The Charitable Giving Act was introduced in the House of Representatives on May 8th by Rep. Roy Blunt (R-MO) and Rep. Harold Ford, Jr. (D-TN). It has been assigned the same number (H.R. 7) as the Faith-Based and Community Initiatives Act passed by the House in 2001, but does not contain any charitable choice provisions. The new bill is similar to the Charity Aid Recovery and Empowerment Act (CARE) passed by the Senate last month, but also has some major differences. Here is a summary of the born-again H.R. 7 and a comparison with the CARE Act: Provision House Charitable Giving Act Senate CARE Act Nonitemizer Deduction Sec. 101. Nonitemizers can deduct amount given over $250 ($500 couple) up to $500 ($1000 couple); sunsets 12/31/05; starts January 2004; requires Dept. of Treasury to report to Congress on effect on increased giving and compare compliance between itemizers and non-itemizers, due 12/31/05. Sec. 101. Same, except starts 2003 and sunsets December 31, 2004;study due 12/31/04. IRA Rollover Sec. 102. Distributions for Individual Retirement Accounts deductible by persons age 70 ? and over if made directly to an exempt organization; effective tax years beginning 2004. Sec. 102 Same, but also allows deduction for persons age 59 1/2 for split interest entities (trusts with both charitable and non-charitable purposes). Increase in Cap on Corporate Contributions Sec. 103. Increases cap on deductible contributions from corporations on a sliding scale, beginning with 11% in 2004 and reaching 20% by 2012 and beyond. Not in CARE Act. Food Inventory Donations Deductible Sec. 104. Fair market value deduction for wholesome food; starts January 2004 Sec. 103. Similar, but some variance in definition of fair market value; effective on enactment. Deduction for Contribution of Scientific Research Property and Computers Sec. 107. Expands deduction to equipment assembled; begins January 2004. Sec. 105. Same. Additional Giving Incentives Not in H.R. 7 Sec. 104. Deductions for contributions of book inventory for educational purposes; Sec. 106-108. Incentives for contributions to encourage land conservation; Sec. 110. Deductions for contribution of literary, musical, artistic or scholarly compositions, or any copyright based on fair market value; Sec. 111. Reimbursement for volunteers’ mileage not taxable income;Sec. 112. Extends deduction for inventory to schools, except for computer equipment. Foundation Excise Taxes and Administrative Expenses Sec. 105. Reduces tax on net investment income to 1%; administrative expenses cannot count toward required 5% annual payout in grants. Not in CARE Act. Revenue Raisers to Pay Cost Tax Incentives Not in H.R. 7 Eliminates several corporate tax shelters. Excise Tax on Unrelated Business Income for Charitable Remainder Trusts Sec. 106. Modifies this tax to make excise tax equal to unrelated business income; begins January 2004 Section 301. Same. S Corporation Stock and Contributions Sec. 108. Adjusts basis of S Corporation stock for decrease caused by charitable contribution; effective tax year beginning 2004. Sec. 109. Same, but starts date of enactment. Suspension of Tax-Exempt Status of Terrorist Organizations Sec. 201. Automatic revocation of exempt status for groups designated as terrorist or supporting terrorism; no appeal; effective date of enactment. Sec. 208. Same. Clarify Definition of Church Tax Inquiry Sec. 202. Adds an exemption to the special process for IRS reviews relating to continuing exemption for churches for unrelated business income and information provided by the Secretary. Sec. 305. Same. Expands Declaratory Judgement Remedy Sec. 203. Allows groups to go to court for declaration on qualification for tax-exempt status; effective for determinations made after the date of enactment. Sec. 306. Same, but effective for determinations starting 12/31/02. Landowner Incentive Programs Grants to private landowners from Depts. of Interior and Agricluture tax free if used for habitat or wildlife protection; effective date of enactment. Not in CARE Act. (CARE has several different conservation related incentives.) Modification re Taxes on Excess Payments Made to Controlling Organizations Sec. 205. Tax on income to controlling organization from subsidiary limited to excess payments. Not in CARE Act. Simplification of Lobbying Rules for Charities Sec. 206. Eliminates the distinction between direct and grassroots lobbying for charities using the expenditure test to measure allowable lobbying; repeals separate limit for grassroots lobbying. All lobbying must still be within expenditure cap; effective date tax year beginning 2004. Sec. 303. Same, except starts 2003. Holdings of Foundations in Publicly Traded Corporations Sec. 207. Increases allowed foundation stock holdings of a publicly traded corporation from 2% to 5%, but must increase grant payout from 5% to 6%; effective tax year beginning 2004. Sec. 113. Similar, but grant payout must increase from 5% to 12%. Increases time for divestiture of holdings from 5 to 10 years. Compassion Capital Fund Sec. 301. Authorizes Sec. of HHS to give out $150 million in FY 2003 for grants to entities that will provide technical assistance to groups operating social service programs, with or without federal funds. Authorizes "such sums as may be necessary" for FY 2004-2007. Sec. 801-805. Similar, but authorizes same amount of money over four agencies: $85 million to HHS, $15 million to the Corporation for National and Community Service, $35 million to the Department of Justice and $15 million to the Department of Housing and Urban Development. Defines "social service organization" as one with no more than six full time equivalent employees providing social services and a current social services budget of less than $450,000. The agencies are required to coordinate their efforts so that funds are distributed equitably and duplication is avoided. In addition, no agency can award more than one grant to the same group for the same purpose. Individual Development Accounts Sec. 302. Reauthorizes low income savings program until 2008. Sec. 501-512. Reauthorizes and expands the program until 2012. Corporate Contributions to Faith-Based Organizations Sec. 303. Sense of Congress statement encouraging greater giving from corporations to faith-based groups. Not in CARE Act. Maternity Group Homes Sec. 304. Authorizes $33 million in FY 2003 and “such sums as may be necessary for FY 2004. Requires evaluation of the program. Sec. 901. Same. Restoration of Funds for Social Services Block Grant Although H.R. 7 does not contain this provision, it has been introduced as a separate bill. See H.R. 1858. Restores $2.35 billion for FY 03 and $1.3 billion for FY 04 to SSBG program, bringing total authorization to $2.8 billion. Restores authority to transfer up to 10% of Temporary Assistance to Needy Families funds to SSBG. Requires HHS to report information submitted by States on expenditure and use of social services funds to Congress annually. Oversight of Exempt Organizations Not in H.R. 7 Sec. 201. Public inspection of documents; Sec. 202-206. Disclosure of web address, and more; Sec. 207. Organizations with budgets of less than $5,000 a year required to file annual statement re continuing existence and qualification for exemption; Sec. 304. Expedited consideration of exempt status applications for groups applying for federal grants; Sec. 307. Stipulates that conventions or associations of churches will not fail to qualify for exempt status by virtue of having individual members; Miscellaneous provisions addressing specific situations.