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| home > policy/legislation > through 2006 > comments from congress > Rep. Johnson letter to congress
Rep. Eddie Bernice Johnson Circulates Letter to Conferees The Honorable Charles Grassley The Honorable Max Baucus The Honorable Bill Thomas
Dear Chairman Grassley, Ranking Member Baucus and Chairman Thomas: As you begin the conference on the tax reconciliation bill, I would like to call your attention to several provisions included in the charitable reform portion of the House tax bill (HR 4297). As currently proposed, HR 4297 contains provisions that are both helpful and harmful to charity organizations. These provisions would only serve to harm a broad range of philanthropic institutions. While the incentives in the bill are positive motivators that encourage charitable donations, some of the provisions, however, are problematic and merit thoughtful consideration before HR 4297 leaves conference committee. The concern therein lies with the following provisions that harm charities without offsetting the benefit to the public interest. Private foundations should continue to be able to make grants to supporting organizations to benefit local communities. The prohibition on private foundations grant making power to all types of supporting organizations should be removed. The grant provisions from donor-advised funds to any entity not listed as a US public charity should be revised to allow the sponsoring organization to award grants for charitable purposes provided the organization follows procedures similar to expenditure responsibility for private foundations. The limitation on grants from donor-advised funds to sponsoring organization should be revised to allow distributions from one donor-advised fund to another. However, provisions barring the use of such distributions to meet the aggregate and minimum distribution rules should be maintained. The provision outlining the creation of special rules for gifts of illiquid assets to donor-advised funds should be removed. Gifts of illiquid assets to donor-advised funds should not be unfairly singled out. Creating a special rule just for gifts that are used to fund donor-advised funds will create a disincentive for non-cash gifts to community foundations compared to making the same gift to another kind of charity. Thank you in advance for your attention to this matter. I urge you to carefully consider the harmful provisions that will only create disincentives to charitable donations necessary to many of our own constituents. Please oppose the excise tax increase on private foundations and oppose the elimination of private foundation grants to supporting organizations as part of the tax reconciliation conference report.
Sincerely, Eddie Bernice Johnson |
