,,ii  #aafth ,,congress  #ast ,session  
,s4 #aiif  ,,in ,,the ,,senate ,,of     
,,the ,,united ,,states  ,june #bf1     
#bjai ,ms4 ,mc,sally 7for herself1 ,ms4 
,sinema1 ,mrs4 ,blackburn1 ,mr4 ,cornyn1
 and ,mr4 ,alexander7 introduced the    
following bill2 which was read twice and
 referred to the ,committee on ,finance 
,a ,,bill  ,to amend the ,internal      
,revenue ,code of #aihf to clarify the  
application of the net operating loss   
deduction4  #a4 ,short title ,this ,act 
may be cited as the ,net ,operating     
,loss ,clarification ,act of #bjai4  #b4
 ,technical amendments relating to the  
net operating loss deduction  7a7       
,clarification of effective date of net 
operating loss rules ,section #accjb7;e7
 of ,public ,law #aae-ig is amended--   
7#a7 by striking all that follows shall 
apply to in paragraph 7#a7 and inserting
 taxable years to which losses arising  
in taxable years beginning after        
,december #ca1 #bjag1 may be carried41  
and  7#b7 by striking ending in         

paragraph 7#b7 and inserting beginning4 
7b7 ,clarification of net operating loss
 carryback for farming losses and       
certain insurance companies ,section    
#agb7;b77#a77;,a7 of the ,internal      
,revenue ,code of #aihf is amended to   
read as follows3  7,a7 ,general rule ,a 
net operating loss for any taxable      
year-- 7i7 shall be a net operating loss
 carryback to the extent provided in    
subparagraphs 7,b7 and 7,c77i71 and     
7ii7 except as provided in subparagraph 
7,c77ii71 shall be a net operating loss 
carryover-- 7,i7 in the case of a net   
operating loss arising in a taxable year
 beginning before ,january #a1 #bjah1 to
 each of the #bj taxable years following
 the taxable year of the loss1 and      
7,,ii7 in the case of a net operating   
loss arising in a taxable year beginning
 after ,december #ca1 #bjag1 to each    
taxable year following the taxable year 
of the loss4  4  7c7 ,clarification of  
determination of taxable income ,section
 #agb7;a77#b7 of the ,internal ,revenue 

,code of #aihf is amended by striking   
deduction allowable under this section  
and inserting deductions allowable under
 this section and sections #aii;,a and  
#bej4  7d7 ,clarification of order and  
method of net operating loss calculation
  7#a7 ,in general ,section #agb of the 
,internal ,revenue ,code of #aihf is    
amended by redesignating subsection 7g7 
as subsection 7h7 and by inserting after
 subsection 7f7 the following new       
subsection3  7g7 ,special rule for      
losses from taxable years beginning     
before ,january #a1 #bjah ,in the case  
of a taxable year 7hereafter in this    
subsection referred to as the current   
year7 to which is carried a net         
operating loss arising in a taxable year
 beginning before ,january #a1 #bjah1   
the amount determined under subsection  
7a7 for the current taxable year shall  
be an amount equal to the sum of--  7#a7
 the aggregate amount of such net       
operating losses carried to the current 
taxable year1 and  7#b7 the lesser of-- 

7,a7 the aggregate amount of net        
operating losses arising in taxable     
years beginning after ,december #ca1    
#bjag1 which are carried to the current 
taxable year1 or  7,b7 #hj percent of   
the excess 7if any7 of-- 7i7 taxable    
income computed without regard to the   
deductions allowable under this section 
and sections #aii;,a and #bej1 over     
7ii7 the amount determined under        
paragraph 7#a74  4  7#b7 ,conforming    
amendment ,section #agb7;b77#b77;,c7 of 
such ,code is amended to read as        
follows3  7,c7 be reduced by #bj percent
 of taxable income computed under       
section 7a77#b7 for such prior taxable  
year 7or if subsection 7g7 applies to   
such prior taxable year1 #bj percent of 
the excess described in subsection      
7g77#b77;,b7 for such year74  4  7e7    
,conforming amendments to rules         
regarding ,r,e,m,i,cs ,section          
#hfj;,e7a77#c77;,b7 of the ,internal    
,revenue ,code of #aihf is amended by   
striking all that follows for purposes  

of and inserting subsection 7a77#b71 and
 the second sentence of subsection      
7b77#b71 of section #agb44  7f7         
,accelerated refunds ,in the case of a  
net operating loss carryback which is   
allowed for a taxable year by reason of 
the amendments made by subsections 7a7  
through 7e71 an application under       
section #fdaa7;a7 of the ,internal      
,revenue ,code of #aihf with respect to 
such carryback shall not fail to be     
treated as timely filed if filed by the 
later of--  7#a7 the date which is #d   
months after the date of the enactment  
of this ,act1 or  7#b7 the date         
otherwise applicable under section      
#fdaa7;a7 of such ,code4  7g7 ,effective
 date ,the amendments made by           
subsections 7a7 through 7e7 shall take  
effect as if included in the provision  
of ,public ,law #aae-ig to which they   
relate4