Congressional Record, Volume 147 Issue 173 (Thursday, December 13, 2001)

[Congressional Record Volume 147, Number 173 (Thursday, December 13, 2001)]
[House]
[Pages H10115-H10141]
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 to take from the Speaker's table 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, with Senate amendments thereto, and to consider in the House,
without intervention of any point of order, any motion, or any demand
for division of the question, a single motion offered by the chairman
of the Committee on Ways and Means or his designee that the House
concur in the Senate amendments with the amendment I have placed at the
desk; that the Senate amendments and the motion be considered as read;
that the motion be debatable for 40 minutes, equally divided and
controlled by the chairman and ranking minority member of the Committee
on Ways and Means; and that after such debate, the motion be considered
as adopted; and that the amendment I have placed at the desk be
considered as read for the purpose of this request.
The Clerk read the title of the bill.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from California?
Mr. RANGEL. Mr. Speaker, reserving the right to object. Mr. Speaker,
I would ask the gentleman from California to describe the substance of
the bill before us today and how it differs from the bill that was
passed by the Senate.
Mr. THOMAS. Mr. Speaker, will the gentleman yield?
Mr. RANGEL. I yield to the gentleman from California.
Mr. THOMAS. Mr. Speaker, perhaps in the explanation if we could start
with the bill that originated in the House, which was an attempt to
take current law that is available to service members and civilians
overseas in a terrorist attack, which would provide income tax relief
and estate tax relief, and we brought them to the gentleman's city to
say that the New York area was, in fact, tantamount to a war zone and
that the victims in that area should receive the same benefit as
current law provides for people who are victims of terrorist acts
overseas. That was the sum and substance of the bill we sent to the
Senate.
For the 3 months that the Senate has had the bill, they examined it
in a number of different ways. They added a particular death benefit
for those individuals who were involved not only in the September 11
terrorist attacks, but also the Oklahoma City bombing of 6 years ago
and for those individuals who, through no fault of their own, were
victims from anthrax attacks.
In addition to that, they added a number of particular provisions
dealing with charitable organizations, disaster relief payments,
victims' compensation funds, and a number of other items.
What we did was examine those items and, where it was appropriate,
offer a generic response. I will give the gentleman an example.
Oftentimes, in dealing with disaster situations, disability trust funds
will be established for individuals. The problem has been there has
been no consistent approach to the way in which those disability funds
would be treated from disaster to disaster. However, there is a typical
response which occurs, but it has never been codified.
What we tried to do in this, working together, is to find those areas
in terms of structured settlements, disability trusts, and similar
arrangements that could be handled on a consistent basis, regardless of
which disaster is involved, using this particular vehicle to assist us
in that broad-based arrangement.
In addition to that, we have one additional amendment which examines
the geographic area of New York that is a zone that is clearly
described in the legislation and provide a number of tax measures to
relieve those individuals, authorize the issue of tax-exempt private
activity bonds, create a 30 percent bonus of depreciable property in
the recovery zone as defined, a 10-year life on leaseholder build-outs
for those individuals who own commercial property and want to rebuild
it so that the vital aspects of New York City, which we visited, the
restaurants and the shops and the others, can be restored as quickly as
possible, and then extension of certain replacement period provisions
which those of us on the Committee on Ways and Means know are extremely
important in making sure that people make a decision quickly to move
back in or to establish in the recovery zone to assist in the recovery
of New York City.
Mr. RANGEL. Mr. Speaker, further reserving the right to object, could
the chairman of the committee share with a member of the committee with
whom he discussed the remedies for the problems that we face in this
city? The chairman constantly referred to ``we.'' Is there a particular
group from the City of New York that the gentleman met and discussed
these issues with?
Mr. THOMAS. Mr. Speaker, if the gentleman will yield, I will tell the
gentleman that I had the privilege at one time, for example, of
accompanying the gentleman to Ground Zero, which I had not done, given
the duties that we had here, and spent some time with a number of city
business leaders that the gentleman and others were kind enough to
bring together at the stock exchange location and, over lunch for
several hours, listened to the particular concerns that those
individuals had about the need and the way in which we needed to
respond. I met with several New York City, New York State governmental
teams, including the Mayor, and, of course, listening to on both sides
of the aisle the members from the New York delegation, both from the
city and the State.
In addition to that, as we all know, there are several other States
that are just across the river and our colleagues from New Jersey and
Pennsylvania had significant concerns as well. All of those came
together culminating in this package today.
And I would be remiss if I did not thank the gentleman from New York
(Mr. Rangel) for his immediate and continuing offering and the members'
willingness to accept his kind invitation to come and visit the city,
albeit not in the way most of us had visited New York in the past on
those wonderful trips that we used to have, but a very realistic trip
to understand firsthand what had happened to the Big Apple.
Mr. RANGEL. Mr. Speaker, I withdraw my reservation, because it is so
important to my city that we get as much relief as possible from both
Houses. But it really never ceases to amaze me of the creative
legislative ability of our distinguished chairman to bring together
ideas and to pull them together without the input of the members of the
committee, without hearings; it is just absolutely fascinating how the
things that we have taken for granted that we do as a Congress or we do
as a committee have been substituted by the inquiries that the Chair
can make in the great City of New York and with people that have an
interest in the City of New York.
So this is not the time to object; this is the time to move the
consideration of this bill forward.
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.
The text of the Senate amendments is as follows:

Senate amendments:
Strike out all after the enacting clause and insert:

SECTION 1. SHORT TITLE; ETC.

(a) Short Title.--This Act may be cited as the ``Victims of
Terrorism Tax Relief Act of 2001''.

[[Page H10116]]

(b) Amendment of 1986 Code.--Except as otherwise expressly
provided, whenever in this Act an amendment or repeal is
expressed in terms of an amendment to, or repeal of, a
section or other provision, the reference shall be considered
to be made to a section or other provision of the Internal
Revenue Code of 1986.
(c) Table of Contents.--The table of contents for this Act
is as follows:

Sec. 1. Short title; etc.

TITLE I--RELIEF PROVISIONS FOR VICTIMS OF TERRORIST ATTACKS

Sec. 101. Income and employment taxes of victims of terrorist attacks.
Sec. 102. Estate tax reduction.
Sec. 103. Payments by charitable organizations treated as exempt
payments.
Sec. 104. Exclusion of certain cancellations of indebtedness.
Sec. 105. Treatment of certain structured settlement payments and
disability trusts.
Sec. 106. No impact on social security trust funds.

TITLE II--GENERAL RELIEF FOR VICTIMS OF DISASTERS AND TERRORISTIC OR
MILITARY ACTIONS

Sec. 201. Exclusion for disaster relief payments.
Sec. 202. Authority to postpone certain deadlines and required actions.
Sec. 203. Internal Revenue Service disaster response team.
Sec. 204. Application of certain provisions to terroristic or military
actions.
Sec. 205. Clarification of due date for airline excise tax deposits.
Sec. 206. Coordination with Air Transportation Safety and System
Stabilization Act.

TITLE III--DISCLOSURE OF TAX INFORMATION IN TERRORISM AND NATIONAL
SECURITY INVESTIGATIONS

Sec. 301. Disclosure of tax information in terrorism and national
security investigations.

TITLE I--RELIEF PROVISIONS FOR VICTIMS OF TERRORIST ATTACKS

SEC. 101. INCOME AND EMPLOYMENT TAXES OF VICTIMS OF TERRORIST
ATTACKS.

(a) In General.--Section 692 (relating to income taxes of
members of Armed Forces on death) is amended by adding at the
end the following new subsection:
``(d) Individuals Dying as a Result of Certain 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 April 19,
1995, or September 11, 2001, or who dies as a result of
illness incurred as a result of a terrorist attack involving
anthrax occurring on or after September 11, 2001, and before
January 1, 2002, 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, injury, or illness were
incurred.
``(2) Exceptions.--
``(A) Taxation of certain benefits.--Subject to such rules
as the Secretary may prescribe, paragraph (1) shall not apply
to the amount of any tax imposed by this subtitle which would
be computed by only taking into account the items of income,
gain, or other amounts attributable to--
``(i) amounts payable in the taxable year by reason of the
death of an individual described in paragraph (1) which would
have been payable in such taxable year if the death had
occurred by reason of an event other than an event described
in paragraph (1), or
``(ii) amounts payable in the taxable year which would not
have been payable in such taxable year but for an action
taken after the date of the applicable terrorist attack.
``(B) No relief for perpetrators.--Paragraph (1) shall not
apply with respect to any individual identified by the
Attorney General to have been a participant or conspirator in
any event described in paragraph (1), or a representative of
such individual.''.
(b) Refund of Other Taxes Paid.--Section 692, as amended by
subsection (a), is amended by adding at the end the following
new subsection:
``(e) Refund of Other Taxes Paid.--In determining the
amount of tax under this section to be credited or refunded
as an overpayment with respect to any individual for any
period, such amount shall be increased by an amount equal to
the amount of taxes imposed and collected under chapter 21
and sections 3201(a), 3211(a)(1), and 3221(a) with respect to
such individual for such period.''.
(c) Conforming Amendments.--
(1) Section 5(b)(1) is amended by inserting ``and victims
of certain terrorist attacks'' before ``on death''.
(2) Section 6013(f)(2)(B) is amended by inserting ``and
victims of certain terrorist attacks'' before ``on death''.
(d) Clerical Amendments.--
(1) The heading of section 692 is amended to read as
follows:

``SEC. 692. INCOME AND EMPLOYMENT TAXES OF MEMBERS OF ARMED
FORCES AND VICTIMS OF CERTAIN TERRORIST ATTACKS
ON DEATH.''.

(2) The item relating to section 692 in the table of
sections for part II of subchapter J of chapter 1 is amended
to read as follows:

``Sec. 692. Income and employment taxes of members of Armed Forces and
victims of certain terrorist attacks on death.''.
(e) Effective Date; Waiver of Limitations.--
(1) Effective date.--The amendments made by this section
shall apply to taxable years ending before, on, or after
September 11, 2001.
(2) Waiver of limitations.--If refund or credit of any
overpayment of tax resulting from the amendments made by this
section is prevented at any time before the close of the 1-
year period beginning on the date of the enactment of this
Act by the operation of any law or rule of law (including res
judicata), such refund or credit may nevertheless be made or
allowed if claim therefor is filed before the close of such
period.

SEC. 102. ESTATE TAX REDUCTION.

(a) In General.--Section 2201 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.

``(a) In General.--Unless the executor elects not to have
this section apply, in applying section 2001 to the estate of
a qualified decedent, the rate schedule set forth in
subsection (c) shall be deemed to be the rate schedule set
forth in section 2001(c).
``(b) Qualified Decedent.--For purposes of this section,
the term `qualified decedent' means--
``(1) any citizen or resident of the United States dying
while in active service of the Armed Forces of the United
States, if such decedent--
``(A) was killed in action while serving in a combat zone,
as determined under section 112(c), or
``(B) died as a result of wounds, disease, or injury
suffered while serving in a combat zone (as determined under
section 112(c)), and while in the line of duty, by reason of
a hazard to which such decedent was subjected as an incident
of such service, or
``(2) any individual who died as a result of wounds or
injury incurred as a result of the terrorist attacks against
the United States on April 19, 1995, or September 11, 2001,
or who died as a result of illness incurred as a result of a
terrorist attack involving anthrax occurring on or after
September 11, 2001, and before January 1, 2002.
Paragraph (2) shall not apply with respect to any individual
identified by the Attorney General to have been a participant
or conspirator in any such terrorist attack, or a
representative of such individual.
``(c) Rate Schedule.--

``If the amount with respect to which the tentative tax to be computed
The tentative tax is:
1 percent of the amount by which such amount exceeds $100,000..........
$500 plus 2 percent of the excess over $150,000........................
$1,500 plus 3 percent of the excess over $200,000......................
$4,500 plus 4 percent of the excess over $300,000......................
$12,500 plus 5 percent of the excess over $500,000.....................
$22,500 plus 6 percent of the excess over $700,000.....................
$34,500 plus 7 percent of the excess over $900,000.....................
$48,500 plus 8 percent of the excess over $1,100,000...................
$88,500 plus 9 percent of the excess over $1,600,000...................
$133,500 plus 10 percent of the excess over $2,100,000.................
$183,500 plus 11 percent of the excess over $2,600,000.................
$238,500 plus 12 percent of the excess over $3,100,000.................
$298,500 plus 13 percent of the excess over $3,600,000.................
$363,500 plus 14 percent of the excess over $4,100,000.................
$503,500 plus 15 percent of the excess over $5,100,000.................
$653,500 plus 16 percent of the excess over $6,100,000.................
$813,500 plus 17 percent of the excess over $7,100,000.................
$983,500 plus 18 percent of the excess over $8,100,000.................
$1,163,500 plus 19 percent of the excess over $9,100,000...............
$1,353,500 plus 20 percent of the excess over $10,100,000..............

``(d) Determination of Unified Credit.--In the case of an
estate to which this section applies, subsection (a) shall
not apply in determining the credit under section 2010.''.
(b) Conforming Amendments.--
(1) Section 2011 is amended by striking subsection (d) and
by redesignating subsections (e), (f), and (g) as subsections
(d), (e), and (f), respectively.
(2) Section 2053(d)(3)(B) is amended by striking ``section
2011(e)'' and inserting ``section 2011(d)''.
(3) Paragraph (9) of section 532(c) of the Economic Growth
and Tax Relief Reconciliation Act of 2001 is repealed.
(c) Clerical Amendment.--The item relating to section 2201
in the table of sections for subchapter C of chapter 11 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.''.

(d) Effective Date; Waiver of Limitations.--

[[Page H10117]]

(1) Effective date.--The amendments made by this section
shall apply to estates of decedents--
(A) dying on or after September 11, 2001, and
(B) in the case of individuals dying as a result of the
April 19, 1995, terrorist attack, dying on or after April 19,
1995.
(2) Waiver of limitations.--If refund or credit of any
overpayment of tax resulting from the amendments made by this
section is prevented at any time before the close of the 1-
year period beginning on the date of the enactment of this
Act by the operation of any law or rule of law (including res
judicata), such refund or credit may nevertheless be made or
allowed if claim therefor is filed before the close of such
period.

SEC. 103. PAYMENTS BY CHARITABLE ORGANIZATIONS TREATED AS
EXEMPT PAYMENTS.

(a) In General.--For purposes of the Internal Revenue Code
of 1986--
(1) payments made by an organization described in section
501(c)(3) of such Code by reason of the death, injury,
wounding, or illness of an individual incurred as the result
of the terrorist attacks against the United States on
September 11, 2001, or a terrorist attack involving anthrax
occurring on or after September 11, 2001, and before January
1, 2002, shall be treated as related to the purpose or
function constituting the basis for such organization's
exemption under section 501 of such Code if such payments are
made using an objective formula which is consistently
applied, and
(2) in the case of a private foundation (as defined in
section 509 of such Code), any payment described in paragraph
(1) shall not be treated as made to a disqualified person for
purposes of section 4941 of such Code.
(b) Effective Date.--This section shall apply to payments
made on or after September 11, 2001.

SEC. 104. EXCLUSION OF CERTAIN CANCELLATIONS OF INDEBTEDNESS.

(a) In General.--For purposes of the Internal Revenue Code
of 1986--
(1) gross income shall not include any amount which (but
for this section) would be includible in gross income by
reason of the discharge (in whole or in part) of indebtedness
of any taxpayer if the discharge is by reason of the death of
an individual incurred as the result of the terrorist attacks
against the United States on September 11, 2001, or a
terrorist attack involving anthrax occurring on or after
September 11, 2001, and before January 1, 2002, and
(2) return requirements under section 6050P of such Code
shall not apply to any discharge described in paragraph (1).
(b) Effective Date.--This section shall apply to discharges
made on or after September 11, 2001, and before January 1,
2002.

SEC. 105. TREATMENT OF CERTAIN STRUCTURED SETTLEMENT PAYMENTS
AND DISABILITY TRUSTS.

(a) Imposition of Excise Tax on Persons Who Acquire Certain
Structured Settlement Payments in Factoring Transactions.--
(1) In general.--Subtitle E is amended by adding at the end
the following new chapter:

``CHAPTER 55--STRUCTURED SETTLEMENT FACTORING TRANSACTIONS

``Sec. 5891. Structured settlement factoring transactions for certain
victims of terrorism.

``SEC. 5891. STRUCTURED SETTLEMENT FACTORING TRANSACTIONS FOR
CERTAIN VICTIMS OF TERRORISM.

``(a) Imposition of Tax.--There is hereby imposed on any
person who acquires directly or indirectly structured
settlement payment rights in a structured settlement
factoring transaction a tax equal to 40 percent of the
factoring discount as determined under subsection (c)(4) with
respect to such factoring transaction.
``(b) Exception for Certain Approved Transactions.--
``(1) In general.--The tax under subsection (a) shall not
apply in the case of a structured settlement factoring
transaction in which the transfer of structured settlement
payment rights is approved in advance in a qualified order.
``(2) Qualified order.--For purposes of this section, the
term `qualified order' means a final order, judgment, or
decree which--
``(A) finds that the transfer described in paragraph (1)--
``(i) does not contravene any Federal or State statute or
the order of any court or responsible administrative
authority, and
``(ii) is in the best interest of the payee, taking into
account the welfare and support of the payee's dependents,
and
``(B) is issued--
``(i) under the authority of an applicable State statute by
an applicable State court, or
``(ii) by the responsible administrative authority (if any)
which has exclusive jurisdiction over the underlying action
or proceeding which was resolved by means of the structured
settlement.
``(3) Applicable state statute.--For purposes of this
section, the term `applicable State statute' means a statute
providing for the entry of an order, judgment, or decree
described in paragraph (2)(A) which is enacted by--
``(A) the State in which the payee of the structured
settlement is domiciled, or
``(B) if there is no statute described in subparagraph (A),
the State in which either the party to the structured
settlement (including an assignee under a qualified
assignment under section 130) or the person issuing the
funding asset for the structured settlement is domiciled or
has its principal place of business.
``(4) Applicable state court.--For purposes of this
section--
``(A) In general.--The term `applicable State court' means,
with respect to any applicable State statute, a court of the
State which enacted such statute.
``(B) Special rule.--In the case of an applicable State
statute described in paragraph (3)(B), such term also
includes a court of the State in which the payee of the
structured settlement is domiciled.
``(5) Qualified order dispositive.--A qualified order shall
be treated as dispositive for purposes of the exception under
this subsection.
``(c) Definitions.--For purposes of this section--
``(1) Structured settlement.--The term `structured
settlement' means an arrangement--
``(A) which is established by--
``(i) suit or agreement for the periodic payment of damages
excludable from the gross income of the recipient under
section 104(a)(2), or
``(ii) agreement for the periodic payment of compensation
under any workers' compensation law excludable from the gross
income of the recipient under section 104(a)(1), and
``(B) under which the periodic payments are--
``(i) of the character described in subparagraphs (A) and
(B) of section 130(c)(2), and
``(ii) payable by a person who is a party to the suit or
agreement or to the workers' compensation claim or by a
person who has assumed the liability for such periodic
payments under a qualified assignment in accordance with
section 130.
``(2) Structured settlement payment rights.--The term
`structured settlement payment rights' means rights to
receive payments under a structured settlement relating to
claims for death, wounding, injury, or illness as a result of
the terrorist attacks against the United States on September
11, 2001, or a terrorist attack involving anthrax occurring
on or after September 11, 2001, and before January 1, 2002.
``(3) Structured settlement factoring transaction.--
``(A) In general.--The term `structured settlement
factoring transaction' means a transfer of structured
settlement payment rights (including portions of structured
settlement payments) made for consideration by means of sale,
assignment, pledge, or other form of encumbrance or
alienation for consideration.
``(B) Exception.--Such term shall not include--
``(i) the creation or perfection of a security interest in
structured settlement payment rights under a blanket security
agreement entered into with an insured depository institution
in the absence of any action to redirect the structured
settlement payments to such institution (or agent or
successor thereof) or otherwise to enforce such blanket
security interest as against the structured settlement
payment rights, or
``(ii) a subsequent transfer of structured settlement
payment rights acquired in a structured settlement factoring
transaction.
``(4) Factoring discount.--The term `factoring discount'
means an amount equal to the excess of--
``(A) the aggregate undiscounted amount of structured
settlement payments being acquired in the structured
settlement factoring transaction, over
``(B) the total amount actually paid by the acquirer to the
person from whom such structured settlement payments are
acquired.
``(5) Responsible administrative authority.--The term
`responsible administrative authority' means the
administrative authority which had jurisdiction over the
underlying action or proceeding which was resolved by means
of the structured settlement.
``(6) State.--The term `State' includes the Commonwealth of
Puerto Rico and any possession of the United States.
``(d) Coordination With Other Provisions.--
``(1) In general.--If the applicable requirements of
sections 72, 104(a)(1), 104(a)(2), 130, and 461(h) were
satisfied at the time the structured settlement involving
structured settlement payment rights was entered into, the
subsequent occurrence of a structured settlement factoring
transaction shall not affect the application of the
provisions of such sections to the parties to the structured
settlement (including an assignee under a qualified
assignment under section 130) in any taxable year.
``(2) No withholding of tax.--The provisions of section
3405 regarding withholding of tax shall not apply to the
person making the payments in the event of a structured
settlement factoring transaction.
``(3) No inference.--No inference shall be drawn from the
application of this subsection to only those payment rights
described in subsection (c)(2).''.
(2) Clerical amendment.--The table of chapters for subtitle
E is amended by adding at the end the following new item:

``Chapter 55. Structured settlement factoring transactions.''.

(3) Effective dates.--
(A) In general.--The amendments made by this subsection
(other than the provisions of section 5891(d) of the Internal
Revenue Code of 1986, as added by this subsection) shall
apply to structured settlement factoring transactions (as
defined in section 5891(c) of such Code (as so added))
entered into on or after the 30th day following the date of
the enactment of this Act.
(B) Clarification of existing law.--Section 5891(d) of such
Code (as so added) shall apply to structured settlement
factoring transactions (as defined in section 5891(c) of such
Code (as so added)) entered into on or after such 30th day.
(C) Transition rule.--In the case of a structured
settlement factoring transaction entered into during the
period beginning on the 30th day following the date of the
enactment of this Act and ending on July 1, 2002, no tax
shall be imposed under section 5891(a) of such Code if--
(i) the structured settlement payee is domiciled in a State
(or possession of the United States) which has not enacted a
statute providing that the structured settlement factoring
transaction is ineffective unless the transaction has been

[[Page H10118]]

approved by an order, judgment, or decree of a court (or
where applicable, a responsible administrative authority)
which finds that such transaction--

(I) does not contravene any Federal or State statute or the
order of any court (or responsible administrative authority),
and
(II) is in the best interest of the structured settlement
payee or is appropriate in light of a hardship faced by the
payee, and

(ii) the person acquiring the structured settlement payment
rights discloses to the structured settlement payee in
advance of the structured settlement factoring transaction
the amounts and due dates of the payments to be transferred,
the aggregate amount to be transferred, the consideration to
be received by the structured settlement payee for the
transferred payments, the discounted present value of the
transferred payments (including the present value as
determined in the manner described in section 7520 of such
Code), and the expenses required under the terms of the
structured settlement factoring transaction to be paid by the
structured settlement payee or deducted from the proceeds of
such transaction.
(b) Personal Exemption Deduction for Certain Disability
Trusts.--
(1) In general.--Section 642(b) (relating to deduction for
personal exemption) is amended--
(A) by striking ``An estate'' and inserting:
``(1) In general.--An estate'', and
(2) by adding at the end the following new paragraph:
``(2) Full personal exemption amount for certain disability
trusts.--Paragraph (1) shall not apply, and the deduction
under section 151 shall apply, to any disability trust
described in subsection (c)(2)(B)(iv), (d)(4)(A), or
(d)(4)(C) of section 1917 of the Social Security Act (42
U.S.C. 1396p) for a beneficiary disabled as the result of a
wounding, injury, or illness as a result of the terrorist
attacks against the United States on April 19, 1995, or
September 11, 2001, or a terrorist attack involving anthrax
occurring on or after September 11, 2001, and before January
1, 2002.''.
(2) Effective date; waiver of limitations.--
(A) Effective date.--The amendments made by this subsection
shall apply to taxable years ending before, on, or after
September 11, 2001.
(B) Waiver of limitations.--If refund or credit of any
overpayment of tax resulting from the amendments made by this
subsection is prevented at any time before the close of the
1-year period beginning on the date of the enactment of this
Act by the operation of any law or rule of law (including res
judicata), such refund or credit may nevertheless be made or
allowed if claim therefor is filed before the close of such
period.

SEC. 106. NO IMPACT ON SOCIAL SECURITY TRUST FUND.

(a) In General.--Nothing in this title (or an amendment
made by this title) shall be construed to alter or amend
title II of the Social Security Act (or any regulation
promulgated under that Act).
(b) Transfers.--
(1) Estimate of secretary.--The Secretary of the Treasury
shall annually estimate the impact that the enactment of this
Act has on the income and balances of the trust funds
established under section 201 of the Social Security Act (42
U.S.C. 401).
(2) Transfer of funds.--If, under paragraph (1), the
Secretary of the Treasury estimates that the enactment of
this Act has a negative impact on the income and balances of
the trust funds established under section 201 of the Social
Security Act (42 U.S.C. 401), the Secretary shall transfer,
not less frequently than quarterly, from the general revenues
of the Federal Government an amount sufficient so as to
ensure that the income and balances of such trust funds are
not reduced as a result of the enactment of this Act.

TITLE II--GENERAL RELIEF FOR VICTIMS OF DISASTERS AND TERRORISTIC OR
MILITARY ACTIONS

SEC. 201. EXCLUSION FOR DISASTER RELIEF PAYMENTS.

(a) In General.--Part III of subchapter B of chapter 1
(relating to items specifically excluded from gross income)
is amended by redesignating section 139 as section 140 and
inserting after section 138 the following new section:

``SEC. 139. DISASTER RELIEF PAYMENTS.

``(a) General Rule.--Gross income shall not include--
``(1) any amount received as payment under section 406 of
the Air Transportation Safety and System Stabilization Act,
or
``(2) any amount received by an individual as a qualified
disaster relief payment.
``(b) Qualified Disaster Relief Payment Defined.--For
purposes of this section, the term `qualified disaster relief
payment' means any amount paid to or for the benefit of an
individual--
``(1) to reimburse or pay reasonable and necessary
personal, family, living, or funeral expenses incurred as a
result of a qualified disaster,
``(2) to reimburse or pay reasonable and necessary expenses
incurred for the repair or rehabilitation of a personal
residence or repair or replacement of its contents to the
extent that the need for such repair, rehabilitation, or
replacement is attributable to a qualified disaster,
``(3) by a person engaged in the furnishing or sale of
transportation as a common carrier by reason of the death or
personal physical injuries incurred as a result of a
qualified disaster, or
``(4) if such amount is paid by a Federal, State, or local
government, or agency or instrumentality thereof, in
connection with a qualified disaster in order to promote the
general welfare,
but only to the extent any expense compensated by such
payment is not otherwise compensated for by insurance or
otherwise.
``(c) Qualified Disaster Defined.--For purposes of this
section, the term `qualified disaster' means--
``(1) a disaster which results from a terroristic or
military action (as defined in section 692(c)(2)),
``(2) a Presidentially declared disaster (as defined in
section 1033(h)(3)),
``(3) a disaster which results from an accident involving a
common carrier, or from any other event, which is determined
by the Secretary to be of a catastrophic nature, or
``(4) with respect to amounts described in subsection
(b)(4), a disaster which is determined by an applicable
Federal, State, or local authority (as determined by the
Secretary) to warrant assistance from the Federal, State, or
local government or agency or instrumentality thereof.
``(d) Coordination With Employment Taxes.--For purposes of
chapter 2 and subtitle C, a qualified disaster relief payment
shall not be treated as net earnings from self-employment,
wages, or compensation subject to tax.
``(e) No Relief for Certain Individuals.--Subsection (a)
shall not apply with respect to any individual identified by
the Attorney General to have been a participant or
conspirator in a terroristic action (as so defined), or a
representative of such individual.''.
(b) Conforming Amendments.--The table of sections for part
III of subchapter B of chapter 1 is amended by striking the
item relating to section 139 and inserting the following new
items:

``Sec. 139. Disaster relief payments.
``Sec. 140. Cross references to other Acts.''.

(c) Effective Date.--The amendments made by this section
shall apply to taxable years ending on or after September 11,
2001.

SEC. 202. AUTHORITY TO POSTPONE CERTAIN DEADLINES AND
REQUIRED ACTIONS.

(a) Expansion of Authority Relating to Disasters and
Terroristic or Military Actions.--Section 7508A is amended to
read as follows:

``SEC. 7508A. AUTHORITY TO POSTPONE CERTAIN DEADLINES BY
REASON OF PRESIDENTIALLY DECLARED DISASTER OR
TERRORISTIC OR MILITARY ACTIONS.

``(a) In General.--In the case of a taxpayer determined by
the Secretary to be affected by a Presidentially declared
disaster (as defined in section 1033(h)(3)) or a terroristic
or military action (as defined in section 692(c)(2)), the
Secretary may specify a period of up to one year that may be
disregarded in determining, under the internal revenue laws,
in respect of any tax liability of such taxpayer--
``(1) whether any of the acts described in paragraph (1) of
section 7508(a) were performed within the time prescribed
therefor (determined without regard to extension under any
other provision of this subtitle for periods after the date
(determined by the Secretary) of such disaster or action),
``(2) the amount of any interest, penalty, additional
amount, or addition to the tax for periods after such date,
and
``(3) the amount of any credit or refund.
``(b) Special Rules Regarding Pensions, Etc.--In the case
of a pension or other employee benefit plan, or any sponsor,
administrator, participant, beneficiary, or other person with
respect to such plan, affected by a disaster or action
described in subsection (a), the Secretary may specify a
period of up to one year which may be disregarded in
determining the date by which any action is required or
permitted to be completed under this title. No plan shall be
treated as failing to be operated in accordance with the
terms of the plan solely as the result of disregarding any
period by reason of the preceding sentence.
``(c) Special Rules for Overpayments.--The rules of section
7508(b) shall apply for purposes of this section.''.
(b) Clarification of Scope of Acts Secretary May
Postpone.--Section 7508(a)(1)(K) (relating to time to be
disregarded) is amended by striking ``in regulations
prescribed under this section''.
(c) Conforming Amendments to ERISA.--
(1) Part 5 of subtitle B of title I of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1131 et
seq.) is amended by adding at the end the following new
section:

``SEC. 518. AUTHORITY TO POSTPONE CERTAIN DEADLINES BY REASON
OF PRESIDENTIALLY DECLARED DISASTER OR
TERRORISTIC OR MILITARY ACTIONS.

[[Page H10119]]

section 692(c)(2) of such Code), the corporation may,
notwithstanding any other provision of law, prescribe, by
notice or otherwise, a period of up to one year which may be
disregarded in determining the date by which any action is
required or permitted to be completed under this Act. No plan
shall be treated as failing to be operated in accordance with
the terms of the plan solely as the result of disregarding
any period by reason of the preceding sentence.''.
(d) Additional Conforming Amendments.--
(1) Section 6404 is amended--
(A) by striking subsection (h),
(B) by redesignating subsection (i) as subsection (h), and
(C) by adding at the end the following new subsection:
``(i) Cross Reference.--

``For authority of the Secretary to abate certain amounts by reason
of Presidentially declared disaster or terroristic or military action,
see section 7508A.''.

(2) Section 6081(c) is amended to read as follows:
``(c) Cross References.--

``For time for performing certain acts postponed by reason of war,
see section 7508, and by reason of Presidentially declared disaster or
terroristic or military action, see section 7508A.''.

(3) Section 6161(d) is amended by adding at the end the
following new paragraph:
``(3) Postponement of certain acts.--

``For time for performing certain acts postponed by reason of war,
see section 7508, and by reason of Presidentially declared disaster or
terroristic or military action, see section 7508A.''.

(d) Clerical Amendments.--
(1) The item relating to section 7508A in the table of
sections for chapter 77 is amended to read as follows:

``Sec. 7508A. Authority to postpone certain deadlines by reason of
Presidentially declared disaster or terroristic or
military actions.''.

(2) The table of contents for the Employee Retirement
Income Security Act of 1974 is amended by inserting after the
item relating to section 517 the following new item:

``Sec. 518. Authority to postpone certain deadlines by reason of
Presidentially declared disaster or terroristic or
military actions.''.

(e) Effective Date.--The amendments made by this section
shall apply to disasters and terroristic or military actions
occurring on or after September 11, 2001, with respect to any
action of the Secretary of the Treasury, the Secretary of
Labor, or the Pension Benefit Guaranty Corporation occurring
on or after the date of the enactment of this Act.

SEC. 203. INTERNAL REVENUE SERVICE DISASTER RESPONSE TEAM.

(a) In General.--Section 7508A, as amended by section
202(a), is amended by adding at the end the following new
subsection:
``(d) Duties of Disaster Response Team.--The Secretary
shall establish as a permanent office in the national office
of the Internal Revenue Service a disaster response team
which, in coordination with the Federal Emergency Management
Agency, shall assist taxpayers in clarifying and resolving
Federal tax matters associated with or resulting from any
Presidentially declared disaster (as defined in section
1033(h)(3)) or a terroristic or military action (as defined
in section 692(c)(2)).''.
(b) Effective Date.--The amendment made by this section
shall take effect on the date of the enactment of this Act.

SEC. 204. APPLICATION OF CERTAIN PROVISIONS TO TERRORISTIC OR
MILITARY ACTIONS.

(a) Exclusion for Death Benefits.--Section 101 (relating to
certain death benefits) is amended by adding at the end the
following new subsection:
``(i) Certain Employee Death Benefits Payable by Reason of
Death From Terroristic or Military Actions.--
``(1) In general.--Gross income does not include amounts
which are received (whether in a single sum or otherwise) if
such amounts are paid by an employer by reason of the death
of an employee incurred as a result of a terroristic or
military action (as defined in section 692(c)(2)).
``(2) No relief for certain individuals.--Paragraph (1)
shall not apply with respect to any individual identified by
the Attorney General to have been a participant or
conspirator in a terroristic action (as so defined), or a
representative of such individual.
``(3) Treatment of self-employed individuals.--For purposes
of this subsection, the term `employee' includes a self-
employed person (as described in section 401(c)(1)).''.
(b) Disability Income.--Section 104(a)(5) (relating to
compensation for injuries or sickness) is amended by striking
``a violent attack'' and all that follows through the period
and inserting ``a terroristic or military action (as defined
in section 692(c)(2)).''.
(c) Exemption From Income Tax for Certain Military or
Civilian Employees.--Section 692(c) is amended--
(1) by striking ``outside the United States'' in paragraph
(1), and
(2) by striking ``Sustained Overseas'' in the heading.
(d) Effective Date.--The amendments made by this section
shall apply to taxable years ending on or after September 11,
2001.

SEC. 205. CLARIFICATION OF DUE DATE FOR AIRLINE EXCISE TAX
DEPOSITS.

(a) In General.--Paragraph (3) of section 301(a) of the Air
Transportation Safety and System Stabilization Act (Public
Law 107-42) is amended to read as follows:
``(3) Airline-related deposit.--For purposes of this
subsection, the term `airline-related deposit' means any
deposit of taxes imposed by subchapter C of chapter 33 of
such Code (relating to transportation by air).''.
(b) Effective Date.--The amendment made by this section
shall take effect as if included in section 301 of the Air
Transportation Safety and System Stabilization Act (Public
Law 107-42).

SEC. 206. COORDINATION WITH AIR TRANSPORTATION SAFETY AND
SYSTEM STABILIZATION ACT.

No reduction in Federal tax liability by reason of any
provision of, or amendment made by, this Act shall be
considered as being received from a collateral source for
purposes of section 402(4) of the Air Transportation Safety
and System Stabilization Act (Public Law 107-42).

TITLE III--DISCLOSURE OF TAX INFORMATION IN TERRORISM AND NATIONAL
SECURITY INVESTIGATIONS

SEC. 301. DISCLOSURE OF TAX INFORMATION IN TERRORISM AND
NATIONAL SECURITY INVESTIGATIONS.

The head of the agency may disclose such return information
to officers and employees of such agency to the extent
necessary to investigate or respond to such terrorist
incident, threat, or activity.
``(ii) Disclosure to the department of justice.--Returns
and taxpayer return information may also be disclosed to the
Attorney General under clause (i) to the extent necessary
for, and solely for use in preparing, an application under
paragraph (7)(D).
``(iii) Taxpayer identity.--For purposes of this
subparagraph, a taxpayer's identity shall not be treated as
taxpayer return information.
``(iv) Termination.--No disclosure may be made under this
subparagraph after December 31, 2003.''.
(b) Disclosure Upon Request of Information Relating to
Terrorist Activities, Etc.--Subsection (i) of section 6103
(relating to disclosure to Federal officers or employees for
administration of Federal laws not relating to tax
administration) is amended by redesignating paragraph (7) as
paragraph (8) and by inserting after paragraph (6) the
following new paragraph:
``(7) Disclosure upon request of information relating to
terrorist activities, etc.--
``(A) Disclosure to law enforcement agencies.--
``(i) In general.--Except as provided in paragraph (6),
upon receipt by the Secretary of a written request which
meets the requirements of clause (iii), the Secretary may
disclose return information (other than taxpayer return
information) to officers and employees of any Federal law
enforcement agency who are personally and directly engaged in
the response to or investigation of any terrorist incident,
threat, or activity.
``(ii) Disclosure to state and local law enforcement
agencies.--The head of any Federal law enforcement agency may
disclose return information obtained under clause (i) to
officers and employees of any State or local law enforcement
agency but only if such agency is part of a team with the
Federal law enforcement agency in such response or
investigation and such information is disclosed only to
officers and employees who are personally and directly
engaged in such response or investigation.
``(iii) Requirements.--A request meets the requirements of
this clause if--

``(I) the request is made by the head of any Federal law
enforcement agency (or his delegate) involved in the response
to or investigation of any terrorist incident, threat, or
activity, and
``(II) the request sets forth the specific reason or
reasons why such disclosure may be relevant to a terrorist
incident, threat, or activity.

``(iv) Limitation on use of information.--Information
disclosed under this subparagraph shall be solely for the use
of the officers and employees to whom such information is
disclosed in such response or investigation.
``(B) Disclosure to intelligence agencies.--
``(i) In general.--Except as provided in paragraph (6),
upon receipt by the Secretary of a written request which
meets the requirements of clause (ii), the Secretary may
disclose return information (other than taxpayer return
information) to those officers and employees of the
Department of Justice, the Department of the Treasury, and
other Federal intelligence agencies who are personally and
directly engaged in the collection or analysis of
intelligence and counterintelligence information or
investigation concerning any terrorist incident, threat, or
activity. For purposes of the preceding sentence, the
information disclosed under the preceding sentence shall be
solely for the use of such officers and employees in such
investigation, collection, or analysis.
``(ii) Requirements.--A request meets the requirements of
this subparagraph if the request--

``(I) is made by an individual described in clause (iii),
and
``(II) sets forth the specific reason or reasons why such
disclosure may be relevant to a terrorist incident, threat,
or activity.

[[Page H10120]]

``(iii) Requesting individuals.--An individual described in
this subparagraph is an individual--

``(I) who is an officer or employee of the Department of
Justice or the Department of the Treasury who is appointed by
the President with the advice and consent of the Senate or
who is the Director of the United States Secret Service, and
``(II) who is responsible for the collection and analysis
of intelligence and counterintelligence information
concerning any terrorist incident, threat, or activity.

``(iv) Taxpayer identity.--For purposes of this
subparagraph, a taxpayer's identity shall not be treated as
taxpayer return information.
``(C) Disclosure under ex parte orders.--
``(i) In general.--Except as provided in paragraph (6), any
return or return information with respect to any specified
taxable period or periods shall, pursuant to and upon the
grant of an ex parte order by a Federal district court judge
or magistrate under clause (ii), be open (but only to the
extent necessary as provided in such order) to inspection by,
or disclosure to, officers and employees of any Federal law
enforcement agency or Federal intelligence agency who are
personally and directly engaged in any investigation,
response to, or analysis of intelligence and
counterintelligence information concerning any terrorist
incident, threat, or activity. Return or return information
opened pursuant to the preceding sentence shall be solely for
the use of such officers and employees in the investigation,
response, or analysis, and in any judicial, administrative,
or grand jury proceedings, pertaining to such terrorist
incident, threat, or activity.
``(ii) Application for order.--The Attorney General, the
Deputy Attorney General, the Associate Attorney General, any
Assistant Attorney General, or any United States attorney may
authorize an application to a Federal district court judge or
magistrate for the order referred to in clause (i). Upon such
application, such judge or magistrate may grant such order if
he determines on the basis of the facts submitted by the
applicant that--

``(I) there is reasonable cause to believe, based upon
information believed to be reliable, that the return or
return information may be relevant to a matter relating to
such terrorist incident, threat, or activity, and
``(II) the return or return information is sought
exclusively for use in a Federal investigation, analysis, or
proceeding concerning any terrorist incident, threat, or
activity.

``(D) Special rule for ex parte disclosure by the irs.--
``(i) In general.--Except as provided in paragraph (6), the
Secretary may authorize an application to a Federal district
court judge or magistrate for the order referred to in
subparagraph (C)(i). Upon such application, such judge or
magistrate may grant such order if he determines on the basis
of the facts submitted by the applicant that the requirements
of subparagraph (C)(ii)(I) are met.
``(ii) Limitation on use of information.--Information
disclosed under clause (i)--

``(I) may be disclosed only to the extent necessary to
apprise the head of the appropriate Federal law enforcement
agency responsible for investigating or responding to a
terrorist incident, threat, or activity, and
``(II) shall be solely for use in a Federal investigation,
analysis, or proceeding concerning any terrorist incident,
threat, or activity.

The head of such Federal agency may disclose such information
to officers and employees of such agency to the extent
necessary to investigate or respond to such terrorist
incident, threat, or activity.
``(E) Termination.--No disclosure may be made under this
paragraph after December 31, 2003.''.
(c) Conforming Amendments.--
(1) Section 6103(a)(2) is amended by inserting ``any local
law enforcement agency receiving information under subsection
(i)(7)(A),'' after ``State,''.
(2) Section 6103(b) is amended by adding at the end the
following new paragraph:
``(11) Terrorist incident, threat, or activity.--The term
`terrorist incident, threat, or activity' means an incident,
threat, or activity involving an act of domestic terrorism
(as defined in section 2331(5) of title 18, United States
Code) or international terrorism (as defined in section
2331(1) of such title).''.
(3) The heading of section 6103(i)(3) is amended by
inserting ``or terrorist'' after ``criminal''.
(4) Paragraph (4) of section 6103(i) is amended--
(A) in subparagraph (A) by inserting ``or (7)(C)'' after
``paragraph (1)'', and
(B) in subparagraph (B) by striking ``or (3)(A)'' and
inserting ``(3)(A) or (C), or (7)''.
(5) Paragraph (6) of section 6103(i) is amended--
(A) by striking ``(3)(A)'' and inserting ``(3)(A) or (C)'',
and
(B) by striking ``or (7)'' and inserting ``(7), or (8)''.
(6) Section 6103(p)(3) is amended--
(A) in subparagraph (A) by striking ``(7)(A)(ii)'' and
inserting ``(8)(A)(ii)'', and
(B) in subparagraph (C) by striking ``(i)(3)(B)(i)'' and
inserting ``(i)(3)(B)(i) or (7)(A)(ii)''.
(7) Section 6103(p)(4) is amended--
(A) in the matter preceding subparagraph (A)--
(i) by striking ``or (5),'' the first place it appears and
inserting ``(5), or (7),'', and
(ii) by striking ``(i)(3)(B)(i),'' and inserting
``(i)(3)(B)(i) or (7)(A)(ii),'', and
(B) in subparagraph (F)(ii) by striking ``or (5),'' the
first place it appears and inserting ``(5) or (7),''.
(8) Section 6103(p)(6)(B)(i) is amended by striking
``(i)(7)(A)(ii)'' and inserting ``(i)(8)(A)(ii)''.
(9) Section 6105(b) is amended--
(A) by striking ``or'' at the end of paragraph (2),
(B) by striking ``paragraphs (1) or (2)'' in paragraph (3)
and inserting ``paragraph (1), (2), or (3)'',
(C) by redesignating paragraph (3) as paragraph (4), and
(D) by inserting after paragraph (2) the following new
paragraph:
``(3) to the disclosure of tax convention information on
the same terms as return information may be disclosed under
paragraph (3)(C) or (7) of section 6103(i), except that in
the case of tax convention information provided by a foreign
government, no disclosure may be made under this paragraph
without the written consent of the foreign government, or''.
(10) Section 7213(a)(2) is amended by striking
``(i)(3)(B)(i),'' and inserting ``(i)(3)(B)(i) or
(7)(A)(ii),''.
(d) Effective Date.--The amendments made by this section
shall apply to disclosures made on or after the date of the
enactment of this Act.
Amend the title 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.''.

Motion Offered By Mr. Thomas

Mr. THOMAS. Mr. Speaker, pursuant to the order of the House, I offer
a motion.
The SPEAKER pro tempore. The Clerk will designate the motion.
The text of the motion is as follows:

Mr. Thomas moves that:
In lieu of the matter proposed to be inserted by the Senate
amendment to the text of the bill, insert the following:

SECTION 1. SHORT TITLE; ETC.

(a) Short Title.--This Act may be cited as the ``Victims of
Terrorism Tax Relief Act of 2001''.
(b) Amendment of 1986 Code.--Except as otherwise expressly
provided, whenever in this Act an amendment or repeal is
expressed in terms of an amendment to, or repeal of, a
section or other provision, the reference shall be considered
to be made to a section or other provision of the Internal
Revenue Code of 1986.
(c) Table of Contents.--The table of contents for this Act
is as follows:

Sec. 1. Short title; etc.

TITLE I--RELIEF PROVISIONS FOR VICTIMS OF TERRORIST ATTACKS

Sec. 101. Income taxes of victims of terrorist attacks.
Sec. 102. Exclusion of certain death benefits.
Sec. 103. Estate tax reduction.
Sec. 104. Payments by charitable organizations treated as exempt
payments.

TITLE II--OTHER RELIEF PROVISIONS

Sec. 201. Exclusion for disaster relief payments.
Sec. 202. Authority to postpone certain deadlines and required actions.
Sec. 203. Application of certain provisions to terroristic or military
actions.
Sec. 204. Clarification of due date for airline excise tax deposits.
Sec. 205. Treatment of certain structured settlement payments.
Sec. 206. Personal exemption deduction for certain disability trusts.

TITLE III--TAX BENEFITS FOR AREA OF NEW YORK CITY DAMAGED IN TERRORIST
ATTACKS ON SEPTEMBER 11, 2001

Sec. 301. Tax benefits for area of New York City damaged in terrorist
attacks on September 11, 2001.

TITLE IV--DISCLOSURE OF TAX INFORMATION IN TERRORISM AND NATIONAL
SECURITY INVESTIGATIONS

Sec. 401. Disclosure of tax information in terrorism and national
security investigations.

TITLE V--NO IMPACT ON SOCIAL SECURITY TRUST FUNDS

Sec. 501. No impact on social security trust funds.

TITLE I--RELIEF PROVISIONS FOR VICTIMS OF TERRORIST ATTACKS

SEC. 101. INCOME TAXES OF VICTIMS OF TERRORIST ATTACKS.

(a) In General.--Section 692 (relating to income taxes of
members of Armed Forces on death) is amended by adding at the
end the following new subsection:
``(d) Individuals Dying as a Result of Certain Attacks.--
``(1) In general.--In the case of a specified terrorist
victim, any tax imposed by this chapter shall not apply--
``(A) with respect to the taxable year in which falls the
date of 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, injury, or illness referred
to in paragraph (2) were incurred.
``(2) Specified terrorist victim.--For purposes of this
subsection, the term `specified terrorist victim' means any
decedent--
``(A) who dies as a result of wounds or injury incurred as
a result of the terrorist attacks against the United States
on April 19, 1995, or September 11, 2001, or
``(B) who dies as a result of illness incurred as a result
of an attack involving anthrax occurring on or after
September 11, 2001, and before January 1, 2002.

Such term shall not include any individual identified by the
Attorney General to have been a participant or conspirator in
any such

[[Page H10121]]

attack or a representative of such an individual.''.
(b) Conforming Amendments.--
(1) Section 5(b)(1) is amended by inserting ``and victims
of certain terrorist attacks'' before ``on death''.
(2) Section 6013(f)(2)(B) is amended by inserting ``and
victims of certain terrorist attacks'' before ``on death''.
(c) Clerical Amendments.--
(1) The heading of section 692 is amended to read as
follows:

``SEC. 692. INCOME TAXES OF MEMBERS OF ARMED FORCES AND
VICTIMS OF CERTAIN TERRORIST ATTACKS ON
DEATH.''.

(2) The item relating to section 692 in the table of
sections for part II of subchapter J of chapter 1 is amended
to read as follows:

``Sec. 692. Income taxes of members of Armed Forces and victims of
certain terrorist attacks on death.''.

(d) Effective Date; Waiver of Limitations.--
(1) Effective date.--The amendments made by this section
shall apply to taxable years ending before, on, or after
September 11, 2001.
(2) Waiver of limitations.--If refund or credit of any
overpayment of tax resulting from the amendments made by this
section is prevented at any time before the close of the 1-
year period beginning on the date of the enactment of this
Act by the operation of any law or rule of law (including res
judicata), such refund or credit may nevertheless be made or
allowed if claim therefor is filed before the close of such
period.

SEC. 102. EXCLUSION OF CERTAIN DEATH BENEFITS.

(a) In General.--Section 101 (relating to certain death
benefits) is amended by adding at the end the following new
subsection:
``(i) Certain Employee Death Benefits Payable by Reason of
Death of Certain Terrorist Victims.--
``(1) In general.--Gross income does not include amounts
(whether in a single sum or otherwise) paid by an employer by
reason of the death of an employee who is a specified
terrorist victim (as defined in section 692(d)(2)).
``(2) Limitation.--Subject to such rules as the Secretary
may prescribe, paragraph (1) shall not apply to amounts which
would have been payable if the individual had died other than
as a specified terrorist victim (as so defined).
``(3) Treatment of self-employed individuals.--For purposes
of paragraph (1), the term `employee' includes a self-
employed individual (as defined in section 401(c)(1)).''.
(b) Effective Date; Waiver of Limitations.--
(1) Effective date.--The amendment made by this section
shall apply to taxable years ending before, on, or after
September 11, 2001.
(2) Waiver of limitations.--If refund or credit of any
overpayment of tax resulting from the amendments made by this
section is prevented at any time before the close of the 1-
year period beginning on the date of the enactment of this
Act by the operation of any law or rule of law (including res
judicata), such refund or credit may nevertheless be made or
allowed if claim therefor is filed before the close of such
period.

SEC. 103. ESTATE TAX REDUCTION.

(a) In General.--Section 2201 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.

``(a) In General.--Unless the executor elects not to have
this section apply, in applying sections 2001 and 2101 to the
estate of a qualified decedent, the rate schedule set forth
in subsection (c) shall be deemed to be the rate schedule set
forth in section 2001(c).
``(b) Qualified Decedent.--For purposes of this section,
the term `qualified decedent' means--
``(1) any citizen or resident of the United States dying
while in active service of the Armed Forces of the United
States, if such decedent--
``(A) was killed in action while serving in a combat zone,
as determined under section 112(c), or
``(B) died as a result of wounds, disease, or injury
suffered while serving in a combat zone (as determined under
section 112(c)), and while in the line of duty, by reason of
a hazard to which such decedent was subjected as an incident
of such service, and
``(2) any specified terrorist victim (as defined in section
692(d)(2)).
``(c) Rate Schedule.--

``Sec. 2201. Combat zone-related deaths of members of the Armed Forces
and deaths of victims of certain terrorist attacks.''.

(d) Effective Date; Waiver of Limitations.--
(1) Effective date.--The amendments made by this section
shall apply to estates of decedents--
(A) dying on or after September 11, 2001, and
(B) in the case of individuals dying as a result of the
April 19, 1995, terrorist attack, dying on or after April 19,
1995.
(2) Waiver of limitations.--If refund or credit of any
overpayment of tax resulting from the amendments made by this
section is prevented at any time before the close of the 1-
year period beginning on the date of the enactment of this
Act by the operation of any law or rule of law (including res
judicata), such refund or credit may nevertheless be made or
allowed if claim therefor is filed before the close of such
period.

SEC. 104. PAYMENTS BY CHARITABLE ORGANIZATIONS TREATED AS
EXEMPT PAYMENTS.

(a) In General.--For purposes of the Internal Revenue Code
of 1986--
(1) payments made by an organization described in section
501(c)(3) of such Code by reason of the death, injury,
wounding, or illness of an individual incurred as the result
of the terrorist attacks against the United States on
September 11, 2001, or an attack involving anthrax occurring
on or after September 11, 2001, and before January 1, 2002,
shall be treated as related to the purpose or function
constituting the basis for such organization's exemption
under section 501 of such Code if such payments are made--
(A) in good faith using a reasonable and objective formula
which is consistently applied, and
(B) in furtherance of public rather than private purposes,
and
(2) in the case of a private foundation (as defined in
section 509 of such Code), any payment described in paragraph
(1) shall not be treated as made to a disqualified person for
purposes of section 4941 of such Code.
(b) Effective Date.--This section shall apply to payments
made on or after September 11, 2001.

TITLE II--OTHER RELIEF PROVISIONS

SEC. 201. EXCLUSION FOR DISASTER RELIEF PAYMENTS.

``SEC. 139. DISASTER RELIEF PAYMENTS.

``(a) General Rule.--Gross income shall not include any
amount received by an individual as a qualified disaster
relief payment.
``(b) Qualified Disaster Relief Payment Defined.--For
purposes of this section, the term `qualified disaster relief
payment' means any amount paid to or for the benefit of an
individual--
``(1) to reimburse or pay reasonable and necessary
personal, family, living, or funeral expenses incurred as a
result of a qualified disaster,
``(2) to reimburse or pay reasonable and necessary expenses
incurred for the repair or rehabilitation of a personal
residence or repair or replacement of its contents to the
extent that the need for such repair, rehabilitation, or
replacement is attributable to a qualified disaster,

[[Page H10122]]

``(3) by a person engaged in the furnishing or sale of
transportation as a common carrier by reason of the death or
personal physical injuries incurred as a result of a
qualified disaster, or
``(4) if such amount is paid by a Federal, State, or local
government, or agency or instrumentality thereof, in
connection with a qualified disaster in order to promote the
general welfare,

but only to the extent any expense compensated by such
payment is not otherwise compensated for by insurance or
otherwise.
``(c) Qualified Disaster Defined.--For purposes of this
section, the term `qualified disaster' means--
``(1) a disaster which results from a terroristic or
military action (as defined in section 692(c)(2)),
``(2) a Presidentially declared disaster (as defined in
section 1033(h)(3)),
``(3) a disaster which results from an accident involving a
common carrier, or from any other event, which is determined
by the Secretary to be of a catastrophic nature, or
``(4) with respect to amounts described in subsection
(b)(4), a disaster which is determined by an applicable
Federal, State, or local authority (as determined by the
Secretary) to warrant assistance from the Federal, State, or
local government or agency or instrumentality thereof.
``(d) Coordination With Employment Taxes.--For purposes of
chapter 2 and subtitle C, a qualified disaster relief payment
shall not be treated as net earnings from self-employment,
wages, or compensation subject to tax.
``(e) No Relief for Certain Individuals.--Subsections (a)
and (f) shall not apply with respect to any individual
identified by the Attorney General to have been a participant
or conspirator in a terroristic action (as so defined), or a
representative of such individual.
``(f) Exclusion of Certain Additional Payments.--Gross
income shall not include any amount received as payment under
section 406 of the Air Transportation Safety and System
Stabilization Act.''
(b) Conforming Amendments.--The table of sections for part
III of subchapter B of chapter 1 is amended by striking the
item relating to section 139 and inserting the following new
items:

``Sec. 139. Disaster relief payments.
``Sec. 140. Cross references to other Acts.''.

(c) Effective Date.--The amendments made by this section
shall apply to taxable years ending on or after September 11,
2001.

SEC. 202. AUTHORITY TO POSTPONE CERTAIN DEADLINES AND
REQUIRED ACTIONS.

(a) Expansion of Authority Relating to Disasters and
Terroristic or Military Actions.--Section 7508A is amended to
read as follows:

``SEC. 7508A. AUTHORITY TO POSTPONE CERTAIN DEADLINES BY
REASON OF PRESIDENTIALLY DECLARED DISASTER OR
TERRORISTIC OR MILITARY ACTIONS.

``SEC. 518. AUTHORITY TO POSTPONE CERTAIN DEADLINES BY REASON
OF PRESIDENTIALLY DECLARED DISASTER OR
TERRORISTIC OR MILITARY ACTIONS.

``In the case of a pension or other employee benefit plan,
or any sponsor, administrator, participant, beneficiary, or
other person with respect to such plan, affected by a
Presidentially declared disaster (as defined in section
1033(h)(3) of the Internal Revenue Code of 1986) or a
terroristic or military action (as defined in section
692(c)(2) of such Code), the Secretary may, notwithstanding
any other provision of law, prescribe, by notice or
otherwise, a period of up to one year which may be
disregarded in determining the date by which any action is
required or permitted to be completed under this Act. No plan
shall be treated as failing to be operated in accordance with
the terms of the plan solely as the result of disregarding
any period by reason of the preceding sentence.''.
(2) Section 4002 of Employee Retirement Income Security Act
of 1974 (29 U.S.C. 1302) is amended by adding at the end the
following new subsection:
``(i) Special Rules Regarding Disasters, Etc.--In the case
of a pension or other employee benefit plan, or any sponsor,
administrator, participant, beneficiary, or other person with
respect to such plan, affected by a Presidentially declared
disaster (as defined in section 1033(h)(3) of the Internal
Revenue Code of 1986) or a terroristic or military action (as
defined in section 692(c)(2) of such Code), the corporation
may, notwithstanding any other provision of law, prescribe,
by notice or otherwise, a period of up to one year which may
be disregarded in determining the date by which any action is
required or permitted to be completed under this Act. No plan
shall be treated as failing to be operated in accordance with
the terms of the plan solely as the result of disregarding
any period by reason of the preceding sentence.''.
(d) Additional Conforming Amendments.--
(1) Section 6404 is amended--
(A) by striking subsection (h),
(B) by redesignating subsection (i) as subsection (h), and
(C) by adding at the end the following new subsection:
``(i) Cross Reference.--

``For authority to suspend running of interest, etc. by reason of
Presidentially declared disaster or terroristic or military action, see
section 7508A.''.