RS S.B. 1948 75(R)BILL ANALYSIS


INSURANCE
S.B. 1948
By: Sibley (Smithee)
5-20-97
Committee Report (Unamended)


BACKGROUND

Charitable gift annuities have been used in Texas for over 50 years. The
74th Legislature passed H.B. 3104 to clarify that, under existing law,
charitable gift annuities have always been recognized as legal in Texas.
However, a federal court has recently ruled that it is unclear whether the
1995 legislation was intended to apply to those charitable gift annuities
whose status was being challenged in pending lawsuits. This bill will make
it clear that the 1995 legislation applies to all charitable gift
annuities, and provides that an annuity treated by a donor as a charitable
gift annuity for any federal tax purposes shall be considered to be a
charitable gift annuity in any legal proceeding brought by or on behalf of
the donor. 

PURPOSE

As proposed, S.B. 1948 provides regulations regarding the treatment of
certain annuities as charitable gift annuities and the applications of the
Insurance Code and certain other laws to charitable gift annuities. 

RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Article 1.14-1A, Insurance Code, by adding Section 7, as
follows: 

Sec.  7.  TREATMENT OF ANNUITY AS CHARITABLE GIFT ANNUITY.  Provides that
any annuity treated by the donor as a charitable gift annuity for any
federal tax purpose shall be considered in any litigation or proceeding
brought by or on behalf of the donor or the donor's heirs or distributees,
as a charitable gift annuity issued by a charitable organization for
purposes of Sections 1, 2, and 6 of this article and Section 2(b), Article
1.14-1 of this code. 

SECTION 2. Makes application of this Sections 1, 2, 6, and 7, Article
1.14-1A, Insurance Code, and Subsection (b), Section 2, Article 1.14-1,
Insurance Code, as those sections exist on the effective date of  this
Act, apply to any charitable gift annuity issued before, on, or after the
effective date of this Act. 

SECTION 3. Emergency clause.
  Effective date: upon passage.