N002519

	Governor of the		Attorney General of
	State of New York		the State of New York

January 18, 2002

VIA OVERNIGHT MAIL

Kenneth Feinberg, Esq.		Kenneth L. Zwick, Esq.
Special Master		Director, Office of Management Programs
September 11th Victim Compensation Fund		Civil Division, U.S. Dept. of Justice
780 Third Avenue, 22nd Floor		Main Building, Room 3140
New York, New York 10017		950 Pennsylvania Avenue NW
		Washington, D.C. 20530

Dear Messrs. Feinberg and Zwick:

We write to comment on the Interim Final Rule promulgated on December 21, 2001 pursuant to the Air Transportation Safety and System Stabilization Act ("ATSSSA" or the "statute"). For ease of presentation, we have attached a mark-up of the Interim Final Rule that offers specific language to address each of our concerns, as well as a section-by-section commentary setting forth the reasons for our proposed changes. Discussed below are our most significant concerns, and why their immediate resolution is essential both to ensure a fair distribution of the Victim Compensation Fund (the "Fund"), and to ease the already significant burdens placed upon grieving families.

A. Eligibility

The Interim Final Rule excludes from participation in the Fund many whom Congress intended to compensate. For example, though ATSSSA covers survivors and beneficiaries of those who suffered "physical harm," the rule redefines and restricts "physical harm" to mean only disabling or incapacitating physical harm that can be documented by medical records created within 24 hours of the attack. The statute does not limit eligibility to those who suffered severe harm, nor does it purport to limit the means by which one can prove injury. Many of the injured went to triage centers that offered none of the documentation required by the rule, and many others did not seek medical assistance within 24 hours. Therefore, a final rule must be promulgated to allow claimants the opportunity to prove "physical harm" by whatever means available.

In addition, although nothing technically precludes undocumented aliens from seeking compensation through the fund, the Interim Final Rule effectively precludes their participation by failing to offer any protection against disclosure of their undocumented status to the Immigration and Naturalization Service ("INS"). Indeed, Section VI of the "Eligibility Form and Application for Advance Benefits" requires claimants to authorize disclosure of "any potential violation of law." The federal government has, in other contexts, restricted the disclosure and use of immigrant status information to promote various public policy goals. Similar confidentiality protections must become part of a final rule to allow those who were injured or the families of those who lost their lives to be compensated from the Fund without having to fear deportation.

Finally, many individuals lost loved ones on September 11 with whom they were in relationships of economic dependence or mutual interdependence. With appropriate proof of these relationships, all such persons should be considered potential distributees.

B. Collateral Sources

Instead of providing needed clarification, the Interim Final Rule forces victims to guess when or if charitable contributions received by victims will be deemed collateral sources. Section 104.47 indicates that they will not be deemed a collateral source, unless the Special Master deems otherwise. Clarification is necessary so that the nebulous exception does not swallow the rule. No charitable funds received by victims including funds donated by the public to government entities for distribution for charitable purposes should be treated as a collateral source offset to an award under the fund. Moreover, once appropriate collateral sources under the statute (such as life insurance and government payments) are calculated, they should not be offset against a noneconomic loss, unless it can be shown that the collateral source was intended to compensate non-economic losses.

C. Economic and Noneconomic Losses

The statute requires the Special Master to determine the specific economic and non- economic losses incurred by claimants. The Interim Final Rule, however, provides presumed loss amounts, and does not enable one to overcome the presumptions with evidence of individual facts and circumstances. Instead, the rule requires one to demonstrate "extraordinary" circumstances to qualify for an award above the Special Master's presumptive economic and noneconomic loss calculations. This burden on the claimants is contrary to law, and must be eliminated.

D. Waiver

The Interim Final Rule compels claimants to waive important litigation rights before claimants have received information sufficient to make a knowing waiver. The statute requires that claimants waive their rights to file civil actions for damages once they submit a claim to the Fund. The rule deems a claim "submitted" once a substantially complete application has been filed with the Special Master even though the claimant ultimately might be found ineligible, or eligible to receive only a minimal award. To address this clear defect, claims should not be deemed "submitted" until the claimant has agreed to accept a payment from the fund. In the event that claimants who received an Advance Benefit are dissatisfied with the determination of their final award, they should be allowed to opt out of the Fund (and thereby preserve their right to bring a civil action) by returning the Advance Benefit to the Special Master.

The foregoing discussion highlights what we believe to be the most critical flaws in the Interim Final Rule. The enclosed section-by-section analysis discusses these issues in more detail, and the mark-up contains our proposal on how these and other deficiencies in the rule should be addressed. We thank you for your consideration of our views on these issues, and are available to discuss any matter on which you may have questions.

Sincerely,

Comments by:
Counsel to the Governor of the State of New York
Counsel to the Attorney General of the State of New York


NEW YORK STATE'S SECTION-BY-SECTION COMMENTARY ON THE
SEPTEMBER 11TH VICTIM COMPENSATION FUND INTERIM FINAL RULE

Subpart A General; Eligibility

§ 104.1 Purpose

No changes recommended.

§ 104.2 Eligibility definitions and requirements

§ 104.2(a) Eligible claimants: No substantive changes recommended.

§ 104.2(b) Immediate aftermath: This definition should refer to "victims" rather than "claimants," because the term "claimant" can refer to the Personal Representative of a victim who was present at the site of a terrorist attack. In addition, a change has been made to clarify that the term "rescue worker" is not limited to police officers, firefighters and other emergency personnel, and instead includes any individual who assisted in efforts to search for and recover victims.

§ 104.2(c) Physical harm: The definition of "physical harm" in the Interim Final Rule requires that the victim: (1) received medical treatment within 24 hours of the attack; (2) has contemporaneous medical records; and (3) suffered a physical disability, incapacity or disfigurement. This definition is much too narrow and clearly violates the intent of Congress, which was to compensate all victims who suffered any physical injury. Many injured victims were not able to seek medical treatment within 24 hours, or were treated at an emergency triage location where no documentation was maintained, or suffered physical injuries that do not constitute "disability, incapacity or disfigurement". The proposed changes eliminate these unwarranted restrictions, and instead simply require the claimant to prove that a physical injury was incurred that required medical treatment.

§ 104.2(d) Personal Representative: No substantive changes recommended.

§ 104.2(e) Present at the site: Changes are proposed to clarify that: (1) physical harm caused by the inhalation of smoke and dust is sufficient for eligibility to file a claim; and (2) all victims physically harmed by the aircraft, fire, explosions, or building collapses are eligible, even if they were not in an area "contiguous to the crash sites".

§ 104.3 Other definitions

§ 104.3(a) Beneficiary: The definition of "beneficiary" has been amended to clarify that domestic partners and other individuals who were in long-term committed relationships with decedents are not excluded from recovery simply because they would not qualify for benefits from the estate of a decedent who died intestate.

§ 104.3(b) Dependent: The explanation of the term "dependent" in the Interim Final Rule is deficient in several ways. Specifically: (1) it does not actually define the term "dependent"; (2) it excludes individuals who were financially dependent upon the victim but who were not listed as dependents on the victim's federal income tax return; and (3) it excludes dependents of victims who were required to file a federal income tax return but failed to do so before September 11th. For example, if an unmarried victim was paying all of the nursing home costs for an elderly aunt who was completely dependent upon the victim for financial support, the aunt may be the person most greatly affected by the death of the victim. However, the Internal Revenue Code may prohibit the aunt from being named as a "dependent" on the victim's federal income tax form. If so, the aunt would not be considered a "dependent" under the Interim Final Rule, and would not receive any benefits from the September 11th Victims Compensation Fund ("Fund"). Similarly, if a married victim had requested an extension until September 15 to file his or her tax return, but that return had not yet been filed, no dependents would be included under the current regulations, even the victim's minor children. The proposed changes correct these deficiencies.

§ 104.3(c) Spouse: The definition of "spouse" in the Interim Final Rule is also clearly deficient. In particular: (1) the definition fails to indicate who qualifies as the "spouse" of victims who were not required to file federal income tax returns for 2000; and (2) precludes any person from qualifying as the spouse of an individual who was required to file a federal income tax return, but failed to do so. The definition therefore has been amended to correct these errors.

§§ 104.3(d) & (e) Act and Victim: No substantive changes recommended.

§§ 104.3(f) & (g) Economic and noneconomic losses: Definitions of "economic loss" and "noneconomic loss" have been added, based upon similar definitions in the Air Transportation Safety and System Stabilization Act ("ATSSSA").

§ 104.4 Personal representative

§ 104.4(a) In general: Subparagraph (a)(1) has been amended to clarify that an individual appointed as an executor or administrator on an interim basis can qualify as the Personal Representative. Subparagraph (a)(2) has been amended: (1) to clarify the manner in which administrators are appointed; (2) to authorize the Special Master to determine the Personal Representative based upon the order of priority for appointment of administrators of an intestate estate; and (3) to authorize the victim's beneficiaries and dependents to agree upon a specific individual to serve as the Personal Representative.

§ 104.4(b) Notice to beneficiaries: This paragraph has been amended: (1) to ensure that notice is provided to potential beneficiaries at least ten weeks prior to the deadline for filing claims; (2) to clarify that the Personal Representative is not required to provide notice to unknown beneficiaries; (3) to add a provision relating to notice to beneficiaries if there is no will; and (4) to require, rather than permit, the publication of a list of claimants.

§ 104.4(c) Objections to Personal Representatives: This paragraph has been amended: (1) to shorten the time period for the filing of objections to the authority of the Personal Representative, so that objections are made prior to any substantive action by the Special Master; and (2) to add a provision governing objections by persons who did not receive notice of the filing of a claim.

§ 104.4(d) Disputes as to identity: This paragraph has been amended: (1) to expand the power of the Special Master to toll the applicable limitations period if there is a dispute over the Personal Representative; and (2) to require that awards be placed in interest-bearing accounts pending resolution of such disputes.

§ 104.5 Foreign claims

Minor changes recommended.

§ 104.6 Amendments to rule

The Special Master should be required to notify individuals with pending claims of any amendments to the rule.

Subpart B Filing for Compensation; Application for Advance Benefits

§ 104.21 Filing for Compensation

§ 104.21(a) Compensation form; filing: A provision has been added requiring the Claims Evaluator to determine whether a claim has been deemed "filed" within seven days after receipt of the forms, and requiring that the claimant be advised of that determination.

§ 104.21(b) Eligibility form:

Subparagraph (1) has been amended to clarify that the limitation on civil actions does not apply to civil actions permitted by § 104.61.

Subparagraph (2) has been amended to eliminate unnecessary language.

Subparagraph (3) has been amended primarily to provide a mechanism for injured victims to prove physical harm even if they do not have medical records of their treatment.

Subparagraph (4) remains unchanged.

Subparagraph (5) has been amended to grant the Special Master discretion to waive the collateral source limits that otherwise would prevent the payment of Advance Benefits. For example, the Interim Final Rule prohibits the Special Master from granting advance benefits to an injured victim who has received collateral source compensation in excess of the victim's "lost wages plus out-of-pocket medical expenses." However, for an unemployed or underemployed victim, a collateral payment in excess of lost wages and medical expenses might not be sufficient to cover the family's expenses, and may still leave the family with substantial hardships. The Special Master should retain discretion to address these types of situations.

Subparagraph (6) has been amended to ensure that the Special Master regularly publishes a list of claimants on an ongoing basis.

§ 104.21(c) Compensation Forms: Minor changes recommended.

§ 104.21(d) Submission of a claim:

The Interim Final Rule terminates a victim's right to bring a civil action: (1) when a Claims Evaluator determines that the Eligibility Form of a victim seeking Advance Benefits is "substantially complete"; or (2) if no Advance Benefits are sought, when a Claims Evaluator determines that both the Eligibility Form and either a Personal Injury Compensation Form or a Death Compensation Form are "substantially complete".

Unfortunately, the Interim Final Rule does not set forth: (1) the formula that the Special Master will use in calculating awards; (2) many of the assumptions (work-life expectancies, consumption factors, replacement services losses, etc.) that the Special Master will adopt; or (3) exactly how charitable contributions, workers' compensation benefits and other payments will be treated for the purpose of determining "collateral source" payments.

As a result, it is impossible for potential claimants to calculate the amount that they can expect to receive from the Fund, even under the "presumed award methodology". The Interim Final Rule currently requires claimants to waive their right to sue long before they are advised of the potential award they might receive. Even worse, claimants found to be ineligible for any award at all will also have waived their right to bring a civil action against the responsible tortfeasors.

Thus, under the Interim Final Rule, individuals will be induced to file claims based upon an implied promise that they will receive full compensation for their losses, only to learn later that they are eligible for a minuscule award, or even worse, that they were never eligible for an award at all. This is particularly true for certain classes of victims of the September 11th terrorist attacks -- most notably the families of police officers, firefighters and other emergency personnel with significant government death and pension benefits -- whose "collateral source" benefits will substantially reduce (or even eliminate) their potential awards from the Fund.

As a result, it is essential that the Interim Final Rule be amended to provide that a claim shall not be deemed "submitted" unless and until the claimant agrees to accept a specific award pursuant to § 104.51 of these regulations. Without such a change, these regulations will force victims to waive their statutory right to sue, without providing any compensation for their injuries or the deaths of their loved ones.

§ 104.21(e) Provision of information by third parties: No recommended changes.

§ 104.21(f) Supplementation of claims: A new paragraph 104.21(f) has been added to provide that the Special Master must advise claimants if their claims are deemed to contain insufficient information or documentation, and to list the materials needed to complete such claims. In addition this new paragraph makes clear that claimants can provide supplemental information at any time.

§ 104.21(g) Notice to claimant of receipt of information: A new paragraph 104.21(g) has been added to require the Special Master to advise the claimant if information relating to the claim has been received from third parties, to disclose such information, and to give the claimant an opportunity to comment on the submission. Information that the Special Master receives relating to possible fraud need not be disclosed to the claimant.

§ 104.22 Advance Benefits

§ 104.22(a) Advance Benefits: No recommended changes.

§ 104.22(b) Credit against award: No recommended changes.

§ 104.22(c) Application for Advance Benefits: This paragraph has been amended to clarify that the financial hardship relates to the victim or the victim's dependents and beneficiaries, and not necessarily the "claimant", who could be a Personal Representative.

§ 104.22(d) Eligibility for Advance Benefits: This paragraph has been amended to eliminate the requirement that an injured claimant be hospitalized for at least one week in order to become eligible for Advance Benefits, and instead permits such claimants to demonstrate both: (1) financial hardship; and (2) a reasonable likelihood of eligibility for an award greater than the amount of the Advance Benefits.

§ 104.22(e) Authorization of payments: As currently drafted, this paragraph provides that before Advance Benefits may be paid, the Personal Representative must obtain the consent of all dependents of a decedent who does not have a surviving spouse, and must give notice of the distribution plan to all the beneficiaries of the decedent. Both the dependents and the beneficiaries have a potential interest in the payment of Advance Benefits, and so both groups should consent to the payment, and should be given notice of the distribution plan. In addition, the recommended changes: (1) grant the Special Master authority to alter the distribution plan of the Personal Representative; and (2) make clear that notice only be given to known dependents and beneficiaries.

§ 104.22(f) Tolling of time periods: A sentence has been added to grant the Special Master the authority to toll any limitations period with the consent of the claimant.

Subpart C Claim Intake, Assistance, and Review Procedure

§ 104.31 Procedure for claims evaluation

§ 104.31(a) Initial review: Language has been added to require the Claims Evaluator to determine whether a claim has been deemed "filed" within seven days of receipt of the required forms.

§ 104.31(b)(1) Procedure for Track A: Language has been added to clarify that claimants may seek review of a "presumed award" determination either by submitting written materials, or by requesting a full hearing.

§ 104.31(b)(2) Procedure for Track B:

ATSSSA provides that each claimant has the right to present evidence to the Special Master, and that the amount of compensation should reflect "the individual circumstances of the claim." ATSSSA, §§ 405(b)(1)(B)(ii) & 405(b)(4)(B). The Interim Final Rule, in contrast, requires the Special Master and his designees to follow the "presumed award methodology" in determining the awards of individuals who seek a full hearing of their claims, and prevents awards in excess of that amount unless the claimant has demonstrated that "extraordinary circumstances" exist. These restrictions clearly violate the Act, which sets forth Congress' intent to compensate victims based upon the evidence of their individualized losses.

As a result, this paragraph has been amended to make clear that the Special Master shall calculate a "Track B" claimant's award based upon the evidence of the claimant's individualized losses presented at the hearing. Assumptions used in the presumed award methodology can be used in the actual award calculation if the claimant agrees to those assumptions. In addition, changes have been proposed to: (1) make clear that claimants may appeal a determination of ineligibility; and (2) eliminate the prohibition against appeals from damage awards (see proposed amendment to § 104.33(h)).

§ 104.31(c) Multiple claims from the same family: This paragraph has been amended: (1) to require the Special Master to notify any claimants whose claims are being consolidated; and (2) to make clear that the claimants should submit separate claims on separate forms for each victim.

§ 104.31(d) Assistance to claimants: A new paragraph 104.31(d) has been added requiring the Special Master to provide certain assistance to claimants, including information relating to filing deadlines, the impact of the claim on possible civil causes of action, the confidential treatment of claims, how to access free legal services, a toll- free number to call if the claimant has questions about the Fund or needs assistance completing the forms, and translation services.

§ 104.32 Eligibility review:

No recommended changes.

§ 104.33 Hearing

§ 104.33(a) Supplemental submissions: No recommended changes.

§ 104.33(b) Conduct of hearings: This paragraph has been amended to make clear that the identity and financial needs of a decedent's spouse, beneficiaries and dependents must be considered in determining awards, as well as the financial needs of injured victims (rather than the financial needs of the "claimant", who could be someone other than a victim).

§ 104.33(c) Location and duration of hearings: This paragraph has been amended to eliminate the unwarranted two-hour time limit on hearings, and instead to provide that the length of the hearing shall be sufficient for the presentation of all evidence. In addition, all hearings should be recorded, and the claimant should be given a free copy of the recording or transcript.

§ 104.33(d) Witnesses, counsel and experts: Language has been added to ensure that claimants will be able to have a friend or family member of the victim attend and assist at the hearing.

§ 104.33(e) Waivers: Language has been added to provide that any waivers sought by the Special Master must relate to the claim being submitted.

§ 104.33(f) Track A: As noted above, ATSSSA requires the Special Master to award compensation based upon "the individual circumstances of the claim." ATSSSA, § 405(b)(1)(B)(ii). The Interim Final Rule, in contrast, provides that for claimants who choose Track A and are dissatisfied with the "presumed award", and who submit additional evidence at a hearing, the award will not be increased unless an error occurred in the calculation or the claimant "presents extraordinary circumstances not adequately addressed by the presumptive award". This is a clear violation of the federal law. Some victims may select "Track A" because they do not want to testify at a "Track B" hearing and relive the horror that they experienced, but these same victims may have suffered damages far greater than the amounts determined by the "presumed award methodology." The compensation to all claimants should be based upon the individualized evidence presented, and no claimant should have to establish "extraordinary circumstances" to be compensated for actual damages, rather than through a "presumed award."

§ 104.33(g) Procedural rulings: A new paragraph 104.33(g) has been added to ensure that procedural and legal errors can be appealed to the Special Master.

§ 104.33(h) Determination: Language has been added to grant the Special Master discretion to reconsider and increase initial awards that are found to be clearly erroneous.

§ 104.34 Publication of awards:

No changes recommended.

§ 104.35 Abandonment and withdrawal of claims

§ 104.35(a) Abandonment: This paragraph has been amended to require that the Special Master notify all known beneficiaries and dependents of the victim before deeming any claim abandoned.

§ 104.35(b) Withdrawal:

As noted above, potential claimants cannot calculate the amount that they may receive from the Fund, because the Interim Final Rule does not set forth the formula that the Special Master will use in calculating awards, the assumptions that the Special Master will adopt, or how various collateral source payments will be treated. As a result, the Interim Final Rule requires victims to waive their right to sue before knowing whether they are eligible to receive compensation from the Fund, or how much they might receive. A new paragraph 104.35(b) therefore has been added to allow claimants to withdraw their claims prior to receipt of an award under § 104.51, so long as any Advance Benefit received by a claimant has been repaid to the Fund.

§ 104.36 Confidentiality

Although Congress made clear that all victims of the September 11th attacks should be eligible for compensation, the Interim Final Rule and the forms that the Special Master has issued provide a nearly absolute deterrent to the submission of claims by undocumented workers and their families. For example, the "Eligibility Form and Application for Advance Benefits" requires claimants to authorize the release of any information indicating "a violation or potential violation of law . . . to any civil or criminal law enforcement authority or other appropriate agency charged with responsibility of investigating or prosecuting such a violation." Undoubtedly few, if any, undocumented aliens would be willing to submit this form to the Department of Justice -- which oversees the Immigration and Naturalization Service -- because they would be legitimately fearful that the information provided would lead to deportation proceedings or other adverse action. This is true even if the victim killed in the attack was legally present in this country.

Because Congress has determined that the families of all individuals killed during the September 11th attacks should be compensated for the loss of their loved ones, it is inappropriate for the Special Master to adopt regulations and forms that effectively preclude recovery by an entire class of victims. As a result, a new § 104.37 has been added to authorize claimants to seek confidential treatment of their claims, and to provide that information relating to such claims may only be used for the purpose of processing and paying the claims. However, an exception has been provided authorizing the use of such information if the claim is fraudulent, if the information has been obtained through other means, or if the information is part of the public domain. In addition, claim information may be disclosed in response to a request from a government tax or law enforcement agency (other than the Immigration and Naturalization Service), or in response to a court subpoena.

The Department of Justice has recognized similar confidentiality concerns in other contexts, such as the enforcement of labor and antidiscrimination laws involving undocumented workers. Finally, confidentiality provision is also advisable because the claims process requires claimants to submit detailed private information, including information about the victim's health records and family situation, and this type of personal private information should be shielded from disclosure.

Subpart D Amount of Compensation for Eligible Claimants

§ 104.41 Amount of Compensation

§ 104.41(a) Factors to be considered: Language has been added clarifying the meaning of the statutory phrases "harm to the claimant," "facts of the claim" and "individual circumstances of the claimant."

§ 104.41(b) Collateral source reduction): No substantive changes recommended.

§ 104.41(c) Minimum award before collateral source reduction: No substantive changes recommended.

§ 104.41(d) Present value calculation: A new paragraph 104.41(d) has been added to clarify that, to the extent an award is based upon future economic losses or future collateral source payments, the amount of the award shall be determined based upon the present value of such losses and payments.

§ 104.41(e) Calculation of losses: A new paragraph 104.41(e) has been added to provide that the losses of any victim who was in a relationship of mutual interdependence shall be calculated by the Special Master in the same manner as the losses of a married victim.

§ 104.41(f) Formula for calculating award: A new paragraph 104.41(f) has been added to set forth how the manner in which the Special Master shall calculate compensation awards, and to clarify that such awards generally shall be based upon the evidence presented by the claimant and such other relevant evidence and information submitted to the Special Master.

§ 104.42 Presumed Losses General Provisions.

Section 104.42 of the Interim Final Rule explains the meaning of the statutory phrase "to the extent recovery for such loss is allowed under applicable loss." That explanation has been moved to § 104.3(f).

A new § 104.42 has now been added, to govern the "presumed loss methodology". In particular:

New paragraph 104.42(a) requires the Special Master to publish the assumptions and methodology used in determining presumed economic and noneconomic losses. Those presumed amounts may be used solely to assist potential claimants in deciding whether to file a claim, and in determining awards for individuals who wish to be compensated based upon the presumed losses.

New paragraph 104.42(b) makes clear that the compensation of all other claimants shall be based upon their individual circumstances, and the presumed losses shall not be used to limit such compensation in any way, so long as the claimant submits sufficient evidence to establish economic or noneconomic losses in excess of the presumed amounts.

New paragraph 104.42(c) authorizes claimants to submit evidence that the presumed loss methodology and assumptions should not be applied to their claims.

§ 104.43 Determination of presumed economic loss for decedents

§ 104.43(a) Loss of earnings or other benefits related to employment: This paragraph has been amended: (1) to clarify that the Special Master shall consider whether the decedent is survived by family members; (2) to permit the calculation of presumed losses for victims whose annual incomes were above the 98th percentile of all wage earners in the United States; and (3) to provide that if the decedent's actual income was less than his or her expected earning power, then the Special Master may use other factors to determine the decedent's economic loss, including but not limited to the decedent's career plans, earning potential, and cost of replacement services.

§ 104.43(b) Medical expense loss: Language has been added to clarify that the amount of medical expense loss shall include amounts that the victim paid for health insurance covering any portion of the total medical expenses incurred.

§ 104.43(c) Loss due to death/burial costs: The language in current paragraph 104.43(c), which governed replacement services loss, has been moved to paragraph 104.43(a). Paragraphs 104.43(d) and 104.43(e) have been relettered as paragraphs 104.43(c) and 104.43(d), respectively. New paragraph 104.43(c) has been amended to make clear that death/burial costs should include amounts that the victim paid for any insurance covering any portion of the total death/burial expenses incurred.

§ 104.43(d) Loss of business or employment opportunities: No substantive changes recommended.

§ 104.44 Determination of presumed noneconomic losses for decedents:

The presumed noneconomic losses for decedents are too low. ATSSSA specifically provides that noneconomic losses include "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." While it is extremely difficult to place a dollar amount on such losses, awards of $250,000 for decedents are simply inadequate. The commentary that accompanied the Interim Final Rule indicates that the $250,000 award is derived from "the amounts received under existing federal programs by public safety officers who are killed while on duty, or members of our military who are killed in the line of duty while serving our nation," but those statutory awards are not intended to provide full compensation for all non- economic losses. Accordingly, the presumed noneconomic losses should be increased to at least $500,000, plus at least an additional $100,000 for the spouse and each dependent of the deceased victim.

§ 104.45 Determination of presumed economic loss for injured claimants

§ 104.45(a) Loss of earnings or other benefits related to employment: Subparagraph (3) of this paragraph has been amended to include language governing temporary disabilities.

§ 104.45(b) Medical expense loss: Language has been added to ensure that the amount of medical expense loss includes any amounts that the victim is expected to pay for health insurance covering the total medical expenses incurred.

§ 104.44(c) Loss of business or employment opportunities: The language in current paragraph 104.44(c), which governed replacement services loss, has been moved to paragraph 104.43(a). Paragraph 104.44(d) has been relettered as paragraph 104.44(c), but no other changes have been made to that paragraph.

§ 104.46 Determination of presumed noneconomic losses for injured claimants:

No recommended changes.

§ 104.47 Collateral sources

§ 104.47(a) Payments that constitute collateral source compensation: This paragraph has been amended to clarify that payments by governmental charities, as well as payments of funds donated by the public to governmental entities for distribution for charitable purposes, shall be treated in the same manner as other charitable contributions, and should not be counted as "collateral source" payments. For example, many individuals throughout the United States made donations directly to the State of New York rather than to a charitable organization, and the State is providing those donations directly to the families of the victims of the September 11th attacks. New York State merely serves as a conduit for the payments, which essentially are charitable donations from the American people to those most greatly impacted by the terrorist attacks, and thus these awards should be treated like all other charitable payments.

§ 104.47(b) Payments that do not constitute collateral source compensation:

For the reasons set forth in our November 1, 2001 submission, charitable contributions should not be counted as collateral source payments. Unfortunately, although the Interim Final Rule provides that charitable donations distributed to victims and their families "do not constitute collateral source compensation," subparagraph 104.47(b)(2) also provides that "the Special Master may determine that funds provided to victims or their families through a private charitable entity constitute, in substance, a [collateral source] payment." This additional language creates significant confusion, making it difficult: (1) for charitable organizations to determine whether and when to make charitable payments; (2) for victims and their families to decide whether to seek and/or accept charitable donations; and (3) for victims and their families to determine whether to file claims, because charitable awards may greatly diminish the compensation they receive from the fund. This language must be eliminated, so that the regulations make absolutely clear that charitable contributions are not collateral source payments.

Paragraph 104.47(b) is also amended to provide that the following do not constitute collateral source payments: (1) payments that are not required to be made by law or contract, (such as voluntary monetary contributions made by friends and family); (2) payments that depend upon a contingent future event (such as possible future college scholarships); and (3) payments by a collateral source payor with a right to a lien against an award from the Fund or any subrogation rights.

§ 104.47(c) Application of collateral source reduction:

A new paragraph 104.47(c) has been added to provide that, if the victim receives a collateral source payment for an expense not covered by the Fund, that collateral source payment shall not be used to reduce the award under the Fund. For example, if a claimant had insurance coverage for personal items destroyed in the attack, and therefore does not seek compensation for those items in his or her claim, then the award from the Fund should not be reduced by the amount of that insurance coverage. Otherwise, the claimant's overall compensation will be reduced to below the amount of the actual losses.

In particular, most life insurance policies and employer death benefits are intended to compensate victims for future lost income and to provide funding for future expenses, and are not intended to provide compensation for noneconomic losses such as pain and suffering. As a result, noneconomic losses should not be reduced by collateral source payments unless the Special Master specifically finds that collateral source payments were made for the purpose of compensating the claimant for such noneconomic losses.

This paragraph has also been amended to provide: (1) that the amount of any collateral source payments should be reduced by past or future insurance premiums that produce the collateral source payments; and (2) if the collateral source payment may be terminated in the future due to some contingent event (e.g., the termination of Social Security survivor's benefits upon the remarriage of the survivor), then the Special Master shall not include in the collateral source calculation any payments which would occur after the average expected date of such future contingent event. If the average expected date of such future contingent event cannot be calculated, then the Special Master may not include such payments in the calculation of the collateral source reduction.

Subpart E Payment of claims

§ 104.51 Payments to eligible individuals

Section 104.51 has been amended to require the Special Master to notify the claimant of the proposed amount of compensation in writing by overnight mail, and to give the claimant 7 days to decide whether or not to agree to accept the award. If the claimant agrees to receive the award, the claim is deemed submitted, the claimant is deemed to have waived any right to file a civil action on behalf of the victim, and the Special Master must authorize payment within 20 days. If the claimant declines the award, then the claimant must pay back any Advance Benefits previously received, and the Personal Representative must simultaneously provide notice of such declination to all known beneficiaries and dependents of the victim.

§ 104.52 Distribution of awards

Section 104.52 has been amended to require that the distribution plan provided by the Personal Representative before payment is authorized must include the amounts to be paid to each individual, the manner of payment, and what protections will be implemented to ensure that funds remain available in the future for use by or on behalf of minors or incompetent persons receiving benefits from the award. In addition, this section has been amended to give the Special Master discretion to direct the Personal Representative to distribute funds to the victim's spouse, children, relatives, beneficiaries or other dependents, and take actions ensuring that all or any portion of the award remains available in the future for minor or incompetent beneficiaries.

§ 104.53 Supplemental Claims

A new § 104.53 has been added to provide that any injured claimant may submit a supplemental claim for any additional physical harm incurred or discovered after receipt of an award under § 104.51, except that no compensation may be provided if the claimant knew or should have known of the physical harm prior to the receipt of the award.

Subpart F Limitations

§ 104.61 Limitation on civil actions

§ 104.61(a) General: This paragraph has been amended to make clear that victims and their families retain the right to sue participants in the terrorist conspiracy that resulted in the September 11th attacks.

§ 104.61(b) Pending actions: No changes recommended.

§ 104.61(c) Exception: A new paragraph 104.62(c) has been added to make clear that claimants may bring or continue civil actions: (1) on behalf of a victim other than the victim on whose behalf the claim has been filed; (2) on behalf of a victim who has been determined not to be eligible for an award from the Fund; (3) for damages other than personal injuries or wrongful death; (4) to recover collateral source obligations; or (5) against any person who was or is a knowing participant in any conspiracy to hijack any aircraft or commit any terrorist act.

§ 104.62 Time limit on filing claims:

No changes recommended.

§ 104.63 Subrogation:

Minor change recommended.

Subpart G Measures to protect the integrity of the compensation program

§ 104.71 Procedures to prevent and detect fraud

§ 104.71(a) Review of claims: This paragraph has been amended to provide that the Special Master must implement procedures: (1) to provide notice of the submission of claims, including notice to the employers of claimants seeking compensation for physical harm; and (2) to establish procedures for the reporting allegations of fraud to the Special Master.

§ 104.71(b) Quality control: No changes recommended.

§ 104.71(c) False or fraudulent claims: No changes recommended.


NEW YORK STATE'S PROPOSED CHANGES TO THE
SEPTEMBER 11TH VICTIM COMPENSATION FUND INTERIM FINAL RULE

Part 104 of chapter I of Title 28 of the Code of Federal Regulations is added to read as follows:

PART 104--SEPTEMBER 11TH VICTIM COMPENSATION FUND OF 2001

Subpart A--General; Eligibility

104.1 Purpose.
104.2 Eligibility definitions and requirements.
104.3 Other definitions.
104.4 Personal Representative.
104.5 Foreign claims.
104.6 Amendments to this rule.

Subpart B--Filing for Compensation; Application for Advance Benefits

104.21 Filing for compensation.
104.22 Advance benefits.

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.
104.36 Confidentiality

Subpart D--Amount of Compensation for Eligible Claimants

104.41 Amount of compensation.
104.42 Applicable state law Presumed Losses - General Provisions.
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.
104.53 Supplemental claims

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.

Authority: Title IV of Pub. L. 107-42, 115 Stat. 230, 49 U.S.C. 40101 note.

Subpart A--General; Eligibility

§ 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) to provide compensation to eligible individuals who were physically injured as a result of the terrorist-related aircraft crashes of September 11, 2001, 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.

§ 104.2 Eligibility definitions and requirements.
(a) Eligible claimants. The term "eligible claimants" means:

(1) Individuals present at the World Trade Center, Pentagon, or Shanksville, Pennsylvania site at the time of or in the immediate aftermath of the crashes and who suffered physical harm, as defined herein, as a direct result of the terrorist-related aircraft crashes;

(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 the World Trade Center, Pentagon, or Shanksville, Pennsylvania 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" of the crashes shall mean, for purposes of all claimants victims other than rescue workers, the period of time from the crashes until 12 hours after the crashes. With respect to rescue workers any individual who assisted in efforts to search for and recover victims, the immediate aftermath shall include the period from the crashes until 96 hours after the crashes.

(c) Physical harm.

(1) The term "physical harm" shall mean a any physical injury to the body that was treated by a medical professional within 24 hours of the injury having been sustained or within 24 hours of rescue; and

(i) Required hospitalization as an in-patient for at least 24 hours; or

(ii) Caused, either temporarily or permanently, partial or total physical disability, incapacity or disfigurement.

(2) In every case not involving death, the physical injury must be verified by contemporaneous medical records created by or at the direction of the medical professional who provided the medical care; provided, however, that if no medical records of the treatment are available, then the physical injury may be verified by an affidavit, declaration, testimony or other sworn statement (or unsworn statement complying with 28 U.S.C. § 1746) from the claimant or other person with personal knowledge of the treatment.

(d) Personal Representative. The term "Personal Representative" shall mean the person determined to be the Personal Representative under § 104.4 of this part.

(e) Present at the site. The term "present at the site" (i.e., the World Trade Center, Pentagon, or Shanksville, Pennsylvania site) shall mean physically present at the time of the crashes or in the immediate aftermath:

(1) In the buildings or portions of buildings that were destroyed as a result of the airplane crashes; or

(2) In any 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 (generally, the immediate area in which the impact occurred, fire occurred, portions of buildings fell, or debris, dust or smoke fell upon and injured persons).

§ 104.3 Other definitions.

(a) Beneficiary. The term "beneficiary" shall mean:

(1) a person entitled under the laws of the decedent's domicile to receive payments or benefits from the estate of or on behalf of the decedent on whose behalf the claim to the Fund was filed; and

(2) a person who was in a relationship of mutual interdependence with the decedent on whose behalf the claim to the Fund was filed, but who was not eligible to be reported as a spouse for federal income tax purposes and would not be considered a beneficiary under subparagraph one of this paragraph. Determinations of beneficiaries pursuant to this subparagraph shall be made based upon the totality of the circumstances, considering factors such as common living arrangements, common ownership of property, emotional commitment, financial commitment, shared budgeting, longevity of the relationship, and written or oral testimony from individuals with personal knowledge of the relationship.

(b) Dependents. The term "dependent" shall mean those persons who were financially dependent on the victim on September 11, 2001. The Special Master shall identify as dependents:

(1) those persons so identified as dependents by the victim on his or her federal income tax return for the year 2000 unless:, as well as any other person who the claimant demonstrates was financially dependent upon such victim;

(1) The claimant demonstrates that a (2) any minor child of the victim was born or adopted on or after January 1, 2001;

(2) Another person (3) any other person who became a dependent in accordance with then-applicable law on or after January 1, 2001; or

(3) The (4) those persons who were financially dependent on any victim was not required by law to who did not file a federal personal income tax return for the year 2000.

(c) Spouse. The Special Master shall identify as the "spouse" of a victim:

(1) the person reported as spouse on the victim's federal income tax return for the year 2000 unless the victim was married or divorced in accordance with applicable law on or after January 1, 2001; or :

(2) the person to whom the victim was lawfully married on September 11, 2001, if the (1) The victim was married or divorced in accordance with applicable state law on or after January 1, 2001; or (2) The victim was not required by law to or did not file a federal income tax return for the year 2000.

(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.

(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) Economic Loss. The term "economic loss" means any pecuniary loss resulting from harm, including but not limited to the loss of earnings or other benefits related to employment, medical expense loss, replacement services loss, loss due to death, burial or funeral costs, loss of guidance and counseling, and loss of business or employment opportunities; provided, however, that claimants will receive compensation only for those categories or types of economic losses that would be compensable under the state law that would be applicable to any tort claims brought by or on behalf of the victim.

(g) Noneconomic losses. The term "noneconomic losses" means 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.

§ 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, including individuals appointed on a temporary or interim basis.

(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 his 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, and no administrator has been appointed for the decedent's estate, the Special Master may, in his discretion, determine that the Personal Representative for purposes of compensation by the Fund is the first qualified person in the line of succession order of priority for appointment as administrator of an intestate estate established by the laws of the decedent's domicile governing intestacy; provided, however, that nothing herein shall prevent the beneficiaries and dependents of the decedent from agreeing, in writing, to the designation of a specific individual as the Personal Representative, and such agreement shall be binding upon the Special Master.

(b) Notice to beneficiaries. Any purported Personal Representative must, before filing an Eligibility Form and no later than October 1, 2003, provide written notice of the claim (including a designated portion of the Eligibility Form) to: (1) the immediate family of the decedent (including, but not limited to, the decedent's spouse, former spouses, children, other dependents, and parents), (2) to the executor, administrator, and known beneficiaries of the decedent's will, (3) if there is nowill, to any known individual who would be entitled to share in the estate under applicable state law, and (4) 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. 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 § 104.21(b)(5)(6) of this part, the Special Master may shall regularly 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 14 days following the filing of an Eligibility Form by the Personal Representative; provided, however, that if the individual filing the objection did not receive written notice of the claim pursuant to § 104.4(b), then such objection may be filed with the Special Master up to 14 days following the earlier of: (1) the date on which such individual had actual knowledge that the claim had been filed; or (2) the date on which the Special Master publishes a list pursuant to § 104.21(b)(6) which contains the name of the Personal Representative whose authority is being challenged and the name of the victim for whom compensation is sought. 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 and toll the applicable limitations periods or, if sufficient information is provided, calculate the appropriate award and authorize payment, but place any payment in an interest-bearing escrow account 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.

§ 104.5 Foreign claims.

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

§ 104.6 Amendments to this rule.

In the event that amendments are subsequently made to any section of this Part, claimants the Special Master shall provide notice of such amendments to all individuals with pending claims. Claimants are entitled to elect, at their discretion, to have their claims processed in accordance with the provisions that were in effect at the time that their claims were submitted under §104.21(d).

Subpart B--Filing for Compensation; Application for Advance Benefits

§ 104.21 Filing for compensation.

(a) Compensation form; "filing." Except for applications for Advance Benefits pursuant to § 104.22, no claim may be considered until the claimant has submitted both an "Eligibility Form" and either a "Personal Injury Compensation Form" or a "Death Compensation Form." 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 not later than 120 days after the date on which a claim is filed), and for any time periods in this part, when a Claims Evaluator determines that both the Eligibility Form and either a Personal Injury Compensation Form or a Death Compensation Form are substantially complete. Provided, however, that if a claimant files an Eligibility Form requesting Advance Benefits pursuant to § 104.22 of this part without filing either a "Personal Injury Compensation Form"or a "Death Compensation Form," the claim shall be deemed "filed" when the Claims Evaluator determines that the Eligibility Form is substantially complete, but the time period for determination and any time periods in this part shall be stayed or tolled as described in § 104.22(g) of this part. The Claims Evaluator shall determine whether a claim has been deemed "filed" within seven days after receipt of the forms from the claimant, and shall advise the claimant of that determination by overnight mail.

(b) Eligibility Form. The Special Master shall develop an Eligibility Form that will require the claimant to provide information necessary for determining the claimant's eligibility to recover from the Fund.

(1) The Eligibility Form may require that the claimant certify that he or she has dismissed any pending lawsuit seeking damages for personal injuries to or wrongful death of the victim as a result of the terrorist-related airplane crashes of September 11, 2001 (except for actions seeking collateral source benefits permitted by § 104.61(c) of this part) within 90 days of the effective date of this part pursuant to section 405(c)(3)(B)(ii) of the Act and that there is no pending lawsuit brought by a dependent, spouse, or beneficiary of the victim seeking such damages, except for actions permitted by § 104.61(c) of this part.

(2) The Special Master may require as part of the notice requirement pursuant to § 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 individuals described in such section.

(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 one of the crash sites, which may include, without limitation, a death certificate, records of employment, contemporaneous medical records, contemporaneous records of federal, state, city or local government, an affidavit or , declaration of the decedent's or injured claimant's employer or other sworn statement (or unsworn statement complying with 28 U.S.C. 1746) of the decedent's or injured claimant's employer regarding the presence of the victim;

(iii) Proof of death on board aircraft: Death certificate or records of American or United Airlines or other sufficient official documentation;

(iv) Proof of physical harm: Contemporaneous (A) medical records of hospitals, clinics, physicians, licensed medical personnel, or registries maintained by federal, state, or local government, and records of all continuing medical treatment regarding the physical harm to the victim; or (B), if no medical records of the treatment are available, then an affidavit, declaration or other sworn statement (or unsworn statement complying with 28 U.S.C. 1746) of the injured claimant regarding the physical harm to the victim;

(v) 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;

(vi) 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) Application for Advance Benefits: The Eligibility Form shall include a section allowing claimants to indicate that they wish to apply for Advance Benefits. Claimants who apply for such Advance Benefits must certify on that Form that they have not yet received $450,000 in collateral source compensation if they are bringing a claim on behalf of a deceased victim with a spouse or dependent, $250,000 in collateral source compensation if they are bringing a claim on behalf of a deceased victim who was single with no dependents, or an amount in excess of their lost wages plus out-of-pocket medical expenses if they are an injured claimant; provided, however, that the Special Master may waive these requirements based upon an adequate showing from the claimant. All such claimants also must state on the Form facts establishing financial hardship that would justify a determination that they are in need of Advance Benefits.

(6) The Special Master may shall regularly 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, 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 personal income tax returns that were filed for the years 1998, 1999, and 2000. The Special Master may, at his discretion, require that claimants submit copies of tax returns or other records for any other period of years he 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)(B) of the Act provides that upon the submission of a claim under the Fund, the claimant waives the right to file a civil action (or to be a party to an action) in any Federal or State court for damages sustained as a result of the terrorist-related aircraft crashes of September 11, 2001, except for civil actions to recover collateral source obligations. A claim shall be deemed submitted for purposes of section 405(c)(3)(B) of the Act when the claim is deemed filed pursuant to Sec. 104.21, regardless of whether any time limits are stayed or tolled claimant agrees to accept a payment from the Fund pursuant to § 104.51 of this part; provided, however, that claim shall be deemed submitted for the purposes of section 405(c)(3)(B) if a claimant abandons or withdraws the claim prior to receiving a payment from the Fund pursuant to § 104.51 of this part, but fails to return an Advance Benefit previously received pursuant to § 104.22 of this part.

(e) 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 his designee may, at his or her discretion, include the written statements or information as part of the claim.

(f) Completion of claims. If any claimant fails to provide information or documentation sufficient to adjudicate the claim, the Special Master or his designee shall advise the claimant that the claim is insufficient, shall provide a written list of the missing information and documentation, and shall provide the claimant with an opportunity to provide such supplemental materials. In addition, any claimant may at any time provide the Special Master with additional information or materials relating to such claim.

(g) Notice to claimant regarding receipt of information. If the Special Master requests or receives information or documentation relevant to the adjudication, verification or processing of a claim from any source other than the claimant, the Special Master shall provide notice to the claimant and, if requested by the claimant, an opportunity to review and comment upon such information or documentation. Nothing in this paragraph shall require the Special Master to provide notice to the claimant relating to information that the Special Master believes may be evidence of fraud and which the Special Master refers to appropriate law enforcement authorities pursuant to § 104.71 of this part.

§ 104.22 Advance Benefits.

(a) Advance Benefits. Eligible Claimants may apply for immediate "Advance Benefits" in a fixed amount as follows:

(1) $50,000 for Personal Representatives; and

(2) $25,000 for injured claimants who meet the requirements of paragraph (d) of this section.

(b) Credit against award. The Advance Benefit shall be credited against any final compensation award so that the amount of the Advance Benefit is deducted from the final award under this program.

(c) Application for Advance Benefits. An otherwise eligible claimant may seek Advance Benefits to alleviate financial hardship faced by the claimant an injured victim (or financial hardship faced by the dependents or beneficiaries of the decedent) by submitting an Eligibility Form described in § 104.21(b) and indicating thereon that he or she is applying for Advance Benefits.

(d) Eligibility for Advance Benefits. In the case of a Personal Representative, the claimant may be deemed eligible for Advance Benefits if a Claims Evaluator or the Special Master or his designee determines that the claimant is eligible to recover under the Fund. In the case of an injured claimant, the claimant may be deemed eligible for Advance Benefits when the Special Master or his designee determines that: (1) the claimant is eligible to recover under the Fund; and that the claimant's physical injury required hospitalization for one week or more (2) the claimant has made a sufficient showing of financial hardship; and (3) the Special Master determines that there is a reasonable likelihood that the claimant will be entitled to an award greater than the amount of the Advance Benefit.

(e) Authorization of payments.

(1) Payment in the amount described in paragraph (a) of this section will be authorized immediately upon a determination that the claimant is eligible for Advance Benefits and the claimant is:

(i) An injured claimant;

(ii) A Personal Representative who was the spouse of the deceased victim on September 11, 2001; or

(iii) A Personal Representative who has obtained the consent of the spouse of the deceased victim (or, if there is no surviving spouse, all of the known dependents and beneficiaries of the deceased victim) to file for Advance Benefits.

(2)(i) With respect to other Personal Representatives, payment:

(i) Payment will be authorized within 15 days after the determination that the claimant is eligible for Advance Benefits, provided that no other individual has asserted a colorable conflicting claim as the Personal Representative with respect to the decedent, and the Personal Representative identifies and has given notice to the has provided the dependents and beneficiaries of the victim with notice of the individuals to whom such Advance Benefits will be distributed.

(ii) Before payment is authorized, the Personal Representative shall provide to the Special Master a plan for distribution of the Advance Benefits, and if the Special Master concludes that such plan does not appropriately compensate the victim's spouse, children, or other relatives or dependents, the Special Master may direct the Personal Representative to distribute all or part of the Advance Benefits in a manner that will benefit such individuals.

(ii) (iii) In the event that a colorable conflicting claim has been asserted, no Advance Benefit will be paid until a final eligibility determination has been made.

(3) Nothing in this paragraph (e) or in § 104.4(b) shall require that notice be given to any person whose identity or whereabouts are not known.

(f) Tolling of 120-day clock and other time periods. A claimant filing an Eligibility Form requesting Advance Benefits before filing a Personal Injury Compensation Form or Death Compensation Form will be deemed to have waived his right to commencement of the 120-day period in section 405(b)(3) of the Act (providing that the Special Master shall provide notice to the claimant of his determination within 120 days after the date on which a claim is filed). The 120-day period and all other time limitations in this part, except those applicable to Advance Benefit payments, shall be stayed or tolled until such time that a Claims Evaluator determines that the claimant's Personal Injury Compensation Form or Death Compensation Form is substantially complete. In addition, the Special Master or his designee may at any time toll any and all such limitation periods with the consent of the claimant.

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

§ 104.31 Procedure for claims evaluation.

(a) Initial review. Claims Evaluators shall review the forms filed by the claimant and within seven days shall either deem the claim "filed" (pursuant to 104.21(a)) or notify the claimant of any deficiency in the forms or any required documents.

(b) Procedural tracks. Each claim will be placed on a procedural track, described herein as "Track A" and "Track B," selected by the claimant on the Personal Injury Compensation Form or Death Compensation Form.

(1) Procedure for Track A. The Claims Evaluator shall determine eligibility and the claimant's presumed award pursuant to §§ 104.43 to 104.46 of this part and, within 45 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 his designee under § 104.33 of this part. After an eligible claimant has been notified of the presumed award, the claimant may either accept the presumed compensation determination as the final determination and request payment, or may instead request a review, either through written submissions or at a hearing before the Special Master or his designee pursuant to § 104.33. Claimants found to be ineligible may appeal pursuant to § 104.32.

(2) Procedure for Track B. The Claims Evaluator shall determine eligibility within 45 days of the date the claim was deemed filed, but shall not determine the claimant's presumed award; the Claims Evaluator shall notify the claimant in writing of the eligibility determination. Claimants found to be ineligible may appeal pursuant to § 104.32. Upon notification of eligibility, the claimant will proceed to a hearing pursuant to § 104.33. At such hearing, the Special Master or his designee shall not utilize the presumptive award methodology as set forth in §§104.43 104.42 to 104.46 of this part, but may instead shall modify or vary calculate the award if the claimant presents extraordinary circumstances not adequately addressed by the presumptive award methodology based upon the evidence of the claimant's economic and non-economic damages, and the collateral source payments received. There shall be no review or appeal from this determination.

(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; provided that (1) the Special Master shall provide notice to the claimants that the claims will be treated as related or consolidated; and (2) any claimant who was both physically injured and is the personal representative of a deceased victim, or who is the personal representative of more than one deceased victim, shall not be required to combine both sets of damages into a single claim.

(d) Assistance to claimants. The Special Master shall provide all claimants with information relating to the Fund and these regulations. Such information shall be provided at the same time, place and manner as the claim forms, and in such other manner as the Special Master shall deem appropriate, and shall include but not be limited to information relating to:

(1) the time deadlines for filing claims;

(2) the impact of the receipt of an award on the right to file a civil action for damages;

(3) the availability of free legal assistance in the claims process, and how to obtain that assistance;

(4) information regarding the ability of claimants to request confidential treatment of a claim;

(5) a toll-free telephone number if the claimant has questions about the Fund or needs assistance in completing the required forms; and

(6) translation and interpretive services for those claimants with limited English proficiency, visual impairments or hearing impairments.

§ 104.32 Eligibility review.

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

§ 104.33 Hearing.

(a) Supplemental submissions. The claimant may prepare and file Supplemental Submissions within 21 calendar days from notification of either the presumed award (Track A) or eligibility (Track B). The Special Master shall develop forms appropriate for Supplemental Submissions.

(b) Conduct of hearings. Hearings shall be before the Special Master or his 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 his designee review any evidence relevant to the determination of the award, including without limitation: Factors and variables used in calculating economic loss; the identity and financial needs of the victim's spouse, beneficiaries and dependents; the financial needs of the claimant injured victims; 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 his 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 his 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 may be limited in length to a time period determined by the Special Master or his designee, but generally not to exceed two hours as sufficient to hear the testimony of the witnesses and receive other relevant testimony that the claimant presents. The claimant may elect whether the hearing shall be public or private. All hearings shall be recorded, and a copy of such recording shall be provided to the claimant free of charge.

(d) Witnesses, counsel, and experts. Claimants shall be permitted, but not required, to present witnesses, including expert witnesses. The Special Master or his 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. The claimant may also have a friend or family member attend and assist at the hearing.

(e) Waivers. The Special Master shall have authority and discretion to require any waivers from a claimant necessary to obtain more individualized information on specific claimants relating to the claim.

(f) Track A review of presumed award. For proceedings under Track A, the Special Master or his 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 has presented evidence substantiating that his or her economic and non-economic damages are greater than the amount determined pursuant to the presumptive award.

(g) Procedural rulings. If any claim is reviewed or heard by a designee of the Special Master, and such designee makes any procedural ruling which the claimant believes to be contrary to law or these regulations, including but not limited to rulings relating to the authentication of documents, the submission of evidence or the presentation of testimony, then such ruling may be appealed by the claimant to the Special Master, who shall either uphold or reverse such ruling. All decisions of the Special Master relating to such procedural issues shall be final and shall not be subject to further review or appeal.

(g) (h) 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, other than the record of the hearing. There shall be no further review or appeal of the Special Master's determination; provided, however, that the Special Master may, in his sole discretion, reconsider such determination if the claimant establishes that the initial award was clearly erroneous, and in such circumstances the Special Master shall increase the amount of the award to any amount that the Special Master determines is sufficient to correct such error.

§ 104.34 Publication of awards.

In order to assist potential claimants in evaluating their options of either filing a claim with the Special Master or filing a lawsuit in tort, 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 his staff.

§ 104.35 Claims deemed abandoned by claimants Abandonment and withdrawal of claims.

(a) Abandonment. The Special Master and his 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 two-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; provided, however, that the Special Master or his designee shall give at least sixty days notice to the claimant and to all known beneficiaries and dependents of the victim prior to determining that any claim has been abandoned.

(b) Withdrawal. At any time prior to acceptance of an award under § 104.51, any claimant who has filed a claim may notify the Special Master that such claim is being withdrawn with prejudice. Such withdrawal shall be effective if: (1) it is sent by certified mail, return receipt requested; (2) it is received by the Special Master prior to the transfer of any award under § 104.51 to the claimant; (3) the claimant has submitted proof of notice to the known beneficiaries and dependents of the victim that the claim is being withdrawn; and (4) the claimant has refunded to the Special Master the amount of any Advance Benefits previously received. In such circumstances, the claimant shall not be held to have waived his or her right to file a civil action (or to be a party to an action) in any court for damages sustained as a result of the terrorist-related aircraft crashes of September 11, 2001.

§ 104.36 Confidentiality

(a) Request for Confidential Treatment. Any claimant may request confidential treatment of a claim. The Special Master shall provide a Confidential Treatment Request Form for this purpose.

(b) Use of Confidential Claim Information.

(1) All information relating to a claim for which a Confidential Treatment Request Form has been submitted, including but not limited to forms, submissions, records, information and evidence submitted with or obtained in relation to such claim, shall be treated as confidential by the Department of Justice, the Special Master and all individuals employed by or assisting the Special Master to the extent permitted by law, as well as all other individuals who obtain such information.

(2) The Department of Justice, the Special Master and all individuals employed by or assisting the Special Master may use confidential claim information solely for the purpose of determining the validity of the claim, processing the claim, and determining the award to the claimant, and such information shall not be used for any other purpose whatsoever.

(3) Confidential claim information shall be deemed confidential "personnel and medical files" as defined in 5 U.S.C. § 552, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy, and therefore shall be exempt from disclosure under such section.

(c) Exception.Notwithstanding the foregoing, this section shall not apply to any documents or information: (1) contained in any claim which the special master determines to be fraudulent in whole or in part; (2) obtained other than through the claims process; or (3) in the public domain. In addition, this section shall not prevent the disclosure of any documents or information in response to a request from a government tax or law enforcement agency (other than the Immigration and Naturalization Service), or in response to a subpoena issued by a court of competent jurisdiction; provided, however, that such disclosure shall not otherwise affect the confidential treatment of such document or information, or the limitations on use of such documents or information, by the Department of Justice, the Special Master, and all individuals employed by or assisting the Special Master, as required by this section.

Subpart D--Amount of Compensation for Eligible Claimants.

§ 104.41 Amount of compensation.

(a) Factors to be considered. 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 harm to the claimant shall be the sum of the economic losses and noneconomic losses suffered by the victim. The facts of the claim shall be the information and evidence presented by the claimant or otherwise submitted to or obtained by the Special Master. The individual circumstances of the claimant may include the financial needs or financial resources of the claimant or the victim's dependents and beneficiaries shall include but not be limited to the victim's age, number of family members, number of dependents, career plans, household expenses, medical costs, and other financial needs and resources.

(b) Collateral source reduction. 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.

(c) Minimum award before collateral source reduction. 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.

(d) Present value calculation. To the extent that an award is based upon future economic losses or future collateral source payments, the amount of the award shall be determined based upon the present value of such losses and payments.

(e) Calculation of losses. The losses of any victim who was in a relationship of mutual interdependence shall be calculated by the Special Master in the same manner as the losses of a married victim. The determination that a victim was in a relationship of mutual interdependence shall be made based upon the totality of the circumstances, considering factors such as common living arrangements, common ownership of property, emotional commitment, financial commitment, shared budgeting, longevity of the relationship, and written or oral testimony from individuals with personal knowledge of the relationship.

(f) Formula for calculating award. The total amount of the award shall be determined as follows: (1) present value of economic losses; minus (2) present value of collateral source payments intended to offset related economic losses, up to the present value of such related economic losses; plus (3) total noneconomic losses; minus (4) present value of collateral source payments intended to offset related noneconomic losses, up to the present value of such related noneconomic losses. With the exception of awards based solely upon the presumed loss methodology set forth in §§ 104.42 to 104.46, the present value of economic losses, present value of collateral source payments, and total noneconomic losses shall be determined by the Special Master or his designee based upon the evidence presented by the claimant and such other relevant evidence and information submitted to the Special Master. There shall be no further adjustments to the award other than those set forth in this paragraph.

§ 104.42 Applicable state law Presumed Losses - General Provisions.

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

(a) Development of presumed losses. The Special Master shall develop presumed amounts of economic and noneconomic losses pursuant to §§ 104.42 to 104.46 of this part, and shall publish the assumptions and methodology used in determining such presumed losses. The Special Master shall use such presumed amounts solely for the purposes of:

(1) assisting potential claimants in evaluating their options of either filing a claim with the Special Master or filing a lawsuit in tort;

(2) determining awards for individuals who wish to be compensated based upon the presumed losses, and who do not wish to provide information, documentation or testimony relating to their individual circumstances in addition to that necessary for the calculation of the presumed award.

(b) Limitation on use of presumed loss amounts. The compensation of all other claimants shall be based upon their individual circumstances, and the presumed losses shall not be used to limit such compensation in any way, so long as the claimant submits sufficient evidence to establish economic or noneconomic losses in excess of the presumed amounts.

(c) Submission of evidence by claimants. Claimants shall be permitted to submit evidence that the methodology and/or assumptions used in determining presumed losses should not be applied, including but not limited to documents and information relating to future projected income, work life expectancy, the cost of replacement services, loss of financial support, loss of parental care and guidance, loss of custodial care, and any category of noneconomic losses.

§ 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 and publish 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 September 11, 2001; the number of dependents who survive the decedent; whether the decedent is survived by a spouse or other family member; and the amount and nature of the decedent's income for recent years. The decedent's salary/income in 1998-2000 shall be evaluated in a manner that the Special Master deems appropriate. The Special Master may, if he deems appropriate, take an average of income figures for each of those three years. The Special Master's methodology and schedules, tables, or charts shall yield presumed determinations of loss of earnings or ther 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 2000. 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. In cases where the Special Master determines that the decedent's actual salary/income was less than the decedent's expected earning power (for example, where the decedent was a student, or was primarily involved in caring for other family members, or was unemployed), then the Special Master may use other factors to determine the decedent's economic loss, including but not limited to the decedent's career plans, earning potential, and cost of replacement services.

(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), plus any amounts that the victim paid for any health insurance covering any portion of the total medical expenses incurred. 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) (c) 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 Personal Representative and includes the out-of-pocket burial costs that were incurred, plus any amounts that the victim paid for any death/burial insurance covering any portion of the total death/burial expenses incurred.

(e) (d) Loss of business or employment opportunities. Such losses shall be addressed through the procedure outlined above in paragraph (a) of this section.

§ 104.44 Determination of presumed noneconomic losses for decedents.

The presumed noneconomic losses for decedents shall be $250,000 at least $500,000 plus at least an additional $50,000 $100,000 for the spouse and each dependent of the deceased victim. Such presumed losses include a noneconomic component of replacement services loss.

§ 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 § 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 or temporary disability. With respect to claims of partial or temporary disability, the Special Master may consider evidence of the effect of the partial or temporary disability on the claimant's ability to perform his or her usual occupation, the time period of such disability, as well as the effect of the partial or temporary disability on the claimant's ability to participate in usual daily activities.

(b) Medical Expense Loss. This loss equals: (1) 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). In addition, this loss equals ; (2) the 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); and (3) any amounts that the victim is expected to pay for any health insurance covering any portion of the total medical expenses incurred. 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) (c) Loss of business or employment opportunities. Such losses shall be addressed through the procedure outlined above in paragraph (a) of this section.

§ 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 §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.

§ 104.47 Collateral sources.

(a) Payments that constitute collateral source compensation. The amount of compensation shall be reduced by all monetary collateral source compensation, including life insurance, pension funds, death benefit programs, and monetary payments by federal, state, or local governments (other than payments by governmental charities and payments of funds donated by the public to governmental entities for distribution for charitable purposes) related to the terrorist-related aircraft crashes of September 11, 2001.

(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 private charitable entities; provided, however, that the Special Master may determine that funds provided to victims or their families through a private charitable entity constitute, in substance, a payment described in paragraph (a) of this section

(3) Any payments that are not required to be made by law or contract, such as voluntary monetary contributions made by friends, family, co-workers and employers;

(4) Any payments that depend upon a contingent future event, such as possible future scholarships for children of the victims; and

(5) Any payments by a collateral source payor with a right to a lien against an award from the Fund or any subrogation rights.

(c) Application of collateral source reduction.

(1) Collateral source compensation shall be used to reduce an award only where the Special Master determines, with reasonable certainty, that a cost or expense of the victim was or will be replaced or indemnified, in whole or in part, by such collateral source. In particular, noneconomic losses shall not be reduced unless the Special Master specifically finds that collateral source payments were made for the purpose of compensating the claimant for such noneconomic losses.

(2) The amount of any collateral source payments shall be reduced by the amount of any past or future premiums that the claimant paid or will pay in order to become or remain eligible for such collateral source payments.

(3) If the collateral source payment may be terminated in the future due to some contingent event, then the Special Master shall not include in the collateral source calculation any payments which would occur after the average expected date of such future contingent event; provided, however, that if the average expected date of such future contingent event cannot be calculated, then the Special Master shall not include such payments in the calculation of the collateral source reduction.

Subpart E--Payment of Claims

§ 104.51 Payments to eligible individuals.

Not later than 20 days after the date on which a determination is made by the Special Master regarding the amount of compensation due a claimant under the Fund, (a) Upon determination by the Special Master of the proposed amount of compensation to a claimant under the Fund, the Special Master shall notify the claimant of such amount and the proposed manner of payment in writing via overnight mail. Not later than seven days after receipt of such notice, the claimant shall advise the Special Master in writing via overnight mail whether he or she agrees to accept such award.

(b) If the claimant agrees to the award, then the Special Master shall authorize payment to such claimant of the amount determined with respect to the claimant not later than twenty days after such determination. The claimant's agreement to accept such award constitutes a final and irrevocable waiver of any right to file a civil action on behalf of the victim for personal injury or wrongful death damages sustained as a result of the terrorist-related aircraft crashes of September 11, 2001.

(c) If the claimant declines the award, then: (1) the claimant shall simultaneously pay back to the Fund any Advance Benefits received; and (2) if the claimant is the Personal Representative of a victim, the claimant shall simultaneously provide notice of such declination to all known beneficiaries and dependents of the victim.

§ 104.52 Distribution of award to decedent's beneficiaries awards

(a) 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, including but not limited to the amounts to be paid to each individual, the manner of payment, and what protections will be implemented to ensure that funds remain available in the future for use by or on behalf of minors or incompetent persons benefitting from the award.

(b) 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 or protect the interests of the victim's spouse, children, or other relatives, beneficiaries or dependents, the Special Master may direct the Personal Representative to distribute all or part of the award be distributed to in a manner to benefit such spouse, children, or other relatives, beneficiaries or dependents. In addition, the Special Master may, in his discretion, direct the Personal Representative to purchase an annuity or take other steps necessary to ensure that all or any portion of the award remains available in the future for use by or on behalf of minors or incompetent persons benefitting from the award, and the Personal Representative shall provide the Special Master with evidence of compliance with any such requirements.

§ 104.53 Supplemental Claims.

Any claimant who has submitted an Eligibility Form within the time period set forth in § 104.62 seeking compensation for physical harm may, after receipt of an award under § 104.51, submit a supplemental claim for any additional physical harm (including illnesses) incurred or discovered after receipt of such award; provided, however, that no compensation may be provided if the claimant knew or should have known of such physical harm prior to the receipt of such award. Supplemental claims shall be governed by the requirements and procedures set forth in this part.

Subpart F--Limitations

§ 104.61 Limitation on civil actions.

(a) General. Section 405(c)(3)(B) of the Act provides that upon the submission of a claim under the Fund, the claimant waives the right to file a civil action (or to be a party to an action) in any federal or state court for damages sustained as a result of the terrorist-related aircraft crashes of September 11, 2001, except that this limitation does not apply to civil actions to recover collateral source obligations, or to civil actions against participants in the terrorist conspiracy. The Special Master shall take appropriate steps to inform potential claimants of section 405(c)(3)(B) 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 March 21, 2002.

(c) Exception. This part shall not preclude any claimant from commencing or continuing a civil action as described in paragraph (a): (1) on behalf of a victim other than the victim on whose behalf the claim has been filed; (2) on behalf of a victim who has been determined not to be eligible for an award from the Fund; (3) for damages other than personal injuries or wrongful death (e.g., civil actions brought on behalf of a partnership or sole proprietorship); (4) to recover collateral source obligations; or (5) against any person who was or is a knowing participant in any conspiracy to hijack any aircraft or commit any terrorist act. The commencement or continuation of any action described in this paragraph shall not preclude the filing of a claim or the payment of benefits pursuant to this part.

§ 104.62 Time limit on filing claims.

In accordance with the Act, no claim may be filed under this part after December 22, 2003.

§ 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 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

§ 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;

(3) Provide notice of the submission of claims pursuant to § 104.21(b)(6), including but not limited to providing notice to the employers of claimants seeking compensation for physical harm;

(4) Establish procedures, including a toll-free telephone number, for the reporting allegations of fraud to the Special Master; and

(5) 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.

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