[Congressional Record Volume 147, Number 119 (Thursday, September 13, 2001)]
[House]
[Pages H5605-H5612]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
VICTIMS OF TERRORISM RELIEF ACT OF 2001
Mr. THOMAS. Mr. Speaker, I ask unanimous consent that it be in order
at any time without intervention of any point of order to consider in
the House the bill (H.R. 2884) to amend the Internal Revenue Code of
1986 to provide tax relief for victims of the terrorist attacks against
the United States on September 11, 2001; that the bill be considered as
read for amendment; and that the previous question be considered as
ordered on the bill to final passage without intervening motion except
1 hour of debate equally divided and controlled by the chairman and
ranking minority member, or his designee, and one motion to recommit.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from California?
Mr. McNULTY. Mr. Speaker, reserving the right to object, and I
certainly shall not object, I rise just simply to thank the chairman
for providing this procedure which will provide us with some additional
time on this particular bill. I thank the chairman for that.
Mr. Speaker, I withdraw my reservation of objection.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from California?
There was no objection.
Mr. THOMAS. Mr. Speaker, pursuant to the previous order of the House,
I call up the bill (H.R. 2884) to amend the Internal Revenue Code of
1986 to provide tax relief for victims of the terrorist attacks against
the United States on September 11, 2001, and ask for its immediate
consideration.
The Clerk read the title of the bill.
The text of H.R. 2884 is as follows:
H.R. 2884
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Victims of Terrorism Relief
Act of 2001''.
SEC. 2. INCOME TAXES OF VICTIMS OF TERRORIST ATTACKS.
(a) In General.--Section 692 of the Internal Revenue Code
of 1986 (relating to income taxes of members of Armed Forces
on death) is amended by adding at the end the following new
subsection:
``(d) Certain Individuals Dying as a Result of September
11, 2001, Terrorist Attacks.--
``(1) In general.--In the case of any individual who dies
as a result of wounds or injury incurred as a result of the
terrorist attacks against the United States on September 11,
2001, any tax imposed by this subtitle shall not apply--
``(A) with respect to the taxable year in which falls the
date of such individual's death, and
``(B) with respect to any prior taxable year in the period
beginning with the last taxable year ending before the
taxable year in which the wounds or injury were incurred.
``(2) Exception.--Paragraph (1) shall not apply to an
individual whom the Secretary determines was a perpetrator of
any such terrorist attack.''.
(b) Conforming and Clerical Amendments.--
(1) The heading of section 692 of such Code is amended to
read as follows:
``SEC. 692. INCOME TAXES OF MEMBERS OF ARMED FORCES ON DEATH
AND VICTIMS OF CERTAIN TERRORIST ATTACKS.''.
(2) The item relating to section 692 in the table of
sections for part II of subchapter J of chapter 1 of such
Code is amended to read as follows:
``Sec. 692. Income taxes of members of Armed Forces on death and
victims of certain terrorist attacks.''.
(3) Section 5(b)(1) of such Code is amended by inserting
``and victims of certain terrorist attacks'' after ``on
death''.
(4) Section 6013(f)(2)(B) of such Code is amended by
inserting ``and victims of certain terrorist attacks'' after
``on death''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years ending on or after September 11,
2001.
SEC. 3. RELIEF FROM ADDITIONAL ESTATE TAX.
(a) In General.--Section 2201 of the Internal Revenue Code
of 1986 is amended--
(1) in the first sentence by inserting ``(a) In General.--
'' before ``The additional estate tax'', and
(2) by adding at the end the following:
``(b) Victims of Certain Terrorist Attacks.--The additional
estate tax shall not apply to the transfer of the taxable
estate of any individual who dies as a result of wounds or
injury incurred as a result of the terrorist attacks against
the United States on September 11, 2001. The preceding
sentence shall not apply with respect to any individual whom
the Secretary determines was a perpetrator of any such
terrorist attack.''.
(b) Clerical Amendments.--
(1) The heading of section 2201 of such Code is amended to
read as follows:
``SEC. 2201. COMBAT ZONE-RELATED DEATHS OF MEMBERS OF THE
ARMED FORCES AND DEATHS OF VICTIMS OF CERTAIN
TERRORIST ATTACKS.''.
(2) The item relating to section 2201 in the table of
sections for subchapter C of chapter 11 of such Code is
amended to read as follows:
``Sec. 2201. Combat zone-related deaths of members of the Armed Forces
and deaths of victims of certain terrorist attacks.''.
(c) Effective Date.--The amendments made by this section
shall apply to estates of decedents dying on or after
September 11, 2001.
The SPEAKER pro tempore. Pursuant to the order of the House of today,
the gentleman from California (Mr. Thomas) and the gentleman from New
York (Mr. McNulty) each will control 30 minutes.
The Chair recognizes the gentleman from California (Mr. Thomas).
Mr. THOMAS. Mr. Speaker, I yield myself such time as I may consume.
(Mr. THOMAS asked and was given permission to revise and extend his
remarks.)
Mr. THOMAS. Mr. Speaker, as we continue to mourn the victims and as
the rescue operation turns to recovery, one of the things that I think
the American people perceived fairly early, and that its elected
leaders are beginning to come to consensus on, is that this was an act
of war.
Although we have not formally declared war, I believe the mental
framework of dealing in a wartime situation is one that will serve this
country well, one, in terms of pursuing the perpetrators as combatants
in a war and using military rules of engagement, but, secondly, on the
home front, understanding that what occurred in New York and what
occurred in the Pentagon and, to a lesser extent, in Pennsylvania were
acts of war.
It would be ironic if we did not have this bill in front of us today,
because what this bill basically does is take those provisions of the
Tax Code already on the books which apply to the
[[Page H5606]]
military and combat zones overseas or to private citizens who are
attacked or are the subjects of terrorist attacks overseas and say,
clearly, New York, the Pentagon, the Washington area, were combat
zones, and that, therefore, it seems entirely appropriate that those
provisions of the Tax Code which relieve tax responsibilities for
individuals meeting a profile overseas ought to be brought here to our
shores, and that, not just figuratively but literally in the Tax Code,
the terrorist victims should be considered as though they were in a
combat zone, which they were, and that they were subject to terrorist
attacks, which they were. That basically was the genesis of the bill.
It provides, then, specifically a reduction in the estate tax similar
to what happens to members of the armed services, who are killed while
serving in a combat zone or die as a result of injuries suffered while
serving in a combat zone. And, in addition, there is a Tax Code
provision, as I said, that exempts Federal military and civilian
employees from paying Federal income taxes in the year of their deaths
based upon their condition of dying. That should be extended to the
victims of the September 11 attacks as well.
In addition, there are technical clarifications, which I believe are
very important to make sure that there are no tax consequences for any
awards provided by third entities such as airlines or others. And, in
addition to that, I want to make sure that, as the President declares
these areas disaster areas, that anyone who avails themselves of the
tax consequences by virtue of that designation of a disaster area does
not later find out that they have tax consequences as a result of their
decision to avail themselves of loans to rebuild property, dollar
amounts to bury loved ones, or other financial inducements available by
virtue of the declaration by the President of a disaster area.
It is the least that we can do before we adjourn for this week to put
on record that Members of the House of Representatives, in a bipartisan
way, believe that those victims of those attacks on September 11 were
in a combat zone and should be afforded the privileges and protections
that are in the code for military personnel and for civilian personnel
because, clearly, this is the first, I believe, substantive reflection
of the fact that we are at war.
Therefore, I want to thank my friends on the other side of the aisle
for the kindnesses that they provided to us to move legislation
relatively quickly. While it is as much a gesture and an indication of
our desire to help these people in a small way, it certainly will not
be the last. But people who are now going through the personal
suffering that they are going through should not also have to face the
consequences of an insensitive government not looking at the fact that
what we provide to people overseas, we would not provide to people here
at home. I believe this bill rectifies that.
Mr. Speaker, I reserve the balance of my time.
Mr. McNULTY. Mr. Speaker, I yield myself such time as I may consume.
(Mr. McNULTY asked and was given permission to revise and extend his
remarks.)
Mr. McNULTY. I also point out, Mr. Speaker, that the cosponsor of
this legislation is the gentleman from New York (Mr. Rangel), the
ranking member of the Committee on Ways and Means. We do hope that the
gentleman from New York (Mr. Rangel) will be here before the end of the
day; but until he gets here, I have the honor of representing him on
the Democratic side of the aisle.
Yesterday, Mr. Speaker, I spoke on the House floor about the innocent
victims of these terrorist acts. Today, my heart goes out to those left
behind, especially to my New York City colleagues who spoke so
eloquently on the floor earlier today: Jerry Nadler and Peter King,
Anthony Weiner, Steve Israel, all of the New York City members, and
especially Joe Crowley, whose cousin, a brave firefighter, lost his
life in the line of duty.
And so today we think about all of those who have been left behind,
all of those who have lost friends and loved ones as a result of this
violation of the fundamental principle that life is to give, not to
take.
Mr. Speaker, I strongly support H.R. 2884, the Victims of Terrorism
Relief Act of 2001.
Mr. Speaker, every American remains horrified by the terrorist events
which occurred this week. While there is nothing we can do to bring our
loved ones and friends back, there are some tax law changes that the
Congress can approve today which will help the surviving families. As
the chairman pointed out, this will provide the families of those who
died this week with substantially the same tax benefits as apply when a
member of our Armed Forces dies as a result of injuries sustained in
the line of duty during periods of combat. The President has recognized
that this was a terrorist act and was also an act of war; and,
therefore, the families of the victims should receive these benefits.
The bill will provide an income tax exemption and will substantially
reduce the potential of estate taxes. I would also point out
parenthetically that the affected airlines are making cash payments to
the families of victims, and those payments are tax free under current
law.
Finally, we are encouraged to know that the Department of the
Treasury and the Internal Revenue Service are in the process of
notifying survivors of the terrorist attacks and victims' families of
various interest and penalty waivers and other tax payment and filing
relief.
Mr. Speaker, I strongly support this bill with the hope that our
action can minimize the distraction of tax issues during this very
difficult time for those who are left behind.
Mr. Speaker, I reserve the balance of my time.
Mr. THOMAS. Mr. Speaker, it is my privilege to yield 2 minutes to the
gentleman from Pennsylvania (Mr. English), a member of the Committee on
Ways and Means.
Mr. ENGLISH. Mr. Speaker, I thank the gentleman not only for giving
me the opportunity to speak but also for preparing on short notice this
legislation.
Mr. Speaker, the evil people who perpetrated the acts of terror this
week made no distinction between civilian and military targets and
casualties. Under these circumstances, neither should the Tax Code. As
many have noted on the floor of the House, the United States is clearly
at war; but, Mr. Speaker, this is a new kind of war, one that treats
civilian buildings the same way as previous combatants treated military
targets. In this war, civilian targets are not avoided by our enemies
but are in fact sought out.
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We already have provisions in the Tax Code which recognize the
special risks that our military personnel face in time of war. What
this bill does is extend the same tax treatment to civilian victims of
Tuesday's attacks.
As with military personnel killed in the line of duty, under this
legislation we will exempt all individuals who are killed as a result
of a military or terrorist act from Federal income taxes.
Likewise, we will reduce estate taxes for civilians killed in
Tuesday's attacks, just as we do for military personnel.
Finally, we will exempt from Federal taxation any compensation or
assistance payments victims' families receive from either the airlines
or from the Federal Emergency Management Agency.
Mr. Speaker, this is the right thing to do, and this is the least we
can do at this moment. In the days and weeks ahead, this House will be
called upon to do even more to bind the Nation's wounds, but today we
make a good start with this crucial assistance to our friends and
neighbors whose lives were decimated by Tuesday's attack.
Mr. McNULTY. Mr. Speaker, I yield 3 minutes to my friend, the
gentleman from Michigan (Mr. Levin), a member of the Committee on Ways
and Means.
(Mr. LEVIN asked and was given permission to revise and extend his
remarks.)
Mr. LEVIN. Mr. Speaker, I stand here not in the front in part because
we come here with such heavy hearts and also with humility. Our hearts
are growing heavier by the minute, by the minute. The tragic human face
is coming into clearer and clearer focus. The images of family, of
relatives on TV, are almost too hard for those of us to look at, though
we are not directly involved, having no family member who lost his or
her life.
[[Page H5607]]
We also have a sense of humility. We know that whatever we do here is
just a small step. It is difficult, as a result, to take them because
we realize how inadequate any action of ours can be.
This Committee on Ways and Means that sometimes is said to have such
power, we realize today in this circumstance has very little; but we
are doing whatever we can.
There was an act of war, that was clear; and we need to approach this
in that regard in every respect. So I am glad the chairman of the
committee and my colleagues on the committee and the gentleman from New
York (Mr. McNulty) and the gentleman from New York (Mr. Rangel), who
has been in New York and is here in spirit and soon will be here in
body, we all want to join together to enact this legislation, to simply
make sure that if we can diminish the pain just a bit, that we will do
so; that those who are victims in this act of war, that they will be
treated fully as such.
So I rise in support of this legislation. I urge that we pass it
unanimously; and then we go on to take whatever further steps, I hope
somewhat larger ones, to respond to this human national tragedy.
Mr. THOMAS. Mr. Speaker, it is my privilege to yield such time as he
may consume to the gentleman from Illinois (Mr. Crane), a senior member
of the Committee on Ways and Means.
Mr. CRANE. Mr. Speaker, I rise in strong support of the Victims' Tax
Relief Act and am pleased to be an original cosponsor of this important
legislation.
We have witnessed the most horrendous attack on American soil by a
foreign invader in our Nation's history. The death toll will reach well
beyond the 2,400 brave Americans who were killed at Pearl Harbor. The
victims include not only civilians trapped in the World Trade Center
buildings, but brave firefighters and police officers who gave their
lives so that others might be saved. Likewise, hundreds of soldiers and
civilian employees were killed in our own backyard when the terrorists
crashed a plane into the Pentagon. Finally, we must not forget those on
the four planes that were crashed.
Given the level of tragedy that has occurred during the last 4 days,
we must do all we can to help those affected by these attacks. While we
are unable to relieve the burden shouldered by those who have suffered,
while we cannot resurrect those who are lost, we can and should do
everything in our power as Members of Congress to make sure that their
government is reaching out a hand to help.
I commend my colleague, the gentleman from California (Mr. Thomas),
for his foresight and ability to put this package together in an
expeditious manner; and I look forward to its speedy passage through
this esteemed body.
Mr. McNULTY. Mr. Speaker, I yield 3 minute to my very distinguished
friend, the gentleman from Wisconsin (Mr. Kleczka), a member of the
Committee on Ways and Means.
Mr. KLECZKA. Mr. Speaker, first of all I would like to urge all my
colleagues to give their unanimous approval to this legislation before
us. I would like to thank and recognize the chairman of the committee,
the gentleman from California (Mr. Thomas), for the speed and hard work
he has put into this legislation to bring it to the floor today.
Two days ago, untold numbers of civilians in New York City alone,
with large numbers of our servicemen and women at the Pentagon, were
killed in an act of terrorism against the United States. This bill will
treat all of the victims of this atrocious attack as equals by giving
the surviving families of the civilians who died in the buildings that
were hit, as well as those on board the airplanes, the same tax
treatment as those who perished while serving in our Armed Forces. This
terrorist attack did not distinguish between military and civilian loss
of life, and our tax laws should not either.
The bill consists of four main parts. Currently members of the
military who are killed while serving in combat or who die of injuries
suffered while serving in a combat zone are given a sizable reduction
in their estate tax liability. The bill before us would extend this
same estate tax treatment to people who are killed as a result of
Tuesday's terrorist attack.
Secondly, the law also exempts Federal military and civilian
employees from paying Federal income taxes in the year of their death
if they die as a result of a military or terrorist attack outside the
United States. This measure would extend this relief to individuals who
died in Tuesday's attack.
Thirdly, the bill would clarify that the $25,000 per passenger
payments made by United Airlines to the victims' families will be
exempt from Federal income taxes. Any payments made by American
Airlines would also receive this benefit.
Lastly, the proposal would ensure that any assistance provided by the
Federal Emergency Management Agency is also exempt from Federal income
taxes.
Mr. Speaker, this bill is an important first step in the long road to
recovering from this tragedy, and it is the least we can do at this
time of national grieving. I ask that all my colleagues support this
bill.
Mr. THOMAS. Mr. Speaker, it is my privilege to yield 2 minutes to the
gentlewoman from Florida (Ms. Ros-Lehtinen).
Ms. ROS-LEHTINEN. Mr. Speaker, I thank the chairman for working
through the night to bring this bill to the floor to us so quickly.
Mr. Speaker, Lady Liberty's torch has been called ``the lamp beside
the golden door.'' Despite Tuesday's terrorist attacks, the glistening
hope of that torch is still ours, as Lady Liberty stands, almost
defiant, in New York's harbor, sending a clear message to our enemies
that this Nation will not crumble, will not hide; that every promise,
every opportunity, every right this Republic and Lady Liberty stands
for is still ours.
As former President Ronald Reagan once said, ``Lady Liberty's heart
is full; her torch is still golden, her future bright.
She has arms big enough to comfort and strong enough to support, for
the strength in her arms is the strength of her people.
She will carry on unafraid, unashamed, and unsurpassed.
In this springtime of hope, some lights seem eternal; America's is.''
This Congress must help to ensure that the torch continues to shine
brightly by taking any action deemed necessary to protect America's
people, to preserve the promise of this great Nation, and to
demonstrate our full support for the victims and their families so that
they can try to reclaim and rebuild their lives.
They are America's newest heroes, and we must demonstrate as a Nation
and as a people that we understand their great sacrifice. They paid the
ultimate price, and we are indebted to them. We will always remember.
We will always be proud. We must be prepared, so that we must always be
free.
Mr. McNULTY. Mr. Speaker, I yield 2 minutes to my friend, the
gentleman from Maryland (Mr. Cardin), a member of the Committee on Ways
and Means.
Mr. CARDIN. Mr. Speaker, first let me thank my friend from New York
and my friend from California for bringing this legislation up so
quickly. Every Member of this body will support and should support this
legislation.
On September 11, there was an attack against our country. It was an
act of war. It was unprovoked, and we have lost life; and there have
been many victims of that attack on our country. They lost their lives,
and the families now are suffering. All of us are suffering as a result
of those attacks.
They are heroes, make no mistake about it. We know many individual
episodes of people who lost their lives in trying to save life on
September 11. But each of those who have lost their life as a result of
these terrorist attacks, each are heroes in our Nation.
This legislation is one additional step for us to collectively
recognize that the victims are truly those who have made sacrifices for
freedom in this Nation. I urge all my colleagues to support this
legislation, but, most importantly, to continue to show compassion for
those families that are suffering in all of our communities.
Mr. THOMAS. Mr. Speaker, it is my privilege to yield 2 minutes to the
gentleman from Indiana (Mr. Pence).
Mr. PENCE. Mr. Speaker, I thank the chairman for yielding me time;
but more than that, I commend the gentleman from California (Chairman
Thomas) for not only his swift action
[[Page H5608]]
on behalf of the development of the Victims' Tax Relief Act, but his
compassionate action in this matter; and I rise in strong support of
the Victims' Tax Relief Act as a proud and humble cosponsor.
The President called our present circumstances the first war of the
21st century; and, as the gentleman from California (Chairman Thomas)
has recognized in this proposal, the victims of these tragic events in
New York and in our Nation's Capital are casualties of war.
Accordingly, we in this Chamber, Mr. Speaker, are called to action,
action far afield of Washington, D.C.; but we are also called to mourn
with those who mourn, as though we ourselves were suffering the same
ordeal.
Currently the Tax Code provides an estate tax reduction for members
of the Armed Forces who are killed while serving in combat. This bill
reduces estate tax liability more than half. The proposal before us
today would extend the same estate tax treatment to individuals who
were killed as a result of Tuesday's terrorist attacks, and well we
should.
Similarly, Federal military and civilian employees are exempted from
paying income taxes in the year of their death in the service of their
country, and this measure would extend the same Federal income tax
relief to individuals who died at the hands of terrorists.
{time} 1400
It is imperative that we support the necessary action in this Chamber
by our President in deploying our military. But it is also, in my
humble opinion, important that we do justice, love, kindness, and adopt
this important legislation.
Mr. McNULTY. Mr. Speaker, I yield myself such time as I may consume
to recognize a colleague from my home State of New York now. I spoke in
my opening remarks about the gentleman from New York (Mr. Crowley.) He
knows firsthand what is going on. He just returned to Washington today,
and he knows of the tremendous loss that we have suffered.
The gentleman's cousin, a firefighter hero, John Moran, is missing in
action; we do not know his fate yet. But I am sure my colleagues
remember the visions that we all saw on television over the last couple
of days, when people were running from those buildings, John Moran and
the other firefighters were running toward the buildings, into the
buildings, up the stairs, putting their lives on the line for their
fellow citizens.
Mr. Speaker, it is my honor to yield such time as he may consume to
the gentleman from New York (Mr. Crowley).
Mr. CROWLEY. Mr. Speaker, I want to thank the gentleman from New York
(Mr. McNulty), my colleague, for his kind words and for yielding me
this time.
I want to rise in strong and full support of the Victims' Tax Relief
Act of 2001. This is just, I think, the beginning of what we are going
to have to do to help to provide for many of the victims of this
terrible tragedy. In first blush, looking at it, I would prefer to see
that there is no tax at all for these people, their families included,
for whatever income they make.
Mr. Speaker, this is certainly something that we should all support.
These people are going through incredible, incredible tragedy right
now.
I received word that the HAZMAT unit in New York, which is located in
my district, is right now missing 19 members of that particular unit.
So the fire department alone will have to rebuild, and I do not know if
we will ever know exactly what it will take to do that.
But these families are going to have to rebuild. Whatever little we
can do today in reducing the estate tax by about half of what it is and
exempting the income in the taxable year of their death for military,
Federal, military and civilian employees from paying Federal income tax
I think is the least that we can do in support and solidarity with the
victims of this atrocity.
Mr. THOMAS. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I would tell the gentleman that this legislation is
meant to be inclusive and not exclusive, and the initial response is to
take those provisions already in the Tax Code applying to combat
situations and terrorist attacks overseas, and bringing them home. That
was the very least in the short time that we had that I thought would
be at least a minimum appropriate response. As the gentleman indicated,
we will have additional responses as we move forward.
It is clear that whatever folks think about New York in terms of its
role, importance, significance, et cetera, there is no question that
the City of New York and the surrounding area took it on the chin for
the rest of the United States, and I think we will find that there will
be additional ongoing responses to make sure that not just the victims,
but those who by their own decisions in carrying out heroic acts and
became accidental victims, are going to be taken care of. All of us
want the gentleman to know that we share the concern, not just as
Americans, but as people who have been brought to the scene in no
physical way, but certainly in mental ways, based upon the horrific
scenes that have been broadcast to us.
Mr. CROWLEY. Mr. Speaker, will the gentleman yield?
Mr. THOMAS. I yield to the gentleman from New York.
Mr. CROWLEY. Mr. Speaker, I just want to say that I in no way, shape,
form, or means wanted to come across as though I do not appreciate what
the gentleman is doing, because I certainly do. If my colleagues will
please forgive me, most of me is back in New York right now and only
about half of me is here, so I appreciate the words of the chairman and
I look forward to working with the gentleman.
Mr. THOMAS. Mr. Speaker, I thank the gentleman. Today is today and
tomorrow is tomorrow, and we will move forward.
Mr. Speaker, it is my privilege to yield 2 minutes to the gentleman
from Wisconsin (Mr. Ryan), a member of the committee.
Mr. RYAN of Wisconsin. Mr. Speaker, I thank the gentleman for
yielding me this time.
This is a quick response and an appropriate response. What we want to
make sure happens is that for those victims of this terrorist act, they
are afforded the same kinds of benefits in the Tax Code that victims of
terrorism abroad, in the military or civilian, are entitled to.
We want to make sure that if any of the benefits that are being given
through an airline, through FEMA, that at the end of the year, their
family members are not hit with some kind of unexpected tax bill.
We want to make sure that the victims have an estate that is not
taxed to the government, but that can go to their remaining loved ones,
because we know that the people who experienced this tragedy did not
have any estate planning, did not have an ability to set their affairs
in order. This came as a surprise.
We want to make sure that with respect to the Federal Tax Code, that
they are given any entitlement and ability to be treated just like a
fallen soldier in battle abroad or a civilian abroad.
I thank the gentleman from California (Mr. Thomas), the chairman of
the Committee on Ways and Means, for bringing this together on such
short notice. I think it is very appropriate. I think we all know that
this is only the beginning of many pieces of legislation that we are
going to have to pass in this body, whether it be to equip FEMA with
resources for rescue missions or the military with the resources they
need.
I think also it is going to have to be a work in progress of this
committee to do what we can to assure that our economy continues to
grow and that the American spirit, not only in patriotism but also in
the awesome economy that we have continues on, so that we can continue
to fuel what we need in this country from a patriotic standpoint, from
an economic standpoint, from a moral standpoint. This is the beginning
of those kinds of works that we are about to pass in this Congress. I
thank the chairman and the ranking member for what they have been
doing.
Mr. McNULTY. Mr. Speaker, I reserve the balance of my time.
Mr. THOMAS. Mr. Speaker, it is my privilege to yield 2 minutes to the
gentleman from New York (Mr. Houghton), a member of the Committee on
Ways and Means.
Mr. HOUGHTON. Mr. Speaker, I thank the gentleman from California
[[Page H5609]]
(Mr. Thomas) for his chairmanship here and the gentleman from New York
(Mr. McNulty). I really appreciate the leadership of the gentleman from
California. Many times we do not realize how important leadership is
until there is a crisis and certainly the gentleman from California has
come up and hit the mark so well.
I am going to defer to my colleagues who have explained the specific
tax provision of this bill. We all have our own individual stories,
particularly those of us who live in New York. I think God reached down
and grabbed my son by the hand. He was not in his 60th floor office in
number 1 tower in the World Trade Center when the bomb went off. But
virtually all of his associates up there were killed, and so we really
identify and understand and sympathize with the people in those
families that had this terrible disaster.
So the important point here is that the victims of terrorism are the
victims of an undeclared war, and that is, pure and simple, what it is.
This bill simply recognizes that reality. The IRS and Treasury are
waiving interest and penalty provisions for the families affected by
Tuesday's outrage, and there is so much more that needs to be done, but
this is an important step.
Mr. McNULTY. Mr. Speaker, I yield myself such time as I may consume.
I have no further requests for time at this point, Mr. Speaker, and I
do want to point out that most of my colleagues from New York are
engaged right now in a meeting about the emergency supplemental
appropriations bill and that is why they are not on the floor. I would
ask the chairman of the Committee on Ways and Means if he has any
further requests for time.
Mr. THOMAS. Mr. Speaker, I yield myself such time as I may consume.
The gentleman from New York (Mr. McNulty) is correct. There are a
number of activities going on. There is a supplemental that is being
put together. A number of the Members from New York are involved in
that. There are briefings going on at the Pentagon. There are a number
of people who would have wished to have taken time on this measure. In
a very short time, we have produced more than a hundred and a half
cosponsors on this measure, and the Members who are not here speaking
on the bill in no way indicates their feelings about the bill, and I
believe it is entirely appropriate that those Members who were able to
make it have had an ability to speak.
General Leave
Mr. THOMAS. Mr. Speaker, I ask unanimous consent that all Members may
have 5 legislative days within which to revise and extend their remarks
on H.R. 2884, the bill presently under consideration.
The SPEAKER pro tempore (Mr. Miller of Florida). Is there objection
to the request of the gentleman from California?
There was no objection.
Mr. THOMAS. Mr. Speaker, I ask unanimous consent that a document
prepared by the Joint Committee on Taxation staff in regard to this
bill just passed be placed at the appropriate place in the Record.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from California?
There was no objection.
Technical Explanation of the Victims of Terrorism Relief Act of 2001
(Prepared by the Staff of the Joint Committee on Taxation)
introduction
This document, prepared by the staff of the Joint Committee
on Taxation, contains a technical explanation of the Victims
of Terrorism Relief Act of 2001, scheduled for consideration
by the U.S. House of Representatives on September 13, 2001.
I. PRESENT LAW
Exemption from tax upon death in a combat zone or as a result
of terrorist action
An individual in active service as a member of the Armed
Forces who dies while serving in a combat zone (or as a
result of wounds, disease, or injury received while serving
in a combat zone) is not subject to income tax for the year
of death (as well as for any prior taxable year ending on or
after the first day the individual served in the combat zone)
(sec. 692). Special computational rules apply in the case of
joint returns. In addition, military and civilian employees
of the United States are entitled to this exemption from
income taxes if they die as a result of wounds or injury
which was incurred outside the United States in terrorist or
military action. This exemption is available for the year of
death and for prior taxable years beginning with the taxable
year prior to the taxable year in which the wounds or injury
were incurred. Accordingly, if someone is injured and dies in
the same taxable year, this exemption from income tax is
available for the taxable year of death as well as the prior
taxable year.
The Code also provides a reduction in Federal estate taxes
for taxable estates of United States citizens or residents
who are killed in action which serving in a combat zone (as
defined in section 112(c)) as active members of the Armed
Forces (see. 2201). This provision also applies to service
members who die as a result of wounds, disease, or injury
suffered while serving in the line of duty in a combat zone
by reason of a hazard to which the service member was
subjected as an incident of such service.
In general, the effect of section 2201 is to replace the
Federal estate tax that would otherwise be imposed with a
Federal estate tax equal to 125% of the maximum state death
tax credit determined under section 2011(b). Credits against
the tax, including the unified credit of section 2010 and the
state death tax credit of section 2011, then apply to reduce
(or eliminate) the amount of the estate tax payable.
Specifically, the reduction in Federal estate taxes under
section 2201 is equal in amount to the ``additional estate
tax,'' as defined in section 2011(d), with respect to the
estates of decedents dying before January 1, 2005. Section
2011(d) provides in relevant part that the additional estate
tax shall be the difference between the Federal estate tax
imposed by section 2001 and 125% of the maximum state death
tax credit determined under section 2011(b). With respect to
the estates of decedents dying after December 31, 2004,
section 2201 provides that the additional estate tax shall be
the difference between the Federal tax imposed by section
2001 and 125% of the maximum state death tax credit
determined under section 2011(b), as in effect prior to its
repeal by the Economic Growth and Tax Relief Reconciliation
Act of 2001.
General time limits for filing tax returns
Present law provides that individuals generally must file
their Federal income tax returns by April 15 of the year
following the close of a taxable year (sec. 6072). Present
law also provides that the Secretary may grant reasonable
extensions of time for filing such returns (sec. 6081).
Treasury regulations provide an additional automatic two-
month extension (until June 15 for calendar-year individuals)
for United States citizens and residents in military or naval
service on duty on April 15 of the following year (the
otherwise applicable due date of the return) outside the
United States (Treas. Reg. sec. 1.6081-5(a)(6)). No action is
necessary to apply for this extension, but taxpayers must
indicate on their returns (when filed) that they are claiming
this extension. Unlike most extensions of time to file, this
extension applies to both filing returns and paying the tax
due.
Treasury regulations also provide, upon application on the
proper form, an automatic four-month extension (until August
15 for calendar-year individuals) for any individual timely
filing that form and paying the amount of tax estimated to be
due (Treas. Reg. sec. 1.6081-4).
In general, individuals must make quarterly estimated tax
payments by April 15, June 15, September 15, and January 15
of the following taxable year. Wage withholding is considered
to be a payment of estimated taxes.
Suspension of time periods
In general, present law suspends the period of time for
performing various acts under the Internal Revenue Code, such
as filing tax returns, paying taxes, or filing a claim for
credit or refund of tax, for any taxpayer determined by the
Secretary to be affected by a Presidentially declared
disaster (sec. 7508A).
The suspension of time applies to the following acts:
(1) Filing any return of income, estate, or gift tax
(except employment and withholding taxes);
(2) Payment of any income, estate, or gift tax (except
employment and withholding taxes);
(3) Filing a petition with the Tax Court for
redetermination of a deficiency, or for review of a decision
rendered by the Tax Court;
(4) Allowance of a credit or refund of any tax;
(5) Filing a claim for credit or refund of any tax;
(6) Bringing suit upon any such claim for credit or refund;
(7) Assessment of any tax;
(8) Giving or making any notice or demand for the payment
of any tax, or with respect to any liability to the United
States in respect of any tax;
(9) Collection of the amount of any liability in respect of
any tax;
(10) Bringing suit by the United States in respect of any
liability in respect of any tax; and
(11) Any other act required or permitted under the internal
revenue laws specified in regulations prescribed under
section 7508 by the Secretary of the Treasury.
Individuals may, if they choose, perform any of these acts
during the period of suspension.
II. DESCRIPTION OF THE BILL
The bill treats individuals who die as a result of wounds
or injury which were incurred as a result of the terrorist
attacks that occurred on September 11, 2001, in the same
manner as if: (1) they were a military or civilian employee
of the United States dying
[[Page H5610]]
as a result of terrorist or military activity outside the
United States for purposes of section 692(c) of the Internal
Revenue Code, and (2) they were a member of the Armed Forces
of the United States in active service killed in action while
serving in a combat zone or as a result of wounds, disease,
or injury suffered while serving in a combat zone for
purposes of section 2201 of the Code. Consequently, these
individuals (whether killed on the four airplanes or on the
ground, whether as victims or in rescue or recovery
operations) are eligible for the exemption from income tax
and the reduction in estate tax provided by these two
provisions. Perpetrators of these terrorist attacks are not
eligible for these special rules. The determination as to
whether an individual is a perpetrator is to be made by the
Secretary of the Treasury (or the Secretary's delegate), in
consultation with appropriate authorities. Individuals who
are wounded or injured as a result of the terrorist attack
that occurred on September 11, 2001, and who die as a result
of their wounds or injury in a later taxable year are
eligible for the exemption from income taxes for all the
taxable years beginning with the year prior to the year of
the wounds or injury and ending with the year of death. The
provision amending section 692 is effective for taxable years
ending on or after September 11, 2001. The provision amending
section 2201 applies to estates of decedents dying on or
after September 11, 2001.
In the past, the IRS has exempted from income certain
disaster payments made by government agencies that provide
for promotion of general welfare, such as certain disaster
payments made by the Federal Emergency Management Agency
(FEMA). The Congress expects that the IRS will consistently
apply this policy in this situation and in the future.
Some have inquired as to the tax treatment of initial
payments made by the airlines to the families of victims on
the four hijacked airplanes. These payments are advances to
the families of the victims to help meet their immediate
needs. Section 104 of the Internal Revenue Code excludes from
income damages received on account of personal physical
injury. Accordingly, no additional statutory provision is
necessary to exclude such payments.
Mr. McNULTY. Mr. Speaker, I yield myself such time as I may consume.
Again, I thank the chairman, and as the chairman pointed out, this is
one small gesture of support for the survivors of the victims of this
terrible, terrible tragedy, and our hearts continue to go out to all
the victims, their families, all of those affected, and I especially
draw attention again to the public safety personnel, the firefighters,
the police officers, the doctors, the nurses, the ambulance attendants
and drivers and everyone who is helping out in this situation.
We should always remember when we get up in the morning to be
grateful for them because they are willing to put their lives on the
line 365 days a year for us and for our families. In New York and in
Washington this week we saw the tremendous price that many of them
paid.
We hope and pray that the gentleman from New York's (Mr. Crowley)
cousin, Jack Moran, can be found alive.
I also would reiterate what the President has said over the past
couple of days, that we are united in this country in our resolve to
track down the cowards who committed these acts. I remind people again
that terrorists by definition are cowards. They cannot get what they
want by the power of persuasion, and therefore, they resort to
attacking and killing innocent men, women and children.
I am particularly grateful for the part of the President's statement
the other night where he indicated that we will make no distinction
between the terrorists and those who harbor them.
So on behalf of the gentleman from New York (Mr. Rangel), who could
not be here because he is still up in New York helping his
constituents, and on behalf of all of the victims in New York and in
Washington and Virginia and Pennsylvania, I say on his behalf, this is
a united country and the forces of evil shall not prevail.
Mr. Speaker, I yield back the balance of my time.
Mr. THOMAS. Mr. Speaker, I yield myself such time as I may consume.
I thank the gentleman from New York (Mr. McNulty) for his statement,
and I do thank our colleagues on the other side of the aisle, beginning
with the gentleman from New York (Mr. Rangel) who was in the epicenter,
the ranking member, and all of the other Members who are currently
carrying out their directed activities in assistance, and what we are
seeing is a societal response to a societal attack. It is all for one
and one for all, and it is a curious aspect of America's nature that it
does sometimes take these kinds of very tragic events to get us to set
aside some of the secondary issues that preoccupy us.
This is not just America's fight. This is the civilized world's
fight. As we have done in a number of other engagements involved with
anti-democratic forces around the world in previous generations, we are
once again engaged in a struggle to protect freedom. It is not against
any particular individuals. It is not against any particular groups. It
is not against any particular religion. It is not against any
particular countries.
It is against all of those who would harbor individuals, who believe
that barbaric acts against individuals somehow further their interests
and causes. To do nothing is to reinforce that belief.
One of the reasons that I thought it would be appropriate to
structure this immediate response in taking what we already provide to
combatants overseas and to victims of terror overseas, in bringing it
home, is to underscore the message that a number of us have repeated,
and that is, we are at war.
{time} 1415
It is as though we have declared war, and that our society needs to
respond on a wartime footing. The benefits that folks get in combat
zones are now available through this legislation here at home. Make no
mistake about it, we are at war. When we are at war, it requires
societal mobilization.
It means that, yes, in terms of a moral resolve, which this Nation
has clearly indicated; yes, in terms of a military resolve, which we
will be moving additional legislation to clearly indicate that we are
ready for; but probably first and foremost, a mental wartime condition
is that this society will do what is necessary to win this fight we did
not choose.
It means, first and foremost, that the society needs to be strong,
but it needs to be strong in a number of ways. One of the ways we need
to be strong is economic. We will continue to examine measures or
options available to us to make us strong.
The infrastructure of the financial structure of this country was
struck a significant blow, given the role and the importance of lower
Manhattan to the financial institutions of this country. They were
struck a significant blow, but clearly, not a mortal blow. We will
overcome this, as we have overcome other adversities.
However, I believe it is appropriate and incumbent upon the people's
government to examine ways in which we can assist our overcoming these
difficulties, not just in terms of a moral position, not just in terms
of a victims' tax provision, but also a societal response to make sure
that the economy is strong.
We will pursue the combatants. We will be strong. We will show
through our resolve that this kind of effort, as in the past, will be
unsuccessful.
So for a very, very small portion of the outpouring of support this
bill is offered today, both in terms of its timely context and also in
terms of its content, it is the beginning to let people know that if we
are at war we will respond, not just in terms of a combatant response
for the military engagement of any group, or indeed, any country that
has been a part of the enablement that allowed that terrorist act to
occur; but that this society is ready to face whatever obstructions
necessary, and we will overcome them, so that people who dedicate
themselves to the kind of democratic and libertarian philosophy of
allowing people to choose the way in which they wish to live in peace
and freedom will be reinforced. This is a very small token in the
ongoing gesture of this society.
Ms. JACKSON-LEE of Texas. Mr. Speaker, I rise in support of H.R.
2884. This legislation will absolve the taxes of those public service
officers who lost their lives in the line of duty on September 11,
2001.
If an armed services officer loses his life in the line of duty, that
individual is not required to pay estate taxes or income taxes for the
year in which they expired. This is central to the way we proceed in
times of war, for this procedure recognizes the reality that soldiers
are also citizens with families, debts, and obligations.
The events of September 11, 2001 have complicated this policy. The
recent acts that occurred on American soil certainly constitute an act
of war against this nation. Over 200 uniformed public service personnel
lost their
[[Page H5611]]
lives in the line of duty on this day. Because this act of war did not
involve armed services personnel, the brave men and women who responded
without thought of their own safety will not receive this exemption
from the Federal government.
H.R. 2884 will forgive the tax burdens of the brave men and women we
now know to be both civil servants and soldiers. This country moved
into a new era as a result of the horrors of September 11, 2001. So too
must the rule of law conform to the pragmatic realities of facing a
headless enemy on our home soil. We honor these patriots by enacting
this legislation to ease the financial burdens on the loved ones and
families they leave behind. This legislation recognizes that for now
and evermore, the service personnel who died in the line of duty here,
on American soil, have paid their debts to this nation.
Though the rules of war have changed forever, the commitment this
country demonstrates to those who serve and protect its citizens must
be unbroken. H.R. 2884 guarantees this will not happen, and I am proud
to give this legislation my full support.
Mr. LARSON of Connecticut. Mr. Speaker, I rise today as an original
cosponsor of H.R. 2884, the Victims' Tax Relief Act, and to ask my
colleagues to show their support of this legislation which will provide
comfort and economic relief to the families of the victims of the Acts
of War perpetrated in New York, at the Pentagon, and in Pennsylvania on
Tuesday, September 11, 2001.
It has been two days since terrorists robbed America of its sense of
security and freedom. We, as Americans, know that our lives will never
be the same. We will never walk down our streets with the same feeling
of freedom and safety that we have enjoyed for so long. However for
many of us, we will get through this with comfort of knowing that our
families are intact. We will mourn and we will empathize, but we will
not have to suffer the tragedy of losing a loved one. But the families
of the thousands of victims of these heinous acts are suffering and
they will continue to suffer for years to come. They will have to have
to answer the questions of their children; they will have to put the
broken pieces of their lives back together. What is worse is that these
families will have to worry how to put food on the table, how to pay
their mortgages or how to pay for their children to go college.
According to my local newspaper, the Hartford Courant, seven
individuals from Connecticut have been identified as victims of this
act of terrorism. Seven families have been ripped apart. In the days
and weeks to come that number will only increase. The grief and sorrow
that these families will suffer through is enough. The innocent victims
of the terrorist attacks on Tuesday have paid the ultimate price
already; their families should not have to pay anymore. The Victims Tax
Relief Act will allow families to direct their energies to rebuilding,
and alleviate some of their financial burdens.
The Victims' Tax Relief Act will exempt individuals killed in the
heinous attacks of September 11, 2001, or who die as a result of
injuries suffered in those attacks, from paying federal income tax in
the year of their death. Also, it would reduce the estate tax liability
for these victims. Presently, these exemptions and reductions are
reserved for members of the Armed Services who are killed in a combat
zone. In addition, this bill would exempt the payments made to families
of the 266 passengers by United Airlines and American Airlines from
Federal income taxes. And it would ensure that Federal Emergency Relief
payments are exempt from Federal income tax. Although these victims
were not serving in the Armed Services, they were in the combat zone
and because of this, there is no reason why we should treat them any
differently than those who have formally enlisted into our military.
The actions of this week were acts of war, and the victims of these
acts of war should be treated as casualties of war.
Mr. Speaker, no American will ever forget September 11, 2001. We will
never forget the horrible images that we have seen. We will never
forget the heroism and dedication displayed by the many firefighters,
police officers, and all other emergency workers fighting to save the
lives of our fellow Americans. We would be performing a disservice to
the families of these heroes and the innocent victims of these cowardly
attacks by adding economic hardship to their incredible loss. This bill
is the very least we can do for the mothers, daughters, sons, husbands
and wives of these victims who have suffered and who will continue to
suffer in the days to come. Therefore, I urge my colleagues to join me
in voting in favor of H.R. 2884.
Mr. GILMAN. Mr. Speaker, I rise in strong support of this legislation
to provide a tax relief package for the victims of Tuesday's terrorist
attacks in New York and Washington DC. I urge my colleagues to join in
supporting this appropriate and necessary measure.
Mr. Speaker, on Tuesday our Nation suffered an unprecedented
terrorist attack in both the scope of its depravity, and in the
magnitude of the resulting destruction of both life and property. At
this time, the full extent of the number of casualties from the attack
on the World Trade Center in New York remains unknown. Not only did
thousands of people perish in the fires and subsequent collapse of the
twin towers at the Trade Center, but hundreds of brave New York
firefighters and police officers lost their lives in attempting to
rescue those trapped in the towers.
There was a similar simultaneous disaster at the Pentagon where the
fire resulting from the attacking airplane burned for more than 24
hours. The process of retrieving the dead has only just started at the
Pentagon site.
Mr. Speaker, we in the Congress will never be able to fully
recompense the loss suffered by the thousands of families of those who
perished. Moreover, we can never hope to repay the heroic sacrifices
made by those brave rescue workers who selflessly laid down their lives
in an attempt to rescue the victims.
We do, however, have the ability to offer a small measure of our
appreciation to ensure that these families are not burdened by any
unexpected liability when tax-filing season comes around next spring.
If we do nothing, the cruel irony is that many families will face an
unexpected and unpleasant burden next April.
This legislation extends the estate tax reduction provisions
established for members of the Armed Forces who are killed or die from
injuries received while serving in a combat zone to those individuals
who were killed in Tuesday's terrorist attack or who die from injuries
suffered in that attack.
It also extends to the victims of Tuesday's attack the benefits
already in place for federal military and civilian employees that
exempts them from paying income taxes in the year of their death if
they die from a terrorist attack.
Finally, this bill exempts any FEMA assistance payments, and
passenger payments from United and possibly American Airlines from
federal income taxes.
Mr. Speaker, in light of the cost to human life from Tuesday's
terrorist attack, and in the noble and selfless sacrifice made by
hundreds of New York's finest police and firefighters, this bill
represents a necessary and appropriate course of action by this
Congress. Accordingly, I strongly urge its adoption.
Mr. FORBES. Mr. Speaker, I rise in strong support of this important
and compassionate legislation, the Victims' Tax Relief Package.
In this time of great anger and sadness, there is an overwhelming
feeling of helplessness as we watch the constant news reports from the
sites of the wreckage. We yearn for something we can do to comfort and
aid the families of those who have lost loved ones to this horrible
violence. We yearn for something we can do to provide solace and
support for those thousands of people who still await word on the fate
of their family and friends still lost in the rubble in New York City
or Western Pennsylvania or Arlington, Virginia.
Eventually, our nation will find and punish those who committed these
heinous acts. But, until then, passage of this relief package is the
least that we can do for these survivors.
The bill will exempt from taxation the payments that these families
receive from airlines to compensate them for their grievous loss. It
will exempt from taxation any assistance payments that victims of these
tragic events receive from the Federal Emergency Management Agency
(FEMA). It will also give the families of our military and civilian
employees who lost their lives as a result of Tuesday's attack a
reprieve from their federal income tax and estate tax this year.
Again, Mr. Speaker, this is the very least that we can provide these
families who have suffered the full brunt of the evil that was
perpetrated against our country. And, I hope it is
[[Page H5612]]
but one of the first steps we take as a Congress. I am proud to stand
with my colleagues and with my President in this effort, and I urge us
to make passage of this bill a unanimous declaration of our support.
Mr. THOMAS. Mr. Speaker, I yield back the balance of my time.
The SPEAKER pro tempore (Mr. Miller of Florida). Pursuant to the
order of the House of today, the bill is considered as read for
amendment and the previous question is ordered.
The question is on the engrossment and third reading of the bill.
The bill was ordered to be engrossed and read a third time, and was
read the third time.
The SPEAKER pro tempore. The question is on the passage of the bill.
The question was taken; and the Speaker pro tempore announced that
the ayes appeared to have it.
Mr. THOMAS. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further
proceedings on this question are postponed.
____________________