[Federal Register Volume 81, Number 171 (Friday, September 2, 2016)]
[Rules and Regulations]
[Pages 60617-60620]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-21216]
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DEPARTMENT OF JUSTICE
28 CFR Part 104
[Docket No. CIV 151]
RIN 1105-AB49
James Zadroga 9/11 Victim Compensation Fund Reauthorization Act
AGENCY: Department of Justice.
ACTION: Final rule.
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SUMMARY: This rule finalizes the Interim Final Rule published on June
15, 2016, which implemented recently-enacted statutory changes
governing the September 11th Victim Compensation Fund of 2001 (the
``Fund''). After consideration of all of the public comments filed in
response to the Interim Final Rule, the Special Master has concluded
that no substantive changes to the Interim Final Rule are needed.
Accordingly, this Final Rule adopts as final the provisions of the
Interim Final Rule, with only two minor technical corrections.
DATES: This final rule takes effect on September 2, 2016.
FOR FURTHER INFORMATION CONTACT: Jordana H. Feldman, September 11th
Victim Compensation Fund, Civil Division, U.S. Department of Justice,
290 Broadway, Suite 1300, New York, NY 10007, telephone 855-885-1555
(TTY 855-885-1558).
SUPPLEMENTARY INFORMATION: On December 18, 2015, President Obama signed
into law the James Zadroga 9/11 Victim Compensation Fund
Reauthorization Act (the ``Reauthorized Zadroga Act''), Public Law 114-
113, Div. O, Title IV. The Act extends the September 11th Victim
Compensation Fund of 2001 (the ``Fund'') which provides 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 rescue and
recovery efforts during the immediate aftermath of such crashes or the
debris removal efforts that took place in the immediate aftermath of
those crashes.
On June 15, 2016, Special Master Sheila L. Birnbaum published an
Interim Final Rule to revise the existing regulations to implement
changes required by the Reauthorized Zadroga Act. (81 FR 38936). Since
the issuance of the Interim Final Rule, Sheila Birnbaum has stepped
down as Special Master and the Attorney General has appointed Rupa
Bhattacharyya in her place, effective July 21, 2016.
The Interim Final Rule took effect on the date of publication (June
15, 2016), but provided a 30-day period for interested persons to
submit public comments. Special Master Bhattacharyya is issuing this
Final Rule, which addresses the issues that have been raised. For the
reasons described below, after consideration of all of the public
comments, the Special Master has concluded that no substantive changes
to the Interim Final Rule are needed. Accordingly, this Final Rule
adopts the provisions of the Interim Final Rule without change, except
for two minor technical corrections.
Background
The June 15, 2016, Interim Final Rule (81 FR 38936) provided a
brief history of the September 11th Victim Compensation Fund of 2001,
the James Zadroga 9/11 Health and Compensation Act of 2010 (Zadroga
Act), and the regulations issued by the Special Masters pursuant to
those statutes.
On December 18, 2015, President Obama signed into law Public Law
114-113, providing for the reauthorization of the Zadroga Act. The
Reauthorized Zadroga Act extends the time period during which eligible
claimants may submit claims, increases the Fund's total funding
available to pay claims, creates different categories of claims,
directs the Special Master to issue full compensation to eligible
claimants, and instructs the Special Master to implement certain
changes to the policies and procedures used to evaluate and process
claims.
The Interim Final Rule addressed those changes mandated by the
statute. The Interim Final Rule was published in the Federal Register
(81 FR 38936) and became effective on June 15, 2016, and was followed
by a 30-day public comment period. The Department received 31 comments
since the publication of the Interim Final Rule. The Special Master's
office has reviewed and evaluated each of these comments in preparing
this Final Rule. Significant comments received in response to the
Interim Final Rule are discussed below. After careful review and
consideration, and for the reasons described below, the Special Master
has concluded that no substantive changes to the Interim Final Rule are
warranted.
Accordingly, this Final Rule adopts the provisions of the Interim
Final Rule without change, except for two technical corrections, as
follows. These are not substantive changes and merely correct minor
drafting errors in the wording of the Interim Final Rule as published.
(1) In section 104.21, Presumptively covered conditions, this Final
Rule corrects an unintended wording error in the second sentence of
paragraph (a), by restoring the missing word ``or,'' in this sentence.
(2) In section 104.62, Time limit for filing claims, in paragraph
(b), this Final Rule restores the missing cross-reference to paragraph
``(a)'' of the section.
Summary of Comments on the Interim Final Rule and the Special Master's
Response Categories of Claims
Many comments focused on the statutory definition of Group A claims
and the decision by Congress to define the two categories of claims by
reference to the date the Special Master ``postmarks and transmits'' a
final award determination to the claimant. Several commenters argued
that the ``cut-off'' date for inclusion in Group A should have been the
date the claim was submitted or filed by the claimant, rather than the
date the final award amount was determined by the Special Master. The
commenters asserted that claims that had been submitted to the Fund on
or before December 17, 2015, but did not have a loss determined by that
time, should be considered Group A claims and subject to the standards
in effect at the time of their submission.
The Reauthorized Zadroga Act makes clear that the critical date is
the date
[[Page 60618]]
that the final award determination was postmarked and transmitted, not
the date the claim was submitted. Therefore, under the plain language
of the statute, claims that were pending but not determined as of
December 17, 2015 cannot be considered Group A claims. Because Congress
expressly set forth this definition in the statute, this definition
cannot be changed by the Special Master.
Some commenters asserted that the statutory definition is unfair or
contrary to laws and principles that ensure that certain rights and
benefits are not changed or compromised without notice. These comments
focused on the unfairness of evaluating a claim submitted prior to
reauthorization under the standards set forth in subsequently enacted
legislation. In this regard, however, the Special Master is constrained
by the law as Congress enacted it, and cannot disregard the clear
language of the statute.
One commenter suggested a change that would violate other
applicable law. This commenter proposed that the Special Master
backdate loss determination letters to December 17, 2015, for all
claims or amendments that were pending at the time of reauthorization.
Such an action would be in violation of the law and of generally
accepted accounting principles. Therefore, the Special Master cannot
accept that suggestion.
Valuation of Claims
$200,000 Annual Gross Income Cap
Several commenters argued about the fairness of the statutory
$200,000 cap on annual gross income. One commenter was concerned about
the broad scope of the definition of ``annual gross income'' in
computing economic loss. The Reauthorized Zadroga Act explicitly
provides that the term ``gross income'' is defined as set forth in
Section 61 of the Internal Revenue Code. Section 405(b)(7)(B), (C).
There, the definition of ``gross income'' is broadly defined to include
``all income from whatever source derived,'' including (but not limited
to) compensation for services, including fees, commissions, fringe
benefits, and other similar items, pensions, annuities, interest, and
other sources of income. Sections 104.43 and 104.45 of the Interim
Final Rule, the provisions that address the determination of economic
loss for decedents and for injured claimants who suffered an eligible
physical harm respectively, were revised to account for the $200,000
annual gross income cap as required by the Reauthorized Zadroga Act.
Because Congress explicitly provided this definition and annual income
cap requirement in the statute, these requirements cannot be changed by
the Special Master.
One commenter noted that the cap may have unintended consequences
for a claimant who is disabled at a young age and therefore has a long
remaining work life. Another commenter suggested that the Special
Master should mitigate the effect of the $200,000 annual gross income
cap by adjusting certain components of the loss calculation
methodology, such as extending work life, reducing the tax offset, or
lowering the residual earnings deduction, in claims where the cap is
implicated. The Special Master cannot make adjustments to the loss
calculation methodology for the purpose of eliminating the effect of
the annual gross income cap, as doing so would violate Congressional
intent. The Special Master, however, intends to exercise her discretion
to apply the cap in ways that are favorable to claimants, while
consistent with the language and intent of the statute. For example,
the VCF will apply the tax adjustment to earnings before computing the
annual cap, rather than after computing the cap. By applying this
adjustment before the annual cap is computed, the amount of gross
income is reduced and thus the award reduction resulting from the
application of the cap is reduced. This is consistent with the overall
purpose of the loss computation which is to determine the amount of
earnings--after all deductions--that is lost to the claimant as a
result of the September 11th attacks. The Special Master will provide
additional information concerning the Fund's valuation methodologies on
the Fund's Web site in order to give claimants greater insight into,
and confidence in, its decision-making process.
Other comments questioned how the $200,000 annual gross income cap
ended up in the statute. One commenter stated that a citizens group
that advocated for the extension of the Zadroga Act in 2015 made no
mention of such a cap. Another commenter asked whether the Fund advised
Congress to designate the cap. The Fund took no such action. The
Special Master cannot respond to questions about the process by which
Congress develops legislation.
Noneconomic Loss Caps
The Reauthorized Zadroga Act imposes caps on the amount of
noneconomic loss that may be awarded for a claim that results from any
type of cancer at $250,000 and for a claim that does not result from
any type of cancer at $90,000. The Interim Final Rule, sections 104.45
and 104.46, clarified that, in computing the total noneconomic loss,
the Special Master has discretion to consider the effect of multiple
cancer conditions or multiple cancer and non-cancer conditions, and
that, in computing the amount of noneconomic loss for economic loss
claims, the Special Master has discretion to consider the extent of
disability and the fact that different eligible conditions may
contribute to the disability. Several commenters commended the Special
Master for interpreting the statutory noneconomic loss caps as not
imposing an aggregate cap on noneconomic loss, noting that this
interpretation is consistent with both the letter and spirit of the
statute. One commenter stated that the Special Master's interpretation
appropriately addresses the realities of the first responders who are
diagnosed with multiple forms of cancer and non-cancer conditions and
is therefore important in ensuring that claimants receive full
compensation as contemplated by the Reauthorized Zadroga Act. This
commenter also noted that the Interim Final Rule properly interpreted
the statute as not affecting the noneconomic loss amounts for claims
filed on behalf of decedents.
Timing of Filing Claims
The Zadroga Act defines the timing requirements for filing a claim
as the date no later than two years after the claimant ``knew (or
reasonably should have known) . . . 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 ``knew (or should have known) . . . that the individual
was eligible to file a claim'' with the Fund. Section 405(c)(3)(A). The
Reauthorized Zadroga Act does not change this requirement.
One commenter suggested that the Special Master interpret the
``knowledge'' component to mean personal knowledge that the claimant's
eligible physical condition was related to his/her 9/11-related
exposure based on the date the claimant received a diagnosis from the
WTC Health Program of an eligible physical harm. The commenter argued
that it is not reasonable to assume that a clean-up worker, resident,
or other ``survivor'' knew or reasonably should have known that his/her
physical condition was related to his/her 9/11-related exposure until
that time, given repeated assurances from public officials regarding
the safety of the air quality around the WTC site, the lack of
resources available to that community
[[Page 60619]]
for medical screening and treatment until 2007, and the media's focus
on the health-related impact on 9/11 responders.
While these comments do not require changes in the regulations,
they raise issues that merit consideration by the Special Master in
evaluating the issue of ``timeliness.'' The Special Master will provide
additional information concerning this issue on the Fund's Web site in
order to give claimants greater insight into the decision-making
process.
Fees and Expenses
Two comments were submitted regarding revisions or clarifications
to the provisions on the amounts that a representative of a claimant
may charge in connection with a claim to the Fund. One commenter
suggested that the Special Master clarify that Section 104.81 be
revised to make clear that the limitation on attorneys' fees applies to
charges ``to a claimant'' and that expenses not charged to a claimant
need not be approved by the Special Master. The Special Master believes
that the existing language is sufficiently clear and that no change is
needed.
Another commenter suggested the addition of a provision to address
how costs associated with the transfer of claimant files should be
allocated if a claimant terminates counsel and retains new counsel. The
commenter suggested that any costs for such a transfer should be borne
solely by ``incoming'' counsel. The Special Master does not believe
that this is an issue to be addressed in the regulations and therefore
no changes to the Final Rule are made with respect to this issue.
Other Comments
The Special Master received a number of additional comments that,
while not requiring changes to the regulations, raise important issues
for the administration of the Fund. Former Special Master Birnbaum
indicated from the reopening of the Fund in 2011 that her goal was to
design, implement, and administer a program that is transparent and
fair. Special Master Bhattacharyya is similarly committed to those
goals in the administration of the Fund for the next five years.
Comments stressed the importance of transparency so that claimants
can understand the reasons for how their claims are handled. Some
commenters suggested that certain claims were submitted months or years
before the reauthorization and did not receive a loss calculation or
other correspondence from the Fund requesting missing information or
clarification of previously submitted information, and as a result,
those claims will be unfairly subject to Group B statutory standards.
These commenters did not identify specific claims and therefore the
Special Master could not investigate the reasons why this may have
happened or whether the loss amount in those claims would yield a
different value under Group B standards. As a general matter, many
claims that did not receive a loss calculation letter at the time of
reauthorization had incomplete compensation forms, had an eligibility
issue that precluded compensation review, were missing required
supporting documents that were not submitted with the claim, or
presented unique circumstances related to compensation that require
additional research or third-party verification. Other claims may have
submitted all of the paperwork necessary to process the claim but
unfortunately were not fully evaluated and determined when Congress
enacted the new legislation. The Fund has prioritized and granted
expedited review for claimants suffering from a terminal illness or
extreme financial hardship and undertook great efforts to review claims
in the order in which they were submitted. The Fund continues its
commitment to reviewing claims when they are fully submitted in a first
in, first out order.
The Special Master appreciates these comments. While these comments
do not require changes in the regulations, they suggest ways that the
Fund can better achieve its mission. The Special Master is attuned to
these issues and will take them into account as she works to ensure
that the Fund serves the 9/11 community as the Zadroga Act intended.
Other commenters suggested changes that are outside the scope of
this program. For example, two commenters called for the expansion of
the New York State World Trade Center (WTC) Disability Law, which
allows certain first responders to receive a disability pension due to
injuries sustained as a result of 9/11 exposure, to include first
responders who voluntarily left their employment or are not otherwise
covered. Such an action would have to be addressed by the state
legislature.
One commenter objected to the definition of the ``9/11 crash site''
on the grounds that the northern boundary line does not encompass the
full New York City exposure zone and is inconsistent with the boundary
used in the WTC Health Program, but properly recognized that it would
require an act of Congress to revise the boundary.
Regulatory Certifications
Administrative Procedure Act
This Final Rule is being made effective on the date of publication
in the Federal Register. The Special Master, pursuant to 5 U.S.C.
553(d)(3), finds that there is good cause to forgo a 30-day delayed
effective date for this Final Rule. The Final Rule makes no change to
the provisions of the Interim Final Rule (except for two minor
technical corrections fixing unintended errors). The preamble of this
Final Rule responds to the public comments and explains why no
substantive changes to the Interim Final Rule are needed. In the
interests of transparency, the Special Master has deferred the issuance
of payments on pending claims until after the publication of this Final
Rule, which serves to make clear the final standards applicable to the
adjudication of claims under the Fund. Thus, a 30-day delay in the
effective date of this Final Rule would also have had the effect of
further delaying the issuance of payments on claims under the revised
provisions of Part 104, which would be undesirable and contrary to
sound public policy.
Paperwork Reduction Act of 1995
This Final Rule implements Public Law 114-113 which reauthorizes
the September 11th Victim Compensation Fund of 2001. In order to be
able to evaluate claims and provide compensation, the Fund must 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, in connection with the
approval of the Interim Final Rule, the Department of Justice, Civil
Division, submitted an information collection request to the Office of
Management and Budget for review and clearance in accordance with the
emergency review procedures of the Paperwork Reduction Act of 1995.
This request sought reinstatement of the prior information collection
authorized under Public Law 111-347. The Department also published a
Notice in the Federal Register soliciting public comment on the
information collection associated with this rulemaking. 81 FR 20674
(April 8, 2016). The Office of Management and Budget approved the
information collection on June 13, 2016. The information collection
will be effective until June 30, 2019.
[[Page 60620]]
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 Victim Compensation Fund. This rule provides
compensation to individuals, not to entities.
Further, because a general notice of proposed rulemaking was not
required for the Interim Final rule, and in accordance with the
Regulatory Flexibility Act (5 U.S.C. 603(a) and 604(a)), a Regulatory
Flexibility Act analysis was not required.
Executive Orders 12866 and 13563--Regulatory Review
This Final Rule 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 Office of Management and Budget had
determined that the Interim Final Rule was an ``economically
significant regulatory action'' under Executive Order 12866, section
3(f), Regulatory Planning and Review, and accordingly the Interim Final
Rule had been reviewed by the Office of Management and Budget. This
Final Rule, however, adopts as final the regulatory provisions
promulgated by the Interim Final Rule, with no substantive change.
Accordingly, the Department has determined that this Final Rule is not
a significant regulatory action under Executive Order 12866, and this
rule has not been reviewed by the Office of Management and Budget.
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. This rule is substantively identical to the Interim Final
Rule published on June 15, 2016, and the Department of Justice worked
cooperatively with state and local officials in the affected
communities, and notified national associations representing elected
officials, in the preparation of the Interim Final Rule.
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.
Congressional Review Act
This rule adopts as final the provisions of the Interim Final Rule
published on June 15, 2016 (81 FR 38936). Upon consideration of the
public comments submitted in response to the Interim Final Rule, the
Special Master has determined that no substantive changes need to be
made in the regulations in 28 CFR part 104, which took effect on June
15, 2016. This rule makes no amendments to the existing regulations in
28 CFR part 104, except for two technical changes correcting minor
drafting errors.
The Special Master has determined that this Final Rule does not
fall within the definition of a ``rule'' under the Congressional Review
Act, 5 U.S.C. 804(3)(C), because it is a rule of agency practice or
procedure that does not substantially affect the rights or obligations
of non-agency parties. Accordingly, the requirement to submit a report
pursuant to 5 U.S.C. 801 is not applicable.
List of Subjects in 28 CFR Part 104
Disaster assistance, Disability benefits, Terrorism.
Accordingly, for the reasons set forth in the preamble, the interim
rule amending 28 CFR part 104, which was published at 81 FR 38936, on
June 15, 2016, is adopted as final with the following changes:
PART 104--SEPTEMBER 11TH VICTIM COMPENSATION FUND
0
1. The authority citation for Part 104 continues to read as follows:
Authority: Title I V of Pub. L. 107-42, 115 Stat. 230, 49 U.S.C.
40101 note; Title II of Pub. L. 111-347, 124 Stat. 3623; Div. O,
Title IV of Pub. L. 114-113, 129 Stat. 2242.
0
2. In Sec. 104.21, the last sentence of paragraph (a) is revised to
read as follows:
Sec. 104.21 Presumptively covered conditions.
(a) * * * Group B claims shall be eligible for compensation only if
the Special Master determines based on the evidence presented that a
claimant who seeks compensation for physical harm has at least one WTC-
Related Physical Health Condition, or, with respect to a deceased
individual, the cause of such individual's death is determined at least
in part to be attributable to a WTC-Related Physical Health Condition.
* * * * *
0
3. In Sec. 104.62, paragraph (b) is revised to read as follows:
Sec. 104.62 Time limit on filing claims.
* * * * *
(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.
Dated: August 29, 2016.
Rupa Bhattacharyya,
Special Master.
[FR Doc. 2016-21216 Filed 9-1-16; 8:45 am]
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