I
106TH CONGRESS
1ST SESSION
H. R. 1607
To assist States in providing individuals a credit against State income taxes
or a comparable benefit for contributions to charitable organizations
working to prevent or reduce poverty and protect and encourage dona-
tions to charitable organizations, to prohibit discrimination against non-
governmental organizations and certain individuals on the basis of reli-
gion in the distribution of government funds to provide government
assistance and the distribution of such assistance, to allow such organiza-
tions to accept such funds to provide such assistance without impairing
the religious character of such organizations, to provide for tax-free
distributions from individual retirement accounts for charitable purposes,
and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
APRIL 28, 1999
Mr. KASICH (for himself, Mr. SOUDER, Mr. PITTS, Ms. GRANGER, Mr. WAMP,
Mr. MCINTOSH, Mr. TIAHRT, Mr. DEMINT, Mr. PICKERING, Mr. ROGAN,
and Mr. WATTS of Oklahoma) introduced the following bill; which was
referred to the Committee on Ways and Means, and in addition to the
Committee on the Judiciary, 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 assist States in providing individuals a credit against
State income taxes or a comparable benefit for contribu-
tions to charitable organizations working to prevent or
reduce poverty and protect and encourage donations to
charitable 
organizations, 
to 
prohibit 
discrimination
against nongovernmental organizations and certain indi-
viduals on the basis of religion in the distribution of
government funds to provide government assistance and
the distribution of such assistance, to allow such organi-
zations to accept such funds to provide such assistance
without impairing the religious character of such organi-
zations, to provide for tax-free distributions from indi-
vidual retirement accounts for charitable purposes, 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; TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Charity Empowerment Act of 1999’’.
(b) TABLE OF CONTENTS.—The table of contents for
this Act is as follows:
Sec. 1. Short title; table of contents.
TITLE I—ASSISTANCE TO STATES IN PROVIDING CHARITY TAX
CREDITS
Sec. 101. Authority to use certain Federal grant funds for State charity tax
credit.
Sec. 102. Definitions.
Sec. 103. Study and report.
Sec. 104. Effective date.
TITLE II—BUDGET OFFSET
Sec. 201. Reduction of earned income credit for individuals without children.
TITLE III—TORT REFORMS RELATING TO CHARITABLE
CONTRIBUTIONS
Sec. 301. Definitions.
Sec. 302. Liability.
Sec. 303. Exceptions.
Sec. 304. Superseding provision.
Sec. 305. Election of State regarding nonapplicability.
Sec. 306. Effective date.
TITLE IV—CHARITABLE CHOICE EXPANSION ACT
Sec. 401. Provision of assistance under government programs by religious orga-
nizations.
TITLE V—TAX-FREE DISTRIBUTIONS FROM INDIVIDUAL
RETIREMENT ACCOUNTS FOR CHARITABLE PURPOSES
Sec. 501. Tax-free distributions from individual retirement accounts for chari-
table purposes.
TITLE 
I—ASSISTANCE 
TO
STATES IN PROVIDING CHAR-
ITY TAX CREDITS
SEC. 101. AUTHORITY TO USE CERTAIN FEDERAL GRANT
FUNDS FOR STATE CHARITY TAX CREDIT.
(a) IN GENERAL.—Notwithstanding any other provi-
sion of law, if there is in effect under State law a charity
tax credit, then the State may use for any purpose—
(1) not more than 50 percent of the total
amount paid to the State during the fiscal year
under the provisions of law specified in subsection
(d)(1);
(2) not more than 50 percent of the total
amount paid to the State during the fiscal year
under the provisions of law specified in subsection
(d)(2);
(3) not more than 50 percent of the total
amount paid to the State during the fiscal year
under the provisions of law specified in subsection
(d)(3);
(4) not more than 50 percent of the total
amount paid to the State during the fiscal year
under the law specified in subsection (d)(4);
(5) not more than 50 percent of the total
amount paid to the State during the fiscal year
under the law specified in subsection (d)(5);
(6) not more than 50 percent of the total
amount paid to the State during the fiscal year
under the law specified in subsection (d)(6); and
(7) not more than 50 percent of the total
amount paid to the State during the fiscal year
under the law specified in subsection (d)(7).
(b) LIMITATION.—The aggregate amount a State
may use under subsection (a) during a fiscal year shall
not exceed 100 percent of the revenue loss of the State
during the fiscal year that is attributable to the charity
tax credit, as determined by the Secretary of the Treasury
without regard to any such revenue loss occurring before
January 1, 2000.
(c) CERTAIN CREDIT AMOUNTS TREATED AS STATE
PAYMENT
FOR TEMPORARY ASSISTANCE
FOR NEEDY
FAMILIES.—For purposes of title IV of the Social Security
Act, an amount equal to the excess (if any) of—
(1) the amount of the revenue loss of a State
(not to exceed 100 percent) during a fiscal year that
is attributable to the charity tax credit, as deter-
mined under subsection (b), over
(2) the aggregate amount used by the State
under subsection (a) during the fiscal year,
shall be treated as an amount used during the fiscal year
by the State to carry out a State program funded under
part A of such title.
(d) PROVISIONS OF LAW.—The provisions of law re-
ferred to in this subsection are the following:
(1) Paragraphs (1) through (4) of section
403(a) of the Social Security Act (42 U.S.C.
603(a)).
(2) The Child Care and Development Block
Grant Act of 1990 (42 U.S.C. 9858–9858q), and
section 418 of the Social Security Act (42 U.S.C.
618).
(3) Sections 2002 and 2007 of the Social Secu-
rity Act (42 U.S.C. 1397a and 1397f).
(4) The Community Services Block Grant Act
(42 U.S.C. 9901–9912).
(5) The Low-Income Home Energy Assistance
Act of 1981.
(6) The Job Training Partnership Act (29
U.S.C. 1501 et seq.).
(7) Title I of the Housing and Community De-
velopment Act of 1974 (42 U.S.C. 5301 et seq.).
SEC. 102. DEFINITIONS.
(a) CHARITY TAX CREDIT.—For purposes of this
title, the term ‘‘charity tax credit’’ means a nonrefundable
credit against State income tax (or, in the case of a State
which does not impose an income tax, a comparable ben-
efit)—
(1) which is allowable only to individuals for
cash contributions to qualified charities,
(2) the maximum amount of which for each
taxable year does not exceed $250 ($500 in the case
of a joint or combined return of individuals who are
married to each other), and
(3) under which the annual amount of the cred-
it allowed per taxpayer is not more than $50 ($100
in the case of a joint or combined return of individ-
uals who are married to each other) in the first year
and increased by not more than $50 ($100 in the
case of a joint or combined return of individuals who
are married to each other) for each subsequent year.
(b) QUALIFIED CHARITY.—For purposes of this
title—
(1) IN GENERAL.—The term ‘‘qualified charity’’
means any organization—
(A) which is described in section 501(c)(3)
of the Internal Revenue Code of 1986 and ex-
empt from tax under section 501(a) of such
Code,
(B) which is certified by the appropriate
State authority as meeting the requirements of
paragraphs (3) and (4), and
(C) if such organization is otherwise re-
quired to file a return under section 6033 of
such Code, which elects to treat the information
required to be furnished by paragraph (5) as
being specified in section 6033(b) of such Code.
(2) CERTAIN CONTRIBUTIONS TO COLLECTION
ORGANIZATIONS
TREATED
AS
CONTRIBUTIONS
TO
QUALIFIED CHARITY.—
(A) IN GENERAL.—A contribution to a col-
lection organization shall be treated as a con-
tribution to a qualified charity if the donor des-
ignates in writing that the contribution is for
the qualified charity.
(B) 
COLLECTION
ORGANIZATION.—The
term ‘‘collection organization’’ means an organi-
zation described in section 501(c)(3) of such
Code and exempt from tax under section 501(a)
of such Code—
(i) which solicits and collects gifts and
grants which, by agreement, are distrib-
uted to qualified charities described in
paragraph (1),
(ii) which distributes to qualified
charities described in paragraph (1) at
least 90 percent of the gifts and grants it
receives that are designated for such quali-
fied charities, and
(iii) which meets the requirements of
paragraph (6).
(3) CHARITY MUST PRIMARILY ASSIST POOR IN-
DIVIDUALS.—
(A) IN GENERAL.—An organization meets
the requirements of this paragraph only if the
appropriate State authority reasonably expects
that the predominant activity of such organiza-
tion will be the provision of direct services with-
in the United States to individuals and families
whose annual incomes generally do not exceed
185 percent of the official poverty line (as de-
fined by the Office of Management and Budget)
in order to prevent or alleviate poverty among
such individuals and families.
(B) NO
RECORDKEEPING
IN
CERTAIN
CASES.—An organization shall not be required
to establish or maintain records with respect to
the incomes of individuals and families for pur-
poses of subparagraph (A) if such individuals or
families are members of groups which are gen-
erally recognized as including substantially only
individuals and families described in subpara-
graph (A).
(C) FOOD
AID
AND
HOMELESS
SHEL-
TERS.—Except as otherwise provided by the ap-
propriate State authority, for purposes of sub-
paragraph (A), services to individuals in the
form of—
(i) donations of food or meals, or
(ii) temporary shelter to homeless in-
dividuals,
shall be treated as provided to individuals de-
scribed in subparagraph (A) if the location and
operation of such services are such that the
service provider may reasonably conclude that
the beneficiaries of such services are predomi-
nantly individuals described in subparagraph
(A).
(4) MINIMUM EXPENSE REQUIREMENT.—
(A) IN GENERAL.—An organization meets
the requirements of this paragraph only if the
appropriate State authority reasonably expects
that the annual poverty program expenses of
such organization will not be less than 75 per-
cent of the annual aggregate expenses of such
organization.
(B) POVERTY
PROGRAM
EXPENSE.—For
purposes of subparagraph (A)—
(i) IN GENERAL.—The term ‘‘poverty
program expense’’ means any expense in
providing program services referred to in
paragraph (3).
(ii) EXCEPTIONS.—Such term shall
not include—
(I) any management or general
expense,
(II) any expense for the purpose
of influencing legislation (as defined
in section 4911(d) of the Internal
Revenue Code of 1986),
(III) any expense for the purpose
of fundraising,
(IV) any expense for a legal serv-
ice provided on behalf of any indi-
vidual referred to in paragraph (3),
and
(V) any expense which consists of
a payment to an affiliate of the orga-
nization.
(5) REPORTING REQUIREMENT.—The informa-
tion required to be furnished under this paragraph
is—
(A) the percentages determined by dividing
the following categories of the organization’s ex-
penses for the year by its total expenses for the
year: program services, management expenses,
general expenses, fundraising expenses, and
payments to affiliates, and
(B) the category or categories (including
food, shelter, education, substance abuse, job
training, or otherwise) of services which con-
stitute its predominant activities.
(6) ADDITIONAL REQUIREMENTS FOR SOLICITA-
TION
ORGANIZATIONS.—The requirements of this
paragraph are met if the organization—
(A) maintains separate accounting for rev-
enues and expenses, and
(B) makes available to the public its ad-
ministrative and fundraising costs and informa-
tion as to the organizations receiving funds
from it and the amount of such funds.
(7) RECOMMENDATIONS.—It is recommended,
but not required, that—
(A) the definition of ‘‘qualified charity’’ be
further 
limited 
under 
State 
law 
to
organizations—
(i) which have been operating for at
least 1 year or are controlled by, or oper-
ated under the auspices of, organizations
which have been operating for at least one
year, and
(ii) with expenses of less than 5 per-
cent of total expenses for the purpose of
influencing legislation, litigation on behalf
of any individual referred to in paragraph
(3), voter registration, political organizing,
public policy advocacy, or public policy re-
search,
(B) subject to subsection (a)(2), the
amount of the credit be at least 50 percent and
not more than 90 percent of the amount of the
cash contributions to qualified charities, and
(C) contributions made not later than the
time prescribed by law for filing the return of
the State income tax for a taxable year (not in-
cluding extensions thereof) be treated as made
(at the taxpayer’s election) on the last day of
such year.
(8) SPECIAL RULE FOR STATES REQUIRING TAX
UNIFORMITY.—In the case of a State—
(A) which has a constitutional requirement
of tax uniformity, and
(B) which, as of December 31, 1997, im-
posed a tax on personal income with—
(i) a single flat rate applicable to all
earned and unearned income (except inso-
far as any amount is not taxed pursuant to
tax forgiveness provisions), and
(ii) no generally available exemptions
or deductions to individuals,
the requirement of subsection (a)(2) shall be treated
as met if the amount of the credit is limited to a
uniform percentage (but not greater than 25 per-
cent) of State personal income tax liability (deter-
mined without regard to credits).
(9) COORDINATION
WITH
FEDERAL
CHARI-
TABLE CONTRIBUTION DEDUCTION.—The amount of
the deduction allowed under the Internal Revenue
Code of 1986 for contributions which are taken into
account in determining any charity tax credit shall
be reduced by the amount of such credit which is al-
lowed.
(c) STATE.—For purposes of this title, 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.
SEC. 103. STUDY AND REPORT.
(a) STUDY.—The Comptroller General of the United
States shall conduct a study of the effects of the charity
tax credit under this title, including—
(1) the types of organizations which receive
contributions during the first year to which the cred-
it applies, and
(2) the types of services provided to the poor by
such organizations.
(b) REPORT.—The Comptroller General shall report
to the Congress the results of such study, including—
(1) the geographical distribution of funding
from charity tax credit contributions, and an anal-
ysis of Internal Revenue Service Form 990’s of
qualified charities to determine if the broad cat-
egories of services provided to the poor (including
food, shelter, education, substance abuse, job train-
ing, or otherwise) match the services that would oth-
erwise be provided by Federal welfare program
funds without the enactment of the reductions in the
programs permitted by this legislation, and
(2) 
any 
recommendations 
for 
legislative
changes.
SEC. 104. EFFECTIVE DATE.
This title shall take effect on January 1, 2000.
TITLE II—BUDGET OFFSET
SEC. 201. REDUCTION OF EARNED INCOME CREDIT FOR IN-
DIVIDUALS WITHOUT CHILDREN.
(a) IN GENERAL.—The table in subparagraph (A) of
section 32(b)(1) of the Internal Revenue Code of 1986 is
amended by striking the item relating to no qualifying
children and inserting the following:
‘‘No qualifying children ........................................................
3.825
7.651.’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to taxable years beginning after
December 31, 2001.
TITLE III—TORT REFORMS RE-
LATING TO CHARITABLE CON-
TRIBUTIONS
SEC. 301. DEFINITIONS.
In this title:
(1) AIRCRAFT.—The term ‘‘aircraft’’ has the
meaning provided that term in section 40102(6) of
title 49, United States Code.
(2) BUSINESS
ENTITY.—The term ‘‘business
entity’’ means a firm, corporation, association, part-
nership, consortium, joint venture, or other form of
enterprise.
(3) EQUIPMENT.—The term ‘‘equipment’’ in-
cludes mechanical equipment, electronic equipment,
and office equipment.
(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 con-
duct) that the conduct is likely to be harmful to the
health or well-being of another person.
(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 an-
other person.
(7) MOTOR VEHICLE.—The term ‘‘motor vehi-
cle’’ 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 Revenue Code of 1986
and exempt from tax under section 501(a) of
such Code; or
(B) any not-for-profit organization orga-
nized and conducted for public benefit and op-
erated primarily for charitable, civic, edu-
cational, religious, 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 Is-
lands, any other territory or possession of the
United States, or any political subdivision of any
such State, territory, or possession.
SEC. 302. LIABILITY.
(a) LIABILITY OF BUSINESS ENTITIES THAT DO-
NATE EQUIPMENT TO NONPROFIT ORGANIZATIONS.—
(1) IN GENERAL.—Subject to section 303, a
business entity shall not be subject to civil liability