[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4795 Introduced in House (IH)]







105th CONGRESS
  2d Session
                                H. R. 4795

To amend the Internal Revenue Code of 1986 to permit the consolidation 
           of life insurance companies with other companies.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            October 10, 1998

 Mr. Crane (for himself, Mrs. Johnson of Connecticut, Mrs. Kennelly of 
  Connecticut, Mr. Ramstad, and Mr. Weller) introduced the following 
      bill; which was referred to the Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
To amend the Internal Revenue Code of 1986 to permit the consolidation 
           of life insurance companies with other companies.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. CONSOLIDATION OF LIFE INSURANCE COMPANIES WITH OTHER 
              COMPANIES PERMITTED.

    (a) In General.--Section 1504(b) of the Internal Revenue Code of 
1986 (defining includible corporation) is amended by striking paragraph 
(2) and by redesignating paragraphs (3) through (8) as paragraphs (2) 
through (7), respectively.
    (b) Conforming Amendments.--
            (1) Section 1503 of such Code is amended by striking 
        subsection (c) (relating to special rule for application of 
        certain losses against income of insurance companies taxed 
        under section 801) and by redesignating subsections (d), (e), 
        and (f) as subsections (b), (c), and (d), respectively.
            (2) Section 1504 of such Code is amended by striking 
        subsection (c) and by redesignating subsections (d), (e), and 
        (f) as subsections (c), (d), and (e), respectively.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1998.
    (d) Phasein of Application of Certain Losses Against Income of 
Insurance Companies.--For taxable years beginning after December 31, 
1998, and before January 1, 2005--
            (1) In general.--If--
                    (A) an affiliated group includes 1 or more domestic 
                insurance companies each of which is subject to tax 
                under section 801 of the Internal Revenue Code of 1986,
                    (B) the common parent of such group has elected to 
                treat all such companies as includible corporations, 
                and
                    (C) the consolidated taxable income of the members 
                of the group not taxed under such section 801 results 
                in a consolidated net operating loss for such taxable 
                year,
        then, under regulations prescribed by the Secretary of the 
        Treasury or his delegate, the amount of such loss which cannot 
        be absorbed in the applicable carryback periods against the 
        taxable income of such members not taxed under such section 801 
        shall be taken into account in determining the consolidated 
        taxable income of the affiliated group for such taxable year to 
        the extent of the applicable percentage of such loss or the 
        applicable percentage of the taxable income of the members 
        taxed under such section 801, whichever is less. The unused 
        portion of such loss shall be available as a carryover, subject 
        to the same limitations (applicable to the sum of the loss for 
        the carryover year and the loss (or losses) carried over to 
        such year), in applicable carryover years.
            (2) Applicable percentage.--For purposes of paragraph (1), 
        the applicable percentage shall be determined in accordance 
        with the following table:

For taxable years beginning in:     The applicable percentage is:
    1999...........................
                                        40
    2000...........................
                                        50
    2001...........................
                                        60
    2002...........................
                                        70
    2003...........................
                                        80
    2004...........................
                                        90.
    (e) Election for Pre-2005 Years of Groups With Insurance 
Companies.--For taxable years beginning after December 31, 1998, and 
before January 1, 2005, the common parent of an affiliated group which 
includes 1 or more domestic insurance companies subject to tax under 
section 801 may elect to treat all such insurance companies as 
corporations which are not includible corporations within the meaning 
of subsection (b) of section 1504 of such Code, provided that, as of 
the date of the enactment of this section--
            (1) such affiliated group included 1 or more insurance 
        companies subject to tax under section 801 of such Code, and
            (2) no election was in effect under section 1504(c)(2) of 
        such Code (as in effect on the day before the date of the 
        enactment of this Act).
    (f) No Carryback Before January 1, 1999.--To the extent that a 
consolidated net operating loss is allowed or increased by reason the 
amendments made by this section, such loss may not be carried back to a 
taxable year beginning before January 1, 1999.
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