I 

108TH CONGRESS 

1ST SESSION H. R. 7

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

charitable contributions by individuals and businesses, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 7, 2003

Mr. BLUNT (for himself, Mr. FORD, Mr. HULSHOF, Mr. WYNN, Mr. 

HASTERT, Mr. GORDON, Mr. DELAY, Ms. NORTON, Ms. PRYCE of Ohio, 

Mr. MEEKS of New York, Mr. CANTOR, Mr. CRANE, Mr. RAMSTAD, Mr. 

ENGLISH, Mr. FOLEY, Mr. SHAYS, Mr. SMITH of Texas, Mr. UPTON, Mr. 

WOLF, Mr. GILLMOR, Mr. STEARNS, Mr. CAMP, Mr. KINGSTON, Mr. 

MCHUGH, Mr. BACHUS, Mr. BARTLETT of Maryland, Mr. BARTON of 

Texas, Mrs. MYRICK, Mr. NORWOOD, Mr. SOUDER, Mr. TIAHRT, Mr. 

WAMP, Mr. WICKER, Mr. DOOLITTLE, Mrs. NORTHUP, Mr. PETERSON of 

Pennsylvania, Mr. PICKERING, Mr. PITTS, Mr. REYNOLDS, Mr. SESSIONS, Mr. SHIMKUS, Mr. GREEN of Wisconsin, Mr. HAYES, Mr. 

ISAKSON, Mr. TERRY, Mr. AKIN, Mr. BOOZMAN, Mr. FORBES, Mr. 

GRAVES, Ms. HART, Mr. KELLER, Mr. PENCE, Mr. SCHROCK, Mr. SIMMONS, Mr. BARRETT of South Carolina, Mrs. BLACKBURN, Ms. GINNY

BROWN-WAITE of Florida, Mr. BURGESS, Mr. CHOCOLA, Mr. GARRETT

of New Jersey, Ms. HARRIS, Mr. JANKLOW, Mrs. MUSGRAVE, Mr. RENZI, 

and Mr. FOSSELLA) introduced the following bill; which was referred to 

the Committee on Ways and Means, and in addition to the Committee 

on Education and the Workforce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions 

as fall within the jurisdiction of the committee concerned 

A BILL

To amend the Internal Revenue Code of 1986 to provide 

incentives for charitable contributions by individuals and 

businesses, and for other purposes.
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1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE; ETC. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Charitable Giving Act of 2003’’. 

6 (b) AMENDMENT OF 1986 CODE.—Except as other7 wise expressly provided, whenever in this Act an amend8 ment or repeal is expressed in terms of an amendment 

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

10 shall be considered to be made to a section or other provi11 sion of the Internal Revenue Code of 1986. 

12 (c) TABLE OF CONTENTS.—

Sec. 1. Short title; etc. 

TITLE I—CHARITABLE GIVING INCENTIVES 

Sec. 101. Deduction for portion of charitable contributions to be allowed to individuals who do not itemize deductions. 

Sec. 102. Tax-free distributions from individual retirement plans for charitable 

purposes. 

Sec. 103. Increase in cap on corporate charitable contributions. 

Sec. 104. Charitable deduction for contributions of food inventory. 

Sec. 105. Reform of certain excise taxes related to private foundations. 

Sec. 106. Excise tax on unrelated business taxable income of charitable remainder trusts. 

Sec. 107. Expansion of charitable contribution allowed for scientific property 

used for research and for computer technology and equipment 

used for educational purposes. 

Sec. 108. Adjustment to basis of S corporation stock for certain charitable contributions. 

TITLE II—TAX REFORM AND IMPROVEMENTS RELATING TO 

CHARITABLE ORGANIZATIONS AND PROGRAMS 

Sec. 201. Suspension of tax-exempt status of terrorist organizations. 

Sec. 202. Clarification of definition of church tax inquiry. 

Sec. 203. Expansion of declaratory judgment remedy to tax-exempt organizations. 

Sec. 204. Landowner incentives programs. 

Sec. 205. Modifications to section 512(b)(13). 

Sec. 206. Simplification of lobbying expenditure limitation. 
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Sec. 207. Permitted holdings of private foundation where corporation is publicly 

traded and publicly controlled. 

TITLE III—OTHER PROVISIONS 

Sec. 301. Compassion capital fund. 

Sec. 302. Reauthorization of assets for independence demonstration. 

Sec. 303. Sense of the Congress regarding corporate contributions to faithbased organizations, etc. 

Sec. 304. 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 (m) as subsection (n) and by inserting 

9 after subsection (l) the following new subsection:

10 ‘‘(m) DEDUCTION FOR INDIVIDUALS NOT ITEMIZING

11 DEDUCTIONS.—

12 ‘‘(1) IN GENERAL.—In the case of an individual 

13 who does not itemize deductions for any taxable 

14 year, there shall be taken into account as a direct 

15 charitable deduction under section 63 an amount 

16 equal to the amount allowable under subsection (a) 

17 for the taxable year for cash contributions (deter18 mined without regard to any carryover), to the ex19 tent that such contributions exceed $250 ($500 in 

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

21 ($1,000 in the case of a joint return). 
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1 ‘‘(2) TERMINATION.—This subsection shall not 

2 apply to any taxable year beginning after December 

3 31, 2005.’’. 

4 (b) DIRECT CHARITABLE DEDUCTION.—

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

6 (defining taxable income) is amended by striking 

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

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

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

10 paragraph: 

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

12 (2) DEFINITION.—Section 63 is amended by re13 designating subsection (g) as subsection (h) and by 

14 inserting after subsection (f) the following new sub15 section: 

16 ‘‘(g) DIRECT CHARITABLE DEDUCTION.—For pur17 poses of this section, the term ‘direct charitable deduction’ 

18 means that portion of the amount allowable under section 

19 170(a) which is taken as a direct charitable deduction for 

20 the taxable year under section 170(m).’’. 

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

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

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

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

25 adding at the end the following new paragraph: 
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1 ‘‘(3) the direct charitable deduction.’’. 

2 (c) STUDY.—

3 (1) IN GENERAL.—The Secretary of the Treas4 ury shall study the effect of the amendments made

5 by this section on increased charitable giving and 

6 taxpayer compliance, including a comparison of tax7 payer compliance between taxpayers who itemize 

8 their charitable contributions and taxpayers who 

9 claim a direct charitable deduction. 

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

11 2005, the Secretary of the Treasury shall report on 

12 the study required under paragraph (1) to the Com13 mittee on Finance of the Senate and the Committee 

14 on Ways and Means of the House of Representa15 tives. 

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

17 this section shall apply to taxable years beginning after 

18 December 31, 2003. 

19 SEC. 102. TAX-FREE DISTRIBUTIONS FROM INDIVIDUAL RE20 TIREMENT PLANS FOR CHARITABLE PUR21 POSES. 

22 (a) IN GENERAL.—Subsection (d) of section 408 (re23 lating to individual retirement accounts) is amended by 

24 adding at the end the following new paragraph: 
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1 ‘‘(8) DISTRIBUTIONS FOR CHARITABLE PUR2 POSES.—

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

4 includible in gross income by reason of a quali5 fied charitable distribution. 

6 ‘‘(B) QUALIFIED CHARITABLE DISTRIBU7 TION.—For purposes of this paragraph, the 

8 term ‘qualified charitable distribution’ means 

9 any distribution from an individual retirement 

10 plan—

11 ‘‘(i) which is made on or after the 

12 date that the individual for whose benefit 

13 the plan is maintained has attained age 70 

1 14 ⁄2, and 

15 ‘‘(ii) which is made directly by the 

16 trustee—

17 ‘‘(I) to an organization described 

18 in section 170(c), or 

19 ‘‘(II) to a split-interest entity. 

20 A distribution shall be treated as a qualified 

21 charitable distribution only to the extent that 

22 the distribution would be includible in gross in23 come without regard to subparagraph (A) and, 

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

25 entity, only if no person holds an income inter-
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1 est in the amounts in the split-interest entity 

2 attributable to such distribution other than one 

3 or more of the following: the individual for 

4 whose benefit such plan is maintained, the 

5 spouse of such individual, or any organization 

6 described in section 170(c). 

7 ‘‘(C) CONTRIBUTIONS MUST BE OTHER8 WISE DEDUCTIBLE.—For purposes of this para9 graph—

10 ‘‘(i) DIRECT CONTRIBUTIONS.—A dis11 tribution to an organization described in 

12 section 170(c) shall be treated as a quali13 fied charitable distribution only if a deduc14 tion for the entire distribution would be al15 lowable under section 170 (determined 

16 without regard to subsection (b) thereof 

17 and this paragraph). 

18 ‘‘(ii) SPLIT-INTEREST GIFTS.—A dis19 tribution to a split-interest entity shall be 

20 treated as a qualified charitable distribu21 tion only if a deduction for the entire value 

22 of the interest in the distribution for the 

23 use of an organization described in section 

24 170(c) would be allowable under section 
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1 170 (determined without regard to sub2 section (b) thereof and this paragraph). 

3 ‘‘(D) APPLICATION OF SECTION 72.—Not4 withstanding section 72, in determining the ex5 tent to which a distribution is a qualified chari6 table distribution, the entire amount of the dis7 tribution shall be treated as includible in gross 

8 income without regard to subparagraph (A) to 

9 the extent that such amount does not exceed 

10 the aggregate amount which would have been so 

11 includible if all amounts were distributed from 

12 all individual retirement plans treated as 1 con13 tract under paragraph (2)(A) for purposes of 

14 determining the inclusion on such distribution 

15 under section 72. Proper adjustments shall be 

16 made in applying section 72 to other distribu17 tions in such taxable year and subsequent tax18 able years. 

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

20 ENTITIES.—

21 ‘‘(i) CHARITABLE REMAINDER

22 TRUSTS.—Notwithstanding section 664(b), 

23 distributions made from a trust described 

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

25 ordinary income in the hands of the bene-
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1 ficiary to whom is paid the annuity de2 scribed in section 664(d)(1)(A) or the pay3 ment described in section 664(d)(2)(A). 

4 ‘‘(ii) POOLED INCOME FUNDS.—No 

5 amount shall be includible in the gross in6 come of a pooled income fund (as defined 

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

8 qualified charitable distribution to such 

9 fund, and all distributions from the fund 

10 which are attributable to qualified chari11 table distributions shall be treated as ordi12 nary income to the beneficiary. 

13 ‘‘(iii) CHARITABLE GIFT ANNU14 ITIES.—Qualified charitable distributions 

15 made for a charitable gift annuity shall not 

16 be treated as an investment in the con17 tract. 

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

19 charitable distributions shall not be taken into 

20 account in determining the deduction under sec21 tion 170. 

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

23 For purposes of this paragraph, the term ‘split24 interest entity’ means—
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1 ‘‘(i) a charitable remainder annuity 

2 trust or a charitable remainder unitrust 

3 (as such terms are defined in section 

4 664(d)) which must be funded exclusively 

5 by qualified charitable distributions,

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

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

8 accounts separately for amounts attrib9 utable to qualified charitable distributions, 

10 and 

11 ‘‘(iii) a charitable gift annuity (as de12 fined in section 501(m)(5)).’’. 

13 (b) MODIFICATIONS RELATING TO INFORMATION RE14 TURNS BY CERTAIN TRUSTS.—

15 (1) RETURNS.—Section 6034 (relating to re16 turns by trusts described in section 4947(a)(2) or 

17 claiming charitable deductions under section 642(c)) 

18 is amended to read as follows: 

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

20 4947(a)(2) OR CLAIMING CHARITABLE DEDUC21 TIONS UNDER SECTION 642(c). 

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

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

24 such information with respect to the taxable year as the 

25 Secretary may by forms or regulations require. 
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1 ‘‘(b) TRUSTS CLAIMING A CHARITABLE DEDUCTION

2 UNDER SECTION 642(c).—

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

4 file a return under subsection (a) but claiming a de5 duction under section 642(c) for the taxable year 

6 shall furnish such information with respect to such 

7 taxable year as the Secretary may by forms or regu8 lations prescribe, including—

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

10 under section 642(c) within such year, 

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

12 which represents amounts for which deductions 

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

14 years,

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

16 have been taken in prior years but which has 

17 not been paid out at the beginning of such year, 

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

19 the current and prior years for the purposes de20 scribed in section 642(c), 

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

22 such year and the expenses attributable thereto, 

23 and 
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1 ‘‘(F) a balance sheet showing the assets, li2 abilities, and net worth of the trust as of the 

3 beginning of such year. 

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

5 apply to a trust for any taxable year if—

6 ‘‘(A) all the net income for such year, de7 termined under the applicable principles of the 

8 law of trusts, is required to be distributed cur9 rently to the beneficiaries, or 

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

11 4947(a)(1).’’. 

12 (2) INCREASE IN PENALTY RELATING TO FIL13 ING OF INFORMATION RETURN BY SPLIT-INTEREST

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

15 to returns by exempt organizations and by certain 

16 trusts) is amended by adding at the end the fol17 lowing new subparagraph: 

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

19 case of a trust which is required to file a return 

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

21 (B) of this paragraph shall not apply and para22 graph (1) shall apply in the same manner as if 

23 such return were required under section 6033, 

24 except that—
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1 ‘‘(i) the 5 percent limitation in the 

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

3 not apply, 

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

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

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

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

8 and the second sentence thereof shall be 

9 applied by substituting ‘$50,000’ for 

10 ‘$10,000’, and 

11 ‘‘(iii) the third sentence of paragraph 

12 (1)(A) shall be disregarded. 

13 In addition to any penalty imposed on the trust 

14 pursuant to this subparagraph, if the person re15 quired to file such return knowingly fails to file 

16 the return, such penalty shall also be imposed 

17 on such person who shall be personally liable 

18 for such penalty.’’. 

19 (3) CONFIDENTIALITY OF NONCHARITABLE

20 BENEFICIARIES.—Subsection (b) of section 6104 

21 (relating to inspection of annual information re22 turns) is amended by adding at the end the fol23 lowing new sentence: ‘‘In the case of a trust which 

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

25 this subsection shall not apply to information re-
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1 garding beneficiaries which are not organizations de2 scribed in section 170(c).’’. 

3 (c) EFFECTIVE DATES.—

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

5 by subsection (a) shall apply to distributions made 

6 after December 31, 2003. 

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

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

9 years beginning after December 31, 2003. 

10 SEC. 103. INCREASE IN CAP ON CORPORATE CHARITABLE 

11 CONTRIBUTIONS. 

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

13 (relating to corporations) is amended by striking ‘‘10 per14 cent’’ and inserting ‘‘the applicable percentage’’. 

15 (b) APPLICABLE PERCENTAGE.—Subsection (b) of 

16 section 170 is amended by adding at the end the following 

17 new paragraph: 

18 ‘‘(3) APPLICABLE PERCENTAGE DEFINED.—For 

19 purposes of paragraph (2), the applicable percentage 

20 shall be determined in accordance with the following 

21 table:

‘‘For taxable years beginning The applicable 

in calendar year— percentage is—

2004 ............................................................................. 11

2005 ............................................................................. 12

2006 ............................................................................. 13

2007 ............................................................................. 14

2008 through 2011 ...................................................... 15

2012 and thereafter ..................................................... 20.’’.
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1 (c) CONFORMING AMENDMENTS.—

2 (1) Sections 512(b)(10) and 805(b)(2)(A) are 

3 each amended by striking ‘‘10 percent’’ each place 

4 it occurs and inserting ‘‘the applicable percentage 

5 (determined under section 170(b)(3))’’.

6 (2) Sections 545(b)(2) and 556(b)(2) are each 

7 amended by striking ‘‘10-percent limitation’’ and in8 serting ‘‘applicable percentage limitation’’. 

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

10 this section shall apply to taxable years beginning after 

11 December 31, 2003. 

12 SEC. 104. CHARITABLE DEDUCTION FOR CONTRIBUTIONS 

13 OF FOOD INVENTORY. 

14 (a) IN GENERAL.—Paragraph (3) of section 170(e) 

15 (relating to special rule for certain contributions of inven16 tory and other property) is amended by redesignating sub17 paragraph (C) as subparagraph (D) and by inserting after 

18 subparagraph (B) the following new subparagraph: 

19 ‘‘(C) SPECIAL RULE FOR CONTRIBUTIONS

20 OF FOOD INVENTORY.—

21 ‘‘(i) GENERAL RULE.—In the case of 

22 a charitable contribution of food, this para23 graph shall be applied—
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1 ‘‘(I) without regard to whether 

2 the contribution is made by a C cor3 poration, and 

4 ‘‘(II) only for food that is appar5 ently wholesome food. 

6 ‘‘(ii) LIMITATION.—In the case of tax7 payer other than a C corporation, clause 

8 (i) shall not apply to any contribution of 

9 apparently wholesome food from a trade or 

10 business of the taxpayer to the extent that 

11 such contribution exceeds the applicable 

12 percentage (within the meaning of sub13 section (b)(3)) of the amount of net in14 come of the taxpayer from the trade or 

15 business with respect to which such food is 

16 inventory. For purposes of the preceding 

17 sentence, the amount of net income of the 

18 taxpayer from a trade or business is the 

19 excess of—

20 ‘‘(I) the aggregate amount of 

21 gross income from such trade or busi22 ness received or accrued by the tax23 payer during the taxable year, over 

24 ‘‘(II) the aggregate amount of 

25 any deductions allocable to such trade 
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1 or business allowed to the taxpayer 

2 under this chapter for the taxable 

3 year. 

4 ‘‘(iii) DETERMINATION OF FAIR MAR5 KET VALUE.—In the case of a qualified 

6 contribution of apparently wholesome food 

7 to which this paragraph applies and which, 

8 solely by reason of internal standards of 

9 the taxpayer or lack of market, cannot or 

10 will not be sold, the fair market value of 

11 such food shall be determined by taking 

12 into account the price at which the same 

13 or substantially the same food items (as to 

14 both type and quality) are sold by the tax15 payer at the time of the contribution (or, 

16 if not so sold at such time, in the recent 

17 past). 

18 ‘‘(iv) APPARENTLY WHOLESOME

19 FOOD.—For purposes of this subpara20 graph, the term ‘apparently wholesome 

21 food’ shall have the meaning given to such 

22 term by section 22(b)(2) of the Bill Emer23 son Good Samaritan Food Donation Act 

24 (42 U.S.C. 1791(b)(2)), as in effect on the 
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1 date of the enactment of this subpara2 graph.’’. 

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

4 section shall apply to taxable years beginning after De5 cember 31, 2003. 

6 SEC. 105. REFORM OF CERTAIN EXCISE TAXES RELATED TO 

7 PRIVATE FOUNDATIONS. 

8 (a) REDUCTION OF TAX ON NET INVESTMENT IN9 COME.—Subsection (a) of section 4940 (relating to excise 

10 tax based on investment income) is amended by striking 

11 ‘‘2 percent’’ and inserting ‘‘1 percent’’. 

12 (b) REPEAL OF REDUCTION IN TAX WHERE PRI13 VATE FOUNDATION MEETS CERTAIN DISTRIBUTION RE14 QUIREMENTS.—Section 4940 is amended by striking sub15 section (e). 

16 (c) MODIFICATION OF EXCISE TAX ON FAILURE TO

17 DISTRIBUTE INCOME.—

18 (1) ADMINISTRATIVE EXPENSES NOT TREATED

19 AS DISTRIBUTIONS.—Subparagraph (A) of section 

20 4942(g)(1) is amended by striking ‘‘including that 

21 portion of reasonable and necessary administrative 

22 expenses’’ and inserting ‘‘excluding administrative 

23 expenses’’. 
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1 (2) EXCLUSION NOT TO APPLY TO CERTAIN

2 PRIVATE FOUNDATIONS.—Paragraph (3) of section 

3 4942(j) is amended—

4 (A) by striking ‘‘(within the meaning of 

5 paragraph (1) or (2) of subsection (g))’’ each 

6 place it appears, and 

7 (B) by inserting at the end the following: 

8 ‘‘For purposes of this paragraph, the term 

9 ‘qualifying distributions’ means qualifying dis10 tributions within the meaning of paragraph (1) 

11 or (2) of subsection (g), except that ‘including 

12 that portion of reasonable and necessary admin13 istrative expenses’ shall be substituted for ‘ex14 cluding administrative expenses’ in subsection 

15 (g)(1)(A).’’. 

16 (3) CONFORMING AMENDMENT.—Subsection (g) 

17 of section 4942 is amended by striking paragraph 

18 (4). 

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

20 this section shall apply to taxable years beginning after 

21 December 31, 2003. 
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1 SEC. 106. EXCISE TAX ON UNRELATED BUSINESS TAXABLE 

2 INCOME OF CHARITABLE REMAINDER 

3 TRUSTS. 

4 (a) IN GENERAL.—Subsection (c) of section 664 (re5 lating to exemption from income taxes) is amended to read 

6 as follows: 

7 ‘‘(c) TAXATION OF TRUSTS.—

8 ‘‘(1) INCOME TAX.—A charitable remainder an9 nuity trust and a charitable remainder unitrust 

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

11 imposed by this subtitle. 

12 ‘‘(2) EXCISE TAX.—

13 ‘‘(A) IN GENERAL.—In the case of a chari14 table remainder annuity trust or a charitable 

15 remainder unitrust that has unrelated business 

16 taxable income (within the meaning of section 

17 512, determined as if part III of subchapter F 

18 applied to such trust) for a taxable year, there 

19 is hereby imposed on such trust or unitrust an 

20 excise tax equal to the amount of such unre21 lated business taxable income. 

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

23 imposed by subparagraph (A) shall be treated 

24 as imposed by chapter 42 for purposes of this 

25 title other than subchapter E of chapter 42. 
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1 ‘‘(C) CHARACTER OF DISTRIBUTIONS AND

2 COORDINATION WITH DISTRIBUTION REQUIRE3 MENTS.—The amounts taken into account in 

4 determining unrelated business taxable income 

5 (as defined in subparagraph (A)) shall not be 

6 taken into account for purposes of—

7 ‘‘(i) subsection (b), 

8 ‘‘(ii) determining the value of trust 

9 assets under subsection (d)(2), and 

10 ‘‘(iii) determining income under sub11 section (d)(3). 

12 ‘‘(D) TAX COURT PROCEEDINGS.—For 

13 purposes of this paragraph, the references in 

14 section 6212(c)(1) to section 4940 shall be 

15 deemed to include references to this para16 graph.’’. 

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

18 this section shall apply to taxable years beginning after 

19 December 31, 2003. 

20 SEC. 107. EXPANSION OF CHARITABLE CONTRIBUTION AL21 LOWED FOR SCIENTIFIC PROPERTY USED 

22 FOR RESEARCH AND FOR COMPUTER TECH23 NOLOGY AND EQUIPMENT USED FOR EDU24 CATIONAL PURPOSES. 

25 (a) SCIENTIFIC PROPERTY USED FOR RESEARCH.—
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1 (1) IN GENERAL.—Clause (ii) of section 

2 170(e)(4)(B) (defining qualified research contribu3 tions) is amended by inserting ‘‘or assembled’’ after 

4 ‘‘constructed’’. 

5 (2) CONFORMING AMENDMENT.—Clause (iii) of 

6 section 170(e)(4)(B) is amended by inserting ‘‘or as7 sembling’’ after ‘‘construction’’. 

8 (b) COMPUTER TECHNOLOGY AND EQUIPMENT FOR

9 EDUCATIONAL PURPOSES.—

10 (1) IN GENERAL.—Clause (ii) of section 

11 170(e)(6)(B) is amended by inserting ‘‘or assem12 bled’’ after ‘‘constructed’’ and ‘‘or assembling’’ after 

13 ‘‘construction’’.

14 (2) SPECIAL RULE EXTENDED.—Section 

15 170(e)(6)(G) is amended by striking ‘‘2003’’ and in16 serting ‘‘2005’’. 

17 (3) CONFORMING AMENDMENTS.—Subpara18 graph (D) of section 170(e)(6) is amended by insert19 ing ‘‘or assembled’’ after ‘‘constructed’’ and ‘‘or as20 sembling’’ after ‘‘construction’’. 

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

22 this section shall apply to taxable years beginning after 

23 December 31, 2003. 
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1 SEC. 108. ADJUSTMENT TO BASIS OF S CORPORATION 

2 STOCK FOR CERTAIN CHARITABLE CON3 TRIBUTIONS. 

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

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

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

7 flush sentence: 

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

9 a charitable contribution (as defined in section 

10 170(c)) of property shall be the amount equal to the 

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

12 such property.’’.

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

14 this section shall apply to taxable years beginning after 

15 December 31, 2003. 

16 TITLE II—TAX REFORM AND IM17 PROVEMENTS RELATING TO 

18 CHARITABLE ORGANIZA19 TIONS AND PROGRAMS 

20 SEC. 201. SUSPENSION OF TAX-EXEMPT STATUS OF TER21 RORIST ORGANIZATIONS. 

22 (a) IN GENERAL.—Section 501 (relating to exemp23 tion from tax on corporations, certain trusts, etc.) is 

24 amended by redesignating subsection (p) as subsection (q) 

25 and by inserting after subsection (o) the following new 

26 subsection: 
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1 ‘‘(p) SUSPENSION OF TAX-EXEMPT STATUS OF TER2 RORIST ORGANIZATIONS.—

3 ‘‘(1) IN GENERAL.—The exemption from tax 

4 under subsection (a) with respect to any organiza5 tion described in paragraph (2), and the eligibility of 

6 any organization described in paragraph (2) to apply 

7 for recognition of exemption under subsection (a), 

8 shall be suspended during the period described in 

9 paragraph (3). 

10 ‘‘(2) TERRORIST ORGANIZATIONS.—An organi11 zation is described in this paragraph if such organi12 zation is designated or otherwise individually identi13 fied— 

14 ‘‘(A) under section 212(a)(3)(B)(vi)(II) or 

15 219 of the Immigration and Nationality Act as 

16 a terrorist organization or foreign terrorist or17 ganization, 

18 ‘‘(B) in or pursuant to an Executive order 

19 which is related to terrorism and issued under 

20 the authority of the International Emergency 

21 Economic Powers Act or section 5 of the 

22 United Nations Participation Act of 1945 for 

23 the purpose of imposing on such organization 

24 an economic or other sanction, or 
25

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1 ‘‘(C) in or pursuant to an Executive order 

2 issued under the authority of any Federal law 

3 if—

4 ‘‘(i) the organization is designated or 

5 otherwise individually identified in or pur6 suant to such Executive order as sup7 porting or engaging in terrorist activity (as 

8 defined in section 212(a)(3)(B) of the Im9 migration and Nationality Act) or sup10 porting terrorism (as defined in section 

11 140(d)(2) of the Foreign Relations Author12 ization Act, Fiscal Years 1988 and 1989); 

13 and 

14 ‘‘(ii) such Executive order refers to 

15 this subsection. 

16 ‘‘(3) PERIOD OF SUSPENSION.—With respect to 

17 any organization described in paragraph (2), the pe18 riod of suspension—

19 ‘‘(A) begins on the later of—

20 ‘‘(i) the date of the first publication of 

21 a designation or identification described in 

22 paragraph (2) with respect to such organi23 zation, or 

24 ‘‘(ii) the date of the enactment of this 

25 subsection, and 
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1 ‘‘(B) ends on the first date that all des2 ignations and identifications described in para3 graph (2) with respect to such organization are 

4 rescinded pursuant to the law or Executive 

5 order under which such designation or identi6 fication was made. 

7 ‘‘(4) DENIAL OF DEDUCTION.—No deduction 

8 shall be allowed under section 170, 545(b)(2), 

9 556(b)(2), 642(c), 2055, 2106(a)(2), or 2522 for 

10 any contribution to an organization described in 

11 paragraph (2) during the period described in para12 graph (3). 

13 ‘‘(5) DENIAL OF ADMINISTRATIVE OR JUDICIAL

14 CHALLENGE OF SUSPENSION OR DENIAL OF DEDUC15 TION.—Notwithstanding section 7428 or any other 

16 provision of law, no organization or other person 

17 may challenge a suspension under paragraph (1), a 

18 designation or identification described in paragraph 

19 (2), the period of suspension described in paragraph 

20 (3), or a denial of a deduction under paragraph (4) 

21 in any administrative or judicial proceeding relating 

22 to the Federal tax liability of such organization or 

23 other person. 

24 ‘‘(6) ERRONEOUS DESIGNATION.—

25 ‘‘(A) IN GENERAL.—If—
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1 ‘‘(i) the tax exemption of any organi2 zation described in paragraph (2) is sus3 pended under paragraph (1), 

4 ‘‘(ii) each designation and identifica5 tion described in paragraph (2) which has 

6 been made with respect to such organiza7 tion is determined to be erroneous pursu8 ant to the law or Executive order under 

9 which such designation or identification 

10 was made, and 

11 ‘‘(iii) the erroneous designations and 

12 identifications result in an overpayment of 

13 income tax for any taxable year by such 

14 organization, 

15 credit or refund (with interest) with respect to 

16 such overpayment shall be made. 

17 ‘‘(B) WAIVER OF LIMITATIONS.—If the 

18 credit or refund of any overpayment of tax de19 scribed in subparagraph (A)(iii) is prevented at 

20 any time by the operation of any law or rule of 

21 law (including res judicata), such credit or re22 fund may nevertheless be allowed or made if the 

23 claim therefor is filed before the close of the 1-

24 year period beginning on the date of the last 
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1 determination described in subparagraph 

2 (A)(ii). 

3 ‘‘(7) NOTICE OF SUSPENSIONS.—If the tax ex4 emption of any organization is suspended under this 

5 subsection, the Internal Revenue Service shall up6 date the listings of tax-exempt organizations and 

7 shall publish appropriate notice to taxpayers of such 

8 suspension and of the fact that contributions to such 

9 organization are not deductible during the period of 

10 such suspension.’’.

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

12 this section shall apply to designations made before, on, 

13 or after the date of the enactment of this Act. 

14 SEC. 202. CLARIFICATION OF DEFINITION OF CHURCH TAX 

15 INQUIRY. 

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

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

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

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

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

21 ‘‘(6) information provided by the Secretary re22 lated to the standards for exemption from tax under 

23 this title and the requirements under this title relat24 ing to unrelated business taxable income.’’. 
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1 SEC. 203. EXPANSION OF DECLARATORY JUDGMENT REM2 EDY TO TAX-EXEMPT ORGANIZATIONS. 

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

4 (relating to creation of remedy) is amended—

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

6 ‘‘509(a))’’ the following: ‘‘or as a private operating 

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

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

9 follows: 

10 ‘‘(C) with respect to the initial qualifica11 tion or continuing qualification of an organiza12 tion as an organization described in subsection 

13 (c) (other than paragraph (3)) or (d) of section 

14 501 which is exempt from tax under section 

15 501(a), or’’. 

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

17 7428 is amended in the material following paragraph (2) 

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

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

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

21 ‘‘United States Tax Court (in the case of any such deter22 mination or failure) or the United States Claims Court 

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

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

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

26 of paragraph (1)),’’. 
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1 (c) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to pleadings filed with respect to 

3 determinations (or requests for determinations) made 

4 after the date of the enactment of this Act. 

5 SEC. 204. LANDOWNER INCENTIVES PROGRAMS. 

6 (a) IN GENERAL.—Subsection (a) of section 126 is 

7 amended by redesignating paragraph (10) as paragraph 

8 (11) and by inserting after paragraph (9) the following 

9 new paragraph: 

10 ‘‘(10) Landowner initiatives programs to con11 serve threatened, endangered, or imperiled species, 

12 or protect or restore habitat carried out under—

13 ‘‘(A) the Fish and Wildlife Coordination 

14 Act (16 U.S.C. 661 et seq.), 

15 ‘‘(B) the Fish and Wildlife Act of 1956 

16 (16 U.S.C. 742f), or 

17 ‘‘(C) section 6 of the Endangered Species 

18 Act (16 U.S.C. 11531 et seq.).’’. 

19 (b) EXCLUDABLE PORTION.—Subparagraph (A) of 

20 section 126(b)(1) is amended by inserting after ‘‘Secretary 

21 of Agriculture’’ the following: ‘‘(the Secretary of the Inte22 rior, in the case of the landowner incentives programs de23 scribed in subsection (a)(10) and the programs described 

24 in subsection (a)(11) that are implemented by the Depart25 ment of the Interior)’’. 
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1 (c) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to amounts received after the date 

3 of the enactment of this Act, in taxable years ending after 

4 such date. 

5 SEC. 205. MODIFICATIONS TO SECTION 512(b)(13). 

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

7 (relating to special rules for certain amounts received from 

8 controlled entities) is amended by redesignating subpara9 graph (E) as subparagraph (F) and by inserting after sub10 paragraph (D) the following new subparagraph: 

11 ‘‘(E) PARAGRAPH TO APPLY ONLY TO EX12 CESS PAYMENTS.—

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

14 shall apply only to the portion of a speci15 fied payment received or accrued by the 

16 controlling organization that exceeds the 

17 amount which would have been paid or ac18 crued if such payment met the require19 ments prescribed under section 482. 

20 ‘‘(ii) ADDITION TO TAX FOR VALU21 ATION MISSTATEMENTS.—The tax imposed 

22 by this chapter on the controlling organiza23 tion shall be increased by an amount equal 

24 to 20 percent of the larger of—
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1 ‘‘(I) such excess determined with2 out regard to any amendment or sup3 plement to a return of tax, or 

4 ‘‘(II) such excess determined 

5 with regard to all such amendments 

6 and supplements.’’. 

7 (b) EFFECTIVE DATE.—

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

9 this section shall apply to payments received or ac10 crued after December 31, 2003. 

11 (2) PAYMENTS SUBJECT TO BINDING CONTRACT

12 TRANSITION RULE.—If the amendments made by 

13 section 1041 of the Taxpayer Relief Act of 1997 did 

14 not apply to any amount received or accrued in the 

15 first 2 taxable years beginning on or after the date 

16 of the enactment of the Taxpayer Relief Act of 1997 

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

18 such section, such amendments also shall not apply 

19 to amounts received or accrued under such contract 

20 before January 1, 2001. 

21 SEC. 206. SIMPLIFICATION OF LOBBYING EXPENDITURE 

22 LIMITATION. 

23 (a) REPEAL OF GRASSROOTS EXPENDITURE

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

2 amended to read as follows: 

3 ‘‘(1) GENERAL RULE.—In the case of an orga4 nization to which this subsection applies, exemption 

5 from taxation under subsection (a) shall be denied 

6 because a substantial part of the activities of such 

7 organization consists of carrying on propaganda, or 

8 otherwise attempting, to influence legislation, but

9 only if such organization normally makes lobbying 

10 expenditures in excess of the lobbying ceiling amount 

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

12 (b) EXCESS LOBBYING EXPENDITURES.—Section 

13 4911(b) is amended to read as follows: 

14 ‘‘(b) EXCESS LOBBYING EXPENDITURES.—For pur15 poses of this section, the term ‘excess lobbying expendi16 tures’ means, for a taxable year, the amount by which the 

17 lobbying expenditures made by the organization during the 

18 taxable year exceed the lobbying nontaxable amount for 

19 such organization for such taxable year.’’. 

20 (c) CONFORMING AMENDMENTS.—

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

22 subparagraphs (C) and (D). 

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

24 paragraphs (3) and (4). 
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1 (3) Paragraph (1)(A) of section 4911(f) is 

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

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

4 has’’. 

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

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

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

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

9 4911(f) are each amended by striking ‘‘limits of sec10 tion 501(h)(1)’’ and inserting ‘‘limit of section 

11 501(h)(1)’’. 

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

13 to certain organizations described in section 

14 501(c)(3)) is amended by inserting ‘‘and’’ at the end 

15 of subparagraph (A) and by striking subparagraphs 

16 (C) and (D). 

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

18 this section shall apply to taxable years beginning after 

19 December 31, 2003. 

20 SEC. 207. PERMITTED HOLDINGS OF PRIVATE FOUNDATION 

21 WHERE CORPORATION IS PUBLICLY TRADED 

22 AND PUBLICLY CONTROLLED. 

23 (a) IN GENERAL.—Paragraph (2) of section 4943(c) 

24 (relating to the permitted holdings in a corporation) is 
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1 amended by adding at the end the following new subpara2 graphs: 

3 ‘‘(D) PERMITTED HOLDINGS WHERE COR4 PORATION IS PUBLICLY-TRADED AND PUBLICLY

5 CONTROLLED.—A private foundation shall not 

6 be treated as having excess business holdings in 

7 any corporation in any calendar year in which 

8 it (together with all other private foundations 

9 which are described in section 4946(a)(1)(H)) 

10 owns not more than 5 percent of the voting 

11 stock and not more than 5 percent in value of 

12 all outstanding shares of all classes of stock 

13 if—

14 ‘‘(i) the common stock of the corpora15 tion, and any other class of stock of which 

16 shares are held by the private foundation, 

17 are regularly traded on an established se18 curities market (within the meaning of sec19 tion 897(c)(3)), 

20 ‘‘(ii) more than 50 percent of—

21 ‘‘(I) the total combined voting 

22 power of all classes of stock of such 

23 corporation entitled to vote, and 

24 ‘‘(II) the total value of the stock 

25 of such corporation, 
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•HR 7 IH 

1 is owned directly or indirectly by persons 

2 other than the private foundation and per3 sons who are disqualified persons with re4 spect to the private foundation, 

5 ‘‘(iii) the Board of Directors of such 

6 corporation consists of a majority of per7 sons who are not disqualified persons with 

8 respect to the private foundation, and 

9 ‘‘(iv) any undistributed income (within 

10 the meaning of section 4942(c)) of the pri11 vate foundation for such year (determined 

12 after substituting ‘6 percent’ for ‘5 per13 cent’ in section 4942(e)(1)) shall have been 

14 distributed within the required period 

15 under section 4942(a) so as to avoid appli16 cation of the initial tax on such undistrib17 uted income. 

18 ‘‘(E) EXCEPTION TO PERMITTED HOLD19 INGS WHERE CORPORATION IS PUBLICLY-TRAD20 ED AND PUBLICLY CONTROLLED.—No stock of 

21 a corporation held by the private foundation 

22 shall be considered permitted holdings pursuant 

23 to subparagraph (D) to the extent such stock 

24 was acquired by the private foundation by pur25 chase in a taxable transaction or was acquired 
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•HR 7 IH 

1 from a disqualified person who acquired such 

2 stock by purchase in a taxable transaction with3 in the 5 years immediately preceding the trans4 fer of such stock to the private foundation. 

5 Solely for purposes of applying the preceding 

6 sentence—

7 ‘‘(i) any such stock acquired by pur8 chase in a taxable transaction by such dis9 qualified person within such 5 year period 

10 shall be treated as included in such trans11 fer to the extent of such transfer, 

12 ‘‘(ii) all stock acquired by such dis13 qualified person by purchase in a taxable 

14 transaction during the 24 month period be15 ginning on the date of the transfer to the 

16 private foundation shall be treated as held 

17 by such disqualified person on the date of 

18 such transfer and included in such trans19 fer, and 

20 ‘‘(iii) the private foundation may spe21 cifically designate any shares of stock not 

22 considered permitted holdings for purposes 

23 of allowing such private foundation to dis24 pose of such stock.’’. 
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1 (b) EFFECTIVE DATE.—The amendment made by 

2 this section shall apply to taxable years beginning after 

3 December 31, 2003. 

4 TITLE III—OTHER PROVISIONS 

5 SEC. 301. COMPASSION CAPITAL FUND. 

6 Title IV of the Social Security Act (42 U.S.C. 601–

7 679b) is amended by adding at the end the following:

8 ‘‘PART F—COMPASSION CAPITAL FUND 

9 ‘‘SEC. 481. SECRETARY’S FUND TO SUPPORT AND REP10 LICATE PROMISING SOCIAL SERVICE PRO11 GRAMS. 

12 ‘‘(a) GRANT AUTHORITY.—

13 ‘‘(1) IN GENERAL.—The Secretary may make 

14 grants to support any private entity that operates a 

15 promising social services program. 

16 ‘‘(2) APPLICATIONS.—An entity desiring to re17 ceive a grant under paragraph (1) shall submit to 

18 the Secretary an application for the grant, which 

19 shall contain such information as the Secretary may 

20 require. 

21 ‘‘(b) CONTRACT AUTHORITY, ETC.—The Secretary 

22 may enter into a grant, contract, or cooperative agreement 

23 with any entity under which the entity would provide tech24 nical assistance to another entity to operate a social serv-
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1 ice program that assists persons and families in need, in2 cluding by—

3 ‘‘(1) providing the other entity with—

4 ‘‘(A) technical assistance and information, 

5 including legal assistance and other business as6 sistance; 

7 ‘‘(B) information on capacity-building; 

8 ‘‘(C) information and assistance in identi9 fying and using best practices for serving per10 sons and families in need; or 

11 ‘‘(D) assistance in replicating programs 

12 with demonstrated effectiveness in assisting 

13 persons and families in need; or 

14 ‘‘(2) supporting research on the best practices 

15 of social service organizations. 

16 ‘‘(c) GUIDANCE AND TECHNICAL ASSISTANCE.—The 

17 Secretary may use not more than 25 percent of the 

18 amount appropriated under this section for a fiscal year 

19 to provide guidance and technical assistance to States and 

20 political subdivisions of States with respect to the imple21 mentation of any social service program. 

22 ‘‘(d) SOCIAL SERVICES PROGRAM DEFINED.—In this 

23 section, the term ‘social services program’ means a pro24 gram that provides benefits or services of any kind to per25 sons and families in need. 
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1 ‘‘(e) LIMITATIONS ON AUTHORIZATION OF APPRO2 PRIATIONS.—To carry out this section, there are author3 ized to be appropriated to the Secretary $150,000,000 for 

4 fiscal year 2003, and such sums as may be necessary for 

5 fiscal years 2004 through 2007.’’. 

6 SEC. 302. REAUTHORIZATION OF ASSETS FOR INDEPEND7 ENCE DEMONSTRATION. 

8 Section 416 of the Assets for Independence Act (title 

9 IV of Public Law 105–285; 42 U.S.C. 604 note) is amend10 ed by striking ‘‘and 2003’’ and inserting ‘‘2003, 2004, 

11 2005, 2006, 2007, and 2008’’. 

12 SEC. 303. SENSE OF THE CONGRESS REGARDING COR13 PORATE CONTRIBUTIONS TO FAITH-BASED 

14 ORGANIZATIONS, ETC. 

15 (a) FINDINGS.—The Congress finds as follows: 

16 (1) America’s community of faith has long 

17 played a leading role in dealing with difficult societal 

18 problems that might otherwise have gone 

19 unaddressed. 

20 (2) President Bush has called upon Americans 

21 ‘‘to revive the spirit of citizenship . . . to marshal 

22 the compassion of our people to meet the continuing 

23 needs of our Nation’’. 

24 (3) Although the work of faith-based organiza25 tions should not be used by government as an excuse 
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1 for backing away from its historic and rightful com2 mitment to help those who are disadvantaged and in 

3 need, such organizations can and should be seen as 

4 a valuable partner with government in meeting soci5 etal challenges. 

6 (4) Every day faith-based organizations in the 

7 United States help people recover from drug and al8 cohol addiction, provide food and shelter for the 

9 homeless, rehabilitate prison inmates so that they 

10 can break free from the cycle of recidivism, and 

11 teach people job skills that will allow them to move 

12 from poverty to productivity. 

13 (5) Faith-based organizations are often more 

14 successful in dealing with difficult societal problems 

15 than government and non-sectarian organizations. 

16 (6) As President Bush has stated, ‘‘It is not 

17 sufficient to praise charities and community groups; 

18 we must support them. And this is both a public ob19 ligation and a personal responsibility.’’. 

20 (7) Corporate foundations contribute billions of 

21 dollars each year to a variety of philanthropic 

22 causes. 

23 (8) According to a study produced by the Cap24 ital Research Center, the 10 largest corporate foun-
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1 dations in the United States contributed 

2 $1,900,000,000 to such causes. 

3 (9) According to the same study, faith-based or4 ganizations only receive a small fraction of the con5 tributions made by corporations in the United 

6 States, and 6 of the 10 corporations that give the 

7 most to philanthropic causes explicitly ban or re8 strict contributions to faith-based organizations. 

9 (b) CORPORATIONS ENCOURAGED TO CONTRIBUTE

10 TO FAITH-BASED ORGANIZATIONS.—The Congress calls 

11 on corporations in the United States, in the words of the 

12 President, ‘‘to give more and to give better’’ by making 

13 greater contributions to faith-based organizations that are 

14 on the front lines battling some of the great societal chal15 lenges of our day. 

16 (c) SENSE OF THE CONGRESS.—It is the sense of 

17 Congress that—

18 (1) corporations in the United States are im19 portant partners with government in efforts to over20 come difficult societal problems; and 

21 (2) no corporation in the United States should 

22 adopt policies that prohibit the corporation from 

23 contributing to an organization that is successfully 

24 advancing a philanthropic cause merely because such 

25 organization is faith based. 
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1 SEC. 304. MATERNITY GROUP HOMES. 

2 (a) PERMISSIBLE USE OF FUNDS.—Section 322 of 

3 the Runaway and Homeless Youth Act (42 U.S.C. 5714–

4 2) is amended—

5 (1) in subsection (a)(1), by inserting ‘‘(includ6 ing maternity group homes)’’ after ‘‘group homes’’; 

7 and 

8 (2) by adding at the end the following: 

9 ‘‘(c) MATERNITY GROUP HOME.—In this part, the 

10 term ‘maternity group home’ means a community-based, 

11 adult-supervised group home that provides— 

12 ‘‘(1) young mothers and their children with a 

13 supportive and supervised living arrangement in 

14 which such mothers are required to learn parenting 

15 skills, including child development, family budgeting, 

16 health and nutrition, and other skills to promote 

17 their long-term economic independence and the well18 being of their children; and 

19 ‘‘(2) pregnant women with—

20 ‘‘(A) information regarding the option of 

21 placing children for adoption through licensed 

22 adoption service providers; 

23 ‘‘(B) assistance with prenatal care and 

24 child birthing; and 

25 ‘‘(C) pre- and post-placement adoption 

26 counseling.’’. 
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1 (b) CONTRACT FOR EVALUATION.—Part B of the 

2 Runaway and Homeless Youth Act (42 U.S.C. 5701 et 

3 seq.) is amended by adding at the end the following: 

4 ‘‘SEC. 323. CONTRACT FOR EVALUATION. 

5 ‘‘(a) IN GENERAL.—The Secretary shall enter into 

6 a contract with a public or private entity for an evaluation 

7 of the maternity group homes that are supported by grant 

8 funds under this Act. 

9 ‘‘(b) INFORMATION.—The evaluation described in 

10 subsection (a) shall include the collection of information 

11 about the relevant characteristics of individuals who ben12 efit from maternity group homes such as those that are 

13 supported by grant funds under this Act and what services 

14 provided by those maternity group homes are most bene15 ficial to such individuals. 

16 ‘‘(c) REPORT.—Not later than 2 years after the date 

17 on which the Secretary enters into a contract for an eval18 uation under subsection (a), and biennially thereafter, the 

19 entity conducting the evaluation under this section shall 

20 submit to Congress a report on the status, activities, and 

21 accomplishments of maternity group homes that are sup22 ported by grant funds under this Act.’’. 

23 (c) AUTHORIZATION OF APPROPRIATIONS.—Section 

24 388 of the Runaway and Homeless Youth Act (42 U.S.C. 

25 5751) is amended—
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1 (1) in subsection (a)(1)—

2 (A) by striking ‘‘There’’ and inserting the 

3 following: 

4 ‘‘(A) IN GENERAL.—There’’; 

5 (B) in subparagraph (A), as redesignated, 

6 by inserting ‘‘and the purpose described in sub7 paragraph (B)’’ after ‘‘other than part E’’; and 

8 (C) by adding at the end the following: 

9 ‘‘(B) MATERNITY GROUP HOMES.—There 

10 is authorized to be appropriated, for maternity 

11 group homes eligible for assistance under sec12 tion 322(a)(1)—

13 ‘‘(i) $33,000,000 for fiscal year 2003; 

14 and 

15 ‘‘(ii) such sums as may be necessary 

16 for fiscal year 2004.’’; and 

17 (2) in subsection (a)(2)(A), by striking ‘‘para18 graph (1)’’ and inserting ‘‘paragraph (1)(A)’’.

Æ