News
Service April 2, 2003
108th CONGRESS
1st Session
S. 476
To provide incentives for charitable contributions by individuals and businesses, to improve the public disclosure of activities of exempt organizations, and to enhance the ability of low-income Americans to gain financial security by building assets, and for other purposes.
IN THE SENATE OF THE UNITED STATES
Mr. GRASSLEY (for himself, Mr. BAUCUS, Mr. SANTORUM, and Mr. LIEBERMAN) introduced the following bill; which was read twice and referred to the Committee on Finance
A BILL
To provide incentives for charitable contributions by individuals and businesses, to improve the public disclosure of activities of exempt organizations, and to enhance the ability of low-income Americans to gain financial security by building assets, and for other purposes.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
(a) SHORT TITLE- This Act may be cited as the `CARE Act of 2003'.
(b) AMENDMENT OF 1986 CODE- Except as otherwise expressly provided, whenever in this Act an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Internal Revenue Code of 1986.
(c) TABLE OF CONTENTS- The table of contents for this Act is as follows:
Sec. 1. Short title; etc.
Sec. 101. Deduction for portion of charitable contributions to be allowed to individuals who do not itemize deductions.
Sec. 102. Tax-free distributions from individual retirement accounts for charitable purposes.
Sec. 103. Charitable deduction for contributions of food inventories.
Sec. 104. Charitable deduction for contributions of book inventories.
Sec. 105. Expansion of charitable contribution allowed for scientific property used for research and for computer technology and equipment used for educational purposes.
Sec. 106. Modifications to encourage contributions of capital gain real property made for conservation purposes.
Sec. 107. Exclusion of 25 percent of gain on sales or exchanges of land or water interests to eligible entities for conservation purposes.
Sec. 108. Tax exclusion for cost-sharing payments under Partners for Fish and Wildlife Program.
Sec. 109. Adjustment to basis of S corporation stock for certain charitable contributions.
Sec. 110. Enhanced deduction for charitable contribution of literary, musical, artistic, and scholarly compositions.
Sec. 111. Mileage reimbursements to charitable volunteers excluded from gross income.
Sec. 201. Disclosure of written determinations.
Sec. 202. Disclosure of Internet web site and name under which organization does business.
Sec. 203. Modification to reporting capital transactions.
Sec. 204. Disclosure that Form 990 is publicly available.
Sec. 205. Disclosure to State officials of proposed actions related to section 501(c) organizations.
Sec. 206. Expansion of penalties to preparers of Form 990.
Sec. 207. Notification requirement for entities not currently required to file.
Sec. 208. Suspension of tax-exempt status of terrorist organizations.
Sec. 301. Modification of excise tax on unrelated business taxable income of charitable remainder trusts.
Sec. 302. Modifications to section 512(b)(13).
Sec. 303. Simplification of lobbying expenditure limitation.
Sec. 304. Expedited review process for certain tax-exemption applications.
Sec. 305. Clarification of definition of church tax inquiry.
Sec. 306. Expansion of declaratory judgment remedy to tax-exempt organizations.
Sec. 307. Definition of convention or association of churches.
Sec. 308. Payments by charitable organizations to victims of war on terrorism.
Sec. 309. Modification of scholarship foundation rules.
Sec. 310. Treatment of certain hospital support organizations as qualified organizations for purposes of determining acquisition indebtedness.
Sec. 401. Restoration of funds for the Social Services Block Grant.
Sec. 402. Restoration of authority to transfer up to 10 percent of TANF funds to the Social Services Block Grant.
Sec. 403. Requirement to submit annual report on State activities.
Sec. 501. Short title.
Sec. 502. Purposes.
Sec. 503. Definitions.
Sec. 504. Structure and administration of qualified individual development account programs.
Sec. 505. Procedures for opening and maintaining an individual development account and qualifying for matching funds.
Sec. 506. Deposits by qualified individual development account programs.
Sec. 507. Withdrawal procedures.
Sec. 508. Certification and termination of qualified individual development account programs.
Sec. 509. Reporting, monitoring, and evaluation.
Sec. 510. Authorization of appropriations.
Sec. 511. Matching funds for individual development accounts provided through a tax credit for qualified financial institutions.
Sec. 512. Account funds disregarded for purposes of certain means-tested Federal programs.
Sec. 601. Authorization of appropriations.
(a) IN GENERAL- Section 170(h) (relating to qualified conservation contribution) is amended by adding at the end the following new paragraph:
`(7) ADDITIONAL INCENTIVES FOR QUALIFIED CONSERVATION CONTRIBUTIONS-
`(A) IN GENERAL- In the case of any qualified conservation contribution (as defined in paragraph (1)) made by an individual--
`(i) subparagraph (C) of subsection (b)(1) shall not apply,
`(ii) except as provided in subparagraph (B)(i), subsections (b)(1)(A) and (d)(1) shall be applied separately with respect to such contributions by treating references to 50 percent of the taxpayer's
contribution base as references to the amount of such percentage of such base reduced by the amount of other contributions allowable under subsection (b)(1)(A), and
`(iii) subparagraph (A) of subsection (d)(1) shall be applied--
`(I) by substituting `15 succeeding taxable years' for `5 succeeding taxable years', and
`(II) by applying clause (ii) to each of the 15 succeeding taxable years.
`(B) SPECIAL RULES FOR ELIGIBLE FARMERS AND RANCHERS-
`(i) IN GENERAL- In the case of any such contributions made by an eligible farmer or rancher--
`(I) if the taxpayer is an individual, subsections (b)(1)(A) and (d)(1) shall be applied separately with respect to such contributions by substituting `the taxpayer's contribution base reduced by the amount of other contributions allowable under subsection (b)(1)(A)' for `50 percent of the taxpayer's contribution base' each place it appears, and
`(II) if the taxpayer is a corporation, subsections (b)(2) and (d)(2) shall be applied separately with respect to such contributions, subsection (b)(2) shall be applied with respect to such contributions as if such subsection did not contain the words `10 percent of' and as if subparagraph (A) thereof read `the deduction under this section for qualified conservation contributions', and rules similar to the rules of subparagraph (A)(iii) shall apply for purposes of subsection (d)(2).
`(ii) DEFINITION- For purposes of clause (i), the term `eligible farmer or rancher' means a taxpayer whose gross income from the trade or business of farming (within the meaning of section 2032A(e)(5)) is at least 51 percent of the taxpayer's gross income for the taxable year, and, in the case of a C corporation, the stock of which is not publicly traded on a recognized exchange.'.
(c) EFFECTIVE DATE- The amendment made by this section shall apply to contributions made after the date of the enactment of this Act.
(a) IN GENERAL- Part III of subchapter B of chapter 1 (relating to items specifically excluded from gross income) is amended by inserting after section 121 the following new section:
`(a) EXCLUSION- Gross income shall not include 25 percent of the qualifying gain from a conservation sale of a long-held qualifying land or water interest.
`(b) QUALIFYING GAIN- For purposes of this section--
`(1) IN GENERAL- The term `qualifying gain' means any gain which would be recognized as long-term capital gain, reduced by the amount of any long-term capital gain attributable to disqualified improvements.
`(2) DISQUALIFIED IMPROVEMENT- For purposes of paragraph (1), the term `disqualified improvement' means any building, structure, or other improvement, other than--
`(A) any improvement which is described in section 175(c)(1), determined--
`(i) without regard to the requirements that the taxpayer be engaged in farming, and
`(ii) without taking into account subparagraphs (A) and (B) thereof, or
`(B) any improvement which the Secretary determines directly furthers conservation purposes.
`(3) SPECIAL RULE FOR SALES OF STOCK- If the long-held qualifying land or water interest is 1 or more shares of stock in a qualifying land or water corporation, the qualifying gain is equal to the lesser of--
`(A) the qualifying gain determined under paragraph (1), or
`(B) the product of--
`(i) the percentage of such corporation's stock which is transferred by the taxpayer, times
`(ii) the amount which would have been the qualifying gain (determined under paragraph (1)) if there had been a conservation sale by such corporation of all of its interests in the land and water for a price equal to the product of the fair market value of such interests times the ratio of--
`(I) the proceeds of the conservation sale of the stock, to
`(II) the fair market value of the stock which was the subject of the conservation sale.
`(c) CONSERVATION SALE- For purposes of this section, the term `conservation sale' means a sale or exchange which meets the following requirements:
`(1) TRANSFEREE IS AN ELIGIBLE ENTITY- The transferee of the long-held qualifying land or water interest is an eligible entity.
`(2) QUALIFYING LETTER OF INTENT REQUIRED- At the time of the sale or exchange, such
transferee provides the taxpayer with a qualifying letter of intent.
`(3) NONAPPLICATION TO CERTAIN SALES- The sale or exchange is not made pursuant to an order of condemnation or eminent domain.
`(4) CONTROLLING INTEREST IN STOCK SALE REQUIRED- In the case of the sale or exchange of stock in a qualifying land or water corporation, at the end of the taxpayer's taxable year in which such sale or exchange occurs, the transferee's ownership of stock in such corporation meets the requirements of section 1504(a)(2) (determined by substituting `90 percent' for `80 percent' each place it appears).
`(d) LONG-HELD QUALIFYING LAND OR WATER INTEREST- For purposes of this section--
`(1) IN GENERAL- The term `long-held qualifying land or water interest' means any qualifying land or water interest owned by the taxpayer or a member of the taxpayer's family (as defined in section 2032A(e)(2)) at all times during the 5-year period ending on the date of the sale.
`(2) QUALIFYING LAND OR WATER INTEREST-
`(A) IN GENERAL- The term `qualifying land or water interest' means a real property interest which constitutes--
`(i) a taxpayer's entire interest in land,
`(ii) a taxpayer's entire interest in water rights,
`(iii) a qualified real property interest (as defined in section 170(h)(2)), or
`(iv) stock in a qualifying land or water corporation.
`(B) ENTIRE INTEREST- For purposes of clause (i) or (ii) of subparagraph (A)--
`(i) a partial interest in land or water is not a taxpayer's entire interest if an interest in land or water was divided in order to create such partial interest in order to avoid the requirements of such clause or section 170(f)(3)(A), and
`(ii) a taxpayer's entire interest in certain land does not fail to satisfy subparagraph (A)(i) solely because the taxpayer has retained an interest in other land, even if the other land is contiguous with such certain land and was acquired by the taxpayer along with such certain land in a single conveyance.
`(e) OTHER DEFINITIONS- For purposes of this section--
`(1) ELIGIBLE ENTITY- The term `eligible entity' means--
`(A) a governmental unit referred to in section 170(c)(1), or an agency or department thereof operated primarily for 1 or more of the conservation purposes specified in clause (i), (ii), or (iii) of section 170(h)(4)(A), or
`(B) an entity which is--
`(i) described in section 170(b)(1)(A)(vi) or section 170(h)(3)(B), and
`(ii) organized and at all times operated primarily for 1 or more of the conservation purposes specified in clause (i), (ii), or (iii) of section 170(h)(4)(A).
`(2) QUALIFYING LETTER OF INTENT- The term `qualifying letter of intent' means a written letter of intent which includes the following statement: `The transferee's intent is that this acquisition will serve 1 or more of the conservation purposes specified in clause (i), (ii), or (iii) of section 170(h)(4)(A) of the Internal Revenue Code of 1986, that the transferee's use of the property so acquired will be consistent with section 170(h)(5) of such Code, and that the use of the property will continue to be consistent with such section, even if ownership or possession of such property is subsequently transferred to another person.'
`(3) QUALIFYING LAND OR WATER CORPORATION- The term `qualifying land or water corporation' means a C corporation (as defined in section 1361(a)(2)) if, as of the date of the conservation sale--
`(A) the fair market value of the corporation's interests in land or water held by the corporation at all times during the preceding 5 years equals or exceeds 90 percent of the fair market value of all of such corporation's assets, and
`(B) not more than 50 percent of the total fair market value of such corporation's assets consists of water rights or infrastructure related to the delivery of water, or both.
`(f) TAX ON SUBSEQUENT TRANSFERS OR REMOVALS OF CONSERVATION RESTRICTIONS-
`(1) IN GENERAL- A tax is hereby imposed on any subsequent--
`(A) transfer by an eligible entity of ownership or possession, whether by sale, exchange, or lease, of property acquired directly or indirectly in--
`(i) a conservation sale described in subsection (a), or
`(ii) a transfer described in clause (i), (ii), or (iii) of paragraph (4)(A), or
`(B) removal of a conservation restriction contained in an instrument of conveyance of such property.
`(2) AMOUNT OF TAX- The amount of tax imposed by paragraph (1) on any transfer or removal shall be equal to the sum of--
`(A) either--
`(i) 20 percent of the fair market value (determined at the time of the transfer) of the property the ownership or possession of which is transferred, or
`(ii) 20 percent of the fair market value (determined at the time immediately after the removal) of the property upon which the conservation restriction was removed, plus
`(B) the product of--
`(i) the highest rate of tax specified in section 11, times
`(ii) any gain or income realized by the transferor or person removing such restriction as a result of the transfer or removal.
`(3) LIABILITY- The tax imposed by paragraph (1) shall be paid--
`(A) on any transfer, by the transferor, and
`(B) on any removal of a conservation restriction contained in an instrument of conveyance, by the person removing such restriction.
`(4) RELIEF FROM LIABILITY- The person (otherwise liable for any tax imposed by paragraph (1)) shall be relieved of liability for the tax imposed by paragraph (1)--
`(A) with respect to any transfer if--
`(i) the transferee is an eligible entity which provides such person, at the time of transfer, a qualifying letter of intent,
`(ii) the transferee is not an eligible entity, it is established to the satisfaction of the Secretary, that the transfer of ownership or possession, as the case may be, will be consistent with section 170(h)(5), and the transferee provides such person, at the time of transfer, a qualifying letter of intent, or
`(iii) tax has previously been paid under this subsection as a result of a prior transfer of ownership or possession of the same property, or
`(B) with respect to any removal of a conservation restriction contained in an instrument of conveyance, if it is established to the satisfaction of the Secretary that the retention of the restriction was impracticable or impossible and the proceeds continue to be used in a manner consistent with 1 or more of the conservation purposes specified in clause (i), (ii), or (iii) of section 170(h)(4)(A).
`(5) ADMINISTRATIVE PROVISIONS- For purposes of subtitle F, the taxes imposed by this subsection shall be treated as excise taxes with respect to which the deficiency procedures of such subtitle apply.
`(6) REPORTING- The Secretary may require such reporting as may be necessary or appropriate to further the purpose under this section that any conservation use be in perpetuity.'.
(b) CLERICAL AMENDMENT- The table of sections for part III of subchapter B of chapter 1 is amended by inserting after the item relating to section 121 the following new item:
`Sec. 121A. 25-percent exclusion of gain on sales or exchanges of land or water interests to eligible entities for conservation purposes.'.
(c) EFFECTIVE DATE- The amendments made by this section shall apply to sales or exchanges occurring after December 31, 2003.