[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2228 Introduced in House (IH)]







108th CONGRESS
  1st Session
                                H. R. 2228

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


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              May 22, 2003

Mr. Crane (for himself, Mr. Matsui, Mr. Shaw, Mr. Rangel, Mrs. Johnson 
of Connecticut, Mr. Houghton, Mr. Herger, Mr. Ramstad, Mr. Sam Johnson 
   of Texas, Mr. Collins, Mr. Portman, Mr. English, Mr. Hulshof, Mr. 
  McInnis, Mr. Lewis of Kentucky, Mr. Foley, Mr. Brady of Texas, Mr. 
 McNulty, Mr. Becerra, and Mr. Pomeroy) 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, 2003.
    (d) Phasein of Application of Certain Losses Against Income of 
Insurance Companies.--For taxable years beginning after December 31, 
2003, and before January 1, 2010--
            (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 not elected 
                under subsection (e) to treat all such insurance 
                companies as corporations which are not 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:

                                                         The applicable
  For taxable years beginning in:                        percentage is:
        2004...................................................     40 
        2005...................................................     50 
        2006...................................................     60 
        2007...................................................     70 
        2008...................................................     80 
        2009...................................................     90.
    (e) Election for Pre-2010 Years of Groups With Insurance 
Companies.--For taxable years beginning after December 31, 2003, and 
before January 1, 2010, the common parent of an affiliated group 
(determined without regard to section 1504(b)(2) of such Code as in 
effect on the day before the date of enactment of this Act) which 
includes 1 or more domestic insurance companies subject to tax under 
section 801 of such Code 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, if, as of 
the date of 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 additional 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, 2004.--To the extent that a 
consolidated net operating loss is allowed or increased by reason of 
the amendments made by this section, such loss may not be carried back 
to a taxable year beginning before January 1, 2004.
    (g) Nontermination of Group.--No affiliated group shall terminate 
solely as a result of the amendments made by this section.
    (h) Subsidiary Stock Basis Adjustments.--A member corporation's 
basis in the stock of a subsidiary corporation shall be adjusted upon 
consolidation to reflect the preconsolidation income, gain, deduction, 
loss distributions and other relevant amounts during a period when such 
corporations were members of an affiliated group (determined without 
regard to section 1504(b)(2) of such Code as in effect on the day 
before the date of enactment of this Act) but were not included in a 
consolidated return of such group by operation of section 1504(c)(2)(A) 
of such Code (as in effect on the day before the date of the enactment 
of this Act) or by reason of the election allowed under subsection (e) 
of this Act.
    (i) Waiver of 5-Year Waiting Period.--An automatic waiver from the 
5-year waiting period for reconsolidation provided in section 
1504(a)(3) of such Code shall be granted to any corporation which was 
previously an includible corporation but was subsequently deemed a 
nonincludible corporation as a result of becoming a subsidiary of a 
corporation which was not an includible corporation solely by operation 
of section 1504(c)(2) of such Code (as in effect on the day before the 
date of enactment of this Act), subject to such conditions as the 
Secretary may prescribe.
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