Federal

Restoring Competitive Property Insurance Availability Act

Source: Congress.gov · 759 words in original text

What This Bill Does

This bill changes the federal tax code to allow certain insurance companies to exclude income from their taxes when they provide real property insurance (home and building insurance) in areas that experienced federally declared disasters. The bill creates a temporary tax break for insurance companies operating in disaster areas to help restore competitive insurance availability.

Who It Affects

Insurance companies that provided real property insurance in federally declared disaster areas before the disaster occurred. The tax break does not apply to life insurance companies.

Key Provisions

* Insurance companies can exclude qualified real property insurance income from their taxable income during the recovery period in disaster areas (Sec. 2(a)) * "Qualified real property insurance income" means the money an insurance company receives from premiums for real property insurance in a disaster area, minus allowable deductions for those premiums (Sec. 2(c)) * The recovery period lasts for the first 5 taxable years after the disaster incident date (Sec. 2(e)) * Real property insurance includes coverage for personal property (like furniture or equipment) if that personal property is on the real property and covered under the same insurance policy (Sec. 2(d))

What Changes

If this bill becomes law, insurance companies operating in federally declared disaster areas will not have to report certain income from providing property insurance as taxable income during a 5-year period after the disaster occurs.

Important Definitions

* "Disaster area" - Not specified in bill text (the bill refers to another section of tax code for this definition) * "Incident date" - The earliest date mentioned in the official disaster declaration * "Recovery period" - The first 5 taxable years after the disaster incident date * "Specified insurance company" - An insurance company (not a life insurance company) that provided real property insurance in a disaster area before the disaster happened

Effective Date

This bill applies to disaster areas where the incident date occurs after December 31, 2022.

I 118TH CONGRESS 1ST SESSION H. R. 1545 To amend the Internal Revenue Code of 1986 to exclude from gross income certain income from providing real property insurance following certain federally declared disasters. IN THE HOUSE OF REPRESENTATIVES MARCH 10, 2023 Mr. HIGGINS of Louisiana 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 exclude from gross income certain income from providing real property insurance following certain federally declared disasters. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Restoring Competitive 4 Property Insurance Availability Act’’. 5 VerDate Sep 11 2014 02:53 Apr 20, 2023 Jkt 039200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H1545.IH H1545 pbinns on DSKJLVW7X2PROD with $$_JOB 2 •HR 1545 IH SEC. 2. EXCLUSION OF CERTAIN INCOME FROM PROVIDING 1 REAL PROPERTY INSURANCE FOLLOWING 2 CERTAIN FEDERALLY DECLARED DISASTERS. 3 (a) IN GENERAL.—Part II of subchapter L of chap- 4 ter 1 of the Internal Revenue Code of 1986 is amended 5 by adding at the end the following new section: 6 ‘‘SEC. 836. EXCLUSION OF CERTAIN INCOME FROM PRO- 7 VIDING REAL PROPERTY INSURANCE FOL- 8 LOWING CERTAIN FEDERALLY DECLARED 9 DISASTERS. 10 ‘‘(a) IN GENERAL.—In the case of each taxable year 11 in the recovery period, there shall be excluded from the 12 gross income of each specified insurance company the 13 qualified real property insurance income of such company 14 for such taxable year with respect to any disaster area. 15 ‘‘(b) SPECIFIED INSURANCE COMPANY.—For pur- 16 poses of this section, the term ‘specified insurance com- 17 pany’ means, with respect to any disaster area, any insur- 18 ance company (other than a life insurance company) 19 which, immediately prior to the incident date with respect 20 to such disaster area, provided real property insurance 21 with respect to property located in such disaster area. 22 ‘‘(c) QUALIFIED REAL PROPERTY INSURANCE IN- 23 COME.—For purposes of this section, the term ‘qualified 24 real property insurance income’ means, with respect to 25 VerDate Sep 11 2014 02:53 Apr 20, 2023 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H1545.IH H1545 pbinns on DSKJLVW7X2PROD with $$_JOB 3 •HR 1545 IH any specified insurance company for any taxable year, the 1 excess of— 2 ‘‘(1) the premiums received by such insurance 3 company for real property insurance with respect to 4 property located in the disaster area, over 5 ‘‘(2) deductions properly allocable to such pre- 6 miums. 7 ‘‘(d) REAL PROPERTY INSURANCE.—For purposes of 8 this section, the term ‘real property insurance’ shall in- 9 clude the coverage of risks associated with personal prop- 10 erty if such risks are covered under the same policy that 11 covers risks associated with real property and such per- 12 sonal property is located on such real property. 13 ‘‘(e) RECOVERY PERIOD.—For purposes of this sec- 14 tion, the term ‘recovery period’ means, with respect to any 15 disaster area, the first 5 taxable years ending after the 16 incident date with respect to such disaster area. 17 ‘‘(f) DISASTER AREA.—For purposes of this section, 18 the term ‘disaster area’ has the meaning given such term 19 in section 7508A(d)(3). 20 ‘‘(g) INCIDENT DATE.—For purposes of this section, 21 the term ‘incident date’ means, with respect to any dis- 22 aster area, the earliest incident date specified in the dec- 23 laration with respect to such disaster area.’’. 24 VerDate Sep 11 2014 02:53 Apr 20, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H1545.IH H1545 pbinns on DSKJLVW7X2PROD with $$_JOB 4 •HR 1545 IH (b) CLERICAL AMENDMENT.—The table of sections 1 for part II of subchapter L of chapter 1 of the Internal 2 Revenue Code of 1986 is amended by adding at the end 3 the following new item: 4 ‘‘Sec. 836. Exclusion of certain income from providing real property insurance following certain federally declared disasters.’’. (c) EFFECTIVE DATE.—The amendments made by 5 this section shall apply to disaster areas the incident date 6 (as defined in section 836(g) of the Internal Revenue Code 7 of 1986, as added by this section) of which is after Decem- 8 ber 31, 2022. 9 Æ VerDate Sep 11 2014 02:53 Apr 20, 2023 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6301 E:\BILLS\H1545.IH H1545 pbinns on DSKJLVW7X2PROD with $$_JOB

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