SRC-SLL S.B. 1948 75(R)   BILL ANALYSIS


Senate Research Center   S.B. 1948
By: Sibley
Economic Development
5-7-97
As Filed


DIGEST 

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 would prevent a donor who treats an annuity as a charitable
gift annuity in a filing with the Internal Revenue Service from taking a
contrary position in court. 

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; ESTOPPEL.
Provides that a donor who treats an annuity as a charitable gift annuity
in a filing with the U.S. Internal Revenue Service is estopped from
asserting in any litigation or proceeding that the annuity is not a
qualified charitable gift annuity issued by a charitable organization, as
described by Sections 1, 2, and 6 of this article and Section 2(b),
Article 1.14-1 of this code. 

SECTION 2. Provides that the purpose of this section is to clarify the
intent of the legislature with respect to the effect of Sections 1, 2, and
6, Article 1.14-1A, Insurance Code, as those sections existed immediately
before the effective date of this Act.  Makes application of this Act
retroactive. 

SECTION 3. Makes application of this Act retroactive.

SECTION 4. Emergency clause.
  Effective date: upon passage.