Congressional Record, Volume 147 Issue 122 (Wednesday, September 19, 2001)

[Congressional Record Volume 147, Number 122 (Wednesday, September 19, 2001)]
[Senate]
[Pages S9506-S9513]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

By Mr. ALLEN (for himself, Mr. Warner, Mr. Campbell, and Mr.
Craig):
S. 1433. A bill 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; to the Committee on Finance.
Mr. ALLEN. Mr. President, I rise today to talk about a bill I
introduced this morning. The first cosponsor of this measure is my good
friend and colleague, Senator John Warner of Virginia. The bill is the
Victims of Terrorism Relief Act of 2001, which would modify current tax
policy to provide needed relief and compassion to the victims of the
terrorist attacks that occurred on September 11, 2001.
As you well know--and all Americans know--on September 11, 2001, the
world was stunned by what may prove to be the most vile, most
horrifying act of hate and terror against a nation's people.
While many questions will remain unanswered in the weeks and months
to come, what is immediately clear is that the conduct of war, as
previously waged by the enemies of the United States, has been suddenly
altered. That conduct of war is so different than what we ever imagined
as a civilized Nation. This new war does not differentiate between a
military and a civilian target. The enemies of liberty and democracy do
not distinguish between a trained soldier and an unarmed child. The
Federal Government, and the Congress, have previously recognized, and
rightfully so, the special circumstances of some of our citizens who
voluntarily serve their country in potentially dangerous regions
outside of the United States.
Current law provides a reduction in the death tax liability of the
estates of members of the Armed Forces who are killed while serving in
a combat zone or die as a result of injuries suffered while serving in
a combat zone.
In addition, current law provides an exemption from the Federal
income tax, on the income earned in the year of death, by Federal
military and civilian employees who die during, or as a result of,
injuries suffered in a military or terrorist attack outside of the
United States.
These brave and honorable individuals put their lives on the line for
our country. It is only right that we recognize their extraordinary
dedication and their sacrifice.
Unfortunately, the advent of a new type of warfare means many
provisions in our Tax Code, which were designed to provide tax relief
to Federal military and civilian employees killed in service to their
country, are now inadequate in the face of new threats. These benefits
do not extend such relief to civilians who may be likewise killed in
enemy attacks now indiscriminately aimed at civilian targets, as well
as military installations.
As we recognize that our world and the rules of war, as the
terrorists use them, have changed, we, too, must change the tax
benefits of those citizens and their families who are adversely
affected.
To address these inadequacies in the current Tax Code, I introduced
the Victims of Terrorism Tax Relief Act of 2001 which would extend and
expand current law benefits to any individual who died as a result of
the terrorist attacks occurring on September 11, 2001.
Specifically, my legislation eliminates all Federal death taxes on
the estates of any individual killed during, or as a result of injuries
derived from, the September 11, 2001 terrorist attacks.
It exempts from Federal income tax, in the year of death, any income
earned by any individual killed during, or who died as a result of
injuries resulting from, the September 11, 2001, terrorist attacks.
It ensures that all our citizens--law enforcement, firefighters,
rescue and relief workers, nurses, doctors, anyone--are recognized for
their heroism and their sacrifice.
On September 13, 2001, the House of Representatives unanimously
passed H.R. 2884, demonstrating overwhelming bipartisan support for
extending current law tax benefits to civilian victims of the September
11, 2001, terrorist attacks. While I do not believe the legislation
went far enough, in that it does not provide for full relief from
Federal death taxes, it takes a very strong stand, sending a message of
unity from Washington.
This is a recognition that all of those who lost their lives, in a
violent act of war on the United States, on September 11, 2001, whether
they are military personnel, civilian personnel, rescue workers,
firefighters, police, nurses, citizens trying to help, citizens in
their offices, children taking a plane trip, passengers on a plane,
pilots of planes, all of these individuals have left us a legacy.
Indeed, it is an enduring legacy of purpose, a legacy of compassion, a
love of liberty, and a quest for justice.

We must honor all of those who lost their lives in this vile act of
war on the United States and never forget; for their memory has truly
unified a very diverse nation and has made it an even stronger and more
respectful nation. We will honor and always remember them.
The U.S. Senate must rise to the occasion and stand in solidarity
with the House of Representatives. The Senate must promptly pass this
important legislation. It matters to those victims and their families.
I have personally talked to many, too many, of those family members--
brothers, children, and wives--who have lost loved ones because of this
dastardly terrorist attack. They are in a time of great grief. That
grief will continue until the day they pass from this earth and reunite
with their loved ones in heaven.
In this new war against the United States, the enemy is making all
Americans, whether they are military or civilian, young or old,
parents, children or spouses, targets for their attacks.
In this effort, the Federal Government must adapt its death benefits
to take into consideration this sad truth: that the traditional line
between combatants and noncombatants is not always respected. I have
told those folks that their husband or their brother or their father is
a hero and that they were killed because they were here in America.
These grieving families need our assistance as much as do the families
of our brave military personnel.
What they do not need in this time of mourning is the added worry of
filling out tax forms. It is going to be hard enough for them to get by
emotionally, much less financially.
For the Senate to act promptly on this legislation, would be to send
a positive, reassuring message to these families: you are not going to
have to worry about any of these tax forms, or how to afford new taxes
in a time of grief--you are not alone in this. We must let them know we
appreciate them as the heroes they are. We will always remember them,
their acts of martyrdom and heroism unifying this Nation like I have
never seen it unified in all of our history.
I hope my Senate colleagues, as they all start coming back after the
holy days, will rise in applause, and help to ensure that our tax
benefit laws reflect the realities of the new war against civilians,
allowing them the same sort of benefits that we provide for our brave
military personnel.

[[Page S9507]]

I ask unanimous consent that the text of my legislation introduced
earlier in the day be printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 1433

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 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.--No tax imposed
under this subtitle shall 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.
______

By Mr. SPECTER (for himself, Mr. Bond, Mr. Bunning, Mrs. Boxer,
Mr. Burns, Ms. Cantwell, Mr. Chafee, Mrs. Clinton, Mr. Ensign,
Mr. Harkin, Mr. Helms, Mr. Kohl, Ms. Landrieu, Mr. Nelson of
Florida, Mr. Schumer, Ms. Collins, Mr. Crapo, Mr. Dorgan, Mr.
Miller, Mr. Dayton, Mr. Nelson of Nebraska, Mr. Corzine, Mr.
McCain, Mr. Wellstone, Ms. Snowe, Mrs. Carnahan, Mrs.
Feinstein, and Mr. Conrad):
S. 1434. A bill to authorize the President to award posthumously the
Congressional Gold Medal to the passengers and crew of Untied Airlines
flight 93 in the aftermath of the terrorist attack on the United States
on September 11, 2001; to the Committee on Banking, Housing, and Urban
Affairs.
Mr. SPECTER. Madam President, today I have sought recognition to
introduce a bill to authorize the President to award posthumously the
Congressional Gold Medal to the passengers and crew of United Airlines
Flight 93 in the aftermath of the terrorist attack on the United States
on September 11, 2001. The bill which I am introducing would authorize
the posthumous award of a Congressional Gold Medal to each of the crew
and passengers of United Airlines Flight 93, which took off from
Newark, New Jersey, changed course over Ohio, and crashed in
Shanksville, PA, which is located in Somerset County.
On Friday, after the Senate had passed H.R. 2888, a resolution
authorizing the use of force and $40 billion for additional disaster
assistance, both of which have been requested by the President, Senator
Santorum and I flew by helicopter to Shanksville, PA, Somerset County,
which is in southwestern Pennsylvania. There, we took a look at the
crash scene, participated in a prayer service, and talked to the
representatives of the FBI and the National Transportation Safety
Board, as well as our constituents and friends in the area.
At that time, we found absolute rubble. The plane had traveled at a
speed of approximately 450 miles an hour at a very low level as it
passed by the Johnstown, PA airport, which is slightly to the north of
the ultimate crash scene. The plane hit the ground with an enormous
impact, leaving just traces, the debris of people, regrettably, and the
plane itself.
In our conversations with the officials of the National
Transportation Safety Board, Senator Santorum and I inquired into a
rumor which had been circulating that the plane might have been shot
down. However, we were assured by the officials from the National
Transportation Safety Board that such an event, in fact, had not
happened.
Notwithstanding the debris, the officials were able to piece together
the four corners of the plane. Had the plane been shot down, there
would have been some sign of it prior to the impact and prior to the
crash.
While we were at the scene, Senator Santorum and I announced our
intention to seek the Congressional Gold Medal for the passengers and
crew of United Airlines Flight 93. I am introducing this legislation
today and, since yesterday, a large number of cosponsors have already
signed on to the bill. Therefore, it is being introduced on behalf of
Senator Harkin, Senator Boxer, Senator Bond, Senator Bunning, Senator
Burns, Senator Cantwell, Senator Clinton, Senator Ensign, Senator
Helms, Senator Landrieu, Senator Nelson of Florida, and Senator
Schumer.
The medal has special significance for the Senate, the House of
Representatives, and for the Capitol because all indications are that
the plane--and this is speculation, because we will never know for
certain--but, there are indications that the plane was headed for the
U.S. Capitol. That statement was made by Vice President Chaney on
Sunday, September 16 on NBC's ``Meet The Press.'' It is speculation. I
want to clearly identify it as such because there is no way to be sure.
But the speculation is supported by the fact that the plane which hit
the Pentagon had been on a direct line to the White House and it veered
off at the last moment. The fourth plane, United Airlines Flight 93,
appeared to have been headed in a line that could have been to the
White House, or even to Camp David, although it is unlikely to have
been headed to Camp David since no one was there at the time. Most
likely, Flight 93 was headed to the Capitol, the symbol of our Nation.
Wherever the United States is symbolized around the world, it is the
Capitol dome that represents the nation. The terrorists intended to
strike at us in every way possible: physically, psychologically,
emotionally, and at the very Capitol.
So it is with a heavy heart, which is a sentiment shared by Americans
all across he land and really, by most people across the globe, that I
introduce this bill denominated at the ``Honoring the Passengers and
Crew of United Airlines Flight 93 Act.''
On September 11, 2001, United Airlines Flight 93 took off at 8:44
a.m. from Newark, New Jersey, destined for San Francisco, California;

[[Page S9508]]

The plane was hijacked by 4 terrorists shortly after it took off;
It is widely presumed that the terrorists who took control of United
Airlines Flight 93 intended to use the aircraft as a weapon and crash
it into the United States Capitol Building in Washington, D.C.;
The passengers and crew of United Airlines Flight 93 learned from
cellular phone conversations with their loved ones of the fate of the 3
other aircraft that were hijacked earlier that same day and used as
weapons to murder thousands of innocent people and destroy American
landmarks;
The passengers and crew of United Airlines Flight 93, recognizing the
potential danger that the aircraft they were aboard posed to large
numbers of innocent Americans, American institutions, and the symbols
of American democracy, took heroic and noble action to ensure that the
aircraft they were aboard could not be used as a weapon:
The 44 people in all, 37 passengers and 7 crew of United Airlines
Flight 93, in the ultimate act of selfless courage and supreme
sacrifice, fought to recapture their flight from the terrorists; and
The struggle of the crew and passengers of United Airlines Flight 93
against the terrorists caused the Boeing 757 to crash down in a
sparsely populated area near Shanksville, Pennsylvania at 10:10 a.m.,
September 11, 2001, possibly saving countless lives in the Nation's
Capital.
The President is authorized, on behalf of Congress, to award
posthumously a gold medal of appropriate design to each of the United
Airlines Flight 93 crew members: Lorraine G. Bay; Sandra W. Bradshaw;
Jason Dahl; Wanda A. Green; LeRoy Homer; CeeCee Lyles; and Deborah A.
Welsh; and the United Airlines Flight 93 passengers: Christian Adams;
Todd Beamer; Alan Beaven; Mark Bingham, who made a call to his mother;
Deora Bodley; Marion Britton; Thomas E. Burnett, Jr.--who was one of
the individuals who had cellular phone contact--William Cashman;
Georgine Rose Corrigan; Joseph Deluca; Patrick Driscoll; Edward Felt;
Colleen Fraser; Andrew Garcia; Jeremy Glick--another one of the
passengers who had contact with his wife, according to very detailed
newspaper accounts, with the determination by Mr. Glick, according to
his wife's report, that something would be done. Obviously, something
was done--Kristin Gould; Lauren Grandcolas; Donald F. Greene; Linda
Gronlund; Richard Guadagno; Toshiya Kuge; Hilda Marcin; Waleska
Martinez; Nicole Miller; Louis J. Nacke; Donald Peterson; Mark
Rothenberg; Christine Snyder; John Talignani; Honor Wainio; and 3
additional heroes whose families have requested that their names be
withheld.

The original thought Senator Santorum and I had was to make the
recommendation requesting the award of these medals only to the three
individuals who had been identified as having cellular phone contact.
However, it is entirely likely that others were involved in the heroic
effort to somehow storm the cockpit. What precisely happened during
that flight, we do not know. We may know more when the black box or the
voice recorder is located and investigated. There was a very heroic
action to stop that plane from continuing on its flight--wherever it
was headed--presumably to the Capitol Building, causing it to crash and
take the lives of the 33 passengers, seven crew members, and foiling
the efforts of those four terrorists.
I send the bill to the desk and ask unanimous consent that it be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 1434

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 ``Honoring the Passengers and
Crew of United Flight 93 Act''.

SEC. 2. FINDINGS.

Congress finds that--
(1) on September 11, 2001, United Airlines Flight 93 took
off at 8:44 a.m. from Newark, New Jersey, destined for San
Francisco, California;
(2) the plane was hijacked by 4 terrorists shortly after it
took off;
(3) it is widely presumed that the terrorists who took
control of United Airlines Flight 93 intended to use the
aircraft as a weapon and crash it into the United States
Capitol Building in Washington, D.C.;
(4) the passengers and crew of United Airlines Flight 93
learned from cellular phone conversations with their loved
ones of the fate of the 3 other aircraft that were hijacked
earlier that same day and used as weapons to murder thousands
of innocent people and destroy American landmarks;
(5) the passengers and crew of United Airlines Flight 93,
recognizing the potential danger that the aircraft they were
aboard posed to large numbers of innocent Americans, American
institutions, and the symbols of American democracy, took
heroic and noble action to ensure that the aircraft they were
aboard could not be used as a weapon;
(6) the 40 passengers and crew of United Airlines Flight
93, in the ultimate act of selfless courage and supreme
sacrifice, fought to recapture their flight from the
terrorists; and
(7) the struggle of the crew and passengers of United
Airlines Flight 93 against the terrorists caused the Boeing
757 to crash down in a sparsely populated area near
Shanksville, Pennsylvania at 10:10 a.m., September 11, 2001,
possibly saving countless lives in the Nation's Capital.

SEC. 3. CONGRESSIONAL GOLD MEDAL.

(a) Presentation Authorized.--
(1) In general.--The President is authorized, on behalf of
Congress, to award posthumously a gold medal of appropriate
design to each of--
(A) the United Airlines Flight 93 crew members--
(i) Lorraine G. Bay;
(ii) Sandra W. Bradshaw;
(iii) Jason Dahl;
(iv) Wanda A. Green;
(v) LeRoy Homer;
(vi) CeeCee Lyles; and
(vii) Deborah A. Welsh; and
(B) the United Airlines Flight 93 passengers--
(i) Christian Adams;
(ii) Todd Beamer;
(iii) Alan Beaven;
(iv) Mark Bingham;
(v) Deora Bodley;
(vi) Marion Britton;
(vii) Thomas E. Burnett, Jr.;
(viii) William Cashman;
(ix) Georgine Rose Corrigan;
(x) Joseph Deluca;
(xi) Patrick Driscoll;
(xii) Edward Felt;
(xiii) Colleen Fraser;
(xiv) Andrew Garcia;
(xv) Jeremy Glick;
(xvi) Kristin Gould;
(xvii) Lauren Grandcolas;
(xviii) Donald F. Greene;
(xix) Linda Gronlund;
(xx) Richard Guadagno;
(xxi) Toshiya Kuge;
(xxii) Hilda Marcin;
(xxiii) Waleska Martinez;
(xxiv) Nicole Miller;
(xxv) Louis J. Nacke;
(xxvi) Donald Peterson;
(xxvii) Mark Rothenberg;
(xxviii) Christine Snyder;
(xxix) John Talignani;
(xxx) Honor Wainio; and
(xxxi) 3 additional heroes whose families have requested
that their names be withheld.
(2) Modalities.--The modalities of presentation of the
medals struck under this Act shall be determined by the
President, after consultation with the Speaker of the House
of Representatives, the Majority Leader of the Senate, the
Minority Leader of the Senate, and the Minority Leader of the
House of Representatives.
(b) Design and Striking.--For purposes of the presentation
referred to in subsection (a), the Secretary of the Treasury
(in this Act referred to as the ``Secretary'') shall strike
gold medals with suitable emblems, devices, and inscriptions,
to be determined by the Secretary.

SEC. 4. STATUS AS NATIONAL MEDALS.

The medals struck under this Act are national medals for
purposes of chapter 51 of title 31, United States Code.

SEC. 5. AUTHORIZATION OF APPROPRIATIONS.

There are authorized to be appropriated to the Secretary
such sums as may be necessary to carry out this Act.

Mr. DORGAN. Madam President, I ask unanimous consent to be added as a
cosponsor to the Senator's bill.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.
______

By Mr. SPECTER:
S. 1436. A bill to authorize additional funding for Members of the
Senate which may be used by a Member for mailings to provide notice of
town meetings; to the Committee on Rules and Administration.
Mr. SPECTER. Mr. President, I have sought recognition today to
introduce legislation which specifically authorizes funding for
Senators to mail town meeting notices to their constituents. My
legislation authorizes $3 million each year for the next five years for
Members to spend on the mailing of town meeting notices in counties
with populations of less than 50,000.
Town meetings are the best way for Members to inform constituents
about

[[Page S9509]]

our actions in Washington, and town meeting notices are the most
effective means we have of advising constituents about these events.
Unfortunately, the budgets under which we operate today are very
restrictive and do not allow us to properly advise all of our
constituents when we will be holding a town meeting in their area. For
Pennsylvania alone, it would cost $735,000, one third of my entire
office budget, to circulate town meeting notices to each household in
Pennsylvania. For this reason, additional funding is necessary to allow
Members to send adequate notice to constituents of their visits
throughout their States. However, recognizing the fiscal constraints
under which we are currently operating, I have limited the scope of my
legislation to only counties with smaller populations.
Smaller, rural communities are not always effectively reached by the
mass media, which are generally relied upon to deliver news of our
legislative activities. For example, if you take the northern tier of
Pennsylvania, or the southern tier, where residents do not necessarily
get any of the major newspapers and are outside television range,
unless you actually go to the county, it is very hard for Senators to
communicate with their constituents about what they are doing in
Washington. Town meetings are a valuable forum in which Members can
share details of our work and in turn hear directly from constituents
concerning their thoughts on a variety of topics. My legislation would
ensure that constituents in all parts of a Member's State are afforded
the opportunity to participate in this process.
I regularly visit all 67 counties in Pennsylvania and find it very
refreshing to get outside the beltway, to find out what people are
thinking about in the more rural, remote parts of Pennsylvania.
Likewise, my constituents also find it valuable to be able to receive
notice that Arlen Specter is coming to town, to listen to a short
speech, and spend the majority of meeting time participating in a
question and answer session. That way you have participatory democracy.
In July 2001, during Senate floor consideration of the Fiscal Year
2002 Legislative Branch Appropriations bill, Subcommittee Chairman
Durbin and Ranking Minority Member Bennett accepted my amendment which
provides $3 million for the mailing of town meeting notices, subject to
authorizing legislation. Today I am introducing this authorizing
legislation, and urge my colleagues to join me in supporting its timely
passage.
______

By Mr. LEAHY (for himself, Mr. Hatch, and Mr. Wyden):
S. 1437. A bill to clarify the applicable standards of professional
conduct for attorneys for the Government, and for other purposes; to
the Committee on the Judiciary.
Mr. LEAHY. Mr. President, I have spoken many times over the past two
years of the problems caused by the so-called McDade law, 28 U.S.C.
530B, which was slipped into the omnibus appropriations bill at the end
of the 105th Congress. The McDade law has delayed important criminal
investigations, prevented the use of effective and traditionally-
accepted investigative techniques, and served as the basis of
litigation to interfere with legitimate Federal prosecutions. At a time
when we need Federal law enforcement authorities to move quickly to
catch those responsible for last week's terrorist attacks, and to
prevent further attacks on our country, we can no longer tolerate the
drag on Federal investigations and prosecutions caused by this ill-
considered legislation.
The bill that I am introducing today, along with Senators Hatch and
Wyden, will modify the McDade law by establishing a set of rules that
clarify the professional standards applicable to government attorneys.
I introduced similar legislation in the last Congress, but was unable
to get it before the Judiciary Committee for consideration. Since then,
I have continued to work closely with the Justice Department and the
FBI to monitor the problems caused by the McDade law and to refine this
corrective legislation. I hope Congress will make it a top priority as
it considers ways to improve Federal law enforcement and combat
terrorism.
By way of background, controversy surrounding the application of
State ethics rules to Federal prosecutors began over a decade ago, when
a Federal appellate court held in United States v. Hammad, that a
disciplinary rule prohibiting lawyers from communicating with persons
they knew to be represented applied in the investigatory stages of a
Federal criminal prosecution. The court also noted that suppression of
evidence was an appropriate remedy for a prosecutor's breach of an
ethical rule.
The Department of Justice responded to the Hammad opinion with what
became known as the Thornburgh Memorandum. Issued on June 8, 1989, the
Memorandum asserted that ``contact with a represented individual in the
course of authorized law enforcement activity does not violate'' the
ABA's model ``no contact'' rule. The Memorandum concluded, ``The
Department will resist, on Supremacy Clause grounds, local attempts to
curb legitimate Federal law enforcement techniques.''
The Federal courts responded negatively to the Department's position.
In general, the Department was unable to persuade the courts of the
efficacy of the Attorney General's policy statement.
Amid mounting criticism of the Thornburgh Memorandum, Attorney
General Reno issued regulations in 1994 governing all Justice
Department litigators in their communications with persons represented
by counsel. These regulations allowed contacts with represented persons
in certain circumstances, even if such contacts were at odds with State
or local Federal court ethics rules. State disciplinary authorities
could sanction a government attorney for willful violation of the
regulations, but only upon a finding by the Attorney General that a
willful violation had occurred.
The Department's new regulations shared the fundamental defect of the
Thornburgh Memorandum, regulation of Federal prosecutors by the Justice
Department instead of by the courts, without valid statutory authority.
Not surprisingly, the only court to consider these regulations found
them to be invalid.
On May 1, 1996, Representative Joseph McDade introduced legislation
that sought to resolve the controversy over the Justice Department's
claimed authority to write its own ethics rules. In essence, H.R. 3386
provided that Federal prosecutors were governed by the ethics rules
that apply to lawyers generally. A hearing on the bill was held on
September 12, 1996, before the Subcommittee on Courts and Intellectual
Property, but no further action was taken.
On March 5, 1998, Representative McDade introduced H.R. 3396, a
modified version of H.R. 3386. Although the House Judiciary Committee
did not hold hearings or act on the bill, language similar to H.R. 3396
was included in the House-passed Commerce-Justice-State appropriations
bill for FY1999. Thereafter, without the benefit of any hearings or
debate in the Senate, and over the objection of a bipartisan majority
of the Senate Judiciary Committee, the same language was enacted as
Title VIII of the final omnibus bill, with a six-month delayed
effective date.
At a hearing before a Judiciary Subcommittee on March 24, 1999, a
number of law enforcement officials lined up to criticize the new law.
In particular, they argued that its vague directive to comply with
rules in each State where the attorney engages in his or her duties
leaves prosecutors unsure about what rule applies to particular
conduct. The one certain result of this confusion: Attorneys would
refrain from taking critically important investigative steps or would
leave law enforcement officers to make their own decisions about whom
and how to investigate.
The McDade law went into effect on April 19, 1999. Since then, all of
law enforcement's concerns about the McDade law have come to pass.
In floor statements on May 25 and September 14, 2000, I described
some of the devastating effects that the McDade law is having on
Federal law enforcement efforts across the country. You will recall
some of the disturbing facts I described:
In Oregon, Federal prosecutors will no longer authorize undercover
operations, and the FBI was forced to shut down its Innocent Images
initiative, which targets child pornography and exploitation.

[[Page S9510]]

In California, a grand jury investigation into an airline's safety
and maintenance practices was stalled for many months because of the
McDade law's interplay with that State's ethics rules. After about a
year of investigation, one of the airline's planes crashed, after
experiencing mechanical problems on the first leg of its trip.
In another State, the FBI was stymied in a child murder investigation
because of a State Bar ethics rule that went far beyond what is
required by established Supreme Court and Federal appellate case law.
There are other recent examples. In one case, the FBI has had to
close an investigation into allegations of fraud committed by the
officials of a city with regard to FEMA disaster funds after the city's
attorney invoked the McDade law to prohibit FBI agents from
interviewing any city employees. In another case, counsel for an
aviation company has used the McDade law to prevent the FBI from
working with company employees who are willing to provide information
and evidence concerning allegations that the company has been selling
defective aircraft engine parts to military and civilian airlines.
Of more immediate urgency, the McDade law seriously threatens to
impede the terrorism investigation into the events of September 11,
2001. In this widespread, international investigation, the McDade law
will subject Justice Department attorneys to multiple and different
attorney conduct rules, either because the attorneys working on or
supervising the investigation are admitted to practice in more than one
state, or because they are seeking assistance through court processes,
search warrants; material witness warrants; criminal complaints; and
grand jury subpoenas, in more than one Federal district court, each of
which adopts its own set of attorney conduct rules. How are Justice
Department attorneys meant to resolve conflicts in those rules in a
manner that is reliable without unduly delaying this critical
investigation?
There can no longer be any serious doubt about the need for
corrective legislation. We cannot afford to wait until the McDade law
impedes the investigation into last Tuesday's attacks before taking
action.
Supporters of the McDade law have argued that Federal prosecutors are
no worse off than their State counterparts, who have long been subject
to State ethics rules. This is simply not the case. State prosecutors
practice almost entirely before the courts of the State in which they
are licensed: they do not practice in Federal court. Thus, they are
subject to only one set of ethics rules, the rules applied by the
courts before which they appear and the rules of the State in which
they are licensed are one and the same. This is not true for Federal
prosecutors, who are licensed by a State but practice in Federal courts
and must comport with local Federal court ethics rules. Thus, Federal
prosecutors are generally subject to at least two sets of potentially
conflicting ethics rules.
Additionally, Federal prosecutors frequently work across State lines.
This is not true of State prosecutors, whose work is generally confined
to a single State. Under the McDade law, Federal prosecutors must
comport with the State ethics rules of each State where they engage in
their duties, which may be different than the rules of either the
licensing State or the local Federal court. This means that Federal
prosecutors may be subject to three or more sets of ethics rules with
respect to the same conduct, including two or more sets of State ethics
rules that do not take into consideration the special needs and
interests of the United States in investigating and prosecuting
violations of Federal law.
In any event, even assuming that State Bar rules are causing serious
problems for State prosecutors as well as Federal prosecutors, that is
a matter for the States, not for Congress. Our responsibility is to
ensure the effective enforcement of the Federal criminal laws, and that
is what my legislation seeks to accomplish.
The Professional Standards for Government Attorneys Act adheres to
the basic premise of the McDade law: The Department of Justice does not
have the authority it has long claimed to write its own ethics rules.
This legislation establishes that the Department may not unilaterally
exempt Federal trial lawyers from the standards of professional
responsibility adopted by the Federal courts. Federal courts are the
more appropriate body to establish such standards for Federal
prosecutors, not only because Federal courts have traditional authority
to establish such standards for lawyers generally, but because the
Department lacks the requisite objectivity.
The first part of this bill embodies the traditional understanding
that when lawyers handle cases before a Federal court, they should be
subject to the Federal court's standards of professional
responsibility, and not to the possibly inconsistent standards of other
jurisdictions. By incorporating this ordinary choice-of-law principle,
the bill preserves the Federal courts' traditional authority to oversee
the professional conduct of Federal trial lawyers, including Federal
prosecutors. It thus avoids the uncertainties presented by the McDade
law, which potentially subjects Federal prosecutors to State laws,
rules of criminal procedure, and judicial decisions which differ from
existing Federal law.
Another part of the bill specifically addresses the situation in
Oregon, where a state court ruling has seriously impeded the ability of
Federal agents to engage in undercover operations and other covert
activities. Such activities are legitimate and essential crimefighting
tools. The Professional Standards for Government Attorneys Act ensures
that these tools will be available to combat terrorism.
Finally, the bill addresses the most pressing contemporary question
of government attorney ethics, namely, the question of which rule
should govern government attorneys' communications with represented
persons. It asks the Judicial Conference of the United States to submit
to the Supreme Court a proposed uniform national rule to govern this
area of professional conduct, and to study the need for additional
national rules to govern other areas in which the proliferation of
local rules may interfere with effective Federal law enforcement. The
Rules Enabling Act process is the ideal one for developing such rules,
both because the Federal judiciary traditionally is responsible for
overseeing the conduct of lawyers in Federal court proceedings, and
because this process would best provide the Supreme Court an
opportunity fully to consider and objectively to weigh all relevant
considerations.
The problems posed to Federal law enforcement investigations and
prosecutions by the McDade law are real and urgent. The Professional
Standards for Government Attorneys Act provides a reasonable and
measured alternative: It preserves the traditional role of the State
courts in regulating the conduct of attorneys licensed to practice
before them, while ensuring that Federal prosecutors and law
enforcement agents will be able to use traditional Federal
investigative techniques. I urge Congress to move quickly to pass this
corrective legislation before more cases are compromised.
I ask unanimous consent that the bill and a summary of the bill be
printed in the Record.
There being no objection, the additional material ordered to be
printed in the Record, as follows:

S. 1437

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 ``Professional Standards for
Government Attorneys Act of 2001''.

SEC. 2. PROFESSIONAL STANDARDS FOR GOVERNMENT ATTORNEYS.

(a) Section 530B of title 28, United States Code, is
amended to read as follows:

``SEC. 530B. PROFESSIONAL STANDARDS FOR GOVERNMENT ATTORNEYS.

``(a) Definitions.--In this section:
``(1) Government attorney.--The term `Government
attorney'----
``(A) means the Attorney General; the Deputy Attorney
General; the Solicitor General; the Associate Attorney
General; the head of, and any attorney employed in, any
division, office, board, bureau, component, or agency of the
Department of Justice; any United States Attorney; any
Assistant United States Attorney; and Special Assistant to
the Attorney General or Special Attorney appointed under
section 515; any special Assistant United States Attorney
appointed under section 543 who is authorized to conduct
criminal or civil law enforcement investigations or
proceedings on behalf of the United States; any other
attorney employed

[[Page S9511]]

by the Department of Justice who is authorized to conduct
criminal or civil law enforcement proceedings on behalf of
the United States; any independent counsel, or employee of
such counsel, appointed under chapter 40; and any outside
special counsel, or employee of such counsel, as may be duly
appointed by the Attorney General; and
``(B) does not include any attorney employed as an
investigator or other law enforcement agent by the Department
of Justice who is not authorized to represent the United
States in criminal or civil law enforcement litigation or to
supervise such proceedings.
``(2) State.--The term `State' includes a Territory and the
District of Columbia.
``(b) Choice of Law.--Subject to any uniform national rule
prescribed by the Supreme Court under chapter 131, the
standards of professional responsibility that apply to a
Government attorney with respect to the attorney's work for
the Government shall be--
``(1) for conduct in connection with a proceeding in or
before a court, the standards of professional responsibility
established by the rules and decisions of that court;
``(2) for conduct reasonably intended to lead to a
proceeding in or before a court, the standards of
professional responsibility established by the rules and
decisions of the court in or before which the proceeding is
intended to be brought; and
``(3) for all other conduct, the standards of professional
responsibility established by the rules and decisions of the
Federal district court for the judicial district in which the
attorney principally performs his or her official duties.
``(c) Licensure.--A Government attorney (except foreign
counsel employed in special cases)----
``(1) shall be duly licensed and authorized to practice as
an attorney under the laws of a State; and
``(2) shall not be required to be a member of the bar of
any particular State.
``(d) Covert Activities.--Notwithstanding any provision of
State law, including disciplinary rules, statutes,
regulations, constitutional provisions, or case law, a
Government attorney may, for the purpose of enforcing Federal
law, provide legal advice, authorization, concurrence,
direction, or supervision on conducting covert activities,
and participate in such activities, even though such
activities may require the use of deceit or
misrepresentation.
``(e) Admissibility of Evidence.--No violation of any
disciplinary, ethical, or professional conduct rule shall be
construed to permit the exclusion of otherwise admissible
evidence in any Federal criminal proceeding.
``(f) Rulemaking Authority.--The Attorney General shall
make and amend rules of the Department of Justice to ensure
compliance with this section.''.
(b) Technical and Conforming Amendment.--The analysis for
chapter 31 of title 28, United States Code, is amended, in
the item relating to section 530B, by striking ``Ethical
standards for attorneys for the Government'' and inserting
``Professional standards for Government attorneys''.
(c) Reports.----
(1) Uniform rule.--In order to encourage the Supreme Court
to prescribe, under chapter 131 of title 28, United States
Code, a uniform national rule for Government attorneys with
respect to communications with represented persons and
parties, not later than 1 year after the date of enactment of
this Act, the Judicial Conference of the United States shall
submit to the Chief Justice of the United States a report,
which shall include recommendations with respect to amending
the Federal Rules of Practice and Procedure to provide for
such a uniform national rule.
(2) Actual or potential conflicts.--Not later than 2 years
after the date of enactment of this Act, the Judicial
Conference of the United States shall submit to the Chairmen
and Ranking Members of the Committees on the Judiciary of the
House of Representatives and the Senate a report, which shall
include----
(A) a review of any areas of actual or potential conflict
between specific Federal duties related to the investigation
and prosecution of violations of Federal law and the
regulation of Government attorneys (as that term is defined
in section 530B of title 28, United States Code, as amended
by this Act) by existing standards of professional
responsibility; and
(B) recommendations with respect to amending the Federal
Rules of Practice and Procedure to provide for additional
rules governing attorney conduct to address any areas of
actual or potential conflict identified pursuant to the
review under subparagraph (A).
(3) Report considerations.--In carrying out paragraphs (1)
and (2), the Judicial Conference of the United States shall
take into consideration----
(A) the needs and circumstances of multiforum and
multijurisdictional litigation;
(B) the special needs and interests of the United States in
investigating and prosecuting violations of Federal criminal
and civil law; and
(C) practices that are approved under Federal statutory or
case law or that are otherwise consistent with traditional
Federal law enforcement techniques.
____

Summary of the ``Professional Standards for Government Attorneys Act of
2001''

I. Amendments to 28 U.S.C. Sec. 530B

The first part of the bill supersedes the McDade law with a
new 28 U.S.C. Sec. 530B, consisting of six subsections:
Subsection (a) codifies the definition of ``government
attorney,'' by reference to the current Department of Justice
regulations.
Subsection (b) establishes clear choice-of-law rules for
government attorneys with respect to standards of
professional responsibility, modeled on Rule 8.5(b) of the
ABA's Model Rules of Professional Conduct. These choice-of-
law rules apply only with respect to government attorney
conduct that is related to the attorney's work for the
government. Under these rules, an attorney who is handling a
case in court would be subject to the professional standards
established by the rules and decisions of that court; an
attorney who is engaged in conduct reasonably intended to
lead to a proceeding in court, such as conduct in connection
with a grand jury or civil investigation, would be subject to
the professional standards of the court in which the
proceeding is intended to be brought; in other circumstances,
where no court has clear supervisory authority over
particular conduct, an attorney would be subject to the
professional standards established by rules and decisions of
the United States District Court for the judicial district in
which the attorney principally performs his official duties.
In the event that the Supreme Court promulgates one or more
uniform national rules governing the professional conduct of
government attorneys practicing before the Federal courts,
the terms of the uniform national rule would apply.
Subsection (c) clarifies the law regarding the licensing of
government attorneys, an issue that is currently addressed
through the appropriations process. Since 1979,
appropriations bills for the Department of Justice have
incorporated by reference section 3(a) of Pub. L. 96-132,
which states: ``None of the sums authorized to be
appropriated by this Act may be used to pay the compensation
of any person employed after the date of the enactment of
this Act as an attorney (except foreign counsel employed in
special cases) unless such person shall be duly licensed and
authorized to practice as an attorney under the laws of a
State, territory, or the District of Columbia.'' Subsection
(c) codifies this longstanding requirement, and also makes
clear that government attorneys need not be licensed under
the laws of any state in particular. The clarification is
necessary to ensure that local rules regarding state
licensure are not applied to federal prosecutors. Cf. United
States v. Straub, No. 5:99 Cr. 10 (N.D. W. Va. June 14, 1999)
(granting defense motion to disqualify the Assistant United
States Attorney because he was not licensed to practice in
West Virginia).
Subsection (d) specifically addresses the situation in
Oregon, where a state court ruling has seriously impeded the
ability of Federal agents to engage in undercover operations
and other covert activities. See In re Gatti, 330 Or. 517
(2000). This subsection ensures that these traditional law
enforcement tools will be available to federal prosecutors
and agents.
Subsection (e) makes clear that violations of professional
conduct rules by government attorneys shall not be construed
to permit the exclusion of otherwise admissible evidence in
any Federal criminal proceeding.
Subsection (f), like the McDade law, authorizes the
Attorney General to make and amend rules to assure compliance
with section 530B.

II. Judicial Conference Report and Recommendations

The second part of the bill directs the Judicial Conference
of the United States to prepare two reports regarding the
regulation of government attorney conduct. Both reports would
contain recommendations with respect to the advisability of
uniform national rules.
The first report would address the issue of contacts with
represented persons, which has generated the most serious
controversy regarding the professional conduct of government
attorneys. See, e.g., State v. Miller, 600 N.W.2d 457 (Minn.
1999); United States v. McDonnell Douglas Corp., 132 F.3d
1252 (8th Cir. 1998); United States v. Lopez, 4 F.3d 1455
(9th Cir. 1993); United States v. Hammad, 858 F.2d 834 (2d
Cir. 1988).
Rule 4.2 of the ABA's Model Rules of Professional Conduct
and analogous rules adopted by state courts and bar
associations place strict limits on when a lawyer may
communicate with a person he knows to be represented by
another lawyer. These ``no contact'' rules preserve fairness
in the adversarial system and the integrity of the attorney-
client relationship by protecting parties, potential parties
and witnesses from lawyers who would exploit the disparity in
legal skill between attorneys and lay people and damage the
position of the represented person. Courts have given a wide
variety of interpretations to these rules, however, creating
uncertainty and confusion as to how they apply in criminal
cases and to government attorneys. For example, courts have
disagreed about whether these rules apply to Federal
prosecutor contacts with represented persons in non-custodial
pre-indictment situations, in custodial pre-indictment
situations, and in post-indictment situations involving the
same or different matters underlying the charges.
Lawyers who practice in federal court--and federal
prosecutors in particular--have a legitimate interest in
being governed by a single set of professional standards
relating to

[[Page S9512]]

frequently recurring questions of professional conduct.
Further, any rule governing federal prosecutors'
communications with represented persons should be respectful
of legitimate law enforcement interest as well as the
legitimate interests of the represented individuals. Absent
clear authority to engage in communications with represented
persons, when necessary and under limited circumstances
carefully circumscribed by law, the government is
significantly hampered in its ability to detect and prosecute
Federal offenses.
The proposed legislation charges the Judicial Conference
with developing a uniform national rule governing government
attorney contacts with represented persons. Given the
advanced stage of dialogue among the interested parties, the
Department of Justice, the ABA, the Federal and State courts,
and others, the Committee is confident that a satisfactory
rule can be developed within the one-year time frame
established by the bill.
While the ``no contact'' rule poses the most serious
challenge to effective law enforcement, other rules of
professional responsibility may also threaten to interfere
with legitimate investigations. The proposed legislation
therefore directs the Judicial Conference to prepare a second
report addressing broader questions regarding the regulation
of government attorney conduct. This report, to be completed
within two years, would review any areas of conflict or
potential conflict between federal law enforcement techniques
and existing standards of professional responsibility, and
make recommendations concerning the need for additional
national rules.

Mr. WYDEN. Mr. President, I wish to bring to the Senate's attention a
serious legal matter currently impeding Federal criminal investigations
in many States, especially Oregon, and legislation that I am joining
the Chairman of the Judiciary Committee, Senator Leahy, in introducing
today to correct this problem.
Enacted at the end of the 105th Congress as Section 801 of the
Omnibus Appropriations Bill (Public Law 105-277), the Citizens
Protection Act, commonly known as the ``McDade law,'' has hampered
Federal law enforcement efforts aimed at combating child pornography,
drug trafficking, and terrorism, particularly in the State of Oregon.
In the Gatti case [Gatti, 330 Or. 517 (2000)] in early 2000, the
Oregon Supreme Court held that a private attorney had acted unethically
by intentionally misrepresenting his identity to the employees of a
medical records review company called Comprehensive Medical Review,
CMR. The attorney, who represented a client who had filed a claim with
an insurance company, believed that the insurance company was using CMR
to generate fraudulent medical reports that the insurer then used to
deny or limit claims. The attorney called CMR and falsely represented
himself to be a chiropractor seeking employment with the company. The
attorney was hoping to obtain information from CMR that he could use in
a subsequent lawsuit against CMR and the insurance company.
The Oregon Supreme Court upheld the State Bar's view that the
attorney's conduct violated two Oregon State Bar disciplinary rules and
an Oregon statute, specifically, a disciplinary rule prohibiting
conduct involving dishonesty, fraud, deceit or misrepresentation; a
disciplinary rule prohibiting knowingly making a false statement of law
or fact; and a statute prohibiting willful deceit or misconduct in the
legal profession. In doing so, the court rejected the attorney's
defense that his misrepresentations were justifiable because he was
engaged in an investigation to seek evidence of fraud and other
wrongful conduct. The court expressly ruled that there was no
`prosecutorial exception' to either the State Bar disciplinary rules or
the Oregon statute. As a result of this decision, prosecutors in Oregon
may not concur or participate in undercover and other covert law
enforcement techniques, even if the law enforcement technique at issue
is lawful under Federal law.
Soon after this Oregon Supreme Court decision, the Oregon U.S.
Attorney's Office informed the Oregon FBI Field Office that it would
not concur or participate in the use of long-used and highly productive
techniques, such as undercover operations and consensual monitoring of
telephone calls, that could be disallowed by the State Bar. Several
important investigations were immediately terminated or severely
impeded. The Oregon U.S. Attorney even refused to certify the renewal
of the Portland Innocent Images undercover program, which targets child
pornography and exploitation. Without the U.S. Attorney's
certification, the program was shut down and a significant criminal
problem has since gone unchecked.
The Federal Investigation Enhancement Act that I am introducing today
with Senator Leahy will clarify that Federal attorneys may, for the
purpose of enforcing Federal law, authorize, concur, direct, and
supervise covert investigations even though such activities may require
the use of deceit or misrepresentation. In doing so, our legislation
will make it possible for Federal authorities to continue their efforts
to investigate and apprehend the most dangerous criminals.
It is my hope that the Senate will act quickly on this legislation
that will correct the most serious problems caused by the McDade law.
It will be of enormous help to Federal law enforcement efforts in
Oregon and across our country who are prosecuting these crimes.
______

By Mr. CRAIG:
S. 1440. A bill 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; to the Committee on Finance.
Mr. CRAIG. Mr. President, today I am introducing the Victims of
Terrorism Relief Act of 2001, to provide tax relief for the innocent
victims of the terrorist attacks against our Nation last Tuesday,
September 11.
Last week's attack was unlike any event in our Nation's history. It
was an act of war committed on U.S. soil, and more, with innocent
civilians cold-bloodedly selected as the principal targets and even
strapped to the weapons. I am confident that, under the leadership of
our Commander-in-Chief, and with broad and deep support, across our
country and, on a bipartisan basis, here in Congress, we will win this
war decisively.
A significant part of our response also must be compassion for the
survivors of those victims of the first day of this war. Our tax code
has long recognized that compassion demands we extend a helping hand by
providing relief to our military heroes killed in combat. Today, sadly,
we recognize the need to extend similar comfort and relief to the
families of civilian victims whose lives have been taken.
The other body has already passed emergency legislation along these
lines. The bill I am introducing is identical to that legislation. The
main provisions of this bill would extend the same relief to
individuals killed in last week's terrorist attack as is currently
provided for members of our armed forces, with regard to the death tax,
and currently provided for Federal military and civilian employees,
with regard to Federal income taxes.
I fully realize that my Senate colleagues, including knowledgeable
members of the Senate Finance Committee, will propose additional tax
relief provisions to meet additional needs that are still being
identified. But I want to add my voice, early and urgently, to
emphasize the importance of acting swiftly and decisively to provide
this relief to our fellow Americans.
I ask unanimous consent that the text of this bill be printed in the
Record, as well as a brief summary of its provisions.
There being no objection, the material was ordered to be printed in
the Record, as follows:

S. 1440

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.

[[Page S9513]]

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. 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:

Victims of Terrorism Relief Act of 2001--Explanation of Provisions

Death Tax Relief.--Section 2201 of the Internal Revenue
Code currently provides an estate tax reduction for members
of the armed forces who are killed while serving in a combat
zone or who die as a result of injuries suffered while
serving in a combat zone. The provision reduces estate tax
liability by more than half.
The bill would extend this estate tax treatment to
individuals who were killed as a result of the September 11
terrorist attack or who dies as a result of injuries suffered
from that attack.
Income Tax Relief.--Section 692(c) of the Internal Revenue
Code currently exempts Federal military and civilian
employees from paying Federal income taxes in the year of
their death if they die during (or as a result of injuries
suffered in) a military or terrorist act outside of the
United States.
The bill would extend this Federal income tax relief to
individuals who died as a result of the September 11
terrorist attack or who die from injuries suffered as a
result of that attack.
Relief for Airline Payments to Passengers.--The bill would
clarify that the $25,000 per passenger payments made by
United Airline will be exempt from Federal income taxes, if
such a clarification is needed. Any similar payments made by
American Airlines would receive similar treatment.
Exempt FEMA Assistance Payments from Tax.--The bill would
ensure that FEMA assistance payments are exempt from federal
income tax.

____________________