SEC. 342. EXEMPTION FROM INCOME TAX FOR STATE-SPONSORED WORKMEN'S COMPENSATION
REINSURANCE ORGANIZATIONS.
Title[ Title III\Subtitle E Contents
(a) In General.--Subsection (c) of section 501 (relating to list of
exempt organizations), as amended by section 341, is amended by adding
at the end the following new paragraph:
``(27) Any membership organization if--
``(A) such organization is established before June
1, 1996, by a State exclusively to reimburse its members
for losses arising under workmen's compensation acts,
``(B) such State requires that the membership of
such organization consist of--
``(i) all persons who issue insurance covering
workmen's compensation losses in such State, and
``(ii) all persons and governmental entities
who self-insure against such losses, and
``(C) such organization operates as a non-profit
organization by--
``(i) returning surplus income to its members
or workmen's compensation policyholders on a
periodic basis, and
``(ii) reducing initial premiums in
anticipation of investment income.''.
(b) Effective <<NOTE: 26 USC 501 note.>> Date.--The amendment made
by this section shall apply to taxable years ending after the date of
the enactment of this Act.
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