I 

108TH CONGRESS 

1ST SESSION H. R. 1530

To amend the Internal Revenue Code of 1986 to clarify the exemption 

from tax for small property and casualty insurance companies. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 1, 2003

Mr. NUSSLE (for himself, Mr. RAMSTAD, Mr. LUCAS of Kentucky, Mr. GREEN

of Wisconsin, Mr. GRAVES, and Mr. PAUL) 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 clarify 

the exemption from tax for small property and casualty 

insurance companies.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Small Insurance Com5 pany Inflation Adjustment Act’’. 
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1 SEC. 2. CLARIFICATION OF EXEMPTION FROM TAX FOR 

2 SMALL PROPERTY AND CASUALTY INSUR3 ANCE COMPANIES. 

4 (a) PREMIUM LIMITATIONS INCREASED TO REFLECT

5 INFLATION SINCE FIRST IMPOSED.—

6 (1) INCREASED LIMITATIONS FOR EXEMPTION

7 FROM TAX.—

8 (A) Subparagraph (A) of section 

9 501(c)(15) of the Internal Revenue Code of 

10 1986 is amended by striking ‘‘$350,000’’ and 

11 inserting ‘‘$575,000’’. 

12 (B) Paragraph (15) of section 501(c) of 

13 such Code is amended by adding at the end the 

14 following new subparagraph: 

15 ‘‘(D) In the case of any taxable year begin16 ning in a calendar year after 2003, the 

17 $575,000 amount set forth in subparagraph (A) 

18 shall be increased by an amount equal to—

19 ‘‘(i) $575,000, multiplied by 

20 ‘‘(ii) the cost-of-living adjustment de21 termined under section 1(f)(3) for such 

22 calendar year by substituting ‘calendar 

23 year 2002’ for ‘calendar year 1992’ in sub24 paragraph (B) thereof. 

25 If the amount as adjusted under the preceding 

26 sentence is not a multiple of $1,000, such 
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1 amount shall be rounded to the next lowest 

2 multiple of $1,000.’’. 

3 (2) INCREASED LIMITATIONS FOR ALTERNATIVE

4 TAX LIABILITY.—

5 (A) Clause (i) of section 831(b)(2)(A) of 

6 such Code is amended to read as follows: 

7 ‘‘(i) the net written premiums (or, if 

8 greater, direct written premiums) for the 

9 taxable year exceed the amount applicable 

10 under section 501(c)(15)(A) but do not ex11 ceed $1,971,000, and’’. 

12 (B) Paragraph (2) of section 831(b) of 

13 such Code is amended by adding at the end the 

14 following new subparagraph: 

15 ‘‘(C) INFLATION ADJUSTMENT.—In the 

16 case of any taxable year beginning in a calendar 

17 year after 2003, the $1,971,000 amount set 

18 forth in subparagraph (A) shall be increased by 

19 an amount equal to—

20 ‘‘(i) $1,971,000, multiplied by 

21 ‘‘(ii) the cost-of-living adjustment de22 termined under section 1(f)(3) for such 

23 calendar year by substituting ‘calendar 

24 year 2002’ for ‘calendar year 1992’ in sub25 paragraph (B) thereof. 
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1 If the amount as adjusted under the preceding 

2 sentence is not a multiple of $1,000, such 

3 amount shall be rounded to the next lowest 

4 multiple of $1,000.’’. 

5 (b) EFFECTIVE DATE.—The amendments made by 

6 this section shall apply to taxable years beginning after 

7 December 31, 2002.

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