Sen. Chuck Grassley, ranking member of the Committee on Finance, wrote a series of charitable reforms that became law in the Pension Protection Act of 2006. The reforms grew out of his oversight of tax-exempt organizations and laws, which had not been updated substantially since 1969. A bill pending before the House of Representatives today would unwind some of the 2006 reforms as they apply to certain supporting organizations. Grassley said he will oppose the House bill, the Charities Enhancement Act of 2008, H.R. 7083, if it comes to the Senate. He urged House members to oppose the bill. Grassley made the following comment on the bill.

"Private foundations and supporting organizations enjoy tax-exempt status on their money. In exchange for that special status, they have to comply with a few requirements. One is that they pay out 5 percent of their assets each year. This pay-out requirement is meant to make sure the organization offers some public benefit in exchange for tax exemption and doesn’t exist simply to invest its money and pay a staff and a board of directors – often family members – in perpetuity. Another requirement is that private foundations and certain supporting organizations are subject to a tax on excess business holdings. In general, the tax applies to substantial interests these organizations may hold in corporations and other businesses. The tax is designed to make sure tax-exempt organizations don’t shelter oil refineries and yacht clubs from paying taxes.

"A handful of organizations argue that these requirements are onerous or that they should be exempt because they were created before 1969. There may be legitimate reasons to look at some of these issues, but the House bill as written is much too broad. Thousands of organizations could be carved out of the payout requirement and business holdings prohibition. The bill would unwind regulations implementing the 2006 reforms before the regulations are even finished. It contains several provisions that need much more study before being enacted. For all of these reasons, the House bill needs more work. I would vote against it if I had to vote and urge my House colleagues to vote no."