Employee contributed pensions and social security are both largely deferred
          income for a wage earner deducted from the pay check, lowering his/her yearly
          income, but repaid in retirement.  Neither should be considered collateral source
          income.  The reduction from the wage earner's income, by pension contributions,
          reduces the earnings at the starting point for the Regulations' matrix, resulting in a
          lower presumptive award.  It is unclear if the regulations will adequately address
          the loss of pension benefits as a loss of income or reduce an award by declaring it
          a collateral source.

          The New York State legal authorities recommended that workers' compensation
          not be considered a collateral source because of the unpredicitability associated
          with future life events, such as re-marriage or children reaching majority, that can
          cause future workers' compensation to be terminated.  The total amount of future
          compensation is difficult, if not impossible, to ascertain because it is subject to
          termination, reductions and reimbursement, and it should not be considered a
          collateral source payment.  Workers' Compensation is typically a monthly annuity
          that is generally terminated once any third party compensates the injured party for
          his/her loss.  There is also usually a lien on any amounts recovered requiring the
          recipient to repay all or a portion of the workers' compensation received prior. 
          Here, however,  104.63 of the Regulations does not allow such a lien in
          specifying that awards from the Fund do not constitute a tort award or recovery
          from a third party.  This does not, however, solve the problem that future workers'
          compensation will be terminated and thus should not be a collateral source.

          The Interim Regulations must be amended to define collateral source as a payment
which is a direct replacement or indemnification of an economic loss that is compensated under
the Fund.  That definition would solve the problem of how to deal with payments made to
nonclaimants.

     As the Regulations currently stand, City and State rescue workers are in danger of
receiving either no recovery or perhaps only the non-economic loss award.  This fails to account
for the true definition and treatment of their pension as deferred income and not a collateral
source.  It also fails to recognize part-time jobs and second careers that most of these rescue
workers had or would have had, upon retirement at ages prior to the expiration of their work life
expectancy. This must be addressed.

Income Loss and Income Growth Rates

     Regulations improperly look backward on a 3 year average of income rather than
          forward.  Rather than focus on the yearly income at the time of death, the starting
          point is reduced and the punishing reduction is repeated forward each and every
          year through retirement.  In most cases, this results in a large understatement of
          the decedent's true earnings.  This unfairly devaluates the loss.

      It is unclear how fringe benefits paid by the employer, such as health care and
          pension contributions will be considered.  Normally economists consider these
          benefits to be additional income at a rate of approximately 20-25% of the
          employee's W-2 income.  Many families will be without health insurance as a
          result of the wage earner's death and will be forced to obtain coverage.  In so far
          as pensions are concerned, the Regulation currently not that some premiums paid
          by employers will be considered, but offers little guidance beyond that..

     Income growth rates of government and military employees are inappropriate to
          determine growth rates of workers in the private sector.  The regulations do not
          account for the much higher income growth rates that the decedents would have
          enjoyed based on promotions, inflation and historical growth in the private sector. 
          This information is publicly available and past income growth rates and industry
          parallels are also available on a case by case basis.  Alternatively, if a uniform
          growth rate is more desirable, even if skewed, a higher rate is more appropriate
          that the 4.2 to 6.6% growth range the regulations currently envision, accounting
          for only an unrealistic .7 to 3% growth after inflation due to merit, performance or
          promotions.

     The Regulations deduct taxes from the gross income based on today's tax rates. 
          Tax rates change on a regular basis and courts and economists are reluctant to
          predict what tax rate would apply 10 or 20 years from now.  No one can dispute
          that tax on gross income is also reduced by deductions, exemptions, deferred
          income, losses and other non-taxable income.  It is not clear if this is being taken
          into account when reducing the award for taxes.  Furthermore, if New York law is
          the applicable law for economic loss, it appears the regulations violate New York
          law because New York law prohibits deduction or consideration of income taxes. 
          Coleman v. NYCTA, 37NY2d 137, 371 NYS2d 663 (1975); NY Pattern Jury
          Instructions 2:280.

      The Regulations disregard earnings in the top two percentile of income and thus
          constitute a cap on damages.  New York law on economic loss is clear in
          prohibiting caps and this is in direct violation of the New York Constitution.  New
          York Const. Art. 1  516 prohibits any limitation on the amount of wrongful death
          recovery.  Section 408 of the Act defines economic loss according to applicable
          state law.  yet the Regulations violate that law and violate the New York
          Constitution.

Non-Economic Loss

     While it is difficult to place a value on non-economic loss or compare one family's loss of
a loved one to another's, or the suffering of a decedent before death, the $250,000 plus $50,000
per spouse and child grossly undervalues this category of injuries based on verdicts and
settlements throughout the United States.  Once again, the Regulations in placing a cap on this
loss violate New York law.  Furthermore, non-economic loss is separate and distinct from
economic loss and should not be reduced by collateral source income, taxes or reduced to present
value.

     In an effort to meet the goals established by Congress, I believe the Special Master should
review the current cap on non-economic damages with an eye towards raising the limit.  A higher
amount is not only fair and supported by law, but would encourage, if not ensure, the vast
majority of families to opt for the Fund rather than pursue litigation.  The non-economic loss
award in the Fund is a creature of the federal law, unassociated with any state law for its
substance.  Accordingly, I would encourage the Special Master to reevaluate and clarify the
claimants eligible to receive compensation under the fund.  See Dixon v. Serotina, Inc., 331F.2d
668 (6th Cir. 1964): Petition of United States, 418 F.2d 264 (1stCir.1969); Spiller v. Lowe, 466
F.2d 903 (8th Cir.1972); Green v. Ross, 338 F. Supp. 365 (S.D. Fla. 1972); Stacey v. Interstate
and Ocean Transp. Co. of Phil., 590 F. Supp. 1043 (E.D.N.Y. 1984); Thompson v. Offshore Co,
440 F. Supp. 752 (S.D. Tex.1977); Boswell v. Bludworth Bond Shipyard, 854 F. supp. 461 (S.D.
Tex. 1994)

     I want to thank you in advance for your attention to this important matter.  I look forward
to hearing from you soon.

                         Sincerely,
			 
			 Comment By:
                         Vito J. Fossella
                         Member of Congress
			 Washington, DC