I
104TH CONGRESS
2D SESSION
H. R. 3716
To implement the Project for American Renewal, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JUNE 25, 1996
Mr. KASICH introduced the following bill; which was referred to the Committee
on Ways and Means, and in addition to the Committees on Agriculture,
Banking and Financial Services, Commerce, Economic and Educational
Opportunities, and the Judiciary, 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 implement the Project for American Renewal, 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
‘‘Project for American Renewal Act’’.
(b) TABLE OF CONTENTS.—
Sec. 1. Short title; table of contents.
TITLE I—EFFECTIVE COMPASSION
Subtitle A—Charity Tax Credit
PART I—CHARITY TAX CREDIT
Sec.
101. Credit for charitable contributions to certain private charities provid-
ing assistance to the poor.
PART II—BUDGET OFFSETS
SUBPART A—TAX OFFSETS
Sec. 111. Repeal of earned income credit for individuals without children.
Sec. 112. Legislation to eliminate corporate tax subsidies.
SUBPART B—FOOD STAMP PROGRAM
Sec. 121. Alternative authorizations of appropriations.
SUBPART C—REDUCTIONS UNDER SOCIAL SECURITY ACT
Sec. 131. Reduction of amounts paid to States under part A of title IV of the
Social Security Act.
Sec. 132. Repeal of block grants to States for social services.
SUBPART D—HOUSING AND COMMUNITY DEVELOPMENT PROGRAMS
Sec. 141. Reduction of community development block grant amounts.
Sec. 142. Repeal of home program.
Subtitle B—Other Provisions
Sec. 151. Credit for charitable contributions to individuals providing home care
to certain individuals in need.
Sec. 152. Medical volunteer tort claim immunity.
Sec. 153. Community partnership grant program.
TITLE II—COMMUNITY EMPOWERMENT
Subtitle A—Education
Sec. 201. Short title.
Sec. 202. Purpose.
Sec. 203. Definitions.
Sec. 204. Authorization of appropriations.
Sec. 205. Program authorized.
Sec. 206. Authorized projects; priority.
Sec. 207. Applications.
Sec. 208. Education certificates.
Sec. 209. Effect on other programs; use of school lunch data; construction pro-
visions.
Sec. 210. Parental notification.
Sec. 210A. Evaluation.
Sec. 210B. Reports.
Subtitle B—Restitution and Responsibility
Sec. 211. Restitution and responsibility grant program.
Subtitle C—Independence
Sec. 221. Findings.
Sec. 222. Individual development account demonstration projects.
Sec. 223. Individual development accounts.
Sec. 224. Funds in individual development accounts of demonstration project
participants disregarded for purposes of all means-tested Fed-
eral programs.
Subtitle D—Housing
PART I—URBAN HOMESTEADS
Sec. 231. Urban homestead provisions.
PART II—MATERNITY SHELTER
Sec. 232. Findings.
SUBPART A—MATERNAL HEALTH CERTIFICATES PROGRAM
Sec. 233. Maternal health certificates for eligible pregnant women.
SUBPART B—MATERNITY HOME DEMONSTRATIONS
Sec. 236. Purposes.
Sec. 237. Establishment of demonstration program.
SUBPART C—REHABILITATION GRANTS FOR MATERNITY HOUSING AND
SERVICES FACILITIES
Sec. 241. Establishment of grant program.
Sec. 242. Authority and applications.
Sec. 243. Grant limitations.
Sec. 244. Reports.
Sec. 245. Definitions.
Sec. 246. Authorization of appropriations.
SUBPART D—MISCELLANEOUS PROVISIONS
Sec. 248. Evaluations and reports.
Sec. 249. Prohibition on abortion.
TITLE III—OTHER AMERICAN RENEWAL INCENTIVES
Subtitle A—Housing
Sec. 301. Public housing for intact families.
Sec. 302. Effective date.
Subtitle B—Responsible Parenting
Sec. 311. Amendments to the Social Security Act.
Sec. 312. Integration of family planning and maternal and child health services.
Sec. 313. Abstinence services.
Sec. 314. Use of funds.
Sec. 315. Application for block grant funds.
Sec. 316. Reports and audits.
Sec. 317. Evaluation.
Sec. 318. Repeal of certain programs.
Sec. 319. Effective date.
Subtitle C—Character Development
Sec. 321. Purposes.
Sec. 322. Definitions.
Sec. 323. Mentoring programs.
Sec. 324. Implementation and evaluation grants.
Sec. 325. Authorized activities.
Sec. 326. Regulations and guidelines.
Sec. 327. Applications.
Sec. 328. Evaluation.
Sec. 329. Reports.
Sec. 330. Authorization of appropriations.
Subtitle D—Family Reconciliation
Sec. 331. Set-aside for States with approved family reconciliation plans.
Sec. 332. Use of funds under Legal Services Corporation Act.
Subtitle E—Mentor Schools
Sec. 341. Mentor schools.
Subtitle F—Role Models Academy
Sec. 351. Purpose; definitions.
Sec. 352. Objectives.
Sec. 353. Academy established.
Sec. 354. Authorization.
Subtitle G—Kinship Care
Sec. 361. Kinship care demonstration.
Sec. 362. Procedures to place children with relatives.
Sec. 363. Authorization of appropriations.
TITLE I—EFFECTIVE
COMPASSION
Subtitle A—Charity Tax Credit
PART I—CHARITY TAX CREDIT
SEC. 101. CREDIT FOR CHARITABLE CONTRIBUTIONS TO
CERTAIN PRIVATE CHARITIES PROVIDING
ASSISTANCE TO THE POOR.
(a) IN GENERAL.—Subpart A of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of
‘‘(2) COLLECTION ORGANIZATIONS.—Such term
also includes an organization described in section
501(c)(3) and exempt from tax under section 501(a)
which—
‘‘(A) solicits and collects gifts and grants
which, by agreement, are distributed to quali-
fied charities described in paragraph (1),
‘‘(B) distributes at least 90 percent of the
contributions described in subsection (a) col-
lected under subparagraph (A) to qualified
charities described in paragraph (1), and
‘‘(C) meets the requirements of paragraph
(6).
‘‘(3) CHARITY MUST PRIMARILY ASSIST POOR
INDIVIDUALS.—
‘‘(A) IN GENERAL.—An organization meets
the requirements of this paragraph only if the
Secretary reasonably expects that the predomi-
nant activity of such organization will be the
provision of direct services within the United
States to individuals and families whose annual
incomes generally do not exceed 185 percent of
the official poverty line (as defined by the Of-
fice of Management and Budget) in order to
prevent or alleviate poverty among such individ-
uals 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 in regula-
tions, for purposes of subparagraph (A), serv-
ices 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
Secretary reasonably expects that the annual
poverty program expenses of such organization
will not be less than 75 percent 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)),
‘‘(III) any expense for the pur-
pose of fundraising,
‘‘(IV) any expense for a legal
service 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 or-
ganization.
‘‘(5) ELECTION TO TREAT POVERTY PROGRAMS
AS SEPARATE ORGANIZATION.—
‘‘(A) IN GENERAL.—An organization may
elect to treat one or more programs operated by
it as a separate organization for purposes of
this section.
‘‘(B) EFFECT OF ELECTION.—If an orga-
nization elects the application of this para-
graph, the organization shall, in accordance
with regulations—
‘‘(i) maintain separate accounting for
revenues and expenses of programs with
respect to which the election was made,
‘‘(ii) ensure that contributions to
which this section applies be used only for
such programs, and
‘‘(iii) provide for the proportional allo-
cation of management, general, and fund-
raising expenses to such programs to the
extent not allocable to a specific program.
‘‘(C) REPORTING REQUIREMENTS.—
‘‘(i) ORGANIZATIONS NOT OTHERWISE
REQUIRED TO FILE.—An organization not
otherwise required to file any return under
section 6033 shall be required to file such
a return with respect to any poverty pro-
gram treated as a separate organization
under this paragraph.
‘‘(ii) ORGANIZATIONS
REQUIRED
TO
FILE.—An organization otherwise required
to file a return under section 6033—
‘‘(I) shall file a separate return
with respect to any poverty program
treated as a separate organization
under this section, and
‘‘(II) shall include on its own re-
turn the percentages equivalent to
those required of qualified charities
under the last sentence of section
6033(b) and determined with respect
to such organization (without regard
to the expenses of any poverty pro-
gram under subclause (I)).
‘‘(6) ADDITIONAL REQUIREMENTS FOR SOLICI-
TATION ORGANIZATIONS.—The requirements of this
paragraph are met if the organization—
‘‘(A) maintains separate accounting for
revenues 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.
‘‘(e) SUBSTANTIATION
REQUIREMENT
FOR
CON-
TRIBUTIONS IN EXCESS OF $250.—No credit shall be al-
lowed under subsection (a) for any contribution of $250
or more unless the taxpayer substantiates the contribution
by a contemporaneous written acknowledgement by the
qualified charity that meet the requirements of section
170(f)(8)(B). The rules of subparagraphs (C), (D), and
(E) of section 170(f)(8) shall apply for purposes of this
subsection.
‘‘(f) 
TIME
WHEN
CONTRIBUTIONS
DEEMED
MADE.—For purposes of this section, at the election of
the taxpayer, a contribution which is made not later than
the time prescribed by law for filing the return of tax for
the taxable year (not including extensions thereof) shall
be treated as made on the last day of such taxable year.
‘‘(g) COORDINATION WITH DEDUCTION FOR CHARI-
TABLE CONTRIBUTIONS.—
‘‘(1) CREDIT
IN
LIEU
OF
DEDUCTION.—The
credit provided by subsection (a) for any qualified
charitable contribution shall be in lieu of any deduc-
tion otherwise allowable under this chapter for such
contribution.
‘‘(2) 
ELECTION
TO
HAVE
SECTION
NOT
APPLY.—A taxpayer may elect for any taxable year
to have this section not apply.’’
(b) RETURNS.—
(1) QUALIFIED CHARITIES REQUIRED TO PRO-
VIDE COPIES OF ANNUAL RETURN.—Subsection (e)
of section 6104 of such Code (relating to public in-
spection of certain annual returns and applications
for exemption) is amended by adding at the end the
following new paragraph:
‘‘(3) QUALIFIED CHARITIES REQUIRED TO PRO-
VIDE COPIES OF ANNUAL RETURN.—
‘‘(A) IN GENERAL.—Every qualified char-
ity (as defined in section 25A(d)) shall, upon
request of an individual made at an office
where such organization’s annual return filed
under section 6033 is required under paragraph
(1) to be available for inspection, provide a copy
of such return to such individual without charge
other than a reasonable fee for any reproduc-
tion and mailing costs. If the request is made
in person, such copies shall be provided imme-
diately and, if made other than in person, shall
be provided within 30 days.
‘‘(B) PERIOD OF AVAILABILITY.—Subpara-
graph (A) shall apply only during the 3-year pe-
riod beginning on the filing date (as defined in
paragraph (1)(D)) of the return requested.’’
(2) 
ADDITIONAL
INFORMATION.—Section
6033(b) of such Code is amended by adding at the
end the following new flush sentence:
‘‘Each qualified charity (as defined in section 25A(d)) to
which this subsection otherwise applies shall also furnish
each of the percentages determined by dividing the follow-
ing categories of the organization’s expenses for the year
by its total expenses for the year: program services; man-
agement and general; fundraising; and payments to affili-
ates and shall also furnish the category or categories (in-
cluding food, shelter, education, substance abuse, job
training, or otherwise) of services which constitute its pre-
dominant activities.’’
(c) CLERICAL AMENDMENT.—The table of sections
for subpart A of part IV of subchapter A of chapter 1
of such Code is amended by inserting after the item relat-
ing to section 25 the following new item:
‘‘Sec. 25A. Credit for certain charitable contributions.’’
(d) EFFECTIVE DATE.—The amendments made by
this section shall take effect as provided in section 112
(relating to offsetting legislation to eliminate corporate tax
subsidies).
(e) STUDY AND REPORT.—
(1) STUDY.—The Comptroller General of the
United States shall conduct a study of the effects of
the credit under section 25A of the Internal Revenue
Code of 1986, including—
(A) the types of organizations which re-
ceive contributions during the first year to
which the credit applies, and
(B) the types of services provided to the
poor by such organizations.
(2) REPORT.—The Comptroller General shall
report to the Congress the results of such study, in-
cluding—
(A) the geographical distribution of fund-
ing from charity tax credit contributions, and
an analysis of Internal Revenue Service form
990s of qualified charities to determine if the
broad categories of services provided to the poor
(including food, shelter, education, substance
abuse, job training, or otherwise) match the
services that would otherwise be provided by
Federal welfare program funds without the en-
actment of the reductions in the programs
called for by this legislation, and
(B) any recommendations for legislative
changes.
PART II—BUDGET OFFSETS
Subpart A—Tax Offsets
SEC. 111. REPEAL OF EARNED INCOME CREDIT FOR INDI-
VIDUALS WITHOUT CHILDREN.
(a) IN GENERAL.—Subparagraph (A) of section
32(c)(1) of the Internal Revenue Code of 1986 (defining
eligible individual) is amended to read as follows:
‘‘(A) IN GENERAL.—The term ‘eligible in-
dividual’ means any individual who has a quali-
fying child for the taxable year.’’.
(b) CONFORMING AMENDMENTS.—Each of the tables
contained in paragraphs (1) and (2) of section 32(b) of
such Code are amended by striking the items relating to
no qualifying children.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 1999.
SEC. 112. LEGISLATION TO ELIMINATE CORPORATE TAX
SUBSIDIES.
(a) LEGISLATION TO ELIMINATE CORPORATE TAX
SUBSIDIES.—
(1) IN
GENERAL.—Within 30 days after the
date of the enactment of this Act, the House Com-
mittee on Ways and Means and the Senate Commit-
tee on Finance shall each report changes in laws
within its jurisdiction reducing corporate tax sub-
sidies sufficient to raise revenues by not less than
$700,000,000 
in 
calendar 
year 
1997,
$3,000,000,000 
in 
calendar 
year 
1998,
$3,000,000,000 
in 
calendar 
year 
1999,
$3,500,000,000 
in 
calendar 
year 
2000, 
and
$4,500,000,000 in calendar year 2001.
(2) ADDITIONAL AMOUNTS.—Amounts referred
to in subsection (a) shall be in addition to amounts
to be reconciled to carry out sections 201 and 202
of House Concurrent Resolution 178 (104th Con-
gress).
(b) EFFECTIVE DATE.—
(1) IN GENERAL.—The amendments made by
section 101 shall apply to contributions made on or
after January 1 of the first calendar year following
the calendar year in which the Director of the Office
of Management and Budget (hereinafter in this sub-
section referred to as the ‘‘Director’’) submits—
(A) the report required by section 252(d)
of the Balanced Budget and Emergency Deficit
Control Act of 1985 for the legislation reported
pursuant to subsection (a)(1); and
(B) at the same time a certification that,
based upon the estimates set forth in that re-
port of the increase in receipts resulting from
that legislation, such increase is not less than
the increase specified in subsection (a)(1) for
each of calendar years 1997 through 2001.
(2) AUTHORIZATION.—The Director is author-
ized and directed to carry out his duties under para-
graph (1)(B).
Subpart B—Food Stamp Program
SEC. 121. ALTERNATIVE AUTHORIZATIONS OF APPROPRIA-
TIONS.
(a) AUTHORIZATION OF APPROPRIATIONS FOR CUR-
RENT PROGRAM.—If section 403 of the Social Security
Act (42 U.S.C. 603) is not replaced as a result of a statute
enacted before October 1, 1998, then the first sentence
of section 18(a)(1) of the Food Stamp Act of 1977 (7
U.S.C. 2027(a)(1)) is amended by striking ‘‘1997.’’ and
inserting ‘‘1998, $29,642,000,000 for fiscal year 1999,
$30,176,000,000 
for 
fiscal 
year 
2000, 
and
$30,697,000,000 for fiscal year 2001.’’.
(b) AUTHORIZATION OF APPROPRIATIONS FOR PRO-
GRAM AS AMENDED BY RECONCILIATION ACT.—If section
403 of the Social Security Act (42 U.S.C. 603) is replaced
as a result of a statute enacted before October 1, 1998,
then the first sentence of section 18(a)(1) of the Food
Stamp Act of 1977 (7 U.S.C. 2027(a)(1)) is amended by
striking ‘‘1997.’’ and inserting ‘‘1998, $25,647,000,000
for fiscal year 1999, $26,008,000,000 for fiscal year 2000,
and $26,193,000,000 for fiscal year 2001.’’.
Subpart C—Reductions Under Social Security Act
SEC. 131. REDUCTION OF AMOUNTS PAID TO STATES
UNDER PART A OF TITLE IV OF THE SOCIAL
SECURITY ACT.
(a) IN GENERAL.—Notwithstanding any other provi-
sion of law, the Secretary of Health and Human Services
shall reduce the amount otherwise payable to each State
under the selected payment provisions of part A of title
IV of the Social Security Act, for each quarter in calendar
year 1999, 2000, and 2001, by such equal percentage for
the calendar quarter as may be necessary to ensure that
the total amount of such reductions for the calendar year
equals the applicable percentage for the calendar year of
the total of such otherwise payable amounts.
(b) DEFINITIONS.—As used in subsection (a):
(1) APPLICABLE PERCENTAGE.—The term ‘‘ap-
plicable percentage’’ means—
(A) 
for 
calendar 
year 
1999,
$1,950,000,000 divided by the total amount
which, in the absence of this section, would be
paid under the selected payment provisions re-
ferred to in subsection (a) for the calendar
year;
(B) 
for 
calendar 
year 
2000,
$2,300,000,000 divided by the total amount
which, in the absence of this section, would be
paid under the selected payment provisions for
calendar year 2000; or
(C) 
for 
calendar 
year 
2001,
$3,150,000,000 divided by the total amount
which, in the absence of this section, would be
paid under the selected payment provisions for
calendar year 2001.
(2) SELECTED PAYMENT PROVISIONS OF PART
A OF TITLE IV OF THE SOCIAL SECURITY ACT.—The
term ‘‘selected payment provisions of part A of title
IV of the Social Security Act’’ means section 403 of
the Social Security Act or, if such section is replaced
after June 24, 1996, section 403(a)(1) of the Social
Security Act.
(3) STATE.—The term ‘‘State’’ has the mean-
ing given such term by section 1101(a)(1) of the So-
cial Security Act when used in title IV of such Act.
SEC. 132. REPEAL OF BLOCK GRANTS TO STATES FOR SO-
CIAL SERVICES.
(a) REPEAL.—Title XX of the Social Security Act
(42 U.S.C. 1397 et seq.) is repealed.
(b) NO EFFECT ON FUNDS OBLIGATED FOR QUALI-
FIED EMPOWERMENT ZONES AND QUALIFIED ENTER-
PRISE COMMUNITIES.—The repeal made by subsection (a)
shall not apply to funds obligated under section 2007 of
the Social Security Act before the effective date of this
section.
(c) EFFECTIVE DATE.—This section and the amend-
ments and repeals made by this section shall take effect
on October 1, 1997.
Subpart D—Housing and Community Development
Programs
SEC. 141. REDUCTION OF COMMUNITY DEVELOPMENT
BLOCK GRANT AMOUNTS.
Section 103 of the Housing and Community Develop-
ment Act of 1974 (42 U.S.C. 5303) is amended—
(1) by striking the second sentence and insert-
ing the following new sentence: ‘‘For purposes of as-
sistance under section 106, there is authorized to be
appropriated $3,312,000,000 for each of fiscal years
1999, 2000, and 2001.’’;
(2) by inserting ‘‘(a) AUTHORIZATION OF AP-
PROPRIATIONS.—’’ after ‘‘SEC. 103.’’; and
(3) by adding at the end the following new sub-
section:
‘‘(b) LIMITATION.—Notwithstanding subsection (a)
or any other provision of law, the amount authorized to
be appropriated and the amount used for grants under
this title in fiscal year 1999 or any fiscal year thereafter
may not exceed $3,312,000,000. This subsection may not
be construed to authorize the appropriation of any
amounts for any fiscal year.’’.
SEC. 142. REPEAL OF HOME PROGRAM.
(a) REPEAL.—Effective January 1, 1999, title II of
the Cranston-Gonzalez National Affordable Housing Act
(42 U.S.C. 12721 et seq.) is repealed.
(b) HOME INVESTMENT TRUST FUNDS.—Notwith-
standing subsection (a), the Secretary of Housing and
Urban Development shall maintain a HOME Investment
Trust Fund in accordance with section 218 of the Cran-
ston-Gonzalez National Affordable Housing Act, as in ef-
fect before the repeal under subsection (a), for each par-
ticipating jurisdiction during the period of time that the
jurisdiction has a positive balance in such fund. Amounts
credited to the HOME Investment Trust Fund of a par-
ticipating jurisdiction shall be available, on and after Jan-
uary 1, 1999, in accordance with the terms of title II of
the Cranston-Gonzalez National Affordable Housing Act,
as in effect before such repeal.
(c) AFFORDABLE HOUSING REQUIREMENTS.—The
repeal under subsection (a) shall not affect any agreement,
obligation, or requirement, pursuant to title II of the
Cranston-Gonzalez National Affordable Housing Act (as
in effect before such repeal), to maintain housing assisted
under such title as affordable housing.
(d) CONFORMING AMENDMENTS.—Effective January
1, 1999—
(1) the United States Housing Act of 1937 is
amended—
(A) in section 8(f) (42 U.S.C. 1437f(f))—
(i) by striking paragraph (4); and
(ii) by redesignating paragraphs (5),
(6), and (7) as paragraphs (4), (5), and
(6), respectively; and
(B) in section 303(c) (42 U.S.C. 1437aaa–
2(c)), by striking paragraph (3);
Act of 1990 (12 U.S.C. 4116(b)(5)(D)) is amend-
ed—
(A) in the third sentence, by inserting ‘‘(as
in effect on December 31, 1998)’’ before the pe-
riod; and
(B) by adding at the end the following: ‘‘If
the HOME Investment Trust Fund for the unit
of general local government or State in which
the housing is located has been terminated, any
such proceeds shall be paid to such unit or
State and the Secretary shall take such actions
as are necessary to ensure that such proceeds
are immediately available for such eligible ac-
tivities to expand the supply of affordable hous-
ing.’’.
Subtitle B—Other Provisions
SEC. 151. CREDIT FOR CHARITABLE CONTRIBUTIONS TO
INDIVIDUALS PROVIDING HOME CARE TO
CERTAIN INDIVIDUALS IN NEED.
(a) IN GENERAL.—Subpart A of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of
1986 (relating to nonrefundable personal credits), as
amended by section 101, is amended by inserting after
section 25A the following new section:
‘‘SEC. 25B. CREDIT FOR HOME CARE FOR NEEDY INDIVID-
UALS.
‘‘(a) IN GENERAL.—In the case of an individual,
there shall be allowed as a credit against the tax imposed
by this chapter for a taxable year an amount equal to
$500 for each eligible individual.
‘‘(b) ELIGIBLE INDIVIDUAL.—For purposes of this
section—
‘‘(1) IN GENERAL.—The term ‘eligible individ-
ual’ means an individual—
‘‘(A) who is a member of a class of individ-
uals described in paragraph (2), and
‘‘(B) to whom the taxpayer provides quali-
fied home care services which are required by
the individual by reason of being a member of
such a class.
‘‘(2) NEEDY INDIVIDUALS.—The classes of indi-
viduals described in this paragraph are as follows:
‘‘(A) Unmarried pregnant women.
‘‘(B) Hospice care patients, including
AIDS patients and cancer patients.
‘‘(C) Homeless individuals.
‘‘(D) Battered women and battered women
with children.
‘‘(3) QUALIFIED HOME CARE SERVICES.—The
term ‘qualified home care services’ means those serv-
ices which the taxpayer is certified as being qualified
to provide to an eligible individual by an organiza-
tion—
‘‘(A) 
which 
is 
described 
in 
section
501(c)(3) and exempt from tax under section
501(a), and
‘‘(B) the predominant activity of which is
providing care to one or more classes of eligible
individuals.’’
(b) CLERICAL AMENDMENT.—The table of sections
for subpart A of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986 is amended by in-
serting after the item relating to section 25A the following
new item:
‘‘Sec. 25B. Credit for home care for needy individuals.’’
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 1996.
SEC. 152. MEDICAL VOLUNTEER TORT CLAIM IMMUNITY.
Section 224 of the Public Health Service Act (42
U.S.C. 233) is amended by adding at the end the following
subsection:
‘‘(o)(1) For purposes of this section, a free clinic
health professional shall in providing a qualifying health
service to an individual be deemed to be an employee of
the Public Health Service for a calendar year that begins
during a fiscal year for which a transfer was made under
paragraph (6)(D). The preceding sentence is subject to
the provisions of this subsection.
‘‘(2) In providing a health service to an individual,
a health care practitioner shall for purposes of this sub-
section be considered to be a free clinic health professional
if the following conditions are met:
‘‘(A) The service is provided to the individual at
a free clinic, or through offsite programs or events
carried out by the free clinic.
‘‘(B) The free clinic is sponsoring the health
care practitioner pursuant to paragraph (5)(C).
‘‘(C) The service is a qualifying health service
(as defined in paragraph (4)).
‘‘(D) Neither the health care practitioner nor
the free clinic receives any compensation for the
service from the individual or from any third-party
payor (including reimbursement under any insurance
policy or health plan, or under any Federal or State
health benefits program). With respect to compliance
with such condition:
‘‘(i) The health care practitioner may re-
ceive repayment from the free clinic for reason-
able expenses incurred by the health care prac-
titioner in the provision of the service to the in-
dividual.
‘‘(ii) The free clinic may accept voluntary
donations for the provision of the service by the
health care practitioner to the individual.
‘‘(E) Before the service is provided, the health
care practitioner or the free clinic provides written
notice to the individual of the extent to which the
legal liability of the health care practitioner is lim-
ited pursuant to this subsection (or in the case of an
emergency, the written notice is provided to the indi-
vidual as soon after the emergency as is practicable).
If the individual is a minor or is otherwise legally in-
competent, the condition under this subparagraph is
that the written notice be provided to a legal guard-
ian or other person with legal responsibility for the
care of the individual.
‘‘(F) At the time the service is provided, the
health care practitioner is licensed or certified in ac-
cordance with applicable law regarding the provision
of the service.
‘‘(3)(A) For purposes of this subsection, the term
‘free clinic’ means a health care facility operated by a non-
profit private entity meeting the following requirements:
‘‘(i) The entity does not, in providing health
services through the facility, accept reimbursement
from any third-party payor (including reimburse-
ment under any insurance policy or health plan, or
under any Federal or State health benefits pro-
gram).
‘‘(ii) The entity, in providing health services
through the facility, either does not impose charges
on the individuals to whom the services are provided,
or imposes a charge according to the ability of the
individual involved to pay the charge.
‘‘(iii) The entity is licensed or certified in ac-
cordance with applicable law regarding the provision
of health services.
‘‘(B) With respect to compliance with the conditions
under subparagraph (A), the entity involved may accept
voluntary donations for the provision of services.
‘‘(4) For purposes of this subsection, the term ‘quali-
fying health service’ means any medical assistance re-
quired or authorized to be provided in the program under
title XIX of the Social Security Act, without regard to
whether the medical assistance is included in the plan sub-
mitted under such program by the State in which the
health care practitioner involved provides the medical as-
sistance. References in the preceding sentence to such pro-
gram shall as applicable be considered to be references to
any successor to such program.
‘‘(5) Subsection (g) (other than paragraphs (3)
through (5)) and subsections (h), (i), and (l) apply to a
health care practitioner for purposes of this subsection to
the same extent and in the same manner as such sub-
sections apply to an officer, governing board member, em-
ployee, or contractor of an entity described in subsection
(g)(4), subject to paragraph (6) and subject to the follow-
ing:
‘‘(A) The first sentence of paragraph (1) ap-
plies in lieu of the first sentence of subsection
(g)(1)(A).
‘‘(B) This subsection may not be construed as
deeming any free clinic to be an employee of the
Public Health Service for purposes of this section.
‘‘(C) With respect to a free clinic, a health care
practitioner is not a free clinic health professional
unless the free clinic sponsors the health care practi-
tioner. For purposes of this subsection, the free clin-
ic shall be considered to be sponsoring the health
care practitioner if—
‘‘(i) with respect to the health care practi-
tioner, the free clinic submits to the Secretary
an application meeting the requirements of sub-
section (g)(1)(D); and
‘‘(ii) the Secretary, pursuant to subsection
(g)(1)(E), determines that the health care prac-
titioner is deemed to be an employee of the
Public Health Service.
‘‘(D) In the case of a health care practitioner
who is determined by the Secretary pursuant to sub-
section (g)(1)(E) to be a free clinic health profes-
sional, this subsection applies to the health care
practitioner (with respect to the free clinic sponsor-
ing the health care practitioner pursuant to subpara-
graph C)) for any cause of action arising from an
act or omission of the health care practitioner occur-
ring on or after the date on which the Secretary
makes such determination.
‘‘(E) Subsection (g)(1)(F) applies to a health
care practitioner for purposes of this subsection only
to the extent that, in providing health services to an
individual, each of the conditions specified in para-
graph (2) is met.
‘‘(6)(A) For purposes of making payments for judg-
ments against the United States (together with related
fees and expenses of witnesses) pursuant to this section
arising from the acts or omissions of free clinic health pro-
fessionals, there is authorized to be appropriated
$10,000,000 for each fiscal year.
‘‘(B) The Secretary shall establish a fund for pur-
poses of this subsection. Each fiscal year amounts appro-
priated under subparagraph (A) shall be deposited in such
fund.
‘‘(C) Not later than May 1 of each fiscal year, the
Attorney General, in consultation with the Secretary, shall
submit to the Congress a report providing an estimate of
the amount of claims (together with related fees and ex-
penses of witnesses) that, by reason of the acts or omis-
sions of free clinic health professionals, will be paid pursu-
ant to this section during the calendar year that begins
in the following fiscal year. Subsection (k)(1)(B) applies
to the estimate under the preceding sentence regarding
free clinic health professionals to the same extent and in
the same manner as such subsection applies to the esti-
mate under such subsection regarding officers, governing
board members, employees, and contractors of entities de-
scribed in subsection (g)(4).
‘‘(D) Not later than December 31 of each fiscal year,
the Secretary shall transfer from the fund under subpara-
graph (B) to the appropriate accounts in the Treasury an
amount equal to the estimate made under subparagraph
(C) for the calendar year beginning in such fiscal year,
subject to the extent of amounts in the fund.
‘‘(7)(A) This subsection takes effect on the date of
the enactment of the first appropriations Act that makes
an appropriation under paragraph (6)(A), except as pro-
vided in subparagraph (B)(i).
‘‘(B)(i) Effective on the date of the enactment of the
Health Insurance Portability and Accountability Act of
1996—
‘‘(I) the Secretary may issue regulations for
carrying out this subsection, and the Secretary may
accept and consider applications submitted pursuant
to paragraph (5)(C); and
‘‘(II) reports under paragraph (6)(C) may be
submitted to the Congress.
‘‘(ii) For the first fiscal year for which an appropria-
tion is made under subparagraph (A) of paragraph (6),
if an estimate under subparagraph (C) of such paragraph
has not been made for the calendar year beginning in such
fiscal year, the transfer under subparagraph (D) of such
paragraph shall be made notwithstanding the lack of the
estimate, and the transfer shall be made in an amount
equal to the amount of such appropriation.’’.
SEC. 153. COMMUNITY PARTNERSHIP GRANT PROGRAM.
(a) IN GENERAL.—The Attorney General and the
Secretary of Health and Human Services shall jointly es-
tablish and carry out a competitive grant program to pro-
vide funding to States and communities to—
(1) establish an information network to enhance
coordination of matches between—
(A) churches, synagogues and other com-
munities of faith, and other community groups;
and
(B)(i) families receiving aid to families
with dependent children under part A of title
IV of the Social Security Act (42 U.S.C. 601 et
seq.) who voluntarily elect to participate; or
(ii) nonviolent criminal offenders who elect
to participate, and are directed to such a pro-
gram through the judicial system;
(2) hire staff to coordinate matches, recruit
churches, enhance coordination between the public
welfare system, judicial system, churches, syna-
gogues and other communities of faith, and other
community groups; and
(3) disseminate information, including training,
to Government agencies and interested community
groups about programs receiving funding under this
Act.
(b) FUNDING.—
(1) IN GENERAL.—A grant under this section
shall not exceed $1,000,000 in any fiscal year.
(2) SOURCES.—There are authorized to be ap-
propriated not more than $50,000,000, of which—
(A) not more than $25,000,000 shall be
available from the Violent Crime Reduction
Trust Fund; and
(B) not more than $25,000,000 shall be
available from funds appropriated to the Sec-
retary of Health and Human Services for ad-
ministrative expenses.
(c) 
INFORMATION
CLEARINGHOUSES.—Of 
the
amount made available under subsection (b), not more
than a total of $1,000,000 shall be available to the Attor-
ney General and Secretary of Health and Human Services
for each to establish a national information clearinghouse
at the Department of Justice and the Department of
Health and Human Services, respectively, to provide infor-
mation and networking to assist States in establishing and
carrying out programs under subsection (a).
TITLE II—COMMUNITY
EMPOWERMENT
Subtitle A—Education
SEC. 201. SHORT TITLE.
This subtitle may be cited as the ‘‘Educational Choice
and Equity Act of 1995’’.
SEC. 202. PURPOSE.
The purpose of this subtitle is to determine the ef-
fects on students and schools of providing financial assist-
ance to low-income parents to enable such parents to se-
lect the public or private schools their children will attend.
SEC. 203. DEFINITIONS.
As used in this subtitle—
(1) the term ‘‘choice school’’ means any public
or private school, including a private sectarian
school or a public charter school, that is involved in
a demonstration project assisted under this subtitle;
(2) the term ‘‘eligible child’’ means a child in
grades 1 through 12 who is eligible for free or re-
duced price lunches under the National School
Lunch Act (42 U.S.C. 1751 et seq.);
(3) the term ‘‘eligible entity’’ means a public
agency, institution, or organization, such as a State,
a State or local educational agency, a consortium of
public agencies, or a consortium of public and pri-
vate nonprofit organizations, that can demonstrate,
to the satisfaction of the Secretary, its ability to—
(A) receive, disburse, and account for Fed-
eral funds; and
(B) carry out the activities described in its
application under this subtitle;
(4) the term ‘‘evaluating agency’’ means any
academic institution, consortium of professionals, or
private or nonprofit organization, with demonstrated
experience in conducting evaluations, that is not an
agency or instrumentality of the Federal Govern-
ment;
(5) the term ‘‘local educational agency’’ has the
meaning given that term in section 14101 of the El-
ementary and Secondary Education Act of 1965 (20
U.S.C. 8801);
(6) the term ‘‘parent’’ includes a legal guardian
or other individual acting in loco parentis;
(7) the term ‘‘school’’ means a school that pro-
vides elementary education or secondary education
(through grade 12), as determined under State law;
and
(8) the term ‘‘Secretary’’ means the Secretary
of Education.
SEC. 204. AUTHORIZATION OF APPROPRIATIONS.
There 
are 
authorized 
to 
be 
appropriated
$600,000,000 for fiscal year 1996 and such sums as may
be necessary for each of the fiscal years 1997, 1998, 1999,
and 2000 to carry out this subtitle.
SEC. 205. PROGRAM AUTHORIZED.
(a) RESERVATION.—From the amount appropriated
pursuant to the authority of section 204 in any fiscal year,
the Secretary shall reserve and make available to the
Comptroller General of the United States 2 percent for
evaluation of the demonstration projects assisted under
this subtitle in accordance with section 210A.
(b) GRANTS.—
(1) IN
GENERAL.—From the amount appro-
priated pursuant to the authority of section 204 and
not reserved under subsection (a) for any fiscal year,
the Secretary shall award grants to eligible entities
to enable such entities to carry out at least 100
demonstration projects under which low-income par-
ents receive education certificates for the costs of en-
rolling their eligible children in a choice school.
(2) AMOUNT.—The Secretary shall award
grants under paragraph (1) for fiscal year 1996 in
amounts of $5,000,000 or less.
(3) CONTINUING ELIGIBILITY.—The Secretary
shall continue a demonstration project under this
subtitle by awarding a grant under paragraph (1) to
an eligible entity that received such a grant for a fis-
cal year preceding the fiscal year for which the de-
termination is made, if the Secretary determines
that such eligible entity was in compliance with this
subtitle for such preceding fiscal year.
(c) USE OF GRANTS.—Grants awarded under sub-
section (b) shall be used to pay the costs of—
(1) providing education certificates to low-in-
come parents to enable such parents to pay the tui-
tion, the fees, the allowable costs of transportation,
if any, and the costs of complying with section
209(a)(1), if any, for their eligible children to attend
a choice school; and
(2) administration of the demonstration project,
which shall not exceed 15 percent of the amount re-
ceived under the grant for the first fiscal year for
which the eligible entity provides education certifi-
cates under this subtitle or 10 percent of such
amount for any subsequent year, including—
(A) seeking the involvement of choice
schools in the demonstration project;
(B) providing information about the dem-
onstration project, and the schools involved in
the demonstration project, to parents of eligible
children;
(C) making determinations of eligibility for
participation in the demonstration project for
eligible children;
(D) selecting students to participate in the
demonstration project;
(E) determining the amount of, and issu-
ing, education certificates;
(F) compiling and maintaining such finan-
cial and programmatic records as the Secretary
may prescribe; and
(G) collecting such information about the
effects of the demonstration project as the eval-
uating agency may need to conduct the evalua-
tion described in section 210A.
(d) SPECIAL RULE.—Each school participating in a
demonstration project under this subtitle shall comply
with title VI of the Civil Rights Act of 1964 (42 U.S.C.
2000d et seq.) which prohibits discrimination on the basis
of race, color, or national origin.
SEC. 206. AUTHORIZED PROJECTS; PRIORITY.
(a) AUTHORIZED PROJECTS.—The Secretary may
award a grant under this subtitle only for a demonstration
project that—
(1) involves at least one local educational agen-
cy that—
(A) receives funds under section 1124A of
the Elementary and Secondary Education Act
of 1965 (20 U.S.C. 6334); and
(B) is among the 20 percent of local edu-
cational agencies receiving funds under section
1124A of such Act (20 U.S.C. 6334) in the
State that have the highest number of children
described in section 1124(c) of such Act (20
U.S.C. 6333(c)); and
(2) includes the involvement of a sufficient
number of public and private choice schools, in the
judgment of the Secretary, to allow for a valid dem-
onstration project.
(b) PRIORITY.—In awarding grants under this sub-
title, the Secretary shall give priority to demonstration
projects—
(1) in which choice schools offer an enrollment
opportunity to the broadest range of eligible chil-
dren;
(2) that involve diverse types of choice schools;
and
(3) that will contribute to the geographic diver-
sity of demonstration projects assisted under this
subtitle, including awarding grants for demonstra-
tion projects in States that are primarily rural and
awarding grants for demonstration projects in States
that are primarily urban.
SEC. 207. APPLICATIONS.
(a) IN GENERAL.—Any eligible entity that wishes to
receive a grant under this subtitle shall submit an applica-
tion to the Secretary at such time and in such manner
as the Secretary may prescribe.
(b) CONTENTS.—Each application described in sub-
section (a) shall contain—
(1) information demonstrating the eligibility of
the eligible entity for participation in the demonstra-
tion project;
(2) with respect to choice schools—
(A) a description of the standards used by
the eligible entity to determine which public and
private schools are within a reasonable commut-
ing distance of eligible children and present a
reasonable commuting cost for such eligible
children;
(B) a description of the types of potential
choice schools that will be involved in the dem-
onstration project;
(C)(i) a description of the procedures used
to encourage public and private schools to be
involved in the demonstration project; and
(ii) a description of how the eligible entity
will annually determine the number of spaces
available for eligible children in each choice
school;
(D) an assurance that each choice school
will not impose higher standards for admission
or participation in its programs and activities
for eligible children provided education certifi-
cates under this subtitle than the choice school
does for other children;
(E) an assurance that each choice school
operated, for at least 1 year prior to accepting
education certificates under this subtitle, an
educational program similar to the educational
program for which such choice school will ac-
cept such education certificates;
(F) an assurance that the eligible entity
will terminate the involvement of any choice
school that fails to comply with the conditions
of its involvement in the demonstration project;
and
(G) a description of the extent to which
choice schools will accept education certificates
under this subtitle as full or partial payment
for tuition and fees;
(3) with respect to the participation in the dem-
onstration project of eligible children—
(A) a description of the procedures to be
used to make a determination of the eligibility
of an eligible child for participation in the dem-
onstration project, which shall include—
(i) the procedures used to determine
eligibility for free or reduced price lunches
under the National School Lunch Act (42
U.S.C. 1751 et seq.); or
(ii) any other procedure, subject to
the Secretary’s approval, that accurately
establishes the eligibility of an eligible child
for such participation;
(B) a description of the procedures to be
used to ensure that, in selecting eligible chil-
dren to participate in the demonstration
project, the eligible entity will—
(i) apply the same criteria to both
public and private school eligible children;
and
(ii) give priority to eligible children
from the lowest income families;
(C) a description of the procedures to be
used to ensure maximum choice of schools for
participating eligible children, including proce-
dures to be used when—
(i) the number of parents provided
education certificates under this subtitle
who desire to enroll their eligible children
in a particular choice school exceeds the
number of eligible children that the choice
school will accept; and
(ii) grant funds and funds from local
sources are insufficient to support the total
cost of choices made by parents with edu-
cation certificates under this subtitle; and
(D) a description of the procedures to be
used 
to 
ensure 
compliance 
with 
section
209(a)(1), which may include—
(i) the direct provision of services by
a local educational agency; and
(ii) arrangements made by a local
educational agency with other service pro-
viders;
(4) with respect to the operation of the dem-
onstration project—
(A) a description of the geographic area to
be served;
(B) a timetable for carrying out the dem-
onstration project;
(C) a description of the procedures to be
used for the issuance and redemption of edu-
cation certificates under this subtitle;
(D) a description of the procedures by
which a choice school will make a pro rata re-
fund of the education certificate under this sub-
title for any participating eligible child who
withdraws from the school for any reason, be-
fore completing 75 percent of the school attend-
ance period for which the education certificate
was issued;
(E) a description of the procedures to be
used to provide the parental notification de-
scribed in section 210;
(F) an assurance that the eligible entity
will place all funds received under this subtitle
into a separate account, and that no other
funds will be placed in such account;
(G) an assurance that the eligible entity
will provide the Secretary periodic reports on
the status of such funds;
(H) an assurance that the eligible entity
will cooperate with the Comptroller General of
the United States and the evaluating agency in
carrying out the evaluations described in section
210A; and
(I) an assurance that the eligible entity
will—
(i) maintain such records as the Sec-
retary may require; and
(ii) comply with reasonable requests
from the Secretary for information; and
(5) such other assurances and information as
the Secretary may require.
SEC. 208. EDUCATION CERTIFICATES.
(a) EDUCATION CERTIFICATES.—
(1) AMOUNT.—The amount of an eligible
child’s education certificate under this subtitle shall
be determined by the eligible entity, but shall be an
amount that provides to the recipient of the edu-
cation certificate the maximum degree of choice in
selecting the choice school the eligible child will at-
tend.
(2) CONSIDERATIONS.—
(A) IN GENERAL.—Subject to such regula-
tions as the Secretary shall prescribe, in deter-
mining the amount of an education certificate
under this subtitle an eligible entity shall con-
sider—
(i) the additional reasonable costs of
transportation directly attributable to the
eligible child’s participation in the dem-
onstration project; and
(ii) the cost of complying with section
209(a)(1).
(B) SCHOOLS CHARGING TUITION.—If an
eligible child participating in a demonstration
project under this subtitle was attending a pub-
lic or private school that charged tuition for the
year preceding the first year of such participa-
tion, then in determining the amount of an edu-
cation certificate for such eligible child under
this subtitle the eligible entity shall consider—
(i) the tuition charged by such school
for such eligible child in such preceding
year; and
(ii) the amount of the education cer-
tificates under this subtitle that are pro-
vided to other eligible children.
(3) SPECIAL RULE.—An eligible entity may pro-
vide an education certificate under this subtitle to
the parent of an eligible child who chooses to attend
a school that does not charge tuition or fees, to pay
the additional reasonable costs of transportation di-
rectly attributable to the eligible child’s participation
in the demonstration project or the cost of comply-
ing with section 209(a)(1).
(b) ADJUSTMENT.—The amount of the education cer-
tificate for a fiscal year may be adjusted in the second
and third years of an eligible child’s participation in a
demonstration project under this subtitle to reflect any in-
crease or decrease in the tuition, fees, or transportation
costs directly attributable to that eligible child’s continued
attendance at a choice school, but shall not be increased
for this purpose by more than 10 percent of the amount
of the education certificate for the fiscal year preceding
the fiscal year for which the determination is made. The
amount of the education certificate may also be adjusted
in any fiscal year to comply with section 209(a)(1).
(c) MAXIMUM AMOUNT.—Notwithstanding any other
provision of this section, the amount of an eligible child’s
education certificate shall not exceed the per pupil expend-
iture for elementary or secondary education, as appro-
priate, by the local educational agency in which the public
school to which the eligible child would normally be as-
signed is located for the fiscal year preceding the fiscal
year for which the determination is made.
(d) INCOME.—An education certificate under this
subtitle, and funds provided under the education certifi-
cate, shall not be treated as income of the parents for pur-
poses of Federal tax laws or for determining eligibility for
any other Federal program.
SEC. 209. EFFECT ON OTHER PROGRAMS; USE OF SCHOOL
LUNCH DATA; CONSTRUCTION PROVISIONS.
(a) EFFECT ON OTHER PROGRAMS.—
(1) IN GENERAL.—An eligible child participat-
ing in a demonstration project under this subtitle,
who, in the absence of such a demonstration project,
would have received services under part A of title I
of the Elementary and Secondary Education Act of
1965 (20 U.S.C. 6311 et seq.) shall be provided
such services.
(2) PART B OF THE INDIVIDUALS WITH DIS-
ABILITIES EDUCATION ACT.—Nothing in this sub-
title shall be construed to affect the requirements of
part B of the Individuals with Disabilities Education
Act (20 U.S.C. 1411 et seq.).
(3) COUNTING OF ELIGIBLE CHILDREN.—Not-
withstanding any other provision of law, any local
educational agency participating in a demonstration
project under this subtitle may count eligible chil-
dren who, in the absence of such a demonstration
project, would attend the schools of such agency, for
purposes of receiving funds under any program ad-
ministered by the Secretary.
(b) USE OF SCHOOL LUNCH DATA.—Notwithstand-
ing section 9 of the National School Lunch Act (42 U.S.C.
1751 et seq.), an eligible entity receiving a grant under
this subtitle may use information collected for the purpose
of determining eligibility for free or reduced price lunches
to determine an eligible child’s eligibility to participate in
a demonstration project under this subtitle and, if needed,
to rank families by income, in accordance with section
207(b)(3)(B)(ii). All such information shall otherwise re-
main confidential, and information pertaining to income
may be disclosed only to persons who need that informa-
tion for the purposes of a demonstration project under this
subtitle.
(c) CONSTRUCTION PROVISIONS.—
(1) OTHER
INSTITUTIONS.—Nothing in this
subtitle shall be construed to supersede or modify
any provision of a State constitution or State law
that prohibits the expenditure of public funds in or
by religious or other private institutions, except that
no provision of a State constitution or State law
shall be construed or applied to prohibit—
(A) any eligible entity receiving funds
under this subtitle from using such funds to
pay the administrative costs of a demonstration
project under this subtitle; or
(B) the expenditure in or by religious or
other private institutions of any Federal funds
provided under this subtitle.
(2) DESEGREGATION PLANS.—Nothing in this
subtitle shall be construed to interfere with any de-
segregation plans that involve school attendance
areas affected by this subtitle.
(3) PROHIBITION OF FEDERAL DIRECTOR, SU-
PERVISION OR CONTROL.—Nothing in this subtitle
shall be construed to authorize the Secretary or any
employee, officer, or agency of the Department of
Education to exercise any direction, supervision, or
control over the curriculum, program of instruction,
or personnel decisions of any educational institution
or school participating in a demonstration project
assisted under this subtitle.
SEC. 210. PARENTAL NOTIFICATION.
Each eligible entity receiving a grant under this sub-
title shall provide timely notice of the demonstration
project to parents of eligible children residing in the area
to be served by the demonstration project. At a minimum,
such notice shall—
(1) describe the demonstration project;
(2) describe the eligibility requirements for par-
ticipation in the demonstration project;
(3) describe the information needed to make a
determination of eligibility for participation in the
demonstration project for an eligible child;
(4) describe the selection procedures to be used
if the number of eligible children seeking to partici-
pate in the demonstration project exceeds the num-
ber that can be accommodated in the demonstration
project;
(5) provide information about each choice
school participating in the demonstration project, in-
cluding information about any admission require-
ments or criteria for each choice school participating
in the demonstration project; and
(6) include the schedule for parents to apply for
their eligible children to participate in the dem-
onstration project.
SEC. 210A. EVALUATION.
(a) ANNUAL EVALUATION.—
(1) CONTRACT.—The Comptroller General of
the United States shall enter into a contract, with
an evaluating agency that has demonstrated experi-
ence in conducting evaluations, for the conduct of an
ongoing rigorous evaluation of the demonstration
projects under this subtitle.
(2) ANNUAL EVALUATION REQUIREMENT.—The
contract described in paragraph (1) shall require the
evaluating agency entering into such contract to an-
nually evaluate each demonstration project under
this subtitle in accordance with the evaluation cri-
teria described in subsection (b).
(3) TRANSMISSION.—The contract described in
paragraph (1) shall require the evaluating agency
entering into such contract to transmit to the Comp-
troller General of the United States—
(A) the findings of each annual evaluation
under paragraph (1); and
(B) a copy of each report received pursu-
ant to section 210B(a) for the applicable year.
(b) EVALUATION CRITERIA.—The Comptroller Gen-
eral of the United States, in consultation with the Sec-
retary, shall establish minimum criteria for evaluating the
demonstration projects under this subtitle. Such criteria
shall provide for—
(1) a description of the implementation of each
demonstration project under this subtitle and the
demonstration project’s effects on all participants,
schools, and communities in the demonstration
project area, with particular attention given to the
effect of parent participation in the life of the school
and the level of parental satisfaction with the dem-
onstration project; and
(2) a comparison of the educational achieve-
ment of all students in the demonstration project
area, including a comparison of—
(A) students receiving education certifi-
cates under this subtitle; and
(B) students not receiving education cer-
tificates under this subtitle.
SEC. 210B. REPORTS.
(a) REPORT BY GRANT RECIPIENT.—Each eligible
entity receiving a grant under this subtitle shall submit
to the evaluating agency entering into the contract under
section 210A(a)(1) an annual report regarding the dem-
onstration project under this subtitle. Each such report
shall be submitted at such time, in such manner, and ac-
companied by such information, as such evaluating agency
may require.
(b) REPORTS BY COMPTROLLER GENERAL.—
(1) ANNUAL REPORTS.—The Comptroller Gen-
eral of the United States shall report annually to the
Congress on the findings of the annual evaluation
under section 210A(a)(2) of each demonstration
project under this subtitle. Each such report shall
contain a copy of—
(A) the annual evaluation under section
210A(a)(2) of each demonstration project under
this subtitle; and
(B) each report received under subsection
(a) for the applicable year.
(2) FINAL REPORT.—The Comptroller General
shall submit a final report to the Congress within 6
months after the conclusion of the demonstration
projects under this subtitle that summarizes the
findings of the annual evaluations conducted pursu-
ant to section 210A(a)(2).
Subtitle B—Restitution and
Responsibility
SEC. 211. RESTITUTION AND RESPONSIBILITY GRANT PRO-
GRAM.
(a) IN GENERAL.—The Attorney General is author-
ized to provide grants to States to enable the States to—
(1) collect data on victim restitution over a
specified period of time as determined by the Attor-
ney General;
(2) create or expand automated data systems to
track restitution payments;
(3) make improvements in the manner in which
restitution is ordered and collected; and
(4) enhance and expand methods of enforce-
ment of restitution orders.
(b) ELIGIBILITY.—To be eligible to receive a grant
under this section, a State shall—
(1) submit an application to the Attorney Gen-
eral, in such form as the Attorney General shall re-
quire, that meets the requirements of subsection (c);
and
(2) certify that the State has a victim advocacy
program that—
(A) provides assistance to victims of crime
throughout the judicial process; and
(B) provides courts with a victim impact
statement prior to sentencing.
(c) APPLICATION.—An application meets the require-
ments of this subsection if it includes—
(1) a description of the State’s victim advocacy
program;
(2) a description of the method by which the
State compiles or will compile data on restitution,
including information on—
(A) restitution amounts ordered and col-
lected;
(B) collection rates for incarcerated offend-
ers and offenders who are on probation;
(C) collection rates for offenders commit-
ting felonies and for those committing mis-
demeanors; and
(D) rates of partial and full payment rates
of collection;
(3) documentation of a State’s current prob-
lems in ordering, collecting, and enforcing restitu-
tion;
(4) a description of State laws and practices re-
lated to restitution;
(5) a description of administrative and legisla-
tive options to improve ordering, collecting, and en-
forcing restitution;
(6) a description of the State’s proposal to cre-
ate or expand an automated data processing system
to track restitution payments;
(7) a description of the State’s plan to improve
the ordering of restitution, including—
(A) provisions to ensure that courts order
restitution whenever a victim suffers economic
loss as a result of unlawful conduct by a de-
fendant;
(B) provisions to ensure that restitution is
ordered in the full amount of the victim’s loss,
as determined by the court;
(C) the prioritization of restitution in the
ordering and disbursing of fees; and
(D) such other provisions consistent with
the purposes of this section;
(8) a description of how the State will improve
collection of restitution payments, including—
(A) the establishment of a central account-
ing, billing, and collection system that tracks
the offender’s obligations and status in meeting
those obligations;
(B) a process by which information about
an offender’s restitution payments is made
available to probation officials;
(C) adopting methods to ensure payments
such as automatic docketing, billing, wage with-
holding, privatization of collection, withholding
State grant privileges, or seizure of State in-
come tax refunds; and
(D) other provisions consistent with the
purposes of this section;
(9) a description of how the State will enforce
restitution payments, including—
(A) assigning an agency responsible for the
enforcement of a restitution order;
(B) adopting policies to increase the inten-
sity of sanctions if an offender defaults on pay-
ments, including—
(i) revoking a term of probation or
parole;
(ii) modifying the terms or conditions
of probation or parole;
(iii) holding a defendant in contempt
of court;
(iv) entering a restraining order or in-
junction; or
(v) ordering the sale of property of
the defendant;
(C) adopting procedures to ensure restitu-
tion orders are entered as civil judgments upon
entry to allow a victim to execute judgment if
restitution payments are delinquent; and
(D) such other provisions consistent with
the purposes of this section; and
(10) the establishment of a community restitu-
tion fund administered by a State agency into which
restitution payments are made by an offender (in
addition to victim restitution payments) and can be
used to pay indigent offenders for performing public
service work.
(d) WAIVER.—The Attorney General may waive the
requirements under subsection (c) for a State that dem-
onstrates sufficient cause for lack of compliance.
(e) GRANT PERIOD.—A grant under this section shall
be awarded for a period of not more than 5 years.
(f) REPORT.—Each State receiving a grant under
this section shall submit an annual report to the Attorney
General that includes an evaluation of the progress of the
projects funded through the grant, an accounting of ex-
penditures, and such other provisions as may be required
by the Attorney General. The Attorney General shall issue
an annual report to Congress that includes the informa-
tion submitted by States under this subsection.
(g) EVALUATION.—
(1) FINAL EVALUATION.—Within a month after
the award of the first grant made under this section,
the Attorney General shall contract with an inde-
pendent organization to do a final evaluation of the
projects funded by this section at the end of 5 years.
(2) INTERIM EVALUATION.—The Attorney Gen-
eral shall conduct an interim evaluation of the
projects funded by this section 3 years after the first
grant made under this section.
(3) CONTENT OF REPORTS.—The reports re-
quired by paragraphs (1) and (2) shall include the
following information:
(A) An evaluation of data collection ef-
forts.
(B) An assessment of whether ordering of
restitution increased and whether prioritizing
restitution in fees collected improved restitution
payments.
(C) An analysis of whether the project was
successful in improving significantly restitution
collection rates.
(D) An evaluation of most effective meth-
ods in improving restitution collection and in
enforcing restitution payments.
(E) An analysis of how effective automated
data systems were in increasing restitution col-
lection.
(F) An analysis of States’ use of the com-
munity restitution fund and its effectiveness in
ensuring indigent offenders pay restitution.
(h) AUTHORIZATION
OF APPROPRIATIONS.—There
are authorized to be appropriated $10,000,000 in each of
fiscal years 1997, 1998, 1999, 2000, and 2001 to carry
out this section
Subtitle C—Independence
SEC. 221. FINDINGS.
The Congress finds that—
(1) traditional welfare programs in the United
States have provided millions of low-income persons
with critically needed food, health, and cash benefits,
and such programs should be improved and contin-
ued;
(2) while such programs have sustained millions
of low-income persons, too rarely have such pro-
grams been successful in promoting and supporting
the transition to economic self-sufficiency;
(3) millions of Americans continue to live in
poverty and continue to receive public assistance;
(4) in addition to the social costs of poverty,
the economic costs to the Federal Government to
provide basic necessities to the poor exceeds
$120,000,000,000 each year;
(5) poverty is a loss of human resources and an
assault on human dignity;
(6) poverty rates remain high and welfare de-
pendency continues, in part, because welfare theory
has taken for granted that a certain level of income
or consumption is necessary for one’s economic well-
being when, in fact, very few people manage to
spend or consume their way out of poverty;
(7) economic well-being does not come solely
from income, spending, and consumption, but also
requires savings, investment, and accumulation of
assets, since assets can improve economic stability,
connect people with a viable and hopeful future,
stimulate development of human and other capital,
enable people to focus and specialize, yield personal,
social, and political dividends, and enhance the wel-
fare of offspring;
(8) income-based welfare policy should be com-
plemented with asset-based welfare policy, because
while income-based policies ensure that present con-
sumption needs (including food, child care, rent,
clothing, and health care) are met, asset-based poli-
cies provide the means to achieve economic self-suffi-
ciency and, accordingly, to leave public assistance;
(9) there is reason to believe that the financial
returns, including increased income, tax revenue,
and decreased welfare cash assistance, of individual
development accounts will far exceed the cost of the
investment;
(10) the Federal Government spends more than
$160,000,000,000 each year to provide middle- and
upper-income persons with incentives to accumulate
savings and assets (including tax subsidies for home
equity accumulation and retirement pension ac-
counts), but such benefits are beyond the reach of
most low-income persons;
(11) under current welfare policies, poor fami-
lies must deplete most of their assets before qualify-
ing for public assistance;
(12) the Federal Government should develop
policies that promote higher rates of personal sav-
ings and net private domestic investment, both of
which fall behind the levels attained in other highly
developed industrial nations; and
(13) the Federal Government should undertake
an asset-based welfare policy demonstration project
to determine the social, civic, psychological, and eco-
nomic effects of asset accumulation opportunities for
low-income persons, families, and communities, and
to determine if such a policy could provide a new
foundation for antipoverty policies and programs in
the United States.
SEC. 222. INDIVIDUAL DEVELOPMENT ACCOUNT DEM-
ONSTRATION PROJECTS.
(a) PURPOSE.—The purpose of this section is to pro-
vide for the establishment of demonstration projects de-
signed to determine—
(1) the social, civic, psychological, and economic
effects of providing to individuals and families with
limited means an incentive to accumulate assets;
(2) the extent to which an asset-based welfare
policy that promotes saving for education, home-
ownership, and microenterprise may be used to en-
able individuals and families with low income to
achieve economic self-sufficiency; and
(3) the extent to which an asset-based welfare
policy improves the community in which participat-
ing individuals and families live.
(b) APPLICATIONS.—
(1) SUBMISSION.—
(A) IN
GENERAL.—Not later than 12
months after the date of the enactment of this
Act, a qualified entity may submit to the Sec-
retary an application to conduct a demonstra-
tion project under this section.
(B) QUALIFIED ENTITY.—For purposes of
this subtitle, the term ‘‘qualified entity’’ means
either—
(i) a not-for-profit organization de-
scribed in section 501(c)(3) of the Internal
Revenue Code of 1986 and exempt from
taxation under section 501(a) of such
Code; or
(ii) a State or local government agen-
cy submitting an application under such
subparagraph jointly with an organization
described in clause (i).
(2) CRITERIA.—In considering whether to ap-
prove any application to conduct a demonstration
project under this section, the Secretary shall assess
the following:
(A) SUFFICIENCY OF PROJECT.—The de-
gree to which the project described in the appli-
cation appears likely to aid project participants
in achieving economic self-sufficiency through
activities requiring qualified expenses (as de-
fined in section 529(c)(1) of the Internal Reve-
nue Code of 1986, as added by section 223 of
this Act). In making such assessment, the Sec-
retary shall consider the overall quality of
project activities in making any particular kind
or combination of qualified expenses (as so de-
fined) to be an essential feature of any project.
(B) ADMINISTRATIVE ABILITY.—The abil-
ity of the applicant to responsibly administer
the project.
(C) ABILITY TO ASSIST PARTICIPANTS.—
The ability of the applicant to assist project
participants to achieve economic self-sufficiency
through the development of assets.
(D) 
COMMITMENT
OF
NON-FEDERAL
FUNDS.—The aggregate amount of direct funds
from non-Federal public sector and private
sources that are formally committed to the
project.
(E) ADEQUACY OF PLAN FOR PROVIDING
INFORMATION
FOR
EVALUATION.—The ade-
quacy of the plan for providing information rel-
evant to an evaluation of the project.
(F) OTHER FACTORS.—Such other factors
as the Secretary may specify.
(3) PREFERENCES.—In considering an applica-
tion to conduct a demonstration project under this
section, the Secretary shall give preference to any
application that—
(A) demonstrates the willingness and abil-
ity to select individuals described in subsection
(e) who are predominantly from households in
which a child (or children) is living with the
child’s biological or adoptive mother or father,
legal guardian, or a responsible adult relative
with whom the child regularly resides;
(B) provides a commitment of non-Federal
funds with a proportionately greater amount of
funds committed by private sector sources; and
(C) targets such individuals residing within
1 or more relatively well-defined communities or
neighborhoods that experience low rates of in-
come or employment.
(4) APPROVAL.—Not later than 15 months
after the date of the enactment of this Act, the Sec-
retary shall, on a competitive basis, approve such ap-
plications to conduct demonstration projects under
this section as the Secretary deems appropriate, tak-
ing into account the assessments required by para-
graphs (2) and (3). The Secretary is encouraged to
ensure that the applications that are approved in-
volve a wide range of communities (both rural and
urban) and diverse populations.
(c) 
DEMONSTRATION
AUTHORITY; 
ANNUAL
GRANTS.—
(1) DEMONSTRATION AUTHORITY.—If the Sec-
retary approves an application to conduct a dem-
onstration project under this section, the Secretary
shall, not later than 16 months after the date of the
enactment of this Act, authorize the applicant to
conduct the project for 4 project years in accordance
with the approved application and this section.
(2) GRANT AUTHORITY.—For each project year
of a demonstration project conducted under this sec-
tion, the Secretary shall make a grant to the quali-
fied entity authorized to conduct the project on the
first day of the project year in an amount not to ex-
ceed the greater of—
(A) the aggregate amount of funds com-
mitted by non-Federal sources; or
(B) $1,000,000.
(3) LIMITATION
ON
GRANT
AMOUNTS
PER
PROJECT.—The amount of each grant for a project
approved under this section shall not exceed
$10,000,000.
(d) RESERVE FUND.—
(1) ESTABLISHMENT.—Each qualified entity
grantee under this section shall establish a Reserve
Fund which shall be maintained in accordance with
this subsection.
(2) AMOUNTS IN RESERVE FUND.—
(A) IN GENERAL.—As soon after receipt as
is practicable, a qualified entity grantee shall
deposit in the Reserve Fund established under
paragraph (1)—
(i) all funds provided to the qualified
entity grantee by any public or private
source in connection with the demonstra-
tion project; and
(ii) the proceeds from any investment
made under paragraph (3)(B).
(B) INDIVIDUAL DEVELOPMENT ACCOUNT
PENALTIES.—
(i) PENALTY AMOUNTS AUTHORIZED
TO BE APPROPRIATED FOR PAYMENT TO
THE RESERVE FUND.—With respect to the
Reserve Fund established by a qualified
entity grantee that provides financial as-
sistance under subsection (g) to any indi-
vidual who pays, or from whose individual
development account is paid, a penalty
amount, there is hereby appropriated to
the Reserve Fund, without fiscal year limi-
tation, an amount equal to such penalty
amount.
(ii) PAYMENT TO RESERVE FUND OF
PENALTY
AMOUNTS
APPROPRIATED
THEREFORE.—The Secretary shall make
quarterly estimated payments to the Re-
serve Fund of any penalty amount appro-
priated pursuant to clause (i).
(C) 
UNIFORM
ACCOUNTING
REGULA-
TIONS.—The Secretary shall prescribe regula-
tions with respect to accounting for amounts in
Reserve Funds.
(3) USE OF RESERVE FUND.—
(A) IN
GENERAL.—A qualified entity
grantee shall use the amounts in the Reserve
Fund established under paragraph (1) to—
(i) assist participants in the dem-
onstration project in obtaining the skills
and information necessary to achieve eco-
nomic self-sufficiency through activities re-
quiring qualified expenses (as so defined);
(ii) provide financial assistance in ac-
cordance with subsection (g) to individuals
selected by the qualified entity grantee to
participate in the project;
(iii) administer the project; and
(iv) provide the research organization
evaluating the project under subsection (k)
with such information with respect to the
project as may be required for the evalua-
tion.
(B) AUTHORITY TO INVEST FUNDS.—
(i) GUIDELINES.—The Secretary shall
establish guidelines for investing amounts
in Reserve Funds in a manner that pro-
vides high liquidity and low risk.
(ii) INVESTMENT.—A qualified entity
grantee shall invest the amounts in its Re-
serve Fund that are not immediately need-
ed to carry out the provisions of subpara-
graph (A), in accordance with guidelines
established under clause (i).
(C) LIMITATION ON USES.—Not more than
7.5 percent of the amounts provided to a quali-
fied entity grantee under subsection (c)(2) shall
be used by the qualified entity grantee for the
purposes described in clauses (i), (iii), and (iv)
of paragraph (3)(A), except that if 2 or more
qualified entities are jointly administering a
project, no qualified entity grantee shall use
more than its proportional share for such pur-
poses.
(4) UNUSED FEDERAL GRANT FUNDS TRANS-
FERRED TO THE SECRETARY WHEN PROJECT TERMI-
NATES.—Notwithstanding paragraph (3), upon the
termination of any demonstration project authorized
under this section, the qualified entity grantee con-
ducting the project shall transfer to the Secretary an
amount equal to—
(A) the amounts in its Reserve Fund at
time of the termination; multiplied by
(B) a percentage equal to—
(i) the aggregate amount of grants
made to the qualified entity grantee under
subsection (c)(2); divided by
(ii) the aggregate amount of all mon-
eys provided to the qualified entity grantee
by all sources to conduct the project.
(e) ELIGIBILITY FOR ASSISTANCE.—
(1) IN
GENERAL.—Any individual who is a
member of a household that meets the following re-
quirements shall be eligible for assistance under a
demonstration project conducted under this section:
(A) INCOME TEST.—The adjusted gross in-
come of the household did not exceed the in-
come limits established under section 32(b)(2)
of the Internal Revenue Code of 1986.
(B) NET WORTH TEST.—
(i) IN GENERAL.—The net worth of
the household, as of the close of the cal-
endar year preceding the determination of
eligibility, does not exceed $20,000.
(ii) 
DETERMINATION
OF
NET
WORTH.—For purposes of clause (i), the
net worth of a household is the amount
equal to—
(I) the aggregate market value of
all assets that are owned in whole or
in part by any member of the house-
hold, minus
(II) the obligations or debts of
any member of the household.
(2) INDIVIDUALS UNABLE TO COMPLETE THE
PROJECT.—The Secretary shall establish such regu-
lations as are necessary, including prohibiting eligi-
bility for further assistance under a demonstration
project conducted under this section, to ensure com-
pliance with this section if an individual participat-
ing in the demonstration project moves from the
community in which the project is conducted or is
otherwise unable to continue participating in the
project.
(f) SELECTION OF INDIVIDUALS TO RECEIVE AS-
SISTANCE.—From among the individuals eligible for as-
sistance under a demonstration project conducted under
this section, each qualified entity grantee shall select the
individuals—
(1) whom the qualified entity grantee deems to
be best suited to receive such assistance; and
(2) to whom the qualified entity grantee will
provide financial assistance in accordance with sub-
section (g).
(g) PROVISION OF FINANCIAL ASSISTANCE.—
(1) IN GENERAL.—Not less than once a month
during each project year, each qualified entity grant-
ee under this section shall deposit in the individual
development account of each individual participating
in the project an amount—
(A) from the grant made under subsection
(c)(2), equal to the amount of earned income
(as defined in section 911(d)(2) of the Internal
Revenue Code of 1986) deposited during the
month by the individual in the individual’s de-
velopment account, and
(B) from the non-Federal funds described
in subsection (b)(2)(D), equal to the amount
described in subparagraph (A).
(2) LIMITATION ON FINANCIAL ASSISTANCE TO
INDIVIDUAL.—Not more than $2,000 from a grant
made under subsection (c)(2) shall be provided to
any 1 individual.
(3) LIMITATION ON FINANCIAL ASSISTANCE TO
HOUSEHOLD.—Not more than $4,000 from a grant
made under subsection (c)(2) shall be provided to
any 1 household.
(4) WITHDRAWAL OF FUNDS.—The Secretary
shall establish such regulations as may be necessary
to ensure that funds held in an individual develop-
ment account are not withdrawn except for 1 or
more of the qualified expenses specified in section
529(c)(1) of the Internal Revenue Code of 1986 (as
added by section 223 of this Act). Such regulations
shall include a requirement that a responsible official
of the qualified entity grantee conducting a project
approve such withdrawal in writing.
(h) 
LOCAL
CONTROL
OVER
DEMONSTRATION
PROJECTS.—Each qualified entity grantee under this sec-
tion shall, subject to the provisions of subsection (j), have
sole authority over the administration of the project. The
Secretary may prescribe only such regulations with respect
to demonstration projects under this section as are nec-
essary to ensure compliance with the approved applica-
tions and this section.
(i) SEMIANNUAL PROGRESS REPORTS.—
(1) IN GENERAL.—Each qualified entity grant-
ee under this section shall prepare semiannual re-
ports on the progress of the project. Each report
shall specify for the semiannual period covered by
the report the following information:
(A) The number of individuals making a
deposit into an individual development account.
(B) Information on the amounts in the Re-
serve Fund established with respect to the
project.
(C) The amounts deposited in the individ-
ual development accounts.
(D) The amounts withdrawn from the indi-
vidual development accounts and the purposes
for which such amounts were withdrawn.
(E) The balances remaining in the individ-
ual development accounts.
(F) Such other information as the Sec-
retary may require to evaluate the project.
(2) SUBMISSION OF REPORTS.—The qualified
entity grantee shall submit each report required to
be prepared under paragraph (1) to—
(A) the Secretary; and
(B) the Treasurer (or equivalent official)
of the State in which the project is conducted,
if the State or local government committed
funds to the demonstration project.
(3) TIMING.—The first report required by para-
graph (1) shall be submitted at the end of the 7-
month period beginning on the date the Secretary
authorized the qualified entity grantee to conduct
the demonstration project, and subsequent reports
shall be submitted every 6 months thereafter, until
the conclusion of the project.
(j) SANCTIONS.—
(1) AUTHORITY
TO
TERMINATE
DEMONSTRA-
TION PROJECT.—If the Secretary determines that a
qualified entity grantee under this section is not op-
erating the project in accordance with the grantee’s
application or this section (and has not implemented
any corrective recommendations directed by the Sec-
retary), the Secretary shall terminate such grantee’s
authority to conduct the project.
(2) ACTIONS REQUIRED UPON TERMINATION.—
If the Secretary terminates the authority to conduct
a demonstration project, the Secretary—
(A) shall suspend the project;
(B) shall take control of the Reserve Fund
established pursuant to subsection (d);
(C) shall make every effort to identify an-
other qualified entity willing and able to con-
duct the project in accordance with the ap-
proved application (or, as modified, if necessary
to incorporate the recommendations) and this
section;
(D) shall, if the Secretary identifies such
an entity—
(i) authorize the entity to conduct the
project in accordance with the approved
application (or, as modified, if necessary,
to incorporate the recommendations) and
this section;
(ii) transfer to the entity control over
the Reserve Fund established pursuant to
subsection (d); and
(iii) consider, for purposes of this sec-
tion—
(I) such other entity to be the
qualified entity originally authorized
to conduct the project; and
(II) the date of such authoriza-
tion to be the date of the original au-
thorization; and
(E) if, by the end of the 1-year period be-
ginning on the date of the termination, the Sec-
retary has not found such a qualified entity,
shall—
(i) terminate the project; and
(ii) from the amount remaining in the
Reserve Fund established as part of the
project, remit to each source that provided
funds under subsection (b)(2)(D) to the
entity originally authorized to conduct the
project, an amount that bears the same
ratio to the amount so remaining as the
amount provided by the source under sub-
section (b)(2)(D) bears to the amount pro-
vided by all such sources under subsection
(b)(2)(D).
(k) EVALUATIONS.—
(1) IN GENERAL.—Not later than 16 months
after the date of the enactment of this Act, the Sec-
retary shall enter into a contract with an independ-
ent research organization to evaluate, individually
and as a group, all qualified entities and sources
participating in the demonstration projects con-
ducted under this section.
(2) FACTORS TO EVALUATE.—In evaluating any
demonstration project conducted under this section,
the research organization shall address the following
factors:
(A) The savings account characteristics
(such as threshold amounts and match rates)
required to stimulate participation in the dem-
onstration project, and how such characteristics
vary among different populations or commu-
nities.
(B) What service configurations of the
qualified entity grantee (such as peer support,
structured planning exercises, mentoring, and
case management) increase the rate and con-
sistency of participation in the demonstration
project and how such configurations vary
among different populations or communities.
(C) The economic, civic, psychological, and
social effects of asset accumulation, and how
such effects vary among different populations
or communities.
(D) The effects of individual development
accounts on savings rates, homeownership, level
of education attained, and self-employment, and
how such effects vary among different popu-
lations or communities.
(E) The potential financial returns to the
Federal Government and to other public sector
and private sector investors in individual devel-
opment accounts over a 5-year and 10-year pe-
riod of time.
(F) The lessons to be learned from the
demonstration projects conducted under this
section and if a permanent program of individ-
ual development accounts should be established.
(G) Such other factors as may be pre-
scribed by the Secretary.
(3) 
METHODOLOGICAL
REQUIREMENTS.—In
evaluating any demonstration project conducted
under this section, the research organization shall—
(A) to the extent possible, use control
groups to compare participants with nonpartici-
pants;
(B) before, during, and after the project,
obtain such quantitative data as are necessary
to evaluate the project thoroughly; and
(C) develop a qualitative assessment, de-
rived from sources such as in-depth interviews,
of how asset accumulation affects individuals
and families.
(4) REPORTS BY THE SECRETARY.—
(A) INTERIM
REPORTS.—Not less than
once during the 12-month period beginning on
the date of the enactment of this Act, and dur-
ing each 12-month period thereafter until all
demonstration projects conducted under this
section are completed, the Secretary shall sub-
mit to the Congress an interim report setting
forth the results of the evaluations conducted
pursuant to this subsection.
(B) FINAL REPORTS.—Not later than 12
months after the conclusion of all demonstra-
tion projects conducted under this section, the
Secretary shall submit to the Congress a final
report setting forth the results and findings of
evaluations conducted pursuant to this sub-
section.
(5) EVALUATION
EXPENSES.—The Secretary
shall expend such sums as may be necessary to carry
out the purposes of this subsection.
(l) DEFINITIONS.—As used in this section:
(1) APPLICABLE PERIOD.—The term ‘‘applica-
ble period’’ means, with respect to amounts to be
paid from a grant made for a project year, the cal-
endar year immediately preceding the calendar year
in which the grant is made.
(2) 
HOUSEHOLD.—The 
term 
‘‘household’’
means all individuals who share use of a dwelling
unit as primary quarters for living and eating sepa-
rate from other individuals.
(3) INDIVIDUAL
DEVELOPMENT
ACCOUNT.—
The term ‘‘individual development account’’ has the
same meaning given such term in section 529 of the
Internal Revenue Code of 1986, as added by section
223 of this Act.
(4) PENALTY
AMOUNT.—The term ‘‘penalty
amount’’ means any of the following:
(A) FINANCIAL ASSISTANCE FORFEITED.—
Any amount paid into the general fund of the
Treasury of the United States under section
529(e) of the Internal Revenue Code of 1986
(as so added).
(B) 10 PERCENT ADDITION TO TAX.—Any
additional tax imposed by section 529(f) of the
Internal Revenue Code of 1986 (as so added).
(C) OTHER EXCISE OR PENALTY TAXES.—
Any tax imposed with respect to an individual
development account by section 4973, 4975, or
6693 of the Internal Revenue Code of 1986.
(5) PROJECT YEAR.—The term ‘‘project year’’
means, with respect to a demonstration project, any
of the 4 consecutive 12-month periods beginning on
the date the project is originally authorized to be
conducted.
(6) QUALIFIED SAVINGS OF THE INDIVIDUAL
FOR THE PERIOD.—The term ‘‘qualified savings of
the individual for the period’’ means the aggregate
of the amounts contributed by the individual to the
individual development account of the individual
during the period.
(7) SECRETARY.—The term ‘‘Secretary’’ means
the Secretary of Health and Human Services.
(m) AUTHORIZATION
OF
APPROPRIATIONS.—To
carry out this section, the following amounts are author-
ized to be appropriated:
(1) $20,000,000 for fiscal year 1996.
(2) $30,000,000 for fiscal year 1997.
(3) $30,000,000 for fiscal year 1998.
(4) $20,000,000 for fiscal year 1999.
SEC. 223. INDIVIDUAL DEVELOPMENT ACCOUNTS.
(a) IN GENERAL.—Subchapter F of chapter 1 of the
Internal Revenue Code of 1986 (relating to exempt organi-
zations) is amended by adding at the end the following
new part:
‘‘PART VIII—INDIVIDUAL DEVELOPMENT
ACCOUNTS
‘‘Sec. 529. Individual development accounts.
‘‘SEC. 529. INDIVIDUAL DEVELOPMENT ACCOUNTS.
‘‘(a) ESTABLISHMENT OF ACCOUNTS.—
‘‘(1) IN GENERAL.—An individual development
account may be established by or on behalf of an eli-
gible individual for the purpose of accumulating
funds to pay the qualified expenses of such individ-
ual.
‘‘(2) ELIGIBLE INDIVIDUAL.—
‘‘(A) IN GENERAL.—The term ‘eligible in-
dividual’ means an individual for whom assist-
ance is (or at any prior time was) provided by
a qualified entity grantee under section 222(g)
of the Project for American Renewal Act.
‘‘(B) 
QUALIFIED
ENTITY.—The 
term
‘qualified entity’ has the meaning given such
term by section 3(b)(1)(B) of such Act.
‘‘(b) LIMITATIONS.—
‘‘(1) ACCOUNT TO BENEFIT 1 INDIVIDUAL.—An
individual development account may not be estab-
lished for the benefit of more than 1 individual.
‘‘(2) MULTIPLE
ACCOUNTS.—If, at any time
during a calendar year, 2 or more individual devel-
opment accounts are maintained for the benefit of
an eligible individual, such individual shall be treat-
ed as an eligible individual for the calendar year only
with respect to the 1st of such accounts.
‘‘(3) ANNUAL LIMIT.—Contributions to an indi-
vidual development account for any taxable year
shall not exceed $2,000. No contribution to the ac-
count under section 222(g) of the Project for Amer-
ican Renewal Act shall be taken into account for
purposes of this paragraph.
‘‘(4) CONTRIBUTIONS TO BE FROM EARNED IN-
COME.—An eligible individual may only contribute to
an account such amounts as are derived from earned
income, as defined in section 911(d)(2).
‘‘(c) DEFINITIONS AND SPECIAL RULES.—For pur-
poses of this section—
‘‘(1) QUALIFIED EXPENSES.—The term ‘quali-
fied expenses’ means 1 or more of the following, as
provided by the qualified entity providing assistance
to the individual under section 222(g) of the Project
for American Renewal Act:
‘‘(A) POSTSECONDARY EDUCATIONAL EX-
PENSES.—Postsecondary educational expenses
paid from an individual development account di-
rectly to an eligible educational institution. For
purposes of this subparagraph—
‘‘(i) IN
GENERAL.—The term ‘post-
secondary educational expenses’ means—
‘‘(I) tuition and fees required for
the enrollment or attendance of a stu-
dent at an eligible educational institu-
tion, and
‘‘(II) fees, books, supplies, and
equipment required for courses of in-
struction at an eligible educational in-
stitution.
‘‘(ii) ELIGIBLE EDUCATIONAL INSTI-
TUTION.—The term ‘eligible educational
institution’ means the following:
‘‘(I) INSTITUTION
OF
HIGHER
EDUCATION.—An institution described
in section 481(a)(1) or 1201(a) of the
Higher Education Act of 1965 (20
U.S.C. 1088(a)(1) or 1141(a)), as
such sections are in effect on the date
of the enactment of this section.
‘‘(II) 
POSTSECONDARY
VOCA-
TIONAL
EDUCATION
SCHOOL.—An
area vocational education school (as
defined in subparagraph (C) or (D) of
section 521(4) of the Carl D. Perkins
Vocational and Applied Technology
Education Act (20 U.S.C. 2471(4)))
which is in any State (as defined in
section 521(33) of such Act), as such
sections are in effect on the date of
the enactment of this section.
‘‘(B) FIRST-HOME
PURCHASE.—Qualified
acquisition costs with respect to a qualified
principal residence for a qualified first-time
homebuyer, if paid from an individual develop-
ment account directly to the persons to whom
the amounts are due. For purposes of this sub-
paragraph—
‘‘(i) 
QUALIFIED
ACQUISITION
COSTS.—The term ‘qualified acquisition
costs’ means the costs of acquiring, con-
structing, or reconstructing a residence.
The term includes any usual or reasonable
settlement, financing, or other closing
costs.
‘‘(ii) QUALIFIED
PRINCIPAL
RESI-
DENCE.—The term ‘qualified principal res-
idence’ means a principal residence (within
the meaning of section 1034), the qualified
acquisition costs of which do not exceed
100 percent of the average area purchase
price applicable to such residence (deter-
mined in accordance with paragraphs (2)
and (3) of section 143(e)).
‘‘(iii) QUALIFIED FIRST-TIME HOME-
BUYER.—
‘‘(I) IN
GENERAL.—The term
‘qualified first-time homebuyer’ means
a taxpayer (and, if married, the tax-
payer’s spouse) who has no present
ownership interest in a principal resi-
dence during the 3-year period ending
on the date of acquisition of the prin-
cipal residence to which this subpara-
graph applies.
‘‘(II) DATE
OF
ACQUISITION.—
The term ‘date of acquisition’ means
the date on which a binding contract
to acquire, construct, or reconstruct
the principal residence to which this
subparagraph applies is entered into.
‘‘(C) 
BUSINESS
CAPITALIZATION.—
Amounts paid from an individual development
account directly to a business capitalization ac-
count which is established in a federally insured
financial institution and is restricted to use
solely for qualified business capitalization ex-
penses. For purposes of this subparagraph—
‘‘(i) QUALIFIED
BUSINESS
CAPITAL-
IZATION EXPENSES.—The term ‘qualified
business capitalization expenses’ means
qualified expenditures for the capitalization
of a qualified business pursuant to a quali-
fied plan.
‘‘(ii) QUALIFIED
EXPENDITURES.—
The term ‘qualified expenditures’ means
expenditures included in a qualified plan,
including capital, plant, equipment, work-
ing capital, and inventory expenses.
‘‘(iii) 
QUALIFIED
BUSINESS.—The
term ‘qualified business’ means any busi-
ness that does not contravene any law or
public policy (as determined by the Sec-
retary).
‘‘(iv) QUALIFIED
PLAN.—The term
‘qualified plan’ means a business plan
which—
‘‘(I) is approved by a financial in-
stitution, or by a nonprofit loan fund
having demonstrated fiduciary integ-
rity,
‘‘(II) includes a description of
services or goods to be sold, a market-
ing plan, and projected financial
statements, and
‘‘(III) may require the eligible in-
dividual to obtain the assistance of an
experienced entrepreneurial advisor.
‘‘(D) TRANSFERS
TO
IDAS
OF
FAMILY
MEMBERS.—Amounts paid from an individual
development account directly into another such
account established for the benefit of an eligible
individual who is—
‘‘(i) the taxpayer’s spouse, or
‘‘(ii) any dependent of the taxpayer
with respect to whom the taxpayer is al-
lowed a deduction under section 151.
‘‘(2) INDIVIDUAL
DEVELOPMENT
ACCOUNT.—
The term ‘individual development account’ means a
trust created or organized in the United States ex-
clusively for the purpose of paying the qualified ex-
penses of an eligible individual, but only if the writ-
ten governing instrument creating the trust meets
the following requirements:
‘‘(A) No contribution will be accepted un-
less it is in cash or by check.
‘‘(B) The trustee is a federally insured fi-
nancial institution.
‘‘(C) The assets of the account will be in-
vested in accordance with the direction of the
eligible individual after consultation with the
qualified entity providing assistance to the indi-
vidual under section 222(g) of the Project for
American Renewal Act.
‘‘(D) The assets of the trust will not be
commingled with other property except in a
common trust fund or common investment
fund.
‘‘(E) Except as provided in subparagraph
(F), any amount in the account which is attrib-
utable to assistance provided under section
222(g) of the Project for American Renewal
Act may be paid or distributed out of the ac-
count only for the purpose of paying the quali-
fied expenses of the eligible individual.
‘‘(F) Any balance in the account on the
day after the date on which the individual for
whose benefit the trust is established dies shall
be distributed within 30 days of such date as
directed by such individual to another individual
development account established for the benefit
of an eligible individual.
‘‘(3) TIME
WHEN
CONTRIBUTIONS
DEEMED
MADE.—A taxpayer shall be deemed to have made a
contribution on the last day of the preceding taxable
year if the contribution is made on account of such
taxable year and is made not later than the time
prescribed by law for filing the return for such tax-
able year (including extensions thereof).
‘‘(d) TAX TREATMENT OF DISTRIBUTIONS.—
‘‘(1) IN GENERAL.—Except as otherwise pro-
vided in this subsection, any amount paid or distrib-
uted out of an individual development account at-
tributable to assistance provided under section
222(g) of the Project for American Renewal Act (in-
cluding earnings attributable to such assistance)
shall be included in gross income of the payee or dis-
tributee for the taxable year in the manner provided
in section 72.
‘‘(2) DISTRIBUTION USED TO PAY QUALIFIED
EXPENSES.—A payment or distribution out of an in-
dividual development account attributable to assist-
ance provided under section 222(g) of the Project
for American Renewal Act shall not be included in
gross income to the extent such payment or distribu-
tion is used exclusively to pay the qualified expenses
incurred by the eligible individual for whose benefit
the account is established.
‘‘(3) ORDERING RULES.—Any distribution from
an individual development account shall not be treat-
ed as made from the accumulated contributions
made to the account by the eligible individual (in-
cluding earnings attributable to such contributions)
until all other amounts to the credit of the eligible
individual have been distributed.
‘‘(e) TAX TREATMENT OF ACCOUNTS.—
‘‘(1) EXEMPTION FROM TAX.—
121
(A) 
DEMONSTRATION
PROGRAM.—The
term ‘‘demonstration program’’ means any pro-
gram conducted by a nonprofit private organi-
zation or agency that (as determined by the
Secretary) is capable of furnishing in a single
setting maternity care services which—
(i) shall include the following serv-
ices—
(I) instruction and counseling re-
garding future health care for the
woman and her child;
(II) nutrition counseling;
(III) counseling and education
concerning all aspects of prenatal
care, childbirth, and motherhood;
(IV) general family counseling,
including child and family develop-
ment counseling;
(V) adoption counseling;
(VI) employability training, job
assistance, and counseling; and
(VII) medical care or referral for
medical care for the woman and her
child, including—