Charity Enhancement Act of 2008

Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 7083) to amend the Internal Revenue Code of 1986 to enhance charitable giving and improve disclosure and tax administration.

Mr. Speaker, I ask unanimous consent that Members may have 5 legislative days to revise and extend their remarks on the bill, H.R. 7083.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I rise in support of H.R. 7083, the Charity Enhancement Act of 2008.

This bill responds to hundreds of pages of written comments that were submitted by charities to the Ways and Means Subcommittee on Oversight. This bill contains a number of important provisions to help charities continue their good work.

Charities play such an important role in our country. Charities and foundations make up the very fabric of our communities. They know the deepest human needs of our friends and neighbors, and they know the solutions that work. Often, at critical times, charities and foundations are the leaders that show government the way to care for our citizens. Their services touch every corner of life in our communities--education, the arts, and medical research.

They also serve those who need our help the most by feeding the hungry, caring for the sick and lifting up those who live in poverty. This bill fixes some of the unintended effects of new charitable laws that keep them from doing their good and necessary work.

First, the bill will promote scholarships by relaxing the rules imposed on certain scholarship funds.

Second, the bill would improve disclosure to the public by increasing the electronic filing of tax returns filed by charities and foundations.

Third, the bill will provide relief to certain longstanding supporting organizations created before 1970. Notably, these are charities where the donors are deceased, so there is no concern about misusing the charity for personal gain.

Historically, these charities have distributed significant amounts to their communities over the past 38 years. Their contributions have been used to fund scholarship and support charitable, scientific, and educational activities.

Finally, this bill will allow charities to reimburse reasonable and necessary expenses of volunteer board members.

I urge my colleagues on both sides of the aisle to support our charities and foundations and vote ``yes'' for H.R. 7083.

I reserve the balance of my time.

Mr. Speaker, I am pleased to yield 3 minutes to the gentleman from California (Mr. Thompson), a member of the Ways and Means Committee.

Mr. Speaker, I am pleased to yield 3 minutes to the gentleman from California (Mr. Becerra).

Mr. Speaker, may I inquire of Mr. Ramstad whether he has any additional speakers?

Mr. Speaker, this is an important bill, and I want to thank my good friend Mr. Ramstad for all of his hard work and for his great work in helping to bring this needed bill before us today.

Given the terrible state of the economy, we need to do all we can to support our charities. We need to promote scholarships, to promote charitable giving and to enhance public disclosure.

I fully support H.R. 7083. I urge all of my colleagues on both sides of the aisle to support our charities and to vote ``yes'' for the bill.

Mr. Speaker, I yield back the balance of my time.

Mr. Speaker, I thank the chairman, Mr. Lewis, and the ranking member, Mr. Ramstad, for this work that is now embodied in H.R. 7083. I support the legislation, and thank them for their efforts to move forward on what is a very important subject, and that is encouraging Americans to participate in charitable giving.

The government has a partnership with the charitable sector. The government relies on charities to reach out to populations in need, and that is why the charitable sector receives tax-preferred treatment. We want to incent charitable activity as much as we can because government, by itself, cannot serve the needs of all of those Americans who work very hard but who sometimes fall upon bad times.

At the same time, we find that there are some charitable organizations that are doing tremendous work while others are not, and I believe this is the beginning of a major effort on the part of Congress to try to really focus our attention on the charitable sector to make sure that we are receiving everything Americans expect through that tax-deferred treatment that these charities and nonprofit organizations receive.

One example in this bill of how we are doing good is through the tribal charities provision in this legislation. Tribal charities, charities that are within the jurisdiction of the tribal governments of this country, are a good example of nonprofits that recognize the overwhelming need of a people, in this case, people in Indian country. Tribal charities play a crucial role in serving the needs of members of these many tribes throughout America.

We know that close to 25 percent of Native Americans today live in poverty. It's even higher for Native American children. Some 31 percent live in households that live in poverty. That compares to 11 percent of American children who are non-Native American. We also know that close to 20 percent of Native American seniors today still live in poverty, far greater than we see outside of Indian country. Fewer than 15 percent of Native Americans today go on to receive a bachelor's degree or higher. We need to change that.

So these tribal charities that we find are making every effort to try to reach out to communities throughout Indian country to make it possible for young kids, for adults who work and for seniors to have a chance to benefit from all we can.

Tribal charities under this legislation will be treated the way any other State government or local government is treated when it comes to dealing with charities, the same type of tax treatment. That will give tribes an opportunity to really enhance the ability of tribal charities to do the most good for a larger population. This legislation will go a long way in correcting some of the mistakes that we've made and in correcting some of the omissions that have been there in the past.

Once again, I believe, as I said before, that under the leadership of Chairman Lewis and with the good help of Mr. Ramstad that we're moving forward to make sure that we have a charitable tax deduction that works for everyone and that is optimal in its efforts to try to do public good.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, tough economic times are especially tough for America's charitable community. They face increasing demands for services from people in need, and the investments that foundations make in order to grow their endowments have eroded significantly due to market turmoil.

Last year on behalf of the Ways and Means Oversight Subcommittee, Chairman Lewis requested comments on the implementation of charitable reforms contained in the 2006 Pension Protection Act.

The bill before us responds to many of the concerns that were raised by the charitable community. Specifically, the bill has seven provisions aimed at relieving burdens on charities and on foundations:

Funds advised by certain public charities and government entities would not be treated as donor advised funds.

Certain scholarships given from donor advised funds would not be considered a taxable distribution.

Thirdly, a special written acknowledgment requirement for charitable contributions to donor advised funds would be repealed.

Fourth, supporting organizations would be allowed to pay reasonable compensation to substantial contributors for the services that they perform without the payment being considered an excess benefit.

Also, certain long-standing Type III organizations with no recent major or living donors would be exempt from payout and excess business holding requirements.

In addition, Mr. Speaker, contributions from Indian tribal governments would be treated the same as contributions from States for purposes of determining whether an organization is a public charity or a private foundation.

Finally, the IRS would be allowed to institute electronic filing for charities that file at least five information returns each year.

Mr. Speaker, I am proud to cosponsor Chairman Lewis' legislation, grateful for his leadership of the Oversight Subcommittee and his friendship over the years. His leadership as chairman of our subcommittee has been thoughtful and bipartisan inclusive. For that I am very grateful. I urge my colleagues to support H.R. 7083, the Charity Enhancement Act to provide relief to America's charitable community.

I reserve the balance of my time.

Mr. Speaker, I continue to reserve the balance of my time.

Mr. Speaker, I have no further speakers. I yield back the balance of my time.

Mr. Speaker, I would like to thank Mr. Lewis and Mr. Ramstad for their work on this very important bill, a bill that I am proud to be the coauthor of, and I rise today in strong support of this bill.

The provisions of this bill will play a vital role in allowing charitable organizations to better serve our communities. In fact, the two largest organizations representing charities, Independent Sector and the Council on Foundations, have both endorsed this critical legislation because it allows charities to better fulfill their valuable mission.

To help explain the practical impact of this bill, I would like to share the story of the Doyle Trust which benefits thousands of hardworking families.

Doyle Trust was founded 59 years ago to serve the students of Santa Rosa Junior College in Sonoma County, California. On Frank Doyle's death, he established the Doyle Trust which he funded with his 51 percent share in the Exchange Bank. Doyle created his trust so that dividends for his bank stock would go to a scholarship fund to help students attending this junior college.

Last year alone, more than $5 million in scholarships for 5,500 Santa Rosa Junior College students was donated by the Doyle Trust. It is not unusual to find three generations of the same family who have benefited from the Doyle Trust scholarships. The Doyle Trust is an institution in Sonoma County, and its contribution to the community makes a real difference in the lives of working families.

Without this legislation, the mission of the Doyle Trust may be undermined because provisions of the Pension Protection Act could force the trust to sell its assets.

The unintended consequence of the Pension Protection Act would be to end Doyle Trust's ability to continue providing scholarships to thousands of students at Santa Rosa Junior College.

I urge my colleagues on both sides of the aisle to help us pass this bill to ensure that future generations of Sonoma County families can benefit from the generosity of the Doyle Trust.