Representative Helen Chenoweth

Statement on

H.R. 2611, the Religious Fairness in Bankruptcy Act

Commercial & Administrative Law Subcommittee

House Judiciary Committee

February 12, 1998

Thank you Mr. Chairman. I would like to express my appreciation to the Subcommittee members and staff for the opportunity to testify on behalf of my Religious Fairness in Bankruptcy Act and Mr. Packard's Religious Liberty and Charitable Donation Protection Act.

This is a timely and crucial issue for churches across the country who have found their financial survival threatened. It also affects those who attend church, or synagogue, or any house of worship and find their ability to fulfill their religious duties questioned.

My home state, Idaho, has seen churches subjected to the disgorgement of debtors' tithes from their already tight funds. Both the Magic Valley Evangelical Free Church and Broadway Avenue Baptist Church in Idaho have been forced to surrender tithe monies that they have spent long before the trustee decides to pursue those funds. Often, these churches operate on a week-to-week basis, and are unable to set aside large sums in the event that one of their parishioners may declare bankruptcy.

The time to bring an end to this misapplication of the bankruptcy code is now. The Right to Free Exercise of Religion is a fundamental liberty expressed in our Constitution. Religious Freedom must be protected.

What is happening to our churches represents a serious threat to those who follow the dictates of their conscience and the framework of their religious beliefs. Many give a portion of their income as tithes to their religious institution; some based on faith, others based on scripture, others based on religious obligation. I think you will agree that our nation's foundations clearly were not based on the notion of depriving her citizens of their religious freedom in this way.

I introduced the Religious Fairness in Bankruptcy Act to combat this problem directly. My bill grants that tithes will be considered to be a transaction involving an exchange of "reasonably equivalent value." This balanced approach addresses both the need for tithes to be protected and the importance of ensuring that creditors be allowed to collect the money legitimately owed them.

There are two primary concerns which must be key components of legislation to address this problem.

First, it must be stressed that the concept of protecting tithes to churches and religious institutions has firm Constitutional standing. As we will hear from later expert Constitutional witnesses, there is no need to connect churches to 501(c)(3) groups in order to pass Constitutional muster.

Any attempt to combine churches with non-profit 501(c)(3) groups, no matter how well-intentioned, could result in the subjection of churches to further governmental regulation down the road. To date, no non-profit group has been subject to the same treatment as churches under the bankruptcy code, so their inclusion solves a non-existent problem. Making this connection only serves to start us down the slippery slope of government regulation of our churches.

I recognize that the motive is to pass Constitutional muster, however, this inclusion is not necessary. The Supreme Court has, on numerous occasions, rejected the argument that exemptions for religious activities are unconstitutional if not extended to secular activities.

Indeed, the Supreme Court stated in Corporation of Presiding Bishop v. Amos (1987), that "...the government may (and sometimes must) accommodate religious practices and that it may do so without violating the Establishment Clause." The protection of Constitutional rights serves a social, secular purpose, not a religious one. I don't profess to be an expert in Constitutional Law, but the Subcommittee will hear from experts who agree.

The second area of major importance is the definition of tithes. The government should not be in the business of attempting to do what only scripture should do. Assigning any numeric value or cap to tithes puts the autonomy of religion in danger. I believe we should be very leery of any language that would attempt to attach a figure to a tithe. As members of Congress, we have the authority to rewrite laws, but we cannot and should not attempt to rewrite scripture. Scripture defines tithes, not the federal government.

In determining the legitimacy of fund transfers, the tests of giving patterns and history should continue to be applied so as to protect the giver's free exercise rights. This should be balanced by language allowing the trustee the discretion to determine intent to defraud. My bill makes room for both of these components.

Finally, I would add that it is crucial in determining action on any legislation that we ask ourselves, "What is the right thing to do?"; not "What is the most politically expedient thing to do?"

A solution that would include non-profit groups may sound both politically and rhetorically attractive. However, I believe there is a very clear problem facing our nation's churches and churchgoers, and there is a very clear answer to dealing with it. My Religious Fairness in Bankruptcy Act provides a lucid solution to this unjust intrusion into religious free exercise. 501(c)(3) organizations are a creation of the state; churches are not. H.R. 2611 is the best approach to specifically address the invasion of religious freedom in our nation's churches, and it is the right thing to do.

It is important that the doctrine of the separation of church and state be kept in tact. Any challenges to this legislation under the Establishment Clause will be unsuccessful. The type of exemption included in H.R. 2611 is wholly Constitutional, as you will hear from other witnesses today, and it does not present Establishment Clause conflicts. The components of H.R. 2611 are consistent with the Supreme Court's rulings in recent cases dealing with religious freedom.

Formulating a solution to a problem that does not exist would only exacerbate the already rising problems of bankruptcy and debt that our nation has been faced with in the last decade. Let's stick to the task at hand, and address separate issues with separate legislation.

Again, I would like to thank Chairman Gekas, Ranking Member Nadler, and the members of the committee for the opportunity to address this body and for the work of both yourself and the staff in preparing this hearing.

I would also like to thank Mr. Grassley and Mr. Packard for their hard work to defend the rights of Americans to practice their religious beliefs.

Thank you, Mr. Chairman, and I look forward to working with you in ensuring the passage of an effective piece of legislation that will provide a solution to this growing problem.

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