Bills · HR 3512
IN COMMITTEE· 119TH CONGRESS
House BillHR 3512Taxation
Tackling Predatory Litigation Funding Act
INTRO MAY 20· LAST ACTION MAY 20
READING
8MIN
COSPONSORS
37
READER REACTIONS0 TOTAL
NO VOTES YET · BE THE FIRST
- Introduced only
LEGISLATIVE PROGRESS
STEP 2 / 8Introduced
In Committee
Reported
Passed House
Passed Senate
Conference
To President
Became Law
WHAT THE BILL DOES
AI-writtenThis bill matters because it would fundamentally change the financial landscape for third-party litigation funding. If enacted, it would introduce a significant new cost for entities that invest in lawsuits, potentially reducing the profitability of such ventures. This could lead to a shift in how lawsuits are funded, potentially making it harder or more expensive for plaintiffs without significant personal resources to pursue legal action.
Voters should care because the practice of litigation funding has become a notable part of the legal system, with debates ongoing about its impact on frivolous lawsuits, access to justice, and the overall fairness of the legal process. If this bill becomes law, it could either curb what some view as "predatory" practices by making them less financially attractive, or it could be seen as an impediment to justice by limiting access to funding for legitimate claims that might otherwise not be pursued. If it doesn't become law, the current tax treatment of litigation funding profits will continue without this additional levy.
KEY PROVISIONS
4AI-extractedPROVISION 01
Establishes a new federal tax on the income received by third-party entities that provide financing for civil lawsuits.
This creates a new revenue stream for the federal government and specifically targets profits from litigation funding.
PROVISION 02
Sets the tax rate at the highest individual income tax rate plus an additional 3.8 percentage points on 'qualified litigation proceeds.'
This defines the specific financial burden on litigation funders and makes the tax rate notably high.
PROVISION 03
Defines 'litigation financing agreement' and specifies exceptions, such as for small funding amounts (under $10,000) or for loans with principal and reasonable interest repayment.
This clarifies which types of agreements are subject to the tax and which are exempt, differentiating between commercial investments and standard loans.
PROVISION 04
Requires the 'applicable person' (e.g., a named party or law firm) paying proceeds to a funder to withhold 50% of the tax from those payments.
This establishes a mechanism for collecting the tax directly at the source of the payment to the funder, similar to income tax withholding.
SPONSORSHIP
1 + 37
R· Oklahoma
YRS IN OFFICE
7
BILLS LED
18
COSPONSOR BREAKDOWNBIPARTISAN · 0%
DEM 0 REP 37 IND 0
ACTION TIMELINE
2 EVENTSMAY 20
Introduced in House
MAY 20
Referred to the House Committee on Ways and Means.
BILL INFO
TypeHouse Bill
NumberHR 3512
Congress119th
StatusIn Committee
IntroducedMay 20, 2025
Last actionMay 20, 2025
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IN COMMITTEE· 119TH CONGRESS · WAYS AND MEANS COMMITTEE · INTRODUCED MAY 20, 2025
House BillHR 3512Taxation
Tackling Predatory Litigation Funding Act
INTRODUCED MAY 20, 2025· LAST ACTION MAY 20, 2025
PASSAGE CHANCES
—%
READING
8 min
COSPONSORS
37
COMPLEXITY
Moderate
