I 

109TH CONGRESS 

1ST SESSION H. R. 3533 

To amend the Internal Revenue Code of 1986 to provide that net operating 

losses shall not be reduced in connection with a discharge of indebtedness 

in certain chapter 11 bankruptcy cases involving asbestos-related claims. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 28, 2005 

Mr. CAMP 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 provide 

that net operating losses shall not be reduced in connection with a discharge of indebtedness in certain chapter 

11 bankruptcy cases involving asbestos-related claims. 

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

3 SECTION 1. ELECTION NOT TO REDUCE NOLS IN CONNEC4 TION WITH DISCHARGES OF INDEBTEDNESS 

5 IN CERTAIN ASBESTOS-RELATED BANK6 RUPTCY CASES. 

7 (a) IN GENERAL.—Subsection (b) of section 108 of 

8 the Internal Revenue Code of 1986 (relating to reduction 
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1 of tax attributes) is amended by adding at the end the 

2 following new paragraph: 

3 ‘‘(6) ELECTION NOT TO REDUCE NOLS IN CER4 TAIN ASBESTOS-RELATED TITLE 11 CASES.— 

5 ‘‘(A) IN GENERAL.—With respect to 

6 amounts excluded from gross income under sub7 section (a)(1)(A) by reason of a discharge re8 ceived in a specified chapter 11 case, this sub9 section may, at the election of the taxpayer (at 

10 such time and in such form and manner as the 

11 Secretary may prescribe), be applied to such 

12 amounts without regard to paragraph (2)(A) if 

13 the aggregate amount of the specified asbestos14 related liabilities of the taxpayer exceeds 

15 $250,000,000. 

16 ‘‘(B) SPECIAL RULES FOR AFFILIATED

17 GROUPS.—If the taxpayer is a member of an af18 filiated group (as defined in section 1504) 

19 which files a consolidated return under section 

20 1501, subparagraph (A) shall be applied (for 

21 purposes of determining if the aggregate 

22 amount of the specified asbestos-related liabil23 ities of the taxpayer exceeds $250,000,000) by 

24 taking into account the specified asbestos-re25 lated liabilities of each member of such group 
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1 which is a debtor in a specified chapter 11 case 

2 which is jointly administered under chapter 11 

3 of title 11, United States Code, with the speci4 fied chapter 11 case of the taxpayer. 

5 ‘‘(C) SPECIFIED ASBESTOS-RELATED LI6 ABILITIES.—For purposes of this paragraph, 

7 the term ‘specified asbestos-related liabilities’ 

8 means the aggregate amount of claims and de9 mands against the debtor payable from a trust 

10 with respect to which an injunction under sec11 tion 524(g) of title 11, United States Code, is 

12 in effect. 

13 ‘‘(D) SPECIFIED CHAPTER 11 CASE.—For 

14 purposes of this paragraph, the term ‘specified 

15 chapter 11 case’ means a case commenced 

16 under chapter 11 of title 11, United States 

17 Code, before July 28, 2005, and with respect to 

18 which a discharge under such chapter is re19 ceived on or after such date.’’. 

20 (b) EFFECTIVE DATE.—The amendment made by 

21 this section shall apply to discharges received on or after 

22 July 28, 2005, in taxable years ending on or after such 

23 date. 

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