I 
112TH CONGRESS 
1ST SESSION H. R. 3139 
To amend the Internal Revenue Code of 1986 to provide for the creation 
of disaster protection funds in the District of Columbia by property 
and casualty insurance companies for the payment of policyholders’ 
claims arising from natural catastrophic events. 
IN THE HOUSE OF REPRESENTATIVES 
OCTOBER 6, 2011 
Ms. NORTON 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 
for the creation of disaster protection funds in the Dis-
trict of Columbia by property and casualty insurance 
companies for the payment of policyholders’ claims aris-
ing from natural catastrophic events. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘District of Columbia 
National Disaster Insurance Protection Act’’. 
VerDate Mar 15 2010 
22:38 Oct 11, 2011
Jkt 019200
PO 00000
Frm 00001
Fmt 6652
Sfmt 6201
E:\BILLS\H3139.IH
H3139
emcdonald on DSK5VPTVN1PROD with BILLS
SEC. 2. DISTRICT OF COLUMBIA NATURAL DISASTER PRO-
TECTION FUNDS. 
(a) CONTRIBUTIONS TO NATURAL DISASTER PRO-
TECTION FUNDS.—Subsection (c) of section 832 of the In-
ternal Revenue Code of 1986 (relating to the taxable in-
come of insurance companies other than life insurance 
companies) is amended by striking ‘‘and’’ at the end of 
paragraph (12), by striking the period at the end of para-
graph (13) and inserting ‘‘; and’’, and by adding at the 
end the following new paragraph: 
‘‘(14) the qualified contributions during the 
taxable year to a natural disaster protection fund.’’ 
(b) NATURAL DISASTER PROTECTION FUND GROSS 
INCOME.—Subsection (b) of section 832 of such Code is 
amended by adding at the end the following new para-
graph: 
‘‘(9) SPECIAL RULE FOR ASSETS HELD IN NAT-
URAL DISASTER PROTECTION FUND.—For purposes 
of determining gross income under this subsection, 
any items of income, gain, loss, or deduction derived 
from or attributable to any assets held in a natural 
disaster protection fund shall not be taken into ac-
count.’’ 
(c) DISTRIBUTIONS FROM NATURAL DISASTER PRO-
TECTION FUNDS.—Paragraph (1) of section 832(b) of 
such Code is amended by striking ‘‘and’’ at the end of 
VerDate Mar 15 2010 
22:38 Oct 11, 2011
Jkt 019200
PO 00000
Frm 00002
Fmt 6652
Sfmt 6201
E:\BILLS\H3139.IH
H3139
emcdonald on DSK5VPTVN1PROD with BILLS
subparagraph (D), by striking the period at the end of 
subparagraph (E) and inserting ‘‘, and’’, and by adding 
at the end the following new subparagraph: 
‘‘(F) the aggregate amount of all distribu-
tions during the taxable year from a natural 
disaster protection fund, except that a distribu-
tion made to return to the qualified insurance 
company any contribution that is not a quali-
fied contribution for a taxable year shall not be 
included in gross income if such distribution is 
made prior to the filing by the qualified insur-
ance company of its tax return for such taxable 
year.’’ 
(d) DEFINITIONS AND OTHER RULES RELATING TO 
NATURAL DISASTER PROTECTION FUNDS.—Section 832 
of such Code is amended by adding at the end the fol-
lowing new subsection: 
‘‘(h) DEFINITIONS AND OTHER RULES RELATING TO 
NATURAL DISASTER PROTECTION FUNDS.—For purposes 
of this section— 
‘‘(1) NATURAL DISASTER PROTECTION FUND.— 
The term ‘natural disaster protection fund’ (here-
after in this subsection referred to as the ‘fund’) 
means any money, securities, or other property held 
VerDate Mar 15 2010 
22:38 Oct 11, 2011
Jkt 019200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6201
E:\BILLS\H3139.IH
H3139
emcdonald on DSK5VPTVN1PROD with BILLS
by a qualified insurance company that is identified 
and maintained in a segregated account— 
‘‘(A) which is designated as a ‘natural dis-
aster protection fund’ and held in a bank or 
bank branch located in the District of Columbia 
that is licensed and regulated by the Comp-
troller of the Currency or the District of Colum-
bia Commissioner of Insurance, Securities, and 
Banking, 
‘‘(B) under the terms of which— 
‘‘(i) the assets in the fund are re-
quired to be invested in a manner con-
sistent with the investment requirements 
applicable to all insurance companies 
under the laws of the District of Columbia, 
‘‘(ii) an excess balance drawdown 
amount is required to be distributed to the 
qualified insurance company no later than 
the close of the taxable year following the 
taxable year with respect to which such 
amount is determined, and 
‘‘(iii) no portion of the assets of the 
fund may be paid or distributed from the 
fund except for a qualified distribution. 
VerDate Mar 15 2010 
22:38 Oct 11, 2011
Jkt 019200
PO 00000
Frm 00004
Fmt 6652
Sfmt 6201
E:\BILLS\H3139.IH
H3139
emcdonald on DSK5VPTVN1PROD with BILLS
‘‘(2) QUALIFIED
INSURANCE
COMPANY.—The 
term ‘qualified insurance company’ means an insurer 
or reinsurer that— 
‘‘(A) is incorporated and domiciled in the 
District of Columbia, 
‘‘(B) is subject to supervision by the Dis-
trict of Columbia Commissioner of Insurance, 
Securities, and Banking, 
‘‘(C) maintains an office in the District of 
Columbia that employs no fewer than 10 full- 
time equivalent employees, of whom no fewer 
than 5 are residents of the District of Colum-
bia, 
‘‘(D) is subject to any premium taxes and 
any other taxes and fees imposed by the Dis-
trict of Columbia on all domestic insurance 
companies, and 
‘‘(E) is subject to such additional tax as 
may be imposed by the District of Columbia— 
‘‘(i) on premiums charged for natural 
catastrophic risk coverage written through 
the fund, and 
‘‘(ii) at such rate— 
‘‘(I) as may be established by the 
District of Columbia, and 
VerDate Mar 15 2010 
22:38 Oct 11, 2011
Jkt 019200
PO 00000
Frm 00005
Fmt 6652
Sfmt 6201
E:\BILLS\H3139.IH
H3139
emcdonald on DSK5VPTVN1PROD with BILLS