[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 1495 Introduced in Senate (IS)]
108th CONGRESS
1st Session
S. 1495
To amend the Internal Revenue Code of 1986 to permit the consolidation
of life insurance companies with other companies.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
July 30 (legislative day, July 21), 2003
Mr. Bunning (for himself and Mr. Conrad) 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 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 the Internal Revenue Code of 1986 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.
(3) Section 243(b)(2)(A) of such Code is amended by
striking ``sections 1504(b)(2), 1504(b)(4), and 1504(c)'' and
inserting ``section 1504(b)(3)''.
(4) Section 805(a)(4)(E) of such Code is amended by
striking ``1504(b)(3)'' and inserting ``1504(b)(2)''.
(5) Section 818(e)(1) of such Code is amended to read as
follows:
``(1) Items of companies other than insurance companies.--
If an affiliated group includes members which are and which are
not life insurance companies, all items of the members of such
group which are not life insurance companies shall not be taken
into account in determining the amount of the tentative LICTI
of members of such group which are life insurance companies.''.
(6) Section 832(b)(5)(D)(ii)(II) of such Code is amended by
striking ``1504(b)(3)'' and inserting ``1504(b)(2)''.
(7) Section 864(e)(5)(A) of such Code is amended by
striking ``paragraph (4)'' and inserting ``paragraph (3)''.
(8) Section 936(i)(5)(A) of such Code is amended by
striking ``section 1504(b)(3) or (4)'' and inserting ``section
1504(b)(2) or (3)''.
(9) Section 952(c)(1)(B)(vii)(II) of such Code is amended
by striking ``1504(b)(3)'' and inserting ``1504(b)(2)''.
(10) Section 953(d)(3) of such Code is amended by striking
``1503(d)'' and inserting ``1503(c)''.
(11) Section 954(h)(4)(F)(ii) of such Code is amended by
striking ``1504(b)(3)'' and inserting ``1504(b)(2)''.
(12) Section 6166(b)(10)(B)(ii)(V) of such Code is amended
by striking ``1504(b)(3)'' and inserting ``1504(b)(2)''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2003.
SEC. 2. PHASE-IN OF APPLICATION OF CERTAIN LOSSES AGAINST INCOME OF
INSURANCE COMPANIES.
(a) Phase-in.--
(1) In general.--For taxable years beginning after December
31, 2003, and before January 1, 2010, if--
(A) an affiliated group includes 1 or more domestic
insurance companies 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 (b) 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.
(b) 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 the Internal
Revenue Code of 1986 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).
(c) No Carryback Before January 1, 2004.--To the extent that a
consolidated net operating loss is allowed or increased by reason of
this section or the amendments made by this Act, such loss may not be
carried back to a taxable year beginning before January 1, 2004.
(d) Nontermination of Group.--No affiliated group shall terminate
solely as a result of this section or the amendments made by this Act.
(e) 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 the Internal Revenue Code of
1986 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 (b).
(f) Waiver of 5-Year Waiting Period.--An automatic waiver from the
5-year waiting period for reconsolidation provided in section
1504(a)(3) of the Internal Revenue Code of 1986 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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