Chocolate Velvet Cake

1 (6 ounce) package semisweet chocolate chips
1/4 cup water
2 1/4 cups sifted flour
1 teaspoon baking soda
3/4 teaspoon salt
1 3/4 cups sugar
3/4 cup softened butter
1 teaspoon vanilla extract
3 eggs
1 cup water

Combine in saucepan semisweet chocolate chips and the 1/4 cup water and stir over low heat until melted and smooth. Remove from heat.

Sift together flour, baking soda and salt; set aside.

Combine in bowl, sugar, butter and vanilla extract and beat until well blended. Add eggs, one at a time, beating well after each addition. Blend in melted chocolate mixture. Stir in flour mixture alternately with the 1 cup water. Pour into two greased and floured 9-inch layer cake pans. Bake at 375 degrees F for 30-35 minutes. Cool. Fill and frost.

Chocolate Velvet Frosting:
1 (6 ounce) package semisweet chocolate chips
3 tablespoons butter
1/4 cup milk
1 teaspoon vanilla extract
1/4 teaspoon salt
3 cups sifted confectioners' sugar

Melt semisweet chocolate chips and butter over hot (not boiling) water. Remove from water. Add milk, vanilla extract and salt; mix until well blended. Gradually beat in confectioners' sugar.