[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 51 Introduced in House (IH)]






109th CONGRESS
  1st Session
                                 H. R. 51

   To amend the Internal Revenue Code of 1986 to increase the dollar 
 limitation on employer-provided group term life insurance that can be 
            excluded from the gross income of the employee.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            January 4, 2005

 Mr. Burgess 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 increase the dollar 
 limitation on employer-provided group term life insurance that can be 
            excluded from the gross income of the employee.

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

SECTION 1. FINDINGS.

    Congress finds the following:
            (1) The primary purpose of group term life insurance is to 
        provide families with protection against the economic loss 
        arising from the death of the principal family income producer.
            (2) The Revenue Act of 1964 (Public Law 88-272) required 
        individuals to pay an imputed income tax on the current value 
        of employer-provided group term life insurance policies of more 
        than $50,000.
            (3) The value of the $50,000 limitation has steadily 
        decreased since 1964 because the limitation was not indexed for 
        inflation.
            (4) The number of individuals affected by the $50,000 
        limitation in 1964 was estimated to be somewhere between 0.5 
        percent and 1 percent of the total number of individuals who 
        received employer sponsored group term life insurance.
            (5) The Department of the Treasury estimated that in 1999, 
        18.1 percent of employees receiving group term life insurance 
        were affected by the $50,000 limitation (13.6 million of the 75 
        million total recipients of employer sponsored group term life 
        insurance).
            (6) If the $50,000 limitation had been indexed for 
        inflation in 1964, the limitation would have been approximately 
        $300,000 by 2004.

SEC. 2. INCREASE IN LIMITATION ON EXCLUSION FOR EMPLOYER-PROVIDED GROUP 
              TERM LIFE INSURANCE PURCHASED FOR EMPLOYEES.

    (a) In General.--Paragraph (1) of section 79(a) of the Internal 
Revenue Code of 1986 is amended by striking ``$50,000'' and inserting 
``$300,000''.
    (b) Inflation Adjustment.--Section 79 of such Code (relating to 
group-term life insurance purchased for employees) is amended by adding 
at the end the following new subsection:
    ``(f) Inflation Adjustment.--
            ``(1) In general.--In the case of a taxable year beginning 
        after 2005, the $300,000 amount under subsection (a)(1) shall 
        be increased by an amount equal to--
                    ``(A) such dollar amount, multiplied by
                    ``(B) the cost-of-living adjustment determined 
                under section 1(f)(3) for the calendar year in which 
                the taxable year begins, determined by substituting 
                `2004' for `1992' in subparagraph (B) thereof.
            ``(2) Rounding.--If any amount as adjusted under paragraph 
        (1) is not a multiple of $10,000, such amount shall be rounded 
        to the nearest multiple of $10,000.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2004.
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