I
107TH CONGRESS
1ST SESSION
H. R. 744
To amend the Internal Revenue Code of 1986 to encourage charitable
contributions to public charities for use in medical research.
IN THE HOUSE OF REPRESENTATIVES
FEBRUARY 27, 2001
Ms. DUNN (for herself and Mr. CARDIN) introduced the following bill; which
was referred to the Committee on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to encourage
charitable contributions to public charities for use in
medical research.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Medical Research In-
vestment Act of 2001’’.
SEC. 2. INCREASE IN LIMITATION ON CHARITABLE DEDUC-
TION FOR CONTRIBUTIONS FOR MEDICAL RE-
SEARCH.
(a) IN GENERAL.—Paragraph (1) of section 170(b)
of the Internal Revenue Code of 1986 (relating to percent-
age limitations) is amended by adding at the end the fol-
lowing new subparagraph:
‘‘(G) SPECIAL LIMITATION WITH RESPECT
TO CERTAIN CONTRIBUTIONS FOR MEDICAL RE-
SEARCH.—
‘‘(i) IN
GENERAL.—Any medical re-
search contribution shall be allowed to the
extent that the aggregate of such contribu-
tions does not exceed the lesser of—
‘‘(I) 80 percent of the taxpayer’s
contribution base for any taxable year,
or
‘‘(II) the excess of 80 percent of
the taxpayer’s contribution base for
the taxable year over the amount of
charitable 
contributions 
allowable
under subparagraphs (A) and (B) (de-
termined without regard to subpara-
graph (C)).
‘‘(ii) CARRYOVER.—If the aggregate
amount of contributions described in clause
(i) exceeds the limitation of such clause,
such excess shall be treated (in a manner
consistent with the rules of subsection
(d)(1)) as a medical research contribution
in each of the 10 succeeding taxable years
in order of time.
‘‘(iii) TREATMENT OF CAPITAL GAIN
PROPERTY.—In the case of any medical re-
search contribution of capital gain property
(as defined in subparagraph (C)(iv)), sub-
section (e)(1) shall apply to such contribu-
tion.
‘‘(iv) MEDICAL RESEARCH CONTRIBU-
TION.—For purposes of this subparagraph,
the term ‘medical research contribution’
means a charitable contribution—
‘‘(I) to an organization described
in clauses (ii), (iii), (v), or (vi) of sub-
paragraph (A), and
‘‘(II) which is designated for use
in conducting medical research.
‘‘(v) MEDICAL RESEARCH.—For pur-
poses of this subparagraph, the term ‘med-
ical research’ has the meaning given such
term under the regulations promulgated
under subparagraph (A)(ii), as in effect on
the date of the enactment of this subpara-
graph.’’.
(b) CONFORMING AMENDMENTS.—
(1) Section 170(b)(1)(A) of the Internal Rev-
enue Code of 1986 is amended in the matter pre-
ceding clause (i) by inserting ‘‘(other than a medical
research contribution)’’ after ‘‘contribution’’.
(2) Section 170(b)(1)(B) of such Code is
amended by inserting ‘‘or a medical research con-
tribution’’ after ‘‘applies’’.
(3) Section 170(b)(1)(C)(i) of such Code is
amended by striking ‘‘subparagraph (D)’’ and in-
serting ‘‘subparagraph (D) or (G)’’.
(4) Section 170(b)(1)(D)(i) of such Code is
amended—
(A) in the matter preceding subclause (I),
by inserting ‘‘or a medical research contribu-
tion’’ after ‘‘applies’’, and
(B) in the second sentence, by inserting
‘‘(other than medical research contributions)’’
before the period.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply—
(1) to contributions made in taxable years be-
ginning after December 31, 2001, and
(2) to contributions made on or before Decem-
ber 31, 2001, but only to the extent that a deduction
would be allowed under section 170 of the Internal
Revenue Code of 1986 for taxable years beginning
after December 31, 1999, had section 170(b)(1)(G)
of such Code (as added by this section) applied to
such contributions when made.
SEC. 3. TREATMENT OF CERTAIN INCENTIVE STOCK OP-
TIONS.
(a) AMT ADJUSTMENTS.—Section 56(b)(3) of the
Internal Revenue Code of 1986 (relating to treatment of
incentive stock options) is amended—
(1) by striking ‘‘Section 421’’ and inserting the
following:
‘‘(A) IN
GENERAL.—Except as pro-
vided in subparagraph (B), section 421’’,
and
(2) by adding at the end the following new sub-
paragraph:
‘‘(B) EXCEPTION FOR CERTAIN MED-
ICAL RESEARCH STOCK.—
‘‘(i) IN
GENERAL.—This para-
graph shall not apply in the case of a
medical research stock transfer of
stock acquired pursuant to the exer-
cise of an incentive stock option oc-
curring within the same taxable year
as the exercise.
‘‘(ii) MEDICAL RESEARCH STOCK
TRANSFER.—For purposes of clause
(i), the term ‘medical research stock
transfer’ means a transfer—
‘‘(I) of stock which is traded
on an established securities mar-
ket, and
‘‘(II) which is a medical re-
search contribution (as defined in
section 170(b)(1)(G)(iv)).’’.
(b) NONRECOGNITION
OF
CERTAIN
INCENTIVE
STOCK OPTIONS.—Section 422(c) of the Internal Revenue
Code of 1986 (relating to special rules) is amended by
adding at the end the following new paragraph:
‘‘(8) MEDICAL
RESEARCH
CONTRIBUTIONS.—
For purposes of this section and section 421, the
transfer of a share of stock which is a medical re-
search stock transfer (as defined in section
56(b)(3)(B)) shall be treated as meeting the require-
ments of subsection (a)(1).’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to transfers of stock made after
the date of the enactment of this Act.
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