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
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About the Evangelical Lutheran Church in America:
The ELCA is one of the largest Christian denominations in the United States, with 2.8 million members in more than 8,500 worshiping communities across the 50 states and in the Caribbean region. Known as the church of "God's work. Our hands.," the ELCA emphasizes the saving grace of God through faith in Jesus Christ, unity among Christians and service in the world. The ELCA's roots are in the writings of the German church reformer Martin Luther.
For information contact:
Candice Hill Buchbinder
Public Relations Manager
Candice.HillBuchbinder@ELCA.org
