Bill · H.R. 1481· House(119-HR-1481)
CART Act of 2025
- Introduced
- 2/21/2025
- Last activity
- 2/21/2025 — Referred to the Committee on Ways and Means, and in addition to the Committee on the Judiciary, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
- Sponsored by
- Darin LaHood
- Cosponsors
- - 0 - 2
- Introduced
- In Committee
What this bill would do
This bill, known as the "Catastrophic Risk Transfer Act of 2025," proposes amendments to the Internal Revenue Code of 1986. It aims to establish a specific taxation system for "catastrophic risk transfer companies." These companies are domestic corporations organized under State laws that allow for special purpose insurers to handle catastrophic risks. The legislation sets requirements for these companies regarding their gross income, which must primarily come from qualified investments or specific insurance premiums. It also outlines specific rules for how these companies are taxed and how their dividends are treated for security holders. Finally, the bill includes provisions to prevent double taxation on reinsurance premiums by certain taxing jurisdictions.
Yes· 3 of 5
Would people with substantial wealth be better off under this?+5
The bill provides favorable tax treatments for dividends and capital gains for security holders.
Would business owners be better off under this?+4
The bill creates a specific tax structure for corporations engaged in catastrophic risk transfer.
Is this likely to grow the economy?+3
The bill aims to ensure sufficient capital is available to cover catastrophic insurance losses.
The opposite
No question was scored the opposite.
Who it would affect, and how
Potential Positive Impacts for People
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Ensuring Sufficient Capital: The bill's stated purpose is to establish a taxation system to ensure sufficient capital is available to cover catastrophic insurance losses (Section 2).
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Tax Treatment for Security Holders: Security holders of these companies will receive dividends that are treated based on their specific source, such as capital gains or qualified dividend income (Section s. 860O(a) and (b)).
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Exemption From Withholding Taxes: Nonresident aliens and foreign corporations may be exempt from certain taxes on "qualified investment income dividends" received from these companies (Section 2(b)(1)).
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Prevention of Double Taxation: The bill seeks to prevent double taxation by prohibiting other taxing jurisdictions from imposing a premium tax on reinsurance premiums paid to these companies (Section 3(a)).
Potential Negative Impacts for People
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Taxation on Gross Income Failures: If a company fails to meet the required gross income sources, it may be subject to a tax based on the excess of its gross income over a specific fraction of its qualifying income (Section 2, Sec. 860M(d)(2)).
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Interest Charges on Non-Compliance: Companies that fail to meet the requirements for a specific tax year (a "non-CART year") may be required to pay interest at the underpayment rate on certain distributions (Section 2, Sec. 860M(d)(3)).
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Limitations on Deductions: The bill restricts certain deductions for these companies, such as prohibiting net operating loss deductions (Section 2, Sec. 860N(b)(2)(A)).
Groups and Interests Ranking
Every group the model scored this bill for, from -10 to +10. Hover a score for the reason it gave.
- Demographic And Interest Groups
- Good For High Net Worth Individuals+5Good For Business Owners+4
- Economy And Finance
- Improves Economic Growth+3Improves Consumer Protection+2Reduces Capital Gains Tax+2
- 2/24/2025
- 1 Cosponsor added.
- 2/21/2025
- Referred to the Committee on Ways and Means, and in addition to the Committee on the Judiciary, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
- 1 Cosponsor added.
- Introduced in House
James HimesDemocrat · Connecticut
Brittany PettersenDemocrat · Colorado