pur23 poses of subtitle F, the taxes imposed by this sub24 section shall be treated as excise taxes with respect 
35 

•S 1780 IS 

1 to which the deficiency procedures of such subtitle 

2 apply. 

3 ‘‘(6) REPORTING.—The Secretary may require 

4 such reporting as may be necessary or appropriate 

5 to further the purpose under this section that any 

6 conservation use be in perpetuity.’’. 

7 (b) CLERICAL AMENDMENT.—The table of sections 

8 for part III of subchapter B of chapter 1 is amended by 

9 inserting after the item relating to section 121 the fol10 lowing new item: 

‘‘Sec. 121A. 25-percent exclusion of gain on sales or exchanges 

of land or water interests to eligible entities for 

conservation purposes.’’. 

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

12 this section shall apply to sales or exchanges occurring 

13 after the date of the enactment of this Act. 

14 SEC. 107. ADJUSTMENT TO BASIS OF S CORPORATION 

15 STOCK FOR CERTAIN CHARITABLE CON16 TRIBUTIONS. 

17 (a) IN GENERAL.—Paragraph (2) of section 1367(a) 

18 (relating to adjustments to basis of stock of shareholders, 

19 etc.) is amended by adding at the end the following new 

20 flush sentence: 

21 ‘‘The decrease under subparagraph (B) by reason of 

22 a charitable contribution (as defined in section 

23 170(c)) of property shall be the amount equal to the 
36 

•S 1780 IS 

1 shareholder’s pro rata share of the adjusted basis of 

2 such property.’’. 

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

4 this section shall apply to contributions made after the 

5 date of the enactment of this Act. 

6 SEC. 108. ENHANCED DEDUCTION FOR CHARITABLE CON7 TRIBUTION OF LITERARY, MUSICAL, ARTIS8 TIC, AND SCHOLARLY COMPOSITIONS. 

9 (a) IN GENERAL.—Subsection (e) of section 170 (re10 lating to certain contributions of ordinary income and cap11 ital gain property), as amended by this Act, is amended 

12 by adding at the end the following new paragraph: 

13 ‘‘(8) SPECIAL RULE FOR CERTAIN CONTRIBU14 TIONS OF LITERARY, MUSICAL, ARTISTIC, OR SCHOL15 ARLY COMPOSITIONS.— 

16 ‘‘(A) IN GENERAL.—In the case of a quali17 fied artistic charitable contribution— 

18 ‘‘(i) the amount of such contribution 

19 taken into account under this section shall 

20 be the fair market value of the property 

21 contributed (determined at the time of 

22 such contribution), and 

23 ‘‘(ii) no reduction in the amount of 

24 such contribution shall be made under 

25 paragraph (1). 
37 

•S 1780 IS 

1 ‘‘(B) QUALIFIED ARTISTIC CHARITABLE

2 CONTRIBUTION.—For purposes of this para3 graph, the term ‘qualified artistic charitable 

4 contribution’ means a charitable contribution of 

5 any literary, musical, artistic, or scholarly com6 position, or similar property, or the copyright 

7 thereon (or both), but only if— 

8 ‘‘(i) such property was created by the 

9 personal efforts of the taxpayer making 

10 such contribution no less than 18 months 

11 prior to such contribution, 

12 ‘‘(ii) the taxpayer— 

13 ‘‘(I) has received a qualified ap14 praisal of the fair market value of 

15 such property in accordance with the 

16 regulations under this section, and 

17 ‘‘(II) attaches to the taxpayer’s 

18 income tax return for the taxable year 

19 in which such contribution was made 

20 a copy of such appraisal, 

21 ‘‘(iii) the donee is an organization de22 scribed in subsection (b)(1)(A), 

23 ‘‘(iv) the use of such property by the 

24 donee is related to the purpose or function 

25 constituting the basis for the donee’s ex-
38 

•S 1780 IS 

1 emption under section 501 (or, in the case 

2 of a governmental unit, to any purpose or 

3 function described under section 501(c)), 

4 ‘‘(v) the taxpayer receives from the 

5 donee a written statement representing 

6 that the donee’s use of the property will be 

7 in accordance with the provisions of clause 

8 (iv), and 

9 ‘‘(vi) the written appraisal referred to 

10 in clause (ii) includes evidence of the ex11 tent (if any) to which property created by 

12 the personal efforts of the taxpayer and of 

13 the same type as the donated property is 

14 or has been— 

15 ‘‘(I) owned, maintained, and dis16 played by organizations described in 

17 subsection (b)(1)(A), and 

18 ‘‘(II) sold to or exchanged by 

19 persons other than the taxpayer, 

20 donee, or any related person (as de21 fined in section 465(b)(3)(C)). 

22 ‘‘(C) MAXIMUM DOLLAR LIMITATION; NO

23 CARRYOVER OF INCREASED DEDUCTION.—The 

24 increase in the deduction under this section by 

25 reason of this paragraph for any taxable year— 
39 

•S 1780 IS 

1 ‘‘(i) shall not exceed the artistic ad2 justed gross income of the taxpayer for 

3 such taxable year, and 

4 ‘‘(ii) shall not be taken into account in 

5 determining the amount which may be car6 ried from such taxable year under sub7 section (d). 

8 ‘‘(D) ARTISTIC ADJUSTED GROSS IN9 COME.—For purposes of this paragraph, the 

10 term ‘artistic adjusted gross income’ means 

11 that portion of the adjusted gross income of the 

12 taxpayer for the taxable year attributable to— 

13 ‘‘(i) income from the sale or use of 

14 property created by the personal efforts of 

15 the taxpayer which is of the same type as 

16 the donated property, and 

17 ‘‘(ii) income from teaching, lecturing, 

18 performing, or similar activity with respect 

19 to property described in clause (i). 

20 ‘‘(E) PARAGRAPH NOT TO APPLY TO CER21 TAIN CONTRIBUTIONS.—Subparagraph (A) shall 

22 not apply to any charitable contribution of any 

23 letter, memorandum, or similar property which 

24 was written, prepared, or produced by or for an 

25 individual while the individual is an officer or 
40 

•S 1780 IS 

1 employee of any person (including any govern2 ment agency or instrumentality) unless such 

3 letter, memorandum, or similar property is en4 tirely personal. 

5 ‘‘(F) COPYRIGHT TREATED AS SEPARATE

6 PROPERTY FOR PARTIAL INTEREST RULE.—In 

7 the case of a qualified artistic charitable con8 tribution, the tangible literary, musical, artistic, 

9 or scholarly composition, or similar property 

10 and the copyright on such work shall be treated 

11 as separate properties for purposes of this para12 graph and subsection (f)(3).’’. 

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

14 this section shall apply to contributions made after the 

15 date of the enactment of this Act. 

16 SEC. 109. MILEAGE REIMBURSEMENTS TO CHARITABLE 

17 VOLUNTEERS EXCLUDED FROM GROSS IN18 COME. 

19 (a) IN GENERAL.—Part III of subchapter B of chap20 ter 1 is amended by inserting after section 139A the fol21 lowing new section: 

22 ‘‘SEC. 139B. MILEAGE REIMBURSEMENTS TO CHARITABLE 

23 VOLUNTEERS. 

24 ‘‘(a) IN GENERAL.—Gross income of an individual 

25 does not include amounts received, from an organization 
41 

•S 1780 IS 

1 described in section 170(c), as reimbursement of operating 

2 expenses with respect to use of a passenger automobile 

3 for the benefit of such organization. The preceding sen4 tence shall apply only to the extent that the expenses 

5 which are reimbursed would be deductible under this chap6 ter if section 274(d) were applied— 

7 ‘‘(1) by using the standard business mileage 

8 rate established under such section, and 

9 ‘‘(2) as if the individual were an employee of an 

10 organization not described in section 170(c). 

11 ‘‘(b) APPLICATION TO VOLUNTEER SERVICES

12 ONLY.—Subsection (a) shall not apply with respect to any 

13 expenses relating to the performance of services for com14 pensation. 

15 ‘‘(c) NO DOUBLE BENEFIT.—A taxpayer may not 

16 claim a deduction or credit under any other provision of 

17 this title with respect to the expenses under subsection (a). 

18 ‘‘(d) EXEMPTION FROM REPORTING REQUIRE19 MENTS.—Section 6041 shall not apply with respect to re20 imbursements excluded from income under subsection 

21 (a).’’. 

22 (b) CLERICAL AMENDMENT.—The table of sections 

23 for part III of subchapter B of chapter 1 is amended by 

24 inserting after the item relating to section 139A the fol25 lowing new item: 

‘‘Sec. 139B. Mileage reimbursements to charitable volunteers.’’. 
42 

•S 1780 IS 

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

2 this section shall apply to taxable years beginning after 

3 the date of the enactment of this Act. 

4 SEC. 110. EXTENSION OF ENHANCED DEDUCTION FOR IN5 VENTORY TO INCLUDE PUBLIC SCHOOLS. 

6 (a) IN GENERAL.—Subparagraph (A) of section 

7 170(e)(3) (relating to special rule for certain contributions 

8 of inventory and other property) is amended by striking 

9 ‘‘to an organization which is described in’’ and all that 

10 follows through the end of clause (i) and inserting ‘‘to a 

11 qualified organization, but only if— 

12 ‘‘(i) the property is to be used by the 

13 donee solely for the care of the ill, the 

14 needy, or infants and, in the case of— 

15 ‘‘(I) an organization described in 

16 section 501(c)(3) (other than an orga17 nization described in subclause (II)), 

18 the use of the property by the donee 

19 is related to the purpose or function 

20 constituting the basis for its exemp21 tion under section 501, and 

22 ‘‘(II) an organization described 

23 in subsection (b)(1)(A)(ii), the use of 

24 the property by the donee is related to 

25 educational purposes and such prop-
43 

•S 1780 IS 

1 erty is not computer technology or 

2 equipment (as defined in paragraph 

3 (6)(F)(i));’’. 

4 (b) QUALIFIED ORGANIZATION.—Paragraph (3) of 

5 section 170(e) of such Code, as amended by this Act, is 

6 amended by redesignating subparagraph (D) as subpara7 graph (E) and by inserting after subparagraph (C) the 

8 following new subparagraph: 

9 ‘‘(D) QUALIFIED ORGANIZATION.—For 

10 purposes of this paragraph, the term ‘qualified 

11 organization’ means— 

12 ‘‘(i) an organization which is de13 scribed in section 501(c)(3) and is exempt 

14 under section 501(a) (other than a private 

15 foundation, as defined in section 509(a), 

16 which is not an operating foundation, as 

17 defined in section 4942(j)(3)), and 

18 ‘‘(ii) an educational organization de19 scribed in subsection (b)(1)(A)(ii).’’. 

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

21 this section shall apply to contributions made after De22 cember 31, 2004. 
44 

•S 1780 IS 

1 TITLE II—PROPOSALS IMPROV2 ING THE OVERSIGHT OF TAX3 EXEMPT ORGANIZATIONS 

4 SEC. 201. DISCLOSURE OF WRITTEN DETERMINATIONS. 

5 (a) IN GENERAL.—Section 6110(l) (relating to sec6 tion not to apply) is amended by striking all matter before 

7 subparagraph (A) of paragraph (2) and inserting the fol8 lowing: 

9 ‘‘(l) SECTION NOT TO APPLY.— 

10 ‘‘(1) IN GENERAL.—This section shall not apply 

11 to any matter to which section 6104 or 6105 ap12 plies, except that this section shall apply to any writ13 ten determination and related background file docu14 ment relating to an organization described under 

15 subsection (c) or (d) of section 501 (including any 

16 written determination denying an organization tax17 exempt status under such subsection) or a political 

18 organization described in section 527 which is not 

19 required to be disclosed by section 6104(a)(1)(A). 

20 ‘‘(2) ADDITIONAL MATTERS.—This section shall 

21 not apply to any—’’. 

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

23 this section shall apply to written determinations issued 

24 after the date of the enactment of this Act. 
45 

•S 1780 IS 

1 SEC. 202. DISCLOSURE OF INTERNET WEB SITE AND NAME 

2 UNDER WHICH ORGANIZATION DOES BUSI3 NESS. 

4 (a) IN GENERAL.—Section 6033 (relating to returns 

5 by exempt organizations) is amended by redesignating 

6 subsection (h) as subsection (i) and by inserting after sub7 section (g) the following new subsection: 

8 ‘‘(h) DISCLOSURE OF NAME UNDER WHICH ORGANI9 ZATION DOES BUSINESS AND ITS INTERNET WEB

10 SITE.—Any organization which is subject to the require11 ments of subsection (a) shall include on the return re12 quired under subsection (a)— 

13 ‘‘(1) any name under which such organization 

14 operates or does business, and 

15 ‘‘(2) the Internet web site address (if any) of 

16 such organization.’’. 

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

18 this section shall apply to returns filed after December 31, 

19 2004. 

20 SEC. 203. MODIFICATION TO REPORTING CAPITAL TRANS21 ACTIONS. 

22 (a) REQUIREMENT OF SUMMARY REPORT.—Section 

23 6033(c) (relating to additional provisions relating to pri24 vate foundations) is amended by adding at the end the 

25 following new sentence: ‘‘Any information included in an 

26 annual return regarding the gain or loss from the sale or 
46 

•S 1780 IS 

1 other disposition of stock or securities which are listed on 

2 an established securities market which is required to be 

3 furnished in order to calculate the tax on net investment 

4 income shall also be reported in summary form with a no5 tice that detailed information is available upon request by 

6 the public.’’. 

7 (b) DISCLOSURE REQUIREMENT.—Section 6104(b) 

8 (relating to inspection of annual information returns), as 

9 amended by this Act, is amended by adding at the end 

10 the following new sentence: ‘‘With respect to any private 

11 foundation (as defined in section 509(a)), any information 

12 regarding the gain or loss from the sale or other disposi13 tion of stock or securities which are listed on an estab14 lished securities market which is required to be furnished 

15 in order to calculate the tax on net investment income but 

16 which is not in summary form is not required to be made 

17 available to the public under this subsection except upon 

18 the explicit request by a member of the public to the Sec19 retary.’’. 

20 (c) PUBLIC INSPECTION REQUIREMENT.—Section 

21 6104(d) (relating to public inspection of certain annual 

22 returns, applications for exemptions, and notices of sta23 tus) is amended— 
47 

•S 1780 IS 

1 (1) by redesignating paragraph (6) (relating to 

2 disclosure of reports by Internal Revenue Service) as 

3 paragraph (7), 

4 (2) by redesignating paragraph (6) (relating to 

5 application to nonexempt charitable trusts and non6 exempt private foundations) as paragraph (8), and 

7 (3) by adding at the end the following new 

8 paragraph: 

9 ‘‘(9) APPLICATION TO PRIVATE FOUNDATION

10 CAPITAL TRANSACTION INFORMATION.—With re11 spect to any private foundation (as defined in sec12 tion 509(a)), any information regarding the gain or 

13 loss from the sale or other disposition of stock or se14 curities which are listed on an established securities 

15 market which is required to be furnished in order to 

16 calculate the tax on net investment income but 

17 which is not in summary form is not required to be 

18 made available to the public under this subsection 

19 except upon the explicit request by a member of the 

20 public to the private foundation in the form and 

21 manner of a request described in paragraph 

22 (1)(B).’’. 

23 (d) EFFECTIVE DATE.—The amendments made by 

24 this section shall apply to returns filed after December 31, 

25 2004. 
48 

•S 1780 IS 

1 SEC. 204. DISCLOSURE THAT FORM 990 IS PUBLICLY AVAIL2 ABLE. 

3 (a) IN GENERAL.—The Commissioner of the Internal 

4 Revenue shall notify the public in appropriate publications 

5 or other materials of the extent to which an exempt orga6 nization’s Form 990, Form 990–EZ, or Form 990–PF is 

7 publicly available. 

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

9 this section shall apply to publications or other materials 

10 issued or revised after the date of the enactment of this 

11 Act. 

12 SEC. 205. DISCLOSURE TO STATE OFFICIALS OF PROPOSED 

13 ACTIONS RELATED TO SECTION 501(c) ORGA14 NIZATIONS. 

15 (a) IN GENERAL.—Subsection (c) of section 6104 is 

16 amended by striking paragraph (2) and inserting the fol17 lowing new paragraphs: 

18 ‘‘(2) DISCLOSURE OF PROPOSED ACTIONS RE19 LATED TO CHARITABLE ORGANIZATIONS.— 

20 ‘‘(A) SPECIFIC NOTIFICATIONS.—In the 

21 case of an organization to which paragraph (1) 

22 applies, the Secretary may disclose to the ap23 propriate State officer— 

24 ‘‘(i) a notice of proposed refusal to 

25 recognize such organization as an organi26 zation described in section 501(c)(3) or a 
49 

•S 1780 IS 

1 notice of proposed revocation of such orga2 nization’s recognition as an organization 

3 exempt from taxation, 

4 ‘‘(ii) the issuance of a letter of pro5 posed deficiency of tax imposed under sec6 tion 507 or chapter 41 or 42, and 

7 ‘‘(iii) the names, addresses, and tax8 payer identification numbers of organiza9 tions which have applied for recognition as 

10 organizations described in section 

11 501(c)(3). 

12 ‘‘(B) ADDITIONAL DISCLOSURES.—Returns 

13 and return information of organizations with 

14 respect to which information is disclosed under 

15 subparagraph (A) may be made available for in16 spection by or disclosed to an appropriate State 

17 officer. 

18 ‘‘(C) PROCEDURES FOR DISCLOSURE.—In19 formation may be inspected or disclosed under 

20 subparagraph (A) or (B) only— 

21 ‘‘(i) upon written request by an ap22 propriate State officer, and 

23 ‘‘(ii) for the purpose of, and only to 

24 the extent necessary in, the administration 
50 

•S 1780 IS 

1 of State laws regulating such organiza2 tions. 

3 Such information may only be inspected by or 

4 disclosed to a person other than the appropriate 

5 State officer if such person is an officer or em6 ployee of the State and is designated by the ap7 propriate State official to receive the returns or 

8 return information under this paragraph on be9 half of the appropriate State officer. 

10 ‘‘(D) DISCLOSURES OTHER THAN BY RE11 QUEST.—The Secretary may make available for 

12 inspection or disclose returns and return infor13 mation of an organization to which paragraph 

14 (1) applies to an appropriate State officer of 

15 any State if the Secretary determines that such 

16 inspection or disclosure may facilitate the reso17 lution of Federal or State issues relating to the 

18 tax-exempt status of such organization. 

19 ‘‘(3) DISCLOSURE WITH RESPECT TO CERTAIN

20 OTHER EXEMPT ORGANIZATIONS.—Upon written re21 quest by an appropriate State officer, the Secretary 

22 may make available for inspection or disclosure re23 turns and return information of an organization de24 scribed in paragraph (2), (4), (6), (7), (8), (10), or 

25 (13) of section 501(c) for the purpose of, and to the 
51 

•S 1780 IS 

1 extent necessary in, the administration of State laws 

2 regulating the solicitation or administration of the 

3 charitable funds or charitable assets of such organi4 zations. Such information may only be inspected by 

5 or disclosed to a person other than the appropriate 

6 State officer if such person is an officer or employee 

7 of the State and is designated by the appropriate 

8 State official to receive the returns or return infor9 mation under this paragraph on behalf of the appro10 priate State officer. 

11 ‘‘(4) USE IN CIVIL JUDICIAL AND ADMINISTRA12 TIVE PROCEEDINGS.—Returns and return informa13 tion disclosed pursuant to this subsection may be 

14 disclosed in civil administrative and civil judicial pro15 ceedings pertaining to the enforcement of State laws 

16 regulating such organizations in a manner pre17 scribed by the Secretary similar to that for tax ad18 ministration proceedings under section 6103(h)(4). 

19 ‘‘(5) NO DISCLOSURE IF IMPAIRMENT.—Re20 turns and return information shall not be disclosed 

21 under this subsection, or in any proceeding described 

22 in paragraph (4), to the extent that the Secretary 

23 determines that such disclosure would seriously im24 pair Federal tax administration. 
52 

•S 1780 IS 

1 ‘‘(6) DEFINITIONS.—For purposes of this sub2 section— 

3 ‘‘(A) RETURN AND RETURN INFORMA4 TION.—The terms ‘return’ and ‘return informa5 tion’ have the respective meanings given to such 

6 terms by section 6103(b). 

7 ‘‘(B) APPROPRIATE STATE OFFICER.—The 

8 term ‘appropriate State officer’ means— 

9 ‘‘(i) the State attorney general, 

10 ‘‘(ii) in the case of an organization to 

11 which paragraph (1) applies, any other 

12 State official charged with overseeing orga13 nizations of the type described in section 

14 501(c)(3), and 

15 ‘‘(iii) in the case of an organization to 

16 which paragraph (3) applies, the head of 

17 an agency designated by the State attorney 

18 general as having primary responsibility 

19 for overseeing the solicitation of funds for 

20 charitable purposes.’’. 

21 (b) CONFORMING AMENDMENTS.— 

22 (1) Subparagraph (A) of section 6103(p)(3) is 

23 amended by inserting ‘‘and section 6104(c)’’ after 

24 ‘‘section’’ in the first sentence. 
53 

•S 1780 IS 

1 (2) Paragraph (4) of section 6103(p) is amend2 ed— 

3 (A) in the matter preceding subparagraph 

4 (A), by inserting ‘‘, or any appropriate State of5 ficer (as defined in section 6104(c)),’’ before 

6 ‘‘or any other person’’, 

7 (B) in subparagraph (F)(i), by inserting 

8 ‘‘or any appropriate State officer (as defined in 

9 section 6104(c)),’’ before ‘‘or any other per10 son’’, and 

11 (C) in the matter following subparagraph 

12 (F), by inserting ‘‘, an appropriate State officer 

13 (as defined in section 6104(c)),’’ after ‘‘includ14 ing an agency’’ each place it appears. 

15 (3) The heading for paragraph (1) of section 

16 6104(c) is amended by inserting ‘‘FOR CHARITABLE

17 ORGANIZATIONS’’ after ‘‘RULE’’. 

18 (4) Paragraph (2) of section 7213(a) is amend19 ed by inserting ‘‘or under section 6104(c)’’ after 

20 ‘‘6103’’. 

21 (5) Paragraph (2) of section 7213A(a) is 

22 amended by inserting ‘‘or 6104(c)’’ after ‘‘6103’’. 

23 (6) Paragraph (2) of section 7431(a) is amend24 ed by inserting ‘‘(including any disclosure in viola25 tion of section 6104(c))’’ after ‘‘6103’’. 
54 

•S 1780 IS 

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

2 this section shall take effect on the date of the enactment 

3 of this Act but shall not apply to requests made before 

4 such date. 

5 SEC. 206. EXPANSION OF PENALTIES TO PREPARERS OF 

6 FORM 990. 

7 (a) IN GENERAL.—Section 6695 (relating to other 

8 assessable penalties with respect to the preparation of in9 come tax returns for other persons) is amended by adding 

10 at the end the following new subsections: 

11 ‘‘(h) CERTAIN OMISSIONS AND MISREPRESENTA12 TIONS.— 

13 ‘‘(1) IN GENERAL.—Any person who prepares 

14 for compensation any return under section 6033 who 

15 omits or misrepresents any information with respect 

16 to such return which was known or should have been 

17 known by such person shall pay a penalty of $250 

18 with respect to such return. 

19 ‘‘(2) EXCEPTION FOR MINOR, INADVERTENT

20 OMISSIONS.—Paragraph (1) shall not apply to 

21 minor, inadvertent omissions. 

22 ‘‘(3) RULES FOR DETERMINING RETURN PRE23 PARER.—For purposes of this subsection and sub24 section (i), any reference to a person who prepares 

25 for compensation a return under section 6033— 
55 

•S 1780 IS 

1 ‘‘(A) shall include any person who employs 

2 1 or more persons to prepare for compensation 

3 a return under section 6033, and 

4 ‘‘(B) shall not include any person who 

5 would be described in clause (i), (ii), (iii), or 

6 (iv) of section 7701(a)(36)(B) if such section 

7 referred to a return under section 6033. 

8 ‘‘(i) WILLFUL OR RECKLESS CONDUCT.— 

9 ‘‘(1) IN GENERAL.—Any person who prepares 

10 for compensation any return under section 6033 who 

11 recklessly or intentionally misrepresents any infor12 mation or recklessly or intentionally disregards any 

13 rule or regulation with respect to such return shall 

14 pay a penalty of $1,000 with respect to such return. 

15 ‘‘(2) COORDINATION WITH OTHER PEN16 ALTIES.—With respect to any return, the amount of 

17 the penalty payable by any person by reason of para18 graph (1) shall be reduced by the amount of the 

19 penalty paid by such person by reason of subsection 

20 (h) or section 6694.’’. 

21 (b) CONFORMING AMENDMENTS.— 

22 (1) The heading for section 6695 is amended by 

23 inserting ‘‘AND OTHER’’ after ‘‘INCOME TAX’’. 

24 (2) The item relating to section 6695 in the 

25 table of sections for part I of subchapter B of chap-
56 

•S 1780 IS 

1 ter 68 is amended by inserting ‘‘and other’’ after 

2 ‘‘income tax’’. 

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

4 this section shall apply with respect to documents pre5 pared after the date of the enactment of this Act. 

6 SEC. 207. NOTIFICATION REQUIREMENT FOR ENTITIES NOT 

7 CURRENTLY REQUIRED TO FILE. 

8 (a) IN GENERAL.—Section 6033 (relating to returns 

9 by exempt organizations), as amended by this Act, is 

10 amended by redesignating subsection (i) as subsection (j) 

11 and by inserting after subsection (h) the following new 

12 subsection: 

13 ‘‘(i) ADDITIONAL NOTIFICATION REQUIREMENTS.— 

14 Any organization the gross receipts of which in any tax15 able year result in such organization being referred to in 

16 subsection (a)(2)(A)(ii) or (a)(2)(B)— 

17 ‘‘(1) shall furnish annually, at such time and in 

18 such manner as the Secretary may by forms or regu19 lations prescribe, information setting forth— 

20 ‘‘(A) the legal name of the organization, 

21 ‘‘(B) any name under which such organiza22 tion operates or does business, 

23 ‘‘(C) the organization’s mailing address 

24 and Internet web site address (if any), 
57 

•S 1780 IS 

1 ‘‘(D) the organization’s taxpayer identifica2 tion number, 

3 ‘‘(E) the name and address of a principal 

4 officer, and 

5 ‘‘(F) evidence of the continuing basis for 

6 the organization’s exemption from the filing re7 quirements under subsection (a)(1), and 

8 ‘‘(2) upon the termination of the existence of 

9 the organization, shall furnish notice of such termi10 nation.’’. 

11 (b) LOSS OF EXEMPT STATUS FOR FAILURE TO

12 FILE RETURN OR NOTICE.—Section 6033 (relating to re13 turns by exempt organizations), as amended by subsection 

14 (a), is amended by redesignating subsection (j) as sub15 section (k) and by inserting after subsection (i) the fol16 lowing new subsection: 

17 ‘‘(j) LOSS OF EXEMPT STATUS FOR FAILURE TO

18 FILE RETURN OR NOTICE.— 

19 ‘‘(1) IN GENERAL.—If an organization de20 scribed in subsection (a)(1) or (i) fails to file an an21 nual return or notice required under either sub22 section for 3 consecutive years, such organization’s 

23 status as an organization exempt from tax under 

24 section 501(a) shall be considered revoked on and 

25 after the date set by the Secretary for the filing of 
58 

•S 1780 IS 

1 the third annual return or notice. The Secretary 

2 shall publish and maintain a list of any organization 

3 the status of which is so revoked. 

4 ‘‘(2) APPLICATION NECESSARY FOR REINSTATE5 MENT.—Any organization the tax-exempt status of 

6 which is revoked under paragraph (1) must apply in 

7 order to obtain reinstatement of such status regard8 less of whether such organization was originally re9 quired to make such an application. 

10 ‘‘(3) RETROACTIVE REINSTATEMENT IF REA11 SONABLE CAUSE SHOWN FOR FAILURE.—If upon ap12 plication for reinstatement of status as an organiza13 tion exempt from tax under section 501(a), an orga14 nization described in paragraph (1) can show to the 

15 satisfaction of the Secretary evidence of reasonable 

16 cause for the failure described in such paragraph, 

17 the organization’s exempt status may, in the discre18 tion of the Secretary, be reinstated effective from 

19 the date of the revocation under such paragraph.’’. 

20 (c) NO DECLARATORY JUDGMENT RELIEF.—Section 

21 7428(b) (relating to limitations) is amended by adding at 

22 the end the following new paragraph: 

23 ‘‘(4) NONAPPLICATION FOR CERTAIN REVOCA24 TIONS.—No action may be brought under this sec-
59 

•S 1780 IS 

1 tion with respect to any revocation of status de2 scribed in section 6033(j)(1).’’. 

3 (d) NO INSPECTION REQUIREMENT.—Section 

4 6104(b) (relating to inspection of annual information re5 turns) is amended by inserting ‘‘(other than subsection (i) 

6 thereof)’’ after ‘‘6033’’. 

7 (e) NO DISCLOSURE REQUIREMENT.—Section 

8 6104(d)(3) (relating to exceptions from disclosure require9 ments) is amended by redesignating subparagraph (B) as 

10 subparagraph (C) and by inserting after subparagraph (A) 

11 the following new subparagraph: 

12 ‘‘(B) NONDISCLOSURE OF ANNUAL NO13 TICES.—Paragraph (1) shall not require the 

14 disclosure of any notice required under section 

15 6033(i).’’. 

16 (f) NO MONETARY PENALTY FOR FAILURE TO NO17 TIFY.—Section 6652(c)(1) (relating to annual returns 

18 under section 6033 or 6012(a)(6)) is amended by adding 

19 at the end the following new subparagraph: 

20 ‘‘(E) NO PENALTY FOR CERTAIN ANNUAL

21 NOTICES.—This paragraph shall not apply with 

22 respect to any notice required under section 

23 6033(i).’’. 

24 (g) SECRETARIAL OUTREACH REQUIREMENTS.— 
60 

•S 1780 IS 

1 (1) NOTICE REQUIREMENT.—The Secretary of 

2 the Treasury shall notify in a timely manner every 

3 organization described in section 6033(i) of the In4 ternal Revenue Code of 1986 (as added by this sec5 tion) of the requirement under such section 6033(i) 

6 and of the penalty established under section 

7 6033(j)— 

8 (A) by mail, in the case of any organiza9 tion the identity and address of which is in10 cluded in the list of exempt organizations main11 tained by the Secretary, and 

12 (B) by Internet or other means of out13 reach, in the case of any other organization. 

14 (2) LOSS OF STATUS PENALTY FOR FAILURE TO

15 FILE RETURN.—The Secretary of the Treasury shall 

16 publicize in a timely manner in appropriate forms 

17 and instructions and through other appropriate 

18 means, the penalty established under section 6033(j) 

19 of such Code for the failure to file a return under 

20 section 6033(a)(1) of such Code. 

21 (h) EFFECTIVE DATE.—The amendments made by 

22 this section shall apply to notices and returns with respect 

23 to annual periods beginning after 2004. 
61 

•S 1780 IS 

1 TITLE III—OTHER CHARITABLE 

2 AND EXEMPT ORGANIZATION 

3 PROVISIONS 

4 SEC. 301. MODIFICATION OF EXCISE TAX ON UNRELATED 

5 BUSINESS TAXABLE INCOME OF CHARITABLE 

6 REMAINDER TRUSTS. 

7 (a) IN GENERAL.—Subsection (c) of section 664 (re8 lating to exemption from income taxes) is amended to read 

9 as follows: 

10 ‘‘(c) TAXATION OF TRUSTS.— 

11 ‘‘(1) INCOME TAX.—A charitable remainder an12 nuity trust and a charitable remainder unitrust 

13 shall, for any taxable year, not be subject to any tax 

14 imposed by this subtitle. 

15 ‘‘(2) EXCISE TAX.— 

16 ‘‘(A) IN GENERAL.—In the case of a chari17 table remainder annuity trust or a charitable 

18 remainder unitrust which has unrelated busi19 ness taxable income (within the meaning of sec20 tion 512, determined as if part III of sub21 chapter F applied to such trust) for a taxable 

22 year, there is hereby imposed on such trust or 

23 unitrust an excise tax equal to the amount of 

24 such unrelated business taxable income. 
62 

•S 1780 IS 

1 ‘‘(B) CERTAIN RULES TO APPLY.—The tax 

2 imposed by subparagraph (A) shall be treated 

3 as imposed by chapter 42 for purposes of this 

4 title other than subchapter E of chapter 42. 

5 ‘‘(C) TAX COURT PROCEEDINGS.—For pur6 poses of this paragraph, the references in sec7 tion 6212(c)(1) to section 4940 shall be deemed 

8 to include references to this paragraph.’’. 

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

10 this section shall apply to taxable years beginning after 

11 December 31, 2004. 

12 SEC. 302. MODIFICATIONS TO SECTION 512(b)(13). 

13 (a) IN GENERAL.—Paragraph (13) of section 512(b) 

14 (relating to special rules for certain amounts received from 

15 controlled entities) is amended by redesignating subpara16 graph (E) as subparagraph (F) and by inserting after sub17 paragraph (D) the following new subparagraph: 

18 ‘‘(E) PARAGRAPH TO APPLY ONLY TO EX19 CESS PAYMENTS.— 

20 ‘‘(i) IN GENERAL.—Subparagraph (A) 

21 shall apply only to the portion of a speci22 fied payment received or accrued by the 

23 controlling organization that exceeds the 

24 amount which would have been paid or ac-
63 

•S 1780 IS 

1 crued if such payment met the require2 ments prescribed under section 482. 

3 ‘‘(ii) ADDITION TO TAX FOR VALU4 ATION MISSTATEMENTS.—The tax imposed 

5 by this chapter on the controlling organiza6 tion shall be increased by an amount equal 

7 to 20 percent of the larger of— 

8 ‘‘(I) such excess determined with9 out regard to any amendment or sup10 plement to a return of tax, or 

11 ‘‘(II) such excess determined 

12 with regard to all such amendments 

13 and supplements.’’. 

14 (b) EFFECTIVE DATE.— 

15 (1) IN GENERAL.—The amendment made by 

16 this section shall apply to payments received or ac17 crued after December 31, 2000. 

18 (2) PAYMENTS SUBJECT TO BINDING CONTRACT

19 TRANSITION RULE.—If the amendments made by 

20 section 1041 of the Taxpayer Relief Act of 1997 did 

21 not apply to any amount received or accrued in the 

22 first 2 taxable years beginning on or after the date 

23 of the enactment of the Taxpayer Relief Act of 1997 

24 under any contract described in subsection (b)(2) of 

25 such section, such amendments also shall not apply 
64 

•S 1780 IS 

1 to amounts received or accrued under such contract 

2 before January 1, 2001. 

3 SEC. 303. SIMPLIFICATION OF LOBBYING EXPENDITURE 

4 LIMITATION. 

5 (a) REPEAL OF GRASSROOTS EXPENDITURE

6 LIMIT.—Paragraph (1) of section 501(h) (relating to ex7 penditures by public charities to influence legislation) is 

8 amended to read as follows: 

9 ‘‘(1) GENERAL RULE.—In the case of an orga10 nization to which this subsection applies, exemption 

11 from taxation under subsection (a) shall be denied 

12 because a substantial part of the activities of such 

13 organization consists of carrying on propaganda, or 

14 otherwise attempting, to influence legislation, but 

15 only if such organization normally makes lobbying 

16 expenditures in excess of the lobbying ceiling amount 

17 for such organization for each taxable year.’’. 

18 (b) EXCESS LOBBYING EXPENDITURES.—Section 

19 4911(b) is amended to read as follows: 

20 ‘‘(b) EXCESS LOBBYING EXPENDITURES.—For pur21 poses of this section, the term ‘excess lobbying expendi22 tures’ means, for a taxable year, the amount by which the 

23 lobbying expenditures made by the organization during the 

24 taxable year exceed the lobbying nontaxable amount for 

25 such organization for such taxable year.’’. 
65 

•S 1780 IS 

1 (c) CONFORMING AMENDMENTS.— 

2 (1) Section 501(h)(2) is amended by striking 

3 subparagraphs (C) and (D). 

4 (2) Section 4911(c) is amended by striking 

5 paragraphs (3) and (4). 

6 (3) Paragraph (1)(A) of section 4911(f) is 

7 amended by striking ‘‘limits of section 501(h)(1) 

8 have’’ and inserting ‘‘limit of section 501(h)(1) 

9 has’’. 

10 (4) Paragraph (1)(C) of section 4911(f) is 

11 amended by striking ‘‘limits of section 501(h)(1) 

12 are’’ and inserting ‘‘limit of section 501(h)(1) is’’. 

13 (5) Paragraphs (4)(A) and (4)(B) of section 

14 4911(f) are each amended by striking ‘‘limits of sec15 tion 501(h)(1)’’ and inserting ‘‘limit of section 

16 501(h)(1)’’. 

17 (6) Paragraph (8) of section 6033(b) (relating 

18 to certain organizations described in section 

19 501(c)(3)) is amended by inserting ‘‘and’’ at the end 

20 of subparagraph (A) and by striking subparagraphs 

21 (C) and (D). 

22 (d) EFFECTIVE DATE.—The amendments made by 

23 this section shall apply to taxable years beginning after 

24 December 31, 2004. 
66 

•S 1780 IS 

1 SEC. 304. EXPEDITED REVIEW PROCESS FOR CERTAIN TAX2 EXEMPTION APPLICATIONS. 

3 (a) IN GENERAL.—The Secretary of the Treasury or 

4 the Secretary’s delegate (in this section, referred to as the 

5 ‘‘Secretary’’) shall adopt procedures to expedite the con6 sideration of applications for exempt status under section 

7 501(c)(3) of the Internal Revenue Code of 1986 filed after 

8 December 31, 2004, by any organization that— 

9 (1) is organized and operated for the primary 

10 purpose of providing social services; 

11 (2) is seeking a contract or grant under a Fed12 eral, State, or local program that provides funding 

13 for social services programs; 

14 (3) establishes that, under the terms and condi15 tions of the contract or grant program, an organiza16 tion is required to obtain such exempt status before 

17 the organization is eligible to apply for a contract or 

18 grant; 

19 (4) includes with its exemption application a 

20 copy of its completed Federal, State, or local con21 tract or grant application; and 

22 (5) meets such other criteria as the Secretary 

23 deems appropriate for expedited consideration. 

24 The Secretary may prescribe other similar circumstances 

25 in which such organizations may be entitled to expedited 

26 consideration. 
67 

•S 1780 IS 

1 (b) WAIVER OF APPLICATION FEE FOR EXEMPT

2 STATUS.—Any organization that meets the conditions de3 scribed in subsection (a) (without regard to paragraph (3) 

4 of that subsection) is entitled to a waiver of any fee for 

5 an application for exempt status under section 501(c)(3) 

6 of the Internal Revenue Code of 1986 if the organization 

7 certifies that the organization has had (or expects to have) 

8 average annual gross receipts of not more than $50,000 

9 during the preceding 4 years (or, in the case of an organi10 zation not in existence throughout the preceding 4 years, 

11 during such organization’s first 4 years). 

12 (c) SOCIAL SERVICES DEFINED.—For purposes of 

13 this section— 

14 (1) IN GENERAL.—The term ‘‘social services’’ 

15 means services directed at helping people in need, 

16 reducing poverty, improving outcomes of low-income 

17 children, revitalizing low-income communities, and 

18 empowering low-income families and low-income in19 dividuals to become self-sufficient, including— 

20 (A) child care services, protective services 

21 for children and adults, services for children 

22 and adults in foster care, adoption services, 

23 services related to the management and mainte24 nance of the home, day care services for adults, 

25 and services to meet the special needs of chil-
68 

•S 1780 IS 

1 dren, older individuals, and individuals with dis2 abilities (including physical, mental, or emo3 tional disabilities); 

4 (B) transportation services; 

5 (C) job training and related services, and 

6 employment services; 

7 (D) information, referral, and counseling 

8 services; 

9 (E) the preparation and delivery of meals, 

10 and services related to soup kitchens or food 

11 banks; 

12 (F) health support services; 

13 (G) literacy and mentoring programs; 

14 (H) services for the prevention and treat15 ment of juvenile delinquency and substance 

16 abuse, services for the prevention of crime and 

17 the provision of assistance to the victims and 

18 the families of criminal offenders, and services 

19 related to the intervention in, and prevention of, 

20 domestic violence; and 

21 (I) services related to the provision of as22 sistance for housing under Federal law. 

23 (2) EXCLUSIONS.—The term does not include a 

24 program having the purpose of delivering edu25 cational assistance under the Elementary and Sec-
69 

•S 1780 IS 

1 ondary Education Act of 1965 (20 U.S.C. 6301 et 

2 seq.) or under the Higher Education Act of 1965 

3 (20 U.S.C. 1001 et seq.). 

4 SEC. 305. CLARIFICATION OF DEFINITION OF CHURCH TAX 

5 INQUIRY. 

6 Subsection (i) of section 7611 (relating to section not 

7 to apply to criminal investigations, etc.) is amended by 

8 striking ‘‘or’’ at the end of paragraph (4), by striking the 

9 period at the end of paragraph (5) and inserting ‘‘, or’’, 

10 and by inserting after paragraph (5) the following: 

11 ‘‘(6) information provided by the Secretary re12 lated to the standards for exemption from tax under 

13 this title and the requirements under this title relat14 ing to unrelated business taxable income.’’. 

15 SEC. 306. EXPANSION OF DECLARATORY JUDGMENT REM16 EDY TO TAX-EXEMPT ORGANIZATIONS. 

17 (a) IN GENERAL.—Paragraph (1) of section 7428(a) 

18 (relating to creation of remedy) is amended— 

19 (1) in subparagraph (B) by inserting after 

20 ‘‘509(a))’’ the following: ‘‘or as a private operating 

21 foundation (as defined in section 4942(j)(3))’’; and 

22 (2) by amending subparagraph (C) to read as 

23 follows: 

24 ‘‘(C) with respect to the initial qualifica25 tion or continuing qualification of an organiza-
70 

•S 1780 IS 

1 tion as an organization described in section 

2 501(c) (other than paragraph (3)) or 501(d) 

3 which is exempt from tax under section 501(a), 

4 or’’. 

5 (b) COURT JURISDICTION.—Subsection (a) of section 

6 7428 is amended in the material following paragraph (2) 

7 by striking ‘‘United States Tax Court, the United States 

8 Claims Court, or the district court of the United States 

9 for the District of Columbia’’ and inserting the following: 

10 ‘‘United States Tax Court (in the case of any such deter11 mination or failure) or the United States Claims Court 

12 or the district court of the United States for the District 

13 of Columbia (in the case of a determination or failure with 

14 respect to an issue referred to in subparagraph (A) or (B) 

15 of paragraph (1)),’’. 

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

17 this section shall apply to pleadings filed with respect to 

18 determinations (or requests for determinations) made 

19 after December 31, 2004. 

20 SEC. 307. DEFINITION OF CONVENTION OR ASSOCIATION 

21 OF CHURCHES. 

22 Section 7701 (relating to definitions) is amended by 

23 redesignating subsection (o) as subsection (p) and by in24 serting after subsection (n) the following new subsection: 
71 

•S 1780 IS 

1 ‘‘(o) CONVENTION OR ASSOCIATION OF CHURCH2 ES.—For purposes of this title, any organization which is 

3 otherwise a convention or association of churches shall not 

4 fail to so qualify merely because the membership of such 

5 organization includes individuals as well as churches or be6 cause individuals have voting rights in such organiza7 tion.’’. 

8 SEC. 308. PAYMENTS BY CHARITABLE ORGANIZATIONS TO 

9 VICTIMS OF WAR ON TERRORISM AND FAMI10 LIES OF ASTRONAUTS KILLED IN THE LINE 

11 OF DUTY. 

12 (a) IN GENERAL.—For purposes of the Internal Rev13 enue Code of 1986— 

14 (1) any payment made by an organization de15 scribed in section 501(c)(3) of such Code to— 

16 (A) a member of the Armed Forces of the 

17 United States, or to an individual of such mem18 ber’s immediate family, by reason of the death, 

19 injury, wounding, or illness of such member in20 curred as the result of the military response of 

21 the United States to the terrorist attacks 

22 against the United States on September 11, 

23 2001, or 

24 (B) an individual of an astronaut’s imme25 diate family by reason of the death of such as-
72 

•S 1780 IS 

1 tronaut occurring in the line of duty after De2 cember 31, 2002, 

3 shall be treated as related to the purpose or function 

4 constituting the basis for such organization’s exemp5 tion under section 501 of such Code if such payment 

6 is made using an objective formula which is consist7 ently applied, and 

8 (2) in the case of a private foundation (as de9 fined in section 509 of such Code), any payment de10 scribed in paragraph (1) shall not be treated as 

11 made to a disqualified person for purposes of section 

12 4941 of such Code. 

13 (b) EFFECTIVE DATES.—This section shall apply 

14 to— 

15 (1) payments described in subsection (a)(1)(A) 

16 made after the date of the enactment of this Act and 

17 before September 11, 2005, and 

18 (2) payments described in subsection (a)(1)(B) 

19 made after December 31, 2002. 

20 SEC. 309. MODIFICATION OF SCHOLARSHIP FOUNDATION 

21 RULES. 

22 In applying the limitations on the percentage of 

23 scholarship grants which may be awarded after the date 

24 of the enactment of this Act, to children of current or 

25 former employees under Revenue Procedure 76–47, such 
73 

•S 1780 IS 

1 percentage shall be increased to 35 percent of the eligible 

2 applicants to be considered by the selection committee and 

3 to 20 percent of individuals eligible for the grants, but 

4 only if the foundation awarding the grants demonstrates 

5 that, in addition to meeting the other requirements of Rev6 enue Procedure 76–47, it provides a comparable number 

7 and aggregate amount of grants during the same program 

8 year to individuals who are not such employees, children 

9 or dependents of such employees, or affiliated with the em10 ployer of such employees. 

11 SEC. 310. TREATMENT OF CERTAIN HOSPITAL SUPPORT 

12 ORGANIZATIONS AS QUALIFIED ORGANIZA13 TIONS FOR PURPOSES OF DETERMINING AC14 QUISITION INDEBTEDNESS. 

15 (a) IN GENERAL.—Subparagraph (C) of section 

16 514(c)(9) (relating to real property acquired by a qualified 

17 organization) is amended by striking ‘‘or’’ at the end of 

18 clause (ii), by striking the period at the end of clause (iii) 

19 and inserting ‘‘; or’’, and by adding at the end the fol20 lowing new clause: 

21 ‘‘(iv) a qualified hospital support 

22 organization (as defined in subpara23 graph (I)).’’. 
74 

•S 1780 IS 

1 (b) QUALIFIED HOSPITAL SUPPORT ORGANIZA2 TIONS.—Paragraph (9) of section 514(c) is amended by 

3 adding at the end the following new subparagraph: 

4 ‘‘(I) QUALIFIED HOSPITAL SUPPORT ORGA5 NIZATIONS.—For purposes of subparagraph 

6 (C)(iv), the term ‘qualified hospital support or7 ganization’ means, with respect to any eligible 

8 indebtedness (including any qualified refi9 nancing of such eligible indebtedness), a sup10 port organization (as defined in section 

11 509(a)(3)) which supports a hospital described 

12 in section 119(d)(4)(B) and with respect to 

13 which— 

14 ‘‘(i) more than half of the organi15 zation’s assets (by value) at any time 

16 since its organization— 

17 ‘‘(I) were acquired, directly 

18 or indirectly, by testamentary gift 

19 or devise, and 

20 ‘‘(II) consisted of real prop21 erty, and 

22 ‘‘(ii) the fair market value of the 

23 organization’s real estate acquired, di24 rectly or indirectly, by gift or devise, 

25 exceeded 25 percent of the fair mar-
75 

•S 1780 IS 

1 ket value of all investment assets held 

2 by the organization immediately prior 

3 to the time that the eligible indebted4 ness was incurred. 

5 For purposes of this subparagraph, the term 

6 ‘eligible indebtedness’ means indebtedness se7 cured by real property acquired by the organi8 zation, directly or indirectly, by gift or devise, 

9 the proceeds of which are used exclusively to ac10 quire any leasehold interest in such real prop11 erty or for improvements on, or repairs to, such 

12 real property. A determination under clauses (i) 

13 and (ii) of this subparagraph shall be made 

14 each time such an eligible indebtedness (or the 

15 qualified refinancing of such an eligible indebt16 edness) is incurred. For purposes of this sub17 paragraph, a refinancing of such an eligible in18 debtedness shall be considered qualified if such 

19 refinancing does not exceed the amount of the 

20 refinanced eligible indebtedness immediately be21 fore the refinancing.’’. 

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

23 this section shall apply to indebtedness incurred after De24 cember 31, 2004. 
76 

•S 1780 IS 

1 SEC. 311. MATCHING GRANTS TO LOW-INCOME TAXPAYER 

2 CLINICS FOR RETURN PREPARATION. 

3 (a) IN GENERAL.—Chapter 77 (relating to miscella4 neous provisions) is amended by inserting after section 

5 7526 the following new section: 

6 ‘‘SEC. 7526A. RETURN PREPARATION CLINICS FOR LOW-IN7 COME TAXPAYERS. 

8 ‘‘(a) IN GENERAL.—The Secretary may, subject to 

9 the availability of appropriated funds, make grants to pro10 vide matching funds for the development, expansion, or 

11 continuation of qualified return preparation clinics. 

12 ‘‘(b) DEFINITIONS.—For purposes of this section— 

13 ‘‘(1) QUALIFIED RETURN PREPARATION CLIN14 IC.— 

15 ‘‘(A) IN GENERAL.—The term ‘qualified 

16 return preparation clinic’ means a clinic 

17 which— 

18 ‘‘(i) does not charge more than a 

19 nominal fee for its services (except for re20 imbursement of actual costs incurred), and 

21 ‘‘(ii) operates programs which assist 

22 low-income taxpayers in preparing and fil23 ing their Federal income tax returns, in24 cluding schedules reporting sole proprietor25 ship or farm income. 
77 

•S 1780 IS 

1 ‘‘(B) ASSISTANCE TO LOW-INCOME TAX2 PAYERS.—A clinic is treated as assisting low-in3 come taxpayers under subparagraph (A)(ii) if 

4 at least 90 percent of the taxpayers assisted by 

5 the clinic have incomes which do not exceed 250 

6 percent of the poverty level, as determined in 

7 accordance with criteria established by the Di8 rector of the Office of Management and Budg9 et. 

10 ‘‘(2) CLINIC.—The term ‘clinic’ includes— 

11 ‘‘(A) a clinical program at an eligible edu12 cational institution (as defined in section 

13 529(e)(5)) which satisfies the requirements of 

14 paragraph (1) through student assistance of 

15 taxpayers in return preparation and filing, and 

16 ‘‘(B) an organization described in section 

17 501(c) and exempt from tax under section 

18 501(a) which satisfies the requirements of para19 graph (1). 

20 ‘‘(c) SPECIAL RULES AND LIMITATIONS.— 

21 ‘‘(1) AGGREGATE LIMITATION.—Unless other22 wise provided by specific appropriation, the Sec23 retary shall not allocate more than $10,000,000 per 

24 year (exclusive of costs of administering the pro25 gram) to grants under this section. 
78 

•S 1780 IS 

1 ‘‘(2) OTHER APPLICABLE RULES.—Rules simi2 lar to the rules under paragraphs (2) through (5) of 

3 section 7526(c) shall apply with respect to the 

4 awarding of grants to qualified return preparation 

5 clinics.’’. 

6 (b) CLERICAL AMENDMENT.—The table of sections 

7 for chapter 77 is amended by inserting after the item re8 lating to section 7526 the following new item: 

‘‘Sec. 7526A. Return preparation clinics for low-income taxpayers.’’. 

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

10 this section shall apply to grants made after the date of 

11 the enactment of this Act. 

12 SEC. 312. EXEMPTION OF QUALIFIED 501(c)(3) BONDS FOR 

13 NURSING HOMES FROM FEDERAL GUAR14 ANTEE PROHIBITIONS. 

15 (a) IN GENERAL.—Section 149(b)(3) (relating to ex16 ceptions) is amended by adding at the end the following 

17 new subparagraph: 

18 ‘‘(E) EXCEPTION FOR QUALIFIED 501(c)(3)

19 BONDS FOR NURSING HOMES.— 

20 ‘‘(i) IN GENERAL.—Paragraph (1) 

21 shall not apply to any qualified 501(c)(3) 

22 bond issued before the date which is 1 year 

23 after the date of the enactment of this sub24 paragraph for the benefit of an organiza-
79 

•S 1780 IS 

1 tion described in section 501(c)(3), if such 

2 bond is part of an issue the proceeds of 

3 which are used to finance 1 or more of the 

4 following facilities primarily for the benefit 

5 of the elderly: 

6 ‘‘(I) Licensed nursing home facil7 ity. 

8 ‘‘(II) Licensed or certified as9 sisted living facility. 

10 ‘‘(III) Licensed personal care fa11 cility. 

12 ‘‘(IV) Continuing care retirement 

13 community. 

14 ‘‘(ii) LIMITATION.—With respect to 

15 any calendar year, clause (i) shall not 

16 apply to any bond described in such clause 

17 if the aggregate authorized face amount of 

18 the issue of which such bond is a part 

19 when increased by the outstanding amount 

20 of such bonds issued by the issuer for such 

21 calendar year exceeds $15,000,000. 

22 ‘‘(iii) CONTINUING CARE RETIREMENT

23 COMMUNITY.—For purposes of this sub24 paragraph, the term ‘continuing care re25 tirement community’ means a community 
80 

•S 1780 IS 

1 which provides, on the same campus, a 

2 continuum of residential living options and 

3 support services to persons at least 60 

4 years of age under a written agreement. 

5 For purposes of the preceding sentence, 

6 the residential living options shall include 

7 independent living units, nursing home 

8 beds, and either assisted living units or 

9 personal care beds.’’. 

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

11 this section shall apply to bonds issued after the date of 

12 the enactment of this Act. 

13 SEC. 313. EXCISE TAXES EXEMPTION FOR BLOOD COL14 LECTOR ORGANIZATIONS. 

15 (a) EXEMPTION FROM IMPOSITION OF SPECIAL

16 FUELS TAX.—Section 4041(g) (relating to other exemp17 tions) is amended by striking ‘‘and’’ at the end of para18 graph (3), by striking the period in paragraph (4) and 

19 inserting ‘‘; and’’, and by inserting after paragraph (4) 

20 the following new paragraph: 

21 ‘‘(5) with respect to the sale of any liquid to a 

22 qualified blood collector organization (as defined in 

23 section 7701(a)(49)) for such organization’s exclu24 sive use, or with respect to the use by a qualified 

25 blood collector organization of any liquid as a fuel.’’. 
81 

•S 1780 IS 

1 (b) EXEMPTION FROM MANUFACTURERS EXCISE

2 TAX.— 

3 (1) IN GENERAL.—Section 4221(a) (relating to 

4 certain tax-free sales) is amended by striking ‘‘or’’ 

5 at the end of paragraph (4), by adding ‘‘or’’ at the 

6 end of paragraph (5), and by inserting after para7 graph (5) the following new paragraph: 

8 ‘‘(6) to a qualified blood collector organization 

9 (as defined in section 7701(a)(49)) for such organi10 zation’s exclusive use,’’. 

11 (2) CONFORMING AMENDMENTS.— 

12 (A) The second sentence of section 

13 4221(a) is amended by striking ‘‘Paragraphs 

14 (4) and (5)’’ and inserting ‘‘Paragraphs (4), 

15 (5), and (6)’’. 

16 (B) Section 6421(c) is amended by strik17 ing ‘‘or (5)’’ and inserting ‘‘(5), or (6)’’. 

18 (c) EXEMPTION FROM COMMUNICATION EXCISE

19 TAX.— 

20 (1) IN GENERAL.—Section 4253 (relating to ex21 emptions) is amended by redesignating subsection 

22 (k) as subsection (l) and inserting after subsection 

23 (j) the following new subsection: 

24 ‘‘(k) EXEMPTION FOR QUALIFIED BLOOD COL25 LECTOR ORGANIZATIONS.—Under regulations provided by 
82 

•S 1780 IS 

1 the Secretary, no tax shall be imposed under section 4251 

2 on any amount paid by a qualified blood collector organi3 zation (as defined in section 7701(a)) for services or facili4 ties furnished to such organization.’’. 

5 (2) CONFORMING AMENDMENT.—Section 

6 4253(l), as redesignated by paragraph (1), is 

7 amended by striking ‘‘or (j)’’ and inserting ‘‘(j), or 

8 (k)’’. 

9 (d) CREDIT FOR REFUND FOR CERTAIN TAXES ON

10 SALES AND SERVICES.— 

11 (1) DEEMED OVERPAYMENT.— 

12 (A) IN GENERAL.—Section 6416(b)(2) is 

13 amended by redesignating subparagraphs (E) 

14 and (F) as subparagraphs (F) and (G), respec15 tively, and by inserting after subparagraph (D) 

16 the following new subparagraph: 

17 ‘‘(E) sold to a qualified blood collector or18 ganization’s (as defined in section 7701(a)(49)) 

19 for such organization’s exclusive use;’’. 

20 (B) CONFORMING AMENDMENTS.—Section 

21 6416(b)(2) is amended— 

22 (i) by striking ‘‘Subparagraphs (C) 

23 and (D)’’ and inserting ‘‘Subparagraphs 

24 (C), (D), and (E)’’, and 
83 

•S 1780 IS 

1 (ii) by striking ‘‘(C), and (D)’’ and in2 serting ‘‘(C), (D), and (E)’’. 

3 (2) SALES OF TIRES.—Clause (ii) of section 

4 6416(b)(4)(B) is amended by inserting ‘‘sold to a 

5 qualified blood collector organization (as defined in 

6 section 7701(a)(49)),’’ after ‘‘for its exclusive use,’’. 

7 (e) DEFINITION OF QUALIFIED BLOOD COLLECTOR

8 ORGANIZATION.—Section 7701(a) is amended by inserting 

9 at the end the following new paragraph: 

10 ‘‘(49) QUALIFIED BLOOD COLLECTOR ORGANI11 ZATION.—For purposes of this title, the term ‘quali12 fied blood collector organization’ means an organiza13 tion which is— 

14 ‘‘(A) described in section 501(c)(3) and ex15 empt from tax under section 501(a), 

16 ‘‘(B) registered by the Food and Drug Ad17 ministration to collect blood, and 

18 ‘‘(C) primarily engaged in the activity of 

19 the collection of blood.’’. 

20 (f) EFFECTIVE DATE.— 

21 (1) IN GENERAL.—Except as provided in para22 graph (2), the amendments made by this section 

23 shall apply with respect to excise taxes imposed on 

24 sales or uses occurring on or after October 1, 2004. 
84 

•S 1780 IS 

1 (2) REFUND OF GASOLINE TAX.—For purposes 

2 of section 6421(c) of the Internal Revenue Code of 

3 1986 and any other provision that allows for a re4 fund or a payment in respect of an excise tax pay5 able at a level before the sale to a qualified blood 

6 collector organization, the amendments made by this 

7 section shall apply with respect to sales to a quali8 fied collector organization on or after October 1, 

9 2004. 

10 TITLE IV—SOCIAL SERVICES 

11 BLOCK GRANT 

12 SEC. 401. RESTORATION OF FUNDS FOR THE SOCIAL SERV13 ICES BLOCK GRANT. 

14 (a) FINDINGS.—Congress makes the following find15 ings: 

16 (1) On August 22, 1996, the Personal Respon17 sibility and Work Opportunity Reconciliation Act of 

18 1996 (Public Law 104–193; 110 Stat. 2105) was 

19 signed into law. 

20 (2) In enacting that law, Congress authorized 

21 $2,800,000,000 for fiscal year 2003 and each fiscal 

22 year thereafter to carry out the Social Services 

23 Block Grant program established under title XX of 

24 the Social Security Act (42 U.S.C. 1397 et seq.). 
85 

•S 1780 IS 

1 (b) RESTORATION OF FUNDS.—Section 2003(c)(11) 

2 of the Social Security Act (42 U.S.C. 1397b(c)(11)) is 

3 amended by inserting ‘‘, except that, with respect to fiscal 

4 year 2006, the amount shall be $1,975,000,000, and with 

5 respect to fiscal year 2007, the amount shall be 

6 $2,800,000,000’’ after ‘‘thereafter’’. 

7 SEC. 402. RESTORATION OF AUTHORITY TO TRANSFER UP 

8 TO 10 PERCENT OF TANF FUNDS TO THE SO9 CIAL SERVICES BLOCK GRANT. 

10 (a) IN GENERAL.—Section 404(d)(2) of the Social 

11 Security Act (42 U.S.C. 604(d)(2)) is amended to read 

12 as follows: 

13 ‘‘(2) LIMITATION ON AMOUNT TRANSFERABLE

14 TO TITLE XX PROGRAMS.—A State may use not 

15 more than 10 percent of the amount of any grant 

16 made to the State under section 403(a) for a fiscal 

17 year to carry out State programs pursuant to title 

18 XX.’’. 

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

20 subsection (a) applies to amounts made available for fiscal 

21 year 2006 and each fiscal year thereafter. 

22 SEC. 403. REQUIREMENT TO SUBMIT ANNUAL REPORT ON 

23 STATE ACTIVITIES. 

24 (a) IN GENERAL.—Section 2006(c) of the Social Se25 curity Act (42 U.S.C. 1397e(c)) is amended by adding at 
86 

•S 1780 IS 

1 the end the following: ‘‘The Secretary shall compile the 

2 information submitted by the States and submit that in3 formation to Congress on an annual basis.’’. 

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

5 subsection (a) applies to information submitted by States 

6 under section 2006 of the Social Security Act (42 U.S.C. 

7 1397e) with respect to fiscal year 2005 and each fiscal 

8 year thereafter. 

9 TITLE V—INDIVIDUAL 

10 DEVELOPMENT ACCOUNTS 

11 SEC. 501. SHORT TITLE. 

12 This title may be cited as the ‘‘Savings for Working 

13 Families Act of 2005’’. 

14 SEC. 502. PURPOSES. 

15 The purposes of this title are to provide for the estab16 lishment of individual development account programs that 

17 will— 

18 (1) provide individuals and families with limited 

19 means an opportunity to accumulate assets and to 

20 enter the financial mainstream, 

21 (2) promote education, homeownership, and the 

22 development of small businesses, 

23 (3) stabilize families and build communities, 

24 and 
87 

•S 1780 IS 

1 (4) support continued United States economic 

2 expansion. 

3 SEC. 503. DEFINITIONS. 

4 As used in this title: 

5 (1) ELIGIBLE INDIVIDUAL.— 

6 (A) IN GENERAL.—The term ‘‘eligible indi7 vidual’’ means, with respect to any taxable year, 

8 an individual who— 

9 (i) has attained the age of 18 but not 

10 the age of 61 as of the last day of such 

11 taxable year, 

12 (ii) is a citizen or lawful permanent 

13 resident (within the meaning of section 

14 7701(b)(6) of the Internal Revenue Code 

15 of 1986) of the United States as of the 

16 last day of such taxable year, 

17 (iii) was not a student (as defined in 

18 section 151(c)(4) of such Code) for the im19 mediately preceding taxable year, 

20 (iv) is not an individual with respect 

21 to whom a deduction under section 151 of 

22 such Code is allowable to another taxpayer 

23 for a taxable year of the other taxpayer 

24 ending during the immediately preceding 

25 taxable year of the individual, 
88 

•S 1780 IS 

1 (v) is not a taxpayer described in sub2 section (c), (d), or (e) of section 6402 of 

3 such Code for the immediately preceding 

4 taxable year, 

5 (vi) is not a taxpayer described in sec6 tion 1(d) of such Code for the immediately 

7 preceding taxable year, and 

8 (vii) is a taxpayer the modified ad9 justed gross income of whom for the imme10 diately preceding taxable year does not ex11 ceed— 

12 (I) $20,000, in the case of a tax13 payer described in section 1(c) of such 

14 Code, 

15 (II) $30,000, in the case of a 

16 taxpayer described in section 1(b) of 

17 such Code, and 

18 (III) $40,000, in the case of a 

19 taxpayer described in section 1(a) of 

20 such Code. 

21 (B) INFLATION ADJUSTMENT.— 

22 (i) IN GENERAL.—In the case of any 

23 taxable year beginning after 2005, each 

24 dollar amount referred to in subparagraph 
89 

•S 1780 IS 

1 (A)(vii) shall be increased by an amount 

2 equal to— 

3 (I) such dollar amount, multi4 plied by 

5 (II) the cost-of-living adjustment 

6 determined under section (1)(f)(3) of 

7 the Internal Revenue Code of 1986 

8 for the calendar year in which the tax9 able year begins, by substituting 

10 ‘‘2004’’ for ‘‘1992’’. 

11 (ii) ROUNDING.—If any amount as 

12 adjusted under clause (i) is not a multiple 

13 of $50, such amount shall be rounded to 

14 the nearest multiple of $50. 

15 (C) MODIFIED ADJUSTED GROSS IN16 COME.—For purposes of subparagraph (A)(v), 

17 the term ‘‘modified adjusted gross income’’ 

18 means adjusted gross income— 

19 (i) determined without regard to sec20 tions 86, 893, 911, 931, and 933 of the 

21 Internal Revenue Code of 1986, and 

22 (ii) increased by the amount of inter23 est received or accrued by the taxpayer 

24 during the taxable year which is exempt 

25 from tax. 
90 

•S 1780 IS 

1 (2) INDIVIDUAL DEVELOPMENT ACCOUNT.— 

2 The term ‘‘Individual Development Account’’ means 

3 an account established for an eligible individual as 

4 part of a qualified individual development account 

5 program, but only if the written governing instru6 ment creating the account meets the following re7 quirements: 

8 (A) The owner of the account is the indi9 vidual for whom the account was established. 

10 (B) No contribution will be accepted unless 

11 it is in cash, and, except in the case of any 

12 qualified rollover, contributions will not be ac13 cepted for the taxable year in excess of $1,500 

14 on behalf of any individual. 

15 (C) The trustee of the account is a quali16 fied financial institution. 

17 (D) The assets of the account will not be 

18 commingled with other property except in a 

19 common trust fund or common investment 

20 fund. 

21 (E) Except as provided in section 507(b), 

22 any amount in the account may be paid out 

23 only for the purpose of paying the qualified ex24 penses of the account owner. 
91 

•S 1780 IS 

1 (3) PARALLEL ACCOUNT.—The term ‘‘parallel 

2 account’’ means a separate, parallel individual or 

3 pooled account for all matching funds and earnings 

4 dedicated to an Individual Development Account 

5 owner as part of a qualified individual development 

6 account program, the trustee of which is a qualified 

7 financial institution. 

8 (4) QUALIFIED FINANCIAL INSTITUTION.— 

9 (A) IN GENERAL.—The term ‘‘qualified fi10 nancial institution’’ means any person author11 ized to be a trustee of any individual retirement 

12 account under section 408(a)(2) of the Internal 

13 Revenue Code of 1986. 

14 (B) RULE OF CONSTRUCTION.— 

15 (i) IN GENERAL.—Nothing in this 

16 paragraph shall be construed as preventing 

17 a person described in subparagraph (A) 

18 from collaborating with 1 or more qualified 

19 nonprofit organizations or Indian tribes to 

20 carry out an individual development ac21 count program established under section 

22 504. 

23 (ii) QUALIFIED NONPROFIT ORGANI24 ZATION.—The term ‘‘qualified nonprofit 

25 organization’’ means— 
92 

•S 1780 IS 

1 (I) any organization described in 

2 section 501(c)(3) of the Internal Rev3 enue Code of 1986 and exempt from 

4 taxation under section 501(a) of such 

5 Code, 

6 (II) any community development 

7 financial institution certified by the 

8 Community Development Financial 

9 Institution Fund, 

10 (III) any credit union chartered 

11 under Federal or State law, or 

12 (IV) any public housing agency 

13 as defined in section 3(b)(6) of the 

14 United States Housing Act of 1937 

15 (42 U.S.C. 1437a(b)(6)). 

16 (iii) INDIAN TRIBE.—The term ‘‘In17 dian tribe’’ means any Indian tribe as de18 fined in section 4(12) of the Native Amer19 ican Housing Assistance and Self-Deter20 mination Act of 1996 (25 U.S.C. 

21 4103(12), and includes any tribally des22 ignated housing entity (as defined in sec23 tion 4(21) of such Act (25 U.S.C. 

24 4103(21)), tribal subsidiary, subdivision, 

25 or other wholly owned tribal entity. 
93 

•S 1780 IS 

1 (5) QUALIFIED INDIVIDUAL DEVELOPMENT AC2 COUNT PROGRAM.—The term ‘‘qualified individual 

3 development account program’’ means a program es4 tablished upon approval of the Secretary under sec5 tion 504 after December 31, 2004, under which— 

6 (A) Individual Development Accounts and 

7 parallel accounts are held in trust by a qualified 

8 financial institution, and 

9 (B) additional activities determined by the 

10 Secretary, in consultation with the Secretary of 

11 Health and Human Services, as necessary to re12 sponsibly develop and administer accounts, in13 cluding recruiting, providing financial education 

14 and other training to Account owners, and reg15 ular program monitoring, are carried out by the 

16 qualified financial institution. 

17 (6) QUALIFIED EXPENSE DISTRIBUTION.— 

18 (A) IN GENERAL.—The term ‘‘qualified ex19 pense distribution’’ means any amount paid (in20 cluding through electronic payments) or distrib21 uted out of an Individual Development Account 

22 or a parallel account established for an eligible 

23 individual if such amount— 

24 (i) is used exclusively to pay the quali25 fied expenses of the Individual Develop-
94 

•S 1780 IS 

1 ment Account owner or such owner’s 

2 spouse or dependents, 

3 (ii) is paid by the qualified financial 

4 institution— 

5 (I) except as otherwise provided 

6 in this clause, directly to the unre7 lated third party to whom the amount 

8 is due, 

9 (II) in the case of any qualified 

10 rollover, directly to another Individual 

11 Development Account and parallel ac12 count, or 

13 (III) in the case of a qualified 

14 final distribution, directly to the 

15 spouse, dependent, or other named 

16 beneficiary of the deceased Account 

17 owner, and 

18 (iii) is paid after the Account owner 

19 has completed a financial education course 

20 if required under section 505(b). 

21 (B) QUALIFIED EXPENSES.— 

22 (i) IN GENERAL.—The term ‘‘qualified 

23 expenses’’ means any of the following ex24 penses approved by the qualified financial 

25 institution: 
95 

•S 1780 IS 

1 (I) Qualified higher education ex2 penses. 

3 (II) Qualified first-time home4 buyer costs. 

5 (III) Qualified business capital6 ization or expansion costs. 

7 (IV) Qualified rollovers. 

8 (V) Qualified final distribution. 

9 (ii) QUALIFIED HIGHER EDUCATION

10 EXPENSES.— 

11 (I) IN GENERAL.—The term 

12 ‘‘qualified higher education expenses’’ 

13 has the meaning given such term by 

14 section 529(e)(3) of the Internal Rev15 enue Code of 1986, determined by 

16 treating the Account owner, the own17 er’s spouse, or one or more of the 

18 owner’s dependents as a designated 

19 beneficiary, and reduced as provided 

20 in section 25A(g)(2) of such Code. 

21 (II) COORDINATION WITH OTHER

22 BENEFITS.—The amount of expenses 

23 which may be taken into account for 

24 purposes of section 135, 529, or 530 

25 of such Code for any taxable year 
96 

•S 1780 IS 

1 shall be reduced by the amount of any 

2 qualified higher education expenses 

3 taken into account as qualified ex4 pense distributions during such tax5 able year. 

6 (iii) QUALIFIED FIRST-TIME HOME7 BUYER COSTS.—The term ‘‘qualified first8 time homebuyer costs’’ means qualified ac9 quisition costs (as defined in section 

10 72(t)(8)(C) of the Internal Revenue Code 

11 of 1986) with respect to a principal resi12 dence (within the meaning of section 121 

13 of such Code) for a qualified first-time 

14 homebuyer (as defined in section 

15 72(t)(8)(D)(i) of such Code). 

16 (iv) QUALIFIED BUSINESS CAPITAL17 IZATION OR EXPANSION COSTS.— 

18 (I) IN GENERAL.—The term 

19 ‘‘qualified business capitalization or 

20 expansion costs’’ means qualified ex21 penditures for the capitalization or ex22 pansion of a qualified business pursu23 ant to a qualified business plan. 

24 (II) QUALIFIED EXPENDI25 TURES.—The term ‘‘qualified expendi-
97 

•S 1780 IS 

1 tures’’ means expenditures normally 

2 associated with starting or expanding 

3 a business and included in a qualified 

4 business plan, including costs for cap5 ital, plant, and equipment, inventory 

6 expenses, and attorney and accounting 

7 fees. 

8 (III) QUALIFIED BUSINESS.— 

9 The term ‘‘qualified business’’ means 

10 any business that does not contravene 

11 any law. 

12 (IV) QUALIFIED BUSINESS

13 PLAN.—The term ‘‘qualified business 

14 plan’’ means a business plan which 

15 has been approved by the qualified fi16 nancial institution and which meets 

17 such requirements as the Secretary 

18 may specify. 

19 (v) QUALIFIED ROLLOVERS.—The 

20 term ‘‘qualified rollover’’ means the com21 plete distribution of the amounts in an In22 dividual Development Account and parallel 

23 account to another Individual Development 

24 Account and parallel account established in 
98 

•S 1780 IS 

1 another qualified financial institution for 

2 the benefit of the Account owner. 

3 (vi) QUALIFIED FINAL DISTRIBU4 TION.—The term ‘‘qualified final distribu5 tion’’ means, in the case of a deceased Ac6 count owner, the complete distribution of 

7 the amounts in the Individual Development 

8 Account and parallel account directly to 

9 the spouse, any dependent, or other named 

10 beneficiary of the deceased. 

11 (7) SECRETARY.—The term ‘‘Secretary’’ means 

12 the Secretary of the Treasury. 

13 SEC. 504. STRUCTURE AND ADMINISTRATION OF QUALI14 FIED INDIVIDUAL DEVELOPMENT ACCOUNT 

15 PROGRAMS. 

16 (a) ESTABLISHMENT OF QUALIFIED INDIVIDUAL DE17 VELOPMENT ACCOUNT PROGRAMS.—Any qualified finan18 cial institution may apply to the Secretary for approval 

19 to establish 1 or more qualified individual development ac20 count programs which meet the requirements of this title 

21 (b) BASIC PROGRAM STRUCTURE.— 

22 (1) IN GENERAL.—All qualified individual de23 velopment account programs shall consist of the fol24 lowing 2 components for each participant: 
99 

•S 1780 IS 

1 (A) An Individual Development Account to 

2 which an eligible individual may contribute cash 

3 in accordance with section 505. 

4 (B) A parallel account to which all match5 ing funds shall be deposited in accordance with 

6 section 506. 

7 (2) TAILORED IDA PROGRAMS.—A qualified fi8 nancial institution may tailor its qualified individual 

9 development account program to allow matching 

10 funds to be spent on 1 or more of the categories of 

11 qualified expenses. 

12 (c) COORDINATION WITH PUBLIC HOUSING AGENCY

13 INDIVIDUAL SAVINGS ACCOUNTS.—Section 3(e)(2) of the 

14 United States Housing Act of 1937 (42 U.S.C. 

15 1437a(e)(2)) is amended by inserting ‘‘or in any Indi16 vidual Development Account established under the Sav17 ings for Working Families Act of 2005’’ after ‘‘sub18 section’’. 

19 (d) TAX TREATMENT OF PARALLEL ACCOUNTS.— 

20 (1) IN GENERAL.—Chapter 77 (relating to mis21 cellaneous provisions) is amended by adding at the 

22 end the following new section: 

23 ‘‘SEC. 7529. TAX INCENTIVES FOR INDIVIDUAL DEVELOP24 MENT PARALLEL ACCOUNTS. 

25 ‘‘For purposes of this title— 
100 

•S 1780 IS 

1 ‘‘(1) any account described in section 

2 504(b)(1)(B) of the Savings for Working Families 

3 Act of 2005 shall be exempt from taxation, 

4 ‘‘(2) except as provided in section 45N, no item 

5 of income, expense, basis, gain, or loss with respect 

6 to such an account may be taken into account, and 

7 ‘‘(3) any amount withdrawn from such an ac8 count shall not be includible in gross income.’’. 

9 (2) CONFORMING AMENDMENT.—The table of 

10 sections for chapter 77 is amended by adding at the 

11 end the following new item: 

‘‘Sec. 7529. Tax incentives for individual development parallel accounts.’’. 

12 (e) COORDINATION OF CERTAIN EXPENSES.—Section 

13 25A(g)(2) is amended by striking ‘‘and’’ at the end of sub14 paragraph (C), by striking the period at the end of sub15 paragraph (D) and inserting ‘‘, and’’, and by adding at 

16 the end the following new subparagraph: 

17 ‘‘(D) a qualified expense distribution with 

18 respect to qualified higher education expenses 

19 from an Individual Development Account or a 

20 parallel account under section 507(a) of the 

21 Savings for Working Families Act of 2005.’’. 
101 

•S 1780 IS 

1 SEC. 505. PROCEDURES FOR OPENING AND MAINTAINING 

2 AN INDIVIDUAL DEVELOPMENT ACCOUNT 

3 AND QUALIFYING FOR MATCHING FUNDS. 

4 (a) OPENING AN ACCOUNT.—An eligible individual 

5 may open an Individual Development Account with a 

6 qualified financial institution upon certification that such 

7 individual has never maintained any other Individual De8 velopment Account (other than an Individual Development 

9 Account to be terminated by a qualified rollover). 

10 (b) REQUIRED COMPLETION OF FINANCIAL EDU11 CATION COURSE.— 

12 (1) IN GENERAL.—Before becoming eligible to 

13 withdraw funds to pay for qualified expenses, owners 

14 of Individual Development Accounts must complete 

15 1 or more financial education courses specified in 

16 the qualified individual development account pro17 gram. 

18 (2) STANDARD AND APPLICABILITY OF

19 COURSE.—The Secretary, in consultation with rep20 resentatives of qualified individual development ac21 count programs and financial educators, shall not 

22 later than January 1, 2006, establish minimum 

23 quality standards for the contents of financial edu24 cation courses and providers of such courses de25 scribed in paragraph (1) and a protocol to exempt 

26 individuals from the requirement under paragraph 
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•S 1780 IS 

1 (1) in the case of hardship, lack of need, the attain2 ment of age 65, or a qualified final distribution. 

3 (c) PROOF OF STATUS AS AN ELIGIBLE INDI4 VIDUAL.—Federal income tax forms for the immediately 

5 preceding taxable year and any other evidence of eligibility 

6 which may be required by a qualified financial institution 

7 shall be presented to such institution at the time of the 

8 establishment of the Individual Development Account and 

9 in any taxable year in which contributions are made to 

10 the Account to qualify for matching funds under section 

11 506(b)(1)(A). 

12 (d) SPECIAL RULE IN THE CASE OF MARRIED INDI13 VIDUALS.—For purposes of this title, if, with respect to 

14 any taxable year, 2 married individuals file a Federal joint 

15 income tax return, then not more than 1 of such individ16 uals may be treated as an eligible individual with respect 

17 to the succeeding taxable year. 

18 SEC. 506. DEPOSITS BY QUALIFIED INDIVIDUAL DEVELOP19 MENT ACCOUNT PROGRAMS. 

20 (a) PARALLEL ACCOUNTS.—The qualified financial 

21 institution shall deposit all matching funds for each Indi22 vidual Development Account into a parallel account at a 

23 qualified financial institution. 

24 (b) REGULAR DEPOSITS OF MATCHING FUNDS.— 
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•S 1780 IS 

1 (1) IN GENERAL.—Subject to paragraph (2), 

2 the qualified financial institution shall deposit into 

3 the parallel account with respect to each eligible in4 dividual the following amounts: 

5 (A) A dollar-for-dollar match for the first 

6 $500 contributed by the eligible individual into 

7 an Individual Development Account with re8 spect to any taxable year of such individual. 

9 (B) Any matching funds provided by State, 

10 local, or private sources in accordance with the 

11 matching ratio set by those sources. 

12 (2) TIMING OF DEPOSITS.—A deposit of the 

13 amounts described in paragraph (1) shall be made 

14 into a parallel account— 

15 (A) in the case of amounts described in 

16 paragraph (1)(A), not later than 30 days after 

17 the end of the calendar quarter during which 

18 the contribution described in such paragraph 

19 was made, and 

20 (B) in the case of amounts described in 

21 paragraph (1)(B), not later than 2 business 

22 days after such amounts were provided. 
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•S 1780 IS 

1 (3) CROSS REFERENCE.— 

For allowance of tax credit for Individual Development Account subsidies, including matching 

funds, see section 45N of the Internal Revenue Code 

of 1986. 

2 (c) DEPOSIT OF MATCHING FUNDS INTO INDI3 VIDUAL DEVELOPMENT ACCOUNT OF INDIVIDUAL WHO

4 HAS ATTAINED AGE 65.—In the case of an Individual De5 velopment Account owner who attains the age of 65, the 

6 qualified financial institution shall deposit the funds in the 

7 parallel account with respect to such individual into the 

8 Individual Development Account of such individual on the 

9 later of— 

10 (1) the day which is the 1-year anniversary of 

11 the deposit of such funds in the parallel account, or 

12 (2) the first business day of the taxable year of 

13 such individual following the taxable year in which 

14 such individual attained age 65. 

15 (d) UNIFORM ACCOUNTING REGULATIONS.—To en16 sure proper recordkeeping and determination of the tax 

17 credit under section 45N of the Internal Revenue Code 

18 of 1986, the Secretary shall prescribe regulations with re19 spect to accounting for matching funds in the parallel ac20 counts. 

21 (e) REGULAR REPORTING OF ACCOUNTS.—Any 

22 qualified financial institution shall report the balances in 

23 any Individual Development Account and parallel account 
105 

•S 1780 IS 

1 of an individual on not less than an annual basis to such 

2 individual. 

3 SEC. 507. WITHDRAWAL PROCEDURES. 

4 (a) WITHDRAWALS FOR QUALIFIED EXPENSES.— 

5 (1) IN GENERAL.—An Individual Development 

6 Account owner may withdraw funds in order to pay 

7 qualified expense distributions from such individ8 ual’s— 

9 (A) Individual Development Account, but 

10 only from funds which have been on deposit in 

11 such Account for at least 1 year, and 

12 (B) parallel account, but only— 

13 (i) from matching funds which have 

14 been on deposit in such parallel account 

15 for at least 1 year, 

16 (ii) from earnings in such parallel ac17 count, after all matching funds described 

18 in clause (i) have been withdrawn, and 

19 (iii) to the extent such withdrawal 

20 does not result in a remaining balance in 

21 such parallel account which is less than the 

22 remaining balance in the Individual Devel23 opment Account after such withdrawal. 

24 (2) PROCEDURE.—Upon receipt of a with25 drawal request which meets the requirements of 
106 

•S 1780 IS 

1 paragraph (1), the qualified financial institution 

2 shall directly transfer the funds electronically to the 

3 distributees described in section 503(6)(A)(ii). If a 

4 distributee is not equipped to receive funds electroni5 cally, the qualified financial institution may issue 

6 such funds by paper check to the distributee. 

7 (b) WITHDRAWALS FOR NONQUALIFIED EX8 PENSES.—An Individual Development Account owner may 

9 withdraw any amount of funds from the Individual Devel10 opment Account for purposes other than to pay qualified 

11 expense distributions, but if, after such withdrawal, the 

12 amount in the parallel account of such owner (excluding 

13 earnings on matching funds) exceeds the amount remain14 ing in such Individual Development Account, then such 

15 owner shall forfeit from the parallel account the lesser of 

16 such excess or the amount withdrawn. 

17 (c) WITHDRAWALS FROM ACCOUNTS OF NON18 ELIGIBLE INDIVIDUALS.—If the individual for whose ben19 efit an Individual Development Account is established 

20 ceases to be an eligible individual, such account shall re21 main an Individual Development Account, but such indi22 vidual shall not be eligible for any further matching funds 

23 under section 506(b)(1)(A) for contributions which are 

24 made to the Account during any taxable year when such 

25 individual is not an eligible individual. 
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•S 1780 IS 

1 (d) EFFECT OF PLEDGING ACCOUNT AS SECU2 RITY.—If, during any taxable year of the individual for 

3 whose benefit an Individual Development Account is es4 tablished, that individual uses the Account, the individ5 ual’s parallel account, or any portion thereof as security 

6 for a loan, the portion so used shall be treated as a with7 drawal of such portion from the Individual Development 

8 Account for purposes other than to pay qualified expenses. 

9 SEC. 508. CERTIFICATION AND TERMINATION OF QUALI10 FIED INDIVIDUAL DEVELOPMENT ACCOUNT 

11 PROGRAMS. 

12 (a) CERTIFICATION PROCEDURES.—Upon estab13 lishing a qualified individual development account pro14 gram under section 504, a qualified financial institution 

15 shall certify to the Secretary at such time and in such 

16 manner as may be prescribed by the Secretary and accom17 panied by any documentation required by the Secretary, 

18 that— 

19 (1) the accounts described in subparagraphs 

20 (A) and (B) of section 504(b)(1) are operating pur21 suant to all the provisions of this title, and 

22 (2) the qualified financial institution agrees to 

23 implement an information system necessary to mon24 itor the cost and outcomes of the qualified individual 

25 development account program. 
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•S 1780 IS 

1 (b) AUTHORITY TO TERMINATE QUALIFIED IDA 

2 PROGRAM.—If the Secretary determines that a qualified 

3 financial institution under this title is not operating a 

4 qualified individual development account program in ac5 cordance with the requirements of this title (and has not 

6 implemented any corrective recommendations directed by 

7 the Secretary), the Secretary shall terminate such institu8 tion’s authority to conduct the program. If the Secretary 

9 is unable to identify a qualified financial institution to as10 sume the authority to conduct such program, then any 

11 funds in a parallel account established for the benefit of 

12 any individual under such program shall be deposited into 

13 the Individual Development Account of such individual as 

14 of the first day of such termination. 

15 SEC. 509. REPORTING, MONITORING, AND EVALUATION. 

16 (a) RESPONSIBILITIES OF QUALIFIED FINANCIAL IN17 STITUTIONS.—Each qualified financial institution that op18 erates a qualified individual development account program 

19 under section 504 shall report annually to the Secretary 

20 within 90 days after the end of each calendar year on— 

21 (1) the number of individuals making contribu22 tions into Individual Development Accounts and the 

23 amounts contributed, 

24 (2) the amounts contributed into Individual De25 velopment Accounts by eligible individuals and the 
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•S 1780 IS 

1 amounts deposited into parallel accounts for match2 ing funds, 

3 (3) the amounts withdrawn from Individual De4 velopment Accounts and parallel accounts, and the 

5 purposes for which such amounts were withdrawn, 

6 (4) the balances remaining in Individual Devel7 opment Accounts and parallel accounts, and 

8 (5) such other information needed to help the 

9 Secretary monitor the effectiveness of the qualified 

10 individual development account program (provided in 

11 a non-individually-identifiable manner). 

12 (b) RESPONSIBILITIES OF THE SECRETARY.— 

13 (1) MONITORING PROTOCOL.—Not later than 

14 12 months after the date of the enactment of this 

15 Act, the Secretary, in consultation with the Sec16 retary of Health and Human Services, shall develop 

17 and implement a protocol and process to monitor the 

18 cost and outcomes of the qualified individual devel19 opment account programs established under section 

20 504. 

21 (2) ANNUAL REPORTS.—For each year after 

22 2007, the Secretary shall submit a progress report 

23 to Congress on the status of such qualified indi24 vidual development account programs. Such report 

25 shall, to the extent data are available, include from 
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•S 1780 IS 

1 a representative sample of qualified individual devel2 opment account programs information on— 

3 (A) the characteristics of participants, in4 cluding age, gender, race or ethnicity, marital 

5 status, number of children, employment status, 

6 and monthly income, 

7 (B) deposits, withdrawals, balances, uses 

8 of Individual Development Accounts, and par9 ticipant characteristics, 

10 (C) the characteristics of qualified indi11 vidual development account programs, including 

12 match rate, economic education requirements, 

13 permissible uses of accounts, staffing of pro14 grams in full time employees, and the total 

15 costs of programs, and 

16 (D) process information on program imple17 mentation and administration, especially on 

18 problems encountered and how problems were 

19 solved. 

20 (3) USE OF ACCOUNTS IN RURAL AREAS EN21 COURAGED.—The Secretary shall develop methods to 

22 encourage the use of Individual Development Ac23 counts in rural areas. 
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•S 1780 IS 

1 SEC. 510. AUTHORIZATION OF APPROPRIATIONS. 

2 (a) IN GENERAL.—There is authorized to be appro3 priated to the Secretary $1,000,000 for fiscal year 2007 

4 and for each fiscal year through 2014, for the purposes 

5 of implementing this Act, including the reporting, moni6 toring, and evaluation required under section 9, to remain 

7 available until expended. 

8 (b) GRANTS.—There is authorized to be appropriated 

9 to the Secretary $20,000,000— 

10 (1) to make grants to qualified nonprofit orga11 nizations and Indian tribes to help defray the ad12 ministrative costs associated with the operation of 

13 individual development account programs, including 

14 the required financial education courses, and 

15 (2) to provide technical assistance to qualified 

16 nonprofit organizations and Indian tribes in meeting 

17 such program requirements. 

18 SEC. 511. MATCHING FUNDS FOR INDIVIDUAL DEVELOP19 MENT ACCOUNTS PROVIDED THROUGH A TAX 

20 CREDIT FOR QUALIFIED FINANCIAL INSTITU21 TIONS. 

22 (a) IN GENERAL.—Subpart D of part IV of sub23 chapter A of chapter 1 (relating to business related cred24 its) is amended by adding at the end the following new 

25 section: 
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•S 1780 IS 

1 ‘‘SEC. 45N. INDIVIDUAL DEVELOPMENT ACCOUNT INVEST2 MENT CREDIT. 

3 ‘‘(a) DETERMINATION OF AMOUNT.—For purposes of 

4 section 38, the individual development account investment 

5 credit determined under this section with respect to any 

6 eligible entity for any taxable year is an amount equal to 

7 the individual development account investment provided 

8 by such eligible entity during the taxable year under an 

9 individual development account program established under 

10 section 504 of the Savings for Working Families Act of 

11 2005. 

12 ‘‘(b) APPLICABLE TAX.—For the purposes of this 

13 section, the term ‘applicable tax’ means the excess (if any) 

14 of— 

15 ‘‘(1) the tax imposed under this chapter (other 

16 than the taxes imposed under the provisions de17 scribed in subparagraphs (C) through (Q) of section 

18 26(b)(2)), over 

19 ‘‘(2) the credits allowable under subpart B 

20 (other than this section) and subpart D of this part. 

21 ‘‘(c) INDIVIDUAL DEVELOPMENT ACCOUNT INVEST22 MENT.—For purposes of this section, the term ‘individual 

23 development account investment’ means, with respect to 

24 an individual development account program in any taxable 

25 year, an amount equal to the sum of— 
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•S 1780 IS 

1 ‘‘(1) the aggregate amount of dollar-for-dollar 

2 matches under such program under section 

3 506(b)(1)(A) of the Savings for Working Families 

4 Act of 2005 for such taxable year, plus 

5 ‘‘(2) $50 with respect to each Individual Devel6 opment Account maintained— 

7 ‘‘(A) as of the end of such taxable year, 

8 but only if such taxable year is within the 7- 

9 taxable-year period beginning with the taxable 

10 year in which such Account is opened, and 

11 ‘‘(B) with a balance of not less than $100 

12 (other than the taxable year in which such Ac13 count is opened). 

14 ‘‘(d) ELIGIBLE ENTITY.—For purposes of this sec15 tion, except as provided in regulations, the term ‘eligible 

16 entity’ means a qualified financial institution. 

17 ‘‘(e) OTHER DEFINITIONS.—For purposes of this 

18 section, any term used in this section and also in the Sav19 ings for Working Families Act of 2005 shall have the 

20 meaning given such term by such Act. 

21 ‘‘(f) DENIAL OF DOUBLE BENEFIT.— 

22 ‘‘(1) IN GENERAL.—No deduction or credit 

23 (other than under this section) shall be allowed 

24 under this chapter with respect to any expense 

25 which— 
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•S 1780 IS 

1 ‘‘(A) is taken into account under sub2 section (c)(1)(A) in determining the credit 

3 under this section, or 

4 ‘‘(B) is attributable to the maintenance of 

5 an Individual Development Account. 

6 ‘‘(2) DETERMINATION OF AMOUNT.—Solely for 

7 purposes of paragraph (1)(B), the amount attrib8 utable to the maintenance of an Individual Develop9 ment Account shall be deemed to be the dollar 

10 amount of the credit allowed under subsection 

11 (c)(l)(B) for each taxable year such Individual De12 velopment Account is maintained. 

13 ‘‘(g) CREDIT MAY BE TRANSFERRED.— 

14 ‘‘(1) IN GENERAL.—An eligible entity may 

15 transfer any credit allowable to the eligible entity 

16 under subsection (a) to any person other than to an17 other eligible entity which is exempt from tax under 

18 this title. The determination as to whether a credit 

19 is allowable shall be made without regard to the tax20 exempt status of the eligible entity. 

21 ‘‘(2) CONSENT REQUIRED FOR REVOCATION.— 

22 Any transfer under paragraph (1) may be revoked 

23 only with the consent of the Secretary. 
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•S 1780 IS 

1 ‘‘(h) REGULATIONS.—The Secretary may prescribe 

2 such regulations as may be necessary or appropriate to 

3 carry out this section, including— 

4 ‘‘(1) such regulations as necessary to insure 

5 that any credit described in subsection (g)(1) is 

6 claimed once and not retransferred by a transferee, 

7 and 

8 ‘‘(2) regulations providing for a recapture of 

9 the credit allowed under this section (notwith10 standing any termination date described in sub11 section (i)) in cases where there is a forfeiture under 

12 section 507(b) of the Savings for Working Families 

13 Act of 2005 in a subsequent taxable year of any 

14 amount which was taken into account in determining 

15 the amount of such credit. 

16 ‘‘(i) APPLICATION OF SECTION.— 

17 ‘‘(1) IN GENERAL.—This section shall apply to 

18 any expenditure made in any taxable year ending 

19 after December 31, 2006, and beginning on or be20 fore January 1, 2014, with respect to any Individual 

21 Development Account which— 

22 ‘‘(A) is opened before January 1, 2012, 

23 and 

24 ‘‘(B) as determined by the Secretary, when 

25 added to all of the previously opened Individual 
116 

•S 1780 IS 

1 Development Accounts, does not exceed 

2 900,000 Accounts. 

3 Notwithstanding the preceding sentence, this section 

4 shall apply to amounts which are described in sub5 section (c)(1) and which are timely deposited into a 

6 parallel account during the 30-day period following 

7 the end of last taxable year beginning before Janu8 ary 1, 2014. 

9 ‘‘(2) DETERMINATION OF LIMITATION.—The 

10 limitation on the number of Individual Development 

11 Accounts under paragraph (1)(B) shall be allocated 

12 by the Secretary among eligible individuals as such 

13 individuals open such Accounts under qualified indi14 vidual development account programs, except that, 

15 in the case of 300,000 Accounts, such limitation 

16 shall be equally allocated among the States.’’. 

17 (b) CREDIT TREATED AS BUSINESS CREDIT.—Sec18 tion 38(b) (relating to current year business credit) is 

19 amended by striking ‘‘plus’’ at the end of paragraph (25), 

20 by striking the period at the end of paragraph (26) and 

21 inserting ‘‘, plus’’, and by adding at the end the following 

22 new paragraph: 

23 ‘‘(27) the individual development account in24 vestment credit determined under section 45N(a).’’. 
117 

•S 1780 IS 

1 (c) CONFORMING AMENDMENT.—The table of sec2 tions for subpart C of part IV of subchapter A of chapter 

3 1 is amended by adding at the end the following new item: 

‘‘Sec. 45N. Individual development account investment credit.’’. 

4 (d) REPORT REGARDING ACCOUNT MAINTENANCE

5 FEES.—The Secretary of the Treasury shall study the 

6 adequacy of the amount specified in section 45N(c)(2) of 

7 the Internal Revenue Code of 1986 (as added by this sec8 tion). Not later than December 31, 2010, the Secretary 

9 of the Treasury shall report the findings of the study de10 scribed in the preceding sentence to Congress. 

11 (e) EFFECTIVE DATE.—The amendments made by 

12 this section shall apply to taxable years ending after De13 cember 31, 2006. 

14 SEC. 512. ACCOUNT FUNDS DISREGARDED FOR PURPOSES 

15 OF CERTAIN MEANS-TESTED FEDERAL PRO16 GRAMS. 

17 Notwithstanding any other provision of Federal law 

18 (other than the Internal Revenue Code of 1986) that re19 quires consideration of 1 or more financial circumstances 

20 of an individual, for the purpose of determining eligibility 

21 to receive, or the amount of, any assistance or benefit au22 thorized by such provision to be provided to or for the 

23 benefit of such individual, any amount (including earnings 

24 thereon) in any Individual Development Account of such 

25 individual and any matching deposit made on behalf of 
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•S 1780 IS 

1 such individual (including earnings thereon) in any par2 allel account shall be disregarded for such purpose with 

3 respect to any period during which such individual main4 tains or makes contributions into such Individual Develop5 ment Account. 

6 TITLE VI—MANAGEMENT OF 

7 EXEMPT ORGANIZATIONS 

8 SEC. 601. AUTHORIZATION OF APPROPRIATIONS. 

9 (a) IN GENERAL.—There is authorized to be appro10 priated to the Secretary of the Treasury $80,000,000 for 

11 each fiscal year to carry out the administration of exempt 

12 organizations by the Internal Revenue Service. 

13 (b) IMPLEMENTATION OF SECTION 527.—There is 

14 authorized to be appropriated to the Secretary of the 

15 Treasury $3,000,000 to carry out the provisions of Public 

16 Laws 106–230 and 107–276 relating to section 527 of the 

17 Internal Revenue Code of 1986. 

18 TITLE VII—COMPASSION 

19 CAPITAL FUND 

20 SEC. 701. SUPPORT FOR NONPROFIT COMMUNITY-BASED 

21 ORGANIZATIONS; DEPARTMENT OF HEALTH 

22 AND HUMAN SERVICES. 

23 (a) SUPPORT FOR NONGOVERNMENTAL ORGANIZA24 TIONS.—The Secretary of Health and Human Services 

25 (referred to in this section as ‘‘the Secretary’’) may award 
119 

•S 1780 IS 

1 grants to and enter into cooperative agreements with non2 governmental organizations, to— 

3 (1) provide technical assistance for community4 based organizations, which may include— 

5 (A) grant writing and grant management 

6 assistance, which may include assistance pro7 vided through workshops and other guidance; 

8 (B) legal assistance with incorporation; 

9 (C) legal assistance to obtain tax-exempt 

10 status; and 

11 (D) information on, and referrals to, other 

12 nongovernmental organizations that provide ex13 pertise in accounting, on legal issues, on tax 

14 issues, in program development, and on a vari15 ety of other organizational topics; 

16 (2) provide information and assistance for com17 munity-based organizations on capacity building; 

18 (3) provide for community-based organizations 

19 information on and assistance in identifying and 

20 using best practices for delivering assistance to per21 sons, families, and communities in need; 

22 (4) provide information on and assistance in 

23 utilizing regional intermediary organizations to in24 crease and strengthen the capabilities of nonprofit 

25 community-based organizations; 
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•S 1780 IS 

1 (5) assist community-based organizations in 

2 replicating social service programs of demonstrated 

3 effectiveness; and 

4 (6) encourage research on the best practices of 

5 social service organizations. 

6 (b) SUPPORT FOR STATES.—The Secretary— 

7 (1) may award grants to and enter into cooper8 ative agreements with States and political subdivi9 sions of States to provide seed money to establish 

10 State and local offices of faith-based and community 

11 initiatives; and 

12 (2) shall provide technical assistance to States 

13 and political subdivisions of States in administering 

14 the provisions of this Act. 

15 (c) APPLICATIONS.—To be eligible to receive a grant 

16 or enter into a cooperative agreement under this section, 

17 a nongovernmental organization, State, or political sub18 division shall submit an application to the Secretary at 

19 such time, in such manner, and containing such informa20 tion as the Secretary may require. 

21 (d) LIMITATION.—In order to widely disburse limited 

22 resources, no community-based organization (other than 

23 a direct recipient of a grant or cooperative agreement from 

24 the Secretary) may receive more than 1 grant or coopera25 tive agreement under this section for the same purpose. 
121 

•S 1780 IS 

1 (e) AUTHORIZATION OF APPROPRIATIONS.—There 

2 are authorized to be appropriated to carry out this section 

3 $85,000,000 for fiscal year 2006, and such sums as may 

4 be necessary for each of fiscal years 2007 through 2009. 

5 (f) DEFINITION.—In this section, the term ‘‘commu6 nity-based organization’’ means a nonprofit corporation or 

7 association that has— 

8 (1) not more than 6 full-time equivalent em9 ployees who are engaged in the provision of social 

10 services; or 

11 (2) a current annual budget (current as of the 

12 date the entity seeks assistance under this section) 

13 for the provision of social services, compiled and 

14 adopted in good faith, of less than $450,000. 

15 SEC. 702. SUPPORT FOR NONPROFIT COMMUNITY-BASED 

16 ORGANIZATIONS; CORPORATION FOR NA17 TIONAL AND COMMUNITY SERVICE. 

18 (a) SUPPORT FOR NONGOVERNMENTAL ORGANIZA19 TIONS.—The Corporation for National and Community 

20 Service (referred to in this section as ‘‘the Corporation’’) 

21 may award grants to and enter into cooperative agree22 ments with nongovernmental organizations and State 

23 Commissions on National and Community Service estab24 lished under section 178 of the National and Community 

25 Service Act of 1990 (42 U.S.C. 12638), to— 
122 

•S 1780 IS 

1 (1) provide technical assistance for community2 based organizations, which may include— 

3 (A) grant writing and grant management 

4 assistance, which may include assistance pro5 vided through workshops and other guidance; 

6 (B) legal assistance with incorporation; 

7 (C) legal assistance to obtain tax-exempt 

8 status; and 

9 (D) information on, and referrals to, other 

10 nongovernmental organizations that provide ex11 pertise in accounting, on legal issues, on tax 

12 issues, in program development, and on a vari13 ety of other organizational topics; 

14 (2) provide information and assistance for com15 munity-based organizations on capacity building; 

16 (3) provide for community-based organizations 

17 information on and assistance in identifying and 

18 using best practices for delivering assistance to per19 sons, families, and communities in need; 

20 (4) provide information on and assistance in 

21 utilizing regional intermediary organizations to in22 crease and strengthen the capabilities of community23 based organizations; 
123 

•S 1780 IS 

1 (5) assist community-based organizations in 

2 replicating social service programs of demonstrated 

3 effectiveness; and 

4 (6) encourage research on the best practices of 

5 social service organizations. 

6 (b) APPLICATIONS.—To be eligible to receive a grant 

7 or enter into a cooperative agreement under this section, 

8 a nongovernmental organization, State Commission, 

9 State, or political subdivision shall submit an application 

10 to the Corporation at such time, in such manner, and con11 taining such information as the Corporation may require. 

12 (c) LIMITATION.—In order to widely disburse limited 

13 resources, no community-based organization (other than 

14 a direct recipient of a grant or cooperative agreement from 

15 the Secretary) may receive more than 1 grant or coopera16 tive agreement under this section for the same purpose. 

17 (d) AUTHORIZATION OF APPROPRIATIONS.—There 

18 are authorized to be appropriated to carry out this section 

19 $15,000,000 for fiscal year 2006, and such sums as may 

20 be necessary for each of fiscal years 2007 through 2009. 

21 (e) DEFINITION.—In this section, the term ‘‘commu22 nity-based organization’’ means a nonprofit corporation or 

23 association that has— 
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•S 1780 IS 

1 (1) not more than 6 full-time equivalent em2 ployees who are engaged in the provision of social 

3 services; or 

4 (2) a current annual budget (current as of the 

5 date the entity seeks assistance under this section) 

6 for the provision of social services, compiled and 

7 adopted in good faith, of less than $450,000. 

8 SEC. 703. SUPPORT FOR NONPROFIT COMMUNITY-BASED 

9 ORGANIZATIONS; DEPARTMENT OF JUSTICE. 

10 (a) SUPPORT FOR NONGOVERNMENTAL ORGANIZA11 TIONS.—The Attorney General may award grants to and 

12 enter into cooperative agreements with nongovernmental 

13 organizations, to— 

14 (1) provide technical assistance for community15 based organizations, which may include— 

16 (A) grant writing and grant management 

17 assistance, which may include assistance pro18 vided through workshops and other guidance; 

19 (B) legal assistance with incorporation; 

20 (C) legal assistance to obtain tax-exempt 

21 status; and 

22 (D) information on, and referrals to, other 

23 nongovernmental organizations that provide ex24 pertise in accounting, on legal issues, on tax 
125 

•S 1780 IS 

1 issues, in program development, and on a vari2 ety of other organizational topics; 

3 (2) provide information and assistance for com4 munity-based organizations on capacity building; 

5 (3) provide for community-based organizations 

6 information on and assistance in identifying and 

7 using best practices for delivering assistance to per8 sons, families, and communities in need; 

9 (4) provide information on and assistance in 

10 utilizing regional intermediary organizations to in11 crease and strengthen the capabilities of nonprofit 

12 community-based organizations; 

13 (5) assist community-based organizations in 

14 replicating social service programs of demonstrated 

15 effectiveness; and 

16 (6) encourage research on the best practices of 

17 social service organizations. 

18 (b) APPLICATIONS.—To be eligible to receive a grant 

19 or enter into a cooperative agreement under this section, 

20 a nongovernmental organization, State, or political sub21 division shall submit an application to the Attorney Gen22 eral at such time, in such manner, and containing such 

23 information as the Attorney General may require. 

24 (c) LIMITATION.—In order to widely disburse limited 

25 resources, no community-based organization (other than 
126 

•S 1780 IS 

1 a direct recipient of a grant or cooperative agreement from 

2 the Attorney General) may receive more than 1 grant or 

3 cooperative agreement under this section for the same pur4 pose. 

5 (d) AUTHORIZATION OF APPROPRIATIONS.—There 

6 are authorized to be appropriated to carry out this section 

7 $35,000,000 for fiscal year 2006, and such sums as may 

8 be necessary for each of fiscal years 2007 through 2009. 

9 (e) DEFINITION.—In this section, the term ‘‘commu10 nity-based organization’’ means a nonprofit corporation or 

11 association that has— 

12 (1) not more than 6 full-time equivalent em13 ployees who are engaged in the provision of social 

14 services; or 

15 (2) a current annual budget (current as of the 

16 date the entity seeks assistance under this section) 

17 for the provision of social services, compiled and 

18 adopted in good faith, of less than $450,000. 

19 SEC. 704. SUPPORT FOR NONPROFIT COMMUNITY-BASED 

20 ORGANIZATIONS; DEPARTMENT OF HOUSING 

21 AND URBAN DEVELOPMENT. 

22 (a) SUPPORT FOR NONGOVERNMENTAL ORGANIZA23 TIONS.—The Secretary of Housing and Urban Develop24 ment (referred to in this section ‘‘the Secretary’’) may 
127 

•S 1780 IS 

1 award grants to and enter into cooperative agreements 

2 with nongovernmental organizations, to— 

3 (1) provide technical assistance for community4 based organizations, which may include— 

5 (A) grant writing and grant management 

6 assistance, which may include assistance pro7 vided through workshops and other guidance; 

8 (B) legal assistance with incorporation; 

9 (C) legal assistance to obtain tax-exempt 

10 status; and 

11 (D) information on, and referrals to, other 

12 nongovernmental organizations that provide ex13 pertise in accounting, on legal issues, on tax 

14 issues, in program development, and on a vari15 ety of other organizational topics; 

16 (2) provide information and assistance for com17 munity-based organizations on capacity building; 

18 (3) provide for community-based organizations 

19 information on and assistance in identifying and 

20 using best practices for delivering assistance to per21 sons, families, and communities in need; 

22 (4) provide information on and assistance in 

23 utilizing regional intermediary organizations to in24 crease and strengthen the capabilities of community25 based organizations; 
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1 (5) assist community-based organizations in 

2 replicating social service programs of demonstrated 

3 effectiveness; and 

4 (6) encourage research on the best practices of 

5 social service organizations. 

6 (b) APPLICATIONS.—To be eligible to receive a grant 

7 or enter into a cooperative agreement under this section, 

8 a nongovernmental organization, State, or political sub9 division shall submit an application to the Secretary at 

10 such time, in such manner, and containing such informa11 tion as the Secretary may require. 

12 (c) LIMITATION.—In order to widely disburse limited 

13 resources, no community-based organization (other than 

14 a direct recipient of a grant or cooperative agreement from 

15 the Secretary) may receive more than 1 grant or coopera16 tive agreement under this section for the same purpose. 

17 (d) AUTHORIZATION OF APPROPRIATIONS.—There 

18 are authorized to be appropriated to carry out this section 

19 $15,000,000 for fiscal year 2006, and such sums as may 

20 be necessary for each of fiscal years 2007 through 2009. 

21 (e) DEFINITION.—In this section, the term ‘‘commu22 nity-based organization’’ means a nonprofit corporation or 

23 association that has— 
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1 (1) not more than 6 full-time equivalent em2 ployees who are engaged in the provision of social 

3 services; or 

4 (2) a current annual budget (current as of the 

5 date the entity seeks assistance under this section) 

6 for the provision of social services, compiled and 

7 adopted in good faith, of less than $450,000. 

8 SEC. 705. COORDINATION. 

9 The Secretary of Health and Human Services, the 

10 Corporation for National and Community Service, the At11 torney General, and the Secretary of Housing and Urban 

12 Development shall coordinate their activities under this 

13 title to ensure— 

14 (1) nonduplication of activities under this title; 

15 and 

16 (2) an equitable distribution of resources under 

17 this title. 

18 TITLE VIII—MATERNITY GROUP 

19 HOMES 

20 SEC. 801. MATERNITY GROUP HOMES. 

21 (a) CONTRACT FOR EVALUATION.—Part B of the 

22 Runaway and Homeless Youth Act (42 U.S.C. 5701 et 

23 seq.) is amended by adding at the end the following: 
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1 ‘‘SEC. 323. CONTRACT FOR EVALUATION. 

2 ‘‘(a) IN GENERAL.—The Secretary shall enter into 

3 a contract with a public or private entity for an evaluation 

4 of the maternity group homes that are supported by grant 

5 funds under this Act. 

6 ‘‘(b) INFORMATION.—The evaluation described in 

7 subsection (a) shall include the collection of information 

8 about the relevant characteristics of individuals who ben9 efit from maternity group homes such as those that are 

10 supported by grant funds under this Act and what services 

11 provided by those maternity group homes are most bene12 ficial to such individuals. 

13 ‘‘(c) REPORT.—Not later than 2 years after the date 

14 on which the Secretary enters into a contract for an eval15 uation under subsection (a), and biennially thereafter, the 

16 entity conducting the evaluation under this section shall 

17 submit to Congress a report on the status, activities, and 

18 accomplishments of maternity group homes that are sup19 ported by grant funds under this Act.’’. 

20 (b) AUTHORIZATION OF APPROPRIATIONS.—Section 

21 388 of the Runaway and Homeless Youth Act (42 U.S.C. 

22 5751) is amended— 

23 (1) in subsection (a)(1)— 

24 (A) by striking ‘‘There’’ and inserting the 

25 following: 

26 ‘‘(A) IN GENERAL.—There’’; 
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1 (B) in subparagraph (A), as redesignated, 

2 by inserting ‘‘and the purpose described in sub3 paragraph (B)’’ after ‘‘other than part E’’; and 

4 (C) by adding at the end the following: 

5 ‘‘(B) MATERNITY GROUP HOMES.—There 

6 is authorized to be appropriated, for maternity 

7 group homes eligible for assistance under sec8 tion 322(a)(1)— 

9 ‘‘(i) $33,000,000 for fiscal year 2006; 

10 and 

11 ‘‘(ii) such sums as may be necessary 

12 for fiscal year 2007.’’; and 

13 (2) in subsection (a)(2)(A), by striking ‘‘para14 graph (1)’’ and inserting ‘‘paragraph (1)(A)’’. 

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