text: SECTION 1. SHORT TITLE.
  
      This Act may be cited as the ``Taxpayer Savings and Employee 
  Notification Act of 2003''.
  
  SEC. 2. REPEAL TAX BENEFITS RELATING TO COMPANY-OWNED LIFE INSURANCE.
  
      (a) Inclusion of Life Insurance Investment Gains.--Section 72 of 
  the Internal Revenue Code of 1986 (relating to annuities; certain 
  proceeds of endowment and life insurance contracts) is amended by 
  inserting after subsection (j) the following new subsection:
      ``(k) Treatment of Nonqualified Company-Owned Life Insurance 
  Contracts.--
              ``(1) In general.--In the case of a nonqualified company-
          owned life insurance contract, the income on the contract (as 
          determined under section 7702(g)) for any taxable year shall be 
          includible in gross income for such year.
              ``(2) Nonqualified company-owned life insurance contract.--
          For the purposes of paragraph (1)--
                      ``(A) In general.--The term `nonqualified company-
                  owned life insurance contract' means any life insurance 
                  policy or endowment contract held by any entity engaged 
                  in a trade or business.
                      ``(B) Exceptions.--Such term shall not include--
                              ``(i) any policy or contract covering the 
                          life solely of individuals who are key persons 
                          (as defined in section 264(e)(3)),
                              ``(ii) any contract which is acquired by 
                          the estate of a decedent by reason of the death 
                          of the decedent,
                              ``(iii) any contract which is held under a 
                          plan described in section 401(a) or 403(a), 
                          under a program described in section 403(b), or 
                          under an individual retirement plan,
                              ``(iv) any contract which is a qualified 
                          funding asset (as defined in section 130(d), 
                          but without regard to whether there is a 
                          qualified assignment), and
                              ``(v) any contract which is purchased by an 
                          employer upon the termination of a plan 
                          described in section 401(a) or 403(a) and is 
                          held by the employer until all amounts under 
                          such contract are distributed to the employee 
                          for whom such contract was purchased or the 
                          employee's beneficiary.
                      ``(C) Contracts held by natural persons, 
                  partnerships, and s corporations.--Rules similar to the 
                  rules of section 264(f)(5) shall apply.''.
      (b) Repeal of Exclusion for Death Benefits.--Section 101 of such 
  Code (relating to certain death benefits) is amended by adding at the 
  end the following new subsection:
      ``(j) Proceeds of Nonqualified Company-Owned Life Insurance.--
  Notwithstanding any other provision of this section, there shall be 
  included in gross income amounts received under a nonqualified company-
  owned life insurance contract (as defined in section 72(k)) to the 
  extent that such amounts exceed the sum of--
              ``(1) the income on the contract (as determined under 
          section 7702(g)) which as been previously included in income, 
          plus
              ``(2) the premiums paid (as defined in section 7702(f)(1)) 
          under the contract.
  Amounts included in gross income under the preceding sentence shall be 
  so included under section 72.''.
      (c) Information Reporting.--Section 6047 of such Code (relating to 
  information relating to certain trusts and annuity plans) is amended by 
  redesignating subsection (g) as subsection (h) and by inserting after 
  subsection (f) the following new subsection:
      ``(g) Nonqualified Company-Owned Life Insurance Contracts.--The 
  Secretary shall require the issuer of nonqualified company-owned life 
  insurance contracts to make such returns and reports regarding such 
  contracts (as defined in section 72(k)) to the Secretary, beneficiaries 
  of such contracts, and such other persons as the Secretary may 
  prescribe.''.
      (d) Reduction in Public Debt.--The increase in Federal receipts in 
  the United States Treasury by reason of the amendments made by this 
  section shall be used solely for reduction of the public debt and for 
  such purpose the Secretary of the Treasury shall deposit an amount 
  equal to such receipts in the account established under section 3113 of 
  title 31, United States Code.
      (e) Effective Date.--The amendments made by this section shall 
  apply to contracts entered into after the date of the enactment of this 
  Act.
  
  SEC. 3. DISCLOSURE.
  
      (a) In General.--Not later than 60 days before the date of purchase 
  of a nonqualified company-owned life insurance contract (as defined by 
  section 72(k) of the Internal Revenue Code of 1986) by an entity on one 
  or more of its employees, the entity shall provide to each such 
  employee a written disclosure that shall contain the following 
  information:
              (1) A statement that the company plans to purchase such 
          contract on the life of the employee.
              (2) The identity of the insurance carrier with respect to 
          such contract.
              (3) The amount of the benefit under such contract.
              (4) The name of the beneficiary under such contract.
      (b) Objection to Purchase of Contract.--If such employee notifies 
  such entity in writing before the date of purchase of such contract 
  that the employee objects to the purchase, then the entity shall not 
  purchase the contract.
      (c) Enforcement.--
              (1) Unfair or deceptive act or practice.--A violation of 
          either subsection (a) or (b) shall be treated as a violation of 
          a rule defining an unfair or deceptive act or practice 
          prescribed under section 18(a)(1)(B) of the Federal Trade 
          Commission Act (15 U.S.C. 57a(a)(1)(B)).
              (2) Actions by the federal trade commission.--The Federal 
          Trade Commission shall enforce this section in the same manner, 
          by the same means, and with the same jurisdiction, powers, and 
          duties as though all applicable terms and provisions of the 
          Federal Trade Commission Act (15 U.S.C. 41 et seq.) were 
          incorporated into and made a part of this Act.
      (d) Effective Date.--This section shall apply to contracts entered 
  into after the date of the enactment of this Act.
  
  SEC. 4. RULE OF CONSTRUCTION.
  
      Nothing in this Act, or the amendments made by this Act, shall be 
  construed to affect any case in controversy, or any investigation by 
  the Secretary of the Treasury, relating to any leveraged company-owned 
  life insurance contract entered into on or before the date of the 
  enactment of this Act.
target: Taxpayer Savings and Employee Notification Act of 2003 - Amends the Internal Revenue Code to include in gross income from nonqualified company-owned life insurance contracts (as defined by this Act) income and death benefits (amounts exceeding reported income and premiums).States that violations of such provisions shall be treated as a violation of an unfair or deceptive act or practice under the Federal Trade Commission Act.
feat_title: To amend the Internal Revenue Code of 1986 to repeal tax benefits relating to company-owned life insurance.