105TH CONGRESS

2D SESSION S. 1244

AN ACT

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 1998’’.
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1 SEC. 2. DEFINITIONS.

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

3 amended by adding at the end the following:

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

5 means a charitable contribution, as that term is defined

6 in section 170(c) of the Internal Revenue Code of 1986,

7 if that contribution—

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

9 ‘‘(B) consists of—

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

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

12 Revenue Code of 1986); or

13 ‘‘(ii) cash.

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

15 charitable entity or organization’ means—

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

17 the Internal Revenue Code of 1986; or

18 ‘‘(B) an entity or organization described in sec19 tion 170(c)(2) of the Internal Revenue Code of

20 1986.’’.

21 SEC. 3. TREATMENT OF PRE-PETITION QUALIFIED CHARI22 TABLE CONTRIBUTIONS.

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

24 States Code, is amended—

25 (1) by inserting ‘‘(1)’’ after ‘‘(a)’’;
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1 (2) by striking ‘‘(1) made’’ and inserting ‘‘(A)

2 made’’;

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

4 (4) by striking ‘‘(B)(i)’’ and inserting ‘‘(ii)(I)’’;

5 (5) by striking ‘‘(ii) was’’ and inserting ‘‘(II)

6 was’’;

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

8 and

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

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

11 qualified religious or charitable entity or organization shall

12 not be considered to be a transfer covered under para13 graph (1)(B) in any case in which—

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

15 exceed 15 percent of the gross annual income of the

16 debtor for the year in which the transfer of the con17 tribution is made; or

18 ‘‘(B) the contribution made by a debtor exceed19 ed the percentage amount of gross annual income

20 specified in subparagraph (A), if the transfer was

21 consistent with the practices of the debtor in making

22 charitable contributions.’’.

23 (b) TRUSTEE AS LIEN CREDITOR AND AS SUCCESSOR

24 TO CERTAIN CREDITORS AND PURCHASERS.—Section

25 544(b) of title 11, United States Code, is amended—
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1 (1) by striking ‘‘(b) The trustee’’ and inserting

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

3 trustee’’; and

4 (2) by adding at the end the following:

5 ‘‘(2) Paragraph (1) shall not apply to a transfer of

6 a charitable contribution (as that term is defined in sec7 tion 548(d)(3)) that is not covered under section

8 548(a)(1)(B), by reason of section 548(a)(2). Any claim

9 by any person to recover a transferred contribution de10 scribed in the preceding sentence under Federal or State

11 law in a Federal or State court shall be preempted by the

12 commencement of the case.’’.

13 (c) CONFORMING AMENDMENTS.—Section 546 of

14 title 11, United States Code, is amended—

15 (1) in subsection (e)—

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

17 ‘‘548(a)(1)(B)’’; and

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

19 ‘‘548(a)(1)(A)’’;

20 (2) in subsection (f)—

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

22 ‘‘548(a)(1)(B)’’; and

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

24 ‘‘548(a)(1)(A)’’; and

25 (3) in subsection (g)—
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1 (A) by striking ‘‘section 548(a)(1)’’ each

2 place it appears and inserting ‘‘section

3 548(a)(1)(A)’’; and

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

5 ‘‘548(a)(1)(B)’’.

6 SEC. 4. TREATMENT OF POST-PETITION CHARITABLE CON7 TRIBUTIONS.

8 (a) CONFIRMATION OF PLAN.—Section

9 1325(b)(2)(A) of title 11, United States Code, is amended

10 by inserting before the semicolon the following: ‘‘, includ11 ing charitable contributions (that meet the definition of

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

13 qualified religious or charitable entity or organization (as

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

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

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

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

18 States Code, is amended by adding at the end the follow19 ing: ‘‘In making a determination whether to dismiss a case

20 under this section, the court may not take into consider21 ation whether a debtor has made, or continues to make,

22 charitable contributions (that meet the definition of ‘chari23 table contribution’ under section 548(d)(3)) to any quali24 fied religious or charitable entity or organization (as that

25 term is defined in section 548(d)(4)).’’.
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1 SEC. 5. APPLICABILITY.

2 This Act and the amendments made by this Act shall

3 apply to any case brought under an applicable provision

4 of title 11, United States Code, that is pending or com5 menced on or after the date of enactment of this Act.

6 SEC. 6. RULE OF CONSTRUCTION.

7 Nothing in the amendments made by this Act is in8 tended to limit the applicability of the Religious Freedom

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

Passed the Senate May 13, 1998.

Attest:

Secretary.
105TH CONGRESS

2D SESSION S. 1244

AN ACT

To amend title 11, United States Code, to protect

purposes.certain charitable contributions, and for other