[Congressional Record Volume 147, Number 122 (Wednesday, September 19, 2001)]
[Senate]
[Pages S9512-S9513]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      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.

       (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

[[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. 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.
                                  ____


   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.

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