H.R.2612 - To amend the Internal Revenue Code of 1986 with respect to the treatment of certain charitable risk pools.103rd Congress (1993-1994)
|Sponsor:||Rep. Stark, Fortney Pete [D-CA-13] (Introduced 07/01/1993)|
|Committees:||House - Ways and Means|
|Latest Action:||House - 07/01/1993 Referred to the House Committee on Ways and Means. (All Actions)|
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Text: H.R.2612 — 103rd Congress (1993-1994)All Information (Except Text)
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Introduced in House (07/01/1993)
[Congressional Bills 103th Congress] [From the U.S. Government Printing Office] [H.R. 2612 Introduced in House (IH)] 103d CONGRESS 1st Session H. R. 2612 To amend the Internal Revenue Code of 1986 with respect to the treatment of certain charitable risk pools. _______________________________________________________________________ IN THE HOUSE OF REPRESENTATIVES July 1, 1993 Mr. Stark (for himself and Mr. Farr of California) introduced the following bill; which was referred to the Committee on Ways and Means _______________________________________________________________________ A BILL To amend the Internal Revenue Code of 1986 with respect to the treatment of certain charitable risk pools. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. TREATMENT OF CERTAIN CHARITABLE RISK POOLS. (a) General Rule.--Section 501 of the Internal Revenue Code of 1986 (relating to exemption from tax on corporations, certain trusts, etc.) is amended by redesignating subsection (n) as subsection (o) and by inserting after subsection (m) the following new subsection: ``(n) Charitable Risk Pools.-- ``(1) In general.--For purposes of this title-- ``(A) a qualified charitable risk pool shall be treated as an organization organized and operated exclusively for charitable purposes, and ``(B) subsection (m) shall not apply to a qualified charitable risk pool. ``(2) Qualified charitable risk pool.--For purposes of this subsection, the term `qualified charitable risk pool' means any organization-- ``(A) which is organized and operated solely to pool insurable risks of its members (other than risks related to medical malpractice) and to provide information to its members with respect to loss control and risk management, ``(B) no part of the net earnings of which inures to the benefit of any member or other person other than through providing insurance coverage (or information) described in subparagraph (A), ``(C) which is comprised solely of members that are organizations described in subsection (c)(3) and exempt from tax under subsection (a), and ``(D) which meets the organizational requirements of paragraph (3). ``(3) Organizational requirements.--An organization (hereinafter in this subsection referred to as the `risk pool') meets the organizational requirements of this paragraph if-- ``(A) such risk pool is organized as a nonprofit organization under State law provisions authorizing risk pooling arrangements for charitable organizations, ``(B) such risk pool is exempt from any income tax imposed by the State (or will be so exempt after such pool qualifies as an organization exempt from tax under this title), ``(C) such risk pool has obtained at least $1,000,000 in startup capital from nonmember charitable organizations, ``(D) such risk pool is controlled by a board of directors elected by its members, and ``(E) the organizational documents of such risk pool require that-- ``(i) each member of such pool continue at all times to be an organization described in subsection (c)(3) and exempt from tax under subsection (a), ``(ii) any member which receives a final determination that it no longer qualifies as an organization described in subsection (c)(3) shall immediately notify the pool of such determination and the effective date of such determination, and ``(iii) each policy of insurance issued by the risk pool shall provide that such policy will not cover the insured with respect to events occurring after the date such final determination was issued to the insured. An organization shall not cease to qualify as a qualified charitable risk pool solely by reason of the failure of any of its members to continue to be an organization described in subsection (c)(3) if, within a reasonable period of time after such pool is notified as required under subparagraph (C)(ii), such pool takes such action as may be reasonably necessary to remove such member from such pool. ``(4) Other definitions.--For purposes of this subsection-- ``(A) Startup capital.--The term `startup capital' means any capital contributed to, and any program- related investments (within the meaning of section 4944(c)) made in, the risk pool before such pool commences operations. ``(B) Nonmember charitable organization.--The term `nonmember charitable organization' means any organization which is described in subsection (c)(3) and exempt from tax under subsection (a) and which is not a member of the risk pool and does not benefit (directly or indirectly) from the insurance coverage provided by the pool to its members.'' (b) Effective Date.--The amendment made by subsection (a) shall apply to taxable years beginning after December 31, 1991. <all>