[Congressional Record Volume 147, Number 178 (Thursday, December 20, 2001)]
[Senate]
[Pages S13856-S13864]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
UNANIMOUS CONSENT AGREEMENT--H.R. 2884
Mr. DASCHLE. Mr. President, there is a matter that has some urgency
associated with it only because I know the House is waiting to receive
the language. So in the interest of expediting consideration of this
particular piece of legislation, I now ask unanimous consent that the
Chair lay before the Senate a message from the House on H.R. 2884, that
the Senate concur in the amendment of the House with a further
amendment which is at the desk.
The PRESIDING OFFICER. Is there objection?
Mr. McCAIN. Reserving the right to object, what is 2884?
Mr. DASCHLE. Mr. President, 2884 is the Victims Relief Fund, the
legislation dealing with victims of terrorism.
Mr. GRAMM. What is the amendment, Mr. President?
Mr. DASCHLE. I yield to the Senator from New Jersey.
Mr. TORRICELLI. I thank the majority leader for yielding. When the
Senate unanimously passed this legislation
[[Page S13857]]
previously, we included waiving income taxes and payroll taxes for
families of the victims of September 11. The House of Representatives
in their bill included only income taxes and not payroll taxes.
When the House repassed the bill and sent it to us, they included a
provision that did not include payroll taxes but set a minimum of
$10,000 so lower income people would receive some tax refund. The House
wanted to retain the principle of not waiving payroll taxes but did
want to give some refund to low-income families. This was seen as
agreeable to both sides and fair.
Mr. GRAMM. Mr. President, further reserving the right to object, it
is my understanding there were additional provisions such as extended
unemployment, provisions of that nature. Are they in this bill?
Let me suggest the absence of a quorum so we could look at that.
The PRESIDING OFFICER. The majority leader has the floor.
Mr. DASCHLE. Mr. President, 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. DASCHLE. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. DASCHLE. Mr. President, I have a unanimous consent request that
is pending.
The PRESIDING OFFICER. Is there objection to the request?
Mr. BAUCUS. Reserving the right to object, is this the victims relief
bill, I ask the majority leader?
Mr. DASCHLE. I answer to the Senator from Montana it is the victims
relief bill.
Mr. BAUCUS. Reserving the right to object, and I shall not object,
there is a disaster in the State of Montana and other higher plain
States, which is a drought. I have been seeking agricultural disaster
assistance. I see that is not going to happen. I ask my friend from
South Dakota if he can assure me that at the first opportunity next
year we will take up and consider the agricultural disaster assistance
bill.
Mr. DASCHLE. Mr. President, I commend the Senator from Montana for
his efforts over the course of the last several months. I have been
impressing the Senate to act on disaster relief. Many farmers in South
Dakota share this problem, and I have applauded the efforts made by the
Senator from Montana. I appreciate his interest and his determination
to see that it adequately responds to the Great Plains, the Midwest,
and elsewhere.
I assure the Senator from Montana that at the first appropriate
opportunity we will find a way to address the legislation and find a
way in which to respond. As he recalls, we did some of that last
summer. We had a good debate about how much was necessary. I think the
Senator from Montana is correct in his observations that there is still
a great deal more to be done. I will work with him to see that that
happens.
Mr. BAUCUS. Mr. President, I thank my good friend from South Dakota.
I add that this bill is very necessary to the victims relief bill, as
it was reported to the Committee on Finance. I will not belabor it by
going through the provisions. According to the rules, there is not time
to do so. Suffice to say, this bill must pass in the next several hours
because it will give much-needed relief. I thank my friend.
Mr. SCHUMER. Mr. President, reserving the right to object, and I will
not object, I would like to just say that some of the provisions that
are not in this bill--first, the victims relief part of the bill is
very necessary. We did not want to stand in the way of that.
Originally, when the victims relief bill came over to the House, it had
provisions to benefit Lower Manhattan. We all know that Lower Manhattan
is in real trouble because of what happened on September 11. The great
fear is that businesses, large and small, will leave. The fear factor
is enormous.
Over on the House side, the chairman of the Ways and Means Committee
worked out a package that would help bring some relief. On this side,
Senator Clinton and I worked out a package that had tremendous support
in our version of the stimulus bill from the majority leader, as well
as the chairman of the Finance Committee. We had spent a great deal of
time after it looked as though the stimulus bill was not going to
happen, starting yesterday, and finishing about an hour and a half ago,
trying to come to a compromise between the House version and the Senate
version.
The chairman of the Ways and Means Committee in the other body and
our staffs worked long and hard to come up with the compromise we have
come up with. There are a few changes here and there that he might
like, I might like, and Senator Clinton might like, and others in New
York might like, but we did come to an agreement. Unfortunately, the
agreement we came to was not able to be reviewed by the Senators in
this body. We just came up with it about an hour, hour and a half ago.
Unfortunately, because time is late and because the victims package
has achieved that agreement, we will not stand in the way and object to
removing the New York part from the bill and bringing up this other
bill.
But I say this to my colleagues: We have a tremendous problem in
downtown Manhattan. We are getting FEMA relief, and it is working well.
The Senator from West Virginia has helped us in other areas. But tax
relief to companies, big and small, to individuals, to nonprofits that
don't have space right now, or that have space but are wondering
whether they can stay in Lower Manhattan, is vital to New York's
reblooming quickly.
I am hopeful that when we come back in January, the package that has
been agreed to and worked on by the chairman of the Ways and Means
Committee and many of his people, Senator Baucus, Senator Grassley,
Senator Clinton, and myself will serve as a basis for bringing
something up quickly then.
We had hoped to get something now. We have come really close--close
but no cigar, they say. We are going to try to gain that cigar as soon
as we come back. But make no mistake about it, we will be back. We very
much need the help, and we appreciate everybody's cooperation to help
us get there.
Mr. LOTT. Has the unanimous consent request been agreed to?
Mr. SCHUMER. I withdraw my objection.
The PRESIDING OFFICER. Is there objection?
Mr. ALLEN. Reserving the right to object.
The PRESIDING OFFICER. The Senator from Virginia.
Mr. ALLEN. Mr. President, I say to the Members, this final victims
package is a good package. I earlier introduced a measure to make sure
we included the provisions of S. 1433,which is supported by Senator
Warner, Senator Campbell, and Senator Craig. I am glad these ideas have
been recognized, that this war we are fighting is against terrorists
who target defenseless men, women, and children. The areas in which
these attacks occur are combat zones.
I am glad this package has been worked out, because the last thing
the families of these victims need to be worrying about is paying
taxes, whether income taxes or other types of taxes--this bill
addresses those concerns.
While my colleague from New York may want to add some other items to
this measure--but at this late hour will not--I commend to my
colleagues the fact that the police officers and firefighters who first
responded to the World Trade Center attacks, as well as the Pentagon,
risked their lives in hazardous conditions, breathing toxic gases, to
save the lives of their fellow citizens.
In my view, those who are serving in those terrorist attack zones
ought to be looked upon as the same as those who work in combat zones,
and the taxes of those first responders for that month ought not be
subject to income taxes. I am going to work next year to get this
proper recognition for our firefighters, law enforcement officers, and
rescue personnel, but I do not want to hold up this good victims'
relief package which means a good deal to a lot of families who feel a
very big hole in their hearts during this holiday season.
I yield the floor.
The PRESIDING OFFICER. Is there objection?
Mr. NICKLES. Reserving the right to object, and I shall not object.
The PRESIDING OFFICER. The Senator from Oklahoma.
[[Page S13858]]
Mr. NICKLES. Mr. President, I thank my colleague, Senator Allen, for
his comments. I also thank my colleague, Senator Torricelli, for his
work and the work we did in the Finance Committee. We also included the
victims from the Oklahoma City bombing disaster 6 years ago in which
189 people lost their lives. Likewise, they should not have to pay
taxes for that year or the preceding year. The amount of income is
almost de minimis, but it is only fair.
I thank my colleagues from New York and New Jersey for their
cooperation. My colleagues from New York had many additional, very
interesting items--accelerated depreciation and other ideas to
stimulate the economy. We are happy to work with them to try to make
that happen in the near future.
I thank my colleagues for their support, and I shall not object.
The PRESIDING OFFICER. Is there objection?
If there is no objection, without objection, it is so ordered.
The majority leader.
Mr. DASCHLE. Mr. President, I ask unanimous consent that the vote on
the conference report to accompany H.R. 3338 occur immediately
following the remarks made by the senior Senator from West Virginia.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. TORRICELLI. Will the majority leader yield?
The PRESIDING OFFICER. Is objection heard?
Mr. LOTT. Mr. President, I seek recognition, but in view of what we
have just agreed to, I know the Senator from New Jersey wants to be
heard. I yield the floor to him.
Mr. TORRICELLI. Mr. President, I thank the Republican leader for his
courtesy. I want to say a word of thanks to all of my colleagues. I was
proud to have offered this provision in the Finance Committee and again
on the Senate floor.
The PRESIDING OFFICER. The Chair needs to ascertain if there is
objection to the preceding unanimous consent request.
Mr. McCAIN. I withdraw my objection.
The PRESIDING OFFICER. The objection is withdrawn. Without objection,
it is so ordered.
The Chair laid before the Senate a message from the House, as
follows:
The PRESIDING OFFICER laid before the Senate the following message
from the House of Representatives:
Resolved, That the House agree to the amendments of the Senate to the
bill (H.R. 2884) entitled ``An Act 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 the following
House amendment to senate amendments:
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 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--
[[Page S13859]]
``(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.--
``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.--
(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.
(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 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.--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.
``(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
[[Page S13860]]
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.
``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.''.
(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. APPLICATION OF CERTAIN PROVISIONS TO TERRORISTIC OR
MILITARY ACTIONS.
(a) 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)).''.
(b) 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.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years ending on or after September 11,
2001.
SEC. 204. 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. 205. TREATMENT OF CERTAIN STRUCTURED SETTLEMENT
PAYMENTS.
(a) 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.
``SEC. 5891. STRUCTURED SETTLEMENT FACTORING TRANSACTIONS.
``(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.
``(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
[[Page S13861]]
``(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.''.
(b) 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.''.
(c) Effective Dates.--
(1) In general.--The amendments made by this section (other
than the provisions of section 5891(d) of the Internal
Revenue Code of 1986, as added by this section) 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.
(2) 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.
(3) 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--
(A) 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
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
(B) 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.
SEC. 206. PERSONAL EXEMPTION DEDUCTION FOR CERTAIN DISABILITY
TRUSTS.
(a) In General.--Subsection (b) of section 642 (relating to
deduction for personal exemption) is amended to read as
follows:
``(b) Deduction for Personal Exemption.--
``(1) Estates.--An estate shall be allowed a deduction of
$600.
``(2) Trusts.--
``(A) In general.--Except as otherwise provided in this
paragraph, a trust shall be allowed a deduction of $100.
``(B) Trusts distributing income currently.--A trust which,
under its governing instrument, is required to distribute all
of its income currently shall be allowed a deduction of $300.
``(C) Disability trusts.--
``(i) In general.--A qualified disability trust shall be
allowed a deduction equal to the exemption amount under
section 151(d), determined--
``(I) by treating such trust as an individual described in
section 151(d)(3)(C)(iii), and
``(II) by applying section 67(e) (without the reference to
section 642(b)) for purposes of determining the adjusted
gross income of the trust.
``(ii) Qualified disability trust.--For purposes of clause
(i), the term `qualified disability trust' means any trust
if--
``(I) such trust is a 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), and
``(II) all of the beneficiaries of the trust as of the
close of the taxable year are determined to have been
disabled (within the meaning of section 1614(a)(3) of the
Social Security Act, 42 U.S.C. 1382c(a)(3)) for some portion
of such year.
A trust shall not fail to meet the requirements of subclause
(II) merely because the corpus of the trust may revert to a
person who is not so disabled after the trust ceases to have
any beneficiary who is so disabled.''
``(3) Deductions in lieu of personal exemption.--The
deductions allowed by this subsection shall be in lieu of the
deductions allowed under section 151 (relating to deduction
for personal exemption).''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years ending on or after September 11,
2001.
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.
(a) In General.--Chapter 1 is amended by adding at the end
the following new subchapter:
``Subchapter Y--New York Liberty Zone Benefits
``Sec. 1400L. Tax benefits for New York Liberty Zone.
``SEC. 1400L. TAX BENEFITS FOR NEW YORK LIBERTY ZONE.
``(a) Special Allowance for Certain Property Acquired After
September 10, 2001.--
``(1) Additional allowance.--In the case of any qualified
New York Liberty Zone property--
``(A) the depreciation deduction provided by section 167(a)
for the taxable year in which such property is placed in
service shall include an allowance equal to 30 percent of the
adjusted basis of such property, and
``(B) the adjusted basis of the qualified New York Liberty
Zone property shall be reduced by the amount of such
deduction before computing the amount otherwise allowable as
a depreciation deduction under this chapter for such taxable
year and any subsequent taxable year.
``(2) Qualified new york liberty zone property.--For
purposes of this subsection--
``(A) In general.--The term `qualified New York Liberty
Zone property' means property--
``(i)(I) to which section 168 applies (other than railroad
grading and tunnel bores), or
``(II) which is computer software (as defined in section
167(f)(1)(B)) for which a deduction is allowable under
section 167(a) without regard to this subsection,
``(ii) substantially all of the use of which is in the New
York Liberty Zone and is in the active conduct of a trade or
business by the taxpayer in such Zone,
``(iii) the original use of which in the New York Liberty
Zone commences with the taxpayer after September 10, 2001,
and
``(iv) which is acquired by the taxpayer by purchase (as
defined in section 179(d)) after September 10, 2001, and
placed in service by the taxpayer on or before the
termination date, but only if no written binding contract for
the acquisition was in effect before September 11, 2001.
The term `termination date' means December 31, 2006 (December
31, 2009, in the case of nonresidential real property and
residential rental property).
``(B) Exceptions.--
``(i) Alternative depreciation property.--The term
`qualified New York Liberty Zone property' shall not include
any property to which the alternative depreciation system
under section 168(g) applies, determined--
``(I) without regard to paragraph (7) of section 168(g)
(relating to election to have system apply), and
``(II) after application of section 280F(b) (relating to
listed property with limited business use).
``(ii) Qualified leasehold improvement property.--Such term
shall not include qualified leasehold improvement property.
``(iii) Election out.--If a taxpayer makes an election
under this clause with respect to any class of property for
any taxable year, this subsection shall not apply to all
property in such class placed in service during such taxable
year.
``(C) Special rules relating to original use.--
``(i) Self-constructed property.--In the case of a taxpayer
manufacturing, constructing, or producing property for the
taxpayer's own use, the requirements of clause (iv) of
subparagraph (A) shall be treated as met if the taxpayer
begins manufacturing, constructing, or producing the property
after September 10, 2001, and before the termination date.
``(ii) Sale-leasebacks.--For purposes of subparagraph
(A)(iii), if property--
``(I) is originally placed in service after September 10,
2001, by a person, and
``(II) sold and leased back by such person within 3 months
after the date such property was originally placed in
service,
such property shall be treated as originally placed in
service not earlier than the date on which such property is
used under the leaseback referred to in subclause (II).
``(D) Allowance against alternative minimum tax.--The
deduction allowed by this subsection shall be allowed in
determining alternative minimum taxable income under section
55.
``(b) 5-Year Recovery Period for Depreciation of Certain
Leasehold Improvements.--
``(1) In general.--For purposes of section 168, the term
`5-year property' includes any qualified leasehold
improvement property.
``(2) Qualified leasehold improvement property.--For
purposes of this section--
``(A) In general.--The term `qualified leasehold
improvement property' means any improvement to an interior
portion of a building which is nonresidential real property
if--
[[Page S13862]]
``(i) such building is located in the New York Liberty
Zone,
``(ii) such improvement is made under or pursuant to a
lease (as defined in section 168(h)(7))--
``(I) by the lessee (or any sublessee) of such portion, or
``(II) by the lessor of such portion,
``(iii) such portion is to be occupied exclusively by the
lessee (or any sublessee) of such portion,
``(iv) such improvement is placed in service--
``(I) after September 10, 2001, and more than 3 years after
the date the building was first placed in service, and
``(II) before January 1, 2007, and
``(v) no written binding contract for such improvement was
in effect before September 11, 2001.
``(B) Certain improvements not included.--Such term shall
not include any improvement for which the expenditure is
attributable to--
``(i) the enlargement of the building,
``(ii) any elevator or escalator,
``(iii) any structural component benefiting a common area,
and
``(iv) the internal structural framework of the building.
``(C) Definitions and special rules.--For purposes of this
paragraph--
``(i) Commitment to lease treated as lease.--A commitment
to enter into a lease shall be treated as a lease, and the
parties to such commitment shall be treated as lessor and
lessee, respectively.
``(ii) Related persons.--A lease between related persons
shall not be considered a lease. For purposes of the
preceding sentence, the term `related persons' means--
``(I) members of an affiliated group (as defined in section
1504), and
``(II) persons having a relationship described in
subsection (b) of section 267; except that, for purposes of
this clause, the phrase `80 percent or more' shall be
substituted for the phrase `more than 50 percent' each place
it appears in such subsection.
``(D) Improvements made by lessor.--
``(i) In general.--In the case of an improvement made by
the person who was the lessor of such improvement when such
improvement was placed in service, such improvement shall be
qualified leasehold improvement property (if at all) only so
long as such improvement is held by such person.
``(ii) Exception for changes in form of business.--Property
shall not cease to be qualified leasehold improvement
property under clause (i) by reason of--
``(I) death,
``(II) a transaction to which section 381(a) applies, or
``(III) a mere change in the form of conducting the trade
or business so long as the property is retained in such trade
or business as qualified leasehold improvement property and
the taxpayer retains a substantial interest in such trade or
business.
``(3) Requirement to use straight line method.--The
applicable depreciation method under section 168 shall be the
straight line method in the case of qualified leasehold
improvement property.
``(4) 9-year recovery period under alternative system.--For
purposes of section 168(g), the class life of qualified
leasehold improvement property shall be 9 years.
``(c) Increase in Expensing Under Section 179.--
``(1) In general.--For purposes of section 179--
``(A) the limitation under section 179(b)(1) shall be
increased by the lesser of--
``(i) $35,000, or
``(ii) the cost of section 179 property which is qualified
New York Liberty Zone property placed in service during the
taxable year, and
``(B) the amount taken into account under section 179(b)(2)
with respect to any section 179 property which is qualified
New York Liberty Zone property shall be 50 percent of the
cost thereof.
``(2) Recapture.--Rules similar to the rules under section
179(d)(10) shall apply with respect to any qualified New York
Liberty Zone property which ceases to be used in the New York
Liberty Zone.
``(d) Tax-Exempt Bond Financing.--
``(1) In general.--For purposes of this title, any
qualified New York Liberty Bond shall be treated as an exempt
facility bond.
``(2) Qualified new york liberty bond.--For purposes of
this subsection, the term `qualified New York Liberty Bond'
means any bond issued as part of an issue if--
``(A) 95 percent or more of the net proceeds (as defined in
section 150(a)(3)) of such issue are to be used for qualified
project costs,
``(B) such bond is issued by the State of New York or any
political subdivision thereof,
``(C) the Governor of New York designates such bond for
purposes of this section, and
``(D) such bond is issued during calendar year 2002, 2003,
or 2004.
``(3) Limitation on amount of bonds designated.--The
maximum aggregate face amount of bonds which may be
designated under this subsection shall not exceed
$15,000,000,000.
``(4) Qualified project costs.--For purposes of this
subsection--
``(A) In general.--The term `qualified project costs' means
the cost of acquisition, construction, reconstruction, and
renovation of--
``(i) nonresidential real property and residential rental
property (including fixed tenant improvements associated with
such property) located in the New York Liberty Zone, and
``(ii) public utility property located in the New York
Liberty Zone.
``(B) Costs for certain property outside zone included.--
Such term includes the cost of acquisition, construction,
reconstruction, and renovation of nonresidential real
property (including fixed tenant improvements associated with
such property) located outside the New York Liberty Zone but
within the City of New York, New York, if such property is
part of a project which consists of at least 100,000 square
feet of usable office or other commercial space located in a
single building or multiple adjacent buildings.
``(C) Limitations.--Such term shall not include--
``(i) costs for property located outside the New York
Liberty Zone to the extent such costs exceed $7,000,000,000,
``(ii) costs with respect to residential rental property to
the extent such costs exceed $3,000,000,000, and
``(iii) costs with respect to property used for retail
sales of tangible property to the extent such costs exceed
$1,500,000,000.
``(D) Movable fixtures and equipment.--Such term shall not
include costs with respect to movable fixtures and equipment.
``(5) Special rules.--In applying this title to any
qualified New York Liberty Bond, the following modifications
shall apply:
``(A) Section 146 (relating to volume cap) shall not apply.
``(B) Section 147(c) (relating to limitation on use for
land acquisition) shall be determined by reference to the
aggregate authorized face amount of all qualified New York
Liberty Bonds rather than the net proceeds of each issue.
``(C) Section 147(d) (relating to acquisition of existing
property not permitted) shall be applied by substituting `50
percent' for `15 percent' each place it appears.
``(D) Section 148(f)(4)(C) (relating to exception from
rebate for certain proceeds to be used to finance
construction expenditures) shall apply to construction
proceeds of bonds issued under this section.
``(E) Financing provided by such a bond shall not be taken
into account under section 168(g)(5)(A) with respect to
property substantially all of the use of which is in the New
York Liberty Zone and is in the active conduct of a trade or
business by the taxpayer in such Zone.
``(F) Repayments of principal on financing provided by the
issue--
``(i) may not be used to provide financing, and
``(ii) are used not later than the close of the 1st
semiannual period beginning after the date of the repayment
to redeem bonds which are part of such issue.
The requirement of clause (ii) shall be treated as met with
respect to amounts received within 10 years after the date of
issuance of the issue (or, in the case of refunding bond, the
date of issuance of the original bond) if such amounts are
used by the close of such 10 years to redeem bonds which are
part of such issue.
``(G) Section 57(a)(5) shall not apply.
``(6) Separate issue treatment of portions of an issue.--
This subsection shall not apply to the portion of the
proceeds of an issue which (if issued as a separate issue)
would be treated as a qualified bond or as a bond that is not
a private activity bond (determined without regard to
subsection (a)), if the issuer elects to so treat such
portion.
``(e) Extension of Replacement Period for Nonrecognition of
Gain.--Notwithstanding subsections (g) and (h) of section
1033, clause (i) of section 1033(a)(2)(B) shall be applied by
substituting `5 years' for `2 years' with respect to property
which is compulsorily or involuntarily converted as a result
of the terrorist attacks on September 11, 2001, in the New
York Liberty Zone but only if substantially all of the use of
the replacement property is in the City of New York, New
York.
``(f) New York Liberty Zone.--For purposes of this section,
the term `New York Liberty Zone' means the area located on or
south of Canal Street, East Broadway (east of its
intersection with Canal Street), or Grand Street (east of its
intersection with East Broadway) in the Borough of Manhattan
in the City of New York, New York.''
(b) Clerical Amendment.--The table of subchapters for
chapter 1 is amended by adding at the end the following new
item:
``Subchapter Y. New York Liberty Zone Benefits.''
TITLE IV--DISCLOSURE OF TAX INFORMATION IN TERRORISM AND NATIONAL
SECURITY INVESTIGATIONS
SEC. 401. DISCLOSURE OF TAX INFORMATION IN TERRORISM AND
NATIONAL SECURITY INVESTIGATIONS.
(a) Disclosure Without a Request of Information Relating to
Terrorist Activities, Etc.--Paragraph (3) of section 6103(i)
(relating to disclosure of return information to apprise
appropriate officials of criminal activities or emergency
circumstances) is amended by adding at the end the following
new subparagraph:
``(C) Terrorist activities, etc.--
``(i) In general.--Except as provided in paragraph (6), the
Secretary may disclose in writing return information (other
than taxpayer return information) that may be related to a
terrorist incident, threat, or activity to the extent
necessary to apprise the head of the appropriate Federal law
enforcement agency responsible for investigating or
responding to such terrorist incident, threat, or activity.
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.
[[Page S13863]]
``(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.
``(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 to inspection or disclosure 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.
TITLE V--NO IMPACT ON SOCIAL SECURITY TRUST FUNDS
SEC. 501. NO IMPACT ON SOCIAL SECURITY TRUST FUNDS.
(a) In General.--Nothing in this Act (or an amendment made
by this Act) 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.
[[Page S13864]]
The amendment (No. 2689) was agreed to.
(The text of the amendment is printed in today's Record under
``Amendments Submitted and Proposed.'')
Mr. TORRICELLI. I express my thanks to Senator Daschle, Senator Lott,
Senator Baucus, Senator Grassley, Senator Nickles, and so many Members
of the Senate who made this possible. I know during this Christmas
season that the plight and distress of the families of those who lost
their lives in Virginia, New York, New Jersey, and Pennsylvania will be
in all of our thoughts. That really is not enough.
Charities have raised an enormous amount of money, but it has not
gotten to the victims' families. There is a victims' fund this
Government has raised, but it has not yet gotten to these victims'
families. This tax relief offers real and immediate benefits. It has
the promise that as American citizens give funds to charities, the
funds from those charities will not in turn be taxed as they get to the
widows, the parents, or other relatives. It holds the promise that
there will be a refund given to many of these families.
Offering financial relief is little solace given such enormous pain,
but it is of some help. Families who have buried their loved ones are
also paying mortgages, tuition, and buying groceries. This is real
help.
I am grateful to the Members of the Senate who have helped pass this
legislation. I am grateful to Chairman Thomas of the House Ways and
Means Committee who has been with us as an architect in its passage.
I express on behalf of all the families for whom this means so much
in this holiday season their gratitude to all of you who have made this
possible. I yield the floor.
The PRESIDING OFFICER (Ms. Cantwell). The majority leader.
Mr. DASCHLE. Madam President, I thank both Senators from New Jersey
for their extraordinary work in getting us to this point. This was not
easy, and I am grateful to them for their persistence, their
leadership, and their efforts. This would not have happened were it not
for their direct involvement to this moment. I say the same to the
Senators from New York for the tremendous work they have done assisting
us in getting to this point as well.
The PRESIDING OFFICER. The Republican leader.
Mr. LOTT. Madam President, I will be brief because I know we want to
finish up the debate on the Defense appropriations conference report
and get a recorded vote. There are Senators who would like that to
occur sooner rather than later, so I will not belabor the point.
I am glad we worked out the agreement on the victims' disaster of
September 11. I appreciate the cooperation all the way around. One can
tell by the discussion that one of the reasons some of these other
meritorious items were not added is that once we had one, there would
be two, three, four, and we could not get all those worked out in the
short time we had, and we stood the chance of losing the victims' tax
provisions. I am glad we did that.
Also, I understand many of these provisions, including the New York
provision, are in the stimulus package that has been voted on by the
House. We are going to eventually get a stimulus package, and I hope
and expect that provision will be in the bill.
I yield the floor.
The PRESIDING OFFICER. The Senator from New Jersey.
Mr. CORZINE. I thank the Chair.
Madam President, I, too, thank the Senate and the leadership of
Senator Daschle, Senator Lott, the chairman of the House Ways and Means
Committee, Senator Baucus, and others who have worked with us to allow
this victims' relief effort to come to pass.
Nothing can be more sincere and heartfelt during this holiday season
than to respond with this legislation for families who have lost so
much.
I thank the Senate for its efforts.
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