[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 2955 Introduced in Senate (IS)]







106th CONGRESS
  2d Session
                                S. 2955

   To amend the Internal Revenue Code of 1986 to provide relief for 
                  payment of asbestos-related claims.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             July 27, 2000

   Mr. DeWine (for himself, Mr. Hatch, Mr. Voinovich, and Mr. Leahy) 
introduced the following bill; which was read twice and referred to the 
                          Committee on Finance

_______________________________________________________________________

                                 A BILL


 
   To amend the Internal Revenue Code of 1986 to provide relief for 
                  payment of asbestos-related claims.

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

SECTION 1. EXEMPTION FOR ASBESTOS-RELATED SETTLEMENT FUNDS.

    (a) Exemption for Asbestos-Related Settlement Funds.--Subsection 
(b) of section 468B of the Internal Revenue Code of 1986 is amended by 
adding at the end the following new paragraph:
            ``(6) Exemption from tax for asbestos-related designated 
        settlement funds.--Notwithstanding paragraph (1), no tax shall 
        be imposed under this section or any other provision of this 
        subtitle on any designated settlement fund established for the 
        principal purpose of resolving and satisfying present and 
        future claims relating to asbestos.''
    (b) Conforming Amendments.--
            (1) Paragraph (1) of section 468B(b) of the Internal 
        Revenue Code of 1986 is amended by striking ``There'' and 
        inserting ``Except as provided in paragraph (6), there''.
            (2) Subsection (g) of section 468B of such Code is amended 
        by inserting ``(other than subsection (b)(6))'' after ``Nothing 
        in any provision of law''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after the date of enactment of this Act.

SEC. 2. MODIFY TREATMENT OF ASBESTOS-RELATED NET OPERATING LOSSES.

    (a) Asbestos-Related Net Operating Losses.--Subsection (f) of 
section 172 of the Internal Revenue Code of 1986 is amended by 
redesignating paragraphs (4), (5), and (6) as paragraphs (5), (6), and 
(7), respectively, and by inserting after paragraph (3) the following 
new paragraph:
            ``(4) Special rules for asbestos liability losses.--
                    ``(A) In general.--At the election of the taxpayer, 
                the portion of any specified liability loss that is 
                attributable to asbestos may, for purposes of 
                subsection (b)(1)(C), be carried back to the taxable 
                year in which the taxpayer, including any predecessor 
                corporation, was first involved in the production or 
                distribution of products containing asbestos and each 
                subsequent taxable year.
                    ``(B) Coordination with credits.--If a deduction is 
                allowable for any taxable year by reason of a carryback 
                described in subparagraph (A)--
                            ``(i) the credits allowable under part IV 
                        (other than subpart C) of subchapter A shall be 
                        determined without regard to such deduction, 
                        and
                            ``(ii) the amount of taxable income taken 
                        into account with respect to the carryback 
                        under subsection (b)(2) for such taxable year 
                        shall be reduced by an amount equal to--
                                    ``(I) the increase in the amount of 
                                such credits allowable for such taxable 
                                year solely by reason of clause (i), 
                                divided by
                                    ``(II) the maximum rate of tax 
                                under section 1 or 11 (whichever is 
                                applicable) for such taxable year.
                    ``(C) Carryforwards taken into account before 
                asbestos-related deductions.--For purposes of this 
                section--
                            ``(i) in determining whether a net 
                        operating loss carryforward may be carried 
                        under subsection (b)(2) to a taxable year, 
                        taxable income for such year shall be 
                        determined without regard to the deductions 
                        referred to in paragraph (1)(A) with respect to 
                        asbestos, and
                            ``(ii) if there is a net operating loss for 
                        such year after taking into account such 
                        carryforwards and deductions, the portion of 
                        such loss attributable to such deductions shall 
                        be treated as a specified liability loss that 
                        is attributable to asbestos.
                    ``(D) Limitation.--The amount of reduction in 
                income tax liability arising from the election 
                described in subparagraph (A) that exceeds the amount 
                of reduction in income tax liability that would have 
                resulted if the taxpayer utilized the 10-year carryback 
                period under subsection (b)(1)(C) shall be devoted by 
                the taxpayer solely to asbestos claimant compensation 
                and related costs, through a designated settlement fund 
                or otherwise.
                    ``(E) Consolidated groups.--For purposes of this 
                paragraph, all members of an affiliated group of 
                corporations that join in the filing of a consolidated 
                return pursuant to section 1501 (or a predecessor 
                section) shall be treated as 1 corporation.
                    ``(F) Predecessor corporation.--For purposes of 
                this paragraph, a predecessor corporation shall include 
                a corporation that transferred or distributed assets to 
                the taxpayer in a transaction to which section 381(a) 
                applies or that distributed the stock of the taxpayer 
                in a transaction to which section 355 applies.''
    (b) Conforming Amendment.--Paragraph (7) of section 172(f) of the 
Internal Revenue Code of 1986, as redesignated by this section, is 
amended by striking ``10-year''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after the date of enactment of this Act.
                                 <all>