[Congressional Record Volume 147, Number 159 (Friday, November 16, 2001)]
[Senate]
[Pages S11991-S11993]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                VICTIMS OF TERRORISM RELIEF ACT OF 2001

  Mr. TORRICELLI. Mr. President, I ask unanimous consent that the 
Finance Committee be discharged from further consideration of H.R. 
2884, and the Senate proceed to its immediate consideration.
  The PRESIDING OFFICER. Without objection, it is so ordered. The clerk 
will report the bill by title.
  The legislative clerk read as follows:

       A 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.

  There being no objection, the Senate proceeded to consider the bill.
  The PRESIDING OFFICER. The Senator from New Jersey.
  Mr. TORRICELLI. Mr. President, as Members of the Senate proceed to 
Thanksgiving Day celebrations with our families, there is little we can 
offer to the victims of September 11 but our prayers and our good 
hopes. But in this final act of the Senate, before we recess, perhaps 
there is something of this world we can do of some meaning for the 
children and the widows and the widowers who remain.
  For these families, September 11 is the crisis that never ends. Even 
as the dead are buried and families reconstitute themselves, they are 
faced, every day, with the living reality of life without someone they 
loved--a father, a mother without a paycheck or savings or a financial 
future. They need our prayers. They need our support and our 
encouragement. But they also need our help.
  I think H.R. 2884, as amended by the Senate Finance Committee, for 
this holiday, offers the hand of the American people to our neighbors. 
It very simply extends current American policy which waives Federal tax 
liability to the families of American soldiers or civilian employees of 
the U.S. Government who are killed in combat or in terrorist actions. 
This extension would now include American citizens whose family members 
were killed on September 11, 2001, in New York and Virginia.
  First, liability for Federal income taxes will be waived for this 
year and last year. Any moneys previously paid will be refunded. This 
money is simply better used to pay mortgages and rents and to feed 
children than it is to be contributed, at this point, to the Federal 
Government.
  Second, we are mindful that many people of moderate means were killed 
in the Pentagon and the World Trade Center who may not have paid 
Federal income taxes. They worked in the restaurants or they cleaned 
the buildings or they performed other valuable services. Their families 
may be in the most dire circumstances of all. They will no longer be 
liable for payroll taxes and will be refunded taxes previously paid.
  Third, for those nonworking spouses and children who may have now 
been in a position to inherit the earnings of a father or a mother who 
is deceased, they, of course, receive that money knowing no more will 
be earned. Whatever money is inherited must carry them through a 
lifetime--to educate the children, house the family. There will be 
nothing else arriving. This legislation provides significant estate tax 
relief from all State estate taxes on assets of up to $3 million and 
Federal estate taxes on assets of up to $8.5 million.
  Fourth, there are those who did not die on September 11 but whose 
physical wounds may be with them for a long time. Many are now eligible 
for disability benefits. Those benefits are theirs, all of them. No 
matter how long it takes for the scars to heal--the people to be able 
to walk or to see or to hear--the Federal Government should have no 
part of their disability funds. Taxes on them will be waived.

[[Page S11992]]

  Fifth, and finally, through the extraordinary generosity of the 
American people, hundreds of millions of dollars have been raised from 
schoolchildren and families and neighbors, corporations, churches and 
synagogues and mosques. It has been a wonderful expression by the 
American people, revealing much about ourselves as we help those in 
desperate need. None of those payments from governments or charities or 
corporations should be taxed. By virtue of this legislation, taxes on 
all such payments will be waived.

  This evening in New Jersey I will meet with hundreds of the widows 
and widowers of people who died in the terrorist attack. I know of no 
better expression by this Senate to those who have survived the loss of 
people they loved in the terrorist attack than to offer not merely 
words of sympathy or an expression of understanding that it was not 
those families who were attacked but America than for the 
representatives of America, assembled in this Chamber through this 
legislation, to express our solidarity with this simple act.
  This is not all we will do. It is not even the beginning of what we 
should do. But it is something we can do.
  Mr. BAUCUS. Mr. President, September 11, 2001, is a date that changed 
America forever. The Nation has endured a terrible tragedy. The human 
suffering is immense and our sense of invulnerability shattered. The 
terrorist strike on that date took the lives of thousands of U.S. 
civilians, and we will spend many months and years trying to come to 
grips with the magnitude of the day's attack on our freedom.
  We have been left with searing images of a horror that could not be 
contained--acts of terrorism that unfolded before our eyes, gripping 
this Nation and the world in raw and vivid devastation, touching all of 
us with feelings expressed in public and in private; from panic to 
helplessness; helplessness to anger; and anger to loss.
  Members of Congress have stood as one to condemn these attacks, 
comfort the victims and their families, and commit our full support to 
bring those responsible to justice. Our heartfelt thoughts and fervent 
prayers continue to go to those who have been lost.
  Today we bring before the Senate a bill to help those victims and 
their families through some of the financial crises they will face as a 
result of the terrorist's actions.
  Throughout our history, Congress has provided Federal tax relief to 
soldiers who die while serving in combat zones, and to service members 
and other individuals who have been affected by hostile actions outside 
of combat zones. But in the past, legislative relief bills have been 
limited in scope, because the actions they were intended to address 
were themselves limited.
  The terrorist attack of September 11, 2001, changed our perception, 
as a nation, of the nature of terrorist activity. Our Tax Code simply 
has no frame of reference for the unprecedented scope of destruction 
and the inconceivable loss of civilian life on American soil that 
resulted form the terrorist attacks.
  The events of September 11 have been characterized by the President 
as an act of war, and in the hearts and minds of most Americans, those 
who died in the attack should be treated like American soldiers who pay 
the ultimate price on the field of battle.
  Because of this, the House passed H.R. 2884, a bill which extends the 
benefits available to those who die in combat zones to all of the 
individual killed as a result of the September 11 attacks. It provides 
significant income tax and estate tax relief to the victims of the 
September 11 attacks.
  The bill before you builds on the House legislation, because we 
acknowledge that the overwhelming loss of life in the September 11 
action was civilian, and civilian victims tend to have different tax 
issues than soldiers.
  This bill provides relief to all of the victims of the September 11 
attacks--the brave firefighters who lost their lives trying to save 
those trapped in the destruction, employees who worked in the targeted 
buildings, tourists who were just visiting, as well as those on the 
airplanes converted into weapons by the terrorists. The bill also 
provides relief to the families of the victims of the post-September 11 
anthrax attacks, and to those who died in the bombing of the Alfred P. 
Murrah Federal Building in Oklahoma City on April 19, 1995.
  Under this legislation, all of the victims will have their Federal 
income tax liability, and any self-employment tax liability, forgiven 
for the year of their death and at least 1 previous year.
  To achieve a measure of tax equity and recognize the different taxes 
paid by individuals, our bill also provides relief from payroll taxes 
that parallels the income tax relief.
  In the case of the estate tax, our bill modernizes the application of 
the statute and creates a special formula that shields the first $3 
million in assets from both Federal and State estate taxes, and $8.5 
million in assets from Federal estate tax for 2001.
  In the wake of the explosions, the Treasury Department quickly waived 
an extensive list of deadlines for those affected by the disaster.
  However, the Department was unable to extend all Federal deadlines, 
in some cases because they had no clear authority and in others because 
of the need to coordinate with other agencies. Those other agencies 
have themselves been confronted with a lack of clear authority in 
waiving deadlines under their jurisdiction.
  Our bill clarifies and expands upon the Government's ability to 
extend deadlines in case of any disaster, including the ability to 
waive interest for payments that are delayed.
  There are also special exclusions for some types of death benefits in 
current law. For example, worker's compensation benefits and life 
insurance proceeds to beneficiaries are not taxed, nor are payments 
from a government retirement plan for a public safety officer killed in 
the line of duty. The first $3,000 of death benefits paid to soldiers 
killed in combat are also not taxed.
  Our bill expands this nontaxable list to include all death benefits 
paid on account of a death resulting from this terrorist action.
  Current law also excludes disability benefits from income if they are 
made under workers compensation laws in certain limited circumstances. 
Our bill expands those eligible for the exclusion to include anyone 
injured in a terrorist attack.
  The Senate bill before us also includes provisions making it clear 
that payments made by FEMA to individuals affected by any disaster are 
not subject to income tax.
  In the wake of the attacks, a number of employers who had workers 
killed in the World Trade Centers, in the Pentagon, and in the 
airplanes used as weapons stepped up to the plate with generous offers 
of help to their lost colleagues' families.
  Under current law, payments such as these would typically be taxed, 
which would reduce the amount of help going directly to the surviving 
families. Our bill exempts these payments from Federal income tax 
liability.
  We are also aware that some financial institutions are considering 
forgiving outstanding credit card balances of those who died in the 
attacks. Our bill makes sure that any such debt forgiveness is not 
itself subject to tax.
  To protect those victims' families who elect structured settlements 
in order to ensure they have a stream of payments for as long as they 
need them, our bill makes sure anyone acquiring these payment streams 
goes through a court process designed to protect the families.
  And for those families who set up special disability trusts in the 
wake of the attacks, a personal exemption is provided.
  The charitable community has also responded overwhelmingly to the 
needs of the victims and their survivors. For example, in my home State 
of Montana, members of the higher education community, including the 
University of Montana, have helped to establish the ``September 11 
College Fund.''

  The money donated to this fund will provide assistance, based on 
need, to cover higher education expenses for dependents and survivors 
of those lost at the institution of their choice. One hundred percent 
of the donated funds will go directly to the students--none of the 
principal will be used for administrative expenses.
  The charitable community is playing an important role in helping our 
Nation recover from this tragedy. Our bill makes it easier for 
charitable organizations to make disaster relief payments to victims 
and their families.

[[Page S11993]]

  Our bill also makes it easier for companies to establish private 
foundations to help the survivors with both short-term and long-term 
needs, such as scholarships for the victim's children.
  In the days following this attack, as well as in the days following 
other natural disasters such as fires and floods, we have seen a great 
deal of confusion among our citizens about their responsibilities and 
benefits under the Tax Code.
  For this reason, the Senate bill also requires the Internal Revenue 
Service to establish a permanent Disaster Response Team whose 
responsibility it will be to help taxpayers clarify and resolve Federal 
tax matters associated with any natural disaster or terroristic or 
military action.
  In addition, the bill clarifies a provision in the recently enacted 
Air Transportation Safety and System Stabilization Act relating to the 
dates certain excise tax deposits are due.
  I don't claim that this bill is perfect, I am sure there are specific 
tax situations that have arisen because of these attacks that we may 
not have addressed in this bill. If we took the time to identify and 
address all of them, we would never complete this legislation, so we 
believe the best course of action is to move forward with what we have, 
and continue to look for opportunities to provide more assistance in 
the future.
  I also am well aware of the fact that no legislation passed by this 
Congress can ever truly compensate the victims of this horrible attack 
and their families for everything they have lost--the love, warmth and 
companionship of those who have died. Nor can we ever replace the 
feeling of security we once had as a nation. But we can help make the 
road to recovery for the families of these victims a little smoother 
with the provisions of this bill, and make it easier to respond to 
other disasters in the future.
  This is a good piece of legislation, and it will help thousands of 
families facing an uncertain future. I urge my colleagues to support 
it.
  Mr. TORRICELLI. Mr. President, I understand Senator Baucus has a 
substitute amendment at the desk. I ask unanimous consent that the 
amendment be agreed to, the act, as amended, be read the third time and 
passed, the amendment to the title be agreed to, the motion to 
reconsider be laid upon the table, and any statements relating thereto 
be printed in the Record.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment (No. 2163) was agreed to.
  (The text of the amendment is printed in today's Record under 
``Amendments Submitted.'')
  The bill (H.R. 2884), as amended, was read the third time and passed.
  The title was amended so as to read: ``An Act to amend the Internal 
Revenue Code of 1986 to provide tax relief for victims of the terrorist 
attacks against the United States, and for other purposes.''.
  Mr. TORRICELLI. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. TORRICELLI. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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