of 1986) with respect to a principal resi-
dence (within the meaning of section 121
of such Code) for a qualified first-time
homebuyer 
(as 
defined 
in 
section
72(t)(8)(D)(i) of such Code).
(iv) QUALIFIED
BUSINESS
CAPITAL-
IZATION OR EXPANSION COSTS.—
(I) 
IN
GENERAL.—The 
term
‘‘qualified business capitalization or
expansion costs’’ means qualified ex-
penditures for the capitalization or ex-
pansion of a qualified business pursu-
ant to a qualified business plan.
(II) 
QUALIFIED
EXPENDI-
TURES.—The term ‘‘qualified expendi-
tures’’ means expenditures included in
a qualified business plan, including
capital, plant, equipment, working
capital, inventory expenses, attorney
and accounting fees, and other costs
normally associated with starting or
expanding a business.
(III) 
QUALIFIED
BUSINESS.—
The term ‘‘qualified business’’ means
any business that does not contravene
any law.
(IV) 
QUALIFIED
BUSINESS
PLAN.—The term ‘‘qualified business
plan’’ means a business plan which
has been approved by the qualified fi-
nancial institution, qualified nonprofit
organization, or Indian tribe and
which meets such requirements as the
Secretary may specify.
(v) 
QUALIFIED
ROLLOVERS.—The
term ‘‘qualified rollover’’ means the com-
plete distribution of the amounts in an In-
dividual Development Account and parallel
account to another Individual Development
Account and parallel account established in
another qualified financial institution for
the benefit of the account owner.
(vi) 
QUALIFIED
FINAL
DISTRIBU-
TION.—The term ‘‘qualified final distribu-
tion’’ means, in the case of a deceased ac-
count owner, the complete distribution of
the amounts in an Individual Development
Account and parallel account directly to
the spouse, any dependent, or other named
beneficiary of the deceased.
(9) SECRETARY.—The term ‘‘Secretary’’ means
the Secretary of the Treasury.
SEC. 204. STRUCTURE AND ADMINISTRATION OF QUALI-
FIED INDIVIDUAL DEVELOPMENT ACCOUNT
PROGRAMS.
(a) ESTABLISHMENT OF QUALIFIED INDIVIDUAL DE-
VELOPMENT ACCOUNT PROGRAMS.—Any qualified finan-
cial institution, qualified nonprofit organization, or Indian
tribe may establish 1 or more qualified individual develop-
ment account programs which meet the requirements of
this Act.
(b) BASIC PROGRAM STRUCTURE.—
(1) IN GENERAL.—All qualified individual de-
velopment account programs shall consist of the fol-
lowing 2 components:
(A) An Individual Development Account to
which an eligible individual may contribute cash
in accordance with section 205.
(B) A parallel account to which all match-
ing funds shall be deposited in accordance with
section 206.
(2) TAILORED IDA PROGRAMS.—A qualified fi-
nancial institution, a qualified nonprofit organiza-
tion, or an Indian tribe may tailor its qualified indi-
vidual development account program to allow match-
ing funds to be spent on 1 or more of the categories
of qualified expenses.
(c) COORDINATION WITH PUBLIC HOUSING AGENCY
INDIVIDUAL SAVINGS ACCOUNTS.—Section 3(e)(2) of the
United States Housing Act of 1937 (42 U.S.C.
1437a(e)(2)) is amended by inserting ‘‘or in any Indi-
vidual Development Account established under the Sav-
ings for Working Families Act of 2001’’ after ‘‘sub-
section’’.
(d) TAX TREATMENT OF PARALLEL ACCOUNTS.—
Any account described in subparagraph (B) of subsection
(b)(1) is exempt from taxation under the Internal Revenue
Code of 1986.
SEC. 205. PROCEDURES FOR OPENING AND MAINTAINING
AN INDIVIDUAL DEVELOPMENT ACCOUNT
AND QUALIFYING FOR MATCHING FUNDS.
(a) OPENING AN ACCOUNT.—An eligible individual
may open an Individual Development Account with a
qualified financial institution, a qualified nonprofit organi-
zation, or an Indian tribe upon certification that such indi-
vidual has never maintained any other Individual Develop-
ment Account (other than an Individual Development Ac-
count to be terminated by a qualified rollover).
(b) REQUIRED COMPLETION OF FINANCIAL EDU-
CATION COURSE.—
(1) IN GENERAL.—Before becoming eligible to
withdraw matching funds to pay for qualified ex-
penses, owners of Individual Development Accounts
must complete a financial education course offered
by a qualified financial institution, a qualified non-
profit organization, an Indian tribe, or a government
entity.
(2) 
STANDARD
AND
APPLICABILITY
OF
COURSE.—The Secretary, in consultation with rep-
resentatives of qualified individual development ac-
count programs and financial educators, shall estab-
lish minimum quality standards for the contents of
financial education courses and providers of such
courses offered under paragraph (1) and a protocol
to exempt individuals from the requirement under
paragraph (1) in the case of hardship, lack of need,
the attainment of age 61, or a qualified final dis-
tribution.
(c) PROOF
OF STATUS
AS
AN ELIGIBLE INDI-
VIDUAL.—Federal income tax forms from the immediately
preceding taxable year shall be presented to the qualified
financial institution, qualified nonprofit organization, or
Indian tribe at the time of the establishment of the Indi-
vidual Development Account and in any taxable year in
which contributions are made to the Account to qualify
for matching funds under section 206(b)(1)(A).
(d) DIRECT DEPOSITS.—The Secretary may, under
regulations, provide for the direct deposit of any portion
(not less than $1) of any overpayment of Federal tax of
an individual as a contribution to the Individual Develop-
ment Account of such individual.
SEC. 206. DEPOSITS BY QUALIFIED INDIVIDUAL DEVELOP-
MENT ACCOUNT PROGRAMS.
(a) PARALLEL ACCOUNTS.—The qualified financial
institution, qualified nonprofit organization, or Indian
tribe shall deposit all matching funds for each Individual
Development Account into a parallel account at a qualified
financial institution.
(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 withdrawal request which meets
the requirements of section 207(a)(1), if necessary)
deposit into the parallel 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 2003, 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 ‘‘2002’’ 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 45G 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 later of—
(1) the day which is the 1-year anniversary of
the deposit of such funds in the parallel account, or
(2) the first day of the taxable year of such in-
dividual following the taxable year in which such in-
dividual attained age 61.
(d) UNIFORM ACCOUNTING REGULATIONS.—To en-
sure proper recordkeeping and determination of the tax
credit under section 45G 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. 207. WITHDRAWAL PROCEDURES.
(a) WITHDRAWALS FOR QUALIFIED EXPENSES.—
(1) IN GENERAL.—An Individual Development
Account owner may withdraw funds in order to pay
qualified expenses of such individual or such individ-
ual’s spouse or dependents from such individual’s—
(A) Individual Development Account, and
(B) parallel account, but only—
(i) from funds which have been on de-
posit in such parallel account for at least
1 year, and
(ii) if such withdrawal does not result
in a remaining balance in such parallel ac-
count which is less than the remaining bal-
ance in the Individual Development Ac-
count after such withdrawal.
(2) PROCEDURE.—Upon receipt of a with-
drawal request which meets the requirements of
paragraph (1), the qualified financial institution,
qualified nonprofit organization, or Indian tribe shall
directly transfer the funds electronically to the
distributees described in section 203(8)(A)(ii). If a
distributee is not equipped to receive funds electroni-
cally, the qualified financial institution, qualified
nonprofit organization, or Indian 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 an equal amount
of matching funds from the individual’s parallel account
by doing so.
(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 206(b)(1)(A) for contributions which are
made to the Account during any taxable year when such
individual is not an eligible individual.
(d) EFFECT
OF PLEDGING ACCOUNT
AS SECU-
RITY.—If, during any taxable year of the individual for
whose benefit an Individual Development Account is es-
tablished, that individual uses the Account or any portion
thereof as security for a loan, the portion so used shall
be treated as a withdrawal of such portion for purposes
other than to pay qualified expenses, and such individual
shall forfeit a proportionate amount of matching funds
from the individual’s parallel account.
(e) TAX TREATMENT OF MATCHING FUNDS.—Any
amount withdrawn from a parallel account shall not be
includible in the account holder’s gross income.
SEC. 208. 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 204, 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 204(b)(1) are operating pur-
suant to all the provisions of this Act; 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 Act is not operating a qualified
individual development account program in accordance
with the requirements of this Act (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. 209. REPORTING, MONITORING, AND EVALUATION.
(a) RESPONSIBILITIES OF QUALIFIED FINANCIAL IN-
STITUTIONS, QUALIFIED NONPROFIT ORGANIZATIONS,
AND INDIAN TRIBES.—
(1) IN GENERAL.—Each qualified financial in-
stitution, qualified nonprofit organization, or Indian
tribe that operates a qualified individual develop-
ment account program under section 204 shall re-
port annually to the Secretary within 90 days after
the end of each calendar year on—
(A) the number of eligible individuals mak-
ing contributions into Individual Development
Accounts;
(B) the amounts contributed into Indi-
vidual Development Accounts and deposited
into parallel accounts for matching funds;
(C) the amounts withdrawn from Indi-
vidual Development Accounts and parallel ac-
counts, and the purposes for which such
amounts were withdrawn;
(D) the balances remaining in Individual
Development Accounts and parallel accounts;
and
(E) 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-identifi-
able manner).
(2) ADDITIONAL REPORTING REQUIREMENTS.—
Each qualified financial institution, qualified non-
profit organization, or Indian tribe that operates a
qualified individual development account program
under section 204 shall report at such time and in
such manner as the Secretary may prescribe any ad-
ditional information that the Secretary requires to
be provided for purposes of administering and super-
vising the qualified individual development account
program. This additional data may include, without
limitation, identifying information about Individual
Development Account holders, their Accounts, addi-
tions to the Accounts, and withdrawals from the Ac-
counts.
(b) RESPONSIBILITIES OF THE SECRETARY.—
(1) MONITORING
PROTOCOL.—Not later than
12 months after the date of the enactment of this
Act, the Secretary, in consultation with the Sec-
retary of Health and Human Services, shall develop
and implement a protocol and process to monitor the
cost and outcomes of the qualified individual devel-
opment account programs established under section
204.
(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) process information on program imple-
mentation and administration, especially on
problems encountered and how problems were
solved.
SEC. 210. AUTHORIZATION OF APPROPRIATIONS.
There is authorized to be appropriated to the Sec-
retary $1,000,000 for fiscal year 2003 and for each fiscal
year through 2009, for the purposes of implementing this
Act, including the reporting, monitoring, and evaluation
required under section 209, to remain available until ex-
pended.
SEC. 211. 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. 212. MATCHING FUNDS FOR INDIVIDUAL DEVELOP-
MENT ACCOUNTS PROVIDED THROUGH A TAX
CREDIT FOR QUALIFIED FINANCIAL INSTITU-
TIONS.
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of
1986 (relating to business related credits) is amended by
adding at the end the following new section:
‘‘SEC. 45G. INDIVIDUAL DEVELOPMENT ACCOUNT INVEST-
MENT CREDIT.
‘‘(a) DETERMINATION OF AMOUNT.—For purposes of
section 38, the individual development account investment
credit determined under this section with respect to any
eligible entity for any taxable year is an amount equal to
the individual development account investment provided
by such eligible entity during the taxable year under an
individual development account program established under
section 204 of the Savings for Working Families 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 206(b)(1)(A) of the Savings for Working
Families Act of 2001 for such taxable year,
plus
‘‘(B) $50 with respect to each Individual
Development Account maintained as of the end
of such taxable year, with a balance of not less
than $100 (other than the taxable year in
which such Account is opened).
‘‘(2) INFLATION ADJUSTMENT.—
‘‘(A) IN
GENERAL.—In the case of any
taxable year beginning after 2003, the $50
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 ‘2002’ 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, except as provided in regulations, the term ‘eligible
entity’ means a qualified financial institution.
‘‘(e) OTHER DEFINITIONS.—For purposes of this
section, any term used in this section and also in the Sav-
ings for Working Families Act of 2001 shall have the
meaning given such term by such Act.
‘‘(f) DENIAL OF DOUBLE BENEFIT.—
‘‘(1) IN
GENERAL.—No deduction or credit
(other than under this section) shall be allowed
under this chapter with respect to any expense
which—
‘‘(A) is taken into account under sub-
section (c)(1)(A) in determining the credit
under this section, or
‘‘(B) is attributable to the maintenance of
an Individual Development Account.
‘‘(2) DETERMINATION OF AMOUNT.—Solely for
purposes of paragraph (1)(B), the amount attrib-
utable to the maintenance of an Individual Develop-
ment Account shall be deemed to be the dollar
amount of the credit allowed under subsection
(c)(l)(B) for each taxable year such Individual De-
velopment Account is maintained.
‘‘(g) REGULATIONS.—The Secretary may prescribe
such regulations as may be necessary or appropriate to
carry out this section, including—
‘‘(1) regulations allowing taxpayers other than
qualified financial institutions to claim credits under
this section, and
‘‘(2) regulations providing for a recapture of
the credit allowed under this section (notwith-
standing any termination date described in sub-
section (h)) in cases where there is a forfeiture
under section 207(b) of the Savings for Working
Families Act of 2001 in a subsequent taxable year
of any amount which was taken into account in de-
termining the amount of such credit.
‘‘(h) APPLICATION OF SECTION.—
‘‘(1) IN GENERAL.—This section shall apply to
any expenditure made in any taxable year beginning
after December 31, 2002, and before January 1,
2010, with respect to any Individual Development
Account which—
‘‘(A) is opened before January 1, 2008,
and
‘‘(B) as determined by the Secretary, when
added to all previously opened Individual Devel-
opment Accounts, does not exceed 900,000 Ac-
counts.
‘‘(2) DETERMINATION
OF LIMITATION.—The
limitation on the number of Individual Development
Accounts under paragraph (1)(B) shall be allocated
by the Secretary among qualified individual develop-
ment account programs selected by the Secretary.’’.
(b) CREDIT TREATED AS BUSINESS CREDIT.—Sec-
tion 38(b) of the Internal Revenue Code of 1986 (relating
to current year business credit) is amended by striking
‘‘plus’’ at the end of paragraph (14), by striking the period
at the end of paragraph (15) and inserting ‘‘, plus’’, and
by adding at the end the following new paragraph:
‘‘(16) the individual development account in-
vestment credit determined under section 45G(a).’’.
(c) NO CARRYBACKS.—Subsection (d) of section 39
of the Internal Revenue Code of 1986 (relating to
carryback and carryforward of unused credits) is amended
by adding at the end the following:
‘‘(11) NO CARRYBACK OF SECTION 45G CREDIT
BEFORE EFFECTIVE DATE.—No portion of the un-
used business credit for any taxable year which is
attributable to the individual development account
investment credit determined under section 45G may
be carried back to a taxable year ending before Jan-
uary 1, 2003.’’.
(d) CONFORMING AMENDMENT.—The table of sec-
tions for subpart C of part IV of subchapter A of chapter
1 of the Internal Revenue Code of 1986 is amended by
adding at the end the following new item:
‘‘Sec. 45G. Individual development account investment credit.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years ending after De-
cember 31, 2002.
TITLE III—EZ PASS RECOGNI-
TION 
OF 
SECTION 
501(c)(3)
STATUS
SEC. 301. EZ PASS RECOGNITION OF SECTION 501(c)(3) STA-
TUS.
(a) IN GENERAL.—The Secretary of the Treasury (in
this section, referred to as the ‘‘Secretary’’) shall adopt
procedures to expedite the consideration of applications
for exempt status under section 501(c)(3) of the Internal
Revenue Code of 1986 (and waive any fees relating to such
applications) by any qualified organization which—
(1) is organized for the primary purpose of pro-
viding social services to the poor and the needy; and
(2) meets such other criteria as the Secretary
deems appropriate for expedited consideration.
(b) GUIDANCE AND REFERRALS.—
(1) GUIDANCE.—The Secretary shall—
(A) develop model articles of incorporation,
model bylaws, and model applications for ex-
empt status under section 501(c)(3) of the In-
ternal Revenue Code of 1986, and
(B) provide such models to qualified orga-
nizations described in subsection (a) and such
other organizations as the Secretary considers
appropriate.
(2) REFERRALS.—The Secretary shall provide
to qualified organizations the names of nongovern-
mental organizations (including those awarded as-
sistance under title VI) that provide legal assistance
with incorporation or legal assistance to obtain tax-
exempt status.
(c) QUALIFIED ORGANIZATION.—For purposes of
this section, the term ‘‘qualified organization’’ means a
nonprofit corporation or association which, on the date of
application, has—
(1) not more than 6 full-time equivalent, social
service employees, or
(2) an annual social service budget, compiled
and adopted in good faith, of less than $450,000.
(d) SOCIAL SERVICE PROGRAM DEFINED.—For pur-
poses of this section, the term ‘‘social service program’’
includes all programs having the primary purpose of deliv-
ering social services or health care, with Federal, State,
or local financial assistance where nongovernmental pro-
viders of social services or health care are involved in the
delivery thereof, and regardless of whether the Federal,
State, or local financial assistance to the nongovernmental
providers is pursuant to a contract, or a grant or coopera-
tive agreement, or pursuant to indirect means of aid such
as individual grants or child-care certificates.
TITLE 
IV—GRANTS 
FOR 
PRO-
GRAMS 
FOR 
MENTORING
CHILDREN 
OF 
INCARCER-
ATED PARENTS
SEC. 401. GRANTS FOR PROGRAMS FOR MENTORING CHIL-
DREN OF INCARCERATED PARENTS.
Subpart 2 of part B of title IV (42 U.S.C. 629 et
seq.) is amended by adding at the end the following:
‘‘SEC. 436. GRANTS FOR PROGRAMS FOR MENTORING CHIL-
DREN OF INCARCERATED PARENTS.
‘‘(a) FINDINGS AND PURPOSE.—
‘‘(1) FINDINGS.—Congress makes the following
findings:
‘‘(A) In the period between 1991 and
1999, the number of children with a parent in-
carcerated in a Federal or State correctional fa-
cility increased by more than 100 percent, from
approximately 
900,000 
to 
approximately
2,000,000. In 1999, 2.1 percent of all children
in the United States had a parent in a Federal
or State correctional facility.
‘‘(B) Prior to incarceration, 64 percent of
female prisoners and 44 percent of male pris-
oners in State facilities lived with their children.
‘‘(C) Nearly 90 percent of the children of
incarcerated fathers live with their mothers,
and 79 percent of the children of incarcerated
mothers live with a grandparent or other rel-
ative. Only 10 percent of incarcerated mothers
and 2 percent of incarcerated fathers in State
facilities report that their child or children are
in foster care.
‘‘(D) Parental arrest and confinement lead
to stress, trauma, stigmatization, and separa-
tion problems for children. These problems are
coupled with existing problems that include pov-
erty, violence, parental substance abuse, high-
crime environments, intrafamilial abuse, child
abuse and neglect, multiple care givers, or prior
separations. As a result, children of an incar-
cerated parent often exhibit a broad variety of
behavioral, emotional, health, and educational
problems that are often compounded by the
pain of separation.
‘‘(E) Empirical research demonstrates that
mentoring is a potent force for improving chil-
dren’s behavior across all risk behaviors affect-
ing health. Quality, one-on-one relationships
that provide young people with caring role mod-
els for future success have profound, life-chang-
ing potential. Done right, mentoring markedly
advances youths’ life prospects. A widely cited
1995 study by Public/Private Ventures meas-
ured the impact of one Big Brothers Big Sis-
ters program and found significant effects in
the lives of youth-cutting first-time drug use by
almost half and first-time alcohol use by about
a third, reducing school absenteeism by half,
cutting assaultive behavior by a third, improv-
ing parental and peer relationships, giving
youth greater confidence in their school work,
and improving academic performance.
‘‘(2) PURPOSE.—The purpose of this section is
to authorize the Secretary to make competitive
grants to local governments in areas with substantial
numbers of children of incarcerated parents to sup-
port the establishment or expansion and operation of
programs using a network of public and private com-
munity entities to provide mentoring services for
children of incarcerated parents.
‘‘(b) DEFINITIONS.—In this section:
‘‘(1) CHILDREN OF INCARCERATED PARENTS.—
The term ‘children of incarcerated parents’ means a
child, 1 or both of whose parents are incarcerated in
a Federal or State correctional facility. Such term
shall be deemed to include any child who is in an on-
going mentoring relationship in a program under
this section at the time of the release of the child’s
parent or parents from a correctional facility, for
purposes of continued participation in the program.
‘‘(2) 
MENTORING.—The 
term 
‘mentoring’
means a structured, managed program in which chil-
dren are appropriately matched with screened and
trained adult volunteers for one-on-one relationships,
involving meetings and activities on a regular basis,
intended to meet, in part, the child’s need for in-
volvement with a caring and supportive adult who
provides a positive role model.
‘‘(3) MENTORING SERVICES.—The term ‘men-
toring services’ means those services and activities
that support a structured, managed program of
mentoring, including the management by trained
personnel of outreach to, and screening of, eligible
children; outreach to, education and training of, and
liaison with sponsoring local organizations; screening
and training of adult volunteers; matching of chil-
dren with suitable adult volunteer mentors; support
and oversight of the mentoring relationship; and es-
tablishment of goals and evaluation of outcomes for
mentored children.
‘‘(c) PROGRAM AUTHORIZED.—From the amount ap-
propriated under subsection (g) for a fiscal year that re-
mains after the application of subsection (g)(2), the Sec-
retary shall make grants under this section for each of
fiscal years 2002 through 2006 to local governments in
areas that have significant numbers of children of incar-
cerated parents and that submit applications meeting the
requirements of this section, including—
‘‘(1) two-thirds of such amount in grants in
amounts of up to $5,000,000 each; and
‘‘(2) one-third of such amount in grants in
amounts of up to $10,000,000 each.
‘‘(d) APPLICATION REQUIREMENTS.—In order to be
eligible for a grant under this section, the mayor or other
chief executive officer of a city, council of governments,
or other unit of local government shall submit to the Sec-
retary an application containing the following:
‘‘(1) PROGRAM DESIGN.—A description of the
proposed local program, including—
‘‘(A) a list of local public and private orga-
nizations and entities that will participate in
the mentoring network;
‘‘(B) the name, description, and qualifica-
tions of the entity that will coordinate and over-
see the activities of the mentoring network;
‘‘(C) the number of mentor-child matches
proposed to be established and maintained an-
nually under the program;
‘‘(D) such information as the Secretary
may require concerning the methods to be used
to recruit, screen support, and oversee individ-
uals participating as mentors (which methods
shall include criminal background checks on
such individuals), and to evaluate outcomes for
participating children, including information
necessary to demonstrate compliance with re-
quirements established by the Secretary for the
program; and
‘‘(E) such other information as the Sec-
retary may require.
‘‘(2) COMMUNITY
CONSULTATION; COORDINA-
TION
WITH
OTHER
PROGRAMS.—A demonstration
that, in developing and implementing the program,
the local government will, to the extent feasible and
appropriate—
‘‘(A) consult with public and private com-
munity entities, and including, as appropriate,
Indian tribal organizations and urban Indian
organizations, and with family members of po-
tential clients;
‘‘(B) coordinate the programs and activi-
ties under the program with other Federal,
State, and local programs serving children and
youth; and
‘‘(C) consult with appropriate Federal,
State, and local corrections, workforce develop-
ment, and substance abuse and mental health
agencies.
‘‘(3) EQUAL ACCESS FOR LOCAL SERVICE PRO-
VIDERS.—An assurance that public and private enti-
ties and community organizations, including Indian
organizations, will be eligible to participate in the
program on an equal basis.
‘‘(4) SUPPLEMENTATION ASSURANCE.—An as-
surance that Federal funds provided to the local gov-
ernment under this section will not be used to sup-
plant Federal or non-Federal funds for existing serv-
ices and activities that promote the purpose of this
section.
‘‘(5) BIENNIAL PROGRAM REPORT.—An agree-
ment that the local government will submit to the
Secretary, after the second year of funding of a pro-
gram under this section and every second year there-
after, a report containing the following:
‘‘(A) A description of the grant require-
ments used by the local government to award
grant funds.
‘‘(B) The measurable goals and outcomes
expected by the programs receiving assistance
under the local government program (and in
later reports, the extent to which such goals
and outcomes were achieved).
‘‘(C) A description of the services provided
by programs receiving assistance under the
local government program.
‘‘(D) The number of children and families
served.
‘‘(E) Such other such information as the
Secretary may require.
‘‘(6) RECORDS, REPORTS, AND
AUDITS.—An
agreement that the local government will maintain
such records, make such reports, and cooperate with
such reviews or audits as the Secretary may find
necessary for purposes of oversight of project activi-
ties and expenditures.
‘‘(7) EVALUATION.—An agreement that the
local government will cooperate fully with the Sec-
retary’s ongoing and final evaluation of the program
under the plan, by means including providing the
Secretary with access to the program and program-
related records and documents, staff, and grantees
receiving funding under the plan.
‘‘(8) EXTENT
OF
LOCAL-STATE
COOPERA-
TION.—A statement as to whether, and the extent to
which, the State government has undertaken to pro-
vide support to and to cooperate with the local pro-
gram.
‘‘(e) FEDERAL SHARE.—
‘‘(1) IN
GENERAL.—A grant for a program
under this section shall be available to pay a per-
centage share of the costs of the program up to—
‘‘(A) 80 percent for the first fiscal year for
which the grant is awarded;
‘‘(B) 60 percent for the second such fiscal
year;
‘‘(C) 40 percent for the third such fiscal
year; and
‘‘(D) 20 percent for each succeeding fiscal
year.
‘‘(2) NON-FEDERAL SHARE.—The non-Federal
share of the cost of projects under this section may
be in cash or in kind. In determining the amount of
the non-Federal share, the Secretary may attribute
fair market value to goods, services, and facilities
contributed from non-Federal sources.
‘‘(f) CONSIDERATIONS IN AWARDING GRANTS.—In
awarding grants under this section, the Secretary shall
take into consideration—
‘‘(1) the experience, qualifications, and capacity
of local and tribal governments and networks of or-
ganizations to effectively carry out a mentoring pro-
gram under this section;
‘‘(2) the comparative severity of need for men-
toring services in given local areas, taking into con-
sideration data on the numbers of children (and in
particular of low-income children) with an incarcer-
ated parent (or parents) in such areas;
‘‘(3) whether, and the extent to which, the
State government has undertaken to support and co-
operate with the local mentoring program;
‘‘(4) evidence of consultation with existing
youth and family service programs, as appropriate;
and
‘‘(5) any other factors the Secretary may deem
significant with respect to the need for or the poten-
tial success of carrying out a mentoring program
under this section.
‘‘(g) AUTHORIZATION
OF APPROPRIATIONS; RES-
ERVATION OF CERTAIN AMOUNTS.—
‘‘(1) AUTHORIZATION.—There are authorized to
be appropriated to carry out this section—
‘‘(A) $67,000,000 for fiscal year 2002; and
‘‘(B) such sums as may be necessary for
each of fiscal years 2003 through 2006.
‘‘(2) RESERVATION.—The Secretary shall re-
serve 2.5 percent of the amount appropriated for
each fiscal year under paragraph (1) for expenditure
by the Secretary for research, technical assistance,
and evaluation related to programs carried out
under this section.’’.
TITLE V—MATERNITY GROUP
HOMES
SEC. 501. MATERNITY GROUP HOMES.
(a) PERMISSIBLE USE OF FUNDS.—Section 322 of
the Runaway and Homeless Youth Act (42 U.S.C. 5714-
2) is amended—
(1) in subsection (a)(1), by inserting ‘‘(includ-
ing maternity group homes)’’ after ‘‘group homes’’;
and
(2) by adding at the end the following:
‘‘(c) MATERNITY GROUP HOME.—In this part, the
term ‘maternity group home’ means a community-based,
adult-supervised group home that provides young mothers
and their children with a supportive and supervised living
arrangement in which such mothers are required to learn
parenting skills, including child development, family budg-
eting, health and nutrition, and other skills to promote
their long-term economic independence and the well-being
of their children.’’.
(b) Part B of the Runaway and Homeless Youth Act
(42 U.S.C. 5701 et seq.) is amended by adding at the end
the following:
‘‘SEC. 323. CONTRACT FOR EVALUATION.
‘‘(a) IN GENERAL.—The Secretary shall enter into
a contract with a public or private entity for an evaluation
of the maternity group homes that are supported by grant
funds under this Act.
‘‘(b) INFORMATION.—The evaluation described in
subsection (a) shall include the collection of information
about the relevant characteristics of individuals who ben-
efit from maternity group homes such as those that are
supported by grant funds under this Act and what services
provided by those maternity group homes are most bene-
ficial to such individuals.
‘‘(c) REPORT.—Not later than 2 years after the date
on which the Secretary enters into a contract for an eval-
uation under subsection (a), and biennially thereafter, the
entity conducting the evaluation under this section shall
submit to Congress a report on the status, activities, and
accomplishments of maternity group homes that are sup-
ported by grant funds under this Act.’’.
(c) AUTHORIZATION OF APPROPRIATIONS.—Section
388 of the Runaway and Homeless Youth Act (42 U.S.C.
5751) is amended—
(1) in subsection(a)(1)—
(A) by striking ‘‘There’’ and inserting the
following:
‘‘(A) IN GENERAL.—There’’;
(B) in subparagraph (A), as redesignated,
by inserting ‘‘and the purpose described in sub-
paragraph (B)’’ after ‘‘other than part E’’; and
(C) by adding at the end the following:
‘‘(B) MATERNITY GROUP HOMES.—There
is authorized to be appropriated, for maternity
group homes eligible for assistance under sec-
tion 322(a)(1)—
‘‘(i) $33,000,000 for fiscal year 2002;
and
‘‘(ii) such sums as may be necessary
for fiscal year 2003.’’; and
(2) in subsection (a)(2)(A), by striking ‘‘para-
graph (1)’’ and inserting ‘‘paragraph (1)(A)’’.
TITLE VI—COMPASSION
CAPITAL FUND
SEC. 601. SUPPORT FOR NONPROFIT COMMUNITY-BASED
ORGANIZATIONS; DEPARTMENT OF HEALTH
AND HUMAN SERVICES.
(a) SUPPORT FOR NONGOVERNMENTAL ORGANIZA-
TIONS.—The Secretary of Health and Human Services
(referred to in this section as ‘‘the Secretary’’) may award
grants to and enter into cooperative agreements with non-
governmental organizations, to—
(1) provide technical assistance for community-
based organizations, which may include—
(A) grant writing and grant management
assistance, which may include assistance pro-
vided through workshops and other guidance;
(B) legal assistance with incorporation;
(C) legal assistance to obtain tax-exempt
status; and
(D) information on, and referrals to, other
nongovernmental organizations that provide ex-
pertise in accounting, on legal issues, on tax
issues, in program development, and on a vari-
ety of other organizational topics;
(2) provide information and assistance for com-
munity-based organizations on capacity building;
(3) provide for community-based organizations
information on and assistance in identifying and
using best practices for delivering assistance to per-
sons, families, and communities in need;
(4) provide information on and assistance in
utilizing regional intermediary organizations to in-
crease and strengthen the capabilities of nonprofit
community-based organizations;
(5) assist community-based organizations in
replicating social service programs of demonstrated
effectiveness; and
(6) encourage research on the best practices of
social service organizations.
(b) APPLICATIONS.—To be eligible to receive a grant
or enter into a cooperative agreement under this section,
a nongovernmental organization, State, or political sub-
division shall submit an application to the Secretary at
such time, in such manner, and containing such informa-
tion as the Secretary may require.
(c) LIMITATION.—In order to widely disburse limited
resources, no community-based organization (other than
a direct recipient of a grant or cooperative agreement from
the Secretary) may receive more than 1 grant or coopera-
tive agreement under this section for the same purpose.
(d) AUTHORIZATION
OF APPROPRIATIONS.—There
are authorized to be appropriated to carry out this section
$89,000,000 for fiscal year 2002, and such sums as may
be necessary for each of fiscal years 2003 through 2006.
(e) DEFINITION.—In this section, the term ‘‘commu-
nity-based organization’’ means a nonprofit corporation or
association that has—
(1) not more than 4 full-time equivalent posi-
tions for employees who are engaged in the provision
of social services; or
(2) an annual budget for the provision of social
services, compiled and adopted in good faith, of less
than $300,000.
SEC. 602. SUPPORT FOR NONPROFIT COMMUNITY-BASED
ORGANIZATIONS; 
CORPORATION 
FOR 
NA-
TIONAL AND COMMUNITY SERVICE.
(a) SUPPORT FOR NONGOVERNMENTAL ORGANIZA-
TIONS.—The Corporation for National and Community
Service (referred to in this section as ‘‘the Corporation’’)
may award grants to and enter into cooperative agree-
ments with nongovernmental organizations and State
Commissions on National and Community Service estab-
lished under section 178 of the National and Community
Service Act of 1990 (42 U.S.C. 12638), to—
(1) provide technical assistance for community-
based organizations, which may include—
(A) grant writing and grant management
assistance, which may include assistance pro-
vided through workshops and other guidance;
(B) legal assistance with incorporation;
(C) legal assistance to obtain tax-exempt
status; and
(D) information on, and referrals to, other
nongovernmental organizations that provide ex-
pertise in accounting, on legal issues, on tax
issues, in program development, and on a vari-
ety of other organizational topics;
(2) provide information and assistance for com-
munity-based organizations on capacity building;
(3) provide for community-based organizations
information on and assistance in identifying and
using best practices for delivering assistance to per-
sons, families, and communities in need;
(4) provide information on and assistance in
utilizing regional intermediary organizations to in-
crease and strengthen the capabilities of community-
based organizations;
(5) assist community-based organizations in
replicating social service programs of demonstrated
effectiveness; and
(6) encourage research on the best practices of
social service organizations.
(b) APPLICATIONS.—To be eligible to receive a grant
or enter into a cooperative agreement under this section,
a nongovernmental organization, State Commission,
State, or political subdivision shall submit an application
to the Corporation at such time, in such manner, and con-
taining such information as the Corporation may require.
(c) LIMITATION.—In order to widely disburse limited
resources, no community-based organization (other than
a direct recipient of a grant or cooperative agreement from
the Secretary) may receive more than 1 grant or coopera-
tive agreement under this section for the same purpose.
(d) AUTHORIZATION
OF APPROPRIATIONS.—There
are authorized to be appropriated to carry out this section
$15,000,000 for fiscal year 2002, and such sums as may
be necessary for each of fiscal years 2003 through 2006.
(e) DEFINITION.—In this section, the term ‘‘commu-
nity-based organization’’ means a nonprofit corporation or
association that has—
(1) not more than 4 full-time equivalent posi-
tions for employees who are engaged in the provision
of social services; or
(2) an annual budget for the provision of social
services, compiled and adopted in good faith, of less
than $300,000.
SEC. 603. SUPPORT FOR NONPROFIT COMMUNITY-BASED
ORGANIZATIONS; DEPARTMENT OF JUSTICE.
(a) SUPPORT FOR NONGOVERNMENTAL ORGANIZA-
TIONS.—The Attorney General may award grants to and
enter into cooperative agreements with nongovernmental
organizations, to—
(1) provide technical assistance for community-
based organizations, which may include—
(A) grant writing and grant management
assistance, which may include assistance pro-
vided through workshops and other guidance;
(B) legal assistance with incorporation;
(C) legal assistance to obtain tax-exempt
status; and
(D) information on, and referrals to, other
nongovernmental organizations that provide ex-
pertise in accounting, on legal issues, on tax
issues, in program development, and on a vari-
ety of other organizational topics;
(2) provide information and assistance for com-
munity-based organizations on capacity building;
(3) provide for community-based organizations
information on and assistance in identifying and
using best practices for delivering assistance to per-
sons, families, and communities in need;
(4) provide information on and assistance in
utilizing regional intermediary organizations to in-
crease and strengthen the capabilities of nonprofit
community-based organizations;
(5) assist community-based organizations in
replicating social service programs of demonstrated
effectiveness; and
(6) encourage research on the best practices of
social service organizations.
(b) APPLICATIONS.—To be eligible to receive a grant
or enter into a cooperative agreement under this section,
a nongovernmental organization, State, or political sub-
division shall submit an application to the Attorney Gen-
eral at such time, in such manner, and containing such
information as the Attorney General may require.
(c) LIMITATION.—In order to widely disburse limited
resources, no community-based organization (other than
a direct recipient of a grant or cooperative agreement from
the Secretary) may receive more than 1 grant or coopera-
tive agreement under this section for the same purpose.
(d) AUTHORIZATION
OF APPROPRIATIONS.—There
are authorized to be appropriated to carry out this section
$35,000,000 for fiscal year 2002, and such sums as may
be necessary for each of fiscal years 2003 through 2006.
(e) DEFINITION.—In this section, the term ‘‘commu-
nity-based organization’’ means a nonprofit corporation or
association that has—
(1) not more than 4 full-time equivalent posi-
tions for employees who are engaged in the provision
of social services; or
(2) an annual budget for the provision of social
services, compiled and adopted in good faith, of less
than $300,000.
SEC. 604. SUPPORT FOR NONPROFIT COMMUNITY-BASED
ORGANIZATIONS; DEPARTMENT OF HOUSING
AND URBAN DEVELOPMENT.
(a) SUPPORT FOR NONGOVERNMENTAL ORGANIZA-
TIONS.—The Secretary of Housing and Urban Develop-
ment (referred to in this section ‘‘the Secretary’’) may
award grants to and enter into cooperative agreements
with nongovernmental organizations, to—
(1) provide technical assistance for community-
based organizations, which may include—
(A) grant writing and grant management
assistance, which may include assistance pro-
vided through workshops and other guidance;
(B) legal assistance with incorporation;
(C) legal assistance to obtain tax-exempt
status; and
(D) information on, and referrals to, other
nongovernmental organizations that provide ex-
pertise in accounting, on legal issues, on tax
issues, in program development, and on a vari-
ety of other organizational topics;
(2) provide information and assistance for com-
munity-based organizations on capacity building;
(3) provide for community-based organizations
information on and assistance in identifying and
using best practices for delivering assistance to per-
sons, families, and communities in need;
(4) provide information on and assistance in
utilizing regional intermediary organizations to in-
crease and strengthen the capabilities of community-
based organizations;
(5) assist community-based organizations in
replicating social service programs of demonstrated
effectiveness; and
(6) encourage research on the best practices of
social service organizations.
(b) APPLICATIONS.—To be eligible to receive a grant
or enter into a cooperative agreement under this section,
a nongovernmental organization, State, or political sub-
division shall submit an application to the Secretary at
such time, in such manner, and containing such informa-
tion as the Secretary may require.
(c) LIMITATION.—In order to widely disburse limited
resources, no community-based organization (other than
a direct recipient of a grant or cooperative agreement from
the Secretary) may receive more than 1 grant or coopera-
tive agreement under this section for the same purpose.
(d) AUTHORIZATION
OF APPROPRIATIONS.—There
are authorized to be appropriated to carry out this section
$15,000,000 for fiscal year 2002, and such sums as may
be necessary for each of fiscal years 2003 through 2006.
(e) DEFINITION.—In this section, the term ‘‘commu-
nity-based organization’’ means a nonprofit corporation or
association that has—
(1) not more than 4 full-time equivalent posi-
tions for employees who are engaged in the provision
of social services; or
(2) an annual budget for the provision of social
services, compiled and adopted in good faith, of less
than $300,000.
SEC. 605. PROHIBITION ON USE OF FUNDS.
Funds made available under this title may not be
used to provide social services.
Æ