[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[S. 1244 Reported in Senate (RS)]





                                                       Calendar No. 314

105th CONGRESS

  2d Session

                                S. 1244

_______________________________________________________________________

                                 A BILL

 To amend title 11, United States Code, to protect certain charitable 
                 contributions, and for other purposes.

_______________________________________________________________________

                           February 26, 1998

                       Reported with an amendment





                                                       Calendar No. 314
105th CONGRESS
  2d Session
                                S. 1244

 To amend title 11, United States Code, to protect certain charitable 
                 contributions, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            October 1, 1997

Mr. Grassley (for himself, Mr. Sessions, Mr. Grams, Mr. Allard, and Mr. 
Hatch) introduced the following bill; which was read twice and referred 
                   to the Committee on the Judiciary

                           February 26, 1998

                Reported by Mr. Hatch, with an amendment
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]

_______________________________________________________________________

                                 A BILL


 
 To amend title 11, United States Code, to protect certain charitable 
                 contributions, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

<DELETED>SECTION 1. SHORT TITLE.</DELETED>

<DELETED>    This Act may be cited as the ``Religious Liberty and 
Charitable Donation Protection Act of 1997''.</DELETED>

<DELETED>SEC. 2. DEFINITIONS.</DELETED>

<DELETED>    Section 548(d) of title 11, United States Code, is amended 
by adding at the end the following:</DELETED>
<DELETED>    ``(3) In this section, the term `charitable contribution' 
means a charitable contribution, as that term is defined in section 
170(c) of the Internal Revenue Code of 1986, if that contribution--
</DELETED>
        <DELETED>    ``(A) is made by a natural person; and</DELETED>
        <DELETED>    ``(B) consists of--</DELETED>
                <DELETED>    ``(i) a financial instrument (as that term 
                is defined in section 731(c)(2)(C) of the Internal 
                Revenue Code of 1986); or</DELETED>
                <DELETED>    ``(ii) cash.</DELETED>
<DELETED>    ``(4) In this section, the term `qualified religious or 
charitable entity or organization' means--</DELETED>
        <DELETED>    ``(A) an entity described in section 170(c)(1) of 
        the Internal Revenue Code of 1986; or</DELETED>
        <DELETED>    ``(B) an entity or organization described in 
        section 170(c)(2) of the Internal Revenue Code of 
        1986.''.</DELETED>

<DELETED>SEC. 3. TREATMENT OF PRE-PETITION QUALIFIED CHARITABLE 
              CONTRIBUTIONS.</DELETED>

<DELETED>    (a) In General.--Section 548(a) of title 11, United States 
Code, is amended--</DELETED>
        <DELETED>    (1) by inserting ``(1)'' after ``(a)'';</DELETED>
        <DELETED>    (2) by striking ``(1) made'' and inserting ``(A) 
        made'';</DELETED>
        <DELETED>    (3) by striking ``(2)(A)'' and inserting 
        ``(B)(i);</DELETED>
        <DELETED>    (4) by striking ``(B)(i)'' and inserting 
        ``(ii)(I)'';</DELETED>
        <DELETED>    (5) by striking ``(ii) was'' and inserting ``(II) 
        was'';</DELETED>
        <DELETED>    (6) by striking ``(iii)'' and inserting ``(III)''; 
        and</DELETED>
        <DELETED>    (7) by adding at the end the following:</DELETED>
<DELETED>    ``(2) A transfer of a charitable contribution to a 
qualified religious or charitable entity or organization shall not be 
considered to be a transfer covered under paragraph (1)(B) in any case 
in which--</DELETED>
        <DELETED>    ``(A) the amount of that contribution does not 
        exceed 15 percent of the gross annual income of the debtor for 
        the year in which the transfer of the contribution is made; 
        or</DELETED>
        <DELETED>    ``(B) the contribution made by a debtor exceeded 
        the percentage amount of gross annual income specified in 
        subparagraph (A), if the transfer was consistent with the 
        practices of the debtor in making charitable 
        contributions.''.</DELETED>
<DELETED>    (b) Trustee as Lien Creditor and as Successor to Certain 
Creditors and Purchasers.--Section 544(b) of title 11, United States 
Code, is amended--</DELETED>
        <DELETED>    (1) by striking ``(b) The trustee'' and inserting 
        ``(b)(1) Except as provided in paragraph (2), the trustee''; 
        and</DELETED>
        <DELETED>    (2) by adding at the end the following:</DELETED>
<DELETED>    ``(2) Paragraph (1) shall not apply to a transfer of a 
charitable contribution (as that term is defined in section 548(d)(3)) 
that is not covered under section 548(a)(1)(B), by reason of section 
548(a)(2).''.</DELETED>
<DELETED>    (c) Conforming Amendments.--Section 546 of title 11, 
United States Code, is amended--</DELETED>
        <DELETED>    (1) in subsection (e)--</DELETED>
                <DELETED>    (A) by striking ``548(a)(2)'' and 
                inserting ``548(a)(1)(B)''; and</DELETED>
                <DELETED>    (B) by striking ``548(a)(1)'' and 
                inserting ``548(a)(1)(A)'';</DELETED>
        <DELETED>    (2) in subsection (f)--</DELETED>
                <DELETED>    (A) by striking ``548(a)(2)'' and 
                inserting ``548(a)(1)(B)''; and</DELETED>
                <DELETED>    (B) by striking ``548(a)(1)'' and 
                inserting ``548(a)(1)(A)''; and</DELETED>
        <DELETED>    (3) in subsection (g)--</DELETED>
                <DELETED>    (A) by striking ``section 548(a)(1)'' each 
                place it appears and inserting ``section 
                548(a)(1)(A)''; and</DELETED>
                <DELETED>    (B) by striking ``548(a)(2)'' and 
                inserting ``548(a)(1)(B)''.</DELETED>

<DELETED>SEC. 4. TREATMENT OF POST-PETITION CHARITABLE 
              CONTRIBUTIONS.</DELETED>

<DELETED>    (a) Confirmation of Plan.--Section 1325(b)(2)(A) of title 
11, United States Code, is amended by inserting before the semicolon 
the following: ``, including charitable contributions (that meet the 
definition of `charitable contribution' under section 548(d)(3)) to a 
qualified religious or charitable entity or organization (as that term 
is defined in section 548(d)(4)) in an amount not to exceed 15 percent 
of the gross income of the debtor for the year in which the 
contributions are made''.</DELETED>
<DELETED>    (b) Dismissal.--Section 707(b) of title 11, United States 
Code, is amended by adding at the end the following: ``In making a 
determination whether to dismiss a case under this section, the court 
may not take into consideration whether a debtor has made, or continues 
to make, charitable contributions (that meet the definition of 
`charitable contribution' under section 548(d)(3)) to any qualified 
religious or charitable entity or organization (as that term is defined 
in section 548(d)(4)).''.</DELETED>

<DELETED>SEC. 5. APPLICABILITY.</DELETED>

<DELETED>    This Act and the amendments made by this Act shall apply 
to any case brought under an applicable provision of title 11, United 
States Code, that is pending or commenced on or after the date of 
enactment of this Act.</DELETED>

<DELETED>SEC. 6. RULE OF CONSTRUCTION.</DELETED>

<DELETED>    Nothing in the amendments made by this Act is intended to 
limit the applicability of the Religious Freedom Restoration Act of 
1993 (42 U.S.C. 2002bb et seq.).</DELETED>

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Religious Liberty and Charitable 
Donation Protection Act of 1998''.

SEC. 2. DEFINITIONS.

    Section 548(d) of title 11, United States Code, is amended by 
adding at the end the following:
    ``(3) In this section, the term `charitable contribution' means a 
charitable contribution, as that term is defined in section 170(c) of 
the Internal Revenue Code of 1986, if that contribution--
            ``(A) is made by a natural person; and
            ``(B) consists of--
                    ``(i) a financial instrument (as that term is 
                defined in section 731(c)(2)(C) of the Internal Revenue 
                Code of 1986); or
                    ``(ii) cash.
    ``(4) In this section, the term `qualified religious or charitable 
entity or organization' means--
            ``(A) an entity described in section 170(c)(1) of the 
        Internal Revenue Code of 1986; or
            ``(B) an entity or organization described in section 
        170(c)(2) of the Internal Revenue Code of 1986.''.

SEC. 3. TREATMENT OF PRE-PETITION QUALIFIED CHARITABLE CONTRIBUTIONS.

    (a) In General.--Section 548(a) of title 11, United States Code, is 
amended--
            (1) by inserting ``(1)'' after ``(a)'';
            (2) by striking ``(1) made'' and inserting ``(A) made'';
            (3) by striking ``(2)(A)'' and inserting ``(B)(i);
            (4) by striking ``(B)(i)'' and inserting ``(ii)(I)'';
            (5) by striking ``(ii) was'' and inserting ``(II) was'';
            (6) by striking ``(iii)'' and inserting ``(III)''; and
            (7) by adding at the end the following:
    ``(2) A transfer of a charitable contribution to a qualified 
religious or charitable entity or organization shall not be considered 
to be a transfer covered under paragraph (1)(B) in any case in which--
            ``(A) the amount of that contribution does not exceed 15 
        percent of the gross annual income of the debtor for the year 
        in which the transfer of the contribution is made; or
            ``(B) the contribution made by a debtor exceeded the 
        percentage amount of gross annual income specified in 
        subparagraph (A), if the transfer was consistent with the 
        practices of the debtor in making charitable contributions.''.
    (b) Trustee as Lien Creditor and as Successor to Certain Creditors 
and Purchasers.--Section 544(b) of title 11, United States Code, is 
amended--
            (1) by striking ``(b) The trustee'' and inserting ``(b)(1) 
        Except as provided in paragraph (2), the trustee''; and
            (2) by adding at the end the following:
    ``(2) Paragraph (1) shall not apply to a transfer of a charitable 
contribution (as that term is defined in section 548(d)(3)) that is not 
covered under section 548(a)(1)(B), by reason of section 548(a)(2). Any 
claim by any person to recover a transferred contribution described in 
the preceding sentence under Federal or State law in a Federal or State 
court shall be preempted by the commencement of the case.''.
    (c) Conforming Amendments.--Section 546 of title 11, United States 
Code, is amended--
            (1) in subsection (e)--
                    (A) by striking ``548(a)(2)'' and inserting 
                ``548(a)(1)(B)''; and
                    (B) by striking ``548(a)(1)'' and inserting 
                ``548(a)(1)(A)'';
            (2) in subsection (f)--
                    (A) by striking ``548(a)(2)'' and inserting 
                ``548(a)(1)(B)''; and
                    (B) by striking ``548(a)(1)'' and inserting 
                ``548(a)(1)(A)''; and
            (3) in subsection (g)--
                    (A) by striking ``section 548(a)(1)'' each place it 
                appears and inserting ``section 548(a)(1)(A)''; and
                    (B) by striking ``548(a)(2)'' and inserting 
                ``548(a)(1)(B)''.

SEC. 4. TREATMENT OF POST-PETITION CHARITABLE CONTRIBUTIONS.

    (a) Confirmation of Plan.--Section 1325(b)(2)(A) of title 11, 
United States Code, is amended by inserting before the semicolon the 
following: ``, including charitable contributions (that meet the 
definition of `charitable contribution' under section 548(d)(3)) to a 
qualified religious or charitable entity or organization (as that term 
is defined in section 548(d)(4)) in an amount not to exceed 15 percent 
of the gross income of the debtor for the year in which the 
contributions are made''.
    (b) Dismissal.--Section 707(b) of title 11, United States Code, is 
amended by adding at the end the following: ``In making a determination 
whether to dismiss a case under this section, the court may not take 
into consideration whether a debtor has made, or continues to make, 
charitable contributions (that meet the definition of `charitable 
contribution' under section 548(d)(3)) to any qualified religious or 
charitable entity or organization (as that term is defined in section 
548(d)(4)).''.

SEC. 5. APPLICABILITY.

    This Act and the amendments made by this Act shall apply to any 
case brought under an applicable provision of title 11, United States 
Code, that is pending or commenced on or after the date of enactment of 
this Act.

SEC. 6. RULE OF CONSTRUCTION.

    Nothing in the amendments made by this Act is intended to limit the 
applicability of the Religious Freedom Restoration Act of 1993 (42 
U.S.C. 2002bb et seq.).