financial institution, a qualified nonprofit organization, or
an Indian tribe.
(b) REGULAR DEPOSITS OF MATCHING FUNDS.—
(1) IN GENERAL.—Subject to paragraph (2),
the qualified financial institution, qualified nonprofit
organization, or Indian tribe shall not less than
quarterly (or upon a proper withdrawal request
under section 306, if necessary) deposit into the par-
allel account with respect to each eligible individual
the following:
(A) A dollar-for-dollar match for the first
$500 contributed by the eligible individual into
an Individual Development Account with re-
spect to any taxable year.
(B) Any matching funds provided by State,
local, or private sources in accordance to the
matching ratio set by those sources.
(2) INFLATION ADJUSTMENT.—
(A) IN GENERAL.—In the case of any tax-
able year beginning after 2002, the dollar
amount referred to in paragraph (1)(A) shall be
increased by an amount equal to—
(i) such dollar amount, multiplied by
(ii) the cost-of-living adjustment de-
termined under section (1)(f)(3) of the In-
ternal Revenue Code of 1986 for the cal-
endar year in which the taxable year be-
gins, by substituting ‘‘2001’’ for ‘‘1992’’.
(B) ROUNDING.—If any amount as ad-
justed under subparagraph (A) is not a multiple
of $20, such amount shall be rounded to the
nearest multiple of $20.
(3) CROSS REFERENCE.—
For allowance of tax credit for Individual Devel-
opment 
Account 
subsidies, 
including 
matching
funds, see section 30B of the Internal Revenue Code
of 1986.
(c) DEPOSIT
OF MATCHING FUNDS INTO INDI-
VIDUAL DEVELOPMENT ACCOUNT OF INDIVIDUAL WHO
HAS ATTAINED AGE 61.—In the case of an Individual De-
velopment Account owner who attains the age of 61, the
qualified financial institution, qualified nonprofit organi-
zation, or Indian tribe which holds the parallel account
for such individual shall deposit the funds in such parallel
account into the Individual Development Account of such
individual on the first day of the succeeding taxable year
of such individual.
(d) UNIFORM ACCOUNTING REGULATIONS.—To en-
sure proper recordkeeping and determination of the tax
credit under section 30B of the Internal Revenue Code
of 1986, the Secretary shall prescribe regulations with re-
spect to accounting for matching funds in the parallel ac-
counts.
(e) REGULAR
REPORTING
OF
ACCOUNTS.—Any
qualified financial institution, qualified nonprofit organi-
zation, or Indian tribe shall report the balances in any
Individual Development Account and parallel account of
an individual on not less than an annual basis to such
individual.
SEC. 306. WITHDRAWAL PROCEDURES.
(a) WITHDRAWALS FOR QUALIFIED EXPENSES.—To
withdraw money from an individual’s Individual Develop-
ment Account to pay qualified expenses of such individual
or such individual’s spouse or dependents, the qualified
financial institution, qualified nonprofit organization, or
Indian tribe shall directly transfer such funds from the
Individual Development Account, and, if applicable, from
the parallel account electronically to the distributees de-
scribed in section 302(8)(A)(ii). If the distributee is not
equipped to receive funds electronically, the qualified fi-
nancial institution, qualified nonprofit organization, or In-
dian tribe may issue such funds by paper check to the
distributee.
(b) 
WITHDRAWALS
FOR
NONQUALIFIED
EX-
PENSES.—An Individual Development Account owner may
unilaterally withdraw any amount of funds from the Indi-
vidual Development Account for purposes other than to
pay qualified expenses, but shall forfeit a proportionate
amount of matching funds from the individual’s parallel
account by doing so, unless such withdrawn funds are re-
contributed to such Account by September 30 following
the withdrawal.
(c) WITHDRAWALS
FROM
ACCOUNTS
OF
NON-
ELIGIBLE INDIVIDUALS.—If the individual for whose ben-
efit an Individual Development Account is established
ceases to be an eligible individual, such account shall re-
main an Individual Development Account, but such indi-
vidual shall not be eligible for any further matching funds
under section 305(b)(1)(A) during the period—
(1) beginning on the first day of the taxable
year of such individual following the beginning of
such ineligibility, and
(2) ending on the last day of the taxable year
of such individual in which such ineligibility ceases.
(d) TAX TREATMENT OF MATCHING FUNDS.—Any
amount withdrawn from a parallel account shall not be
includible in an eligible individual’s gross income.
(e) WITHDRAWAL LIABILITY RESTS ONLY WITH EL-
IGIBLE INDIVIDUALS.—Nothing in this title may be con-
strued to impose liability on a qualified financial institu-
tion, a qualified nonprofit organization, or an Indian tribe
for non-compliance with the requirements of this title re-
lated to withdrawals from Individual Development Ac-
counts.
SEC. 307. CERTIFICATION AND TERMINATION OF QUALI-
FIED INDIVIDUAL DEVELOPMENT ACCOUNT
PROGRAMS.
(a) CERTIFICATION
PROCEDURES.—Upon estab-
lishing a qualified individual development account pro-
gram under section 303, a qualified financial institution,
a qualified nonprofit organization, or an Indian tribe shall
certify to the Secretary on forms prescribed by the Sec-
retary and accompanied by any documentation required
by the Secretary, that—
(1) the accounts described in subparagraphs
(A) and (B) of section 303(b)(1) are operating pur-
suant to all the provisions of this title; and
(2) the qualified financial institution, qualified
nonprofit organization, or Indian tribe agrees to im-
plement an information system necessary to monitor
the cost and outcomes of the qualified individual de-
velopment account program.
(b) AUTHORITY TO TERMINATE QUALIFIED IDA
PROGRAM.—If the Secretary determines that a qualified
financial institution, a qualified nonprofit organization, or
an Indian tribe under this title is not operating a qualified
individual development account program in accordance
with the requirements of this title (and has not imple-
mented any corrective recommendations directed by the
Secretary), the Secretary shall terminate such institu-
tion’s, nonprofit organization’s, or Indian tribe’s authority
to conduct the program. If the Secretary is unable to iden-
tify a qualified financial institution, a qualified nonprofit
organization, or an Indian tribe to assume the authority
to conduct such program, then any funds in a parallel ac-
count established for the benefit of any individual under
such program shall be deposited into the Individual Devel-
opment Account of such individual as of the first day of
such termination.
SEC. 308. REPORTING, MONITORING, AND EVALUATION.
(a) RESPONSIBILITIES OF QUALIFIED FINANCIAL IN-
STITUTIONS, QUALIFIED NONPROFIT ORGANIZATIONS,
AND INDIAN TRIBES.—Each qualified financial institu-
tion, qualified nonprofit organization, or Indian tribe that
operates a qualified individual development account pro-
gram under section 303 shall report annually to the Sec-
retary within 90 days after the end of each calendar year
on—
(1) the number of eligible individuals making
contributions into Individual Development Accounts;
(2) the amounts contributed into Individual De-
velopment Accounts and deposited into parallel ac-
counts for matching funds;
(3) the amounts withdrawn from Individual De-
velopment Accounts and parallel accounts, and the
purposes for which such amounts were withdrawn;
(4) the balances remaining in Individual Devel-
opment Accounts and parallel accounts; and
(5) such other information needed to help the
Secretary monitor the cost and outcomes of the
qualified individual development account program
(provided in a non-individually-identifiable manner).
(b) RESPONSIBILITIES OF THE SECRETARY.—
(1) MONITORING
PROTOCOL.—Not later than
12 months after the date of the enactment of this
Act, the Secretary shall develop and implement a
protocol and process to monitor the cost and out-
comes of the qualified individual development ac-
count programs established under section 303.
(2) ANNUAL REPORTS.—In each year after the
date of the enactment of this Act, the Secretary
shall submit a progress report to Congress on the
status of such qualified individual development ac-
count programs. Such report shall include from a
representative sample of qualified individual develop-
ment account programs information on—
(A) the characteristics of participants, in-
cluding age, gender, race or ethnicity, marital
status, number of children, employment status,
and monthly income;
(B) deposits, withdrawals, balances, uses
of Individual Development Accounts, and par-
ticipant characteristics;
(C) the characteristics of qualified indi-
vidual development account programs, including
match rate, economic education requirements,
permissible uses of accounts, staffing of pro-
grams in full time employees, and the total
costs of programs; and
(D) information on program implementa-
tion and administration, especially on problems
encountered and how problems were solved.
SEC. 309. AUTHORIZATION OF APPROPRIATIONS.
There is authorized to be appropriated to the Sec-
retary $1,000,000 for fiscal year 2002 and for each fiscal
year through 2008, for the purposes of implementing this
title, including the reporting, monitoring, and evaluation
required under section 308, to remain available until ex-
pended.
SEC. 310. ACCOUNT FUNDS DISREGARDED FOR PURPOSES
OF CERTAIN MEANS-TESTED FEDERAL PRO-
GRAMS.
Notwithstanding any other provision of Federal law
that requires consideration of 1 or more financial cir-
cumstances of an individual, for the purposes of deter-
mining eligibility to receive, or the amount of, any assist-
ance or benefit authorized by such provision to be provided
to or for the benefit of such individual, an amount equal
to the sum of—
(1) all amounts (including earnings thereon) in
any Individual Development Account; plus
(2) the matching deposits made on behalf of
such individual (including earnings thereon) in any
parallel account,
shall be disregarded for such purposes.
SEC. 311. MATCHING FUNDS FOR INDIVIDUAL DEVELOP-
MENT ACCOUNTS PROVIDED THROUGH A TAX
CREDIT FOR QUALIFIED FINANCIAL INSTITU-
TIONS.
(a) IN GENERAL.—Subpart B of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of
1986 (relating to other credits) is amended by inserting
after section 30A the following new section:
‘‘SEC. 30B. INDIVIDUAL DEVELOPMENT ACCOUNT INVEST-
MENT CREDIT FOR QUALIFIED FINANCIAL IN-
STITUTIONS.
‘‘(a) DETERMINATION OF AMOUNT.—There shall be
allowed as a credit against the applicable tax for the tax-
able year an amount equal to the individual development
account investment provided by an eligible entity during
the taxable year under an individual development account
program established under section 303 of the Community
Solutions Act of 2001.
‘‘(b) APPLICABLE TAX.—For the purposes of this
section, the term ‘applicable tax’ means the excess (if any)
of—
‘‘(1) the tax imposed under this chapter (other
than the taxes imposed under the provisions de-
scribed in subparagraphs (C) through (Q) of section
26(b)(2)), over
‘‘(2) the credits allowable under subpart B
(other than this section) and subpart D of this part.
‘‘(c) INDIVIDUAL DEVELOPMENT ACCOUNT INVEST-
MENT.—
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, the term ‘individual development account in-
vestment’ means, with respect to an individual devel-
opment account program of a qualified financial in-
stitution in any taxable year, an amount equal to the
sum of—
‘‘(A) the aggregate amount of dollar-for-
dollar matches under such program under sec-
tion 305(b)(1)(A) of the Community Solutions
Act of 2001 for such taxable year, plus
‘‘(B) an amount equal to the sum of—
‘‘(i) with respect to each Individual
Development Account opened during such
taxable year, $100, plus
‘‘(ii) with respect to each Individual
Development Account maintained during
such taxable year, $30.
‘‘(2) INFLATION ADJUSTMENT.—
‘‘(A) IN
GENERAL.—In the case of any
taxable year beginning after 2002, each dollar
amount referred to in paragraph (1)(B) shall be
increased by an amount equal to—
‘‘(i) such dollar amount, multiplied by
‘‘(ii) the cost-of-living adjustment de-
termined under section (1)(f)(3) for the
calendar year in which the taxable year be-
gins, by substituting ‘2001’ for ‘1992’.
‘‘(B) ROUNDING.—If any amount as ad-
justed under subparagraph (A) is not a multiple
of $5, such amount shall be rounded to the
nearest multiple of $5.
‘‘(d) ELIGIBLE ENTITY.—For purposes of this sec-
tion, the term ‘eligible entity’ means a qualified financial
institution, or 1 or more contractual affiliates of such an
institution as defined by the Secretary in regulations.
‘‘(e) OTHER DEFINITIONS.—For purposes of this
section, any term used in this section and also in the Com-
munity Solutions Act shall have the meaning given such
term by such Act.
‘‘(f) DENIAL OF DOUBLE BENEFIT.—No deduction
or credit (other than under this section) shall be allowed
under this chapter with respect to any expense which is
taken into account under subsection (c)(1)(A) in deter-
mining the credit under this section.
‘‘(g) REGULATIONS.—The Secretary may prescribe
such regulations as may be necessary or appropriate to
carry out this section, including regulations providing for
a recapture of the credit allowed under this section (not-
withstanding any termination date described in subsection
(h)) in cases where there is a forfeiture under section
306(b) of the Community Solutions Act of 2001 in a sub-
sequent taxable year of any amount which was taken into
account in determining the amount of such credit.
‘‘(h) APPLICATION OF SECTION.—This section shall
apply to any expenditure made in any taxable year begin-
ning after December 31, 2001, and before January 1,
2009, with respect to any Individual Development Account
opened before January 1, 2007.’’.
(b) CONFORMING AMENDMENT.—The table of sec-
tions for subpart B of part IV of subchapter A of chapter
1 is amended by inserting after the item relating to section
30A the following new item:
‘‘Sec. 30B. Individual development account investment credit for qualified finan-
cial institutions.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 2001.
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as
the ‘‘Community Solutions Act of 2001’’.
(b) TABLE OF CONTENTS.—The table of con-
tents is as follows:
Sec. 1. Short title; table of contents.
TITLE I—CHARITABLE GIVING INCENTIVES PACKAGE
Sec. 101. Deduction for portion of charitable contributions to
be allowed to individuals who do not itemize de-
ductions.
Sec. 102. Tax-free distributions from individual retirement ac-
counts for charitable purposes.
Sec. 103. Increase in cap on corporate charitable contribu-
tions.
Sec. 104. Charitable donations liability reform for in-kind cor-
porate contributions.
Sec. 105. Charitable deduction for contributions of food inven-
tory.
Sec. 106. Reform of excise tax on net investment income of pri-
vate foundations.
Sec. 107. Excise tax on unrelated business taxable income of
charitable remainder trusts.
Sec. 108. Expansion of charitable contribution allowed for sci-
entific property used for research and for com-
puter technology and equipment used for edu-
cational purposes.
Sec. 109. Adjustment to basis of S corporation stock for certain
charitable contributions.
TITLE II—EXPANSION OF CHARITABLE CHOICE
Sec. 201. Provision of assistance under government programs
by religious and community organizations.
TITLE III—INDIVIDUAL DEVELOPMENT ACCOUNTS
Sec. 301. Additional qualified entities eligible to conduct
projects under the Assets for Independence Act.
Sec. 302. Increase in limitation on net worth.
Sec. 303. Change in limitation on deposits for an individual.
Sec. 304. Elimination of limitation on deposits for a household.
Sec. 305. Extension of program.
Sec. 306. Conforming amendments.
Sec. 307. Applicability.
TITLE I—CHARITABLE GIVING
INCENTIVES PACKAGE
SEC. 101. DEDUCTION FOR PORTION OF CHARITABLE CON-
TRIBUTIONS TO BE ALLOWED TO INDIVID-
UALS WHO DO NOT ITEMIZE DEDUCTIONS.
(a) IN GENERAL.—Section 170 of the Inter-
nal Revenue Code of 1986 (relating to chari-
table, etc., contributions and gifts) is amended
by redesignating subsection (m) as subsection
(n) and by inserting after subsection (l) the
following new subsection:
‘‘(m) DEDUCTION
FOR
INDIVIDUALS
NOT
ITEMIZING DEDUCTIONS.—
‘‘(1) IN GENERAL.—In the case of an in-
dividual who does not itemize his deduc-
tions for the taxable year, there shall be
taken into account as a direct charitable
deduction under section 63 an amount
equal to the lesser of—
‘‘(A) the amount allowable under
subsection (a) for the taxable year for
cash contributions, or
‘‘(B) the applicable amount.
‘‘(2) APPLICABLE
AMOUNT.—For pur-
poses of paragraph (1), the applicable
amount shall be determined as follows:
‘‘For taxable years
The applicable
beginning in:
amount is:
2002 and 2003 ......................................................
$25
2004, 2005, 2006 ..................................................
$50
2007, 2008, 2009 ..................................................
$75
2010 and thereafter ...........................................
$100.
In the case of a joint return, the applica-
ble 
amount 
is 
twice 
the 
applicable
amount determined under the preceding
table.’’.
(b) DIRECT CHARITABLE DEDUCTION.—
(1) IN GENERAL.—Subsection (b) of sec-
tion 63 of such Code is amended by strik-
ing ‘‘and’’ at the end of paragraph (1), by
striking the period at the end of para-
graph (2) and inserting ‘‘, and’’, and by
adding at the end thereof the following
new paragraph:
‘‘(3) the direct charitable deduction.’’.
(2) DEFINITION.—Section 63 of such
Code is amended by redesignating sub-
section (g) as subsection (h) and by in-
serting after subsection (f) the following
new subsection:
‘‘(g) DIRECT CHARITABLE DEDUCTION.—For
purposes of this section, the term ‘direct char-
itable deduction’ means that portion of the
amount allowable under section 170(a) which
is taken as a direct charitable deduction for
the taxable year under section 170(m).’’.
(3) 
CONFORMING
AMENDMENT.—Sub-
section (d) of section 63 of such Code is
amended by striking ‘‘and’’ at the end of
paragraph (1), by striking the period at
the end of paragraph (2) and inserting ‘‘,
and’’, and by adding at the end thereof
the following new paragraph:
‘‘(3) the direct charitable deduction.’’.
(c) EFFECTIVE
DATE.—The amendments
made by this section shall apply to taxable
years beginning after December 31, 2001.
SEC. 102. TAX-FREE DISTRIBUTIONS FROM INDIVIDUAL RE-
TIREMENT 
ACCOUNTS 
FOR 
CHARITABLE
PURPOSES.
(a) IN GENERAL.—Subsection (d) of section
408 of the Internal Revenue Code of 1986 (re-
lating to individual retirement accounts) is
amended by adding at the end the following
new paragraph:
‘‘(8) DISTRIBUTIONS
FOR
CHARITABLE
PURPOSES.—
‘‘(A) 
IN
GENERAL.—No 
amount
shall be includible in gross income by
reason of a qualified charitable dis-
tribution.
‘‘(B) QUALIFIED
CHARITABLE
DIS-
TRIBUTION.—For 
purposes 
of 
this
paragraph, the term ‘qualified chari-
table distribution’ means any dis-
tribution from an individual retire-
ment account—
‘‘(i) which is made on or after
the date that the individual for
whose 
benefit 
the 
account 
is
maintained has attained age 701⁄2,
and
‘‘(ii) which is made directly by
the trustee—
‘‘(I) to an organization de-
scribed in section 170(c), or
‘‘(II) to a split-interest en-
tity.
A distribution shall be treated as a
qualified charitable distribution only
to the extent that the distribution
would be includible in gross income
without regard to subparagraph (A)
and, in the case of a distribution to a
split-interest entity, only if no person
holds an income interest in the
amounts in the split-interest entity
attributable 
to 
such 
distribution
other than one or more of the fol-
lowing: the individual for whose ben-
efit such account is maintained, the
spouse of such individual, or any or-
ganization 
described 
in 
section
170(c).
‘‘(C) CONTRIBUTIONS MUST BE OTH-
ERWISE DEDUCTIBLE.—For purposes of
this paragraph—
‘‘(i) DIRECT CONTRIBUTIONS.—A
distribution to an organization
described in section 170(c) shall
be treated as a qualified chari-
table distribution only if a deduc-
tion for the entire distribution
would be allowable under section
170 (determined without regard
to subsection (b) thereof and this
paragraph).
‘‘(ii) SPLIT-INTEREST
GIFTS.—A
distribution to a split-interest en-
tity shall be treated as a qualified
charitable distribution only if a
deduction for the entire value of
the interest in the distribution for
the use of an organization de-
scribed in section 170(c) would be
allowable under section 170 (de-
termined without regard to sub-
section (b) thereof and this para-
graph).
‘‘(D) APPLICATION OF SECTION 72.—
Notwithstanding section 72, in deter-
mining the extent to which a distribu-
tion is a qualified charitable distribu-
tion, the entire amount of the dis-
tribution shall be treated as includ-
ible in gross income without regard
to subparagraph (A) to the extent
that such amount does not exceed the
aggregate amount which would be so
includible if all amounts were distrib-
uted from all individual retirement
accounts otherwise taken into ac-
count in determining the inclusion on
such distribution under section 72.
Proper adjustments shall be made in
applying section 72 to other distribu-
tions in such taxable year and subse-
quent taxable years.
‘‘(E) SPECIAL
RULES
FOR
SPLIT-IN-
TEREST ENTITIES.—
‘‘(i) 
CHARITABLE
REMAINDER
TRUSTS.—Distributions made from
an individual retirement account
to a trust described in subpara-
graph (G)(ii)(I) shall be treated as
income 
described 
in 
section
664(b)(1) except to the extent that
the beneficiary of the individual
retirement account notifies the
trustee of the trust of the amount
which is not allocable to income
under subparagraph (D).
‘‘(ii) POOLED
INCOME
FUNDS.—
No amount shall be includible in
the gross income of a pooled in-
come fund (as defined in subpara-
graph (G)(ii)(II)) by reason of a
qualified charitable distribution
to such fund.
‘‘(iii) CHARITABLE
GIFT
ANNU-
ITIES.—Qualified 
charitable 
dis-
tributions made for a charitable
gift annuity shall not be treated
as an investment in the contract.
‘‘(F) DENIAL OF DEDUCTION.—Quali-
fied charitable distributions shall not
be taken into account in determining
the deduction under section 170.
‘‘(G) SPLIT-INTEREST
ENTITY
DE-
FINED.—For purposes of this para-
graph, the term ‘split-interest entity’
means—
‘‘(i) a charitable remainder
annuity trust or a charitable re-
mainder unitrust (as such terms
are defined in section 664(d)),
‘‘(ii) a pooled income fund (as
defined in section 642(c)(5)), and
‘‘(iii) a charitable gift annuity
(as defined in section 501(m)(5)).’’.
(b) MODIFICATIONS RELATING TO INFORMA-
TION RETURNS BY CERTAIN TRUSTS.—
(1) RETURNS.—Section 6034 of such
Code (relating to returns by trusts de-
scribed in section 4947(a)(2) or claiming
charitable 
deductions 
under 
section
642(c)) is amended to read as follows:
‘‘SEC. 6034. RETURNS BY TRUSTS DESCRIBED IN SECTION
4947(a)(2) OR CLAIMING CHARITABLE DEDUC-
TIONS UNDER SECTION 642(c).
‘‘(a) 
TRUSTS
DESCRIBED
IN
SECTION
4947(a)(2).—Every trust described in section
4947(a)(2) shall furnish such information with
respect to the taxable year as the Secretary
may by forms or regulations require.
‘‘(b) TRUSTS CLAIMING
A CHARITABLE DE-
DUCTION UNDER SECTION 642(c).—
‘‘(1) IN GENERAL.—Every trust not re-
quired to file a return under subsection
(a) but claiming a charitable, etc., deduc-
tion under section 642(c) for the taxable
year shall furnish such information with
respect to such taxable year as the Sec-
retary may by forms or regulations pre-
scribe, including:
‘‘(A) the amount of the charitable,
etc., deduction taken under section
642(c) within such year,
‘‘(B) the amount paid out within
such year which represents amounts
for which charitable, etc., deductions
under section 642(c) have been taken
in prior years,
‘‘(C) the amount for which chari-
table, etc., deductions have been
taken in prior years but which has
not been paid out at the beginning of
such year,
‘‘(D) the amount paid out of prin-
cipal in the current and prior years
for charitable, etc., purposes,
‘‘(E) the total income of the trust
within such year and the expenses at-
tributable thereto, and
‘‘(F) a balance sheet showing the
assets, liabilities, and net worth of
the trust as of the beginning of such
year.
‘‘(2) EXCEPTIONS.—Paragraph (1) shall
not apply in the case of a taxable year if
all the net income for such year, deter-
mined under the applicable principles of
the law of trusts, is required to be dis-
tributed currently to the beneficiaries.
Paragraph (1) shall not apply in the case
of 
a 
trust 
described 
in 
section
4947(a)(1).’’.
(2) INCREASE IN PENALTY RELATING TO
FILING OF INFORMATION RETURN BY SPLIT-
INTEREST
TRUSTS.—Paragraph (2) of sec-
tion 6652(c) of such Code (relating to re-
turns by exempt organizations and by
certain trusts) is amended by adding at
the end the following new subparagraph:
‘‘(C) 
SPLIT-INTEREST
TRUSTS.—In
the case of a trust which is required
to file a return under section 6034(a),
subparagraphs (A) and (B) of this
paragraph shall not apply and para-
graph (1) shall apply in the same
manner as if such return were re-
quired under section 6033, except
that—
‘‘(i) the 5 percent limitation in
the second sentence of paragraph
(1)(A) shall not apply,
‘‘(ii) in the case of any trust
with gross income in excess of
$250,000, the first sentence of
paragraph (1)(A) shall be applied
by substituting ‘$100’ for ‘$20’, and
the second sentence thereof shall
be 
applied 
by 
substituting
‘$50,000’ for ‘$10,000’, and
‘‘(iii) the third sentence of
paragraph (1)(A) shall be dis-
regarded.
If the person required to file such re-
turn knowingly fails to file the re-
turn, such person shall be personally
liable for the penalty imposed pursu-
ant to this subparagraph.’’.
(3) 
CONFIDENTIALITY
OF
NONCHARI-
TABLE
BENEFICIARIES.—Subsection (b) of
section 6104 of such Code (relating to in-
spection of annual information returns)
is amended by adding at the end the fol-
lowing new sentence: ‘‘In the case of a
trust which is required to file a return
under section 6034(a), this subsection
shall not apply to information regarding
beneficiaries which are not organizations
described in section 170(c).’’.
(c) EFFECTIVE DATES.—
(1) SUBSECTION (a).—The amendment
made by subsection (a) shall apply to tax-
able years beginning after December 31,
2001.
(2) SUBSECTION (b).—The amendments
made by subsection (b) shall apply to re-
turns for taxable years beginning after
December 31, 2001.
SEC. 103. INCREASE IN CAP ON CORPORATE CHARITABLE
CONTRIBUTIONS.
(a) IN GENERAL.—Paragraph (2) of section
170(b) of the Internal Revenue Code of 1986
(relating to corporations) is amended by strik-
ing ‘‘10 percent’’ and inserting ‘‘the applicable
percentage’’.
(b) APPLICABLE PERCENTAGE.—Subsection
(b) of section 170 of such Code is amended by
adding at the end the following new para-
graph:
‘‘(3) 
APPLICABLE
PERCENTAGE
DE-
FINED.—For purposes of paragraph (2),
the applicable percentage shall be deter-
mined in accordance with the following
table:
‘‘For taxable years beginning
The applicable
in calendar year—
percentage is—
2002 through 2007 ..............................................
2008 .......................................................................
2009 .......................................................................
2010 and thereafter ...........................................
15.’’.
(c) CONFORMING AMENDMENTS.—
(1) 
Sections 
512(b)(10) 
and
805(b)(2)(A) 
of 
such 
Code 
are 
each
amended by striking ‘‘10 percent’’ each
place it occurs and inserting ‘‘the applica-
ble percentage (determined under section
170(b)(3))’’.
(2) Sections 545(b)(2) and 556(b)(2) of
such Code are each amended by striking
‘‘10-percent limitation’’ and inserting ‘‘ap-
plicable percentage limitation’’.
(d) EFFECTIVE
DATE.—The amendments
made by this section shall apply to taxable
years beginning after December 31, 2001.
SEC. 104. CHARITABLE DONATIONS LIABILITY REFORM
FOR IN-KIND CORPORATE CONTRIBUTIONS.
(a) DEFINITIONS.—For purposes of this sec-
tion:
(1) AIRCRAFT.—The term ‘‘aircraft’’ has
the meaning provided that term in sec-
tion 40102(6) of title 49, United States
Code.
(2) BUSINESS ENTITY.—The term ‘‘busi-
ness entity’’ means a firm, corporation,
association, 
partnership, 
consortium,
joint venture, or other form of enterprise.
(3) 
EQUIPMENT.—The 
term 
‘‘equip-
ment’’ includes mechanical equipment,
electronic equipment, and office equip-
ment.
(4) 
FACILITY.—The 
term 
‘‘facility’’
means any real property, including any
building, improvement, or appurtenance.
(5) 
GROSS
NEGLIGENCE.—The 
term
‘‘gross negligence’’ means voluntary and
conscious conduct by a person with
knowledge (at the time of the conduct)
that the conduct is likely to be harmful to
the health or well-being of another per-
son.
(6) 
INTENTIONAL
MISCONDUCT.—The
term 
‘‘intentional 
misconduct’’ 
means
conduct by a person with knowledge (at
the time of the conduct) that the conduct
is harmful to the health or well-being of
another person.
(7) MOTOR VEHICLE.—The term ‘‘motor
vehicle’’ has the meaning provided that
term in section 30102(6) of title 49, United
States Code.
(8) 
NONPROFIT
ORGANIZATION.—The
term ‘‘nonprofit organization’’ means—
(A) any organization described in
section 501(c)(3) of the Internal Rev-
enue Code of 1986 and exempt from
tax under section 501(a) of such Code;
or
(B) any not-for-profit organization
organized and conducted for public
benefit and operated primarily for
charitable, civic, educational, reli-
gious, welfare, or health purposes.
(9) STATE.—The term ‘‘State’’ means
each of the several States, the District of
Columbia, the Commonwealth of Puerto
Rico, the Virgin Islands, Guam, American
Samoa, the Northern Mariana Islands,
any other territory or possession of the
United States, or any political subdivi-
sion of any such State, territory, or pos-
session.
(b) LIABILITY.—
(1) LIABILITY
OF
BUSINESS
ENTITIES
THAT DONATE EQUIPMENT TO NONPROFIT OR-
GANIZATIONS.—
(A) IN
GENERAL.—Subject to sub-
section (c), a business entity shall not
be subject to civil liability relating to
any injury or death that results from
the use of equipment donated by a
business entity to a nonprofit organi-
zation.
(B) APPLICATION.—This paragraph
shall apply with respect to civil liabil-
ity under Federal and State law.
(2) LIABILITY
OF
BUSINESS
ENTITIES
PROVIDING USE OF FACILITIES TO NONPROFIT
ORGANIZATIONS.—
(A) IN
GENERAL.—Subject to sub-
section (c), a business entity shall not
be subject to civil liability relating to
any injury or death occurring at a fa-
cility of the business entity in connec-
tion with a use of such facility by a
nonprofit organization, if—
(i) the use occurs outside of
the scope of business of the busi-
ness entity;
(ii) such injury or death oc-
curs during a period that such fa-
cility is used by the nonprofit or-
ganization; and
(iii) the business entity au-
thorized the use of such facility
by the nonprofit organization.
(B) APPLICATION.—This paragraph
shall apply—
(i) with respect to civil liabil-
ity under Federal and State law;
and
(ii) regardless of whether a
nonprofit organization pays for
the use of a facility.
(3) LIABILITY
OF
BUSINESS
ENTITIES
PROVIDING USE OF A MOTOR VEHICLE OR AIR-
CRAFT.—
(A) IN
GENERAL.—Subject to sub-
section (c), a business entity shall not
be subject to civil liability relating to
any injury or death occurring as a re-
sult of the operation of aircraft or a
motor vehicle of a business entity
loaned to a nonprofit organization for
use outside of the scope of business of
the business entity, if—
(i) such injury or death occurs
during a period that such motor
vehicle or aircraft is used by a
nonprofit organization; and
(ii) the business entity author-
ized the use by the nonprofit or-
ganization of motor vehicle or air-
craft that resulted in the injury
or death.
(B) APPLICATION.—This paragraph
shall apply—
(i) with respect to civil liabil-
ity under Federal and State law;
and
(ii) regardless of whether a
nonprofit organization pays for
the use of the aircraft or motor
vehicle.
(4) LIABILITY
OF
BUSINESS
ENTITIES
PROVIDING TOURS OF FACILITIES.—
(A) IN
GENERAL.—Subject to sub-
section (c), a business entity shall not
be subject to civil liability relating to
any injury to, or death of an indi-
vidual occurring at a facility of the
business entity, if—
(i) such injury or death occurs
during a tour of the facility in an
area of the facility that is not oth-
erwise accessible to the general
public; and
(ii) the business entity author-
ized the tour.
(B) APPLICATION.—This paragraph
shall apply—
(i) with respect to civil liabil-
ity under Federal and State law;
and
(ii) regardless of whether an
individual pays for the tour.
(c) EXCEPTIONS.—Subsection (b) shall not
apply to an injury or death that results from
an act or omission of a business entity that
constitutes gross negligence or intentional
misconduct, including any misconduct that—
(1) constitutes a crime of violence (as
that term is defined in section 16 of title
18, United States Code) or act of inter-
national terrorism (as that term is de-
fined in section 2331 of title 18, United
States Code) for which the defendant has
been convicted in any court;
(2) constitutes a hate crime (as that
term is used in the Hate Crime Statistics
Act (28 U.S.C. 534 note));
(3) involves a sexual offense, as de-
fined by applicable State law, for which
the defendant has been convicted in any
court; or
(4) involves misconduct for which the
defendant has been found to have vio-
lated a Federal or State civil rights law.
(d) SUPERSEDING PROVISION.—
(1) IN GENERAL.—Subject to paragraph
(2) and subsection (e), this title preempts
the laws of any State to the extent that
such laws are inconsistent with this title,
except that this title shall not preempt
any State law that provides additional
protection for a business entity for an in-
jury or death described in a paragraph of
subsection (b) with respect to which the
conditions specified in such paragraph
apply.
(2) LIMITATION.—Nothing in this title
shall be construed to supersede any Fed-
eral or State health or safety law.
(e) ELECTION
OF STATE REGARDING NON-
APPLICABILITY.—A provision of this title shall
not apply to any civil action in a State court
against a business entity in which all parties
are citizens of the State if such State enacts
a statute—
(1) citing the authority of this section;
(2) declaring the election of such
State that such provision shall not apply
to such civil action in the State; and
(3) containing no other provisions.
(f) EFFECTIVE DATE.—This section shall
apply to injuries (and deaths resulting there-
from) occurring on or after the date of the en-
actment of this Act.
SEC. 105. CHARITABLE DEDUCTION FOR CONTRIBUTIONS
OF FOOD INVENTORY.
(a) IN GENERAL.—Paragraph (3) of section
170(e) of the Internal Revenue Code of 1986
(relating to special rule for certain contribu-
tions of inventory and other property) is
amended by redesignating subparagraph (C)
as subparagraph (D) and by inserting after
subparagraph (B) the following new subpara-
graph:
‘‘(C) SPECIAL RULE FOR CONTRIBU-
TIONS OF FOOD INVENTORY.—
‘‘(i) GENERAL
RULE.—In the
case of a charitable contribution
of food, this paragraph shall be
applied—
‘‘(I) 
without 
regard 
to
whether the contribution is
made by a C corporation, and
‘‘(II) only for food that is
apparently wholesome food.
‘‘(ii) DETERMINATION
OF
FAIR
MARKET VALUE.—In the case of a
qualified contribution of appar-
ently wholesome food to which
this paragraph applies and which,
solely by reason of internal stand-
ards of the taxpayer or lack of
market, cannot or will not be
sold, the fair market value of such
food shall be determined by tak-
ing into account the price at
which the same or similar food
items are sold by the taxpayer at
the time of the contribution (or, if
100
not so sold at such time, in the re-
cent past).
‘‘(iii) APPARENTLY
WHOLESOME
FOOD.—For purposes of this sub-
paragraph, the term ‘apparently
wholesome food’ shall have the
meaning given to such term by
section 22(b)(2) of the Bill Emer-
son Good Samaritan Food Dona-
tion Act (42 U.S.C. 1791(b)(2)), as
in effect on the date of the enact-
ment of this subparagraph.’’.
(b) EFFECTIVE
DATE.—The amendment
made by subsection (a) shall apply to taxable
years beginning after December 31, 2001.
SEC. 106. REFORM OF EXCISE TAX ON NET INVESTMENT IN-
COME OF PRIVATE FOUNDATIONS.
(a) IN GENERAL.—Subsection (a) of section
4940 of the Internal Revenue Code of 1986 (re-
lating to excise tax based on investment in-
come) is amended by striking ‘‘2 percent’’ and
inserting ‘‘1 percent’’.
(b) REPEAL OF REDUCTION IN TAX WHERE
PRIVATE FOUNDATION MEETS CERTAIN DISTRIBU-
101
TION
REQUIREMENTS.—Section 4940 of such
Code is amended by striking subsection (e).
(c) EFFECTIVE
DATE.—The amendments
made by this section shall apply to taxable
years beginning after December 31, 2001.
SEC. 107. EXCISE TAX ON UNRELATED BUSINESS TAXABLE
INCOME 
OF 
CHARITABLE 
REMAINDER
TRUSTS.
(a) IN GENERAL.—Subsection (c) of section
664 of the Internal Revenue Code of 1986 (re-
lating to exemption from income taxes) is
amended to read as follows:
‘‘(c) TAXATION OF TRUSTS.—
‘‘(1) INCOME
TAX.—A charitable re-
mainder annuity trust and a charitable
remainder unitrust shall, for any taxable
year, not be subject to any tax imposed
by this subtitle.
‘‘(2) EXCISE TAX.—
‘‘(A) IN GENERAL.—In the case of a
charitable remainder annuity trust or
a charitable remainder unitrust that
has unrelated business taxable in-
come (within the meaning of section
512, determined as if part III of sub-