II 110th CONGRESS 1st Session S. 2040 IN THE SENATE OF THE UNITED STATES September 12, 2007 Mr. Bond (for himself and Mrs. Lincoln) 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 increase the alternative tax liability limitation for small property and casualty insurance companies.

1.

Increase in limitation for alternative tax liability for small property and casualty insurance companies

(a)

In general

Clause (i) of section 831(b)(2)(A) of the Internal Revenue Code of 1986 is amended to read as follows: (i)the net written premiums (or, if greater, direct written premiums) for the taxable year do not exceed $1,971,000, and . (b)

Inflation adjustment

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 2007, the dollar amount set forth in subparagraph (A) shall be increased by an amount equal to— (i)such dollar amount, multiplied by (ii)the cost-of-living adjustment determined under section 1(f)(3) for such calendar year by substituting calendar year 2006 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, 2006.