See our summary of the House Charitable Giving Act and its comparison to the CARE Act. On May 8th Rep. Roy Blunt (R-MO) and Rep. Harold Ford Jr. (D-TN) filed the "Charitable Giving Act of 2003" H.R. 7, which is similar to the CARE Act passed by the Senate last month. It has been assigned the same number (H.R. 7) as the controversial faith-based legislation passed by the House in 2001. The new bill includes provisions that address charitable giving incentives, simplification of the lobbying rules for charities, the Compassion Capital Fund, and changes in the rules for foundation payout. Like the Senate’s CARE Act, it does not deal with grant rules for faith-based organizations. Unlike the CARE Act, it does not include elimination of tax shelters to offset the cost of its giving incentives or restoration of funding for the Social Services Block Grant (SSBG). Rep. Blunt said he hopes the House can vote on the bill by July 4. The House will be considering restoration of funding for SSBG in a separate bill, HR 1858, filed on April 29 by Reps. Nancy Johnson (R-CT), Sander Levin (D-MI), and Bob Matsui (D-CA). Its provisions are the same as the SSBG section of the CARE Act – it increases funding to $2.8 billion, as previously authorized. The sections of the new H.R. 7 relating to foundations are causing controversy about what constitutes reasonable administrative expenses for foundations and how much private foundations should pay out in grants each year. While the bill lowers the excise tax on net investment income to a flat 1% (simplifying a complex formula that could result in a tax of up to 2%), private foundations would not be allowed to count administrative expenses toward their annual grant payout requirement of 5%. A New York Times article published May 19th notes that not counting administrative expenses of 64,000 foundations would increase payout by less than 1%. Some foundations say this would effect perpetuity. Others disagree, claiming that the change would not force foundations to spend down, and would increase grantmaking.