I 
109TH CONGRESS 
1ST SESSION H. R. 3019
To amend the Internal Revenue Code of 1986 to permit the consolidation 
of life insurance companies with other companies. 
IN THE HOUSE OF REPRESENTATIVES 
JUNE 21, 2005
Mr. RAMSTAD (for himself, Mrs. JOHNSON of Connecticut, Mr. RANGEL, Mr. 
ENGLISH
of Pennsylvania, Mr. HAYWORTH, Mr. REYNOLDS, Mr. 
HULSHOF, Mr. POMEROY, Mrs. JONES of Ohio, and Mr. MCNULTY) in-
troduced the following bill; which was referred to the Committee on Ways 
and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to permit 
the consolidation of life insurance companies with other 
companies.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. CONSOLIDATION OF LIFE INSURANCE COMPA-
NIES WITH OTHER COMPANIES PERMITTED. 
(a) IN GENERAL.—Section 1504(b) of the Internal 
Revenue Code of 1986 (defining includible corporation) is 
amended by striking paragraph (2) and by redesignating
paragraphs (3) through (8) as paragraphs (2) through 
(7), respectively. 
(b) CONFORMING AMENDMENTS.—
(1) Section 1503 of the Internal Revenue Code 
of 1986 is amended by striking subsection (c) (relat-
ing to special rule for application of certain losses 
against income of insurance companies taxed under 
section 801) and by redesignating subsections (d), 
(e), and (f) as subsections (c), (d), and (e), respec-
tively. 
(2) Section 1504 of such Code is amended by 
striking subsection (c) and by redesignating sub-
sections (d), (e), and (f) as subsections (c), (d), and 
(e), respectively. 
(3) Section 243(b)(2)(A) of such Code is 
amended 
by 
striking 
‘‘sections 
1504(b)(2), 
1504(b)(4), and 1504(c)’’ and inserting ‘‘section 
1504(b)(3)’’. 
(4) Section 805(a)(4)(E) of such Code is 
amended by striking ‘‘1504(b)(3)’’ and inserting 
‘‘1504(b)(2)’’. 
(5) Section 818(e)(1) of such Code is amended 
to read as follows: 
‘‘(1) ITEMS OF COMPANIES OTHER THAN IN-
SURANCE
COMPANIES.—If an affiliated group in-
cludes members which are and which are not taxed 
under section 801, all items of the members of such 
group which are not taxed under section 801 shall 
not be taken into account in determining the amount 
of the tentative LICTI of members of such group 
which are taxed under section 801.’’. 
(6) Section 832(b)(5)(D)(ii)(II) of such Code is 
amended by striking ‘‘1504(b)(3)’’ and inserting 
‘‘1504(b)(2)’’. 
(7) Section 864(e)(5)(A) of such Code is 
amended by striking ‘‘paragraph (4)’’ and inserting 
‘‘paragraph (3)’’. 
(8) Section 936(i)(5)(A) of such Code is 
amended by striking ‘‘section 1504(b)(3) or (4)’’ 
and inserting ‘‘section 1504(b)(2) or (3)’’. 
(9) Section 952(c)(1)(B)(vii)(II) of such Code 
is amended by striking ‘‘1504(b)(3)’’ and inserting 
‘‘1504(b)(2)’’. 
(10) Section 953(d)(3) of such Code is amend-
ed by striking ‘‘1503(d)’’ and inserting ‘‘1503(c)’’. 
(11) Section 954(h)(4)(F)(ii) of such Code is 
amended by striking ‘‘1504(b)(3)’’ and inserting 
‘‘1504(b)(2)’’.
(12) Section 6166(b)(10)(B)(ii)(V) of such 
Code is amended by striking ‘‘1504(b)(3)’’ and in-
serting ‘‘1504(b)(2)’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2004. 
SEC. 2. PHASE-IN OF APPLICATION OF CERTAIN LOSSES 
AGAINST INCOME OF INSURANCE COMPA-
NIES. 
(a) PHASE-IN.—
(1) IN GENERAL.—For taxable years beginning 
after December 31, 2004, and before January 1, 
2011, if—
(A) an affiliated group includes 1 or more 
domestic insurance companies subject to tax 
under section 801 of the Internal Revenue Code 
of 1986, and 
(B) the consolidated taxable income of the 
members of the group not taxed under such 
section 801 results in a consolidated net oper-
ating loss for such taxable year, 
then, under regulations prescribed by the Secretary 
of the Treasury or his delegate, the amount of such 
loss which cannot be absorbed in the applicable 
carryback periods against the taxable income of such
members not taxed under such section 801 shall be 
taken into account in determining the consolidated 
taxable income of the affiliated group for such tax-
able year to the extent of the applicable percentage 
of such loss or the applicable percentage of the tax-
able income of the members taxed under such sec-
tion 801, whichever is less. The unused portion of 
such loss shall be available as a carryover, subject to 
the same limitations (but determined based on the 
applicable percentage with respect to the year to 
which carried and applicable to the sum of the loss 
for the carryover year and the loss (or losses) car-
ried over to such year), in applicable carryover 
years. 
(2) APPLICABLE PERCENTAGE.—For purposes 
of paragraph (1), the applicable percentage shall be 
determined in accordance with the following table:
For taxable years
The applicable 
beginning in: 
percentage is: 
2005 ...................................................................................................
2006 ...................................................................................................
2007 ...................................................................................................
2008 ...................................................................................................
2009 ...................................................................................................
2010 ...................................................................................................
90.
(b) NO CARRYBACK BEFORE JANUARY 1, 2005.—To 
the extent that a consolidated net operating loss is allowed 
or increased by reason of this section or the amendments 
made by this Act, such loss (or increase in such loss, as
the case may be) may not be carried back to a taxable 
year beginning before January 1, 2005. 
(c) NONTERMINATION
OF GROUP.—No affiliated 
group shall terminate solely as a result of this section or 
the amendments made by this Act. 
(d) SUBSIDIARY STOCK BASIS ADJUSTMENTS.—A 
member corporation’s basis in the stock of a subsidiary 
corporation shall be adjusted upon consolidation to reflect 
the preconsolidation income, gain, deduction, loss, dis-
tributions, and other relevant amounts during a period 
when such corporations were members of an affiliated 
group (determined without regard to section 1504(b)(2) 
of the Internal Revenue Code of 1986 as in effect on the 
day before the date of enactment of this Act) but were 
not included in a consolidated return of such group by op-
eration of section 1504(c)(2)(A) of such Code (as in effect 
on the day before the date of the enactment of this Act). 
(e) WAIVER OF 5-YEAR WAITING PERIOD.—An auto-
matic waiver from the 5-year waiting period for reconsoli-
dation provided in section 1504(a)(3) of the Internal Rev-
enue Code of 1986 shall be granted to any corporation 
which was previously an includible corporation but was 
subsequently deemed a nonincludible corporation as a re-
sult of becoming a subsidiary of a corporation which was 
not an includible corporation solely by operation of section
1504(c)(2) of such Code (as in effect on the day before 
the date of enactment of this Act), subject to such condi-
tions as the Secretary may prescribe.
Æ