The bill -- co-sponsored by committee chairman Sen. Orrin Hatch, R-Utah, and Sen. Charles Grassley, R-Iowa -- would re-enact some of the protections for churches lost when the Supreme Court struck down the 1993 Religious Freedom Restoration Act. The proposal was prompted by several recent court cases in which courts have ordered churches to surrender gifts from donors to their creditors. "Such judicial action seriously threatens the ability of religious institutions not only to function but to survive," Hatch said in a statement.
His bill would prevent federal bankruptcy judges from forcing churches and other tax-exempt, charitable organizations to return donations of up to 15 percent of a debtor's gross annual income, even if donated after bankruptcy was declared. The House is also considering a similar bill which is being co-sponsored by more than 100 representatives.