[Congressional Record (Bound Edition), Volume 147 (2001), Part 12]
[Senate]
[Pages 17270-17277]
[From the U.S. Government Publishing Office, www.gpo.gov]



          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. ALLEN (for himself, Mr. Warner, Mr. Campbell, and Mr. 
        Craig):
  S. 1433. A bill to amend the Internal Revenue Code of 1986 to provide 
tax relief for victims of the terrorist attacks against the United 
States on September 11, 2001; to the Committee on Finance.
  Mr. ALLEN. Mr. President, I rise today to talk about a bill I 
introduced this morning. The first cosponsor of this measure is my good 
friend and colleague, Senator John Warner of Virginia. The bill is the 
Victims of Terrorism Relief Act of 2001, which would modify current tax 
policy to provide needed relief and compassion to the victims of the 
terrorist attacks that occurred on September 11, 2001.
  As you well know--and all Americans know--on September 11, 2001, the 
world was stunned by what may prove to be the most vile, most 
horrifying act of hate and terror against a nation's people.
  While many questions will remain unanswered in the weeks and months 
to come, what is immediately clear is that the conduct of war, as 
previously waged by the enemies of the United States, has been suddenly 
altered. That conduct of war is so different than what we ever imagined 
as a civilized Nation. This new war does not differentiate between a 
military and a civilian target. The enemies of liberty and democracy do 
not distinguish between a trained soldier and an unarmed child. The 
Federal Government, and the Congress, have previously recognized, and 
rightfully so, the special circumstances of some of our citizens who 
voluntarily serve their country in potentially dangerous regions 
outside of the United States.
  Current law provides a reduction in the death tax liability of the 
estates of members of the Armed Forces who are killed while serving in 
a combat zone or die as a result of injuries suffered while serving in 
a combat zone.
  In addition, current law provides an exemption from the Federal 
income tax, on the income earned in the year of death, by Federal 
military and civilian employees who die during, or as a result of, 
injuries suffered in a military or terrorist attack outside of the 
United States.
  These brave and honorable individuals put their lives on the line for 
our country. It is only right that we recognize their extraordinary 
dedication and their sacrifice.
  Unfortunately, the advent of a new type of warfare means many 
provisions in our Tax Code, which were designed to provide tax relief 
to Federal military and civilian employees killed in service to their 
country, are now inadequate in the face of new threats. These benefits 
do not extend such relief to civilians who may be likewise killed in 
enemy attacks now indiscriminately aimed at civilian targets, as well 
as military installations.
  As we recognize that our world and the rules of war, as the 
terrorists use them, have changed, we, too, must change the tax 
benefits of those citizens and their families who are adversely 
affected.
  To address these inadequacies in the current Tax Code, I introduced 
the Victims of Terrorism Tax Relief Act of 2001 which would extend and 
expand current law benefits to any individual who died as a result of 
the terrorist attacks occurring on September 11, 2001.
  Specifically, my legislation eliminates all Federal death taxes on 
the estates of any individual killed during, or as a result of injuries 
derived from, the September 11, 2001 terrorist attacks.
  It exempts from Federal income tax, in the year of death, any income 
earned by any individual killed during, or who died as a result of 
injuries resulting from, the September 11, 2001, terrorist attacks.
  It ensures that all our citizens--law enforcement, firefighters, 
rescue and relief workers, nurses, doctors, anyone--are recognized for 
their heroism and their sacrifice.
  On September 13, 2001, the House of Representatives unanimously 
passed H.R. 2884, demonstrating overwhelming bipartisan support for 
extending current law tax benefits to civilian victims of the September 
11, 2001, terrorist attacks. While I do not believe the legislation 
went far enough, in that it does not provide for full relief from 
Federal death taxes, it takes a very strong stand, sending a message of 
unity from Washington.
  This is a recognition that all of those who lost their lives, in a 
violent act of war on the United States, on September 11, 2001, whether 
they are military personnel, civilian personnel, rescue workers, 
firefighters, police, nurses, citizens trying to help, citizens in 
their offices, children taking a plane trip, passengers on a plane, 
pilots of planes, all of these individuals have left us a legacy. 
Indeed, it is an enduring legacy of purpose, a legacy of compassion, a 
love of liberty, and a quest for justice.
  We must honor all of those who lost their lives in this vile act of 
war on the United States and never forget; for their memory has truly 
unified a very diverse nation and has made it an even stronger and more 
respectful nation. We will honor and always remember them.
  The U.S. Senate must rise to the occasion and stand in solidarity 
with the House of Representatives. The Senate must promptly pass this 
important legislation. It matters to those victims and their families.
  I have personally talked to many, too many, of those family members--
brothers, children, and wives--who have lost loved ones because of this 
dastardly terrorist attack. They are in a time of great grief. That 
grief will continue until the day they pass from this earth and reunite 
with their loved ones in heaven.
  In this new war against the United States, the enemy is making all 
Americans, whether they are military or civilian, young or old, 
parents, children or spouses, targets for their attacks.
  In this effort, the Federal Government must adapt its death benefits 
to take into consideration this sad truth: that the traditional line 
between combatants and noncombatants is not always respected. I have 
told those folks that their husband or their brother or their father is 
a hero and that they were killed because they were here in America. 
These grieving families need our assistance as much as do the families 
of our brave military personnel.
  What they do not need in this time of mourning is the added worry of 
filling out tax forms. It is going to be hard enough for them to get by 
emotionally, much less financially.
  For the Senate to act promptly on this legislation, would be to send 
a positive, reassuring message to these families: you are not going to 
have to worry about any of these tax forms, or how to afford new taxes 
in a time of

[[Page 17271]]

grief--you are not alone in this. We must let them know we appreciate 
them as the heroes they are. We will always remember them, their acts 
of martyrdom and heroism unifying this Nation like I have never seen it 
unified in all of our history.
  I hope my Senate colleagues, as they all start coming back after the 
holy days, will rise in applause, and help to ensure that our tax 
benefit laws reflect the realities of the new war against civilians, 
allowing them the same sort of benefits that we provide for our brave 
military personnel.
  I ask unanimous consent that the text of my legislation introduced 
earlier in the day be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1433

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Victims of Terrorism Relief 
     Act of 2001''.

     SEC. 2. INCOME TAXES OF VICTIMS OF TERRORIST ATTACKS.

       (a) In General.--Section 692 of the Internal Revenue Code 
     of 1986 (relating to income taxes of members of Armed Forces 
     on death) is amended by adding at the end the following new 
     subsection:
       ``(d) Certain Individuals Dying as a Result of September 
     11, 2001, Terrorist Attacks.--
       ``(1) In general.--In the case of any individual who dies 
     as a result of wounds or injury incurred as a result of the 
     terrorist attacks against the United States on September 11, 
     2001, any tax imposed by this subtitle shall not apply--
       ``(A) with respect to the taxable year in which falls the 
     date of such individual's death, and
       ``(B) with respect to any prior taxable year in the period 
     beginning with the last taxable year ending before the 
     taxable year in which the wounds or injury were incurred.
       ``(2) Exception.--Paragraph (1) shall not apply to an 
     individual whom the Secretary determines was a perpetrator of 
     any such terrorist attack.''.
       (b) Conforming and Clerical Amendments.--
       (1) The heading of section 692 of such Code is amended to 
     read as follows:

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

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

``Sec. 692. Income taxes of members of Armed Forces on death and 
              victims of certain terrorist attacks.''.
       (3) Section 5(b)(1) of such Code is amended by inserting 
     ``and victims of certain terrorist attacks'' after ``on 
     death''.
       (4) Section 6013(f)(2)(B) of such Code is amended by 
     inserting ``and victims of certain terrorist attacks'' after 
     ``on death''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years ending on or after September 11, 
     2001.

     SEC. 3. RELIEF FROM ESTATE TAX.

       (a) In General.--Section 2201 of the Internal Revenue Code 
     of 1986 is amended--
       (1) in the first sentence by inserting ``(a) In General.--
     '' before ``The additional estate tax''; and
       (2) by adding at the end the following:
       ``(b) Victims of Certain Terrorist Attacks.--No tax imposed 
     under this subtitle shall apply to the transfer of the 
     taxable estate of any individual who dies as a result of 
     wounds or injury incurred as a result of the terrorist 
     attacks against the United States on September 11, 2001. The 
     preceding sentence shall not apply with respect to any 
     individual whom the Secretary determines was a perpetrator of 
     any such terrorist attack.''.
       (b) Clerical Amendments.--
       (1) The heading of section 2201 of such Code is amended to 
     read as follows:

     ``SEC. 2201. COMBAT ZONE-RELATED DEATHS OF MEMBERS OF THE 
                   ARMED FORCES AND DEATHS OF VICTIMS OF CERTAIN 
                   TERRORIST ATTACKS.''.

       (2) The item relating to section 2201 in the table of 
     sections for subchapter C of chapter 11 of such Code is 
     amended to read as follows:

``Sec. 2201. Combat zone-related deaths of members of the Armed Forces 
              and deaths of victims of certain terrorist attacks.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to estates of decedents dying on or after 
     September 11, 2001.
                                 ______
                                 
      By Mr. SPECTER (for himself, Mr. Bond, Mr. Bunning, Mrs. Boxer, 
        Mr. Burns, Ms. Cantwell, Mr. Chafee, Mrs. Clinton, Mr. Ensign, 
        Mr. Harkin, Mr. Helms, Mr. Kohl, Ms. Landrieu, Mr. Nelson of 
        Florida, Mr. Schumer, Ms. Collins, Mr. Crapo, Mr. Dorgan, Mr. 
        Miller, Mr. Dayton, Mr. Nelson of Nebraska, Mr. Corzine, Mr. 
        McCain, Mr. Wellstone, Ms. Snowe, Mrs. Carnahan, Mrs. 
        Feinstein, and Mr. Conrad):
  S. 1434. A bill to authorize the President to award posthumously the 
Congressional Gold Medal to the passengers and crew of Untied Airlines 
flight 93 in the aftermath of the terrorist attack on the United States 
on September 11, 2001; to the Committee on Banking, Housing, and Urban 
Affairs.
  Mr. SPECTER. Madam President, today I have sought recognition to 
introduce a bill to authorize the President to award posthumously the 
Congressional Gold Medal to the passengers and crew of United Airlines 
Flight 93 in the aftermath of the terrorist attack on the United States 
on September 11, 2001. The bill which I am introducing would authorize 
the posthumous award of a Congressional Gold Medal to each of the crew 
and passengers of United Airlines Flight 93, which took off from 
Newark, New Jersey, changed course over Ohio, and crashed in 
Shanksville, PA, which is located in Somerset County.
  On Friday, after the Senate had passed H.R. 2888, a resolution 
authorizing the use of force and $40 billion for additional disaster 
assistance, both of which have been requested by the President, Senator 
Santorum and I flew by helicopter to Shanksville, PA, Somerset County, 
which is in southwestern Pennsylvania. There, we took a look at the 
crash scene, participated in a prayer service, and talked to the 
representatives of the FBI and the National Transportation Safety 
Board, as well as our constituents and friends in the area.
  At that time, we found absolute rubble. The plane had traveled at a 
speed of approximately 450 miles an hour at a very low level as it 
passed by the Johnstown, PA airport, which is slightly to the north of 
the ultimate crash scene. The plane hit the ground with an enormous 
impact, leaving just traces, the debris of people, regrettably, and the 
plane itself.
  In our conversations with the officials of the National 
Transportation Safety Board, Senator Santorum and I inquired into a 
rumor which had been circulating that the plane might have been shot 
down. However, we were assured by the officials from the National 
Transportation Safety Board that such an event, in fact, had not 
happened.
  Notwithstanding the debris, the officials were able to piece together 
the four corners of the plane. Had the plane been shot down, there 
would have been some sign of it prior to the impact and prior to the 
crash.
  While we were at the scene, Senator Santorum and I announced our 
intention to seek the Congressional Gold Medal for the passengers and 
crew of United Airlines Flight 93. I am introducing this legislation 
today and, since yesterday, a large number of cosponsors have already 
signed on to the bill. Therefore, it is being introduced on behalf of 
Senator Harkin, Senator Boxer, Senator Bond, Senator Bunning, Senator 
Burns, Senator Cantwell, Senator Clinton, Senator Ensign, Senator 
Helms, Senator Landrieu, Senator Nelson of Florida, and Senator 
Schumer.
  The medal has special significance for the Senate, the House of 
Representatives, and for the Capitol because all indications are that 
the plane--and this is speculation, because we will never know for 
certain--but, there are indications that the plane was headed for the 
U.S. Capitol. That statement was made by Vice President Cheney on 
Sunday, September 16 on NBC's ``Meet The Press.'' It is speculation. I 
want to clearly identify it as such because there is no way to be sure. 
But the speculation is supported by the fact that the plane which hit 
the Pentagon had been on a direct line to the White House and it veered 
off at the last moment. The fourth plane, United Airlines Flight 93, 
appeared to have been headed in a line that could have been to the 
White House, or even to Camp

[[Page 17272]]

David, although it is unlikely to have been headed to Camp David since 
no one was there at the time. Most likely, Flight 93 was headed to the 
Capitol, the symbol of our Nation.
  Wherever the United States is symbolized around the world, it is the 
Capitol dome that represents the nation. The terrorists intended to 
strike at us in every way possible: physically, psychologically, 
emotionally, and at the very Capitol.
  So it is with a heavy heart, which is a sentiment shared by Americans 
all across he land and really, by most people across the globe, that I 
introduce this bill denominated at the ``Honoring the Passengers and 
Crew of United Airlines Flight 93 Act.''
  On September 11, 2001, United Airlines Flight 93 took off at 8:44 
a.m. from Newark, New Jersey, destined for San Francisco, California;
  The plane was hijacked by 4 terrorists shortly after it took off;
  It is widely presumed that the terrorists who took control of United 
Airlines Flight 93 intended to use the aircraft as a weapon and crash 
it into the United States Capitol Building in Washington, D.C.;
  The passengers and crew of United Airlines Flight 93 learned from 
cellular phone conversations with their loved ones of the fate of the 3 
other aircraft that were hijacked earlier that same day and used as 
weapons to murder thousands of innocent people and destroy American 
landmarks;
  The passengers and crew of United Airlines Flight 93, recognizing the 
potential danger that the aircraft they were aboard posed to large 
numbers of innocent Americans, American institutions, and the symbols 
of American democracy, took heroic and noble action to ensure that the 
aircraft they were aboard could not be used as a weapon:
  The 40 people in all, 33 passengers and 7 crew of United Airlines 
Flight 93, in the ultimate act of selfless courage and supreme 
sacrifice, fought to recapture their flight from the terrorists; and
  The struggle of the crew and passengers of United Airlines Flight 93 
against the terrorists caused the Boeing 757 to crash down in a 
sparsely populated area near Shanksville, Pennsylvania at 10:10 a.m., 
September 11, 2001, possibly saving countless lives in the Nation's 
Capital.
  The President is authorized, on behalf of Congress, to award 
posthumously a gold medal of appropriate design to each of the United 
Airlines Flight 93 crew members: Lorraine G. Bay; Sandra W. Bradshaw; 
Jason Dahl; Wanda A. Green; LeRoy Homer; CeeCee Lyles; and Deborah A. 
Welsh; and the United Airlines Flight 93 passengers: Christian Adams; 
Todd Beamer; Alan Beaven; Mark Bingham, who made a call to his mother; 
Deora Bodley; Marion Britton; Thomas E. Burnett, Jr.--who was one of 
the individuals who had cellular phone contact--William Cashman; 
Georgine Rose Corrigan; Joseph Deluca; Patrick Driscoll; Edward Felt; 
Colleen Fraser; Andrew Garcia; Jeremy Glick--another one of the 
passengers who had contact with his wife, according to very detailed 
newspaper accounts, with the determination by Mr. Glick, according to 
his wife's report, that something would be done. Obviously, something 
was done--Kristin Gould; Lauren Grandcolas; Donald F. Greene; Linda 
Gronlund; Richard Guadagno; Toshiya Kuge; Hilda Marcin; Waleska 
Martinez; Nicole Miller; Louis J. Nacke; Donald Peterson; Mark 
Rothenberg; Christine Snyder; John Talignani; Honor Wainio; and 3 
additional heroes whose families have requested that their names be 
withheld.
  The original thought Senator Santorum and I had was to make the 
recommendation requesting the award of these medals only to the three 
individuals who had been identified as having cellular phone contact. 
However, it is entirely likely that others were involved in the heroic 
effort to somehow storm the cockpit. What precisely happened during 
that flight, we do not know. We may know more when the black box or the 
voice recorder is located and investigated. There was a very heroic 
action to stop that plane from continuing on its flight--wherever it 
was headed--presumably to the Capitol Building, causing it to crash and 
take the lives of the 33 passengers, seven crew members, and foiling 
the efforts of those four terrorists.
  I send the bill to the desk and ask unanimous consent that it be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1434

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Honoring the Passengers and 
     Crew of United Flight 93 Act''.

     SEC. 2. FINDINGS.

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

     SEC. 3. CONGRESSIONAL GOLD MEDAL.

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

[[Page 17273]]



     SEC. 4. STATUS AS NATIONAL MEDALS.

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

     SEC. 5. AUTHORIZATION OF APPROPRIATIONS.

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

  Mr. DORGAN. Madam President, I ask unanimous consent to be added as a 
cosponsor to the Senator's bill.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
                                 ______
                                 
      By Mr. SPECTER:
  S. 1436. A bill to authorize additional funding for Members of the 
Senate which may be used by a Member for mailings to provide notice of 
town meetings; to the Committee on Rules and Administration.
  Mr. SPECTER. Mr. President, I have sought recognition today to 
introduce legislation which specifically authorizes funding for 
Senators to mail town meeting notices to their constituents. My 
legislation authorizes $3 million each year for the next five years for 
Members to spend on the mailing of town meeting notices in counties 
with populations of less than 50,000.
  Town meetings are the best way for Members to inform constituents 
about our actions in Washington, and town meeting notices are the most 
effective means we have of advising constituents about these events. 
Unfortunately, the budgets under which we operate today are very 
restrictive and do not allow us to properly advise all of our 
constituents when we will be holding a town meeting in their area. For 
Pennsylvania alone, it would cost $735,000, one third of my entire 
office budget, to circulate town meeting notices to each household in 
Pennsylvania. For this reason, additional funding is necessary to allow 
Members to send adequate notice to constituents of their visits 
throughout their States. However, recognizing the fiscal constraints 
under which we are currently operating, I have limited the scope of my 
legislation to only counties with smaller populations.
  Smaller, rural communities are not always effectively reached by the 
mass media, which are generally relied upon to deliver news of our 
legislative activities. For example, if you take the northern tier of 
Pennsylvania, or the southern tier, where residents do not necessarily 
get any of the major newspapers and are outside television range, 
unless you actually go to the county, it is very hard for Senators to 
communicate with their constituents about what they are doing in 
Washington. Town meetings are a valuable forum in which Members can 
share details of our work and in turn hear directly from constituents 
concerning their thoughts on a variety of topics. My legislation would 
ensure that constituents in all parts of a Member's State are afforded 
the opportunity to participate in this process.
  I regularly visit all 67 counties in Pennsylvania and find it very 
refreshing to get outside the beltway, to find out what people are 
thinking about in the more rural, remote parts of Pennsylvania. 
Likewise, my constituents also find it valuable to be able to receive 
notice that Arlen Specter is coming to town, to listen to a short 
speech, and spend the majority of meeting time participating in a 
question and answer session. That way you have participatory democracy.
  In July 2001, during Senate floor consideration of the Fiscal Year 
2002 Legislative Branch Appropriations bill, Subcommittee Chairman 
Durbin and Ranking Minority Member Bennett accepted my amendment which 
provides $3 million for the mailing of town meeting notices, subject to 
authorizing legislation. Today I am introducing this authorizing 
legislation, and urge my colleagues to join me in supporting its timely 
passage.
                                 ______
                                 
      By Mr. LEAHY (for himself, Mr. Hatch, and Mr. Wyden):
  S. 1437. A bill to clarify the applicable standards of professional 
conduct for attorneys for the Government, and for other purposes; to 
the Committee on the Judiciary.
  Mr. LEAHY. Mr. President, I have spoken many times over the past two 
years of the problems caused by the so-called McDade law, 28 U.S.C. 
530B, which was slipped into the omnibus appropriations bill at the end 
of the 105th Congress. The McDade law has delayed important criminal 
investigations, prevented the use of effective and traditionally-
accepted investigative techniques, and served as the basis of 
litigation to interfere with legitimate Federal prosecutions. At a time 
when we need Federal law enforcement authorities to move quickly to 
catch those responsible for last week's terrorist attacks, and to 
prevent further attacks on our country, we can no longer tolerate the 
drag on Federal investigations and prosecutions caused by this ill-
considered legislation.
  The bill that I am introducing today, along with Senators Hatch and 
Wyden, will modify the McDade law by establishing a set of rules that 
clarify the professional standards applicable to government attorneys. 
I introduced similar legislation in the last Congress, but was unable 
to get it before the Judiciary Committee for consideration. Since then, 
I have continued to work closely with the Justice Department and the 
FBI to monitor the problems caused by the McDade law and to refine this 
corrective legislation. I hope Congress will make it a top priority as 
it considers ways to improve Federal law enforcement and combat 
terrorism.
  By way of background, controversy surrounding the application of 
State ethics rules to Federal prosecutors began over a decade ago, when 
a Federal appellate court held in United States v. Hammad, that a 
disciplinary rule prohibiting lawyers from communicating with persons 
they knew to be represented applied in the investigatory stages of a 
Federal criminal prosecution. The court also noted that suppression of 
evidence was an appropriate remedy for a prosecutor's breach of an 
ethical rule.
  The Department of Justice responded to the Hammad opinion with what 
became known as the Thornburgh Memorandum. Issued on June 8, 1989, the 
Memorandum asserted that ``contact with a represented individual in the 
course of authorized law enforcement activity does not violate'' the 
ABA's model ``no contact'' rule. The Memorandum concluded, ``The 
Department will resist, on Supremacy Clause grounds, local attempts to 
curb legitimate Federal law enforcement techniques.''
  The Federal courts responded negatively to the Department's position. 
In general, the Department was unable to persuade the courts of the 
efficacy of the Attorney General's policy statement.
  Amid mounting criticism of the Thornburgh Memorandum, Attorney 
General Reno issued regulations in 1994 governing all Justice 
Department litigators in their communications with persons represented 
by counsel. These regulations allowed contacts with represented persons 
in certain circumstances, even if such contacts were at odds with State 
or local Federal court ethics rules. State disciplinary authorities 
could sanction a government attorney for willful violation of the 
regulations, but only upon a finding by the Attorney General that a 
willful violation had occurred.
  The Department's new regulations shared the fundamental defect of the 
Thornburgh Memorandum, regulation of Federal prosecutors by the Justice 
Department instead of by the courts, without valid statutory authority. 
Not surprisingly, the only court to consider these regulations found 
them to be invalid.
  On May 1, 1996, Representative Joseph McDade introduced legislation 
that sought to resolve the controversy over the Justice Department's 
claimed authority to write its own ethics rules. In essence, H.R. 3386 
provided that Federal prosecutors were governed by the ethics rules 
that apply to lawyers generally. A hearing on the bill was held on 
September 12, 1996, before the Subcommittee on Courts and Intellectual 
Property, but no further action was taken.
  On March 5, 1998, Representative McDade introduced H.R. 3396, a 
modified version of H.R. 3386. Although the House Judiciary Committee 
did not hold hearings or act on the bill, language similar to H.R. 3396 
was included

[[Page 17274]]

in the House-passed Commerce-Justice-State appropriations bill for 
FY1999. Thereafter, without the benefit of any hearings or debate in 
the Senate, and over the objection of a bipartisan majority of the 
Senate Judiciary Committee, the same language was enacted as Title VIII 
of the final omnibus bill, with a six-month delayed effective date.
  At a hearing before a Judiciary Subcommittee on March 24, 1999, a 
number of law enforcement officials lined up to criticize the new law. 
In particular, they argued that its vague directive to comply with 
rules in each State where the attorney engages in his or her duties 
leaves prosecutors unsure about what rule applies to particular 
conduct. The one certain result of this confusion: Attorneys would 
refrain from taking critically important investigative steps or would 
leave law enforcement officers to make their own decisions about whom 
and how to investigate.
  The McDade law went into effect on April 19, 1999. Since then, all of 
law enforcement's concerns about the McDade law have come to pass.
  In floor statements on May 25 and September 14, 2000, I described 
some of the devastating effects that the McDade law is having on 
Federal law enforcement efforts across the country. You will recall 
some of the disturbing facts I described:
  In Oregon, Federal prosecutors will no longer authorize undercover 
operations, and the FBI was forced to shut down its Innocent Images 
initiative, which targets child pornography and exploitation.
  In California, a grand jury investigation into an airline's safety 
and maintenance practices was stalled for many months because of the 
McDade law's interplay with that State's ethics rules. After about a 
year of investigation, one of the airline's planes crashed, after 
experiencing mechanical problems on the first leg of its trip.
  In another State, the FBI was stymied in a child murder investigation 
because of a State Bar ethics rule that went far beyond what is 
required by established Supreme Court and Federal appellate case law.
  There are other recent examples. In one case, the FBI has had to 
close an investigation into allegations of fraud committed by the 
officials of a city with regard to FEMA disaster funds after the city's 
attorney invoked the McDade law to prohibit FBI agents from 
interviewing any city employees. In another case, counsel for an 
aviation company has used the McDade law to prevent the FBI from 
working with company employees who are willing to provide information 
and evidence concerning allegations that the company has been selling 
defective aircraft engine parts to military and civilian airlines.
  Of more immediate urgency, the McDade law seriously threatens to 
impede the terrorism investigation into the events of September 11, 
2001. In this widespread, international investigation, the McDade law 
will subject Justice Department attorneys to multiple and different 
attorney conduct rules, either because the attorneys working on or 
supervising the investigation are admitted to practice in more than one 
state, or because they are seeking assistance through court processes, 
search warrants; material witness warrants; criminal complaints; and 
grand jury subpoenas, in more than one Federal district court, each of 
which adopts its own set of attorney conduct rules. How are Justice 
Department attorneys meant to resolve conflicts in those rules in a 
manner that is reliable without unduly delaying this critical 
investigation?
  There can no longer be any serious doubt about the need for 
corrective legislation. We cannot afford to wait until the McDade law 
impedes the investigation into last Tuesday's attacks before taking 
action.
  Supporters of the McDade law have argued that Federal prosecutors are 
no worse off than their State counterparts, who have long been subject 
to State ethics rules. This is simply not the case. State prosecutors 
practice almost entirely before the courts of the State in which they 
are licensed: they do not practice in Federal court. Thus, they are 
subject to only one set of ethics rules, the rules applied by the 
courts before which they appear and the rules of the State in which 
they are licensed are one and the same. This is not true for Federal 
prosecutors, who are licensed by a State but practice in Federal courts 
and must comport with local Federal court ethics rules. Thus, Federal 
prosecutors are generally subject to at least two sets of potentially 
conflicting ethics rules.
  Additionally, Federal prosecutors frequently work across State lines. 
This is not true of State prosecutors, whose work is generally confined 
to a single State. Under the McDade law, Federal prosecutors must 
comport with the State ethics rules of each State where they engage in 
their duties, which may be different than the rules of either the 
licensing State or the local Federal court. This means that Federal 
prosecutors may be subject to three or more sets of ethics rules with 
respect to the same conduct, including two or more sets of State ethics 
rules that do not take into consideration the special needs and 
interests of the United States in investigating and prosecuting 
violations of Federal law.
  In any event, even assuming that State Bar rules are causing serious 
problems for State prosecutors as well as Federal prosecutors, that is 
a matter for the States, not for Congress. Our responsibility is to 
ensure the effective enforcement of the Federal criminal laws, and that 
is what my legislation seeks to accomplish.
  The Professional Standards for Government Attorneys Act adheres to 
the basic premise of the McDade law: The Department of Justice does not 
have the authority it has long claimed to write its own ethics rules. 
This legislation establishes that the Department may not unilaterally 
exempt Federal trial lawyers from the standards of professional 
responsibility adopted by the Federal courts. Federal courts are the 
more appropriate body to establish such standards for Federal 
prosecutors, not only because Federal courts have traditional authority 
to establish such standards for lawyers generally, but because the 
Department lacks the requisite objectivity.
  The first part of this bill embodies the traditional understanding 
that when lawyers handle cases before a Federal court, they should be 
subject to the Federal court's standards of professional 
responsibility, and not to the possibly inconsistent standards of other 
jurisdictions. By incorporating this ordinary choice-of-law principle, 
the bill preserves the Federal courts' traditional authority to oversee 
the professional conduct of Federal trial lawyers, including Federal 
prosecutors. It thus avoids the uncertainties presented by the McDade 
law, which potentially subjects Federal prosecutors to State laws, 
rules of criminal procedure, and judicial decisions which differ from 
existing Federal law.
  Another part of the bill specifically addresses the situation in 
Oregon, where a state court ruling has seriously impeded the ability of 
Federal agents to engage in undercover operations and other covert 
activities. Such activities are legitimate and essential crimefighting 
tools. The Professional Standards for Government Attorneys Act ensures 
that these tools will be available to combat terrorism.
  Finally, the bill addresses the most pressing contemporary question 
of government attorney ethics, namely, the question of which rule 
should govern government attorneys' communications with represented 
persons. It asks the Judicial Conference of the United States to submit 
to the Supreme Court a proposed uniform national rule to govern this 
area of professional conduct, and to study the need for additional 
national rules to govern other areas in which the proliferation of 
local rules may interfere with effective Federal law enforcement. The 
Rules Enabling Act process is the ideal one for developing such rules, 
both because the Federal judiciary traditionally is responsible for 
overseeing the conduct of lawyers in Federal court proceedings, and 
because this process would best provide the Supreme Court an 
opportunity fully to consider and objectively to weigh all relevant 
considerations.

[[Page 17275]]

  The problems posed to Federal law enforcement investigations and 
prosecutions by the McDade law are real and urgent. The Professional 
Standards for Government Attorneys Act provides a reasonable and 
measured alternative: It preserves the traditional role of the State 
courts in regulating the conduct of attorneys licensed to practice 
before them, while ensuring that Federal prosecutors and law 
enforcement agents will be able to use traditional Federal 
investigative techniques. I urge Congress to move quickly to pass this 
corrective legislation before more cases are compromised.
  I ask unanimous consent that the bill and a summary of the bill be 
printed in the Record.
  There being no objection, the additional material ordered to be 
printed in the Record, as follows:

                                S. 1437

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Professional Standards for 
     Government Attorneys Act of 2001''.

     SEC. 2. PROFESSIONAL STANDARDS FOR GOVERNMENT ATTORNEYS.

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

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

       ``(a) Definitions.--In this section:
       ``(1) Government attorney.--The term `Government 
     attorney'----
       ``(A) means the Attorney General; the Deputy Attorney 
     General; the Solicitor General; the Associate Attorney 
     General; the head of, and any attorney employed in, any 
     division, office, board, bureau, component, or agency of the 
     Department of Justice; any United States Attorney; any 
     Assistant United States Attorney; and Special Assistant to 
     the Attorney General or Special Attorney appointed under 
     section 515; any special Assistant United States Attorney 
     appointed under section 543 who is authorized to conduct 
     criminal or civil law enforcement investigations or 
     proceedings on behalf of the United States; any other 
     attorney employed by the Department of Justice who is 
     authorized to conduct criminal or civil law enforcement 
     proceedings on behalf of the United States; any independent 
     counsel, or employee of such counsel, appointed under chapter 
     40; and any outside special counsel, or employee of such 
     counsel, as may be duly appointed by the Attorney General; 
     and
       ``(B) does not include any attorney employed as an 
     investigator or other law enforcement agent by the Department 
     of Justice who is not authorized to represent the United 
     States in criminal or civil law enforcement litigation or to 
     supervise such proceedings.
       ``(2) State.--The term `State' includes a Territory and the 
     District of Columbia.
       ``(b) Choice of Law.--Subject to any uniform national rule 
     prescribed by the Supreme Court under chapter 131, the 
     standards of professional responsibility that apply to a 
     Government attorney with respect to the attorney's work for 
     the Government shall be--
       ``(1) for conduct in connection with a proceeding in or 
     before a court, the standards of professional responsibility 
     established by the rules and decisions of that court;
       ``(2) for conduct reasonably intended to lead to a 
     proceeding in or before a court, the standards of 
     professional responsibility established by the rules and 
     decisions of the court in or before which the proceeding is 
     intended to be brought; and
       ``(3) for all other conduct, the standards of professional 
     responsibility established by the rules and decisions of the 
     Federal district court for the judicial district in which the 
     attorney principally performs his or her official duties.
       ``(c) Licensure.--A Government attorney (except foreign 
     counsel employed in special cases)----
       ``(1) shall be duly licensed and authorized to practice as 
     an attorney under the laws of a State; and
       ``(2) shall not be required to be a member of the bar of 
     any particular State.
       ``(d) Covert Activities.--Notwithstanding any provision of 
     State law, including disciplinary rules, statutes, 
     regulations, constitutional provisions, or case law, a 
     Government attorney may, for the purpose of enforcing Federal 
     law, provide legal advice, authorization, concurrence, 
     direction, or supervision on conducting covert activities, 
     and participate in such activities, even though such 
     activities may require the use of deceit or 
     misrepresentation.
       ``(e) Admissibility of Evidence.--No violation of any 
     disciplinary, ethical, or professional conduct rule shall be 
     construed to permit the exclusion of otherwise admissible 
     evidence in any Federal criminal proceeding.
       ``(f) Rulemaking Authority.--The Attorney General shall 
     make and amend rules of the Department of Justice to ensure 
     compliance with this section.''.
       (b) Technical and Conforming Amendment.--The analysis for 
     chapter 31 of title 28, United States Code, is amended, in 
     the item relating to section 530B, by striking ``Ethical 
     standards for attorneys for the Government'' and inserting 
     ``Professional standards for Government attorneys''.
       (c) Reports.----
       (1) Uniform rule.--In order to encourage the Supreme Court 
     to prescribe, under chapter 131 of title 28, United States 
     Code, a uniform national rule for Government attorneys with 
     respect to communications with represented persons and 
     parties, not later than 1 year after the date of enactment of 
     this Act, the Judicial Conference of the United States shall 
     submit to the Chief Justice of the United States a report, 
     which shall include recommendations with respect to amending 
     the Federal Rules of Practice and Procedure to provide for 
     such a uniform national rule.
       (2) Actual or potential conflicts.--Not later than 2 years 
     after the date of enactment of this Act, the Judicial 
     Conference of the United States shall submit to the Chairmen 
     and Ranking Members of the Committees on the Judiciary of the 
     House of Representatives and the Senate a report, which shall 
     include----
       (A) a review of any areas of actual or potential conflict 
     between specific Federal duties related to the investigation 
     and prosecution of violations of Federal law and the 
     regulation of Government attorneys (as that term is defined 
     in section 530B of title 28, United States Code, as amended 
     by this Act) by existing standards of professional 
     responsibility; and
       (B) recommendations with respect to amending the Federal 
     Rules of Practice and Procedure to provide for additional 
     rules governing attorney conduct to address any areas of 
     actual or potential conflict identified pursuant to the 
     review under subparagraph (A).
       (3) Report considerations.--In carrying out paragraphs (1) 
     and (2), the Judicial Conference of the United States shall 
     take into consideration----
       (A) the needs and circumstances of multiforum and 
     multijurisdictional litigation;
       (B) the special needs and interests of the United States in 
     investigating and prosecuting violations of Federal criminal 
     and civil law; and
       (C) practices that are approved under Federal statutory or 
     case law or that are otherwise consistent with traditional 
     Federal law enforcement techniques.
                                  ____


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


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

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

[[Page 17276]]

     States Attorney because he was not licensed to practice in 
     West Virginia).
       Subsection (d) specifically addresses the situation in 
     Oregon, where a state court ruling has seriously impeded the 
     ability of Federal agents to engage in undercover operations 
     and other covert activities. See In re Gatti, 330 Or. 517 
     (2000). This subsection ensures that these traditional law 
     enforcement tools will be available to federal prosecutors 
     and agents.
       Subsection (e) makes clear that violations of professional 
     conduct rules by government attorneys shall not be construed 
     to permit the exclusion of otherwise admissible evidence in 
     any Federal criminal proceeding.
       Subsection (f), like the McDade law, authorizes the 
     Attorney General to make and amend rules to assure compliance 
     with section 530B.


           II. Judicial Conference Report and Recommendations

       The second part of the bill directs the Judicial Conference 
     of the United States to prepare two reports regarding the 
     regulation of government attorney conduct. Both reports would 
     contain recommendations with respect to the advisability of 
     uniform national rules.
       The first report would address the issue of contacts with 
     represented persons, which has generated the most serious 
     controversy regarding the professional conduct of government 
     attorneys. See, e.g., State v. Miller, 600 N.W.2d 457 (Minn. 
     1999); United States v. McDonnell Douglas Corp., 132 F.3d 
     1252 (8th Cir. 1998); United States v. Lopez, 4 F.3d 1455 
     (9th Cir. 1993); United States v. Hammad, 858 F.2d 834 (2d 
     Cir. 1988).
       Rule 4.2 of the ABA's Model Rules of Professional Conduct 
     and analogous rules adopted by state courts and bar 
     associations place strict limits on when a lawyer may 
     communicate with a person he knows to be represented by 
     another lawyer. These ``no contact'' rules preserve fairness 
     in the adversarial system and the integrity of the attorney-
     client relationship by protecting parties, potential parties 
     and witnesses from lawyers who would exploit the disparity in 
     legal skill between attorneys and lay people and damage the 
     position of the represented person. Courts have given a wide 
     variety of interpretations to these rules, however, creating 
     uncertainty and confusion as to how they apply in criminal 
     cases and to government attorneys. For example, courts have 
     disagreed about whether these rules apply to Federal 
     prosecutor contacts with represented persons in non-custodial 
     pre-indictment situations, in custodial pre-indictment 
     situations, and in post-indictment situations involving the 
     same or different matters underlying the charges.
       Lawyers who practice in federal court--and federal 
     prosecutors in particular--have a legitimate interest in 
     being governed by a single set of professional standards 
     relating to frequently recurring questions of professional 
     conduct. Further, any rule governing federal prosecutors' 
     communications with represented persons should be respectful 
     of legitimate law enforcement interest as well as the 
     legitimate interests of the represented individuals. Absent 
     clear authority to engage in communications with represented 
     persons, when necessary and under limited circumstances 
     carefully circumscribed by law, the government is 
     significantly hampered in its ability to detect and prosecute 
     Federal offenses.
       The proposed legislation charges the Judicial Conference 
     with developing a uniform national rule governing government 
     attorney contacts with represented persons. Given the 
     advanced stage of dialogue among the interested parties, the 
     Department of Justice, the ABA, the Federal and State courts, 
     and others, the Committee is confident that a satisfactory 
     rule can be developed within the one-year time frame 
     established by the bill.
       While the ``no contact'' rule poses the most serious 
     challenge to effective law enforcement, other rules of 
     professional responsibility may also threaten to interfere 
     with legitimate investigations. The proposed legislation 
     therefore directs the Judicial Conference to prepare a second 
     report addressing broader questions regarding the regulation 
     of government attorney conduct. This report, to be completed 
     within two years, would review any areas of conflict or 
     potential conflict between federal law enforcement techniques 
     and existing standards of professional responsibility, and 
     make recommendations concerning the need for additional 
     national rules.

  Mr. WYDEN. Mr. President, I wish to bring to the Senate's attention a 
serious legal matter currently impeding Federal criminal investigations 
in many States, especially Oregon, and legislation that I am joining 
the Chairman of the Judiciary Committee, Senator Leahy, in introducing 
today to correct this problem.
  Enacted at the end of the 105th Congress as Section 801 of the 
Omnibus Appropriations Bill (Public Law 105-277), the Citizens 
Protection Act, commonly known as the ``McDade law,'' has hampered 
Federal law enforcement efforts aimed at combating child pornography, 
drug trafficking, and terrorism, particularly in the State of Oregon.
  In the Gatti case [Gatti, 330 Or. 517 (2000)] in early 2000, the 
Oregon Supreme Court held that a private attorney had acted unethically 
by intentionally misrepresenting his identity to the employees of a 
medical records review company called Comprehensive Medical Review, 
CMR. The attorney, who represented a client who had filed a claim with 
an insurance company, believed that the insurance company was using CMR 
to generate fraudulent medical reports that the insurer then used to 
deny or limit claims. The attorney called CMR and falsely represented 
himself to be a chiropractor seeking employment with the company. The 
attorney was hoping to obtain information from CMR that he could use in 
a subsequent lawsuit against CMR and the insurance company.
  The Oregon Supreme Court upheld the State Bar's view that the 
attorney's conduct violated two Oregon State Bar disciplinary rules and 
an Oregon statute, specifically, a disciplinary rule prohibiting 
conduct involving dishonesty, fraud, deceit or misrepresentation; a 
disciplinary rule prohibiting knowingly making a false statement of law 
or fact; and a statute prohibiting willful deceit or misconduct in the 
legal profession. In doing so, the court rejected the attorney's 
defense that his misrepresentations were justifiable because he was 
engaged in an investigation to seek evidence of fraud and other 
wrongful conduct. The court expressly ruled that there was no 
`prosecutorial exception' to either the State Bar disciplinary rules or 
the Oregon statute. As a result of this decision, prosecutors in Oregon 
may not concur or participate in undercover and other covert law 
enforcement techniques, even if the law enforcement technique at issue 
is lawful under Federal law.
  Soon after this Oregon Supreme Court decision, the Oregon U.S. 
Attorney's Office informed the Oregon FBI Field Office that it would 
not concur or participate in the use of long-used and highly productive 
techniques, such as undercover operations and consensual monitoring of 
telephone calls, that could be disallowed by the State Bar. Several 
important investigations were immediately terminated or severely 
impeded. The Oregon U.S. Attorney even refused to certify the renewal 
of the Portland Innocent Images undercover program, which targets child 
pornography and exploitation. Without the U.S. Attorney's 
certification, the program was shut down and a significant criminal 
problem has since gone unchecked.
  The Federal Investigation Enhancement Act that I am introducing today 
with Senator Leahy will clarify that Federal attorneys may, for the 
purpose of enforcing Federal law, authorize, concur, direct, and 
supervise covert investigations even though such activities may require 
the use of deceit or misrepresentation. In doing so, our legislation 
will make it possible for Federal authorities to continue their efforts 
to investigate and apprehend the most dangerous criminals.
  It is my hope that the Senate will act quickly on this legislation 
that will correct the most serious problems caused by the McDade law. 
It will be of enormous help to Federal law enforcement efforts in 
Oregon and across our country who are prosecuting these crimes.
                                 ______
                                 
      By Mr. CRAIG:
  S. 1440. A bill to amend the Internal Revenue Code of 1986 to provide 
tax relief for victims of the terrorist attacks against the United 
States on September 11, 2001; to the Committee on Finance.
  Mr. CRAIG. Mr. President, today I am introducing the Victims of 
Terrorism Relief Act of 2001, to provide tax relief for the innocent 
victims of the terrorist attacks against our Nation last Tuesday, 
September 11.
  Last week's attack was unlike any event in our Nation's history. It 
was an act of war committed on U.S. soil, and more, with innocent 
civilians cold-bloodedly selected as the principal targets and even 
strapped to the weapons. I am confident that, under the leadership of 
our Commander-in-Chief, and

[[Page 17277]]

with broad and deep support, across our country and, on a bipartisan 
basis, here in Congress, we will win this war decisively.
  A significant part of our response also must be compassion for the 
survivors of those victims of the first day of this war. Our tax code 
has long recognized that compassion demands we extend a helping hand by 
providing relief to our military heroes killed in combat. Today, sadly, 
we recognize the need to extend similar comfort and relief to the 
families of civilian victims whose lives have been taken.
  The other body has already passed emergency legislation along these 
lines. The bill I am introducing is identical to that legislation. The 
main provisions of this bill would extend the same relief to 
individuals killed in last week's terrorist attack as is currently 
provided for members of our armed forces, with regard to the death tax, 
and currently provided for Federal military and civilian employees, 
with regard to Federal income taxes.
  I fully realize that my Senate colleagues, including knowledgeable 
members of the Senate Finance Committee, will propose additional tax 
relief provisions to meet additional needs that are still being 
identified. But I want to add my voice, early and urgently, to 
emphasize the importance of acting swiftly and decisively to provide 
this relief to our fellow Americans.
  I ask unanimous consent that the text of this bill be printed in the 
Record, as well as a brief summary of its provisions.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 1440

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Victims of Terrorism Relief 
     Act of 2001''.

     SEC. 2. INCOME TAXES OF VICTIMS OF TERRORIST ATTACKS.

       (a) In General.--Section 692 of the Internal Revenue Code 
     of 1986 (relating to income taxes of members of Armed Forces 
     on death) is amended by adding at the end the following new 
     subsection:
       ``(d) Certain Individuals Dying as a Result of September 
     11, 2001, Terrorist Attacks.--
       ``(1) In general.--In the case of any individual who dies 
     as a result of wounds or injury incurred as a result of the 
     terrorist attacks against the United States on September 11, 
     2001, any tax imposed by this subtitle shall not apply--
       ``(A) with respect to the taxable year in which falls the 
     date of such individual's death, and
       ``(B) with respect to any prior taxable year in the period 
     beginning with the last taxable year ending before the 
     taxable year in which the wounds or injury were incurred.
       ``(2) Exception.--Paragraph (1) shall not apply to an 
     individual whom the Secretary determines was a perpetrator of 
     any such terrorist attack.''.
       (b) Conforming and Clerical Amendments.--
       (1) The heading of section 692 of such Code is amended to 
     read as follows:

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

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

``Sec. 692. Income taxes of members of Armed Forces on death and 
              victims of certain terrorist attacks.''.
       (3) Section 5(b)(1) of such Code is amended by inserting 
     ``and victims of certain terrorist attacks'' after ``on 
     death''.
       (4) Section 6013(f)(2)(B) of such Code is amended by 
     inserting ``and victims of certain terrorist attacks'' after 
     ``on death''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years ending on or after September 11, 
     2001.

     SEC. 3. RELIEF FROM ADDITIONAL ESTATE TAX.

       (a) In General.--Section 2201 of the Internal Revenue Code 
     of 1986 is amended--
       (1) in the first sentence by inserting ``(a) In General.--
     '' before ``The additional estate tax'', and
       (2) by adding at the end the following:
       ``(b) Victims of Certain Terrorist Attacks.--The additional 
     estate tax shall not apply to the transfer of the taxable 
     estate of any individual who dies as a result of wounds or 
     injury incurred as a result of the terrorist attacks against 
     the United States on September 11, 2001. The preceding 
     sentence shall not apply with respect to any individual whom 
     the Secretary determines was a perpetrator of any such 
     terrorist attack.''.
       (b) Clerical Amendments.--
       (1) The heading of section 2201 of such Code is amended to 
     read as follows:

     ``SEC. 2201. COMBAT ZONE-RELATED DEATHS OF MEMBERS OF THE 
                   ARMED FORCES AND DEATHS OF VICTIMS OF CERTAIN 
                   TERRORIST ATTACKS.''.

       (2) The item relating to section 2201 in the table of 
     sections for subchapter C of chapter 11 of such Code is 
     amended to read as follows:

``Sec. 2201. Combat zone-related deaths of members of the Armed Forces 
              and deaths of victims of certain terrorist attacks.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to estates of decedents dying on or after 
     September 11, 2001.
                                  ____


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

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

                          ____________________