8
Post, p. 633.
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PUBLIC LAW 429-MAR. 13, 1966
[70 STAT.
mean of the aggregates, at the beginning and end of the taxable year, of the policy loans outstanding with respect to contracts for which life insurance reserves are maintained. "(e) BURIAL AND FUNERAL IbiNEFrr INSURANCE COMPANIES.—A burial or funeral benefit insurance company engaged directly in the manufacture of funeral supplies or the performance of funeral services shall not be taxable under this part but shall be taxable under section 821 or section 831. "SEC. 802. TAX IMPOSED FOR 1955. "(a) TAX IMPOSED.—A tax is hereby imposed for each taxable year beginning in 1955 on the income of every life insurance company. Except as provided in subsection (c), such tax shall consist of a normal tax (computed under section 11(b)) and a surtax (computed under section 11(c)) on the sum of— " (1) the life insurance taxable income (as defined in subsection (b)), plus "(2) the non-life insurance taxable income (as defined in subsection (f)). "(b) L I F E INSURANCE TAXAHLE INCOME DEFINED.—For purposes of this subpart, the term 'life insurance taxable income' means the net investment income (as defined in section 803(c)), minus the sum of— "(1) the net investment income allocable to non-life insurance reserves (determined under section 804(d)), "(2) the reserve and other policy liability deduction (determined under section 804), and "(3) the special interest deduction, if any, allowed by section 805. " (c) ALTERNATIVE T A X I N THE C A S E o r C O M P A N I E S H A VI N G N O N L I F E INSURANCE RESERVES.—
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"(1) IN GENERAL.—In the case of a life insurance company which has non-life insurance reserves, the tax imposed by subsection (a) of this section for any taxable year beginning in 1955 shall be the tax computed under such subsection (or under section ^^^^ (^) if applicable) or the tax computed under paragraph (2) of this subsection, whichever is the greater. " (2) ALTERNATIVE i PERCENT TAX ON NON-LIFE INSURANCE
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BUSINESS.—The tax referred to in paragraph (1) is a tax equal to the sum of the following: " (A) A partial tax consisting of a normal tax (computed under section 11(b)) and a surtax (computed under section 11 (c)) on the life insurance taxable income. " (B) A partial tax consisting of— " (i) 1 percent of the amount which bears the same ratio to the gross investment income (reduced by the deduction for wholly-exempt interest allowed by section 803 (c)(1)) as the non-life insurance reserves bear to the qualified reserves (determined under section 804(c)), plus "(ii) 1 percent of the excess of the amount by which the net premiums on contracts meeting the requirements of section 804(d)(2)(A) exceed the dividends to policyholders on such contracts. For purposes of this clause, net premiums, and dividends to policyholders, shall be computed in the manner provided in section 823. " (d) DEDUCTIONS FOR PARTIALLY TAX-EXEMPT INTEREST.— " (1) COMPUTATIONS UNDER SUBSECTION (a).—For purposes of
computing the normal tax under subsection (a), there shall be allowed as a deduction an amount which bears the same ratio
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