[Federal Register Volume 76, Number 169 (Wednesday, August 31, 2011)]
[Rules and Regulations]
[Pages 54112-54126]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-22295]


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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: Final rule.

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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. The Attorney General 
appointed Sheila L. Birnbaum to serve as Special Master and administer 
the Fund. On June 21, 2011, the Special Master issued a Notice of 
Proposed Rulemaking that proposed to amend the regulations implementing 
the Fund to reflect the changes made by the Zadroga Act. After 
reviewing the extensive public comments and meeting with numerous 
victims, victims' families, and other groups, the Special Master is 
issuing this final rule and associated commentary, which make certain 
clarifications and changes that are designed to address issues that 
have been raised. Specifically, the final rule clarifies, supplements, 
and amends the proposed rule by, among other things: Expanding the 
geographic zone recognized as a ``9/11 crash site''; providing greater 
consistency with the World Trade Center Health Program by adding 
additional forms of proof that may be used to establish eligibility; 
and clarifying the types of fees and charges that would come within the 
caps on amounts that a claimant's representative may charge in 
connection with a claim made to the Fund.

DATES: This final rule takes effect on October 3, 2011.

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: 

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

[[Page 54113]]

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 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 appointed Sheila L. Birnbaum to serve as 
Special Master and to administer the Fund. On June 21, 2011, the 
Special Master issued the Notice of Proposed Rulemaking, which provided 
for a 45-day public comment period.
    The Department received 95 comments since the publication of the 
proposed rules. The Special Master's office has reviewed each of these 
comments. In addition, the Special Master has participated in town hall 
meetings with several hundred victims, victims' advocates, and others. 
The Special Master has considered all comments in promulgating the 
final rules. Significant comments received in response to the proposed 
rules and any significant changes are discussed below.

Significant Comments or Changes

I. Eligibility

    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. The Department received many comments 
regarding the interpretation of these provisions in the proposed rule.

(a) ``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. Title II of the Zadroga Act 
defines ``9/11 crash site'' to include both the crash sites themselves, 
routes of debris removal, 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 Centre 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 Centre 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 site'' ``includ[es]'' that original area but 
could also include other areas.
    The proposed rule suggested 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). Those 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.
    Several commenters stated that the proposed boundaries were too 
narrow. Some commenters noted that debris removal barges were located 
north of Reade Street. With respect to these comments, areas related to 
debris removal barges will be covered. The definition of ``9/11 crash 
site'' in the Zadroga Act and proposed and final rules includes 
``routes of debris removal, such as barges and Fresh Kills.'' Another 
commenter urged that survivors who were present at the Shanksville, 
Pennsylvania, or Pentagon sites should be covered. The Zadroga Act and 
proposed and final rules cover those who were present at, among other 
things, the ``Pentagon site, and Shanksville, Pennsylvania site.'' As a 
result, both the areas in which the barges were located and the 
Pentagon and Shanksville sites will be covered.
    Some suggested that the Fund's geographic definition of ``9/11 
crash site'' should be coextensive with the geographic boundaries 
identified in Title I of the Zadroga Act, for the WTC Health Program. 
Such boundaries would ensure complete consistency in geographic 
eligibility under the two programs. While that consistency has value, 
Title II of the Zadroga Act requires the Special Master to make an 
independent determination based on the area in which there was a 
demonstrable risk of harm. Accordingly, the Special Master must review 
evidence of that risk. That evidence is discussed further below.
    Some commenters indicated that dust from the explosions traveled 
north of Reade Street, as well as into parts of Brooklyn, thereby 
creating a heightened risk of harm in those areas, too. Some of these 
comments indicated that dust was visibly present north of Reade Street. 
A few commenters noted further that even in areas in which dust was not 
visibly present, harmful microscopic dust particles may have traveled 
farther north.
    A review of the comments and of available scientific evidence 
suggests that the risk of physical harm differed depending on the level 
of an individual's exposure. Based on the comments that were submitted, 
as well as further examination of the available evidence, the Special 
Master has determined that individuals in the area

[[Page 54114]]

of Manhattan south of Canal Street suffered an increased risk of harm 
as a result of the crashes, depending on the duration, timing and 
amount of exposure. In addition to the dust that was present most 
heavily in the area south of Reade Street, there is also evidence 
suggesting that prolonged exposure to dust between Reade Street and 
Canal Street created a demonstrable risk of physical harm. There are 
also substantial numbers of patients who live between Reade Street and 
Canal Street that are receiving treatment in the World Trade Center 
Environmental Health Center program. Based on this information, the 
final rule expands the zone of geographic eligibility to include the 
area south of Canal Street.
    While there is evidence that the smoke plume from the site traveled 
beyond Manhattan south of Canal Street, the concentrations of 
contaminants in the smoke cloud were most intense within and very near 
Ground Zero. By the time the smoke cloud had reached other areas, such 
as Brooklyn, the particulate concentrations were significantly diluted. 
Thus while the final rule gives the Special Master discretion to 
identify, based on additional evidence, additional areas in which there 
was a demonstrable risk of harm, the initial zone of coverage will 
include the World Trade Center, Pentagon, and Shanksville sites; the 
buildings that were destroyed; the area south of Canal St. in lower 
Manhattan; and the routes of debris removal. It is important to bear in 
mind, however, that eligibility for the Fund requires not only that a 
claimant have been present at one of these 9/11 crash sites, but also 
that the claimant satisfy the Fund's other eligibility criteria, 
including that the claimant's injury was ``a result of'' the aircraft 
crashes or debris removal. Depending on the condition, this criterion 
likely will be satisfied only by individuals with significant exposure, 
and thus individuals who have transient or limited exposure are 
unlikely to meet this requirement.
    Finally, a few comments expressed uncertainty regarding whether 
claimants must live in the New York area to be eligible for the Fund. 
The Special Master does not believe that these questions require any 
changes to the proposed rule. Although the proposed and final rules 
address the location of a claimant in the immediate aftermath of the 
attacks, there is no requirement regarding a claimant's current 
residence or location. Therefore, eligibility is not limited to those 
who currently live in the New York area.

(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.
    Although Title II of the Zadroga Act does not provide additional 
specificity about the harms that are to be covered by the Fund, Title I 
of the Zadroga Act, which establishes the WTC Health Program, contains 
a list of illnesses and health conditions for which exposure to 
airborne 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, or 
contributing to an 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.''
    The proposed rule required the Fund to maintain and publish a list 
of presumptively covered conditions that resulted from the air crashes 
or debris removal. This list would consist of the physical injuries and 
conditions that are found, under the WTC Health Program, to be WTC-
related health conditions. The proposed rule also required the Special 
Master to 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.
    General approach. Many individuals and organizations commented on 
the general approach that the Fund should take on these issues. One set 
of comments noted that in order to ensure that the available funds go 
to those most deserving, it will be important for the Fund to ensure 
that the compensated injuries are, in fact, caused as a result of the 
crashes and debris removal. Other comments rightly noted the sacrifices 
made by the first responders and other claimants, and urged that the 
Fund reciprocate the generosity that they showed. Through the processes 
laid out in Zadroga Act and the final rule, the Fund will seek to 
ensure that eligible claimants are compensated in the manner Congress 
provided, and that payments to the deserving are not diluted by 
payments made to claimants who do not actually meet the criteria laid 
out in the law.
    Cancer and other conditions. The most frequently discussed topic in 
these comments concerned eligibility for individuals with cancer. Most 
of these comments argued that cancer should be considered a WTC-related 
condition. Several commenters stated that many first responders who 
worked or volunteered at Ground Zero have developed cancer, and that it 
is likely that these conditions resulted from the air crashes or debris 
removal. To a lesser extent, other illnesses were also suggested for 
coverage.
    After considering all of the comments and the available evidence, 
the Special Master will continue to rely on the medical judgment made 
by the WTC Health Program. While the Fund will continue to evaluate new 
evidence as it becomes available, and will add to its list of 
presumptively covered conditions any physical injury condition that the 
WTC Health Program recognizes as WTC-related, the final rule will not 
add any additional conditions at this time. Title I of the Zadroga Act 
contains a list of illnesses and health conditions that experienced 
medical professionals have determined could be found on an individual 
basis to be substantially likely to have been aggravated, caused, or 
contributed to by exposure to airborne toxins, other hazards and any 
other adverse conditions resulting from the September 11, 2001 
terrorists attacks. This list does not include any form of cancer. In 
addition, the Zadroga Act requires the Administrator of the WTC Health 
Program to consider other conditions for coverage over time, and 
specifically to ``periodically conduct a review of all available 
scientific and medical evidence, including findings and recommendations 
of Clinical Centers of Excellence, published in peer-reviewed journals 
to determine if, based on such evidence, cancer or a certain type of 
cancer should be added to the applicable list of WTC-related health 
conditions.'' 42 U.S.C. sec. 300mm-22(a)(5)(A).
    The first periodic review by the WTC Health Program Administrator 
found insufficient scientific and medical evidence for adding cancer to 
the list of covered conditions. See First Periodic Review of Scientific 
and Medical Evidence Related to Cancer for the World Trade Center 
Health Program; as prepared by the Department of Health and Human 
Services, Centers for

[[Page 54115]]

Disease Control and Prevention, National Institute for Occupational 
Safety and Health, available at http://www.cdc.gov/niosh/topics/wtc/prc/prc-1.html. That review was based on peer-reviewed scientific 
literature, findings and recommendations solicited from clinics and 
other stakeholders who monitor the health of WTC first responders, and 
information solicited from the public through notices issued in March 
2011. The WTC Health Program's second review will consider additional 
evidence that has become available since the initial review, and 
determine whether it provides a sufficient basis to identify particular 
types of cancer as WTC-related conditions. If the WTC Health Program 
determines that certain forms of cancer should be added to the list of 
WTC-related conditions, the final rule requires the Special Master to 
add such conditions to the list of presumptively covered conditions for 
the Fund.
    PTSD and mental health conditions. Several comments argued that the 
Fund should include individuals with Post-Traumatic Stress Disorder 
(PTSD) or other mental health conditions. The Special Master is unable 
to change the final rule to accept these comments. As in the Fund's 
first iteration, the statute creating the Fund limits eligible injuries 
to those consisting of ``physical harm.'' While individuals with mental 
or emotional injuries may be eligible for treatment by the WTC Health 
Program, the statutory language does not permit the Fund to cover 
individuals with only mental and emotional injuries.
    Extraordinary circumstances. Finally, the Special Master notes that 
the final regulations do not make the list of presumptively covered 
conditions the only conditions for which a claimant may seek coverage 
from the Fund. Where the claimant satisfies other eligibility criteria, 
including presence at a 9/11 crash site, and establishes extraordinary 
circumstances that were not adequately taken into account in the list 
of presumptively covered conditions, the proposed rule 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. Though 
one commenter suggested that the ``extraordinary circumstances'' test 
is too high a bar, as a result of the Fund's reliance on the WTC Health 
Program's process for making decisions based on the best available 
science, it is anticipated that it will be the unusual case in which a 
condition not on the list of presumptively covered conditions would be 
covered. Any lower threshold for that determination would invite much 
larger volumes of claims that would require extensive, expensive 
reviews, sapping administrative costs out of the funds available to pay 
other victims, but would be highly unlikely to result in payable 
claims. Given those trade-offs, the final rule maintains the 
``extraordinary circumstances'' standard.

(c) Immediate Aftermath

    One comment suggested that, because many workers continued their 
efforts after May 30, 2002, the period defined as the ``immediate 
aftermath'' should be defined to match the eligibility requirements for 
the WTC Health Program, and that individuals who suffered harms after 
May 30, 2002, should be eligible if they can meet other eligibility 
requirements. Because the Zadroga Act defines the ``immediate 
aftermath'' to end at May 30, 2002, the Fund has no discretion to 
extend that deadline. Another commenter suggested that regulations make 
clear that individuals whose work spanned the period before and after 
May 30, 2002 are eligible to file claims and that any injury sustained 
by such an individual that is found to have occurred (either in whole 
or in part) from work at the site after May 30, 2002, shall be deemed 
to ``relate back'' to the individual's work at the WTC Site prior to 
May 30, 2002. The Special Master does not believe that this comment 
requires a change to the rule. The Zadroga Act requires that an 
individual have been present prior to May 30, 2002 in order to be 
eligible; an individual's eligibility will not be affected by whether 
he or she continued to be present after that date. Once an individual 
is deemed to have been eligible based on presence during the relevant 
time period, it will not be necessary for the Fund to determine the 
precise date on which the condition was deemed to have been caused.

(d) Forms of Proof

    Several comments also sought to ensure that, to the greatest extent 
possible, the information required to determine eligibility in the Fund 
are consistent with the information required for participation in the 
WTC Health Program. Section 104.22(b)(3)(ii) has been modified to 
include certain forms of proof that will be considered in the WTC 
Health Program. The forms of proof listed there are not exhaustive, and 
the Fund will consider other appropriate forms of proof.

II. Timing and Effect of Filing Claims

    Several comments focused on the times by which claimants must file 
claims, and the consequences of those filings on any September 11th-
related civil litigation.
    Timing. Commenters expressed concerns regarding the two-year 
statute of limitations on filing claims. One commenter indicated that 
if a new condition is added as a presumptively covered condition in the 
Fund's third year, claimants who had that condition but had not applied 
in the first two years should not be barred from filing a claim. The 
Fund agrees that the Zadroga Act's two-year statute of limitations does 
not bar that claim, and that individuals have two years from the time 
that they became eligible to file a claim. Sections 104.62(a)(1) and 
(a)(2) of the final rule make clear that the two-year statute of 
limitations on a claim does not begin to run before an individual is 
eligible to file the claim.
    One commenter also noted that there may be instances in which the 
two-year statute of limitations extends past the Fund's five-year 
limitation on accepting claims. The Zadroga Act provides that 
notwithstanding the two-year statute of limitations, claims may not be 
filed after the date that is five years after the regulations become 
final. The Special Master has no discretion to change the final rule in 
this respect.
    Relationship to litigation. There were a variety of concerns 
expressed regarding the requirement that claimants in pending WTC-
related litigation withdraw from their litigation prior to submitting a 
claim to the Fund. One comment contended that the requirement should be 
eliminated entirely, because it puts claimants who already settled 
their actions on different footing from those who have not already 
settled their actions, will encourage litigants who might have been 
successful in their litigation to withdraw from it and apply instead to 
the Fund, and will reduce the funds available to pay claims from the 
Fund. There were also concerns that requiring claimants to withdraw 
from litigation within 90 days of the final regulations would force 
them to give up their civil actions without knowing whether they would 
be eligible for payment under the Fund; the commenter proposed that the 
Fund require withdrawal of the civil action only after the Fund has 
advised the claimant whether he or she would be eligible for payment. 
With respect to both issues, the requirement to withdraw from pending 
WTC-related litigation within 90 days of the regulations becoming final 
is a statutory provision, which the Special Master has no authority to 
disregard. Nor may the Fund accept the commenter's suggestion to 
determine a potential claimant's eligibility prior to requiring the 
claimant

[[Page 54116]]

to withdraw a pending suit. The statute requires such individuals to 
withdraw from pending litigation within 90 days of the promulgation of 
these regulations; otherwise the individual ``may not submit a claim.'' 
Therefore, the Fund cannot accept applications that do not satisfy this 
requirement.
    One comment raised the specific concern that the filing of a claim 
with the Fund should not preclude a claimant from later filing a civil 
action regarding harms that a claimant later suffers that are unrelated 
to the harm for which the claim was submitted. This comment suggests 
that the release that claimants were required to sign in the Fund's 
first iteration was overly broad. By law, when a claimant submits a 
claim, ``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, or for damages arising from or related to debris 
removal.'' Section 104.61 of the rule requires the Special Master to 
inform potential claimants of this statutory requirement. While the 
final rule permits claimants to amend their claims to add new 
conditions in certain circumstances, the Fund does not have the 
authority to change the terms or consequences of the statute.

III. Valuation of Claims

    A number of commenters suggested changes in the manner in which the 
Fund would determine the appropriate value of compensable claims.
    Methodology for injury claims. One commenter was troubled that the 
Special Master, in determining economic loss for claimants who suffered 
physical harm, may rely upon the methodology created for determination 
of economic loss for claimants who died. The commenter noted that in 
calculating economic loss for death claims, a deduction is taken for 
consumption that would not be appropriate in calculating losses for 
injury claims. The Special Master agrees with the commenter that it 
would not be appropriate to deduct for consumption in personal injury 
claims, and notes that the methodology applied in the first iteration 
of the Fund in fact made an adjustment to eliminate consumption 
deductions when computing economic loss for injury claims. Accordingly, 
no change in the rule is necessary.
    Future losses. Several comments focused on the manner in which the 
Fund would calculate future losses. Some noted that the accuracy of 
calculations of future economic losses may depend on the continuation 
of the WTC Health Program. These comments note that the WTC Health 
Program is set to expire in 2016, and that projections of future 
medical expenses should be lower if treatment provided under that 
program is extended. In order to ensure that projections of future 
economic losses are as accurate as possible, the final rule modifies 
Section 104.47 to clarify that in calculating offsets from the World 
Trade Center Health Program, the Fund will assume continuing operations 
of the Program to the extent that the Program is authorized to continue 
operations at the time of the payment to the claimant. If the Program 
is extended, shortened, or modified before a claimant's subsequent 
payments, such subsequent payments may be adjusted to reflect the 
Program's current status.
    Other comments focused on the valuation of replacement services and 
noted that replacement services losses can be substantial and should be 
considered. Replacement services loss is included in the definition of 
economic loss in the statute. Under the Fund's first iteration, the 
computation of economic loss included replacement services loss where 
such loss was demonstrated with appropriate proof. In addition, under 
the proposed rule and the rule that governed the Fund's first 
iteration, Sections 104.43(c) and 104.45(c) specifically provide that 
replacement services losses may be compensated for individuals who did 
not have any prior earned income or who worked only part-time outside 
the home. That provision does not exclude other individuals for whom 
replacement services losses may also be appropriate. As in the Fund's 
first iteration, losses from replacement services may be variable, and 
claimants must present individualized data to support their inclusion 
in an award.
    Finally, one comment suggested that the valuation approach proposed 
in Section 104.43(a), regarding the appropriate calculation for future 
losses for victims who are minors, should rely not on the average 
income of all wage earners, but on likely educational attainment based 
on the child's demographics. In the Fund's first iteration, minor 
children's earning capacity was based on average income of all wage 
earners. Changing the standard now would result in different projected 
earnings between identical claimants in the two Funds, based solely on 
when the claim was filed. While slight modifications to the previous 
valuation models may be appropriate where the facts underlying the 
assumptions have changed, adopting a new approach to valuation now 
would undermine the consistency that is important to treating all 
claimants equally. Further, given the difficulty of projecting a 
child's future earning capacity, regardless of the model, a heavily 
fact-intensive inquiry for such projections may add significant 
administrative costs with little additional benefit in accuracy.
    Valuation of mental injuries. Some commenters noted that it is 
often difficult to distinguish between the harms caused by physical 
injuries and those caused by mental injuries, with one commenter 
suggesting that awards for non-economic losses should take into account 
the losses caused by PTSD. Under the Zadroga Act, non-economic losses 
consist of ``losses for physical and emotional pain, suffering, 
inconvenience, physical impairment, mental anguish, disfigurement, loss 
of enjoyment of life, loss of society and companionship, loss of 
consortium (other than loss of domestic service), hedonic damages, 
injury to reputation, and all other nonpecuniary losses of any kind or 
nature.'' To the extent that an individual is eligible for compensation 
by the Fund, an award for non-economic losses will reflect these harms, 
but no change is required to the final rule.
    Offsets. One comment addressed the manner in which pensions are 
used as offsets, and urged that the regulations distinguish between 
retirement pensions that are earned through years of service and 
disability pensions that are based on an injury caused by September 
11th. Section 104.47(a) provides that pension funds will be used to 
offset payments only to the extent they are related to the crashes or 
debris removal. Standard retirement pensions will not be used as 
offsets.
    Reliance on determinations by other bodies. Several commenters 
suggested that the Fund should recognize determinations of eligibility 
or disability made by other government agencies, such as the Department 
of Veterans Affairs and Department of Labor, administrative boards, or 
in the September 11th litigation. One commenter noted that relying on 
such determinations would save administrative costs. Under Section 
104.22(c)(2), a claimant may submit any such information for 
consideration by the Fund. As in the first iteration, the Fund will 
consider such information in the context of the full claim.

IV. Funding and Payment of Claims

    A number of comments focused on the amounts available for payment 
and the manner in which the regulations proposed to distribute the 
available

[[Page 54117]]

funds. For example, several comments addressed the provisions in the 
Zadroga Act regarding the $2.775 billion cap on total awards that can 
be paid by the Fund, as well as the requirement that only $875 million 
may be paid during the first five years of the Fund. One commenter 
suggested simply that additional funding will be needed. Another argued 
that claimants should not have to wait five years to receive full 
payment. Because Congress explicitly provided these requirements in the 
statute creating the Fund, these requirements cannot be changed by the 
Special Master.
    Another comment focused on the schedule of payments, and suggested 
that instead of evenly dividing the funds available to make the initial 
award payments, the Fund should take into account the extent of a 
claimant's harm and the immediacy and severity of the claimant's need. 
The Special Master has given this suggestion considerable thought, and 
recognizes that--particularly given that only one-third of the overall 
funding is available during the Fund's first five years--initial 
payments may make only a small difference in a claimant's overall 
circumstance. Because initial payments will be pro-rated, those who 
have suffered or will suffer greater harms will receive larger payments 
than those with lesser harms. To that extent, the initial payments will 
take into account both the extent of the claimant's harm and the 
immediacy of the claimant's need. However, giving greater awards based 
on the immediacy of a particular claimant's needs raises numerous 
practical challenges, such as the nature of the urgent needs that would 
justify a greater payment: The Zadroga Act empowered the Special Master 
to determine how much a claimant is entitled to receive for economic 
losses, but the Special Master is not in a position to compare the 
urgency of each claimant's needs and resources.
    While the final rule thus does not contemplate advance benefits for 
urgent needs, it does incorporate a change that may ease some of this 
burden. One comment noted that over the Fund's first five years, it may 
become apparent that it would be possible to provide claimants with 
more than one payment without expending all the available funds. The 
proposed rule contemplated just two rounds of payments to each 
claimant: An initial payment within the first five years, followed by 
the remaining payment in the sixth year. If it becomes apparent that 
sufficient funding is available for additional payments before the 
sixth year, the final rule gives the Special Master discretion to make 
such additional payment.
    Finally, some commenters asked that the Fund inform claimants of 
the Fund's full valuation of their award at the time the award decision 
is made, even though the first payment will only be a pro-rated portion 
of that total. Under Section 104.33(g), the Special Master will notify 
the claimant in writing of the final amount of the award. The Special 
Master intends for this notice to inform the claimant of the Fund's 
full award determination and the pro-rated amount of the initial 
payment. In addition, claimants will be informed that they will receive 
a subsequent payment during the Fund's sixth year, but that the amount 
of this payment is not certain, and may be reduced pursuant to Section 
Sec.  104.51 (requiring the Special Master to ratably reduce the amount 
of compensation in the event that the total amount of all claims 
exceeds the amount available under law) and Section 104.47 (authorizing 
the Special Master to recalculate offsets from the World Trade Center 
Health Program and adjust subsequent payments accordingly).

V. Fees and Expenses

    A number of comments sought clarity or modifications in the 
provisions of the proposed rule regarding the amounts that a 
representative of a claimant may charge in connection with a claim made 
to the Fund.
    10% cap on fees. Some comments sought clarity on the provisions 
implementing the Zadroga Act's 10% cap on fees that representatives may 
charge a client in connection with a claim to the Fund. Specifically, 
one set of these comments expressed concern that the regulations did 
not provide sufficient guidance on the types of fees and charges that 
would come within the cap on amounts that a claimant's representative 
may charge in connection with a claim made to the Fund. While it is 
recognized that there may be cases in which an attorney provides some 
unusual service, and there is no indication in the statute that 
Congress intended to disadvantage claimants by discouraging those 
attorneys from providing beneficial services, the Zadroga Act does 
reflect an intention to limit the amounts that may be charged for 
routine legal services. Accordingly, the final rule clarifies that the 
caps on amounts that an attorney may charge include charges for 
expenses routinely incurred in the course of providing legal services. 
Thus, for example, absent special circumstances, routine office 
photocopying costs, as well as fees charged by expert consultants or 
witnesses, that are routinely incurred in the course of providing legal 
services, count against the caps on fees that attorneys may charge. By 
the same token, where an attorney provides a non-routine service, which 
depending on the circumstances may include acquiring a client's files 
from a third party (rather than requiring the claimant to collect those 
files), the attorney may be able to pass along those costs on top of 
the routine fees. Thus, the final rule notes that charges for services 
routinely incurred in the course of providing legal services fall 
within the cap on fees, and provides that attorneys or other 
representatives may seek the Fund's approval to charge for non-routine 
services in particular cases.
    Records costs. Along similar lines, there were a number of comments 
regarding the costs of obtaining voluminous medical files that are 
often in the possession of a claimant's medical provider or previous 
counsel. Some comments suggested that the Fund establish a retrieval 
service or limit the fees that custodians of those records may charge 
claimants or their new attorneys for providing documents that a 
claimant must provide to the Fund. Others noted that the custodian's 
costs of producing such records can be significant, too, and that 
current custodians should be permitted to pass on reasonable costs.
    At the outset, it is worth noting that the Fund intends to work 
with willing custodians who possess large volumes of relevant records 
to determine the extent to which it is possible to transfer appropriate 
information to the Fund electronically. Providing the electronic 
transfer of information where appropriate and cost-effective will 
reduce burdens and costs for claimants.
    Further, while the Zadroga Act does not grant the Fund the 
authority to establish caps on costs that a third-party custodian not 
before the Fund may charge for providing records, it does empower the 
Special Master to ensure that counsel who represent claimants before 
the Fund are charging appropriate rates. The Special Master recognizes 
the role that able counsel will serve in the claims process, and notes 
that in the Fund's first iteration, there was an outpouring of pro bono 
assistance that was consistent with the spirit of the legislation and 
the Bar's tradition of public service. While the Zadroga Act does not 
prevent a claimant's previous counsel from passing along certain 
minimal administrative costs associated with the transfer of files, 
attorneys have professional obligations regarding a client's access to 
his or her records. The

[[Page 54118]]

Zadroga Act empowers the Special Master to reduce the fees that an 
attorney may charge claimants, and attorneys who charge unreasonable 
costs for the services provided should expect that, in appropriate 
cases, the Fund will exercise its statutory authority to limit the fees 
charged.
    Effects of fees charged in a previous settlement. One comment 
focused on the question of whether certain attorneys may charge fees in 
connection with a claim filed with the Fund. Specifically, the 
commenter expressed concern regarding Section 104.81 of the proposed 
rule, which implements the Zadroga Act's statutory cap on fees that an 
attorney who charged a fee in connection with a prior September 11th-
related settlement may charge in connection with a claim submitted to 
the Fund. Under the Zadroga Act, such an attorney may charge a fee in 
connection with the claim to the Fund only if the legal fee charged in 
connection with the settlement ``is less than 10 percent of the 
aggregate amount of compensation awarded to such individual through 
such settlement''; in such instances, the attorney may receive only 
such funds as are necessary to reach a total payment that equals 10 
percent of the aggregate compensation from the settlement. The 
commenter expressed concern that Section 104.81 of the proposed 
regulation interprets this provision in a manner that is inequitable to 
attorneys who previously represented clients in a settlement, and 
argued that the cap on fees should be based on the aggregate of the 
civil settlement and recoveries under the Fund. The statute refers to 
``the aggregate amount of compensation awarded to such individual 
through such settlement'' (emphasis added), and therefore does not 
permit such a reading.
    Along similar lines, the commenter suggested that Section 
104.81(b)(1) of the proposed rule be clarified to give guidance on 
whether an attorney who previously charged a fee in connection with a 
previous settlement may charge a client's new counsel a ``consultation 
or participation fee'' in connection with the client's claim to the 
Fund. The commenter suggests that such consultation or participation 
fee would allow the former attorney to provide time and resources to 
assist the new counsel. The statutory provision in question provides 
that ``the representative of the individual may not charge any amount 
for compensation for services rendered in connection with a claim filed 
under this title.'' The proposed regulatory provision on which the 
commenter sought clarification had stated that such attorney may not 
charge ``that individual'' any such amount; the commenter suggests that 
because a consultation fee would not increase the overall charge to the 
claimant herself, but would be charged only to the claimant's new 
counsel, a consultation or participation fee achieves the statutory 
objectives. The Special Master disagrees, and the final rule clarifies 
that provision. Because Congress dictated that the representative ``may 
not charge any amount for compensation for services rendered in 
connection with a claim,'' it would defeat Congress's intention were 
that representative permitted to charge an amount for services 
rendered. Accordingly, Section 104.81(b)(1) is clarified in the final 
rule to track, with one exception, the statutory language. Because it 
does not appear that Congress intended to forbid such a representative 
from charging for services rendered in connection with claims filed by 
other clients, whom the representative did not charge any amount in a 
previous settlement, Section 104.81(b)(1) is clarified to provide that 
``the representative who charged such legal fee may not charge any 
amount for compensation for services rendered in connection with a 
claim filed by or on behalf of that individual under this title'' 
(emphasis added).

VI. Other Comments

    The Fund received a number of additional comments that, while not 
requiring changes to the regulations, raise important issues for the 
administration of the Fund. As the Special Master has indicated 
previously, her goal is to design a program that is fair, transparent, 
and easy to navigate. The many suggestions along these lines will be 
extremely valuable as the Fund gets up and running.
    Comments stressed the importance of making the claims process as 
accessible to the public as possible, a goal that the Special Master 
shares. Commenters suggested several ways that the Fund can make this 
goal a reality. They stressed the value of transparency, so that 
claimants can make informed decisions and understand the reasons for 
how their claims are handled. The Special Master agrees that making 
public as much information as possible concerning the Fund's valuation 
methodologies will assist claimants in deciding whether to file with 
the Fund or pursue other forms of relief. The Fund will provide 
information outside the context of formal regulations, such as through 
Frequently Asked Questions, periodic reports, explanations of decisions 
to individual claimants, and other materials on the Fund's Web site, in 
order to give claimants greater confidence in the Fund's decision-
making processes.
    Making the Fund accessible to the public also requires that the 
process be as simple and non-bureaucratic as possible. Although 
claimants should be able to use an attorney if they so choose, the 
process should be simple enough that claimants can participate without 
the need for one--and the Special Master should encourage attorneys to 
provide pro bono assistance. Given the diversity of the eligible 
population, commenters also urged the Fund to translate key forms and 
other materials into languages other than English. The Special Master 
agrees with these commenters and will take steps to make the Fund more 
accessible in these ways.
    In addition to creating a process that is transparent, commenters 
also urged the Special Master to recognize that between private 
litigation and various governmental programs operating in this space, a 
lack of consistency can lead to confusion, frustration, and increased 
burdens on claimants who have already suffered extensively. Commenters 
noted that this can play out in a variety of contexts: Different sets 
of forms and proof requirements; different types of harms and valuation 
methodologies; and inconsistent determinations between government 
programs ostensibly aimed at the same populations. While the Fund has 
certain unique statutory purposes, the Special Master recognizes that 
unnecessary inconsistency and redundancy are in no one's interests. So 
while some differences are inevitable, coordination with other 
government programs will be an important consideration in the Fund's 
operations. Importantly, as part of the Fund's efforts to minimize 
burdens on claimants, it will work with medical providers and others in 
possession of claimants' information to provide for appropriate 
transfers of electronic data where possible.
    The Special Master appreciates all of these comments, as well as 
the many comments expressing appreciation or good wishes for the Fund's 
operations. While the suggestions here do not require changes in the 
regulations, they suggest a number of ways that the Fund can better 
achieve its mission. They will all be taken into account as we seek to 
build a program that serves this community as the Zadroga Act intended.

[[Page 54119]]

Regulatory Certifications

Paperwork Reduction Act of 1995

    This rule implements 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 establish 
procedures to screen out ineligible or inappropriate claims while 
keeping administrative expenses as low as possible consistent with the 
goal of ensuring that funds are not diverted to processing ineligible 
claims 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 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.

[[Page 54120]]

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 amended by 
revising part 104 to read as follows:

PART 104--SEPTEMBER 11TH VICTIM COMPENSATION FUND

Subpart A--General; Eligibility
Sec.
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 through 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
    (3) The area in Manhattan south of the line that runs along Canal 
Street from the Hudson River to the intersection of Canal Street and 
East Broadway, north on East Broadway to Clinton Street, and east on 
Clinton Street to the East River; or
    (4) 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
    (5) 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

[[Page 54121]]

    (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).

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, which may be a portion of a complete claim form, that 
will require

[[Page 54122]]

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, such as a lease or 
utility bill, records of employment or school attendance, 
contemporaneous medical records, contemporaneous records of federal, 
state, city or local government, a pay stub, official personnel roster, 
site credentials, 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 and is eligible for treatment under the program; or 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, or debris 
removal, 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.  104.22, regardless of whether any time limits are stayed or 
tolled.
    (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.

[[Page 54123]]

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.  
104.22(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 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

[[Page 54124]]

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 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

[[Page 54125]]

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 the claimant has received or is entitled to receive as a 
result of the terrorist-related aircraft crashes of September 11, 2001, 
or debris removal in the immediate aftermath, 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 (to the extent such program is authorized, at the 
time of the payment, to continue operations), 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 paragraph (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 October 3, 2011, will not exceed $2,775,000,000. Furthermore, the 
total amount of Federal funds expended during the period from October 
3, 2011, through October 3, 2016, 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 October 3, 2011, to 
October 3, 2016, 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 
amount of ratable reduction in light of available information regarding 
potential future claims and available funds, and may make additional 
payments in light of such adjustments.
    (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 October 3, 
2016, but in no event later than October 3, 2017, 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 
October 3, 2011, to October 3, 2016.
    (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 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.
    (4) At the time at which subsequent payments are made, the Special 
Master may review offsets from the World Trade Center Health Program 
that were included in the award determination and adjust such 
subsequent payments to reflect the Program's current status.
    (5) During the five years that the Fund is accepting claims, the 
Special Master shall report periodically on the total amount of all 
claims under paragraph (c)(2) of this section.


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

[[Page 54126]]

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 January 2, 2012.
    (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 October 3, 2011, and ending on October 3, 2016, as 
follows:
    (1) In the case that the individual knew (or reasonably should have 
known) before October 3, 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 is 
eligible to file a claim under this Part as of October 3, 2011, the 
individual may file a claim not later than October 3, 2013.
    (2) In the case that the individual first knew (or reasonably 
should have known) on or after October 3, 2011, that the individual 
suffered such a physical harm or in the case that the individual became 
eligible to file a claim under this Part on or after that date, the 
individual may file a claim not later than the last day of the 2-year 
period beginning on either the date that the individual first knew (or 
should have known) that the individual both suffered from such harm or 
the date the individual became eligible to file a claim under this 
title, whichever is later, but in no event beyond October 3, 2016.
    (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, 
including expenses routinely incurred in the course of providing legal 
services, more than 10 percent of an award paid under this title on 
such claim. Expenses incurred in connection with the claim of an 
individual in this title other than those that are routinely incurred 
in the course of providing legal services may be charged to a claimant 
only if they have been approved by the Special Master.
    (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 any amount for compensation for services 
rendered in connection with a claim filed by or on behalf of that 
individual 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 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: August 26, 2011.
Sheila L. Birnbaum,
Special Master.
[FR Doc. 2011-22295 Filed 8-30-11; 8:45 am]
BILLING CODE 4410-12-P