President Bush Signs WTC Victims Compensation Act

by Mike Godfrey, Tax-News.com, New York

25 January 2002

The National Organization on Disability commended President Bush's signing this week of the Victims of Terrorism Tax Relief Act. The bill was passed by both houses of Congress in December and incorporates the Structured Settlements Protection Act (SSPA), which will apply to all injury victims, including victims of terrorism.

Under the SSPA, court oversight and approval will now be required for injury victims who choose to sell payments from a structured settlement to a third-party company. This will protect the rights of those who have received disabling injuries so that they will receive the full settlements they have been awarded.

"The tax relief legislation passed today is a sign of compassion, and of the President's and Congress's dedication to helping the victims of the terrorist strikes. The Structured Settlements Protection Act is an excellent extension of that concern," said N.O.D. President Alan A. Reich. "The SSPA will guard Americans who have acquired or will acquire disabilities due to accidents or crimes, from companies that would take advantage of them financially." Reich and N.O.D. had joined forces with others to work for the passage of the SSPA, which Congress identified as a disability-related issue. The recent terrorist attacks drove home just how critical it is that people who have received settlements not be victimized once again.

Recognized by Congress since 1982, structured settlements provide long- term financial security to injury victims and their families through a stream of payments tailored to their needs. The new federal protection addresses concerns about "factoring," in which companies purchase future structured settlement payments in exchange for a cash sum, often much less than the victim is scheduled to receive. The new legislation provides for a substantial federal excise tax on any company trying to purchase future payments from injury victims, unless a state court first approves the transaction as being in the best interests of the victim.

The National Organization on Disability, founded in 1982, promotes the full and equal participation and contribution of America's 54 million men, women and children with disabilities in all aspects of life.

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