(Sec. 103) Directs the Comptroller General to study and report to Congress on the effects of the charity tax credit under this title.
Title II: Budget Offset - Amends the Internal Revenue Code to reduce the earned income credit for individuals without children.
Title III: Tort Reforms Relating to Charitable Contributions - Relieves business entities of civil liability (except in cases of gross negligence or intentional misconduct) relating to any injury or death: (1) resulting from use of equipment the entity donates, or from the operation (outside the scope of business of the entity) of aircraft or a motor vehicle loaned, to a nonprofit organization; (2) occurring at a facility of the entity used by a nonprofit organization (outside the scope of business of the entity), or during a tour of the facility (in an area otherwise not accessible to the general public). Preempts State liability law in this matter, but allows a State to elect not to allow this title to apply.
Title IV: Charitable Choice Expansion Act - Charitable Choice Expansion Act of 1999 - Amends the Revised Statutes to prohibit the Federal Government and State or local governments receiving Federal funds for any assistance program (except certain education and child care programs) from discriminating against an organization providing assistance under, or applying to provide assistance under, such a program, on the basis that the organization has a religious character.
Title V: Tax-free Distributions from Individual Retirement Accounts for Charitable Purposes - Amends the Internal Revenue Code to exclude from an individual's gross income any qualified distributions from individual retirement accounts to tax-exempt charitable organizations, charitable remainder trusts, pooled income funds, and charitable gift annuities.
[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 997 Introduced in Senate (IS)]
106th CONGRESS
1st Session
S. 997
To assist States in providing individuals a credit against State income
taxes or a comparable benefit for contributions to charitable
organizations working to prevent or reduce poverty and protect and
encourage donations to charitable organizations, to prohibit
discrimination against nongovernmental organizations and certain
individuals on the basis of religion in the distribution of government
funds to provide government assistance and the distribution of such
assistance, to allow such organizations to accept such funds to provide
such assistance without impairing the religious character of such
organizations, to provide for tax-free distributions from individual
retirement accounts for charitable purposes, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
May 11, 1999
Mr. Santorum (for himself, Mr. Abraham, Mr. Ashcroft, Mr. Brownback,
Mr. Coverdell, Mr. DeWine, Mrs. Hutchison, and Mr. McCain) introduced
the following bill; which was read twice and referred to the Committee
on Finance
_______________________________________________________________________
A BILL
To assist States in providing individuals a credit against State income
taxes or a comparable benefit for contributions to charitable
organizations working to prevent or reduce poverty and protect and
encourage donations to charitable organizations, to prohibit
discrimination against nongovernmental organizations and certain
individuals on the basis of religion in the distribution of government
funds to provide government assistance and the distribution of such
assistance, to allow such organizations to accept such funds to provide
such assistance without impairing the religious character of such
organizations, to provide for tax-free distributions from individual
retirement accounts for charitable purposes, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Charity
Empowerment Act of 1999''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
TITLE I--ASSISTANCE TO STATES IN PROVIDING CHARITY TAX CREDITS
Sec. 101. Authority to use certain Federal grant funds for State
charity tax credit.
Sec. 102. Definitions.
Sec. 103. Study and report.
Sec. 104. Effective date.
TITLE II--BUDGET OFFSET
Sec. 201. Reduction of earned income credit for individuals without
children.
TITLE III--TORT REFORMS RELATING TO CHARITABLE CONTRIBUTIONS
Sec. 301. Definitions.
Sec. 302. Liability.
Sec. 303. Exceptions.
Sec. 304. Superseding provision.
Sec. 305. Election of State regarding nonapplicability.
Sec. 306. Effective date.
TITLE IV--CHARITABLE CHOICE EXPANSION ACT
Sec. 401. Provision of assistance under government programs by
religious organizations.
TITLE V--TAX-FREE DISTRIBUTIONS FROM INDIVIDUAL RETIREMENT ACCOUNTS FOR
CHARITABLE PURPOSES
Sec. 501. Tax-free distributions from individual retirement accounts
for charitable purposes.
TITLE I--ASSISTANCE TO STATES IN PROVIDING CHARITY TAX CREDITS
SEC. 101. AUTHORITY TO USE CERTAIN FEDERAL GRANT FUNDS FOR STATE
CHARITY TAX CREDIT.
(a) In General.--Notwithstanding any other provision of law, if
there is in effect under State law a charity tax credit, then the State
may use for any purpose not more than 50 percent of each total amount
paid to the State during the fiscal year under each of the provisions
of law specified in subsection (d).
(b) Limitation.--The aggregate amount a State may use under
subsection (a) during a fiscal year shall not exceed an amount equal to
100 percent of the revenue loss of the State during the fiscal year
that is attributable to the charity tax credit, as determined by the
Secretary of the Treasury without regard to any such revenue loss
occurring before January 1, 2000.
(c) Certain Credit Amounts Treated as State Payment for Temporary
Assistance for Needy Families.--For purposes of title IV of the Social
Security Act, an amount equal to the excess (if any) of--
(1) the amount of the revenue loss of a State (not to
exceed 100 percent) during a fiscal year that is attributable
to the charity tax credit, as determined under subsection (b);
over
(2) the aggregate amount used by the State under subsection
(a) during the fiscal year,
shall be treated as an amount used during the fiscal year by the State
to carry out a State program funded under part A of such title.
(d) Provisions of Law.--The provisions of law specified in this
subsection are the following:
(1) Paragraphs (1) through (4) of section 403(a) of the
Social Security Act (42 U.S.C. 603(a)).
(2) The Child Care and Development Block Grant Act of 1990
(42 U.S.C. 9858-9858q) and section 418 of the Social Security
Act (42 U.S.C. 618).
(3) Sections 2002 and 2007 of the Social Security Act (42
U.S.C. 1397a and 1397f).
(4) The Community Services Block Grant Act (42 U.S.C. 9901-
9912).
(5) The Low-Income Home Energy Assistance Act of 1981 (42
U.S.C. 8621 et seq.).
(6) The Job Training Partnership Act (29 U.S.C. 1501 et
seq.).
(7) Title I of the Housing and Community Development Act of
1974 (42 U.S.C. 5301 et seq.).
SEC. 102. DEFINITIONS.
(a) Charity Tax Credit.--For purposes of this title, the term
``charity tax credit'' means a nonrefundable credit against State
income tax (or, in the case of a State which does not impose an income
tax, a comparable benefit)--
(1) which is allowable only to an individual for a cash
contribution to a qualified charity; and
(2) of which the maximum amount allowable to an individual
for any taxable year does not exceed $50 ($100 in the case of a
joint or combined return of individuals who are married to each
other) in the first year the credit is available and such
amount is increased by not more than $50 ($100 in the case of a
joint or combined return of individuals who are married to each
other) for each subsequent year (but not to exceed $250 ($500,
if applicable)).
(b) Qualified Charity.--For purposes of this title--
(1) In general.--The term ``qualified charity'' means any
organization--
(A) which is described in section 501(c)(3) of the
Internal Revenue Code of 1986 and exempt from tax under
section 501(a) of such Code;
(B) which is certified by the appropriate State
authority as meeting the requirements of paragraphs (3)
and (4); and
(C) which annually reports the information required
to be furnished under paragraph (5) and if such
organization is otherwise required to file a return
under section 6033 of such Code, which elects to treat
the information required to be furnished under
paragraph (5) as the information specified in section
6033(b) of such Code.
(2) Certain contributions to collection organizations
treated as contributions to qualified charity.--
(A) In general.--A contribution to a collection
organization shall be treated as a contribution to a
qualified charity if the donor designates in writing
that the contribution is for the qualified charity.
(B) Collection organization.--The term ``collection
organization'' means an organization described in
section 501(c)(3) of the Internal Revenue Code of 1986
and exempt from tax under section 501(a) of such Code--
(i) which solicits and collects gifts and
grants which, by agreement, are distributed to
qualified charities described in paragraph (1);
(ii) which distributes to qualified
charities described in paragraph (1) at least
90 percent of the gifts and grants received
that are designated for such qualified
charities; and
(iii) which 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 appropriate
State authority reasonably expects that the predominant
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 Office of Management and Budget) in
order to prevent or alleviate poverty among such
individuals and families.
(B) No recordkeeping in certain cases.--An
organization shall not be required to establish or
maintain records with respect to the incomes of
individuals and families for purposes of subparagraph
(A) if such individuals or families are members of
groups which are generally recognized as including
substantially only individuals and families described
in subparagraph (A).
(C) Food aid and homeless shelters.--Except as
otherwise provided by the appropriate State authority,
for purposes of subparagraph (A), services to
individuals in the form of--
(i) donations of food or meals; or
(ii) temporary shelter to homeless
individuals,
shall be treated as provided to individuals described
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 predominantly individuals described in
subparagraph (A).
(4) Minimum expense requirement.--
(A) In general.--An organization meets the
requirements of this paragraph only if the appropriate
State authority reasonably expects that the annual
poverty program expense 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 paid or incurred in
providing program services described in
paragraph (3).
(ii) Exceptions.--Such term shall not
include--
(I) any management or general
expense;
(II) any expense for the purpose of
influencing legislation (as defined in
section 4911(d) of the Internal Revenue
Code of 1986);
(III) any expense for the purpose
of fundraising;
(IV) any expense for a legal
service provided on behalf of any
individual described in paragraph (3);
and
(V) any expense which consists of a
payment to an affiliate of the
organization.
(5) Reporting requirement.--The information required to be
furnished under this paragraph is--
(A) each category of services (including food,
shelter, education, substance abuse, job training, or
otherwise) which constitutes the predominant activities
of the organization; and
(B) the percentages determined by dividing the
categories of the organization's expenses for the year
by the total expenses of the organization for the year,
including--
(i) program services;
(ii) management expenses;
(iii) general expenses;
(iv) fundraising expenses; and
(v) payments to affiliates.
(6) Additional requirements for solicitation
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 administrative
and fundraising costs and information regarding any
organization receiving funds from the organization and
the amount of such funds.
(7) Recommendations.--It is recommended, but not required,
that--
(A) the definition of ``qualified charity'' be
further limited under State law to an organization--
(i) which has been operating for at least 1
year or is controlled by, or operated under the
auspices of, an organization which has been
operating for at least 1 year; and
(ii) with expenses for the purpose of
influencing legislation, litigation on behalf
of any individual described in paragraph (3),
voter registration, political organizing,
public policy advocacy, or public policy
research in an amount not in excess of 5
percent of the total expenses of the
organization;
(B) except as provided in subsection (a)(2), the
amount of the charity tax credit be equal to at least
50 percent and not more than 90 percent of the amount
of the individual's cash contribution to a qualified
charity; and
(C) contributions made not later than the time
prescribed by law for filing the return of the State
income tax for a taxable year (not including extensions
thereof) be treated as made (at the taxpayer's
election) on the last day of such year.
(8) Special rule for states requiring tax uniformity.--In
the case of a State--
(A) which has a constitutional requirement of tax
uniformity; and
(B) which, as of December 31, 1997, imposed a tax
on personal income with--
(i) a single flat rate applicable to all
earned and unearned income (except insofar as
any amount is not taxed pursuant to tax
forgiveness provisions); and
(ii) no generally available exemptions or
deductions to individuals,
the requirement of subsection (a)(2) shall be treated as met if
the amount of the credit is limited to a uniform percentage
(but not greater than 25 percent) of State personal income tax
liability (determined without regard to credits).
(9) Coordination with federal charitable contribution
deduction.--The amount of the deduction allowed under the
Internal Revenue Code of 1986 for contributions which are taken
into account in determining any charity tax credit shall be
reduced by the amount of such credit which is allowed.
(c) State.--For purposes of this title, the term ``State'' means
each of the several States, the District of Columbia, the Commonwealth
of Puerto Rico, the Virgin Islands, Guam, American Samoa, the Northern
Mariana Islands, any other territory or possession of the United
States.
SEC. 103. STUDY AND REPORT.
(a) Study.--The Comptroller General of the United States shall
conduct a study of the effects of the charity tax credit under this
title, including--
(1) the types of organizations which receive contributions
during the first year to which the credit applies; and
(2) the types of services provided to the poor by such
organizations.
(b) Report.--The Comptroller General shall report to Congress the
results of such study, including--
(1) the geographical distribution of funding from charity
tax credit contributions, and an analysis of the information
provided on the annual returns required under section 6033 of
the Internal Revenue Code of 1986 with respect to 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 enactment of the reductions in the programs
permitted by this legislation; and
(2) any recommendations for legislative changes.
SEC. 104. EFFECTIVE DATE.
This title shall take effect on January 1, 2000.
TITLE II--BUDGET OFFSET
SEC. 201. REDUCTION OF EARNED INCOME CREDIT FOR INDIVIDUALS WITHOUT
CHILDREN.
(a) In General.--The table in subparagraph (A) of section 32(b)(1)
of the Internal Revenue Code of 1986 (relating to percentages) is
amended by striking the item relating to no qualifying children and
inserting the following:
``No qualifying children..... 3.825 7.65.''
(b) Effective Date.--The amendment made by subsection (a) shall
apply to taxable years beginning after December 31, 2001.
TITLE III--TORT REFORMS RELATING TO CHARITABLE CONTRIBUTIONS
SEC. 301. DEFINITIONS.
In this title:
(1) Aircraft.--The term ``aircraft'' has the meaning
provided that term in section 40102(6) of title 49, United
States Code.
(2) Business entity.--The term ``business entity'' means a
firm, corporation, association, partnership, consortium, joint
venture, or other form of enterprise.
(3) Equipment.--The term ``equipment'' includes mechanical
equipment, electronic equipment, and office equipment.
(4) Facility.--The term ``facility'' means any real
property, including any building, improvement, or appurtenance.
(5) Gross negligence.--The term ``gross negligence'' means
voluntary and conscious conduct by a person with knowledge (at
the time of the conduct) that the conduct is likely to be
harmful to the health or well-being of another person.
(6) Intentional misconduct.--The term ``intentional
misconduct'' means conduct by a person with knowledge (at the
time of the conduct) that the conduct is harmful to the health
or well-being of another person.
(7) Motor vehicle.--The term ``motor vehicle'' has the
meaning provided that term in section 30102(6) of title 49,
United States Code.
(8) Nonprofit organization.--The term ``nonprofit
organization'' means--
(A) any organization described in section 501(c)(3)
of the Internal Revenue Code of 1986 and exempt from
tax under section 501(a) of such Code; or
(B) any not-for-profit organization organized and
conducted for public benefit and operated primarily for
charitable, civic, educational, religious, welfare, or
health purposes.
(9) State.--The term ``State'' means each of the several
States, the District of Columbia, the Commonwealth of Puerto
Rico, the Virgin Islands, Guam, American Samoa, the Northern
Mariana Islands, any other territory or possession of the
United States, or any political subdivision of any such State,
territory, or possession.
SEC. 302. LIABILITY.
(a) Liability of Business Entities That Donate Equipment to
Nonprofit Organizations.--
(1) In general.--Subject to section 303, a business entity
shall not be subject to civil liability relating to any injury
or death that results from the use of equipment donated by a
business entity to a nonprofit organization.
(2) Application.--This subsection shall apply with respect
to civil liability under Federal and State law.
(b) Liability of Business Entities Providing Use of Facilities to
Nonprofit Organizations.--
(1) In general.--Subject to section 303, a business entity
shall not be subject to civil liability relating to any injury
or death occurring at a facility of the business entity in
connection with a use of such facility by a nonprofit
organization, if--
(A) the use occurs outside of the scope of business
of the business entity;
(B) such injury or death occurs during a period
that such facility is used by the nonprofit
organization; and
(C) the business entity authorized the use of such
facility by the nonprofit organization.
(2) Application.--This subsection shall apply--
(A) with respect to civil liability under Federal
and State law; and
(B) regardless of whether a nonprofit organization
pays for the use of a facility.
(c) Liability of Business Entities Providing Use of a Motor Vehicle
or Aircraft.--
(1) In general.--Subject to section 303, a business entity
shall not be subject to civil liability relating to any injury
or death occurring as a result of the operation of aircraft or
a motor vehicle of a business entity loaned to a nonprofit
organization for use outside of the scope of business of the
business entity, if--
(A) such injury or death occurs during a period
that such motor vehicle or aircraft is used by a
nonprofit organization; and
(B) the business entity authorized the use by the
nonprofit organization of motor vehicle or aircraft
that resulted in the injury or death.
(2) Application.--This subsection shall apply--
(A) with respect to civil liability under Federal
and State law; and
(B) regardless of whether a nonprofit organization
pays for the use of the aircraft or motor vehicle.
(d) Liability of Business Entities Providing Tours of Facilities.--
(1) In general.--Subject to section 303, a business entity
shall not be subject to civil liability relating to any injury
to, or death of an individual occurring at a facility of the
business entity, if--
(A) such injury or death occurs during a tour of
the facility in an area of the facility that is not
otherwise accessible to the general public; and
(B) the business entity authorized the tour.
(2) Application.--This subsection shall apply--
(A) with respect to civil liability under Federal
and State law; and
(B) regardless of whether an individual pays for
the tour.
SEC. 303. EXCEPTIONS.
Section 302 shall not apply to an injury or death that results from
an act or omission of a business entity that constitutes gross
negligence or intentional misconduct, including any misconduct that--
(1) constitutes a crime of violence (as that term is
defined in section 16 of title 18, United States Code) or act
of international terrorism (as that term is defined in section
2331 of title 18, United States Code) for which the defendant
has been convicted in any court;
(2) constitutes a hate crime (as that term is used in the
Hate Crime Statistics Act (28 U.S.C. 534 note));
(3) involves a sexual offense, as defined by applicable
State law, for which the defendant has been convicted in any
court; or
(4) involves misconduct for which the defendant has been
found to have violated a Federal or State civil rights law.
SEC. 304. SUPERSEDING PROVISION.
(a) In General.--Subject to subsection (b) and section 305, this
title preempts the laws of any State to the extent that such laws are
inconsistent with this title, except that this title shall not preempt
any State law that provides additional protection for a business entity
for an injury or death described in a subsection of section 302 with
respect to which the conditions specified in such subsection apply.
(b) Limitation.--Nothing in this title shall be construed to
supersede any Federal or State health or safety law.
SEC. 305. ELECTION OF STATE REGARDING NONAPPLICABILITY.
(a) Election of State Regarding Nonapplicability.--A provision of
this title shall not apply to any civil action in a State court against
a business entity in which all parties are citizens of the State if
such State enacts a statute--
(1) citing the authority of this section;
(2) declaring the election of such State that such
provision shall not apply to such civil action in the State;
and
(3) containing no other provisions.
SEC. 306. EFFECTIVE DATE.
This title shall apply to injuries (and deaths resulting therefrom)
occurring on or after the date of the enactment of this Act.
TITLE IV--CHARITABLE CHOICE EXPANSION ACT
SEC. 401. PROVISION OF ASSISTANCE UNDER GOVERNMENT PROGRAMS BY
RELIGIOUS ORGANIZATIONS.
Title XXIV of the Revised Statutes is amended by inserting after
section 1990 (42 U.S.C. 1994) the following:
``SEC. 1994A. CHARITABLE CHOICE.
``(a) Short Title.--This section may be cited as the `Charitable
Choice Expansion Act of 1999'.
``(b) Purpose.--The purposes of this section are--
``(1) to prohibit discrimination against nongovernmental
organizations and certain individuals on the basis of religion
in the distribution of government funds to provide government
assistance and distribution of such assistance, under
government programs described in subsection (c); and
``(2) to allow such organizations to accept such funds to
provide such assistance to such individuals without impairing
the religious character of such organizations or the religious
freedom of such individuals.
``(c) Religious Organizations Included as Nongovernmental
Providers.--For any program carried out by the Federal Government, or
by a State or local government with Federal funds, in which the
Federal, State, or local government is authorized to use
nongovernmental organizations, through contracts, grants, certificates,
vouchers, or other forms of disbursement, to provide assistance to
beneficiaries under the program, the government shall consider, on the
same basis as other nongovernmental organizations, religious
organizations to provide the assistance under the program, so long as
the program is implemented in a manner consistent with the
Establishment Clause of the first amendment to the Constitution.
Neither the Federal Government nor a State or local government
receiving funds under such program shall discriminate against an
organization that provides assistance under, or applies to provide
assistance under, such program, on the basis that the organization has
a religious character.
``(d) Exclusions.--As used in subsection (c), the term `program'
does not include activities carried out under--
``(1) Federal programs providing education to children
eligible to attend elementary schools or secondary schools, as
defined in section 14101 of the Elementary and Secondary
Education Act of 1965 (20 U.S.C. 8801) (except for activities
to assist students in obtaining the recognized equivalents of
secondary school diplomas);
``(2) the Higher Education Act of 1965 (20 U.S.C. 1001 et
seq.);
``(3) the Head Start Act (42 U.S.C. 9831 et seq.); or
``(4) the Child Care and Development Block Grant Act of
1990 (42 U.S.C. 9858 et seq.).
``(e) Religious Character and Independence.--
``(1) In general.--A religious organization that provides
assistance under a program described in subsection (c) shall
retain its independence from Federal, State, and local governments,
including such organization's control over the definition, development,
practice, and expression of its religious beliefs.
``(2) Additional safeguards.--Neither the Federal
Government nor a State or local government shall require a
religious organization--
``(A) to alter its form of internal governance; or
``(B) to remove religious art, icons, scripture, or
other symbols;
in order to be eligible to provide assistance under a program
described in subsection (c).
``(f) Employment Practices.--
``(1) Tenets and teachings.--A religious organization that
provides assistance under a program described in subsection (c)
may require that its employees providing assistance under such
program adhere to the religious tenets and teachings of such
organization, and such organization may require that those
employees adhere to rules forbidding the use of drugs or
alcohol.
``(2) Title vii exemption.--The exemption of a religious
organization provided under section 702 or 703(e)(2) of the
Civil Rights Act of 1964 (42 U.S.C. 2000e-1, 2000e-2(e)(2))
regarding employment practices shall not be affected by the
religious organization's provision of assistance under, or
receipt of funds from, a program described in subsection (c).
``(g) Rights of Beneficiaries of Assistance.--
``(1) In general.--If an individual described in paragraph
(3) has an objection to the religious character of the
organization from which the individual receives, or would
receive, assistance funded under any program described in
subsection (c), the appropriate Federal, State, or local
governmental entity shall provide to such individual (if
otherwise eligible for such assistance) within a reasonable
period of time after the date of such objection, assistance
that--
``(A) is from an alternative organization that is
accessible to the individual; and
``(B) has a value that is not less than the value
of the assistance that the individual would have
received from such organization.
``(2) Notice.--The appropriate Federal, State, or local
governmental entity shall ensure that notice is provided to
individuals described in paragraph (3) of the rights of such
individuals under this section.
``(3) Individual described.--An individual described in
this paragraph is an individual who receives or applies for
assistance under a program described in subsection (c).
``(h) Nondiscrimination Against Beneficiaries.--
``(1) Grants and contracts.--A religious organization
providing assistance through a grant or contract under a
program described in subsection (c) shall not discriminate, in
carrying out the program, against an individual described in
subsection (g)(3) on the basis of religion, a religious belief,
a refusal to hold a religious belief, or a refusal to actively
participate in a religious practice.
``(2) Indirect forms of disbursement.--A religious
organization providing assistance through a voucher,
certificate, or other form of indirect disbursement under a
program described in subsection (c) shall not deny an
individual described in subsection (g)(3) admission into such
program on the basis of religion, a religious belief, or a
refusal to hold a religious belief.
``(i) Fiscal Accountability.--
``(1) In general.--Except as provided in paragraph (2), any
religious organization providing assistance under any program
described in subsection (c) shall be subject to the same
regulations as other nongovernmental organizations to account
in accord with generally accepted accounting principles for the
use of such funds provided under such program.
``(2) Limited audit.--Such organization shall segregate
government funds provided under such program into a separate
account. Only the government funds shall be subject to audit by
the government.
``(j) Compliance.--A party alleging that the rights of the party
under this section have been violated by a State or local government
may bring a civil action pursuant to section 1979 against the official
or government agency that has allegedly committed such violation. A
party alleging that the rights of the party under this section have
been violated by the Federal Government may bring a civil action for
appropriate relief in an appropriate Federal district court against the
official or government agency that has allegedly committed such
violation.
``(k) Limitations on Use of Funds for Certain Purposes.--No funds
provided through a grant or contract to a religious organization to
provide assistance under any program described in subsection (c) shall
be expended for sectarian worship, instruction, or proselytization.
``(l) Effect on State and Local Funds.--If a State or local
government contributes State or local funds to carry out a program
described in subsection (c), the State or local government may
segregate the State or local funds from the Federal funds provided to
carry out the program or may commingle the State or local funds with
the Federal funds. If the State or local government commingles the
State or local funds, the provisions of this section shall apply to the
commingled funds in the same manner, and to the same extent, as the
provisions apply to the Federal funds.
``(m) Treatment of Intermediate Contractors.--If a nongovernmental
organization (referred to in this subsection as an `intermediate
organization'), acting under a contract or other agreement with the
Federal Government or a State or local government, is given the
authority under the contract or agreement to select nongovernmental
organizations to provide assistance under the programs described in
subsection (c), the intermediate organization shall have the same
duties under this section as the government but shall retain all other
rights of a nongovernmental organization under this section.''.
TITLE V--TAX-FREE DISTRIBUTIONS FROM INDIVIDUAL RETIREMENT ACCOUNTS FOR
CHARITABLE PURPOSES
SEC. 501. TAX-FREE DISTRIBUTIONS FROM INDIVIDUAL RETIREMENT ACCOUNTS
FOR CHARITABLE PURPOSES.
(a) In General.--Subsection (d) of section 408 of the Internal
Revenue Code of 1986 (relating to individual retirement accounts) is
amended by adding at the end the following new paragraph:
``(8) Distributions for charitable purposes.--
``(A) In general.--No amount shall be includible in
gross income by reason of a qualified charitable
distribution from an individual retirement plan--
``(i) to an organization described in
section 170(c), or
``(ii) to a trust or fund, or for the
issuance of an annuity, described in
subparagraph (B).
``(B) Special rules relating to charitable
remainder trusts, pooled income funds, and charitable
gift annuities.--
``(i) In general.--A trust, fund, or
annuity is described in this subparagraph if
such trust, fund, or annuity is--
``(I) a charitable remainder
annuity trust or a charitable remainder
unitrust (as such terms are defined in
section 664(d)),
``(II) a pooled income fund (as
defined in section 642(c)(5)), or
``(III) a charitable gift annuity
(as defined in section 501(m)(5)).
The preceding sentence shall apply only if no
person holds an income interest in the amounts
in the trust, fund, or annuity attributable to
a qualified charitable distribution other than
one or more of the following: the individual
for whose benefit such account or annuity is
maintained, the spouse of such individual, or
any organization described in section 170(c).
``(ii) Determination of inclusion of
amounts distributed.--In determining the amount
includible in the gross income of any person by
reason of a payment or distribution from a
trust referred to in clause (i)(I) or a
charitable gift annuity (as so defined), the
portion of any qualified charitable
distribution to such trust or for such annuity
which would (but for this subparagraph) have
been includible in gross income--
``(I) shall be treated as income
described in section 664(b)(1), and
``(II) shall not be treated as an
investment in the contract.
``(iii) No inclusion for distribution to
pooled income fund.--No amount shall be
includible in the gross income of a pooled
income fund (as so defined) by reason of a
qualified charitable distribution to such fund.
``(C) Qualified charitable distribution.--For
purposes of this paragraph, the term `qualified
charitable distribution' means any distribution from an
individual retirement plan--
``(i) which is made on or after the date
that the individual for whose benefit the
account or annuity is maintained has attained
age 59\1/2\, and
``(ii) which is made directly from the
account or annuity to--
``(I) an organization described in
section 170(c); or
``(II) a trust, fund, or annuity
described in subparagraph (B).
``(D) Denial of deduction.--The amount allowable as
a deduction under section 170 to the taxpayer for the
taxable year shall be reduced (but not below zero) by
the sum of the amounts of the qualified charitable
distributions during such year which would be
includible in the gross income of the taxpayer for such
year but for this paragraph.''
(b) Effective Date.--The amendment made by subsection (a) shall
apply to taxable years beginning after the date of the enactment of
this Act.
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Introduced in Senate
Read twice and referred to the Committee on Finance.
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