S. 1244 Religious Liberty and Charitable Donation Protection Act of 1997

To amend title 11, United States Code, to protect certain charitable contributions, and for other purposes.
Religious Liberty and Charitable Donation Protection Act of 1998
(Engrossed as Agreed to or Passed by Senate)

S 1244 ES

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,

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.).

Passed the Senate May 13, 1998.

Attest:

Secretary.

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

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