Amends the Internal Revenue Code to: (1) allow affiliated life and non-life insurance companies to file consolidated tax returns; (2) phase in, between 2005 and 2011, the full application of losses of affiliated non-life insurance companies against the taxable income of an affiliated life insurance company; and (3) automatically waive the five-year waiting period applicable to affiliated non-life insurance companies for offset of their losses against life insurance company income.
[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 1293 Introduced in Senate (IS)]
109th CONGRESS
1st Session
S. 1293
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
June 23, 2005
Mr. Bunning (for himself, Mr. Conrad, Mr. Lott, Mr. Smith, 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 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 taxed under section 801, all items of the members of such
group which are not taxed under section 801 shall not be taken
into account in determining the amount of the tentative LICTI
of members of such group which are taxed under section 801.''.
(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, 2004.
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, 2004, and before January 1, 2011, 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, and
(B) 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 (but determined based on the applicable
percentage with respect to the year to which carried and
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:
2005................................................... 40
2006................................................... 50
2007................................................... 60
2008................................................... 70
2009................................................... 80
2010................................................... 90.
(b) No Carryback Before January 1, 2005.--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 (or increase
in such loss, as the case may be) may not be carried back to a taxable
year beginning before January 1, 2005.
(c) Nontermination of Group.--No affiliated group shall terminate
solely as a result of this section or the amendments made by this Act.
(d) 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).
(e) 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.
<all>
Introduced in Senate
Sponsor introductory remarks on measure. (CR S7297-7298)
Read twice and referred to the Committee on Finance.
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