wfn.org | Bush Signs Clergy Housing Allowance Legislation

[News News <NEWS@ELCA.ORG>]

ELCA NEWS SERVICE

May 22, 2002

BUSH SIGNS CLERGY HOUSING ALLOWANCE LEGISLATION
02-119-JB

     CHICAGO (ELCA) -- President George W. Bush signed into law the
"Clergy Housing Allowance Act," which clarifies the portion of income
clergy can deduct as housing.  Bush signed the legislation at a May 20
ceremony at the White House.
  The legislation was sponsored in the U.S. House of Representatives
by Rep. Jim Ramstad (R-Minn., 3rd) and Rep. Earl Pomeroy (D-N.D.).  U.S.
Senate sponsors were Sen. Max Baucus (D-Mont.) and Sen. Charles Grassley
(R-Iowa).  The act clarified that the parsonage allowance exclusion is
limited to the fair market rental value of the property.
  The ELCA Board of Pensions supported the legislation, through the
Church Alliance, a coalition of 32 Protestant, Catholic and Jewish
benefits programs.  John G. Kapanke, president of the ELCA Board of
Pensions, Minneapolis, chairs the alliance.
  "I'm grateful for the strong bipartisan support this legislation
has received from Congress and the President," Ramstad said.  "Without
this bill, America's clergy would face a devastating $2.3 billion tax
increase on their housing."
  "In North Dakota and across the country, churches operate on the
thinnest of budgets to carry out what is among the nation's most
important of missions," Pomeroy said. "Rural churches are especially
vulnerable. With 2,000 churches, North Dakota has more churches per
capita than any other state, and nearly 80 percent of them are in rural
areas."
     The legislation was introduced in response to a case now pending
in the Ninth U.S. Circuit Court of Appeals, San Francisco.  The U.S.
Internal Revenue Service (IRS) challenged the amount of money that a
California Baptist minister deducted as his housing allowance, saying it
exceeded the "fair market rental value" of the house. A federal tax
court ruled in favor of the minister. The IRS appealed the ruling to the
Ninth U.S. Circuit Court of Appeals. In hearing the case, the appellate
court announced plans to review first the constitutionality of the
exemption.
     Without the legislation, "the Ninth Circuit Court of Appeals
appeared poised to strike down the clergy housing allowance as
unconstitutional," Kapanke said.  Now that the Clergy Housing Allowance
Act is law, Kapanke said he anticipates "an end to the appeal in the
Ninth Circuit Court of Appeals."
     Last month, the ELCA Board of Pensions placed a "call to action"
on its Web site, sent e-mail to the church's 65 synod bishops and mailed
a special newsletter to all of the church's pastors -- active and
retired -- asking that e-mail and letters supporting the legislation be
sent to all members of Congress.
-- -- --
     Additional information about the Clergy Housing Allowance Act can
be found at
http://www.elcabop.org on the ELCA Board of Pensions' Web site.

For information contact:
John Brooks, Director (773) 380-2958 or NEWS@ELCA.ORG
http://listserv.elca.org/archives/elcanews.html