I
104TH CONGRESS
1ST SESSION
H. R. 1768
To amend the Internal Revenue Code of 1986 to provide a credit for
charitable contributions to fight poverty, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JUNE 7, 1995
Mr. KNOLLENBERG (for himself, Mr. KOLBE, Mr. BARTLETT of Maryland,
Mr. EWING, Ms. MOLINARI, and Mr. UPTON) introduced the following
bill; which was referred to the Committee on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to provide
a credit for charitable contributions to fight poverty,
and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Choice in Welfare Tax
Credit Act of 1995’’.
SEC. 2. CREDIT FOR CHARITABLE CONTRIBUTIONS TO CER-
TAIN PRIVATE CHARITIES PROVIDING AS-
SISTANCE TO THE POOR.
(a) IN GENERAL.—Subpart A of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of
1986 (relating to nonrefundable personal credits) is
amended by inserting after section 22 the following new
section:
‘‘SEC. 23. CREDIT FOR CERTAIN CHARITABLE CONTRIBU-
TIONS.
‘‘(a) IN GENERAL.—In the case of an individual,
there shall be allowed as a credit against the tax imposed
by this chapter for the taxable year an amount equal to
the qualified charitable contributions which are paid by
the taxpayer during the taxable year.
‘‘(b) LIMITATION.—The credit allowed by subsection
(a) for the taxable year shall not exceed $100 ($200 in
the case of a joint return).
‘‘(c) QUALIFIED CHARITABLE CONTRIBUTION.—For
purposes of this section, the term ‘qualified charitable con-
tribution’ means any charitable contribution (as defined
in section 170(c)) made in cash to a qualified charity but
only if the amount of each such contribution, and the re-
cipient thereof, are identified on the return for the taxable
year during which such contribution is made.
‘‘(d) QUALIFIED CHARITY.—
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, the term ‘qualified charity’ means, with respect
to the taxpayer, any organization described in sec-
tion 501(c)(3) and exempt from tax under section
501(a)—
‘‘(A) which is certified by the Secretary as
meeting the requirements of paragraphs (2)
and (3),
‘‘(B) which is organized under the laws of
the United States or of any State in which the
organization is qualified to operate, and
‘‘(C) which is required, or elects to be
treated as being required, to file returns under
section 6033.
‘‘(2) CHARITY
MUST
PRIMARILY
ASSIST
THE
POOR.—An organization meets the requirements of
this paragraph only if the predominant activity of
such organization is the provision of services to indi-
viduals whose annual incomes generally do not ex-
ceed 150 percent of the official poverty line (as de-
fined by the Office of Management and Budget).
‘‘(3) MINIMUM EXPENDITURE REQUIREMENT.—
‘‘(A) IN GENERAL.—An organization meets
the requirements of this paragraph only if the
Secretary reasonably expects that the annual
exempt purpose expenditures of such organiza-
tion will not be less than 70 percent of the an-
nual aggregate expenditures of such organiza-
tion.
‘‘(B) EXEMPT PURPOSE EXPENDITURE.—
For purposes of subparagraph (A)—
‘‘(i) IN GENERAL.—The term ‘exempt
purpose expenditure’ means any expendi-
ture to carry out the activity referred to in
paragraph (2).
‘‘(ii) EXCEPTIONS.—Such term shall
not include—
‘‘(I) any administrative expense,
‘‘(II) any expense for the purpose
of influencing legislation (as defined
in section 4911(d)),
‘‘(III) any expense primarily for
the purpose of fundraising, and
‘‘(IV) any expense for litigation
on behalf of any individual referred to
in paragraph (2).
‘‘(e) 
TIME
WHEN
CONTRIBUTIONS
DEEMED
MADE.—For purposes of this section, at the election of
the taxpayer, a contribution which is made not later than
the time prescribed by law for filing the return for the
taxable year (not including extensions thereof) shall be
treated as made on the last day of such taxable year.
‘‘(f) COORDINATION WITH DEDUCTION FOR CHARI-
TABLE CONTRIBUTIONS.—
‘‘(1) CREDIT
IN
LIEU
OF
DEDUCTION.—The
credit provided by subsection (a) for any qualified
charitable contribution shall be in lieu of any deduc-
tion otherwise allowable under this chapter for such
contribution.
‘‘(2) 
ELECTION
TO
HAVE
SECTION
NOT
APPLY.—A taxpayer may elect for any taxable year
to have this section not apply.’’
(b) QUALIFIED CHARITIES REQUIRED TO PROVIDE
COPIES OF ANNUAL RETURN.—Subsection (e) of section
6104 of such Code (relating to public inspection of certain
annual returns and applications for exemption) is amend-
ed by adding at the end the following new paragraph:
‘‘(3) CHARITIES RECEIVING CREDITABLE CON-
TRIBUTIONS REQUIRED TO PROVIDE COPIES OF AN-
NUAL RETURN.—
‘‘(A) IN GENERAL.—Every qualified char-
ity (as defined in section 23(d)) shall, upon re-
quest of an individual made at an office where
such organization’s annual return filed under
section 6033 is required under paragraph (1) to
be available for inspection, provide a copy of
such return to such individual without charge
other than a reasonable fee for any reproduc-
tion and mailing costs. If the request is made
in person, such copies shall be provided imme-
diately and, if made other than in person, shall
be provided within 30 days.
‘‘(B) PERIOD OF AVAILABILITY.—Subpara-
graph (A) shall apply only during the 3-year pe-
riod beginning on the filing date (as defined in
paragraph (1)(D) of the return requested).’’
(c) CLERICAL AMENDMENT.—The table of sections
for subpart A of part IV of subchapter A of chapter 1
of such Code is amended by inserting after the item relat-
ing to section 22 the following new item:
‘‘Sec. 23. Credit for certain charitable contributions.’’
(d) EFFECTIVE DATE.—The amendments made by
this section shall apply to contributions made after the
90th day after the date of the enactment of this Act in
taxable years ending after such date.
SEC. 3. REPEAL OF CERTAIN CHANGES MADE IN THE
EARNED INCOME CREDIT.
(a) REPEAL OF CREDIT FOR INDIVIDUALS WITHOUT
CHILDREN.—Subparagraph (A) of section 32(c)(1) of the
Internal Revenue Code of 1986 (defining eligible individ-
ual) is amended to read as follows:
‘‘(A) IN GENERAL.—The term ‘eligible in-
dividual’ means any individual who has a quali-
fying child for the taxable year.’’
(b) REPEAL OF INCREASES IN AMOUNT OF CRED-
IT.—
(1) Subsection (b) of section 32 of such Code
is amended to read as follows:
‘‘(b) PERCENTAGES.—
‘‘(1) IN GENERAL.—The credit percentage and
the phaseout percentage shall be determined as
follows:
‘‘In the case of an eligible individ-
ual with:
The credit percentage
is:
The phaseout percentage
is:
1 qualifying child ....................
34 .............................
15.98
2 or more qualifying children ..
36 .............................
20.22
‘‘(2) AMOUNTS.—The earned income amount
and the phaseout amount shall be determined as
follows:
‘‘In the case of an eligible individ-
ual with:
The earned income
amount is:
The phaseout amount is:
1 qualifying child ....................
$6,000 ......................
$11,000
2 or more qualifying children ..
$8,425 ......................
$11,000.’’
(2) Paragraph (1) of section 32(i) of such Code
is amended by striking ‘‘subsection (b)(2)(A)’’ and
inserting ‘‘subsection (b)(2)’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 1995, except that adjustments shall be