[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2884 Enrolled Bill (ENR)]
H.R.2884
One Hundred Seventh Congress
of the
United States of America
AT THE FIRST SESSION
Begun and held at the City of Washington on Wednesday,
the third day of January, two thousand and one
An Act
To amend the Internal Revenue Code of 1986 to provide tax relief for
victims of the terrorist attacks against the United States, and for
other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,

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(a) Short Title.--This Act may be cited as the ``Victims of
Terrorism Tax Relief Act of 2001''.
(b) Amendment of 1986 Code.--Except as otherwise expressly
provided, whenever in this Act an amendment or repeal is expressed in
terms of an amendment to, or repeal of, a section or other provision,
the reference shall be considered to be made to a section or other
provision of the Internal Revenue Code of 1986.
(c) Table of Contents.--The table of contents for this Act is as
follows:

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Subtitle A--Relief Provisions for Victims of Terrorist Attacks

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TITLE I

-VICTIMS OF TERRORISM TAX RELIEF

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TITLE II

-DISCLOSURE OF TAX INFORMATION IN TERRORISM AND NATIONAL

TITLE III

-NO IMPACT ON SOCIAL SECURITY TRUST FUNDS

(a) In General.--Section 692 (relating to income taxes of members
of Armed Forces on death) is amended by adding at the end the following
new subsection:
``(d) Individuals Dying as a Result of Certain Attacks.--
``(1) In general.--In the case of a specified terrorist victim,
any tax imposed by this chapter shall not apply--
``(A) with respect to the taxable year in which falls the
date of death, and
``(B) with respect to any prior taxable year in the period
beginning with the last taxable year ending before the taxable
year in which the wounds, injury, or illness referred to in
paragraph (3) were incurred.
``(2) $10,000 minimum benefit.--If, but for this paragraph, the
amount of tax not imposed by paragraph (1) with respect to a
specified terrorist victim is less than $10,000, then such victim
shall be treated as having made a payment against the tax imposed
by this chapter for such victim's last taxable year in an amount
equal to the excess of $10,000 over the amount of tax not so
imposed.
``(3) Taxation of certain benefits.--Subject to such rules as
the Secretary may prescribe, paragraph (1) shall not apply to the
amount of any tax imposed by this chapter which would be computed
by only taking into account the items of income, gain, or other
amounts attributable to--
``(A) deferred compensation which would have been payable
after death if the individual had died other than as a
specified terrorist victim, or
``(B) amounts payable in the taxable year which would not
have been payable in such taxable year but for an action taken
after September 11, 2001.
``(4) Specified terrorist victim.--For purposes of this
subsection, the term `specified terrorist victim' means any
decedent--
``(A) who dies as a result of wounds or injury incurred as
a result of the terrorist attacks against the United States on
April 19, 1995, or September 11, 2001, or
``(B) who dies as a result of illness incurred as a result
of an attack involving anthrax occurring on or after September
11, 2001, and before January 1, 2002.
Such term shall not include any individual identified by the
Attorney General to have been a participant or conspirator in any
such attack or a representative of such an individual.''.
(b) Conforming Amendments.--
(1) Section 5(b)(1) is amended by inserting ``and victims of
certain terrorist attacks'' before ``on death''.
(2) Section 6013(f)(2)(B) is amended by inserting ``and victims
of certain terrorist attacks'' before ``on death''.
(c) Clerical Amendments.--
(1) The heading of section 692 is amended to read as follows:
``SEC. 692. INCOME TAXES OF MEMBERS OF ARMED FORCES AND VICTIMS OF
CERTAIN TERRORIST ATTACKS ON DEATH.''.
(2) The item relating to section 692 in the table of sections
for part II of subchapter J of chapter 1 is amended to read as
follows:
``Sec. 692. Income taxes of members of Armed Forces and victims
of certain terrorist attacks on death.''.
(d) Effective Date; Waiver of Limitations.--
(1) Effective date.--The amendments made by this section shall
apply to taxable years ending before, on, or after September 11,
2001.
(2) Waiver of limitations.--If refund or credit of any
overpayment of tax resulting from the amendments made by this
section is prevented at any time before the close of the 1-year
period beginning on the date of the enactment of this Act by the
operation of any law or rule of law (including res judicata), such
refund or credit may nevertheless be made or allowed if claim
therefor is filed before the close of such period.

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(a) In General.--Section 101 (relating to certain death benefits)
is amended by adding at the end the following new subsection:
``(i) Certain Employee Death Benefits Payable by Reason of Death of
Certain Terrorist Victims.--
``(1) In general.--Gross income does not include amounts
(whether in a single sum or otherwise) paid by an employer by
reason of the death of an employee who is a specified terrorist
victim (as defined in section 692(d)(4)).
``(2) Limitation.--
``(A) In general.--Subject to such rules as the Secretary
may prescribe, paragraph (1) shall not apply to amounts which
would have been payable after death if the individual had died
other than as a specified terrorist victim (as so defined).
``(B) Exception.--Subparagraph (A) shall not apply to
incidental death benefits paid from a plan described in section
401(a) and exempt from tax under section 501(a).
``(3) Treatment of self-employed individuals.--For purposes of
paragraph (1), the term `employee' includes a self-employed
individual (as defined in section 401(c)(1)).''.
(b) Effective Date; Waiver of Limitations.--
(1) Effective date.--The amendment made by this section shall
apply to taxable years ending before, on, or after September 11,
2001.
(2) Waiver of limitations.--If refund or credit of any
overpayment of tax resulting from the amendments made by this
section is prevented at any time before the close of the 1-year
period beginning on the date of the enactment of this Act by the
operation of any law or rule of law (including res judicata), such
refund or credit may nevertheless be made or allowed if claim
therefor is filed before the close of such period.

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(a) In General.--Section 2201 is amended to read as follows:
``SEC. 2201. COMBAT ZONE-RELATED DEATHS OF MEMBERS OF THE ARMED FORCES
AND DEATHS OF VICTIMS OF CERTAIN TERRORIST ATTACKS.
``(a) In General.--Unless the executor elects not to have this
section apply, in applying sections 2001 and 2101 to the estate of a
qualified decedent, the rate schedule set forth in subsection (c) shall
be deemed to be the rate schedule set forth in section 2001(c).
``(b) Qualified Decedent.--For purposes of this section, the term
`qualified decedent' means--
``(1) any citizen or resident of the United States dying while
in active service of the Armed Forces of the United States, if such
decedent--
``(A) was killed in action while serving in a combat zone,
as determined under section 112(c), or
``(B) died as a result of wounds, disease, or injury
suffered while serving in a combat zone (as determined under
section 112(c)), and while in the line of duty, by reason of a
hazard to which such decedent was subjected as an incident of
such service, and
``(2) any specified terrorist victim (as defined in section
692(d)(4)).
``(c) Rate Schedule.--
``If the amount with respect to which the tentative tax to be computed
is:
The tentative tax is:
Not over $150,000
1 percent of the amount by which such amount exceeds $100,000.
Over $150,000 but not over $200,000
$500 plus 2 percent of the excess over $150,000.
Over $200,000 but not over $300,000
$1,500 plus 3 percent of the excess over $200,000.
Over $300,000 but not over $500,000
$4,500 plus 4 percent of the excess over $300,000.
Over $500,000 but not over $700,000
$12,500 plus 5 percent of the excess over $500,000.
Over $700,000 but not over $900,000
$22,500 plus 6 percent of the excess over $700,000.
Over $900,000 but not over $1,100,000
$34,500 plus 7 percent of the excess over $900,000.
Over $1,100,000 but not over $1,600,000
$48,500 plus 8 percent of the excess over $1,100,000.
Over $1,600,000 but not over $2,100,000
$88,500 plus 9 percent of the excess over $1,600,000.
Over $2,100,000 but not over $2,600,000
$133,500 plus 10 percent of the excess over $2,100,000.
Over $2,600,000 but not over $3,100,000
$183,500 plus 11 percent of the excess over $2,600,000.
Over $3,100,000 but not over $3,600,000
$238,500 plus 12 percent of the excess over $3,100,000.
Over $3,600,000 but not over $4,100,000
$298,500 plus 13 percent of the excess over $3,600,000.
Over $4,100,000 but not over $5,100,000
$363,500 plus 14 percent of the excess over $4,100,000.
Over $5,100,000 but not over $6,100,000
$503,500 plus 15 percent of the excess over $5,100,000.
Over $6,100,000 but not over $7,100,000
$653,500 plus 16 percent of the excess over $6,100,000.
Over $7,100,000 but not over $8,100,000
$813,500 plus 17 percent of the excess over $7,100,000.
Over $8,100,000 but not over $9,100,000
$983,500 plus 18 percent of the excess over $8,100,000.
Over $9,100,000 but not over $10,100,000
$1,163,500 plus 19 percent of the excess over $9,100,000.
Over $10,100,000
$1,353,500 plus 20 percent of the excess over $10,100,000.
``(d) Determination of Unified Credit.--In the case of an estate to
which this section applies, subsection (a) shall not apply in
determining the credit under section 2010.''.
(b) Conforming Amendments.--
(1) Section 2011 is amended by striking subsection (d) and by
redesignating subsections (e), (f), and (g) as subsections (d),
(e), and (f), respectively.
(2) Section 2053(d)(3)(B) is amended by striking ``section
2011(e)'' and inserting ``section 2011(d)''.
(3) Paragraph (9) of section 532(c) of the Economic Growth and
Tax Relief Reconciliation Act of 2001 is repealed.
(c) Clerical Amendment.--The item relating to section 2201 in the
table of sections for subchapter C of chapter 11 is amended to read as
follows:
``Sec. 2201. Combat zone-related deaths of members of the Armed
Forces and deaths of victims of certain terrorist
attacks.''.
(d) Effective Date; Waiver of Limitations.--
(1) Effective date.--The amendments made by this section shall
apply to estates of decedents--
(A) dying on or after September 11, 2001; and
(B) in the case of individuals dying as a result of the
April 19, 1995, terrorist attack, dying on or after April 19,
1995.
(2) Waiver of limitations.--If refund or credit of any
overpayment of tax resulting from the amendments made by this
section is prevented at any time before the close of the 1-year
period beginning on the date of the enactment of this Act by the
operation of any law or rule of law (including res judicata), such
refund or credit may nevertheless be made or allowed if claim
therefor is filed before the close of such period.

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PAYMENTS.
(a) In General.--For purposes of the Internal Revenue Code of
1986--
(1) payments made by an organization described in section
501(c)(3) of such Code by reason of the death, injury, wounding, or
illness of an individual incurred as the result of the terrorist
attacks against the United States on September 11, 2001, or an
attack involving anthrax occurring on or after September 11, 2001,
and before January 1, 2002, shall be treated as related to the
purpose or function constituting the basis for such organization's
exemption under section 501 of such Code if such payments are made
in good faith using a reasonable and objective formula which is
consistently applied; and
(2) in the case of a private foundation (as defined in section
509 of such Code), any payment described in paragraph (1) shall not
be treated as made to a disqualified person for purposes of section
4941 of such Code.
(b) Effective Date.--This section shall apply to payments made on
or after September 11, 2001.

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(a) In General.--For purposes of the Internal Revenue Code of
1986--
(1) gross income shall not include any amount which (but for
this section) would be includible in gross income by reason of the
discharge (in whole or in part) of indebtedness of any taxpayer if
the discharge is by reason of the death of an individual incurred
as the result of the terrorist attacks against the United States on
September 11, 2001, or as the result of illness incurred as a
result of an attack involving anthrax occurring on or after
September 11, 2001, and before January 1, 2002; and
(2) return requirements under section 6050P of such Code shall
not apply to any discharge described in paragraph (1).
(b) Effective Date.--This section shall apply to discharges made on
or after September 11, 2001, and before January 1, 2002.
Subtitle B--Other Relief Provisions

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(a) In General.--Part III of subchapter B of chapter 1 (relating to
items specifically excluded from gross income) is amended by
redesignating section 139 as section 140 and inserting after section
138 the following new section:
``SEC. 139. DISASTER RELIEF PAYMENTS.
``(a) General Rule.--Gross income shall not include any amount
received by an individual as a qualified disaster relief payment.
``(b) Qualified Disaster Relief Payment Defined.--For purposes of
this section, the term `qualified disaster relief payment' means any
amount paid to or for the benefit of an individual--
``(1) to reimburse or pay reasonable and necessary personal,
family, living, or funeral expenses incurred as a result of a
qualified disaster,
``(2) to reimburse or pay reasonable and necessary expenses
incurred for the repair or rehabilitation of a personal residence
or repair or replacement of its contents to the extent that the
need for such repair, rehabilitation, or replacement is
attributable to a qualified disaster,
``(3) by a person engaged in the furnishing or sale of
transportation as a common carrier by reason of the death or
personal physical injuries incurred as a result of a qualified
disaster, or
``(4) if such amount is paid by a Federal, State, or local
government, or agency or instrumentality thereof, in connection
with a qualified disaster in order to promote the general welfare,
but only to the extent any expense compensated by such payment is not
otherwise compensated for by insurance or otherwise.
``(c) Qualified Disaster Defined.--For purposes of this section,
the term `qualified disaster' means--
``(1) a disaster which results from a terroristic or military
action (as defined in section 692(c)(2)),
``(2) a Presidentially declared disaster (as defined in section
1033(h)(3)),
``(3) a disaster which results from an accident involving a
common carrier, or from any other event, which is determined by the
Secretary to be of a catastrophic nature, or
``(4) with respect to amounts described in subsection (b)(4), a
disaster which is determined by an applicable Federal, State, or
local authority (as determined by the Secretary) to warrant
assistance from the Federal, State, or local government or agency
or instrumentality thereof.
``(d) Coordination With Employment Taxes.--For purposes of chapter
2 and subtitle C, a qualified disaster relief payment shall not be
treated as net earnings from self-employment, wages, or compensation
subject to tax.
``(e) No Relief for Certain Individuals.--Subsections (a) and (f)
shall not apply with respect to any individual identified by the
Attorney General to have been a participant or conspirator in a
terroristic action (as so defined), or a representative of such
individual.
``(f) Exclusion of Certain Additional Payments.--Gross income shall
not include any amount received as payment under section 406 of the Air
Transportation Safety and System Stabilization Act.''.
(b) Conforming Amendments.--The table of sections for part III of
subchapter B of chapter 1 is amended by striking the item relating to
section 139 and inserting the following new items:
``Sec. 139. Disaster relief payments.
``Sec. 140. Cross references to other Acts.''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years ending on or after September 11, 2001.

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(a) Expansion of Authority Relating to Disasters and Terroristic or
Military Actions.--Section 7508A is amended to read as follows:
``SEC. 7508A. AUTHORITY TO POSTPONE CERTAIN DEADLINES BY REASON OF
PRESIDENTIALLY DECLARED DISASTER OR TERRORISTIC OR
MILITARY ACTIONS.
``(a) In General.--In the case of a taxpayer determined by the
Secretary to be affected by a Presidentially declared disaster (as
defined in section 1033(h)(3)) or a terroristic or military action (as
defined in section 692(c)(2)), the Secretary may specify a period of up
to 1 year that may be disregarded in determining, under the internal
revenue laws, in respect of any tax liability of such taxpayer--
``(1) whether any of the acts described in paragraph (1) of
section 7508(a) were performed within the time prescribed therefor
(determined without regard to extension under any other provision
of this subtitle for periods after the date (determined by the
Secretary) of such disaster or action),
``(2) the amount of any interest, penalty, additional amount,
or addition to the tax for periods after such date, and
``(3) the amount of any credit or refund.
``(b) Special Rules Regarding Pensions, Etc.--In the case of a
pension or other employee benefit plan, or any sponsor, administrator,
participant, beneficiary, or other person with respect to such plan,
affected by a disaster or action described in subsection (a), the
Secretary may specify a period of up to 1 year which may be disregarded
in determining the date by which any action is required or permitted to
be completed under this title. No plan shall be treated as failing to
be operated in accordance with the terms of the plan solely as the
result of disregarding any period by reason of the preceding sentence.
``(c) Special Rules for Overpayments.--The rules of section 7508(b)
shall apply for purposes of this section.''.
(b) Clarification of Scope of Acts Secretary May Postpone.--Section
7508(a)(1)(K) (relating to time to be disregarded) is amended by
striking ``in regulations prescribed under this section''.
(c) Conforming Amendments to ERISA.--
(1) Part 5 of subtitle B of title I of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1131 et seq.) is amended by
adding at the end the following new section:
``SEC. 518. AUTHORITY TO POSTPONE CERTAIN DEADLINES BY REASON OF
PRESIDENTIALLY DECLARED DISASTER OR TERRORISTIC OR
MILITARY ACTIONS.
``In the case of a pension or other employee benefit plan, or any
sponsor, administrator, participant, beneficiary, or other person with
respect to such plan, affected by a Presidentially declared disaster
(as defined in section 1033(h)(3) of the Internal Revenue Code of 1986)
or a terroristic or military action (as defined in section 692(c)(2) of
such Code), the Secretary may, notwithstanding any other provision of
law, prescribe, by notice or otherwise, a period of up to 1 year which
may be disregarded in determining the date by which any action is
required or permitted to be completed under this Act. No plan shall be
treated as failing to be operated in accordance with the terms of the
plan solely as the result of disregarding any period by reason of the
preceding sentence.''.
(2) Section 4002 of Employee Retirement Income Security Act of
1974 (29 U.S.C. 1302) is amended by adding at the end the following
new subsection:
``(i) Special Rules Regarding Disasters, Etc.--In the case of a
pension or other employee benefit plan, or any sponsor, administrator,
participant, beneficiary, or other person with respect to such plan,
affected by a Presidentially declared disaster (as defined in section
1033(h)(3) of the Internal Revenue Code of 1986) or a terroristic or
military action (as defined in section 692(c)(2) of such Code), the
corporation may, notwithstanding any other provision of law, prescribe,
by notice or otherwise, a period of up to 1 year which may be
disregarded in determining the date by which any action is required or
permitted to be completed under this Act. No plan shall be treated as
failing to be operated in accordance with the terms of the plan solely
as the result of disregarding any period by reason of the preceding
sentence.''.
(d) Additional Conforming Amendments.--
(1) Section 6404 is amended--
(A) by striking subsection (h);
(B) by redesignating subsection (i) as subsection (h); and
(C) by adding at the end the following new subsection:
``(i) Cross Reference.--
``For authority to suspend running of interest, etc. by reason
of Presidentially declared disaster or terroristic or military
action, see section 7508A.''.
(2) Section 6081(c) is amended to read as follows:
``(c) Cross References.--
``For time for performing certain acts postponed by reason of
war, see section 7508, and by reason of Presidentially declared
disaster or terroristic or military action, see section
7508A.''.
(3) Section 6161(d) is amended by adding at the end the
following new paragraph:
``(3) Postponement of certain acts.--
``For time for performing certain acts postponed by reason of
war, see section 7508, and by reason of Presidentially declared
disaster or terroristic or military action, see section
7508A.''.
(e) Clerical Amendments.--
(1) The item relating to section 7508A in the table of sections
for chapter 77 is amended to read as follows:
``Sec. 7508A. Authority to postpone certain deadlines by reason
of Presidentially declared disaster or terroristic or
military actions.''.
(2) The table of contents for the Employee Retirement Income
Security Act of 1974 is amended by inserting after the item
relating to section 517 the following new item:
``Sec. 518. Authority to postpone certain deadlines by reason of
Presidentially declared disaster or terroristic or
military actions.''.
(f) Effective Date.--The amendments made by this section shall
apply to disasters and terroristic or military actions occurring on or
after September 11, 2001, with respect to any action of the Secretary
of the Treasury, the Secretary of Labor, or the Pension Benefit
Guaranty Corporation occurring on or after the date of the enactment of
this Act.

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ACTIONS.
(a) Disability Income.--Section 104(a)(5) (relating to compensation
for injuries or sickness) is amended by striking ``a violent attack''
and all that follows through the period and inserting ``a terroristic
or military action (as defined in section 692(c)(2)).''.
(b) Exemption From Income Tax for Certain Military or Civilian
Employees.--Section 692(c) is amended--
(1) by striking ``outside the United States'' in paragraph (1);
and
(2) by striking ``Sustained Overseas'' in the heading.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years ending on or after September 11, 2001.

dee825ab105e180ba9e30f849afcc69cb898d47242f602d509f73e445edb0ca0

(a) In General.--Paragraph (3) of section 301(a) of the Air
Transportation Safety and System Stabilization Act (Public Law 107-42)
is amended to read as follows:
``(3) Airline-related deposit.--For purposes of this
subsection, the term `airline-related deposit' means any deposit of
taxes imposed by subchapter C of chapter 33 of such Code (relating
to transportation by air).''.
(b) Effective Date.--The amendment made by this section shall take
effect as if included in section 301 of the Air Transportation Safety
and System Stabilization Act (Public Law 107-42).

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(a) In General.--Subtitle E is amended by adding at the end the
following new chapter:
``CHAPTER 55--STRUCTURED SETTLEMENT FACTORING TRANSACTIONS
``Sec. 5891. Structured settlement factoring transactions.
``SEC. 5891. STRUCTURED SETTLEMENT FACTORING TRANSACTIONS.
``(a) Imposition of Tax.--There is hereby imposed on any person who
acquires directly or indirectly structured settlement payment rights in
a structured settlement factoring transaction a tax equal to 40 percent
of the factoring discount as determined under subsection (c)(4) with
respect to such factoring transaction.
``(b) Exception for Certain Approved Transactions.--
``(1) In general.--The tax under subsection (a) shall not apply
in the case of a structured settlement factoring transaction in
which the transfer of structured settlement payment rights is
approved in advance in a qualified order.
``(2) Qualified order.--For purposes of this section, the term
`qualified order' means a final order, judgment, or decree which--
``(A) finds that the transfer described in paragraph (1)--
``(i) does not contravene any Federal or State statute
or the order of any court or responsible administrative
authority, and
``(ii) is in the best interest of the payee, taking
into account the welfare and support of the payee's
dependents, and
``(B) is issued--
``(i) under the authority of an applicable State
statute by an applicable State court, or
``(ii) by the responsible administrative authority (if
any) which has exclusive jurisdiction over the underlying
action or proceeding which was resolved by means of the
structured settlement.
``(3) Applicable state statute.--For purposes of this section,
the term `applicable State statute' means a statute providing for
the entry of an order, judgment, or decree described in paragraph
(2)(A) which is enacted by--
``(A) the State in which the payee of the structured
settlement is domiciled, or
``(B) if there is no statute described in subparagraph (A),
the State in which either the party to the structured
settlement (including an assignee under a qualified assignment
under section 130) or the person issuing the funding asset for
the structured settlement is domiciled or has its principal
place of business.
``(4) Applicable state court.--For purposes of this section--
``(A) In general.--The term `applicable State court' means,
with respect to any applicable State statute, a court of the
State which enacted such statute.
``(B) Special rule.--In the case of an applicable State
statute described in paragraph (3)(B), such term also includes
a court of the State in which the payee of the structured
settlement is domiciled.
``(5) Qualified order dispositive.--A qualified order shall be
treated as dispositive for purposes of the exception under this
subsection.
``(c) Definitions.--For purposes of this section--
``(1) Structured settlement.--The term `structured settlement'
means an arrangement--
``(A) which is established by--
``(i) suit or agreement for the periodic payment of
damages excludable from the gross income of the recipient
under section 104(a)(2), or
``(ii) agreement for the periodic payment of
compensation under any workers' compensation law excludable
from the gross income of the recipient under section
104(a)(1), and
``(B) under which the periodic payments are--
``(i) of the character described in subparagraphs (A)
and (B) of section 130(c)(2), and
``(ii) payable by a person who is a party to the suit
or agreement or to the workers' compensation claim or by a
person who has assumed the liability for such periodic
payments under a qualified assignment in accordance with
section 130.
``(2) Structured settlement payment rights.--The term
`structured settlement payment rights' means rights to receive
payments under a structured settlement.
``(3) Structured settlement factoring transaction.--
``(A) In general.--The term `structured settlement
factoring transaction' means a transfer of structured
settlement payment rights (including portions of structured
settlement payments) made for consideration by means of sale,
assignment, pledge, or other form of encumbrance or alienation
for consideration.
``(B) Exception.--Such term shall not include--
``(i) the creation or perfection of a security interest
in structured settlement payment rights under a blanket
security agreement entered into with an insured depository
institution in the absence of any action to redirect the
structured settlement payments to such institution (or
agent or successor thereof) or otherwise to enforce such
blanket security interest as against the structured
settlement payment rights, or
``(ii) a subsequent transfer of structured settlement
payment rights acquired in a structured settlement
factoring transaction.
``(4) Factoring discount.--The term `factoring discount' means
an amount equal to the excess of--
``(A) the aggregate undiscounted amount of structured
settlement payments being acquired in the structured settlement
factoring transaction, over
``(B) the total amount actually paid by the acquirer to the
person from whom such structured settlement payments are
acquired.
``(5) Responsible administrative authority.--The term
`responsible administrative authority' means the administrative
authority which had jurisdiction over the underlying action or
proceeding which was resolved by means of the structured
settlement.
``(6) State.--The term `State' includes the Commonwealth of
Puerto Rico and any possession of the United States.
``(d) Coordination With Other Provisions.--
``(1) In general.--If the applicable requirements of sections
72, 104(a)(1), 104(a)(2), 130, and 461(h) were satisfied at the
time the structured settlement involving structured settlement
payment rights was entered into, the subsequent occurrence of a
structured settlement factoring transaction shall not affect the
application of the provisions of such sections to the parties to
the structured settlement (including an assignee under a qualified
assignment under section 130) in any taxable year.
``(2) No withholding of tax.--The provisions of section 3405
regarding withholding of tax shall not apply to the person making
the payments in the event of a structured settlement factoring
transaction.''.
(b) Clerical Amendment.--The table of chapters for subtitle E is
amended by adding at the end the following new item:
``Chapter 55. Structured settlement factoring transactions.''.
(c) Effective Dates.--
(1) In general.--The amendments made by this section (other
than the provisions of section 5891(d) of the Internal Revenue Code
of 1986, as added by this section) shall apply to structured
settlement factoring transactions (as defined in section 5891(c) of
such Code (as so added)) entered into on or after the 30th day
following the date of the enactment of this Act.
(2) Clarification of existing law.--Section 5891(d) of such
Code (as so added) shall apply to structured settlement factoring
transactions (as defined in section 5891(c) of such Code (as so
added)) entered into before, on, or after such 30th day.
(3) Transition rule.--In the case of a structured settlement
factoring transaction entered into during the period beginning on
the 30th day following the date of the enactment of this Act and
ending on July 1, 2002, no tax shall be imposed under section
5891(a) of such Code if--
(A) the structured settlement payee is domiciled in a State
(or possession of the United States) which has not enacted a
statute providing that the structured settlement factoring
transaction is ineffective unless the transaction has been
approved by an order, judgment, or decree of a court (or where
applicable, a responsible administrative authority) which finds
that such transaction--
(i) does not contravene any Federal or State statute or
the order of any court (or responsible administrative
authority); and
(ii) is in the best interest of the structured
settlement payee or is appropriate in light of a hardship
faced by the payee; and
(B) the person acquiring the structured settlement payment
rights discloses to the structured settlement payee in advance
of the structured settlement factoring transaction the amounts
and due dates of the payments to be transferred, the aggregate
amount to be transferred, the consideration to be received by
the structured settlement payee for the transferred payments,
the discounted present value of the transferred payments
(including the present value as determined in the manner
described in section 7520 of such Code), and the expenses
required under the terms of the structured settlement factoring
transaction to be paid by the structured settlement payee or
deducted from the proceeds of such transaction.

609355b5446803756fa4fee07807b189da22b03acf4e8d0646bcba384e4e2328

(a) In General.--Subsection (b) of section 642 (relating to
deduction for personal exemption) is amended to read as follows:
``(b) Deduction for Personal Exemption.--
``(1) Estates.--An estate shall be allowed a deduction of $600.
``(2) Trusts.--
``(A) In general.--Except as otherwise provided in this
paragraph, a trust shall be allowed a deduction of $100.
``(B) Trusts distributing income currently.--A trust which,
under its governing instrument, is required to distribute all
of its income currently shall be allowed a deduction of $300.
``(C) Disability trusts.--
``(i) In general.--A qualified disability trust shall
be allowed a deduction equal to the exemption amount under
section 151(d), determined--
``(I) by treating such trust as an individual
described in section 151(d)(3)(C)(iii), and
``(II) by applying section 67(e) (without the
reference to section 642(b)) for purposes of
determining the adjusted gross income of the trust.
``(ii) Qualified disability trust.--For purposes of
clause (i), the term `qualified disability trust' means any
trust if--
``(I) such trust is a disability trust described in
subsection (c)(2)(B)(iv) of section 1917 of the Social
Security Act (42 U.S.C. 1396p), and
``(II) all of the beneficiaries of the trust as of
the close of the taxable year are determined by the
Commissioner of Social Security to have been disabled
(within the meaning of section 1614(a)(3) of the Social
Security Act, 42 U.S.C. 1382c(a)(3)) for some portion
of such year.
A trust shall not fail to meet the requirements of
subclause (II) merely because the corpus of the trust may
revert to a person who is not so disabled after the trust
ceases to have any beneficiary who is so disabled.
``(3) Deductions in lieu of personal exemption.--The deductions
allowed by this subsection shall be in lieu of the deductions
allowed under section 151 (relating to deduction for personal
exemption).''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years ending on or after September 11, 2001.
SECURITY INVESTIGATIONS

609c01db9566aaab08eaeba7bc003fce7faf08b211d485bda39eb12e9f39d039

SECURITY INVESTIGATIONS.
(a) Disclosure Without a Request of Information Relating to
Terrorist Activities, Etc.--Paragraph (3) of section 6103(i) (relating
to disclosure of return information to apprise appropriate officials of
criminal activities or emergency circumstances) is amended by adding at
the end the following new subparagraph:
``(C) Terrorist activities, etc.--
``(i) In general.--Except as provided in paragraph (6),
the Secretary may disclose in writing return information
(other than taxpayer return information) that may be
related to a terrorist incident, threat, or activity to the
extent necessary to apprise the head of the appropriate
Federal law enforcement agency responsible for
investigating or responding to such terrorist incident,
threat, or activity. The head of the agency may disclose
such return information to officers and employees of such
agency to the extent necessary to investigate or respond to
such terrorist incident, threat, or activity.
``(ii) Disclosure to the department of justice.--
Returns and taxpayer return information may also be
disclosed to the Attorney General under clause (i) to the
extent necessary for, and solely for use in preparing, an
application under paragraph (7)(D).
``(iii) Taxpayer identity.--For purposes of this
subparagraph, a taxpayer's identity shall not be treated as
taxpayer return information.
``(iv) Termination.--No disclosure may be made under
this subparagraph after December 31, 2003.''.
(b) Disclosure Upon Request of Information Relating to Terrorist
Activities, Etc.--Subsection (i) of section 6103 (relating to
disclosure to Federal officers or employees for administration of
Federal laws not relating to tax administration) is amended by
redesignating paragraph (7) as paragraph (8) and by inserting after
paragraph (6) the following new paragraph:
``(7) Disclosure upon request of information relating to
terrorist activities, etc.--
``(A) Disclosure to law enforcement agencies.--
``(i) In general.--Except as provided in paragraph (6),
upon receipt by the Secretary of a written request which
meets the requirements of clause (iii), the Secretary may
disclose return information (other than taxpayer return
information) to officers and employees of any Federal law
enforcement agency who are personally and directly engaged
in the response to or investigation of any terrorist
incident, threat, or activity.
``(ii) Disclosure to state and local law enforcement
agencies.--The head of any Federal law enforcement agency
may disclose return information obtained under clause (i)
to officers and employees of any State or local law
enforcement agency but only if such agency is part of a
team with the Federal law enforcement agency in such
response or investigation and such information is disclosed
only to officers and employees who are personally and
directly engaged in such response or investigation.
``(iii) Requirements.--A request meets the requirements
of this clause if--
``(I) the request is made by the head of any
Federal law enforcement agency (or his delegate)
involved in the response to or investigation of any
terrorist incident, threat, or activity, and
``(II) the request sets forth the specific reason
or reasons why such disclosure may be relevant to a
terrorist incident, threat, or activity.
``(iv) Limitation on use of information.--Information
disclosed under this subparagraph shall be solely for the
use of the officers and employees to whom such information
is disclosed in such response or investigation.
``(B) Disclosure to intelligence agencies.--
``(i) In general.--Except as provided in paragraph (6),
upon receipt by the Secretary of a written request which
meets the requirements of clause (ii), the Secretary may
disclose return information (other than taxpayer return
information) to those officers and employees of the
Department of Justice, the Department of the Treasury, and
other Federal intelligence agencies who are personally and
directly engaged in the collection or analysis of
intelligence and counterintelligence information or
investigation concerning any terrorist incident, threat, or
activity. For purposes of the preceding sentence, the
information disclosed under the preceding sentence shall be
solely for the use of such officers and employees in such
investigation, collection, or analysis.
``(ii) Requirements.--A request meets the requirements
of this subparagraph if the request--
``(I) is made by an individual described in clause
(iii), and
``(II) sets forth the specific reason or reasons
why such disclosure may be relevant to a terrorist
incident, threat, or activity.
``(iii) Requesting individuals.--An individual
described in this subparagraph is an individual--
``(I) who is an officer or employee of the
Department of Justice or the Department of the Treasury
who is appointed by the President with the advice and
consent of the Senate or who is the Director of the
United States Secret Service, and
``(II) who is responsible for the collection and
analysis of intelligence and counterintelligence
information concerning any terrorist incident, threat,
or activity.
``(iv) Taxpayer identity.--For purposes of this
subparagraph, a taxpayer's identity shall not be treated as
taxpayer return information.
``(C) Disclosure under ex parte orders.--
``(i) In general.--Except as provided in paragraph (6),
any return or return information with respect to any
specified taxable period or periods shall, pursuant to and
upon the grant of an ex parte order by a Federal district
court judge or magistrate under clause (ii), be open (but
only to the extent necessary as provided in such order) to
inspection by, or disclosure to, officers and employees of
any Federal law enforcement agency or Federal intelligence
agency who are personally and directly engaged in any
investigation, response to, or analysis of intelligence and
counterintelligence information concerning any terrorist
incident, threat, or activity. Return or return information
opened to inspection or disclosure pursuant to the
preceding sentence shall be solely for the use of such
officers and employees in the investigation, response, or
analysis, and in any judicial, administrative, or grand
jury proceedings, pertaining to such terrorist incident,
threat, or activity.
``(ii) Application for order.--The Attorney General,
the Deputy Attorney General, the Associate Attorney
General, any Assistant Attorney General, or any United
States attorney may authorize an application to a Federal
district court judge or magistrate for the order referred
to in clause (i). Upon such application, such judge or
magistrate may grant such order if he determines on the
basis of the facts submitted by the applicant that--
``(I) there is reasonable cause to believe, based
upon information believed to be reliable, that the
return or return information may be relevant to a
matter relating to such terrorist incident, threat, or
activity, and
``(II) the return or return information is sought
exclusively for use in a Federal investigation,
analysis, or proceeding concerning any terrorist
incident, threat, or activity.
``(D) Special rule for ex parte disclosure by the irs.--
``(i) In general.--Except as provided in paragraph (6),
the Secretary may authorize an application to a Federal
district court judge or magistrate for the order referred
to in subparagraph (C)(i). Upon such application, such
judge or magistrate may grant such order if he determines
on the basis of the facts submitted by the applicant that
the requirements of subparagraph (C)(ii)(I) are met.
``(ii) Limitation on use of information.--Information
disclosed under clause (i)--
``(I) may be disclosed only to the extent necessary
to apprise the head of the appropriate Federal law
enforcement agency responsible for investigating or
responding to a terrorist incident, threat, or
activity, and
``(II) shall be solely for use in a Federal
investigation, analysis, or proceeding concerning any
terrorist incident, threat, or activity.
The head of such Federal agency may disclose such
information to officers and employees of such agency to the
extent necessary to investigate or respond to such
terrorist incident, threat, or activity.
``(E) Termination.--No disclosure may be made under this
paragraph after December 31, 2003.''.
(c) Conforming Amendments.--
(1) Section 6103(a)(2) is amended by inserting ``any local law
enforcement agency receiving information under subsection
(i)(7)(A),'' after ``State,''.
(2) Section 6103(b) is amended by adding at the end the
following new paragraph:
``(11) Terrorist incident, threat, or activity.--The term
`terrorist incident, threat, or activity' means an incident,
threat, or activity involving an act of domestic terrorism (as
defined in section 2331(5) of title 18, United States Code) or
international terrorism (as defined in section 2331(1) of such
title).''.
(3) The heading of section 6103(i)(3) is amended by inserting
``or terrorist'' after ``criminal''.
(4) Paragraph (4) of section 6103(i) is amended--
(A) in subparagraph (A) by inserting ``or (7)(C)'' after
``paragraph (1)''; and
(B) in subparagraph (B) by striking ``or (3)(A)'' and
inserting ``(3)(A) or (C), or (7)''.
(5) Paragraph (6) of section 6103(i) is amended--
(A) by striking ``(3)(A)'' and inserting ``(3)(A) or (C)'';
and
(B) by striking ``or (7)'' and inserting ``(7), or (8)''.
(6) Section 6103(p)(3) is amended--
(A) in subparagraph (A) by striking ``(7)(A)(ii)'' and
inserting ``(8)(A)(ii)''; and
(B) in subparagraph (C) by striking ``(i)(3)(B)(i)'' and
inserting ``(i)(3)(B)(i) or (7)(A)(ii)''.
(7) Section 6103(p)(4) is amended--
(A) in the matter preceding subparagraph (A)--
(i) by striking ``or (5),'' the first place it appears
and inserting ``(5), or (7),''; and
(ii) by striking ``(i)(3)(B)(i),'' and inserting
``(i)(3)(B)(i) or (7)(A)(ii),''; and
(B) in subparagraph (F)(ii) by striking ``or (5),'' the
first place it appears and inserting ``(5) or (7),''.
(8) Section 6103(p)(6)(B)(i) is amended by striking
``(i)(7)(A)(ii)'' and inserting ``(i)(8)(A)(ii)''.
(9) Section 6105(b) is amended--
(A) by striking ``or'' at the end of paragraph (2);
(B) by striking ``paragraphs (1) or (2)'' in paragraph (3)
and inserting ``paragraph (1), (2), or (3)'';
(C) by redesignating paragraph (3) as paragraph (4); and
(D) by inserting after paragraph (2) the following new
paragraph:
``(3) to the disclosure of tax convention information on the
same terms as return information may be disclosed under paragraph
(3)(C) or (7) of section 6103(i), except that in the case of tax
convention information provided by a foreign government, no
disclosure may be made under this paragraph without the written
consent of the foreign government, or''.
(10) Section 7213(a)(2) is amended by striking
``(i)(3)(B)(i),'' and inserting ``(i)(3)(B)(i) or (7)(A)(ii),''.
(d) Effective Date.--The amendments made by this section shall
apply to disclosures made on or after the date of the enactment of this
Act.

5d5fc8cc7bc1bd1b6e432e13b4102b0c5ee9c721f285fd6d629f65c7083dc779

(a) In General.--Nothing in this Act (or an amendment made by this
Act) shall be construed to alter or amend title II of the Social
Security Act (or any regulation promulgated under that Act).
(b) Transfers.--
(1) Estimate of secretary.--The Secretary of the Treasury shall
annually estimate the impact that the enactment of this Act has on
the income and balances of the trust funds established under
section 201 of the Social Security Act (42 U.S.C. 401).
(2) Transfer of funds.--If, under paragraph (1), the Secretary
of the Treasury estimates that the enactment of this Act has a
negative impact on the income and balances of the trust funds
established under section 201 of the Social Security Act (42 U.S.C.
401), the Secretary shall transfer, not less frequently than
quarterly, from the general revenues of the Federal Government an
amount sufficient so as to ensure that the income and balances of
such trust funds are not reduced as a result of the enactment of
this Act.
Speaker of the House of Representatives.
Vice President of the United States and
President of the Senate.

475af23a5b5a84267c3cea91297b5a894cea0b61a365db7c1c8d51f8a3327d97

Tax Relief for Victims bill — HR. 2884

Other Sections

TITLE I

TITLE II

TITLE III

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