676
justed base-period commercial pre-
miums of any person by reason of the
disposition of any portion of such per-
son’s commercial insurance business,
such person shall be secondarily lia-
ble for the tax imposed by section 4691
with respect to the adjusted base-pe-
riod 
commercial 
premiums 
attrib-
utable to such portion.
‘‘(E) COMMERCIAL INSURANCE BUSI-
NESS.—For purposes of this subsection,
the term ‘commercial insurance busi-
ness’ means any liability or potential
liability under any policy with respect
to which commercial net premiums
were written and the assets associated
with such a liability.
‘‘(d) TREATMENT OF FOREIGN INSURERS.—
‘‘(1) IN GENERAL.—There is hereby im-
posed a tax on any policy described in
paragraph (2) on which any premium is
written by a foreign person. Such tax
shall be an amount equal to 0.50 percent
of the maximum limit of liability of such
person under such policy.
677
‘‘(2) POLICIES
SUBJECT
TO
TAX.—For
purposes of paragraph (1), a policy is de-
scribed in this paragraph if such policy
is—
‘‘(A) a policy of casualty insurance
against, or with respect to, hazards,
risks, losses, or liabilities wholly or
partly within the United States, or
‘‘(B) a policy of reinsurance with
respect to a policy described in sub-
paragraph (A).
‘‘(3) EXCEPTIONS.—
‘‘(A) IN
GENERAL.—Paragraph (1)
shall not apply to any policy if the for-
eign person writing the premium on
such policy is an assessable person (as
defined in section 4691(e)) as of the
withholding date.
‘‘(B) PRIOR
TRANSACTIONS.—Para-
graph (1) shall not apply to any policy
if, as of the withholding date, the for-
eign person writing the premium on
such policy demonstrates that the tax
imposed by paragraph (1) has been
paid on a policy covering the same
678
hazards, risks, losses, or liabilities
within the United States as those cov-
ered by such policy.
‘‘(C) CLOSING AGREEMENT.—
‘‘(i) IN
GENERAL.—Paragraph
(1) shall not apply to any policy if,
as of the withholding date, the for-
eign person writing the premium
on such policy has in effect an
agreement 
with 
the 
Secretary
which—
‘‘(I) 
provides 
that 
such
person shall be treated as an
assessable person for purposes
of this part, and
‘‘(II) contains such provi-
sions as the Secretary deter-
mines to be necessary to en-
sure proper computation and
payment of the tax imposed by
section 4691 and the assess-
ment imposed by section 4696.
‘‘(ii) PERIOD
OF
AGREEMENT.—
Any closing agreement entered
into under clause (i) shall take ef-
679
fect on the date specified in such
agreement and shall apply for all
subsequent periods unless revoked
by the Secretary or revoked by the
foreign person with the consent of
the Secretary.
‘‘(iii) TREATMENT
OF
RELATED
PERSONS.—The Secretary shall not
enter into an agreement under
clause (i) with any foreign person
unless such foreign person estab-
lishes to the satisfaction of the
Secretary that all persons which
are, or become, related persons to
such foreign person and which
have commercial net premiums for
any base-period year are subject to
such an agreement.
‘‘(iv) CLOSING
AGREEMENT
NOT
REQUIRED
IN
CERTAIN
CASES.—No
closing agreement shall be re-
quired to be filed by any person
filing a statement referred to in
subparagraph (E).
680
‘‘(D) 
PERIOD
BEFORE
CLOSING
AGREEMENT.—Paragraph (1) shall not
apply to any policy if, as of the with-
holding date, the foreign person writ-
ing the premium on such policy—
‘‘(i) has in effect an election to
be treated as an assessable person
for purposes of this part,
‘‘(ii) gives such bond or other
security as the Secretary may re-
quire for the collection of any tax
imposed by section 4691 and any
assessment 
imposed 
by 
section
4696, and
‘‘(iii) meets such other require-
ments as the Secretary may re-
quire.
If such person fails to enter into an
agreement referred to in subpara-
graph (C)(i) in a timely manner after
making such election, such election
shall be treated as never being in ef-
fect.
‘‘(E) 
NO
ADJUSTED
BASE-PERIOD
COMMERCIAL
PREMIUMS.—Paragraph
681
(1) shall not apply to any policy if, as
of the withholding date, the foreign
person writing the premium on such
policy has filed with the Secretary a
statement (which meets such require-
ments as may be prescribed by the Sec-
retary) certifying under penalties of
perjury that it has no adjusted base-
period 
commercial 
premiums. 
Any
such statement shall remain in effect
only so long as such person does not
have any adjusted base-period com-
mercial premiums.
‘‘(F) WITHHOLDING DATE.—The term
‘withholding date’ means the date as
of which an amount would otherwise
be required to be deducted or withheld
under paragraph (5) with respect to
any policy.
‘‘(4) DEFINITIONS.—For purposes of this
subsection—
‘‘(A) FOREIGN
PERSON.—The term
‘foreign person’ means any person
which is not a United States person.
682
‘‘(B) POLICY
OF
CASUALTY
INSUR-
ANCE.—The term ‘policy of casualty in-
surance’ means any policy other than
a policy of life, sickness, or accident
insurance, or annuity contract (as de-
fined in section 4372(e)).
‘‘(C) RELATED
PERSON.—The term
‘related person’ has the meaning given
such term by section 954(d)(3), except
that such section shall be applied by
substituting ‘the person with respect
to whom the determination is being
made’ for ‘controlled foreign corpora-
tion’ each place it appears.
‘‘(D) MAXIMUM LIMIT OF LIABILITY.—
The term ‘maximum limit of liability’
means the total amount for which the
foreign person would be liable—
‘‘(i) in the case of a policy de-
scribed in paragraph (2)(A), if
each person insured under such
policy were simultaneously enti-
tled to the maximum recovery al-
lowed under the policy, and
683
‘‘(ii) in the case of a policy de-
scribed in paragraph (2)(B), if
each person insured under a pol-
icy described in paragraph (2)(A)
which is directly or indirectly re-
insured by the policy described in
paragraph (2)(B) were simulta-
neously entitled to the maximum
recovery allowed under the policy
described in paragraph (2)(A).
Such maximum limit of liability shall
not be reduced by any liability which
is reinsured.
‘‘(5) COLLECTION OF TAX.—All persons,
in whatever capacity acting, having con-
trol, receipt, custody, disposal, or payment
of any premium or other amount for any
policy on which a tax is imposed under
paragraph (1) shall deduct and withhold
from such premium or other amount the
amount of such tax. Every person required
to so deduct and withhold such tax is
hereby made liable for such tax and is
hereby indemnified against the claims
684
and demands of any person for the
amount so deducted and withheld.
‘‘(e) CERTAIN
PERSONS
TREATED
AS
EN-
GAGED IN TRADE OR BUSINESS.—For purposes of
this part, a person shall be treated as engaged
in a trade or business if any other person, who
with such person is treated as a single em-
ployer under subsection (a) or (b) of section 52,
is engaged in a trade or business.
‘‘PART II—TAX ON CURRENT-YEAR PREMIUMS
‘‘Sec. 4695. Tax on current-year premiums.
‘‘SEC. 4695. TAX ON CURRENT-YEAR PREMIUMS.
‘‘(a) IMPOSITION OF TAX.—There is hereby
imposed on each policy described in subsection
(b) a tax equal to—
‘‘(1) 
the 
direct 
premiums 
written
under such policy, multiplied by
‘‘(2) the applicable funding rate.
‘‘(b) POLICIES SUBJECT TO TAX.—
‘‘(1) IN GENERAL.—A policy is described
in this subsection if—
‘‘(A) such policy is issued against,
or with respect to, hazards, risks,
losses, or liabilities wholly or partly
685
within the United States (as defined
in section 4612(a)(4)), and
‘‘(B) the premiums or liabilities
under such policy are of a type re-
quired to be reported in the line of the
exhibit of premiums and losses of the
annual statement relating to any of
the following lines of business:
‘‘(i) Fire.
‘‘(ii) 
Commercial 
multiple
peril.
‘‘(iii) Other liability.
‘‘(iv) Products liability.
‘‘(v) Allied lines.
‘‘(vi) Inland marine.
‘‘(vii) Commercial auto no-
fault.
‘‘(viii) Other commercial auto
liability.
‘‘(ix) Commercial auto phys-
ical damage.
‘‘(x) 
Farmowners 
multiple
peril.
‘‘(xi) Ocean marine.
‘‘(xii) Financial guaranty.
686
‘‘(xiii) Aircraft.
‘‘(xiv) Fidelity.
‘‘(xv) Surety.
‘‘(xvi) Glass.
‘‘(xvii) Burglary and theft.
‘‘(xviii) Boiler and machinery.
‘‘(xix) 
Any 
other 
line 
des-
ignated by the Secretary.
‘‘(2) EXCEPTION.—Paragraph (1) shall
not apply to any policy which the issuer
establishes is of any of the following types
of insurance:
‘‘(A) Directors and officers liabil-
ity insurance.
‘‘(B) Professional liability insur-
ance.
‘‘(C) Fire insurance on residential
or farm owner-occupied housing units.
‘‘(3) ANNUAL
STATEMENT; POLICY.—For
purposes of this section, the terms ‘annual
statement’ and ‘policy’ have the respective
meanings given such terms by section
4694(a). The provisions of section 4694(b)
shall apply for purposes of this section.
687
‘‘(c) APPLICABLE FUNDING RATE.—For pur-
poses of this section, the applicable funding
rate is—
‘‘(1) 0.33 percent for direct premiums
written during 1995, 1996, 1997, or 1998,
and
‘‘(2) 0.63 percent thereafter.
‘‘(d) EXEMPTION AMOUNT.—
‘‘(1) IN GENERAL.—No tax shall be im-
posed by subsection (a) on any premium
under a policy to which subsection (b) ap-
plies which is included in direct pre-
miums written during any calendar year
to the extent that the amount of such pre-
mium, when added to the aggregate
amount of all prior direct premiums writ-
ten on such policies during such calendar
year, does not exceed the exemption
amount.
‘‘(2) 
EXEMPTION
AMOUNT.—For 
pur-
poses of paragraph (1)—
‘‘(A) IN
GENERAL.—The exemption
amount for any person is $5,000,000.
‘‘(B) CONTROLLED
GROUP
RULES.—
For purposes of subparagraph (A)—
688
‘‘(i) IN GENERAL.—The rules of
subparagraphs (A) and (B)(i) of
section 4692(d)(2) shall apply (de-
termined without regard to the
date therein).
‘‘(ii) REGULATIONS.—The Sec-
retary may by regulations treat
multiple arrangements (including
multiple joint underwriting oper-
ations) as 1 arrangement where
the separate operation of such ar-
rangements is without a substan-
tial business purpose.
‘‘(e) DIRECT PREMIUMS WRITTEN.—For pur-
poses of this section, the determination of the
direct premiums written of any person for any
year shall be made on the basis of the exhibit
of premiums and losses of the annual state-
ment filed by such person for such year (or, if
such person did not file such a statement, the
determination shall be made on a basis con-
sistent with the annual statement require-
ments applicable to such year). Notwithstand-
ing the preceding sentence, direct premiums
written shall include the gross amount of pre-
689
miums and other consideration (including ad-
vance premiums, deposits, fees, and assess-
ments) arising from policies issued by a person
acting as the direct writer, adjusted for any re-
turn or additional premiums arising from en-
dorsements, cancellations, premium audits, or
retrospective rating. Amounts returned where
the amount is not fixed in the contract by for-
mula or otherwise but depends on the experi-
ence of the insurer or the discretion of man-
agement shall not be included in return pre-
miums.
‘‘(f) LIABILITY FOR TAX.—
‘‘(1) IN GENERAL.—Except as provided
in paragraph (2)—
‘‘(A) TAX PAID BY ISSUER.—The tax
imposed by subsection (a) shall be
paid by the person issuing the policy.
‘‘(B) DUE DATE.—Any tax payable
under subparagraph (A) shall be paid
on or before the 14th day after the
close of the calendar quarter in which
the premium is included in direct pre-
miums written.
690
‘‘(C) DEPOSITS
REQUIRED.—Any is-
suer liable for tax payable under sub-
paragraph (A) shall make monthly de-
posits of such tax on or before the 14th
day after the close of the month in
which the premium is included in di-
rect premiums written.
‘‘(2) SPECIAL RULES FOR FOREIGN INSUR-
ERS.—
‘‘(A) IN GENERAL.—If any premium
is written by a foreign person (as de-
fined in section 4694(d)(4)) on any pol-
icy described in subsection (b), all per-
sons, in whatever capacity acting,
having control, receipt, custody, dis-
posal, or payment of any premium or
other amount for such policy shall de-
duct and withhold from such pre-
mium or other amount the amount of
the tax imposed by subsection (a).
Every person required to so deduct
and withhold such tax is hereby made
liable for such tax and is hereby in-
demnified against the claims and de-
691
mands of any person for the amount
so deducted and withheld.
‘‘(B) 
EXCEPTION.—Subparagraph
(A) shall not apply with respect to any
premium or other amount the income
from which is effectively connected
with the conduct of a trade or busi-
ness within the United States, unless
such income is exempt from the appli-
cation of sections 871(b) and 882(a)
pursuant to a treaty obligation of the
United States.
‘‘PART III—ASSESSMENT ON INSURERS RESOLV-
ING CLAIMS WITH ENVIRONMENTAL INSUR-
ANCE RESOLUTION TRUST FUND
‘‘Sec. 4696. Imposition of assessment.
‘‘SEC. 4696. IMPOSITION OF ASSESSMENT.
‘‘(a) IN GENERAL.—There is hereby imposed
on each insurer to which this section applies
an assessment for each calendar year in the
amount determined under subsection (c).
‘‘(b) INSURERS
TO
WHICH
SECTION
AP-
PLIES.—This section shall apply to any insurer
for any calendar year if such insurer issued
any policy which, for such calendar year, is —
692
‘‘(1) an assessable direct policy, or
‘‘(2) an assessable reinsurance policy.
‘‘(c) AMOUNT OF ASSESSMENT.—
‘‘(1) IN GENERAL.—The assessment im-
posed by this section on any insurer for
any calendar year shall be an amount
equal to the sum of—
‘‘(A) such insurer’s EIRF-certified
percentage of the direct insurance
limit, and
‘‘(B) such insurer’s EIRF-certified
percentage of the reinsurance limit.
‘‘(2) LIMITS.—For purposes of para-
graph (1)—
‘‘(A) the direct insurance limit for
each calendar year is $81,000,000, and
‘‘(B) the reinsurance limit for each
calendar year is $167,000,000.
‘‘(d) TIME FOR PAYMENT OF ASSESSMENT.—
The assessment imposed by subsection (a) for
any calendar year shall be paid on or before
September 30 of such calendar year.
‘‘(e) DEFINITIONS.—For purposes of this sec-
tion—
693
‘‘(1) ASSESSABLE
DIRECT
POLICY.—The
term ‘assessable direct policy’ means, for
any calendar year, any policy if—
‘‘(A) the Environmental Insurance
Resolution Fund determined that such
policy was a valid insurance contract
of an eligible person,
‘‘(B) such contract (or documen-
tary evidence of such contract) was
submitted (whether or not within the
calendar year or the applicable pe-
riod with respect thereto) under sec-
tion 804 of the Superfund Reform Act
of 1994 to such Fund by or for such el-
igible person, and
‘‘(C) such Fund, during the appli-
cable period with respect to such cal-
endar year, made 1 or more payments
to such eligible person under title VIII
of such Act.
‘‘(2) 
ASSESSABLE
REINSURANCE
POL-
ICY.—The term ‘assessable reinsurance
policy’ means, for any calendar year, any
policy if—
694
‘‘(A) such contract is identified
under paragraph (5)(G)(ii) as reinsur-
ing a policy which is an assessable di-
rect policy for such calendar year,
‘‘(B) the Environmental Insurance
Resolution Fund notifies the issuer of
such policy that it has been so identi-
fied,
‘‘(C) such issuer is an assessable
person (as defined in section 4692(e))
or is treated as such for purposes of
part I, and
‘‘(D) such Fund determines (after
affording such insurer an opportunity
to contest such reinsurance) that such
contract reinsures an assessable di-
rect policy.
‘‘(3) EIRF-CERTIFIED PERCENTAGE.—
‘‘(A) 
APPLICATION
WITH
DIRECT
LIMIT.—The term ‘EIRF-certified per-
centage’ means, with respect to the di-
rect limit of any insurer for any cal-
endar year, the percentage determined
by the Environmental Insurance Reso-
lution Fund which—
695
‘‘(i) the aggregate of the cov-
erage limits contained in assess-
able direct policies issued by such
insurer, bears to
‘‘(ii) the aggregate of the cov-
erage limits contained in all as-
sessable direct policies issued by
all insurers.
‘‘(B) APPLICATION
WITH
REINSUR-
ANCE LIMIT.—The term ‘EIRF-certified
percentage’ means, with respect to the
reinsurance limit of any insurer for
any calendar year, the percentage de-
termined by the Environmental Insur-
ance Resolution Fund which—
‘‘(i) the aggregate of the cov-
erage limits contained in assess-
able reinsurance policies issued by
such insurer, bears to
‘‘(ii) the aggregate of the cov-
erage limits contained in all as-
sessable reinsurance policies is-
sued by all insurers.
‘‘(4) APPLICABLE
PERIOD.—The term
‘applicable period’ means, with respect to
696
any calendar year, the period of the 4 cal-
endar years preceding such year.
‘‘(5) COVERAGE LIMIT.—
‘‘(A) IN GENERAL.—Except as other-
wise provided in this paragraph, the
term ‘coverage limit’ means, with re-
spect to any policy, the aggregate
limit on coverage under the policy.
‘‘(B) ANNUAL LIMIT.—If the limit on
coverage under any policy is an an-
nual limit, the term ‘coverage limit’
means, with respect to such policy, an
amount equal to such annual limit
multiplied by the number of years
such contract was in effect.
‘‘(C) PER
OCCURRENCE
LIMITS.—If
the limit on coverage under an insur-
ance policy is expressed on a per oc-
currence basis without an aggregate
or annual limit, the term ‘coverage
limit’ means, with respect to such pol-
icy, an amount equal to—
‘‘(i) 
the 
limit 
on 
coverage
under the policy for 1 occurrence,
multiplied by
697
‘‘(ii) the number of eligible fa-
cilities of the eligible person that
were taken into account in deter-
mining the applicable percentage
under 
section 
806 
of 
the
Superfund Reform Act of 1994 of
such person, multiplied by
‘‘(iii) the number of years such
contract was in effect.
‘‘(D) EXCESS COVERAGE.—If the pol-
icy provides excess coverage without
an aggregate, annual, or per occur-
rence limit, the term ‘coverage limit’
means, with respect to such policy, an
amount equal to—
‘‘(i) 10 times the amount that
must be paid by an insurer to the
eligible person before such person
is entitled to submit a claim for
such excess coverage, multiplied
by
‘‘(ii) the number of years such
contract was in effect.
‘‘(E) OTHER CASES.—If the coverage
limit under any policy is not deter-
698
minable under the preceding provi-
sions of this paragraph, such limit
shall be determined by the Environ-
mental Insurance Resolution Fund
under a method prescribed by the Sec-
retary.
‘‘(F) DEDUCTIBLES
DISREGARDED.—
The determination under this para-
graph of any coverage limit under any
assessable direct policy shall be made
without regard to any deductible or
self-insured retention of an eligible
person.
‘‘(G) TREATMENT OF REINSURANCE.—
‘‘(i) IN GENERAL.—The coverage
limit (determined without regard
to this clause) under—
‘‘(I) any assessable direct
policy, and
‘‘(II) any assessable rein-
surance policy,
shall be reduced by 80 percent of
the portion of such limit which is
reinsured, but only if the rein-
surer and the reinsured are not
699
members of the same controlled
group 
(as 
defined 
in 
section
4693(e)).
‘‘(ii) REINSURER MUST BE IDEN-
TIFIED.—A policy shall be treated
as not reinsured for any period
unless the Environmental Insur-
ance Resolution Fund is notified
of such reinsurance (in such form
and manner, and at such time or
times, as is specified by such
Fund).
‘‘(6) ELIGIBLE
FACILITY; ELIGIBLE
PER-
SON; 
VALID
INSURANCE
CONTRACT.—The
terms ‘eligible facility’, ‘eligible person’,
and ‘valid insurance contract’ have the
respective meanings given to such terms
by section 802 of the Superfund Reform
Act of 1994.
‘‘(7) POLICY.—The term ‘policy’ has the
meaning given such term by section
4694(a)(4).
‘‘(f) NO REVIEW
OF EIRF-CERTIFIED PER-
CENTAGES.—
700
‘‘(1) IN
GENERAL.—No court of the
United States shall have jurisdiction to
hear any action, whether legal or equi-
table, brought to review any final deter-
mination of any percentage under sub-
section (e)(3). No such final determination
shall be subject to review by the Secretary
in an administrative proceeding.
‘‘(2) FINAL
DETERMINATION.—For pur-
poses of paragraph (1), the percentages
determined under subsection (e)(3) by the
Environmental 
Insurance 
Resolution
Fund as of August 1st of any calendar
year shall be treated as final determina-
tions of such percentages for such year.
‘‘(g) SECTION 4694(d) TAX TO APPLY TO CER-
TAIN ASSESSABLE INSURERS WITHOUT CLOSING
AGREEMENT.—If—
‘‘(1) paragraph (1) of section 4694(d)
does not apply to any foreign person solely
by reason of paragraph (3)(E) thereof,
and
‘‘(2) any policy issued by such person
is an assessable direct policy or an assess-
701
able reinsurance policy under this sec-
tion,
subparagraphs (C)(iv) and (E) of section
4694(d)(3) shall cease to apply to such person
with respect to such policy.
‘‘(h) ADMINISTRATIVE PROVISIONS.—
‘‘(1) IN GENERAL.—All assessments im-
posed by this section are excise taxes, and
shall be assessed and collected in the
same manner as other excise taxes im-
posed by this chapter.
‘‘(2) CERTAIN PROVISIONS MADE APPLICA-
BLE.—All provisions of law, including pen-
alties and provisions providing for inter-
est, shall apply to the assessments im-
posed by this section in the same manner
as other excise taxes imposed by this
chapter.
‘‘(i) APPLICATION OF SECTION.—This section
shall apply to calendar years after 1998.
‘‘PART IV—TERMINATION; ADMINISTRATIVE
PROVISIONS
‘‘Sec. 4697. Termination.
‘‘Sec. 4698. Return requirements; regulations.
702
‘‘SEC. 4697. TERMINATION.
‘‘(a) IN GENERAL.—Except as provided in
subsection (b), this subchapter shall not apply
to any calendar year after 2004.
‘‘(b) PART I TAX ON CERTAIN FOREIGN INSUR-
ERS.—The tax imposed by section 4694(d) shall
not apply to premiums and other amounts
paid after the close of the 10-year period begin-
ning on the date such tax takes effect.
‘‘SEC. 4698. RETURN REQUIREMENTS; REGULATIONS.
‘‘(a) RETURN REQUIREMENTS.—
‘‘(1) IN GENERAL.—Each person liable
for any tax or assessment under this sub-
chapter shall make such returns, and fur-
nish such other statements and informa-
tion to the Secretary, as the Secretary de-
termines to be necessary to carry out the
purposes of this subchapter.
‘‘(2) INITIAL
RETURN.—The initial re-
turn made with respect to the tax imposed
by section 4691 shall include such infor-
mation as the Secretary shall by forms re-
quire for purposes of computing the ad-
justed base-period commercial premiums
of the person making such return.
708
the 14th day of the first month beginning
after the close of such period.
(d) PART I TAX ON CERTAIN FOREIGN INSUR-
ERS.—The tax imposed by section 4694(d) of the
Internal Revenue Code of 1986, as added by
this title, shall apply to a policy for which any
premium is written after the close of the con-
tingency period.
(e) CONTINGENCY PERIOD.—For purposes of
this section, the term ‘‘contingency period’’
means the period specified in section 816 of the
Superfund Reform Act of 1994 during which
title VIII of such Act is in effect on a contin-
gent basis.
Subtitle B—5-Year Extension of
Hazardous Substance Superfund
SEC. 911. 5-YEAR EXTENSION OF HAZARDOUS SUBSTANCE
SUPERFUND.
(a) EXTENSION OF TAXES.—
(1) The following provisions of the In-
ternal Revenue Code of 1986 are each
amended by striking ‘‘January 1, 1996’’
each place it appears and inserting ‘‘Jan-
uary 1, 2001’’: