A bill to amend the Internal Revenue Code of 1986 to enhance tax incentives for small property and casualty insurance companies.

Amends the Internal Revenue Code to: (1) revise the definition of gross receipts applicable to tax-exempt small property and casualty insurance companies to include gross investment income; (2) increase to $1.971 million (from $1.2 million) the limitation on net written premiums for purposes of qualifying non-life insurance companies for alternative tax rates; and (3) adjust such increased limitation amount annually for inflation after 2006.

[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 1553 Introduced in Senate (IS)]








109th CONGRESS
  1st Session
                                S. 1553

 To amend the Internal Revenue Code of 1986 to enhance tax incentives 
          for small property and casualty insurance companies.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             July 29, 2005

   Mr. Bond 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 enhance tax incentives 
          for small property and casualty insurance companies.

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

SECTION 1. CLARIFICATION OF DEFINITION OF GROSS RECEIPTS FOR PURPOSES 
              OF DETERMINING TAX EXEMPTION OF SMALL PROPERTY AND 
              CASUALTY INSURANCE COMPANIES.

    (a) In General.--Section 501(c)(15) of the Internal Revenue Code is 
amended by adding at the end the following:
                    ``(D) For purposes of subparagraph (A), the term 
                `gross receipts' means the gross amount received during 
                the taxable year from the items described in section 
                834(b) and premiums (including deposits and 
                assessments).''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2003.

SEC. 2. 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 2006, 
                the $1,971,000 amount set forth in subparagraph (A) 
                shall be increased by an amount equal to--
                            ``(i) $1,971,000, multiplied by
                            ``(ii) the cost-of-living adjustment 
                        determined under section 1(f)(3) for such 
                        calendar year by substituting `calendar year 
                        2005' 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, 2005.
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