,i  #aag? ,,congress  #a/ ,session  ,h4 
,r4 #egcd  ,,9 ,,! ,,h\se ,,(           
,,repres5tatives  ,octob] #bf1 #bjba,mr4
 ,himes 7= himself1 ,mrs4 ,murphy (     
,florida1 ,mr4 ,luetkemey]1 & ,mr4      
,la,hood7 introduc$ ! foll[+ bill2 :i* 0
 ref]r$ to ! ,committee on ,ways &      
,means1 & 9 addition to ! ,committee on 
! ,judici>y1 = a p]iod to be subsequ5tly
 det]m9$ by ! ,speak]1 9 ea* case =     
consid]ation ( su* provisions z fall )9 
! jurisdiction ( ! committee conc]n$  ,a
 ,,bill  ,to am5d ! ,int]nal ,rev5ue    
,code ( #aihf to e/abli% a sy/em = !    
taxation ( cata/rophic risk transf]     
companies to ensure suffici5t capital to
 cov] cata/rophic insurance losses1 & = 
o!r purposes4  #a4 ,%ort title ,?is ,act
 may be cit$ z ! ,cata/rophic ,risk     
,transf] ,act ( #bjba or ! ,,c>t ,act4  
#b4 ,taxation ( cata/rophic risk transf]
 companies  7a7 ,9 ,g5]al ,sub*apt] ,m (
 *apt] #a ( ! ,int]nal ,rev5ue ,code (  
#aihf is am5d$ by add+ at ! end ! foll[+
 new "p3  ,v ,cata/rophic risk transf]  

companies  ,sec4 #hfj,m4 ,cata/rophic   
risk transf] companies4 ,sec4 #hfj,n4   
,taxation ( cata/rophic risk transf]    
companies4 ,sec4 #hfj,o4 ,taxation (    
security hold]s ( cata/rophic risk      
transf] company2 limitations applicable 
to divid5ds receiv$ f cata/rophic risk  
transf] company4 ,sec4 #hfj,p4 ,divid5ds
 paid by cata/rophic risk transf]       
company aft] close ( taxable ye>4       
#hfj,m4 ,cata/rophic risk transf]       
companies  7a7 ,g5]al rule ,= purposes (
 ?is subtitle1 ! t]m cata/rophic risk   
transf] company means any dome/ic       
corporation :i*-- 7#a7 is-- 7,a7 creat$ 
or organiz$ "u ! laws ( a ,/ate :i* has 
enact$ a ,/ate law :i* enables !        
organization & lic5sure ( a special     
purpose insur] 7:e!r or n designat$ z   
su* "u su* ,/ate law7 :i* is capable (  
c>ry+ out ! activities describ$ 9       
p>agraph 7#b71 &  7,b7 regulat$ & lic5s$
 z su* a special purpose insur] by !    
,/ate commission] ( insurance or o!r    
,/ate (ficial *>g$ ) regulation (       

insurance )9 ! ,/ate1  7#b7 ! pr9cipal  
purpose ( :i* is ! c>ry+ out ( !        
activities ( cata/rophic risk transf]1 b
 only if-- 7,a7 sub/antially all ( su*  
activities relate to bus9ess o!r ?an    
g5]al annuity bus9ess1 &  7,b7 su*      
activities are limit$ to-- 7i7 issu+    
equity & debt securities1  7ii7 own+    
qualifi$ inve/m5ts1 &  7iii7 ent]+ into 
"o or m insurance or re9surance         
agreem5ts cov]+ cata/rophic risks f     
p]sons :o are n relat$ to su*           
corporation at any "t dur+ ! p]iod      
beg9n+ ) ! date su* agreem5ts are ent]$ 
into & end+ ) ! la/ day ( ! p]iod su*   
agreem5ts are 9 effect1 &  7#c7 is      
au?oriz$ by ! ,/ate commission] (       
insurance or o!r ,/ate (ficial *>g$ )   
regulation ( insurance )9 ! ,/ate to    
c>ry out ! activities ( cata/rophic risk
 transf]4  7b7 ,limitations ,a          
corporation %all n be consid]$ a        
cata/rophic risk transf] company = any  
taxable ye> unless-- 7#a7 x files ) its 
return = ! taxable ye> an election to be

 a cata/rophic risk transf] company or  
has made su* election = a previ\s       
taxable ye>1  7#b7 at lea/ #ij p]c5t (  
its gross income is d]iv$ f-- 7,a7      
inve/m5t income f qualifi$ inve/m5ts1 & 
7,b7 7i7 re9surance premiums receiv$ f a
 regulat$ insurance company1 or  7ii7   
insurance premiums f-- 7,i7 a gov]nm5tal
 ag5cy1  7,,ii7 a company ! assets ( :i*
 exce$ #ajj1jjj1jjj1 or  7,,iii7 a      
company t is transf]r+ a suffici5tly    
l>ge pool ( a s+le type ( und]ly+ risk t
 ! insurance ( su* pool ( risk w\ld on a
 /&-alone basis con/itute op]ation ( an 
insurance bus9ess "u "p ,,ii ( sub*apt] 
,l1 &  7#c7 ! limit ( ! insurance or    
re9surance be+ provid$ is fully         
collat]aliz$4  7c7 ,special rule = s]ies
 issuances ,if a cata/rophic risk       
transf] company 7)9 ! mean+ ( subsection
 7a771 or a protect$ cell ( su* company1
 issues a s]ies or class ( securities   
:i* prim>ily has rec\rse to1 or is      
prim>ily l9k$ to1 a designat$ re9surance
 agreem5t & pool ( collat]al or assets1 

su* s]ies or class %all be treat$ z a   
sep>ate corporation = purposes ( ?is    
title 7o!r ?an det]m9+ :e!r !           
requirem5ts ( subsection 7a7 are met74  
7d7 ,failure ,to satisfy gross income   
te/  7#a7 ,disclosure requirem5t ,a     
cata/rophic risk transf] company :i*    
fails to meet ! requirem5t ( p>agraph   
7#b7 ( subsection 7b7 = any taxable ye> 
%all nev]!less be consid]$ to h satisfi$
 ! requirem5t ( su* p>agraph = su*      
taxable ye> if-- 7,a7 foll[+ !          
cata/rophic risk transf] company        
id5tification ( ! failure to meet su*   
requirem5t = su* taxable ye>1 a         
description ( ea* item ( its gross      
income describ$ 9 su* p>agraph is set =?
 9 a s*$ule = su* taxable ye> fil$ 9 !  
mann] provid$ by ! ,secret>y1 &  7,b7 ! 
failure to meet su* requirem5t is due to
 reasonable cause & n due to willful    
neglect4  7#b7 ,imposition ( tax on     
failures ,if p>agraph 7#a7 applies to   
cata/rophic risk transf] company = any  
taxable ye>1 !re is h]eby impos$ on su* 

company a tax 9 an am\nt equal to !     
excess (-- 7,a7 ! gross income ( su*    
company :i* is n d]iv$ f s\rces ref]r$  
to 9 subsection 7b77#b71 ov]  7,b7      
"o-n9? ( ! gross income ( su* company   
:i* is d]iv$ f su* s\rces4  7e7         
,def9itions ,= purposes ( ?is "p-- 7#a7 
,cata/rophic risk  7,a7 ,9 g5]al ,! t]m 
cata/rophic risk means a risk ( loss :i*
 has a l[ likelihood ( occurr+ b :i* w  
be l>ge 9 am\nt4  7,b7 ,special rules ,=
 purposes ( subp>agraph 7,a7-- 7i7 9 !  
case ( direct insurance1 a risk ( loss  
%all n be treat$ z l>ge 9 am\nt unless  
su* loss w\ld exce$ #be1jjj1jjj if x    
occurs1 &  7ii7 9 ! case ( mortality    
risk1 ! risk ( loss transf]r$ may be    
tak5 into acc\nt "u subp>agraph 7,a7    
only if x involves a pool ( mortality or
 longevity risks4  7#b7 ,inve/m5ts &    
income  7,a7 ,qualifi$ inve/m5t ,! t]m  
qualifi$ inve/m5t means-- 7i7 ca%1  7ii7
 int]e/s 9 money m>ket funds1 &  7iii7  
inve/m5t-grade debt securities & funds  
prim>ily hold+ su* debt securities4     

7,b7 ,inve/m5t income ,! t]m inve/m5t   
income means int]e/ t is accru$ or      
receiv$ on1 di/ributions 9 connection )1
 or proce$s f ! disposition (1 qualifi$ 
inve/m5ts4  7#c7 ,regulat$ insurance    
company ,! t]m regulat$ insurance       
company means any company :i* is lic5s$ 
to engage 9 ! bus9ess ( insurance 9 a   
,/ate & :i* is subject to ,/ate law :i* 
regulates insurance 7)9 ! mean+ (       
section #ead7;b77#b7 ( ! ,employee      
,retirem5t ,income ,security ,act (     
#aigd1 z 9 effect on ! date ( ! enactm5t
 ( ?is section74  7#d7 ,relat$ p]son ,a 
p]son %all be treat$ z relat$ p]son to  
ano!r p]son if su* p]son be>s a         
relation%ip to su* o!r p]son describ$ 9 
section #bfg7;b7 or #gjg7;b74  #hfj,n4  
,taxation ( cata/rophic risk transf]    
companies  7a7 ,requirem5ts applicable  
to cata/rophic risk transf] companies ,!
 provisions ( ?is "p 7o!r ?an subsection
 7c7 ( ?is section7 %all n be applicable
 to a cata/rophic risk transf] company =
 a taxable ye> unless-- 7#a7 ! d$uction 

= divid5ds paid dur+ ! taxable ye> 7z   
def9$ 9 section #efa7 equals or exce$s  
#ij p]c5t ( its cata/rophic risk transf]
 company taxable income = ! taxable ye> 
det]m9$ )\t reg>d to subsection         
7b77#b77;,c71 &  7#b7 z ( ! close ( !   
taxable ye>1 ! cata/rophic risk transf] 
company has no e>n+s & pr(its accumulat$
 9 any taxable ye> to :i* ! provisions (
 ?is "p 7or ! correspond+ provisions (  
prior law7 did n apply to x4  7b7 ,me?od
 ( taxation ( companies  7#a7           
,imposition ( tax on cata/rophic risk   
transf] companies ,!re is h]eby impos$ =
 ea* taxable ye> ^u ! cata/rophic risk  
transf] company taxable income ( e      
cata/rophic risk transf] company a tax  
comput$ z provid$ 9 section #aa1 z ?\gh 
! cata/rophic risk transf] company      
taxable income 7 ! taxable income ref]r$
 to 9 section #aa4  7#b7 ,cata/rophic   
risk transf] company taxable income ,!  
cata/rophic risk transf] company taxable
 income %all be ! taxable income ( !    
cata/rophic risk transf] company adju/$ 

z foll[s3 7,a7 ,! net op]at+ loss       
d$uction provid$ 9 section #agb %all n  
be all[$4  7,b7 ,! d$uctions =          
corporations provid$ 9 "p ,,viii 7except
 section #bdh7 9 sub*apt] ,b 7section   
#bda & foll[+1 relat+ to ! d$uction =   
divid5ds receiv$1 etc47 %all n be all[$4
  7,c7 ,! d$uction = divid5ds paid 7z   
def9$ 9 section #efa7 %all be all[$4    
7,d7 ,! taxable income %all be comput$  
)\t reg>d to section #ddc7;b7 7relat+ to
 computation ( tax on *ange ( annual    
acc\nt+ p]iod74  7,e7 ,! taxable income 
%all be comput$ )\t reg>d to section    
#ded7;b7 7relat+ to %ort-t]m obligations
 issu$ on a disc\nt basis7 if ! company 
s elects 9 a mann] prescrib$ by !       
,secret>y4  7,f7 ,!re %all be d$uct$ an 
am\nt equal to ! tax impos$ by          
subsection 7d77#b7 ( section #hfj,m = ! 
taxable ye>4  7,g7 ,!re w be all[$ z a  
d$uction loss adju/m5t exp5ses & exp5ses
 (-- 7i7 model+ firms1 claims review]s1 
loss res]ve speciali/s1 attorneys1      
acc\ntants1 actu>ies1 ind5ture tru/ees  

7includ+ re9surance tru/ees & pay+      
ag5ts71 indep5d5t directors1            
adm9i/rators ( ! cata/rophic risk       
transf] company1 rat+ ag5cies ( any     
securities issu$ by ! cata/rophic risk  
transf] company1 reset & calculation    
ag5ts1 report+ ag5cies1 data provid]s1  
model escr[ ag5ts1 securities li/+s1 &  
securities li/+ ag5ts1 &  7ii7 o!r      
pr(essionals or s]vice provid]s1 or o!r 
out-(-pocket co/s incurr$ ) issu+       
securities1 reasonably relat$ !reto4    
7#c7 ,section #caa7;b7 n to apply to    
c]ta9 di/ributions ,section #caa7;b7    
%all n apply to any di/ribution by a    
cata/rophic risk transf] company to :i* 
?is "p applies1 if su* di/ribution is 9 
r$emption ( its /ock or securities ^u ! 
dem& ( ! hold]4  7#d7 ,"t c]ta9 divid5ds
 tak5 into acc\nt ,= purposes ( ?is     
title1 any divid5d decl>$ by a          
cata/rophic risk transf] company dur+   
any cal5d> ye> & payable to security    
hold]s ( record on a specifi$ date 9 su*
 a ye> %all be deem$-- 7,a7 to h be5    

receiv$ by ea* security hold] on        
,decemb] #ca ( su* cal5d> ye>1 &  7,b7  
to h be5 paid by su* company on ,decemb]
 #ca ( su* cal5d> ye> 7or1 if e>li]1 z  
provid$ 9 section #hfj,p74  ,! prec$+   
s5t5ce %all apply only if su* divid5d is
 actually paid by ! company prior to !  
#ae? day ( ! #i? mon? ( ! foll[+ cal5d> 
ye>4  7c7 ,e>n+s & pr(its  7#a7         
,di/ributions to meet requirem5ts (     
subsection 7a77#b7 ,any di/ribution :i* 
is made 9 ord] to comply ) ! requirem5ts
 ( subsection 7a77#b7-- 7,a7 %all be    
treat$ = purposes ( ?is subsection &    
subsection 7a77#b7 z made f e>n+s &     
pr(its :i*1 b = ! di/ribution1 w\ld     
result 9 a failure to meet su*          
requirem5ts 7& allocat$ to su* e>n+s on 
a fir/-91 fir/-out basis71 &  7,b7 to ! 
ext5t treat$ "u subp>agraph 7,a7 z made 
f accumulat$ e>n+s & pr(its1 %all n be  
treat$ z a di/ribution = purposes (     
subsection 7b77#b77;,c7 & section       
#hfj,p4  7#b7 ,cata/rophic risk transf] 
company ,= purposes ( ?is subsection1 ! 

t]m cata/rophic risk transf] company    
includes a dome/ic corporation :i* is a 
cata/rophic risk transf] company det]m9$
 )\t reg>d to ! requirem5ts ( subsection
 7a74  7d7 ,proc$ures simil> to         
defici5cy divid5d proc$ures made        
applicable  7#a7 ,9 g5]al ,if-- 7,a7 !re
 is a det]m9ation t ! provisions ( ?is  
"p d n apply to a cata/rophic risk      
transf] company = any taxable ye>       
7h]eaft] 9 ?is subsection ref]r$ to z ! 
non-,,c>t ye>71 &  7,b7 su* cata/rophic 
risk transf] company meets ! di/ribution
 requirem5ts ( p>agraph 7#b7 ) respect  
to ! non-,,c>t ye>1  !n1 = purposes (   
apply+ subsection 7a77#b7 to subsequ5t  
taxable ye>s1 ! provisions ( ?is "p %all
 be treat$ z apply+ to su* cata/rophic  
risk transf] company = ! non-,,c>t ye>4 
,if ! det]m9ation "u subp>agraph 7,a7 is
 solely z a result ( ! failure to meet !
 requirem5ts ( subsection 7a77#b71 !    
prec$+ s5t5ce %all also apply = purposes
 ( apply+ subsection 7a77#b7 to !       
non-,,c>t ye> & ! am\nt ref]r$ to 9     

p>agraph 7#b77;,a77i7 %all be ! portion 
( ! accumulat$ e>n+s & pr(its :i*       
result$ 9 su* failure4  7#b7            
,di/ribution requirem5ts  7,a7 ,9 g5]al 
,! di/ribution requirem5ts ( ?is        
p>agraph are met ) respect to any       
non-,,c>t ye> if1 )9 ! #ij-;day p]iod   
beg9n+ on ! date ( ! det]m9ation 7or )9 
su* long] p]iod z ! ,secret>y may       
p]mit71 ! cata/rophic risk transf]      
company makes #a or m qualifi$ designat$
 di/ributions & ! am\nt ( su*           
di/ributions is n less ?an ! excess (-- 
7i7 ! portion ( ! accumulat$ e>n+s &    
pr(its ( ! cata/rophic risk transf]     
company 7z ( ! date ( ! det]m9ation7 :i*
 are attributable to ! non-,,c>t ye>1   
ov]  7ii7 any int]e/ payable "u p>agraph
 7#c74  7,b7 ,qualifi$ designat$        
di/ribution ,= purposes ( ?is p>agraph1 
! t]m qualifi$ designat$ di/ribution    
means any di/ribution made by !         
cata/rophic risk transf] company if--   
7i7 section #cja applies to su*         
di/ribution1 &  7ii7 su* di/ribution is 

designat$ 7at su* "t & 9 su* mann] z !  
,secret>y %all by regulations prescribe7
 z be+ tak5 into acc\nt "u ?is p>agraph 
) respect to ! non-,,c>t ye>4  7,c7     
,effect on divid5ds paid d$uction ,any  
qualifi$ designat$ di/ribution %all n be
 includ$ 9 ! am\nt ( divid5ds paid =    
purposes ( comput+ ! divid5ds paid      
d$uction = any taxable ye>4  7#c7       
,int]e/ *>ge  7,a7 ,9 g5]al ,if p>agraph
 7#a7 applies to any non-,,c>t ye> ( a  
cata/rophic risk transf] company1 su*   
cata/rophic risk transf] company %all   
pay int]e/ at ! und]paym5t rate e/abli%$
 "u section #ffba-- 7i7 on an am\nt     
equal to #ej p]c5t ( ! am\nt ref]r$ to 9
 p>agraph 7#b77;,a77i71 &  7ii7 = !     
p]iod-- 7,i7 :i* beg9s on ! la/ day     
prescrib$ = paym5t ( ! tax impos$ = !   
non-,,c>t ye> 7det]m9$ )\t reg>d to     
ext5sions71 &  7,,ii7 :i* ends on ! date
 ! det]m9ation is made4  7,b7           
,coord9ation ) subtitle ,f ,any int]e/  
payable "u subp>agraph 7,a7 may be      
assess$ & collect$ at any "t dur+ !     

p]iod dur+ :i* any tax impos$ = !       
taxable ye> 9 :i* ! det]m9ation is made 
may be assess$ & collect$4  7#d7        
,provisions n to apply 9 ! case ( fraud 
,! provisions ( ?is subsection %all n   
apply if ! det]m9ation conta9s a f9d+ t 
! failure to meet any requirem5t ( ?is  
"p 0 due to fraud ) int5t to evade tax4 
7#e7 ,det]m9ation ,= purposes ( ?is     
subsection1 ! t]m det]m9ation has !     
mean+ giv5 to su* t]m by section        
#hfj7;e74 ,su* t]m also includes a      
det]m9ation by ! cata/rophic risk       
transf] company fil$ ) ! ,secret>y t !  
provisions ( ?is "p d n apply to !      
cata/rophic risk transf] company = a    
taxable ye>4  7e7 ,def9itions ,=        
purposes ( ?is "p-- 7#a7 ! t]ms divid5d 
& di/ribution %all include paym5ts made 
to hold]s ( debt securities1 &  7#b7 !  
t]m security hold] %all include hold]s (
 equity & debts securities issu$ by a   
cata/rophic risk transf] company4       
#hfj,o4 ,taxation ( security hold]s (   
cata/rophic risk transf] company2       

limitations applicable to divid5ds      
receiv$ f cata/rophic risk transf]      
company  7a7 ,"* ( divid5ds ,ea*        
cata/rophic risk transf] company %all   
id5tify 9 a /atem5t issu$ to ea*        
security hold] ! portion ( its divid5ds 
paid ) respect to ! ye>1 "u ! rules (   
section #hfj,n1 :i* are attributable to 
! foll[+ types ( income ( ! cata/rophic 
risk transf] company3 7#a7 ,int]e/4     
7#b7 ,tax-exempt int]e/4  7#c7 ,qualifi$
 divid5d income1 )9 ! mean+ (           
subp>agraph 7,b7 ( section #a7;h77#aa7 (
 ?is title4  7#d7 ,divid5ds o!r ?an     
qualifi$ divid5d income4  7#e7 ,capital 
ga9s4  7#f7 ,insurance or re9surance    
premiums4  7b7 ,look ?r\gh = taxation ( 
divid5ds  7#a7 ,g5]al ,except z provid$ 
9 subsection 7n7 ( section #hga or      
subsection 7f7 ( section #hha ( ?is     
title1 ea* security hold] %all be       
subject to taxation "u ?is title on !   
divid5ds receiv$ f a cata/rophic risk   
transf] company 9 ! same mann] z if su* 
security hold] _h receiv$ ! portions (  

ea* divid5d id5tifi$ on ! /atem5t       
provid$ "u subsection 7a7 directly4     
7#b7 ,divid5d income ,9 comput+ any     
d$uction "u section #bdc ) respect to ! 
portion ( a divid5d id5tifi$ on !       
/atem5t "u subsection 7a7 z divid5d     
income ref]5c$ 9 p>agraphs 7#c7 or 7#d7 
( su* subsection1 su* portion %all be   
treat$ z receiv$ f a corporation :i* is 
n a #bj-p]c5t own$ corporation4  7#c7   
,capital ga9 income ,! portion ( a      
divid5d id5tifi$ on ! /atem5t "u        
subsection 7a7 z capital ga9 income     
ref]5c$ 9 p>agraph 7#e7 ( su* subsection
 %all be treat$ by ! security hold]s z a
 ga9 f ! sale or ex*ange ( a capital    
asset held = m ?an #a ye>4  #hfj,p4     
,divid5ds paid by cata/rophic risk      
transf] company aft] close ( taxable ye>
  7a7 ,g5]al rule ,= purposes ( ?is     
*apt]1 if a cata/rophic risk transf]    
company-- 7#a7 decl>es a divid5d on or  
be=e ! lat] (-- 7,a7 ! #ae? day ( ! #i? 
mon? foll[+ ! close ( ! taxable ye>1 or 
7,b7 9 ! case ( an ext5sion ( "t = fil+ 

! company's return = ! taxable ye>1 !   
due date = fil+ su* return tak+ into    
acc\nt su* ext5sion1 &  7#b7 di/ributes 
! am\nt ( su* divid5d to security hold]s
 9 ! #ab-mon? p]iod foll[+ ! close ( su*
 taxable ye> & n lat] ?an ! date ( !    
fir/ divid5d paym5t ( ! same type (     
divid5d made aft] su* decl>ation1  !    
am\nt s decl>$ & di/ribut$ %all1 except 
z provid$ 9 subsection 7b7 & to ! ext5t 
! company elects 9 su* return 9         
accordance ) regulations prescrib$ by ! 
,secret>y1 be consid]$ z hav+ be5 paid  
dur+ su* taxable ye>4  7b7 ,receipt by  
security hold] ,am\nts to :i* subsection
 7a7 applies %all be treat$ z receiv$ by
 ! security hold] 9 ! taxable ye> 9 :i* 
! di/ribution is made4  4  7b7          
,exemption f )hold+ taxes on nonresid5t 
ali5s & =eign corporations  7#a7        
,nonresid5t ali5s ,section #hga ( !     
,int]nal ,rev5ue ,code ( #aihf is am5d$ 
by r$esignat+ subsection 7n7 z          
subsection 7o7 & by ins]t+ aft]         
subsection 7m7 ! foll[+3  7n7 ,exemption

 = qualifi$ inve/m5t income divid5ds (  
cata/rophic risk transf] companies  7#a7
 ,9 g5]al ,except z provid$ 9 p>agraph  
7#b71 no tax %all be impos$ "u p>agraph 
7#a77;,a7 ( subsection 7a7 on any       
qualifi$ inve/m5t income divid5d receiv$
 f a cata/rophic risk transf] company   
:i* meets ! requirem5ts ( section       
#hfj,m7a7 = ! taxable ye> ) respect to  
:i* ! divid5d is paid4  7#b7 ,exceptions
 ,p>agraph 7#a7 %all n apply-- 7,a7 to  
any qualifi$ inve/m5t income divid5d    
receiv$ f a cata/rophic risk transf]    
company by a p]son to ! ext5t su*       
divid5d is attributable to inve/m5t     
income receiv$ by su* company on        
indebt$ness issu$ by su* p]son or by any
 corporation or p>tn]%ip ) respect to   
:i* su* p]son is a #aj-p]c5t %>ehold]1  
7,b7 to any qualifi$ inve/m5t income    
divid5d ) respect to /ock ( a           
cata/rophic risk transf] company unless 
! p]son :o w\ld o!rwise be requir$ to   
d$uct & )hold tax f su* divid5d "u *apt]
 #c receives a /atem5t 7:i* meets       

requirem5ts simil> to ! requirem5ts (   
subsection 7h77#e77 t ! b5eficial own] (
 su* /ock is n a ,unit$ ,/ates p]son1 & 
7,c7 to any qualifi$ inve/m5t income    
divid5d paid to any p]son )9 a =eign    
c\ntry 7or any su* divid5d paym5t       
address$ to1 or = ! acc\nt (1 p]sons )9 
su* =eign c\ntry7 dur+ any p]iod        
describ$ 9 subsection 7h77#f7 ) respect 
to su* c\ntry4  ,subp>agraph 7,c7 %all n
 apply to any divid5d ) respect to any  
/ock :i* 0 acquir$ on or be=e ! date ( !
 publication ( ! ,secret>y's det]m9ation
 "u subsection 7h77#f74  7#c7 ,qualifi$ 
inve/m5t income divid5d ,= purposes (   
?is p>agraph1 ! t]m qualifi$ inve/m5t   
income divid5d means ! portion ( any    
divid5d di/ribut$ by a cata/rophic risk 
transf] company-- 7,a7 :i* is           
attributable to inve/m5t income f       
qualifi$ inve/m5ts e>n$ dur+ a taxable  
ye> 9 :i* ! cata/rophic risk transf]    
company meets ! requirem5ts ( subsection
 7b7 ( section #hfj,m & subsection 7a7 (
 section #hfj,n1 &  7,b7 :i* is report$ 

by ! company z a qualifi$ inve/m5t      
income divid5d 9 writt5 /atem5ts furni%$
 to its security hold]s4  4  7#b7 ,=eign
 corporations ,section #hha ( su* ,code 
is am5d$ by r$esignat+ subsection 7f7 z 
subsection 7g7 & by ins]t+ aft]         
subsection 7e7 ! foll[+3  7f7 ,exemption
 = qualifi$ inve/m5t income divid5ds (  
cata/rophic risk transf] companies  7#a7
 ,9 g5]al ,except z provid$ 9 p>agraph  
7#b71 no tax %all be impos$ "u p>agraph 
7#a77;,a7 ( subsection 7a7 on any       
qualifi$ inve/m5t income divid5d receiv$
 f a cata/rophic risk transf] company   
:i* meets ! requirem5ts ( section       
#hfj,m7a7 = ! taxable ye> ) respect to  
:i* ! divid5d is paid4  7#b7 ,exceptions
 ,p>agraph 7#a7 %all n apply any divid5d
 describ$ 9 section #hga7n77#b74  7#c7  
,qualifi$ inve/m5t income divid5d ,=    
purposes ( ?is p>agraph1 ! t]m qualifi$ 
inve/m5t income divid5d has ! same mean+
 giv5 su* t]m by section #hga7n77#c74  4
  7c7 ,con=m+ am5dm5t ,! table ( p>ts = 
sub*apt] ,m ( *apt] #a ( ! ,int]nal     

,rev5ue ,code ( #aihf is am5d$ by add+  
at ! end ! foll[+ new item3  ,"p        
,v-,cata/rophic risk transf] companies4 
4  #c4 ,/ate taxation ( re9surance      
premiums ( cata/rophic risk transf]     
companies  7a7 ,prev5tion ( d\ble       
taxation ,a tax+ jurisdiction o!r ?an ! 
,/ate "u ! laws ( :i* a cata/rophic risk
 transf] company is creat$ or organiz$  
%all n impose a premium tax on any      
premiums paid to1 or receiv$ by1 su*    
company on a policy ( re9surance4  7b7  
,coord9ation ( rate ( premium tax ) tax 
on =eign re9sur]s ,if a ,/ate all[$ "u  
subsection 7a7 imposes a premium tax on 
a cata/rophic risk transf] company on   
premiums on a policy ( re9surance1 !    
am\nt ( su* tax %all n exce$ ! tax :i*  
w\ld h be5 impos$ "u section #dcga ( !  
,int]nal ,rev5ue ,code ( #aihf if su*   
premiums 7 paid to a =eign insur] or    
re9sur]4  7c7 ,def9itions ,= purposes ( 
?is section-- 7#a7 ,cata/rophic risk    
transf] company ,! t]m cata/rophic risk 
transf] company has ! mean+ giv5 su* t]m

 by section #hfj,m ( ! ,int]nal ,rev5ue 
,code ( #aihf4  7#b7 ,policy (          
re9surance ,! t]m policy ( re9surance   
has ! mean+ giv5 su* t]m by section     
#dcgb7;f7 ( su* ,code4  7#c7 ,tax+      
jurisdiction ,! t]m tax+ jurisdiction   
means any ( ! sev]al ,/ates1 ! ,di/rict 
( ,columbia1 or any t]ritory or         
possession ( ! ,unit$ ,/ates1 any       
municipality1 city1 c\nty1 or any o!r   
political subdivision )9 ! t]ritorial   
limits ( ! ,unit$ ,/ates ) ! au?ority to
 impose a premium tax on a policy (     
re9surance4