[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 3099 Introduced in Senate (IS)]







106th CONGRESS
  2d Session
                                S. 3099

  To amend the Internal Revenue Code of 1986 to clarify the exemption 
 from tax for small property and casualty insurance companies, and for 
                            other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           September 22, 2000

   Mr. Grams 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 clarify the exemption 
 from tax for small property and casualty insurance companies, and for 
                            other purposes.

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

SECTION 1. CLARIFICATION OF EXEMPTION FROM TAX FOR SMALL PROPERTY AND 
              CASUALTY INSURANCE COMPANIES.

    (a) Anti-Abuse Rule.--Paragraph (15) of section 501(c) of the 
Internal Revenue Code of 1986 is amended by redesignating subparagraph 
(C) as subparagraph (D) and by inserting after subparagraph (B) the 
following new subparagraph:
                    ``(C) Subparagraph (A) shall apply only to a 
                company or association which is solely and directly 
                owned by its policyholders and is organized and 
                operates only in 1 State.''
    (b) Premium Limitations Increased To Reflect Inflation Since First 
Imposed.--
            (1)(A) Subparagraph (A) of section 501(c)(15) of such Code 
        is amended by striking ``$350,000'' and inserting ``$531,000''.
            (B) Paragraph (15) of section 501(c) of such Code is 
        amended by adding at the end the following new subparagraph:
                    ``(E) In the case of any taxable year beginning in 
                a calendar year after 2000, the $531,000 amount set 
                forth in subparagraph (A) shall be increased by an 
                amount equal to--
                            ``(i) $531,000, multiplied by
                            ``(ii) the cost-of-living adjustment 
                        determined under section 1(f)(3) for such 
                        calendar year by substituting `calendar year 
                        1999' for `calendar year 1992' in subparagraph 
                        (B) thereof.
                If the amount as adjusted under the preceding sentence 
                is not a multiple of $1,000, such amount shall be 
                rounded to the next lowest multiple of $1,000.''
            (2)(A) Clause (i) of section 831(b)(2)(A) of such Code is 
        amended to read as follows:
                            ``(i) the net written premiums (or, if 
                        greater, direct written premiums) for the 
                        taxable year exceed the amount applicable under 
                        section 501(c)(15)(A) but do not exceed 
                        $1,819,000, and''.
            (B) Paragraph (2) of section 831(b) of such Code is amended 
        by adding at the end the following new subparagraph:
                    ``(C) Inflation Adjustment.--In the case of any 
                taxable year beginning in a calendar year after 2000, 
                the $1,819,000 amount set forth in subparagraph (A) 
                shall be increased by an amount equal to--
                            ``(i) $1,819,000, multiplied by
                            ``(ii) the cost-of-living adjustment 
                        determined under section 1(f)(3) for such 
                        calendar year by substituting `calendar year 
                        1999' for `calendar year 1992' in subparagraph 
                        (B) thereof.
                If the amount as adjusted under the preceding sentence 
                is not a multiple of $1,000, such amount shall be 
                rounded to the next lowest multiple of $1,000.''
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2000.
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