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The James Zadroga 9/11 Health and Compensation Act

On July 29th, the House debated the James Zadroga 9/11 Health and Compensation Act (H.R. 847) and while the vote was 255 to 159 in support of the bill, it fell short of the 2/3 needed for passage under suspension of the rules; 155 Republicans voted against the legislation.  This bill provides funding for a Health Program to monitor and treat responders and community residents for health conditions related to the 9/11 World Trade Center attacks.  It also reopens the September 11 Victim Compensation Fund of 2001 to provide monetary compensation for those physically injured by the 9/11 terrorist attacks or by response activities and debris removal.  The costs of the bill are fully paid for.

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Summary from the Committees on Energy and Commerce, Judiciary, and Ways and Means:
On September 11, 2001, terrorists attacked the World Trade Center and the Pentagon.  In addition, an airplane commandeered by terrorists crashed in Shanksville, Pennsylvania. The firefighters and emergency personnel who responded to the attacks on the World Trade Center were exposed to a massive, highly toxic plume of dust from the collapse of the Twin Towers.  In many cases, this exposure resulted in serious respiratory illnesses and related conditions. 

H.R. 847 provides funding for a Health Program to monitor and treat responders and community residents for health conditions related to the terrorist attacks. It also reopens the September 11, 2001 Victim Compensation Fund to provide monetary compensation for those physically injured by the attacks or by response activities and debris removal. The bill, which would cost $7.4 billion over the next ten years, is fully paid for by a provision preventing foreign multinational firms that are incorporated in tax haven countries from avoiding tax on income earned in the U.S.

Title I. World Trade Center (WTC) Health Program
H.R. 847 builds upon an existing, unauthorized federal program administered by the Centers for Disease Control and Prevention (CDC) that provides monitoring and treatment services through medical Centers of Excellence to responders and community residents affected by the terrorist attacks on the World Trade Center.  The bill would authorize this program, expand it to include responders to the Pentagon and Shanksville sites, and provide nine years of capped mandatory funding (into FY 2019).  The federal government would pay ninety percent of the costs of the Health Program, subject to an annual cap; CBO estimates that federal spending will total $3.2 billion.  The remaining 10 percent of the costs of the program would be paid by New York City. The authorization for the Health Program would sunset on September 30, 2020.

The Health Program would provide monitoring and specialized treatment services through Centers of Excellence for two populations: responders (emergency personnel, rescue, and clean-up workers who responded to the 9/11 attacks on the World Trade Center, the Pentagon, and Shanksville) and survivors (residents, workers, and students who returned to the World Trade Center area shortly after the attacks). The bill includes a national program to monitor and treat responders who live outside of the New York City/New Jersey metropolitan area. About 65,000 responders and less than 25,000 survivors are expected to enroll in the Health Program.

Title II. September 11 Victim Compensation Fund of 2001
H.R. 847 would reopen the September 11 Victim Compensation Fund of 2001 (VCF) to provide compensation for economic damages and losses to first responders, recovery workers and others injured in the aftermath of the attacks, including persons who were exposed to World Trade Center toxins during debris removal.  The bill would reopen the VCF until December 22, 2031 in order to cover persons who became ill, or will become ill, after the original fund closed.  The 20-year period would protect persons with latent injuries that may not manifest for years.  The total amount of compensation to be awarded would be capped at $4.2 billion over the first 10 years and an additional $4.2 billion over the second 10 years. 

Awards under the VCF must be reduced by the amount of other compensation to the victim, including life insurance, health insurance, workers compensation, and any amount obtained in the settlement of a civil suit that occurred while the VCF was closed.  Persons with civil suits pending on or after the date of enactment must relinquish those suits in order to file a claim with the VCF.  The bill would cap at 10% the amount of VCF compensation that could be used for attorneys' fees, with an exception for old and extraordinary cases where large amounts of legal work have already been expended.  The bill would also provide protection from liability to certain entities that participated in recovery efforts and debris removal, including the City of New York, the New York City Port Authority, and certain contractors. 

Title III. Revenue Offset - Limitation on Treaty Benefits for Certain Deductible Payments
Under current law, certain payments (principally dividends, interest, and royalties) made by US-based entities to a parent company based overseas are subject to a 30 percent withholding tax.  That requirement customarily is reduced or eliminated when the payment is made to a country with which the US has a tax treaty.  Companies with parents based in tax haven countries are able to effectively bypass the withholding tax by routing payments through an affiliate in a tax treaty country, which then transfers the funds to the parent company.  The provision would limit this practice by retaining the withholding tax on certain deductible payments (principally interest and royalties) to a foreign-based affiliate unless the tax would be reduced under a treaty if the payment were made directly to the company's parent corporation.

This provision is identical to a provision that passed the House of Representatives on March 24, as part of H.R. 4849 by a vote of 246-178.  The House also approved the provision in November of last year as part of H.R. 3962 by a vote of 220 to 215.  The provision is modified from a previous version approved by the House of Representatives as part of H.R. 2419 (110th Congress) by a vote of 231 to 191 (with 19 House Republicans joining 212 House Democrats in support) to ensure that foreign multinational corporations incorporated in treaty partner countries will not be affected by this provision.  This provision is estimated to raise $7.433 billion over 10 years.