II

105TH CONGRESS

1ST 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, and Mr. GRAMS) introduced the

following bill; which was read twice and referred to the Committee on the

Judiciary

A BILL

To amend title 11, United States Code, to protect certain

charitable contributions, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Religious Liberty and

5 Charitable Donation Protection Act of 1997’’.

6 SEC. 2. DEFINITIONS.

7 Section 548(d) of title 11, United States Code, is

8 amended by adding at the end the following:

9 ‘‘(3) In this section, the term ‘charitable contribution’

10 means a charitable contribution, as that term is defined
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1 in section 170(c) of the Internal Revenue Code of 1986,

2 if that contribution—

3 ‘‘(A) is made by a natural person; and

4 ‘‘(B) consists of—

5 ‘‘(i) a financial instrument (as that term is

6 defined in section 731(c)(2)(C) of the Internal

7 Revenue Code of 1986); or

8 ‘‘(ii) cash.

9 ‘‘(4) In this section, the term ‘qualified religious or

10 charitable entity or organization’ means—

11 ‘‘(A) an entity described in section 170(c)(1) of

12 the Internal Revenue Code of 1986; or

13 ‘‘(B) an entity or organization described in sec14 tion 170(c)(2) of the Internal Revenue Code of

15 1986.’’.

16 SEC. 3. TREATMENT OF PRE-PETITION QUALIFIED CHARI17 TABLE CONTRIBUTIONS.

18 (a) IN GENERAL.—Section 548(a) of title 11, United

19 States Code, is amended—

20 (1) by inserting ‘‘(1)’’ after ‘‘(a)’’;

21 (2) by striking ‘‘(1) made’’ and inserting ‘‘(A)

22 made’’;

23 (3) by striking ‘‘(2)(A)’’ and inserting ‘‘(B)(i);

24 (4) by striking ‘‘(B)(i)’’ and inserting ‘‘(ii)(I)’’;
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1 (5) by striking ‘‘(ii) was’’ and inserting ‘‘(II)

2 was’’;

3 (6) by striking ‘‘(iii)’’ and inserting ‘‘(III)’’;

4 and

5 (7) by adding at the end the following:

6 ‘‘(2) A transfer of a charitable contribution to a

7 qualified religious or charitable entity or organization shall

8 not be considered to be a transfer covered under para9 graph (1)(B) in any case in which—

10 ‘‘(A) the amount of that contribution does not

11 exceed 15 percent of the gross annual income of the

12 debtor for the year in which the transfer of the con13 tribution is made; or

14 ‘‘(B) the contribution made by a debtor ex15 ceeded the percentage amount of gross annual in16 come specified in subparagraph (A), if the transfer

17 was consistent with the practices of the debtor in

18 making charitable contributions.’’.

19 (b) TRUSTEE AS LIEN CREDITOR AND AS SUCCESSOR

20 TO CERTAIN CREDITORS AND PURCHASERS.—Section

21 544(b) of title 11, United States Code, is amended—

22 (1) by striking ‘‘(b) The trustee’’ and inserting

23 ‘‘(b)(1) Except as provided in paragraph (2), the

24 trustee’’; and

25 (2) by adding at the end the following:
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1 ‘‘(2) Paragraph (1) shall not apply to a transfer of

2 a charitable contribution (as that term is defined in sec3 tion 548(d)(3)) that is not covered under section

4 548(a)(1)(B), by reason of section 548(a)(2).’’.

5 (c) CONFORMING AMENDMENTS.—Section 546 of

6 title 11, United States Code, is amended—

7 (1) in subsection (e)—

8 (A) by striking ‘‘548(a)(2)’’ and inserting

9 ‘‘548(a)(1)(B)’’; and

10 (B) by striking ‘‘548(a)(1)’’ and inserting

11 ‘‘548(a)(1)(A)’’;

12 (2) in subsection (f)—

13 (A) by striking ‘‘548(a)(2)’’ and inserting

14 ‘‘548(a)(1)(B)’’; and

15 (B) by striking ‘‘548(a)(1)’’ and inserting

16 ‘‘548(a)(1)(A)’’; and

17 (3) in subsection (g)—

18 (A) by striking ‘‘section 548(a)(1)’’ each

19 place it appears and inserting ‘‘section

20 548(a)(1)(A)’’; and

21 (B) by striking ‘‘548(a)(2)’’ and inserting

22 ‘‘548(a)(1)(B)’’.
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1 SEC. 4. TREATMENT OF POST-PETITION CHARITABLE CON2 TRIBUTIONS.

3 (a) CONFIRMATION OF PLAN.—Section

4 1325(b)(2)(A) of title 11, United States Code, is amended

5 by inserting before the semicolon the following: ‘‘, includ6 ing charitable contributions (that meet the definition of

7 ‘charitable contribution’ under section 548(d)(3)) to a

8 qualified religious or charitable entity or organization (as

9 that term is defined in section 548(d)(4)) in an amount

10 not to exceed 15 percent of the gross income of the debtor

11 for the year in which the contributions are made’’.

12 (b) DISMISSAL.—Section 707(b) of title 11, United

13 States Code, is amended by adding at the end the follow14 ing: ‘‘In making a determination whether to dismiss a case

15 under this section, the court may not take into consider16 ation whether a debtor has made, or continues to make,

17 charitable contributions (that meet the definition of ‘chari18 table contribution’ under section 548(d)(3)) to any quali19 fied religious or charitable entity or organization (as that

20 term is defined in section 548(d)(4)).’’.

21 SEC. 5. APPLICABILITY.

22 This Act and the amendments made by this Act shall

23 apply to any case brought under an applicable provision

24 of title 11, United States Code, that is pending or com25 menced on or after the date of enactment of this Act.
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1 SEC. 6. RULE OF CONSTRUCTION.

2 Nothing in the amendments made by this Act is in3 tended to limit the applicability of the Religious Freedom

4 Restoration Act of 1993 (42 U.S.C. 2002bb et seq.).

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