diff --git a/lib/sass/css.rb b/lib/sass/css.rb
index 9b771a1e..0fbe29ce 100644
--- a/lib/sass/css.rb
+++ b/lib/sass/css.rb
@@ -273,21 +273,25 @@ module Sass
     #       color: blue
     #
     def parent_ref_rules(root)
-      rules = OrderedHash.new
+      current_rule = nil
       root.children.select { |c| Tree::RuleNode === c }.each do |child|
         root.children.delete child
         first, rest = child.rules.first.scan(/^(&?(?: .|[^ ])[^.#: \[]*)([.#: \[].*)?$/).first
-        rules[first] ||= Tree::RuleNode.new(first, {})
+
+        if current_rule.nil? || current_rule.rules.first != first
+          current_rule = Tree::RuleNode.new(first, {})
+          root << current_rule
+        end
+
         if rest
           child.rules = ["&" + rest]
-          rules[first] << child
+          current_rule << child
         else
-          rules[first].children += child.children
+          current_rule.children += child.children
         end
       end
 
-      rules.values.each { |v| parent_ref_rules(v) }
-      root.children += rules.values
+      root.children.each { |v| parent_ref_rules(v) }
     end
 
     # Remove useless parent refs so that
diff --git a/test/sass/css2sass_test.rb b/test/sass/css2sass_test.rb
index b7669def..f0434d36 100644
--- a/test/sass/css2sass_test.rb
+++ b/test/sass/css2sass_test.rb
@@ -51,6 +51,28 @@ li a:hover {
 CSS
   end
 
+  def test_no_nesting_around_rules
+    assert_equal(<<SASS, css2sass(<<CSS))
+div .warning
+  :color #d21a19
+
+
+span .debug
+  :cursor crosshair
+
+
+div .debug
+  :cursor default
+SASS
+div .warning {
+  color: #d21a19; }
+span .debug { 
+  cursor: crosshair;}
+div .debug {
+  cursor: default; }
+CSS
+  end
+
   def test_comments_multiline
     css = <<CSS
 /* comment */