[Federal Register Volume 76, Number 119 (Tuesday, June 21, 2011)]
[Proposed Rules]
[Pages 36027-36039]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-15459]


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DEPARTMENT OF JUSTICE

28 CFR Part 104

[Docket No. CIV 151]
RIN 1105-AB39


James Zadroga 9/11 Health and Compensation Act of 2010

AGENCY: Department of Justice.

ACTION: Notice of proposed rulemaking.

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SUMMARY: On January 2, 2011, President Obama signed into law the James 
Zadroga 9/11 Health and Compensation Act of 2010 (Zadroga Act). Title 
II of the Zadroga Act reactivates the September 11th Victim 
Compensation Fund of 2001 and requires a Special Master, appointed by 
the Attorney General, to provide compensation to any individual (or a 
personal representative of a deceased individual) who suffered physical 
harm or was killed as a result of the terrorist-related aircraft 
crashes of September 11, 2001, or the debris removal efforts that took 
place in the immediate aftermath of those crashes. This rule proposes 
to amend the regulations implementing the Fund to reflect the changes 
made by the Zadroga Act.

DATES: Written comments must be postmarked and electronic comments must 
be submitted on or before August 5, 2011. Comments received by mail 
will be considered timely if they are postmarked on or before that 
date. The electronic Federal Docket Management System (FDMS) will 
accept comments until Midnight Eastern Time at the end of that day.

ADDRESSES: Comments may be mailed to Kenneth L. Zwick, Director, Office 
of Management Programs, Civil Division, U.S. Department of Justice, 
Main Building, Room 3140, 950 Pennsylvania Avenue, NW., Washington, DC 
20530. However, the Department encourages commenters to submit their 
comments using http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Kenneth L. Zwick, Director, Office of 
Management Programs, Civil Division, U.S. Department of Justice, Main 
Building, Room 3140, 950 Pennsylvania Avenue, NW., Washington, DC 
20530, telephone 855-885-1555 (TTY 855-885-1558).

SUPPLEMENTARY INFORMATION:
    Comment Period: The Department of Justice has allocated 45 days for 
public comment. This timeline is appropriate in light of the proposed 
regulations' substantial incorporation of the regulations that were 
previously used, the Department's experience in operating the Victim 
Compensation Fund, and the public interest in beginning operation of 
the Fund as soon as possible.
    Posting of Public Comments: Please note that all comments received 
are considered part of the public record and made available for public 
inspection online at http://www.regulations.gov. Such information 
includes personal identifying information (such as your name and 
address) voluntarily submitted by the commenter.
    You are not required to submit personal identifying information in 
order to comment on this rule. Nevertheless, if you want to submit 
personal identifying information (such

[[Page 36028]]

as your name and address) as part of your comment, but do not want it 
to be posted online, you must include the phrase ``PERSONAL IDENTIFYING 
INFORMATION'' in the first paragraph of your comment. You also must 
locate all the personal identifying information you do not want posted 
online in the first paragraph of your comment and identify what 
information you want redacted.
    If you want to submit confidential business information as part of 
your comment but do not want it to be posted online, you must include 
the phrase ``CONFIDENTIAL BUSINESS INFORMATION'' in the first paragraph 
of your comment. You also must prominently identify confidential 
business information to be redacted within the comment. If a comment 
has so much confidential business information that it cannot be 
effectively redacted, all or part of that comment may not be posted on 
http://www.regulations.gov.
    Personal identifying information and confidential business 
information identified and located as set forth above will be placed in 
the agency's public docket file, but not posted online. If you wish to 
inspect the agency's public docket file in person by appointment, 
please see the paragraph above entitled FOR FURTHER INFORMATION 
CONTACT.

Background

    Pursuant to Title IV of Public Law 107-42 (``Air Transportation 
Safety and System Stabilization Act'') (2001 Act), the September 11th 
Victim Compensation Fund of 2001 was open for claims from December 21, 
2001, through December 22, 2003. The Fund provided compensation to 
eligible individuals who were physically injured as a result of the 
terrorist-related aircraft crashes of September 11, 2001, and to 
personal representatives of those who died as a result of the crashes.
    Special Master Kenneth R. Feinberg was appointed by the Attorney 
General to administer the Fund. The Fund was governed by Interim Final 
Regulations issued on December 21, 2001, see 66 FR 66274, and by Final 
Regulations issued on March 13, 2002, see 67 FR 11233. During its two 
years of operation, the Fund distributed over $7.049 billion to 
survivors of 2,880 persons killed in the September 11th attacks and to 
2,680 individuals who were injured in the attacks or in the rescue 
efforts conducted thereafter. In 2004, Special Master Feinberg issued a 
report describing how the fund was administered. See Final Report of 
the Special Master for the September 11th Victim Compensation Fund of 
2001, available at http://www.justice.gov/final_report.pdf.
    On January 2, 2011, President Obama signed the Zadroga Act into 
law. Title I of the Zadroga Act establishes a program within the 
Department of Health and Human Services to provide medical monitoring 
and treatment benefits to eligible individuals. Title II amends the 
2001 Act and reopens the Fund. Among other changes, Title II adds new 
categories of beneficiaries for the Fund and sets new filing deadlines. 
It also imposes a cap on the total awards that can be paid by the Fund 
and limits the fees that an attorney may receive for awards made under 
the Fund.
    The Zadroga Act, as originally enacted, did not appropriate 
administrative funds for the Fund to begin taking and processing 
claims. On April 15, 2011, President Obama signed into law Public Law 
112-10, the continuing budget resolution for 2011, which permits the 
Fund to draw on the money originally allocated in the Zadroga Act in 
order to pay for its administrative expenses, beginning on October 1, 
2011.
    The Attorney General has appointed Sheila L. Birnbaum to serve as 
Special Master and to administer the Fund.

Statement From the Special Master

    The James Zadroga 9/11 Health and Compensation Act of 2010 reopens 
the September 11th Victim Compensation Fund of 2001 to provide 
compensation to those who were physically injured or who died in the 
immediate aftermath of the terrorist attacks of September 11, 2001, 
including those who were injured during the clean-up and debris removal 
operations at a 9/11 crash site. This extension recognizes the 
considerable efforts of and effects on those engaged in or in the 
immediate vicinity of the response, recovery, and clean-up operations. 
The intent of the extension of the Fund is to provide fair and 
consistent compensation for those who are eligible and to do so in an 
efficient and timely manner.
    As I stated when I was appointed, my goal is for the September 11th 
Victim Compensation Fund to be fair, transparent, and easy to navigate. 
In order to achieve that goal, I intend to build on the strong 
foundation that was established by Special Master Kenneth Feinberg in 
the first iteration of the Victim Compensation Fund and listen 
carefully to the views and concerns expressed by those who will be most 
affected by the program. I have sought to publish these proposed 
regulations quickly, so that there will be ample time for others to 
review them and for comments to be fully evaluated and the regulations 
revised, where appropriate, before the Victim Compensation Fund opens 
later this year. Given the Victim Compensation Fund's success in its 
previous iteration, I propose to implement the original processes where 
I can and to propose additional or different procedures where the 
Zadroga Act requires a different approach.
    At the outset, I would highlight some key principles that will 
guide my effort to create a process that is fair, transparent, and easy 
to navigate. First, I intend to make decisions based on the best 
scientific and medical evidence that is available. The Zadroga Act 
requires the Special Master to make a number of decisions about who is 
eligible to bring a claim, based on the nature of the individual's 
injuries, how it was caused, and whether the individual was present in 
an area where there was a demonstrable risk of physical harm resulting 
from the crashes. In order to make these determinations in a fair 
manner, I intend to look to the evidence that scientists and medical 
professionals rely on in exercising their best professional judgment. I 
also intend for the Victim Compensation Fund to keep pace with the 
evolving science and to ensure that as we learn more about conditions 
that may have been caused by the crashes or related debris-removal 
efforts, we are able to compensate claimants accordingly.
    Second, Congress has appropriated a capped amount--$2.775 billion 
payable over a period of years--for this program. Only $875 million may 
be spent in the first five years of the program with the remainder 
being paid out in the sixth year. It is important therefore to assure 
that funds are targeted to the payment of eligible claims and to avoid 
procedures or guidelines that will dilute those payments. Funds used to 
process ineligible claims or for unnecessary administrative costs 
result in fewer funds available to pay intended and deserving 
claimants. In implementing the program, I intend to initiate procedures 
that will permit efficiency without sacrificing fairness, and to seek 
ways to minimize administrative expenses, thereby maximizing the amount 
available for distribution to eligible claimants.
    Third, it is exceedingly important, in my view, to fully 
investigate the facts and circumstances surrounding the response, 
clean-up and debris removal activities necessitated by the attacks and 
the injuries that have resulted from these activities. To achieve these 
goals over the next several months, I will hold meetings with 
interested parties to explain the Victim Compensation Fund

[[Page 36029]]

and the proposed regulations, to hear your thoughts, and to answer as 
many questions as I can. I also look forward to reviewing your written 
comments about these proposed regulations, so that I can make the best 
decisions possible to refine the regulations and administer the 
program.

Discussion

    The following discussion explains the proposed updates to the 
regulations governing the Fund. The proposed regulations are based on 
the Final Regulations governing the Fund from 2001-2004. Nevertheless, 
the Zadroga Act requires certain changes. Section I discusses proposed 
changes to the eligibility criteria; Section II discusses proposed 
procedures for amending claims; Section III discusses awards and 
proration of awards; and Section IV discusses proposed changes to the 
claims evaluation process. The text of the proposed regulations, as 
amended, is set forth following these explanatory sections. More 
detailed information, including a comparison of the original 
regulations to these proposed regulations, will be available on the 
Victim Compensation Fund's Web site at www.usdoj.gov/vcf.

I. Eligibility

    Title II of the Zadroga Act sets criteria for determining whether a 
claimant is eligible to receive compensation from the Fund. The Act 
made changes to the criteria that governed eligibility in the Fund's 
previous iteration. In order to be eligible for the Fund, Title II of 
the Zadroga Act requires an individual to have been present at a ``9/11 
crash site'' at the time or in the immediate aftermath of the crashes, 
and have suffered ``physical harm or death as a result of'' one of the 
air crashes or debris removal. In making these determinations, the 
Special Master is mindful that Congress has appropriated a limited 
amount of funds for paying awards, and therefore that inappropriate 
expansions of eligibility may result in lower awards for deserving 
claimants.

(a) The Definition of ``9/11 Crash Site''

    In requiring that a claimant have been present at a ``9/11 crash 
site'' in order to receive compensation from the Fund, Title II of the 
Zadroga Act recognizes that such sites include more than just the World 
Trade Center, Pentagon, and Shanksville, Pennsylvania sites and the 
buildings that were destroyed as a result. The Zadroga Act also 
encompasses two other areas.
(1) Sufficiently Close to the Site
    First, Title II of the Zadroga Act defines ``9/11 crash site'' to 
include both the crash sites themselves and any area that is contiguous 
to one of the crash sites that the Special Master ``determines was 
sufficiently close to the site that there was a demonstrable risk of 
physical harm resulting from'' the impact of the aircraft or subsequent 
fire, explosions, or building collapses.
    During the Fund's first iteration, Special Master Feinberg applied 
a regulation that required him to make this same determination. At that 
time, the most prevalent physical injuries were blunt trauma injuries 
suffered by those who were struck by debris or who were in the zone in 
which there was a demonstrable risk of physical harm from falling 
debris, explosions, or fire. Accordingly, the relevant area was defined 
to include the immediate area surrounding the World Trade Center: 
starting from the intersection of Reade and Center Streets, the 
northern boundary ran west along Reade Street to the Hudson River; the 
western boundary was the Hudson River; the southern boundary ran from 
the Hudson River, east along the line of W. Thames Street, Edgar Street 
and Exchange Place to Nassau Street; and the eastern boundary, starting 
from the intersection of Exchange Place and Nassau Street, ran north 
along Nassau Street to the intersection of Center and Reade Streets. 
See Final Report of the Special Master for the September 11th Victim 
Compensation Fund of 2001 at 19 and n. 53. The Zadroga Act, which 
covers conditions that may have been caused over longer periods of time 
and thus are not limited to harms caused by falling debris, states that 
the term ``9/11 crash sites'' ``includ[es]'' that original area but 
could also include other areas.
    In determining which other areas to include, the Special Master 
will consider scientific evidence regarding the risks of physical harm 
resulting from the crashes and the text and structure of the Act, 
including the relationship between Title I and Title II and the goal of 
allocating the available funds to deserving claimants. Given these 
considerations, this proposed rule suggests that the term ``9/11 crash 
site'' includes the area in Manhattan south of the line that runs along 
Reade Street from the Hudson River to the intersection of Reade Street 
and Centre Street, south on Centre Street to the Brooklyn Bridge, and 
along the Brooklyn Bridge, or any other area contiguous to the crash 
sites that the Special Master determines was sufficiently close to the 
site that there was a demonstrable risk of physical harm resulting from 
the impact of the aircraft or any subsequent fire, explosions, or 
building collapses (including the immediate area in which the impact 
occurred, fire occurred, portions of buildings fell, or debris fell 
upon and injured individuals). These proposed boundaries are 
substantially broader than those used in the Fund's first iteration and 
narrower than boundaries used for the World Trade Center (WTC) Health 
Program in Title I of the Act. The Special Master invites comments on 
the proposal.
(2) Routes of Debris Removal
    Second, the Zadroga Act defines the term ``9/11 crash site'' to 
include ``any area related to, or along, routes of debris removal, such 
as barges and Fresh Kills.'' The Special Master invites comments that 
provide information regarding the routes of debris removal.

(b) Physical Harm or Death as a Result of the Crash or Debris Removal

    In requiring that a claimant have suffered ``physical harm or death 
as a result of'' one of the air crashes or the debris removal, the 
Zadroga Act also requires the Special Master to determine which 
physical harms and deaths were ``a result of'' the crashes or debris 
removal within the meaning of the statute. The Department notes that 
Title II of the Zadroga Act does not provide additional specificity 
about the harms that are to be covered by the Fund.
    However, Title I of the Zadroga Act, which establishes the WTC 
Health Program, contains a list of illnesses and health conditions for 
which exposure to air borne toxins, other hazards and any other adverse 
conditions resulting from the September 11, 2001 terrorists attacks 
could be determined by experienced medical professionals to be 
substantially likely to have been a significant factor in aggravating, 
causing, contributing to illness or health condition, as well as 
procedures for adding additional conditions to the list over time. That 
title also provides that in order for an individual to receive 
treatment under the WTC Health Program, there must be an individual 
determination that the WTC attacks were ``substantially likely to be a 
significant factor in aggravating, contributing to, or causing the 
illness or health condition.''
    Accordingly, the Special Master proposes that the Fund maintain and 
publish a list of presumptively covered conditions that resulted from 
the air crashes or debris removal, and that this list shall consist of 
the physical injuries and conditions that are found, under the WTC 
Health Program, to be WTC-related

[[Page 36030]]

health conditions. The Special Master will update this list so that it 
includes not only those physical conditions listed in Title I of the 
Zadroga Act, but also any additional physical conditions that the WTC 
Health Program determines to be WTC-related. The list of presumptively 
covered conditions will be published on the Fund's Web site.
    The Special Master notes that as in the Fund's first iteration, the 
statute limits eligible injuries to those consisting of ``physical 
harm.'' Accordingly, as in the Fund's first iteration, the statutory 
language does not permit the Fund to cover individuals with only mental 
and emotional injuries, even if the mental and emotional injuries are 
covered by the WTC Health Program.
    Finally, the Special Master notes that the proposed regulations 
does not make the list of presumptively covered conditions the only 
conditions for which a claimant may seek coverage from the Fund. Where 
the claimant is otherwise eligible for an award and establishes 
extraordinary circumstances that were not adequately taken into account 
in the list of presumptively covered conditions, the proposed rules 
will permit the Special Master to find the claimant eligible even if 
the injury in question is not on the list of presumptively covered 
conditions. Because the list of presumptively covered conditions will 
be set based on the WTC Health Program's process for making decisions 
based on the best available science, it is anticipated that these 
instances will be rare.

II. Amendments of Claims

    The 2001 Act provided that ``not more than one claim may be 
submitted under this Title by an individual or on behalf of a deceased 
individual.'' The Zadroga Act did not amend this limitation. This 
provision does not appear to bar individuals who previously submitted 
claims from amending those earlier claims if additional relevant 
information has become available. The Special Master proposes that 
claimants be permitted to amend their claims to reflect the following 
circumstances:
    (i) An injury that the claimant had not suffered (or did not 
reasonably know the claimant suffered) at the time the claimant filed 
the previous claim;
    (ii) A condition that the Special Master has identified, since the 
time the claimant filed the previous claim, as a presumptively covered 
condition;
    (iii) An injury for which the claimant was compensated by the Fund, 
but only if that injury has substantially worsened, resulting in 
damages or loss that was not previously compensated; and;
    (iv) Claims for which the individual is an eligible claimant as a 
result of amendments contained in the James Zadroga 9/11 Health and 
Compensation Act of 2010, Title II of Public Law 111-347.
    Accordingly, the proposed regulations permit claimants to amend 
claims in those circumstances.

III. Awards and Prorating of Awards

    The 2001 Act provides that the Fund will pay benefits for both 
``economic losses,'' which consist of pecuniary losses such as lost 
earnings, medical expenses, and other costs, and ``noneconomic 
losses,'' which include losses for physical and emotional pain, 
suffering, and loss of companionship. The Zadroga Act did not amend 
those provisions; however, the Zadroga Act does limit the total amount 
of funds available for paying awards and prohibits the Fund from 
distributing more than a certain amount of compensation within the 
first five years.

(a) Advance Benefits

    The 2001 rule included a provision for ``advance benefits'' for 
eligible claimants to be paid during the pendency of the claims 
process, in recognition of the exigency of the circumstances and the 
urgency of the need for providing some immediate compensation to those 
who, without a moment's notice, were physically injured and the 
families of those who were killed. The context at this point is 
different. The statute already contemplates two separate rounds of 
payments, one in the first five years and a second in the program's 
sixth year. Further, the administrative costs associated with 
additional rounds of payments reduce the funds available to pay 
claimants. Accordingly, the proposed rule does not include a provision 
for payment of advance benefits.

(b) Methodology for Calculating Awards

    The determination of ``economic losses'' will be made, as in the 
Fund's first iteration, on a case-by-case basis according to the losses 
that each claimant has demonstrated. In the Fund's first iteration, the 
Special Master determined that the ``noneconomic losses'' of a claimant 
who was killed in the 9/11 crashes themselves would be $250,000 plus an 
additional $100,000 for each dependent. Those dollar values were 
consistent with the compensation that Congress made available under 
existing federal programs for certain citizens who have also died, 
often without a moment's notice: public safety officers who are killed 
while on duty and members of our military who are killed in the line of 
duty while serving our nation. See 67 FR 11239 (Mar. 13, 2002). Those 
awards for noneconomic losses were presumed correct, but individuals 
were able to submit additional evidence that would justify a higher 
amount in a particular instance. For individuals who suffered physical 
injuries, rather than death, the noneconomic awards determined adjusted 
based on the extent and duration of the physical harm.
    The Special Master proposes that the methodologies for 
establishing, and the compensation offered for, harms in the first 
iteration of the Fund are initially appropriate here. The Special 
Master will continue to consider whether noneconomic damages for such 
deaths should be adjusted.

(c) Proration of Awards

    In the Zadroga Act, Congress appropriated $2.775 billion to be 
provided by the Fund during this second iteration. Of this amount, the 
Act provides that only $875 million may be spent during the program's 
first five years, with the remaining funds to be paid during the sixth 
year.
    In order to ensure that the $875 million cap is not exceeded during 
those first five years, the Zadroga Act requires the Special Master to 
ratably reduce the amount of compensation paid to claimants during that 
time to ensure that all claimants entitled to payment ``receive a 
payment'' during that period and to ensure that the $875 million cap is 
not exceeded. The Act further requires that claimants whose payments 
are ratably reduced during this time are to receive a second payment in 
the year after the claims period has ended (July 1, 2016 to June 30, 
2017), consisting of the difference between the amount that the 
claimant should have been paid under the Act and the reduced amount 
paid during the first five years. The regulations accordingly require 
the Special Master to prorate payments in a manner consistent with the 
statute, based on available information regarding potential future 
claims and available funds. The Special Master invites comments on the 
best manner to fulfill the statute's purposes in this respect.

IV. Procedure for Claims Evaluation

    Because the $2.775 billion appropriated by Congress for the Fund 
must pay for claimant awards as well as the Fund's administrative 
expenses, it is important for the Fund to keep administrative expenses 
low in order to

[[Page 36031]]

maximize the amount of funds available for claimants. Accordingly, the 
Special Master proposes eliminating one of the two procedures used 
previously for evaluating claims.
    Previously, claimants could select one of two procedures: Track A 
or Track B. Under Track A, the Fund would determine eligibility and a 
presumed award based on the claimant's filings. The claimant could then 
either (1) accept the presumed award and request payment or (2) request 
a hearing for further review of the determination. Importantly, every 
claimant had the option of a hearing to determine whether the 
claimant's presumptive award was correct.
    Under Track B, claimants proceeded directly to a hearing following 
a finding of eligibility. Only after that hearing would the Fund make 
an award determination, which was not subject to any further review or 
appeal.
    The proposed regulations eliminate Track B. In doing so, the 
proposed regulations seek to reduce administrative expenses in order to 
maximize the funds available to pay claimants. Hearings are a 
substantial source of administrative expenses, and eliminating the 
initial hearing under Track B would still ensure that any claimant who 
wanted a hearing, after receiving his or her presumptive award, could 
receive one. Because some claimants who might have opted for a Track B 
initial hearing will find that they are satisfied with their 
presumptive award, some hearings will be avoided--and the costs 
associated with those hearings can instead be used to pay claimants.

V. Other Changes

    The proposed regulations address a number of other issues. Among 
other things, the regulations address the ability of individuals who 
have settled civil actions to participate in the Fund, and the amounts 
that attorneys may charge claimants for services rendered in connection 
with a claim to the Fund. The Special Master invites comments on these 
and any other issues relating to the Fund.

Regulatory Certifications

Paperwork Reduction Act of 1995

    This rule proposes to implement Title II of the Zadroga Act which 
reactivates the September 11th Victim Compensation Fund of 2001. In 
order to be able to evaluate claims and provide compensation, the Fund 
will need to collect information from an individual (or a personal 
representatives of a deceased individual) who suffered physical harm or 
was killed as a result of the terrorist-related aircraft crashes of 
September 11, 2001 or the debris removal efforts that took place in the 
immediate aftermath of those crashes. Accordingly, the Department of 
Justice (DOJ), Civil Division will submit an information collection 
request to the Office of Management and Budget (OMB) for review and 
clearance in accordance with the emergency review procedures of the 
Paperwork Reduction Act of 1995. The Department will also publish a 
Notice in the Federal Register soliciting public comment on the 
information collection associated with this rulemaking.

Regulatory Flexibility Act

    These regulations set forth procedures by which the Federal 
government will award compensation benefits to eligible victims of the 
September 11, 2001 terrorist attacks. Under 5 U.S.C. 601(6), the term 
``small entity'' does not include the Federal government, the party 
charged with incurring the costs attendant to the implementation and 
administration of the Victims Compensation Fund. Accordingly, the 
Department has reviewed this rule in accordance with the Regulatory 
Flexibility Act (5 U.S.C. 605(b)) and by approving it certifies that 
this rule will not have a significant economic impact on a substantial 
number of small entities because it provides compensation to eligible 
individuals who were physically injured as a result of the terrorist-
related aircraft crashes of September 11, 2001, and compensation 
through a ``personal representative'' for those who were killed as a 
result of those crashes. This rule provides compensation to 
individuals, not to entities.

Executive Orders 12866 and 13563--Regulatory Review

    This regulation has been drafted and reviewed in accordance with 
Executive Order 12866, ``Regulatory Planning and Review'' section 1(b), 
Principles of Regulation and in accordance with Executive Order 13563 
``Improving Regulation and Regulatory Review'' section 1(b) General 
Principles of Regulation.
    The Department of Justice has determined that this rule is an 
``economically significant regulatory action'' under Executive Order 
12866, section 3(f), Regulatory Planning and Review, and accordingly 
this rule has been reviewed by the Office of Management and Budget.
    Further, both Executive Orders 12866 and 13563 direct agencies to 
assess all costs and benefits of available regulatory alternatives and, 
if regulation is necessary, to select regulatory approaches that 
maximize net benefits (including potential economic, environmental, 
public health and safety effects, distributive impacts, and equity). 
Executive Order 13563 emphasizes the importance of quantifying both 
costs and benefits, of reducing costs, of harmonizing rules, and of 
promoting flexibility. The Department has assessed the costs and 
benefits of this regulation and believes that the regulatory approach 
selected maximizes net benefits.

Assessment of Benefits, Costs, and Alternatives.

    As required by Executive Order 13563 and Executive Order 12866 for 
economically significant regulatory actions, the Department has 
assessed the benefits and costs anticipated from this rulemaking and 
considered whether there are reasonably feasible alternatives to this 
rulemaking, including considering whether there are reasonably viable 
non-regulatory actions that could be taken in lieu of this rulemaking. 
The purpose of this rulemaking is to provide the legal and 
administrative framework necessary to provide compensation to any 
individual (or a personal representative of a deceased individual) who 
suffered physical harm or was killed as a result of the terrorist-
related aircraft crashes of September 11, 2001 or the debris removal 
efforts that took place in the immediate aftermath of those crashes, as 
provided by Title II of the Zadroga Act. The primary benefits and costs 
of this rulemaking are both set by statute as Congress has appropriated 
a capped amount--$2.775 billion payable over a period of years--for 
this program. Because the $2.775 billion appropriated by Congress for 
the Fund must pay for claimant awards as well as the Fund's 
administrative expenses, it is important for the Fund to keep 
administrative expenses low in order to maximize the amount of funds 
available for claimants. Finally, based on past practice with the 
operation of the original Fund and the necessity to establish the legal 
and administrative framework for the reopened Fund, the Department 
concludes that there are no viable non-regulatory actions that it could 
take to implement the Zadroga Act in a fair and efficient manner.

Executive Order 13132--Federalism

    This regulation will not have substantial direct effects on the 
States, on the relationship between the national government and the 
States, or on distribution of power and

[[Page 36032]]

responsibilities among the various levels of government. Therefore, in 
accordance with Executive Order 13132, it is determined that this rule 
does not have sufficient federalism implications to warrant the 
preparation of a Federalism Assessment. However, the Department of 
Justice has worked cooperatively with state and local officials in the 
affected communities in the preparation of this rule. Also, the 
Department individually notified national associations representing 
elected officials regarding this rulemaking.

Executive Order 12988--Civil Justice Reform

    This regulation meets the applicable standards set forth in 
sections 3(a) and 3(b)(2) of Executive Order 12988.

Unfunded Mandates Reform Act of 1995

    This rule will not result in the expenditure by State, local and 
tribal governments, in the aggregate, or by the private sector, of 
$100,000,000 or more in any one year, and it will not significantly or 
uniquely affect small governments. Therefore, no actions were deemed 
necessary under the provisions of the Unfunded Mandates Reform Act of 
1995.

Small Business Regulatory Enforcement Fairness Act of 1996

    This rule is not a major rule as defined by section 804 of the 
Small Business Regulatory Enforcement Fairness Act of 1996. This rule 
will not result in an annual effect on the economy of $100,000,000 or 
more; a major increase in costs or prices; or significant adverse 
effects on competition, employment, investment, productivity, 
innovation, or on the ability of United States-based companies to 
compete with foreign-based companies in domestic and export markets.

List of Subjects in 28 CFR Part 104

    Disaster assistance, Disability benefits, Terrorism.

    Accordingly, for the reasons set forth in the preamble, Part 104 of 
chapter I of Title 28 of the Code of Federal Regulations is proposed to 
be amended by revising part 104 to read as follows:

PART 104--SEPTEMBER 11TH VICTIM COMPENSATION FUND

Subpart A--General; Eligibility
104.1 Purpose.
104.2 Eligibility definitions and requirements.
104.3 Other definitions.
104.4 Personal Representative.
104.5 Foreign claims.
104.6 Amendments to this part.
Subpart B--Filing for Compensation
104.21 Presumptively covered conditions.
104.22 Filing for compensation.
Subpart C--Claim Intake, Assistance, and Review Procedures
104.31 Procedure for claims evaluation.
104.32 Eligibility review.
104.33 Hearing.
104.34 Publication of awards.
104.35 Claims deemed abandoned by claimants.
Subpart D--Amount of Compensation for Eligible Claimants
104.41 Amount of compensation.
104.42 Applicable state law.
104.43 Determination of presumed economic loss for decedents.
104.44 Determination of presumed noneconomic losses for decedents.
104.45 Determination of presumed economic loss for claimants who 
suffered physical harm.
104.46 Determination of presumed noneconomic losses for claimants 
who suffered physical harm.
104.47 Collateral sources.
Subpart E--Payment of Claims
104.51 Payments to eligible individuals.
104.52 Distribution of award to decedent's beneficiaries.
Subpart F--Limitations
104.61 Limitation on civil actions.
104.62 Time limit on filing claims.
104.63 Subrogation.
Subpart G--Measures To Protect the Integrity of the Compensation 
Program
104.71 Procedures to prevent and detect fraud.
Subpart H--Attorney Fees
104.81 Limitation on attorney fees.

    Authority:  Title IV of Pub. L. 107-42, 115 Stat. 230, 49 U.S.C. 
40101 note; Title II of Pub.L. 111-347, 124 Stat. 3623.

Subpart A--General; Eligibility


Sec.  104.1  Purpose.

    This part implements the provisions of the September 11th Victim 
Compensation Fund of 2001, Title IV of Public Law 107-42, 115 Stat. 230 
(Air Transportation Safety and System Stabilization Act), as amended by 
the James Zadroga 9/11 Health and Compensation Act of 2010, Title II of 
Public Law 111-347, to provide compensation to eligible individuals who 
were physically injured as a result of the terrorist-related aircraft 
crashes of September 11, 2001 or debris removal during the immediate 
aftermath of those crashes, and to the ``personal representatives'' of 
those who were killed as a result of the crashes. All compensation 
provided through the Fund will be on account of personal physical 
injuries or death.


Sec.  104.2  Eligibility definitions and requirements.

    (a) Eligible claimants. The term eligible claimants means:
    (1) Individuals present at a 9/11 crash site at the time of or in 
the immediate aftermath of the terrorist-related aircraft crashes and 
who suffered physical harm, as defined herein, as a direct result of 
the crashes or debris removal;
    (2) The Personal Representatives of deceased individuals aboard 
American Airlines flights 11 or 77 and United Airlines flights 93 or 
175; and
    (3) The Personal Representatives of individuals who were present at 
a 9/11 crash site at the time of or in the immediate aftermath of the 
crashes and who died as a direct result of the terrorist-related 
aircraft crash.
    (4) The term eligible claimants does not include any individual or 
representative of an individual who is identified to have been a 
participant or conspirator in the terrorist-related crashes of 
September 11.
    (b) Immediate aftermath. The term immediate aftermath means any 
period beginning with the terrorist-related aircraft crashes of 
September 11, 2001, and ending on May 30, 2002.
    (c) Physical harm. (1) The term physical harm shall mean a physical 
injury to the body that was treated by a medical professional within a 
reasonable time from the date of discovering such harm; and
    (2) The physical injury must be verified by medical records created 
by or at the direction of the medical professional who provided the 
medical care contemporaneously with the care.
    (d) Personal Representative. The term Personal Representative shall 
mean the person determined to be the Personal Representative under 
Sec.  104.4 of this part.
    (e) WTC Health Program. The term WTC Health Program means the World 
Trade Center Health Program established by Title I of Public Law 111-
347 (codified at Title XXXIII of the Public Health Service Act, 42 
U.S.C. 300mm--300mm-61).
    (f) WTC-related health condition. The term WTC-related health 
condition means those health conditions identified as WTC-related by 
Title I of Public Law 111-347 and by regulations implementing that 
Title.
    (g) 9/11 crash site. The term 9/11 crash site means:
    (1) The World Trade Center site, Pentagon site, and Shanksville, 
Pennsylvania site; or
    (2) The buildings or portions of buildings that were destroyed as a 
result of the terrorist-related airplane crashes of September 11, 2001; 
or

[[Page 36033]]

    (3) The area in Manhattan south of the line that runs along Reade 
Street from the Hudson River to the intersection of Reade Street and 
Centre Street, south on Centre Street to the Brooklyn Bridge, and along 
the Brooklyn Bridge, or any other area contiguous to the crash sites 
that the Special Master determines was sufficiently close to the site 
that there was a demonstrable risk of physical harm resulting from the 
impact of the aircraft or any subsequent fire, explosions, or building 
collapses (including the immediate area in which the impact occurred, 
fire occurred, portions of buildings fell, or debris fell upon and 
injured individuals); or
    (4) Any area related to, or along, routes of debris removal, such 
as barges and Fresh Kills.


Sec.  104.3  Other definitions.

    (a) Beneficiary. The term beneficiary shall mean a person to whom 
the Personal Representative shall distribute all or part of the award 
under Sec.  104.52 of this Part.
    (b) Dependents. The Special Master shall identify as dependents 
those persons so identified by the victim on his or her federal tax 
return for the year prior to the year of the victim's death (or those 
persons who legally could have been identified by the victim on his or 
her federal tax return for the year prior to the year of the victim's 
death) unless:
    (1) The claimant demonstrates that a minor child of the victim was 
born or adopted on or after January 1 of the year of the victim's 
death;
    (2) Another person became a dependent in accordance with then-
applicable law on or after January 1 of the year of the victim's death; 
or
    (3) The victim was not required by law to file a federal income tax 
return for the year prior to the year of the victim's death.
    (c) Spouse. The Special Master shall identify as the spouse of a 
victim the person reported as spouse on the victim's federal tax return 
for the year prior to the year of the victim's death (or the person who 
legally could have been identified by the victim on his or her federal 
tax return for the year prior to the year of the victim's death) 
unless:
    (1) The victim was married or divorced in accordance with 
applicable state law on or after January 1 of the year of the victim's 
death; or
    (2) The victim was not required by law to file a federal income tax 
return for the year prior to the year of the victim's death.
    (d) The Act. The Act, as used in this part, shall mean Public Law 
107-42, 115 Stat. 230 (``Air Transportation Safety and System 
Stabilization Act''), 49 U.S.C. 40101 note, as amended by the James 
Zadroga 9/11 Health and Compensation Act of 2010, Title II of Public 
Law 111-347.
    (e) Victim. The term victim shall mean an eligible injured claimant 
or a decedent on whose behalf a claim is brought by an eligible 
Personal Representative.
    (f) Substantially Complete. A claim becomes substantially complete 
when, in the opinion of the Special Master or her designee, the claim 
contains sufficient information and documentation to determine both the 
claimant's eligibility and, if the claimant is eligible, an appropriate 
award.


Sec.  104.4  Personal Representative.

    (a) In general. The Personal Representative shall be:
    (1) An individual appointed by a court of competent jurisdiction as 
the Personal Representative of the decedent or as the executor or 
administrator of the decedent's will or estate.
    (2) In the event that no Personal Representative or executor or 
administrator has been appointed by any court of competent 
jurisdiction, and such issue is not the subject of pending litigation 
or other dispute, the Special Master may, in her discretion, determine 
that the Personal Representative for purposes of compensation by the 
Fund is the person named by the decedent in the decedent's will as the 
executor or administrator of the decedent's estate. In the event no 
will exists, the Special Master may, in her discretion, determine that 
the Personal Representative for purposes of compensation by the Fund is 
the first person in the line of succession established by the laws of 
the decedent's domicile governing intestacy.
    (b) Notice to beneficiaries. (1) Any purported Personal 
Representative must, before filing an Eligibility Form, provide written 
notice of the claim (including a designated portion of the Eligibility 
Form) to the immediate family of the decedent (including, but not 
limited to, the decedent's spouse, former spouses, children, other 
dependents, and parents), to the executor, administrator, and 
beneficiaries of the decedent's will, and to any other persons who may 
reasonably be expected to assert an interest in an award or to have a 
cause of action to recover damages relating to the wrongful death of 
the decedent.
    (2) Personal delivery or transmission by certified mail, return 
receipt requested, shall be deemed sufficient notice under this 
provision. The claim forms shall require that the purported Personal 
Representative certify that such notice (or other notice that the 
Special Master deems appropriate) has been given. In addition, as 
provided in Sec.  104.21(b)(5) of this part, the Special Master may 
publish a list of individuals who have filed Eligibility Forms and the 
names of the victims for whom compensation is sought, but shall not 
publish the content of any such form.
    (c) Objections to Personal Representatives. Objections to the 
authority of an individual to file as the Personal Representative of a 
decedent may be filed with the Special Master by parties who assert a 
financial interest in the award up to 30 days following the filing by 
the Personal Representative. If timely filed, such objections shall be 
treated as evidence of a ``dispute'' pursuant to paragraph (d) of this 
section.
    (d) Disputes as to identity. The Special Master shall not be 
required to arbitrate, litigate, or otherwise resolve any dispute as to 
the identity of the Personal Representative. In the event of a dispute 
over the appropriate Personal Representative, the Special Master may 
suspend adjudication of the claim or, if sufficient information is 
provided, calculate the appropriate award and authorize payment, but 
place in escrow any payment until the dispute is resolved either by 
agreement of the disputing parties or by a court of competent 
jurisdiction. Alternatively, the disputing parties may agree in writing 
to the identity of a Personal Representative to act on their behalf, 
who may seek and accept payment from the Fund while the disputing 
parties work to settle their dispute.


Sec.  104.5  Foreign claims.

    In the case of claims brought by or on behalf of foreign citizens, 
the Special Master may alter the requirements for documentation set 
forth herein to the extent such materials are unavailable to such 
foreign claimants.


Sec.  104.6  Amendments to this part.

    Claimants are entitled to have their claims processed in accordance 
with the provisions of this Part that were in effect at the time that 
their claims were submitted under Sec.  104.22(d). All claims will be 
processed in accordance with the current provisions of this Part, 
unless the claimant has notified the Special Master that he or she has 
elected to have the claim resolved under the regulations that were in 
effect at the time that the claim was submitted under Sec.  104.22(d).

[[Page 36034]]

Subpart B--Filing for Compensation


Sec.  104.21  Presumptively covered conditions.

    (a) In general. The Special Master shall maintain and publish on 
the Fund's Web site a list of presumptively covered conditions that 
resulted from the terrorist-related air crashes of September 11, 2001, 
or debris removal. The list shall consist of physical injuries that are 
determined to be WTC-related health conditions by the WTC Health 
Program.
    (b) Updates. The Special Master shall update the list of 
presumptively covered conditions as the list of WTC-related health 
conditions by the WTC Health Program is updated. Claims may then be 
amended pursuant to Sec.  104.22(e)(ii).
    (c) Conditions other than presumptively covered conditions. A 
claimant may also be eligible for payment under Sec.  104.51 where the 
claimant--
    (1) Presents extraordinary circumstances not adequately addressed 
by the list of presumptively covered conditions; and
    (2) Is otherwise eligible for payment.


Sec.  104.22  Filing for compensation.

    (a) Compensation form; ``filing.'' A claim shall be deemed 
``filed'' for purposes of section 405(b)(3) of the Act (providing that 
the Special Master shall issue a determination regarding the matters 
that were the subject of the claim not later than 120 calendar days 
after the date on which a claim is filed), and for any time periods in 
this part, when it is substantially complete.
    (b) Eligibility Form. The Special Master shall develop an 
Eligibility Form that will require the claimant to provide information 
necessary for determining the claimant's eligibility to recover from 
the Fund.
    (1) The Eligibility Form may require that the claimant certify that 
he or she has dismissed any pending lawsuit seeking damages as a result 
of the terrorist-related airplane crashes of September 11, 2001, or for 
damages arising from or related to debris removal (except for actions 
seeking collateral source benefits) within 90 days of the effective 
date of this part pursuant to section 405(c)(3)(C)(ii) of the Act and 
that there is no pending lawsuit brought by a dependent, spouse, or 
beneficiary of the victim.
    (2) The Special Master may require as part of the notice 
requirement pursuant to Sec.  104.4(b) that the claimant provide copies 
of a designated portion of the Eligibility Form to the immediate family 
of the decedent (including, but not limited to, the spouse, former 
spouses, children, other dependents, and parents), to the executor, 
administrator, and beneficiaries of the decedent's will, and to any 
other persons who may reasonably be expected to assert an interest in 
an award or to have a cause of action to recover damages relating to 
the wrongful death of the decedent.
    (3) The Eligibility Form may require claimants to provide the 
following proof:
    (i) Proof of death: Death certificate or similar official 
documentation;
    (ii) Proof of presence at site: Documentation sufficient to 
establish presence at a 9/11 crash site, which may include, without 
limitation, a death certificate, proof of residence, records of 
employment or school attendance, contemporaneous medical records, 
contemporaneous records of federal, state, city or local government, an 
affidavit or declaration of the decedent's or injured claimant's 
employer, or other sworn statement (or unsworn statement complying with 
28 U.S.C. 1746) regarding the presence of the victim;
    (iii) Proof of physical harm: Certification of a conclusion by the 
WTC Health Program that the claimant suffers from a WTC-related health 
condition; a health form provided by the Fund and completed by a 
licensed medical professional.
    (iv) Personal Representative: Copies of relevant legal 
documentation, including court orders; letters testamentary or similar 
documentation; proof of the purported Personal Representative's 
relationship to the decedent; copies of wills, trusts, or other 
testamentary documents; and information regarding other possible 
beneficiaries as requested by the Eligibility Form;
    (v) Any other information that the Special Master deems necessary 
to determine the claimant's eligibility.
    (4) The Special Master may also require waivers, consents, or 
authorizations from claimants to obtain directly from third parties tax 
returns, medical information, employment information, or other 
information that the Special Master deems relevant in determining the 
claimant's eligibility or award, and may request an opportunity to 
review originals of documents submitted in connection with the Fund.
    (5) The Special Master may publish a list of individuals who have 
filed Eligibility Forms and the names of the victims for whom 
compensation is sought, but shall not publish the content of any such 
form.
    (c) Personal Injury Compensation Form and Death Compensation Form. 
The Special Master shall develop a Personal Injury Compensation Form 
that each injured claimant must submit. The Special Master shall also 
develop a Death Compensation Form that each Personal Representative 
must submit. These forms shall require the claimant to provide certain 
information that the Special Master deems necessary to determining the 
amount of any award, including information concerning income, 
collateral sources, benefits, settlements and attorneys' fees relating 
to civil actions described in section 405(c)(3)(C)(iii) of the Act, and 
other financial information, and shall require the claimant to state 
the factual basis for the amount of compensation sought. It shall also 
allow the claimant to submit certain other information that may be 
relevant, but not necessary, to the determination of the amount of any 
award.
    (1) Claimants shall, at a minimum, submit all tax returns that were 
filed for the period beginning three years prior to the year of death 
or discovery of the injury and ending with the year the claim was filed 
or the year of death. The Special Master may, at the Special Master's 
discretion, require that claimants submit copies of tax returns or 
other records for any other period of years the Special Master deems 
appropriate for determination of an award. The Special Master may also 
require waivers, consents, or authorizations from claimants to obtain 
directly from third parties medical information, employment 
information, or other information that the Special Master deems 
relevant to determining the amount of any award.
    (2) Claimants may attach to the ``Personal Injury Compensation 
Form'' or ``Death Compensation Form'' any additional statements, 
documents or analyses by physicians, experts, advisors, or any other 
person or entity that the claimant believes may be relevant to a 
determination of compensation.
    (d) Submission of a claim. Section 405(c)(3)(C) of the Act provides 
that upon the submission of a claim under the Fund, the claimant waives 
the right to file a civil action (or to be a party to an action) in any 
Federal or State court for damages sustained as a result of the 
terrorist-related aircraft crashes of September 11, 2001, except for 
civil actions to recover collateral source obligations and civil 
actions against any person who is a knowing participant in any 
conspiracy to hijack any aircraft or commit any terrorist act. A claim 
shall be deemed submitted for purposes of section 405(c)(3)(C) of the 
Act when the claim is deemed filed pursuant to Sec.  104.21, regardless 
of whether any time limits are stayed or tolled.

[[Page 36035]]

    (e) Amendment of claims. A claimant who has previously submitted a 
claim may amend such claim to include
    (1) An injury that the claimant had not suffered (or did not 
reasonably know the claimant suffered) at the time the claimant filed 
the previous claim;
    (2) A condition that the Special Master has identified and 
published in accordance with 104.21(a), since the time the claimant 
filed the previous claim, as a presumptively covered condition;
    (3) An injury for which the claimant was previously compensated by 
the Fund, but only if that injury has substantially worsened, resulting 
in damages or loss that was not previously compensated; and
    (4) Claims for which the individual is an eligible claimant as a 
result of amendments contained in the James Zadroga 9/11 Health and 
Compensation Act of 2010, Title II of Public Law 111-347.
    (f) Provisions of information by third parties. Any third party 
having an interest in a claim brought by a Personal Representative may 
provide written statements or information regarding the Personal 
Representative's claim. The Claims Evaluator or the Special Master or 
the Special Master's designee may, at his or her discretion, include 
the written statements or information as part of the claim.

Subpart C--Claim Intake, Assistance, and Review Procedures


Sec.  104.31  Procedure for claims evaluation.

    (a) Initial review. Claims Evaluators shall review the forms filed 
by the claimant and either deem the claim ``filed'' (pursuant to Sec.  
104.21(a)) or notify the claimant of any deficiency in the forms or any 
required documents.
    (b) Procedure. The Claims Evaluator shall determine eligibility and 
the claimant's presumed award pursuant to Sec. Sec.  104.43 to 104.46 
of this part and, within 75 days of the date the claim was deemed 
filed, notify the claimant in writing of the eligibility determination, 
the amount of the presumed award, and the right to request a hearing 
before the Special Master or her designee under Sec.  104.33 of this 
part. After an eligible claimant has been notified of the presumed 
award, within 30 days the claimant may either accept the presumed 
compensation determination as the final determination and request 
payment, or may instead request a review before the Special Master or 
her designee pursuant to Sec.  104.33. Claimants found to be ineligible 
may appeal pursuant to Sec.  104.32.
    (c) Multiple claims from the same family. The Special Master may 
treat claims brought by or on behalf of two or more members of the same 
immediate family as related or consolidated claims for purposes of 
determining the amount of any award.


Sec.  104.32  Eligibility review.

    Any claimant deemed ineligible by the Claims Evaluator may appeal 
that decision to the Special Master or her designee by filing an 
eligibility appeal within 30 days on forms created by the office of the 
Special Master.


Sec.  104.33  Hearing.

    (a) Supplemental submissions. The claimant may prepare and file 
Supplemental Submissions within 21 calendar days from notification of 
the presumed award. The Special Master shall develop forms appropriate 
for Supplemental Submissions.
    (b) Conduct of hearings. Hearings shall be before the Special 
Master or her designee. The objective of hearings shall be to permit 
the claimant to present information or evidence that the claimant 
believes is necessary to a full understanding of the claim. The 
claimant may request that the Special Master or her designee review any 
evidence relevant to the determination of the award, including without 
limitation: The nature and extent of the claimant's injury; evidence of 
the claimant's presence at a 9/11 crash site; factors and variables 
used in calculating economic loss; the identity of the victim's spouse 
and dependents; the financial needs of the claimant; facts affecting 
noneconomic loss; and any factual or legal arguments that the claimant 
contends should affect the award. Claimants shall be entitled to submit 
any statements or reports in writing. The Special Master or her 
designee may require authentication of documents, including medical 
records and reports, and may request and consider information regarding 
the financial resources and expenses of the victim's family or other 
material that the Special Master or her designee deems relevant.
    (c) Location and duration of hearings. The hearings shall, to the 
extent practicable, be scheduled at times and in locations convenient 
to the claimant or his or her representative. The hearings shall be 
limited in length to a time period determined by the Special Master or 
her designee.
    (d) Witnesses, counsel, and experts. Claimants shall be permitted, 
but not required, to present witnesses, including expert witnesses. The 
Special Master or her designee shall be permitted to question witnesses 
and examine the credentials of experts. The claimant shall be entitled 
to be represented by an attorney in good standing, but it is not 
necessary that the claimant be represented by an attorney. All 
testimony shall be taken under oath.
    (e) Waivers. The Special Master shall have authority and discretion 
to require any waivers necessary to obtain more individualized 
information on specific claimants.
    (f) Award Appeals. For award appeals, the Special Master or her 
designee shall make a determination whether:
    (1) There was an error in determining the presumptive award, either 
because the claimant's individual criteria were misapplied or for 
another reason; or
    (2) The claimant presents extraordinary circumstances not 
adequately addressed by the presumptive award.
    (g) Determination. The Special Master shall notify the claimant in 
writing of the final amount of the award, but need not create or 
provide any written record of the deliberations that resulted in that 
determination. There shall be no further review or appeal of the 
Special Master's determination. In notifying the claimant of the final 
amount of the award, the Special Master may designate the portions or 
percentages of the final award that are attributable to economic loss 
and non-economic loss, respectively, and may provide such other 
information as appropriate to provide adequate guidance for a court of 
competent jurisdiction and a personal representative.


Sec.  104.34  Publication of awards.

    The Special Master reserves the right to publicize the amounts of 
some or all of the awards, but shall not publish the name of the 
claimants or victims that received each award. If published, these 
decisions would be intended by the Special Master as general guides for 
potential claimants and should not be viewed as precedent binding on 
the Special Master or her staff.


Sec.  104.35  Claims deemed abandoned by claimants.

    The Special Master and her staff will endeavor to evaluate promptly 
any information submitted by claimants. Nonetheless, it is the 
responsibility of the claimant to keep the Special Master informed of 
his or her current address and to respond within the duration of this 
five-year program to requests for additional information. Claims 
outstanding at the end of this program because of a claimant's failure 
to

[[Page 36036]]

complete his or her filings shall be deemed abandoned.

Subpart D--Amount of Compensation for Eligible Claimants


Sec.  104.41  Amount of compensation.

    As provided in section 405(b)(1)(B)(ii) of the Act, in determining 
the amount of compensation to which a claimant is entitled, the Special 
Master shall take into consideration the harm to the claimant, the 
facts of the claim, and the individual circumstances of the claimant. 
The individual circumstances of the claimant may include the financial 
needs or financial resources of the claimant or the victim's dependents 
and beneficiaries. As provided in section 405(b)(6) of the Act, the 
Special Master shall reduce the amount of compensation by the amount of 
collateral source compensation the claimant (or, in the case of a 
Personal Representative, the victim's beneficiaries) has received or is 
entitled to receive as a result of the terrorist-related aircraft 
crashes of September 11, 2001. In no event shall an award (before 
collateral source compensation has been deducted) be less than $500,000 
in any case brought on behalf of a deceased victim with a spouse or 
dependent, or $300,000 in any case brought on behalf of a deceased 
victim who was single with no dependents.


Sec.  104.42  Applicable state law.

    The phrase ``to the extent recovery for such loss is allowed under 
applicable state law,'' as used in the statute's definition of economic 
loss in section 402(5) of the Act, is interpreted to mean that the 
Special Master is not permitted to compensate claimants for those 
categories or types of economic losses that would not be compensable 
under the law of the state that would be applicable to any tort claims 
brought by or on behalf of the victim.


Sec.  104.43  Determination of presumed economic loss for decedents.

    In reaching presumed determinations for economic loss for Personal 
Representatives bringing claims on behalf of decedents, the Special 
Master shall consider sums corresponding to the following:
    (a) Loss of earnings or other benefits related to employment. The 
Special Master, as part of the process of reaching a ``determination'' 
pursuant to section 405(b) of the Act, shall develop a methodology and 
publish schedules, tables, or charts that will permit prospective 
claimants to estimate determinations of loss of earnings or other 
benefits related to employment based upon individual circumstances of 
the deceased victim, including: The age of the decedent as of the date 
of death; the number of dependents who survive the decedent; whether 
the decedent is survived by a spouse; and the amount and nature of the 
decedent's income for recent years. The Decedent's salary/income in the 
three years preceding the year of death (or for other years the Special 
Master deems relevant) shall be evaluated in a manner that the Special 
Master deems appropriate. The Special Master may, if she deems 
appropriate, take an average of income figures for the three years 
preceding the year of death, and may also consider income for other 
periods that she deems appropriate, including published pay scales for 
victims who were government or military employees. The Special Master's 
methodology and schedules, tables, or charts shall yield presumed 
determinations of loss of earnings or other benefits related to 
employment for annual incomes up to but not beyond the 98th percentile 
of individual income in the United States for the year preceding the 
year of death. In cases where the victim was a minor child, the Special 
Master may assume an average income for the child commensurate with the 
average income of all wage earners in the United States. For victims 
who were members of the armed services or government employees such as 
firefighters or police officers, the Special Master may consider all 
forms of compensation (or pay) to which the victim was entitled. For 
example, military service members' and uniformed service members' 
compensation includes all of the various components of compensation, 
including, but not limited to, basic pay (BPY), basic allowance for 
housing (BAH), basic allowance for subsistence (BAS), federal income 
tax advantage (TAD), overtime bonuses, differential pay, and longevity 
pay.
    (b) Medical expense loss. This loss equals the out-of-pocket 
medical expenses that were incurred as a result of the physical harm 
suffered by the victim (i.e., those medical expenses that were not paid 
for or reimbursed through health insurance or other programs for which 
the claimant was not charged). This loss shall be calculated on a case-
by-case basis, using documentation and other information submitted by 
the Personal Representative.
    (c) Replacement services loss. For decedents who did not have any 
prior earned income, or who worked only part time outside the home, 
economic loss may be determined with reference to replacement services 
and similar measures.
    (d) Loss due to death/burial costs. This loss shall be calculated 
on a case-by-case basis, using documentation and other information 
submitted by the personal representative and includes the out-of pocket 
burial costs that were incurred.
    (e) Loss of business or employment opportunities. Such losses shall 
be addressed through the procedure outlined above in paragraph (a) of 
this section.


Sec.  104.44  Determination of presumed noneconomic losses for 
decedents.

    The presumed non-economic losses for decedents shall be $250,000 
plus an additional $100,000 for the spouse and each dependent of the 
deceased victim. Such presumed losses include a noneconomic component 
of replacement services loss.


Sec.  104.45  Determination of presumed economic loss for claimants who 
suffered physical harm.

    In reaching presumed determinations for economic loss for claimants 
who suffered physical harm (but did not die), the Special Master shall 
consider sums corresponding to the following:
    (a) Loss of earnings or other benefits related to employment. The 
Special Master may determine the loss of earnings or other benefits 
related to employment on a case-by-case basis, using documentation and 
other information submitted by the claimant, regarding the actual 
amount of work that the claimant has missed or will miss without 
compensation. Alternatively, the Special Master may determine the loss 
of earnings or other benefits related to employment by relying upon the 
methodology created pursuant to Sec.  104.43(a) and adjusting the loss 
based upon the extent of the victim's physical harm.
    (1) Disability; in general. In evaluating claims of disability, the 
Special Master will, in general, make a determination regarding whether 
the claimant is capable of performing his or her usual profession in 
light of the injuries.
    (2) Total permanent disability. With respect to claims of total 
permanent disability, the Special Master may accept a determination of 
disability made by the Social Security Administration as evidence of 
disability without any further medical evidence or review. The Special 
Master may also consider determinations of permanent total disability 
made by other governmental agencies or private insurers in evaluating 
the claim. The Special Master may require that the claimant submit an 
evaluation of the claimant's disability and ability to

[[Page 36037]]

perform his or her occupation prepared by medical experts.
    (3) Partial disability. With respect to claims of partial 
disability, the Special Master may consider evidence of the effect of 
the partial disability on the claimant's ability to perform his or her 
usual occupation as well as the effect of the partial disability on the 
claimant's ability to participate in usual daily activities.
    (b) Medical Expense Loss. This loss equals the out-of-pocket 
medical expenses that were incurred as a result of the physical harm 
suffered by the victim (i.e., those medical expenses that were not paid 
for or reimbursed through health insurance or other programs for which 
the claimant was not charged). In addition, this loss equals future 
out-of-pocket medical expenses that will be incurred as a result of the 
physical harm suffered by the victim (i.e., those medical expenses that 
will not be paid for or reimbursed through health insurance). These 
losses shall be calculated on a case-by-case basis, using documentation 
and other information submitted by the claimant.
    (c) Replacement services loss. For injured claimants who did not 
have any prior earned income, or who worked only part-time outside the 
home, economic loss may be determined with reference to replacement 
services and similar measures.
    (d) Loss of business or employment opportunities. Such losses shall 
be addressed through the procedure outlined above in paragraph (a) of 
this section.


Sec.  104.46  Determination of presumed noneconomic losses for 
claimants who suffered physical harm.

    The Special Master may determine the presumed noneconomic losses 
for claimants who suffered physical harm (but did not die) by relying 
upon the noneconomic losses described in Sec.  104.44 and adjusting the 
losses based upon the extent of the victim's physical harm. Such 
presumed losses include any noneconomic component of replacement 
services loss.


Sec.  104.47  Collateral sources.

    (a) Payments that constitute collateral source compensation. The 
amount of compensation shall be reduced by all collateral source 
compensation, including life insurance, pension funds, death benefits 
programs, payments by Federal, State, or local governments related to 
the terrorist-related aircraft crashes of September 11, 2001 or debris 
removal, including under the World Trade Center Health Program 
established under section 3001 of the Public Health Service Act, and 
payments made pursuant to the settlement of a civil action as described 
in section 405(c)(3)(C)(iii) of the Act. In determining the appropriate 
collateral source offset for future benefit payments, the Special 
Master may employ an appropriate methodology for determining the 
present value of such future benefits. In determining the appropriate 
value of offsets for pension funds, life insurance and similar 
collateral sources, the Special Master may, as appropriate, reduce the 
amount of offsets to take account of self-contributions made or 
premiums paid by the victim during his or her lifetime. In determining 
the appropriate collateral source offset for future benefit payments 
that are contingent upon one or more future event(s), the Special 
Master may reduce such offsets to account for the possibility that the 
future contingencies may or may not occur. In cases where the 
recipients of collateral source compensation are not beneficiaries of 
the awards from the Fund, the Special Master shall have discretion to 
exclude such compensation from the collateral source offset where 
necessary to prevent beneficiaries from having their awards reduced by 
collateral source compensation that they will not receive.
    (b) Payments that do not constitute collateral source compensation. 
The following payments received by claimants do not constitute 
collateral source compensation:
    (1) The value of services or in-kind charitable gifts such as 
provision of emergency housing, food, or clothing; and
    (2) Charitable donations distributed to the beneficiaries of the 
decedent, to the injured claimant, or to the beneficiaries of the 
injured claimant by privately funded charitable entities; provided 
however, that the Special Master may determine that funds provided to 
victims or their families through a privately funded charitable entity 
constitute, in substance, a payment described in paragraph (a) of this 
section.
    (3) Tax benefits received from the Federal government as a result 
of the enactment of the Victims of Terrorism Tax Relief Act.

Subpart E--Payment of Claims


Sec.  104.51  Payments to eligible individuals.

    (a) Payment date. Subject to subsection (c) of this section, the 
Special Master shall authorize payment of an award to a claimant not 
later than 20 days after the date on which:
    (1) The claimant accepts the presumed award; or
    (2) A final award for the claimant is determined after a hearing on 
appeal.
    (b) Failure to accept or appeal presumed award. If a claimant fails 
to accept or appeal the presumed award determined for that claimant 
within 30 days, the presumed award shall be deemed to have been 
accepted and all rights to appeal the award shall have been waived.
    (c) Pro-ration and payment of remaining claims. The James Zadroga 
9/11 Health and Compensation Act of 2010, Title II of Public Law 111-
347, requires that the total amount of Federal funds paid for 
expenditures including compensation with respect to claims filed on or 
after [OPEN DATE], 2011 will not exceed $2,775,000,000. Furthermore, 
the total amount of Federal funds expended during the period from 
[EFFECTIVE DATE OF FINAL RULE], through [DATE 5 YEARS AFTER EFFECTIVE 
DATE OF FINAL RULE], may not exceed $875,000,000.
    (1) In general. The Special Master shall ratably reduce the amount 
of compensation due claimants in a manner to ensure, to the extent 
possible, that all claimants who are determined to be entitled to a 
payment receive a payment during the period from [EFFECTIVE DATE OF 
FINAL RULE], to [DATE 5 YEARS AFTER EFFECTIVE DATE OF FINAL RULE], and 
that the total amount of all such payments made during that 5-year 
period do not exceed the amount available under law during that period. 
The Special Master may periodically adjust the method of ratable 
reduction in light of available information regarding potential future 
claims and available funds.
    (2) Subsequent payments. Subject to paragraph (c)(3) of this 
section, in any case in which the amount of a claim is ratably reduced 
pursuant to paragraph (c)(1) of this section, on or after [DATE 5 YEARS 
AFTER EFFECTIVE DATE OF FINAL RULE], but in no event later than [DATE 6 
YEARS AFTER EFFECTIVE DATE OF FINAL RULE], the Special Master shall pay 
to the claimant the amount that is equal to the difference between:
    (i) The amount that the claimant would have been paid under the 
presumed award; and
    (ii) The amount the claimant was paid during the period from 
[EFFECTIVE DATE OF FINAL RULE], 2011 to [DATE 5 YEARS AFTER EFFECTIVE 
DATE OF FINAL RULE].
    (3) In the event that the total amount of all claims under 
paragraph (c)(2) of this section exceeds the amount available under 
law, the Special Master

[[Page 36038]]

shall ratably reduce the amount of compensation due claimants in a 
manner to ensure, to the extent possible, that all claimants who are 
determined to be entitled to an additional payment receive their pro-
rated share of the available funds.


Sec.  104.52  Distribution of award to decedent's beneficiaries.

    The Personal Representative shall distribute the award in a manner 
consistent with the law of the decedent's domicile or any applicable 
rulings made by a court of competent jurisdiction. The Personal 
Representative shall, before payment is authorized, provide to the 
Special Master a plan for distribution of any award received from the 
Fund. Notwithstanding any other provision of these regulations or any 
other provision of state law, in the event that the Special Master 
concludes that the Personal Representative's plan for distribution does 
not appropriately compensate the victim's spouse, children, or other 
relatives, the Special Master may direct the Personal Representative to 
distribute all or part of the award to such spouse, children, or other 
relatives.

Subpart F--Limitations


Sec.  104.61  Limitation on civil actions.

    (a) General. Section 405(c)(3)(C) of the Act provides that upon the 
submission of a claim under the Fund, the claimant waives the right to 
file a civil action (or be a party to an action) in any Federal or 
State court for damages sustained as a result of the terrorist-related 
aircraft crashes of September 11, 2001, or for damages arising from or 
related to debris removal, except that this limitation does not apply 
to recover collateral source obligations, or to a civil action against 
any person who is a knowing participant in any conspiracy to hijack any 
aircraft or commit any terrorist act. The Special Master shall take 
appropriate steps to inform potential claimants of section 405(c)(3)(C) 
of the Act.
    (b) Pending actions. Claimants who have filed a civil action or who 
are a party to such an action as described in paragraph (a) of this 
section may not file a claim with the Special Master unless they 
withdraw from such action not later than [DATE 90 DAYS AFTER EFFECTIVE 
DATE OF FINAL RULE].
    (c) Settled actions. In the case of an individual who settled a 
civil action described in Section 405(c)(3)(C) of the Act, such 
individual may not submit a claim under this title unless such action 
was commenced after December 22, 2003, and a release of all claims in 
such action was tendered prior to January 2, 2011.


Sec.  104.62  Time limit on filing claims.

    (a) In general. A claim may be filed by an individual (or by a 
personal representative on behalf of a deceased individual) during the 
period beginning on [EFFECTIVE DATE OF FINAL RULE], and ending on [DATE 
5 YEARS AFTER EFFECTIVE DATE OF FINAL RULE], as follows:
    (1) In the case that the individual knew (or reasonably should have 
known) before [EFFECTIVE DATE OF FINAL RULE], 2011 that the individual 
suffered a physical harm at a 9/11 crash site as a result of the 
terrorist-related aircraft crashes of September 11, 2001, or as a 
result of debris removal, and that the individual knew (or should have 
known) before such specified date that the individual was eligible to 
file a claim under this title, the individual may file a claim not 
later than [DATE 2 YEARS AFTER EFFECTIVE DATE OF FINAL RULE].
    (2) In the case that the individual first knew (or reasonably 
should have known) on or after [EFFECTIVE DATE OF FINAL RULE], that the 
individual suffered such a physical harm or that the individual first 
knew (or should have known) on or after that date that the individual 
was eligible to file a claim under this title, the individual may file 
a claim not later than the last day of the 2-year period beginning on 
the date that the individual first knew (or should have known) that the 
individual both suffered from such harm and was eligible to file a 
claim under this title, but in no event beyond [DATE 5 YEARS AFTER 
EFFECTIVE DATE OF FINAL RULE].
    (b) Determination by Special Master. The Special Master or the 
Special Master's designee should determine the timeliness of all claims 
under paragraph (a) of this section.


Sec.  104.63  Subrogation.

    Compensation under this Fund does not constitute the recovery of 
tort damages against a third party nor the settlement of a third party 
action, and the United States shall be subrogated to all potential 
claims against third party tortfeasors of any victim receiving 
compensation from the Fund. For that reason, no person or entity having 
paid other benefits or compensation to or on behalf of a victim shall 
have any right of recovery, whether through subrogation or otherwise, 
against the compensation paid by the Fund.

Subpart G--Measures To Protect the Integrity of the Compensation 
Program


Sec.  104.71  Procedures to prevent and detect fraud.

    (a) Review of claims. For the purpose of detecting and preventing 
the payment of fraudulent claims and for the purpose of assuring 
accurate and appropriate payments to eligible claimants, the Special 
Master shall implement procedures to:
    (1) Verify, authenticate, and audit claims;
    (2) Analyze claim submissions to detect inconsistencies, 
irregularities, duplication, and multiple claimants; and
    (3) Ensure the quality control of claims review procedures.
    (b) Quality control. The Special Master shall institute periodic 
quality control audits designed to evaluate the accuracy of submissions 
and the accuracy of payments, subject to the oversight of the Inspector 
General of the Department of Justice.
    (c) False or fraudulent claims. The Special Master shall refer all 
evidence of false or fraudulent claims to appropriate law enforcement 
authorities.

Subpart H--Attorney Fees


Sec.  104.81  Limitation on Attorney Fees

    (a) In general. (1) In general. Notwithstanding any contract, the 
representative of an individual may not charge, for services rendered 
in connection with the claim of an individual under this title, more 
than 10 percent of an award paid under this title on such claim.
    (2) Certification. In the case of any claim in connection with 
which servicers covered by this section were rendered, the 
representative shall certify his or her compliance with this section 
and shall provide such information as the Special Master requires to 
ensure such compliance.
    (b) Limitation. (1) In general. Except as provided in paragraph 
(b)(2) of this section, in the case of an individual who was charged a 
legal fee in connection with the settlement of a civil action described 
in section 405(c)(3)(C)(iii) of the Act, the representative who charged 
such legal fee may not charge that individual any amount for 
compensation for services rendered in connection with a claim filed 
under this title.
    (2) Exception. If the legal fee charged in connection with the 
settlement of a civil action described in section 405(c)(3)(C)(iii) of 
the Act of an individual is less than 10 percent of the aggregate 
amount of compensation

[[Page 36039]]

awarded to such individual through such settlement, the representative 
who charged such legal fee to that individual may charge an amount for 
compensation for services rendered to the extent that such amount 
charged is not more than--
    (i) Ten (10) percent of such aggregate amount through the 
settlement, minus
    (ii) The total amount of all legal fees charged for services 
rendered in connection with such settlement.
    (c) Discretion to lower fee. In the event that the Special Master 
finds that the fee limit set by paragraph (a) or (b) of this section 
provides excessive compensation for services rendered in connection 
with such claim, the Special Master may, in the discretion of the 
Special Master, award as reasonable compensation for services rendered 
an amount lesser than that permitted for in paragraph (a) of this 
section.

    Dated: June 16, 2011.
Sheila L. Birnbaum,
Special Master.
[FR Doc. 2011-15459 Filed 6-20-11; 8:45 am]
BILLING CODE 4410-12-P