N002557
Thursday, January 17, 2002 3:34 PM
Comments of the New York State Department of Taxation and
Finance
January 4, 2002
Mr. Kenneth L. Zwick, Director
Office of Management Programs
Civil Division
U.S. Department of Justice
Main Building, Room 3140
950 Pennsylvania Avenue NW
Washington, D.C. 20530
Dear Mr. Zwick:
With this letter, I would like to submit to you comments on the Interim
Final Rules for the September 11th Victim Compensation Fund of 2001,
published on December 21, 2001. My comments concern the definition in the
Rules of the term "collateral source compensation." Awards from the New
York State World Trade Center Relief Fund ("Relief Fund") should be
excluded from that definition, based on their similarity to payments from
private charitable organizations. I urge you to clarify the Rules in this
regard.
Governor Pataki set up the Relief Fund within several days of the September
11th terrorist attacks to assist the families and dependents of the victims
of the attacks. The Fund, when viewed literally, is a fund of the State of
New York, created pursuant to authority in the New York State Finance Law
(§11). The New York State Department of Taxation and Finance is the
custodian of the Relief Fund. However, the Relief Fund is not supported by
tax revenues or fees collected by the State. The Relief Fund consists
solely of monetary gifts from individuals, businesses and even foreign
governments. The monies in the Relief Fund are being used to pay awards to
the families of the victims of the attacks and will not be paid out for any
other purpose. The Relief Fund thus has a purpose which closely resembles
that of the private charitable organizations soliciting donations and
providing financial assistance to victims. The same is true as to its
income, which comes strictly from donations. As with private charities,
the Internal Revenue Code allows donors to claim a deduction in computing
their federal income tax for the contributions they are making to the New
York State World Trade Center Relief Fund. Yet, because the Relief Fund is
a fund of the State of New York and not a private charitable entity, the
awards made by the Relief Fund do not fall within the express terms of the
specific exception in section 104.47 of the Interim Final Rules which
excludes from collateral source compensation "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" (emphasis added).
An award from the Relief Fund is not like other payments being made by the
State to the families or beneficiaries of victims of the attacks. An
individual injured in one of the attacks or the survivor of a victim killed
in one of the attacks does not have a legally enforceable and vested right
to compel the New York State World Trade Center Relief Fund to pay a
benefit. In contrast, the estate of a state employee killed at the World
Trade Center has the legal right to compel the payment of a death benefit
by the State because the right or entitlement to that death benefit existed
prior to the victim's death. While the latter clearly should be considered
to be a collateral source for purposes of the September 11th Victim
Compensation Fund, awards from the Relief Fund should not.
Thus, as you further examine the issue of "collateral source
compensation," I urge you to treat payments from the New York State World
Trade Center Relief Fund not as payments from the State of New York, but
rather as payments from a charitable organization. I appreciate your
consideration of this issue.
Very truly yours,
Comment By:
New York State Department of Taxation and
Finance
Albany, NY