[Congressional Record Volume 143, Number 142 (Tuesday, October 21, 1997)]
[Extensions of Remarks]
[Page E2037]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




               WE MUST PROTECT OUR CHURCHES AND CHARITIES

                                 ______
                                 

                            HON. RON PACKARD

                             of california

                    in the house of representatives

                       Tuesday, October 21, 1997

  Mr. PACKARD. Mr. Speaker, how much of the work done by your church or 
favorite charity depends on the generous donations of parishioners and 
contributors like yourself? Did you know that creditors can take 
already donated money from them because current bankruptcy law allows 
them to do so? It's unbelievable, but it's true.
  In a recent case, a U.S. Federal Bankruptcy Trustee brought an action 
against the Crystal Evangelical Free Church of New Hope, MN. In doing 
so, the unprecedented case reinterpreted the Bankruptcy Code to mean 
that if an individual gives money to a nonprofit group within 1 year of 
declaring bankruptcy, creditors can come after the group to reclaim 
this money. Why? Because an individual must receive something of 
reasonable equivalent value in return for a monetary donation.
  Mr. Speaker, current law essentially says that if an individual has 
filed for bankruptcy, he cannot simply donate money to a charitable 
organization or to the church. However, because the Bankruptcy Code 
allows for certain ``entertainment exemptions,'' taking a luxury 
vacation, purchasing liquor, buying a new car, or making 1-900 calls to 
psychics, are all reasonable expenditures.
  This case outraged me and I decided to do something about it. I 
introduced legislation in early October to protect certain charitable 
contributions. Known as the Religious Liberty and Charitable Donation 
Protection Act, this legislation will amend U.S. Code to protect our 
Nation's churches and charities from the hands of creditors.
  Mr. Speaker, H.R. 2604, the Religious Liberty and Charitable Donation 
Protection Act will allow your church or favorite charity to continue 
to thrive and prosper. Donations received in good faith from 
individuals will not be taken from their pockets by creditors. I 
encourage all of my colleagues to cosponsor this important legislation. 
As the holidays quickly approach, we must work to address the needs of 
our churches, charities, and the less fortunate who rely on their vital 
services. H.R. 2604 will do just that.

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