Page:United States Statutes at Large Volume 110 Part 3.djvu/340

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110 STAT. 2070 PUBLIC LAW 104-191—AUG. 21, 1996 Subtitle E—State Insurance Pools SEC. 341. EXEMPTION FROM INCOME TAX FOR STATE-SPONSORED ORGANIZATIONS PROVIDING HEALTH COVERAGE FOR HIGH-RISK INDIVIDUALS. (a) IN GENERAL. —Subsection (c) of section 501 (relating to list of exempt organizations) is amended by adding at the end the following new paragraph: "(26) Any membership organization if— "(A) such organization is established by a State exclusively to provide coverage for medical care (as defined in section 213(d)) on a not-for-profit basis to individuals described in subparagraph (B) through— "(i) insurance issued by the organization, or "(ii) a health maintensmce organization under an arrangement with the organization, "(B) the only individuals receiving such coverage through the organization are individuals— "(i) who are residents of such State, and "(ii) who, by reason of the existence or history of a medical condition— "(I) are unable to acquire medical care coverage for such condition through insurance or from a health maintengmce organization, or "(II) are able to acquire such coverage only at a rate which is substantially in excess of the rate for such coverage through the membership organization, "(C) the composition of the membership in such organization is specified by such State, and "(D) no part of the net earnings of the organization inures to the benefit of any private shareholder or individual.". 26 USC 501 note. (b) EFFECTIVE DATE.—The amendment made by this section shall apply to taxable years beginning after December 31, 1996. SEC. 342. EXEMPTION FROM INCOME TAX FOR STATE-SPONSORED WORKMEN'S COMPENSATION REINSURANCE ORGANIZA- TIONS. (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—