Senate Floor Speech
Senator Kay Bailey Hutchison
May 20, 1999 -- Page: S5739

MRS. HUTCHISON. Mr. President, today, I am pleased to introduce, along with Senator Durbin, the IRA Rollover to Charity Act of 1999. This legislation has the support of numerous charitable organizations across the United States. The effect of this bill would be to unlock billions of dollars in savings Americans hold and make them available to charity.

Mr. President, the legislation will allow individuals to roll assets from an Individual Retirement Account (IRA) into a charity or a deferred charitable gift plan without incurring any income tax consequences. Thus, the donation would be made to charity without ever withdrawing it as income and paying tax on it.

Americans hold well over $1 trillion in assets in IRAs. Nearly half of America's families have IRAs. Recent studies show that assets of qualified retirement plans comprise a substantial part of the net worth of many persons. Many individuals would like to give a portion of these assets to charity.

Under current law, if an IRA is transferred into a charitable remainder trust, donors are required to recognize all such income. Therefore, absent the changes called for in the legislation, the donor will have taxable income in the year the gift is funded. The IRA Rollover to Charity Act lifts the disincentives contained in our complicated and burdensome tax code and will unleash a critical source of funding for our nation's charities. This is a common sense way to remove obstacles to private charitable giving.

Under the legislation, upon reaching age 59 1/2 , an individual could move assets penalty-free from an IRA directly to charity or into a qualifying deferred charitable gift plan--e.g. charitable reminder trusts, pooled income funds and gift annuities. In the latter case the donor would be able to receive an income stream from the retirement plan assets, which would be taxed according to normal rules. Upon the death of the individual, the remainder would be transferred to charity.

Mr. President, I hope the Senate will join in this effort to provide a valuable new source of philanthropy for our nation's charities. This legislation has the support of numerous universities and charitable groups, including the Charitable Accord, an umbrella organization representing more than 1,000 organizations and associations.

Mr. President, I have just returned from the Balkans. I have seen first hand the wonderful work that is being done by charitable groups in dealing with the massive refugee crisis that has occurred there. As terrible as this crisis has been, it would be worse if not for the great work that is being done by charitable groups. Our bill will help direct additional resources to those charities and thousands of others. I urge my colleagues to co-sponsor this legislation.