I 
118TH CONGRESS 
1ST SESSION H. R. 3105 
To amend the Internal Revenue Code of 1986 to provide special rules for 
purposes of determining if financial guaranty insurance companies are 
qualifying insurance corporations under the passive foreign investment 
company rules. 
IN THE HOUSE OF REPRESENTATIVES 
MAY 5, 2023 
Ms. MOORE of Wisconsin (for herself and Mr. SMITH of Nebraska) 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 
special rules for purposes of determining if financial 
guaranty insurance companies are qualifying insurance 
corporations under the passive foreign investment com-
pany rules. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
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SECTION 1. TREATMENT OF FINANCIAL GUARANTY INSUR-
ANCE COMPANIES AS QUALIFYING INSUR-
ANCE CORPORATIONS UNDER PASSIVE FOR-
EIGN INVESTMENT COMPANY RULES. 
(a) IN GENERAL.—Section 1297(f)(3) of the Internal 
Revenue Code of 1986 is amended by adding at the end 
the following new subparagraph: 
‘‘(C) SPECIAL
RULES
FOR
FINANCIAL 
GUARANTY INSURANCE COMPANIES.— 
‘‘(i) IN
GENERAL.—Notwithstanding 
subparagraphs (A)(ii) and (B), the applica-
ble insurance liabilities of a financial guar-
anty insurance company shall include its 
unearned premium reserves if— 
‘‘(I) such company is prohibited 
under generally accepted accounting 
principles from reporting on its appli-
cable financial statements reserves for 
losses and loss adjustment expenses 
with respect to a financial guaranty 
insurance or reinsurance contract ex-
cept to the extent that losses and loss 
adjustment expenses are expected to 
exceed the unearned premium reserves 
on the contract, 
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‘‘(II) the applicable financial 
statement of such company reports fi-
nancial guaranty exposure of at least 
15-to-1 or State or local bond expo-
sure of at least 9-to-1 (8-to-1 in the 
case of a taxable year of such com-
pany which ends on or before Decem-
ber 31, 2018), and 
‘‘(III) such company includes in 
its insurance liabilities only its un-
earned premium reserves relating to 
insurance written or assumed that is 
within the single risk limits set forth 
in subsection (D) of section 4 of the 
Financial Guaranty Insurance Guide-
line (modified by using total share-
holder’s equity as reported on the ap-
plicable financial statement of the 
company rather than aggregate of the 
surplus to policyholders and contin-
gency reserves). 
‘‘(ii) APPLICATION
OF
ALTERNATIVE 
FACTS AND CIRCUMSTANCES TEST.—A fi-
nancial guaranty insurance company shall 
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‘‘(v) STATE OR LOCAL BOND EXPO-
SURE.—For purposes of this subpara-
graph, the term ‘State or local bond expo-
sure’ means the ratio of— 
‘‘(I) the net unpaid principal of 
State or local bonds (as defined in 
section 103(c)(1)) insured or rein-
sured by the company that is within 
the single risk limits set forth in the 
Financial Guaranty Insurance Guide-
line (as reported on such company’s 
applicable financial statement), to 
‘‘(II) the company’s total assets 
(as so reported). 
‘‘(vi) FINANCIAL
GUARANTY
INSUR-
ANCE
GUIDELINE.—For purposes of this 
subparagraph— 
‘‘(I) IN
GENERAL.—The term 
‘Financial Guaranty Insurance Guide-
line’ means the October 2008 model 
regulation that was adopted by the 
National Association of Insurance 
Commissioners on December 4, 2007. 
‘‘(II) DETERMINATIONS MADE BY 
SECRETARY.—The determination of 
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whether any provision of the Financial 
Guaranty Insurance Guideline has 
been satisfied shall be made by the 
Secretary.’’. 
(b) 
REPORTING
OF
CERTAIN
ITEMS.—Section 
1297(f)(4) of such Code is amended by adding at the end 
the following new subparagraph: 
‘‘(C) CLARIFICATION THAT CERTAIN ITEMS 
ON
APPLICABLE
FINANCIAL
STATEMENT
BE 
SEPARATELY
REPORTED
WITH
RESPECT
TO 
CORPORATION.—An amount described in para-
graph (1)(B) or clause (i)(II), (i)(III), (iv)(I), 
(iv)(II), (v)(I), or (v)(II) of paragraph (3)(C) 
shall be treated as reported on an applicable fi-
nancial statement for purposes of this section 
if— 
‘‘(i) such amount is separately re-
ported on such statement with respect to 
the corporation referred to in paragraph 
(1), or 
‘‘(ii) such amount is separately deter-
mined for purposes of calculating an 
amount which is reported on such state-
ment. 
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‘‘(D) AUTHORITY OF SECRETARY TO RE-
QUIRE REPORTING.— 
‘‘(i) 
IN
GENERAL.—Each 
United 
States person who owns an interest in a 
specified non-publicly traded foreign cor-
poration and who takes the position that 
such corporation is not a passive foreign 
investment company shall report to the 
Secretary such information with respect to 
such corporation as the Secretary may re-
quire. 
‘‘(ii) SPECIFIED NON-PUBLICLY TRAD-
ED FOREIGN CORPORATION.—For purposes 
of this subparagraph, the term ‘specified 
non-publicly traded foreign corporation’ 
means any foreign corporation— 
‘‘(I) which would be a passive 
foreign investment company if sub-
section (b)(2)(B) did not apply, and 
‘‘(II) no interest in which is trad-
ed on an established securities mar-
ket.’’. 
(c) EFFECTIVE DATE.— 
(1) IN
GENERAL.—Except as otherwise pro-
vided in this subsection, the amendments made by 
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this section shall take effect as if included in section 
14501 of Public Law 115–97. 
(2) REPORTING.—The amendment made by 
subsection (b) shall apply to reports made after the 
date of the enactment of this Act. 
Æ 
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