Charitable Giving Protection Act of 1995

Summary: TABLE OF CONTENTS: 
     Title I:  Amendments to the Securities Laws 
     Title II:  Clarification of Antitrust Laws 
Charitable Giving Protection Act of 1995 - 
Title I:  Amendments to the Securities Laws
 - Exempts from the jurisdiction of the Investment Company Act of 1940, the Securities Act of 1933, the Securities Exchange Act of 1934, and the Investment Advisers Act of 1940 any security issued by or any interest or participation in any pooled income fund, collective trust fund, collective investment fund, or similar fund deemed not to be an investment company under the Investment Company Act of 1940 (charitable gift annuities). 
Preempts State law to extend the charitable gift annuities exemption from its jurisdiction over:  (1) securities registration or qualification requirements; and (2) any charitable organization regulation. 
Permits a State to enact a statute that specifically refers to this Act and provides prospectively that it does not preempt its laws. 
Title II:  Clarification of Antitrust Laws
 - Exempts charitable gift annuities from application of the antitrust laws.

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Charitable Giving 
Protection Act of 1995''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings.
               TITLE I--AMENDMENTS TO THE SECURITIES LAWS

Sec. 101. Amendment to the Investment Company Act of 1940.
Sec. 102. Amendment to the Securities Act of 1933.
Sec. 103. Amendments to the Securities Exchange Act of 1934.
Sec. 104. Amendment of the Investment Advisers Act of 1940.
Sec. 105. Effective dates and applicability.
               TITLE II--CLARIFICATION OF ANTITRUST LAWS

Sec. 201. Exemption from antitrust laws.
Sec. 202. Effective date and applicability.
SEC. 2. FINDINGS.

    The Congress finds that--
            (1) charities have served a unique and essential role in 
        meeting the needs of the American people;
            (2) charities have healed the sick, fed the hungry, 
        sheltered the needy, and educated our children;
            (3) in order to ensure that charities can continue to meet 
        the needs of the American people, the Federal Government should 
        do everything possible to encourage charitable giving;
            (4) charities should be able to raise funds and invest 
        funds, both on their own and collectively with other charities, 
        without excessive Government intervention or unnecessary legal 
        or regulatory requirements;
            (5) the Congress, in passing the Technical Corrections Act 
        of 1988, differentiated between charitable gift annuities and 
        annuities issued by commercial organizations for profit; and
            (6) unlike commercial annuities, charitable gift annuities 
        are not issued for profit, and their issuance, maintenance, and 
        investment by charities is not subject to the anticompetitive 
        prohibitions of the Federal antitrust laws.

               TITLE I--AMENDMENTS TO THE SECURITIES LAWS

SEC. 101. AMENDMENT TO THE INVESTMENT COMPANY ACT OF 1940.

    Section 3(c) of the Investment Company Act of 1940 (15 U.S.C. 80a-
3(c)) is amended by inserting after paragraph (6) the following new 
paragraph:
            ``(7)(A) Subject to subparagraph (B), a pooled income fund, 
        or any collective trust fund, collective investment fund, or 
        similar fund maintained by a charitable organization 
        exclusively for the collective investment and reinvestment of--
                    ``(i) the general endowment fund or other funds of 
                one or more charitable organizations;
                    ``(ii) assets of a pooled income fund;
                    ``(iii) assets contributed to a charitable 
                organization in exchange for the issuance of charitable 
                gift annuities;
                    ``(iv) assets of a charitable remainder trust or of 
                any other trust, the remainder interests of which are 
                irrevocably dedicated to any charitable organization;
                    ``(v) assets of a charitable lead trust; or
                    ``(vi) assets of a trust not described in clauses 
                (i) through (v), the remainder interests of which are 
                revocably dedicated to a charitable organization.
            ``(B) A fund described in subparagraph (A), and any 
        charitable organization that maintains such a fund, shall be 
        excluded from treatment as an investment company in accordance 
        with this subsection only if--
                    ``(i) each contributor to a pooled income fund and 
                each settlor of a trust described in clause (iv), (v), 
                or (vi) of subparagraph (A) is provided with written 
                information describing the material terms of the 
                instruments governing the operation of the pooled 
                income fund, in the case of a contributor to such fund, 
                or of the fund in which any assets of such pooled 
                income fund or such a trust are invested, by the later 
                of June 30, 1996, or the date of investment in such 
                fund; and
                    ``(ii) each person soliciting gifts, as described 
                in subparagraph (A), that will be administered in any 
                collective trust fund, collective investment fund, or 
                similar fund maintained by a charitable organization is 
                either a volunteer or is employed in the overall 
                fundraising activities of a charitable organization and 
                receives no commissions or other special compensation 
                based on the amount of gifts transferred to such fund.
            ``(C) The exemption provided by subparagraph (A)(vi) shall 
        terminate on December 31, 1998.
            ``(D) For purposes of this paragraph--
                    ``(i) a trust or fund is `maintained' by a 
                charitable organization that serves as a trustee or 
                administrator of the trust or fund or that has the 
                power to remove the trustees or administrators of the 
                trust or fund and to designate new trustees or 
                administrators;
                    ``(ii) the term `pooled income fund' has the same 
                meaning as in section 642(c)(5) of the Internal Revenue 
                Code of 1986;
                    ``(iii) the term `charitable organization' means an 
                organization described in paragraphs (1) through (5) of 
                section 170(c) or section 501(c)(3) of the Internal 
                Revenue Code of 1986;
                    ``(iv) the term `charitable lead trust' means a 
                trust described in section 170(f)(2)(B), 2055(e)(2)(B), 
                or 2522(c)(2)(B) of the Internal Revenue Code of 1986;
                    ``(v) the term `charitable remainder trust' means a 
                charitable remainder annuity trust or a charitable 
                remainder unitrust, as those terms are defined in 
                section 664(d) of the Internal Revenue Code of 1986; 
                and
                    ``(vi) the term `charitable gift annuity' means an 
                annuity issued by a charitable organization that is 
                described in section 501(m)(5) of the Internal Revenue 
                Code of 1986.''.

SEC. 102. AMENDMENT TO THE SECURITIES ACT OF 1933.

    Section 3(a) of the Securities Act of 1933 (15 U.S.C. 77c(a)) is 
amended by adding at the end the following new paragraph:
            ``(13) Any security issued by or any interest or 
        participation in any pooled income fund, collective trust fund, 
        collective investment fund, or similar fund that is deemed not 
        to be an investment company under section 3(c)(7) of the 
        Investment Company Act of 1940.''.
SEC. 103. AMENDMENTS TO THE SECURITIES EXCHANGE ACT OF 1934.

    (a) Exempted Securities.--Section 3(a)(12)(A) of the Securities 
Exchange Act of 1934 (15 U.S.C. 78c(a)(12)(A)) is amended--
            (1) in clause (iv) by striking ``and'' at the end;
            (2) by redesignating clause (v) as clause (vi); and
            (3) by inserting after clause (iv) the following new 
        clause:
                            ``(v) any security issued by or any 
                        interest or participation in any pooled income 
                        fund, collective trust fund, collective 
                        investment fund, or similar fund that is deemed 
                        not to be an investment company under section 
                        3(c)(7) of the Investment Company Act of 1940; 
                        and''.
    (b) Exemption From Broker-Dealer Provisions.--Section 3(a) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78c(c)) is amended by adding 
at the end the following new paragraph:
            ``(54) Charitable organizations.--Notwithstanding any other 
        provision of this title, a charitable organization, as defined 
        in section 3(c)(7) of the Investment Company Act of 1940, or 
        any trust- 
        ee, director, officer, employee, or volunteer of such a 
        charitable organization acting within the scope of such 
        person's employment or duties, shall not be deemed to be a 
        `broker', `dealer', `municipal securities broker', `municipal 
        securities dealer', `government securities broker', or 
        `government securities dealer' for purposes of this title 
        solely because such organization or person buys, holds, sells, 
        or trades in securities for its own account in its capacity as 
        trustee or administrator of, or otherwise on behalf of or for 
        the account of--
                    ``(A) such a charitable organization;
                    ``(B) a fund that is exempt from the provisions of 
                the Investment Company Act of 1940 under section 
                3(c)(7) of that Act; or
                    ``(C) a trust or other donative instrument, the 
                assets of which may be contributed to or invested in 
                such funds in accordance with section 3(c)(7) of the 
                Investment Company Act of 1940, or the settlors (or 
                potential settlors) or beneficiaries of any such trust 
                or other instrument.''.

SEC. 104. AMENDMENT OF THE INVESTMENT ADVISERS ACT OF 1940.

    Section 202(a)(11) of the Investment Advisers Act of 1940 (15 
U.S.C. 80b-2(a)(11)) is amended--
            (1) by striking ``does not include (A) a bank'' and 
        inserting ``does not include--
                    ``(A) a bank'';
            (2) by striking ``(B) any lawyer'' and inserting the 
        following:
                    ``(B) any lawyer'';
            (3) by striking ``(C) any broker'' and inserting the 
        following:
                    ``(C) any broker'';
            (4) by striking ``(D) the publisher'' and inserting the 
        following:
                    ``(D) the publisher'';
            (5) by striking ``(E) any person'' and inserting the 
        following:
                    ``(E) any person'';
            (6) by striking ``or (F) such other'' and inserting the 
        following:
                    ``(G) such other''; and
            (7) by inserting after subparagraph (E) the following new 
        subparagraph:
                    ``(F) any charitable organization, as defined in 
                section 3(c)(7) of the Investment Company Act of 1940, 
                or any trustee, director, officer, employee, or 
                volunteer of such a charitable organization acting 
                within the scope of the employment or duties of such 
                person, whose advice, analyses, or reports are provided 
                only to--
                            ``(i) any such charitable organization;
                            ``(ii) a fund that is exempt from the 
                        Investment Company Act of 1940 under section 
                        3(c)(7) of that Act, or the trustees or 
                        administrators of such fund; or
                            ``(iii) a trust or other donative 
                        instrument, the assets of which may be 
                        contributed to or invested in such fund in 
                        accordance with section 3(c)(7) of the 
                        Investment Company Act of 1940, or the 
                        trustees, administrators, settlors (or 
                        potential settlors), or beneficiaries of any 
                        such trust or other instrument; or''.

SEC. 105. EFFECTIVE DATES AND APPLICABILITY.

    This title and the amendments made by this title shall apply in all 
administrative and judicial actions pending on or commenced after the 
date of enactment of this Act, as a defense to any claim that any 
person, security, interest, or participation of the type described in 
this title and the amendments made by this title is subject to the
 provisions of the Securities Act of 1933, the Securities Exchange Act 
of 1934, the Investment Company Act of 1940, or the Investment Advisers 
Act of 1940, except as otherwise specifically provided in those Acts.

SEC. 106. PREEMPTION OF STATE LAW.

    (a) Registration Requirements.--A security issued by or any 
interest or participation in any pooled income fund, collective trust 
fund, collective investment fund, or similar fund that is exempt from 
the Investment Company Act of 1940 under section 3(c)(7) of that Act, 
and the offer or sale thereof, shall be exempt from any law of a State 
that requires registration or qualification of securities.
    (b) Treatment of Charitable Organizations.--No charitable 
organization, or any trustee, director, officer, employee, or volunteer 
of a charitable organization acting within the scope of such person's 
employment or duties, shall be required to register as, or be subject 
to regulation as, a dealer, broker, agent, or investment adviser under 
the laws of any State solely because such organization or person buys, 
holds, sells, or trades in securities for its own account in its 
capacity as trustee or administrator of, or otherwise on behalf of or 
for the account of--
            (1) a charitable organization;
            (2) a fund that is exempt from the Investment Company Act 
        of 1940 under section 3(c)(7) of that Act; or
            (3) a trust or other donative instrument, the assets of 
        which may be contributed to or invested in such funds in 
        accordance with section 3(c)(7) of the Investment Company Act 
        of 1940, or the settlors (or potential settlors) or 
        beneficiaries of any such trusts or other instruments.
    (c) State Action.--Notwithstanding subsections (a) and (b), during 
the 3-year period beginning on the date of enactment of this Act, a 
State may enact a statute that specifically refers to this section and 
provides prospectively that this section shall not preempt the laws of 
that State referred to in this section.
    (d) Definitions.--For purposes of this section--
            (1) the term ``charitable organization'' means an 
        organization described in paragraphs (1) through (5) of section 
        170(c) or section 501(c)(3) of the Internal Revenue Code of 
        1986;
            (2) the term ``security'' has the same meaning as in 
        section 3 of the Securities Exchange Act of 1934; and
            (3) the term ``State'' means each of the several States of 
        the United States, the District of Columbia, the Commonwealth 
        of Puerto Rico, the Virgin Islands, Guam, American Samoa, and 
        the Commonwealth of the Northern Mariana Islands.

               TITLE II--CLARIFICATION OF ANTITRUST LAWS

SEC. 201. EXEMPTION FROM ANTITRUST LAWS.

    (a) In General.--The activities of a charitable organization 
relating to the issuance, maintenance, or investment of a charitable 
gift annuity are exempt from the application of the antitrust laws.
    (b) Definitions.--For purposes of this section--
            (1) the term ``antitrust laws'' means--
                    (A) the Sherman Act (15 U.S.C. 1 et seq.);
                    (B) the Clayton Act (15 U.S.C. 12 et seq.);
                    (C) the Federal Trade Commission Act (15 U.S.C. 41 
                et seq.); and
                    (D) any State law that is similar to the Acts 
                referred to in subparagraphs (A) through (C).
            (2) the term ``charitable organization'' means an 
        organization described in paragraphs (1) through (5) of section 
        170(c) or section 501(c)(3) of the Internal Revenue Code of 
        1986;
            (3) the term ``charitable gift annuity'' means an annuity 
        issued by a charitable organization that is described in 
        section 501(m)(5) of the Internal Revenue Code of 1986; and
            (4) the term ``State'' means each of the several States of 
        the United States, the District of Columbia, the Commonwealth 
        of Puerto Rico, the Virgin Islands, Guam, American Samoa, and 
        the Commonwealth of the Northern Mariana Islands.
    (c) State Action.--Notwithstanding subsections (a) and (b), during 
the 3-year period beginning on the date of enactment of this Act, a 
State may enact a statute that specifically refers to this section and 
provides prospectively that this section shall not preempt the laws of 
that State referred to in this section.

SEC. 202. EFFECTIVE DATE AND APPLICABILITY.

    The exemption provided for in section 201 shall apply in any 
judicial or administrative action pending on or commenced after the 
date of enactment of this Act and shall serve as a defense to any claim 
that the sale or issuance of a charitable gift annuity is subject to 
any provision of antitrust laws.