I 
108TH CONGRESS 
1ST SESSION 
H. R. 7
To amend the Internal Revenue Code of 1986 to provide incentives for 
charitable contributions by individuals and businesses, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MAY 7, 2003
Mr. BLUNT (for himself, Mr. FORD, Mr. HULSHOF, Mr. WYNN, Mr. 
HASTERT, Mr. GORDON, Mr. DELAY, Ms. NORTON, Ms. PRYCE of Ohio, 
Mr. MEEKS of New York, Mr. CANTOR, Mr. CRANE, Mr. RAMSTAD, Mr. 
ENGLISH, Mr. FOLEY, Mr. SHAYS, Mr. SMITH of Texas, Mr. UPTON, Mr. 
WOLF, Mr. GILLMOR, Mr. STEARNS, Mr. CAMP, Mr. KINGSTON, Mr. 
MCHUGH, Mr. BACHUS, Mr. BARTLETT of Maryland, Mr. BARTON of 
Texas, Mrs. MYRICK, Mr. NORWOOD, Mr. SOUDER, Mr. TIAHRT, Mr. 
WAMP, Mr. WICKER, Mr. DOOLITTLE, Mrs. NORTHUP, Mr. PETERSON of 
Pennsylvania, Mr. PICKERING, Mr. PITTS, Mr. REYNOLDS, Mr. SES-
SIONS, Mr. SHIMKUS, Mr. GREEN of Wisconsin, Mr. HAYES, Mr. 
ISAKSON, Mr. TERRY, Mr. AKIN, Mr. BOOZMAN, Mr. FORBES, Mr. 
GRAVES, Ms. HART, Mr. KELLER, Mr. PENCE, Mr. SCHROCK, Mr. SIM-
MONS, Mr. BARRETT of South Carolina, Mrs. BLACKBURN, Ms. GINNY 
BROWN-WAITE of Florida, Mr. BURGESS, Mr. CHOCOLA, Mr. GARRETT 
of New Jersey, Ms. HARRIS, Mr. JANKLOW, Mrs. MUSGRAVE, Mr. RENZI, 
and Mr. FOSSELLA) introduced the following bill; which was referred to 
the Committee on Ways and Means, and in addition to the Committee 
on Education and the Workforce, for a period to be subsequently deter-
mined by the Speaker, in each case for consideration of such provisions 
as fall within the jurisdiction of the committee concerned 
A BILL 
To amend the Internal Revenue Code of 1986 to provide 
incentives for charitable contributions by individuals and 
businesses, 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; ETC. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Charitable Giving Act of 2003’’. 
(b) AMENDMENT OF 1986 CODE.—Except as other-
wise expressly provided, whenever in this Act an amend-
ment or repeal is expressed in terms of an amendment 
to, or repeal of, a section or other provision, the reference 
shall be considered to be made to a section or other provi-
sion of the Internal Revenue Code of 1986. 
(c) TABLE OF CONTENTS.—
Sec. 1. Short title; etc. 
TITLE I—CHARITABLE GIVING INCENTIVES 
Sec. 101. Deduction for portion of charitable contributions to be allowed to in-
dividuals who do not itemize deductions. 
Sec. 102. Tax-free distributions from individual retirement plans for charitable 
purposes. 
Sec. 103. Increase in cap on corporate charitable contributions. 
Sec. 104. Charitable deduction for contributions of food inventory. 
Sec. 105. Reform of certain excise taxes related to private foundations. 
Sec. 106. Excise tax on unrelated business taxable income of charitable remain-
der trusts. 
Sec. 107. Expansion of charitable contribution allowed for scientific property 
used for research and for computer technology and equipment 
used for educational purposes. 
Sec. 108. Adjustment to basis of S corporation stock for certain charitable con-
tributions. 
TITLE II—TAX REFORM AND IMPROVEMENTS RELATING TO 
CHARITABLE ORGANIZATIONS AND PROGRAMS 
Sec. 201. Suspension of tax-exempt status of terrorist organizations. 
Sec. 202. Clarification of definition of church tax inquiry. 
Sec. 203. Expansion of declaratory judgment remedy to tax-exempt organiza-
tions. 
Sec. 204. Landowner incentives programs. 
Sec. 205. Modifications to section 512(b)(13). 
Sec. 206. Simplification of lobbying expenditure limitation.
Sec. 207. Permitted holdings of private foundation where corporation is publicly 
traded and publicly controlled. 
TITLE III—OTHER PROVISIONS 
Sec. 301. Compassion capital fund. 
Sec. 302. Reauthorization of assets for independence demonstration. 
Sec. 303. Sense of the Congress regarding corporate contributions to faith-
based organizations, etc. 
Sec. 304. Maternity group homes.
TITLE I—CHARITABLE GIVING 
INCENTIVES 
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 (relating to chari-
table, etc., contributions and gifts) is amended by redesig-
nating 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 individual 
who does not itemize deductions for any taxable 
year, there shall be taken into account as a direct 
charitable deduction under section 63 an amount 
equal to the amount allowable under subsection (a) 
for the taxable year for cash contributions (deter-
mined without regard to any carryover), to the ex-
tent that such contributions exceed $250 ($500 in 
the case of a joint return) but do not exceed $500 
($1,000 in the case of a joint return).
‘‘(2) TERMINATION.—This subsection shall not 
apply to any taxable year beginning after December 
31, 2005.’’. 
(b) DIRECT CHARITABLE DEDUCTION.—
(1) IN GENERAL.—Subsection (b) of section 63 
(defining taxable income) 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 the following new 
paragraph: 
‘‘(3) the direct charitable deduction.’’. 
(2) DEFINITION.—Section 63 is amended by re-
designating subsection (g) as subsection (h) and by 
inserting after subsection (f) the following new sub-
section: 
‘‘(g) DIRECT CHARITABLE DEDUCTION.—For pur-
poses of this section, the term ‘direct charitable 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.—Subsection (d) 
of section 63 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 the following new paragraph:
‘‘(3) the direct charitable deduction.’’. 
(c) STUDY.—
(1) IN GENERAL.—The Secretary of the Treas-
ury shall study the effect of the amendments made
by this section on increased charitable giving and 
taxpayer compliance, including a comparison of tax-
payer compliance between taxpayers who itemize 
their charitable contributions and taxpayers who 
claim a direct charitable deduction. 
(2) REPORT.—By not later than December 31, 
2005, the Secretary of the Treasury shall report on 
the study required under paragraph (1) to the Com-
mittee on Finance of the Senate and the Committee 
on Ways and Means of the House of Representa-
tives. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2003. 
SEC. 102. TAX-FREE DISTRIBUTIONS FROM INDIVIDUAL RE-
TIREMENT PLANS FOR CHARITABLE PUR-
POSES. 
(a) IN GENERAL.—Subsection (d) of section 408 (re-
lating to individual retirement accounts) is amended by 
adding at the end the following new paragraph:
‘‘(8) DISTRIBUTIONS
FOR
CHARITABLE
PUR-
POSES.—
‘‘(A) IN GENERAL.—No amount shall be 
includible in gross income by reason of a quali-
fied charitable distribution. 
‘‘(B) QUALIFIED
CHARITABLE
DISTRIBU-
TION.—For purposes of this paragraph, the 
term ‘qualified charitable distribution’ means 
any distribution from an individual retirement 
plan—
‘‘(i) which is made on or after the 
date that the individual for whose benefit 
the plan is maintained has attained age 70 
1⁄2, and 
‘‘(ii) which is made directly by the 
trustee—
‘‘(I) to an organization described 
in section 170(c), or 
‘‘(II) to a split-interest entity. 
A distribution shall be treated as a qualified 
charitable distribution only to the extent that 
the distribution would be includible in gross in-
come without regard to subparagraph (A) and, 
in the case of a distribution to a split-interest 
entity, only if no person holds an income inter-
est in the amounts in the split-interest entity 
attributable to such distribution other than one 
or more of the following: the individual for 
whose benefit such plan is maintained, the 
spouse of such individual, or any organization 
described in section 170(c). 
‘‘(C) CONTRIBUTIONS
MUST
BE
OTHER-
WISE DEDUCTIBLE.—For purposes of this para-
graph—
‘‘(i) DIRECT CONTRIBUTIONS.—A dis-
tribution to an organization described in 
section 170(c) shall be treated as a quali-
fied charitable distribution only if a deduc-
tion for the entire distribution would be al-
lowable under section 170 (determined 
without regard to subsection (b) thereof 
and this paragraph). 
‘‘(ii) SPLIT-INTEREST GIFTS.—A dis-
tribution to a split-interest entity shall be 
treated as a qualified charitable distribu-
tion only if a deduction for the entire value 
of the interest in the distribution for the 
use of an organization described in section 
170(c) would be allowable under section
170 (determined without regard to sub-
section (b) thereof and this paragraph). 
‘‘(D) APPLICATION OF SECTION 72.—Not-
withstanding section 72, in determining the ex-
tent to which a distribution is a qualified chari-
table distribution, the entire amount of the dis-
tribution shall be treated as includible in gross 
income without regard to subparagraph (A) to 
the extent that such amount does not exceed 
the aggregate amount which would have been so 
includible if all amounts were distributed from 
all individual retirement plans treated as 1 con-
tract under paragraph (2)(A) for purposes of 
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 subsequent tax-
able years. 
‘‘(E) SPECIAL RULES FOR SPLIT-INTEREST 
ENTITIES.—
‘‘(i) 
CHARITABLE
REMAINDER 
TRUSTS.—Notwithstanding section 664(b), 
distributions made from a trust described 
in subparagraph (G)(i) shall be treated as 
ordinary income in the hands of the bene-
ficiary to whom is paid the annuity de-
scribed in section 664(d)(1)(A) or the pay-
ment described in section 664(d)(2)(A). 
‘‘(ii) POOLED
INCOME
FUNDS.—No 
amount shall be includible in the gross in-
come of a pooled income fund (as defined 
in subparagraph (G)(ii)) by reason of a 
qualified charitable distribution to such 
fund, and all distributions from the fund 
which are attributable to qualified chari-
table distributions shall be treated as ordi-
nary income to the beneficiary. 
‘‘(iii) 
CHARITABLE
GIFT
ANNU-
ITIES.—Qualified charitable distributions 
made for a charitable gift annuity shall not 
be treated as an investment in the con-
tract. 
‘‘(F) DENIAL
OF
DEDUCTION.—Qualified 
charitable distributions shall not be taken into 
account in determining the deduction under sec-
tion 170. 
‘‘(G) SPLIT-INTEREST ENTITY DEFINED.—
For purposes of this paragraph, the term ‘split-
interest entity’ means—
‘‘(i) a charitable remainder annuity 
trust or a charitable remainder unitrust 
(as such terms are defined in section 
664(d)) which must be funded exclusively 
by qualified charitable distributions,
‘‘(ii) a pooled income fund (as defined 
in section 642(c)(5)), but only if the fund 
accounts separately for amounts attrib-
utable to qualified charitable distributions, 
and 
‘‘(iii) a charitable gift annuity (as de-
fined in section 501(m)(5)).’’. 
(b) MODIFICATIONS RELATING TO INFORMATION RE-
TURNS BY CERTAIN TRUSTS.—
(1) RETURNS.—Section 6034 (relating to re-
turns by trusts described 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.