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ALBANY 12247

November 16, 2001

Kenneth 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

Director Zwick:

As the Chairman of the New York State Senate Crime Victims, Crime and Corrections
Committee, I would like to take this opportunity to provide comment on the record
regarding the September 11th Victim Compensation Fund of 2001 [Public Law No:
107-42, Title IV] and its proposed regulations.

The specific source of my concern arises from the broad definition of 'collateral
source' [Section 402(4)] and the possible interpretation which could include charitable
contributions. It is of the utmost importance that the tremendous amount of charitable
contributions after the September 11th tragedies are not included as a collateral source
which, under Section 405(b)(6),' ...shall reduce the amount of compensation
determined under paragraph (1)(B)(ii)...' To do so would not only be an insult to
the donors and benefactors, it would be contrary to the very law which established the
September 11th Victim Compensation Fund of 2001 and contrary to New York State

In addition to the obvious policy reasons for excluding charitable contributions from
the definition of 'collateral sources,' and the fact that charitable contributions were not
included in the statutory definition of 'collateral source, 'such an interpretation should
not be made, because the Act as a whole requires the Department to exclude such
contributions from its definition.

Looking at the language Congress used in defining 'collateral source' and the law in its
entirety, it is clear the intent is to include only entitlements as an offset to the
compensation awarded to a claimant under this act. Sections 405(a)(2)(B)(iii) and
405(b)(6) both use 'collateral source' in context as compensation a claimant has,
'...received or is entitled to receive...' (emphasis added). Compensation from a
'collateral source' in this Act is an entitlement in the true definition of the word-
arising from a contract or by law. Section 402(4) simply provides major examples-
life insurance, pension funds, death benefits, and payments made by Federal, State or
local governments- which create an entitlement under contract or law.

Although under a moral obligation to provide assistance to those they have collected
donations for, and under a general, legal obligation to their donors to ensure the money
collected for a specific purpose is used for that purpose, charities are under no
contractual or legal obligation to provide assistance to any particular benefactor.

Finally, please allow me to concur and restate the position of the memorandum to the
Honorable Phillip Perry, Acting Associate Attorney General, from the offices of
Governor Pataki, Attorney General Spitzer and Mayor Giuliani, which excludes
charitable contributions from potential offsets under this Act consistent with the
dictates of New York's collateral source law:

....Section 4545(c) of the New York Civil Practice Law and Rules provides:

In any action brought to recover damages for personal injury, injury to
property or wrongful death, where the plaintiff seeks to recover for the
cost of medical care, dental care, custodial care or rehabilitation
services, loss of earnings or other economic loss, evidence shall be
admissible for consideration by the court to establish that any such past
or future cost or expense was or will, with reasonable certainty, be
replaced or indemnified, in whole or in part, from any collateral source
such as insurance (except for life insurance), social security (except
those benefits provided under Title XVIII of the social security act),
workers' compensation or employee benefit programs (except such
collateral sources entitled by law to liens against any recovery of the

To be deemed a collateral source, the court must find that such cost or expense
was replaced or indemnified from any collateral source.

[T]o find that any future cost or expenses will, with reasonable
certainty, be replaced or indemnified by the collateral source, the court
must find that the plaintiff is legally entitled to the continued receipt of
such collateral source, pursuant to a contract or otherwise enforceable
agreement, subject only to the continued payment of a premium and
such other financial obligations as may be required by such agreement.

Id. Similarly, awards made by the New York Crime Victims Board are reduced
only by public funds or payments mandated by law or contract. Exec. Law Sec.
631, 9 NYCRR 525.11. Individuals are not legally entitled to the receipt of
charitable contributions, pursuant to a contract or otherwise enforceable
agreement. See Wasau Business Insurance Co. a/s/o Central Synagogue v.
Turner Construction Co. Et al., No. 99 CIV 0862 (RWS) (amicus brief)...

In summary, while Section 402(4) does not specifically exclude charitable
contributions from the definition of 'collateral source', Title IV, in its entirety, is not meant to include charitable contributions as a 'collateral source'. The statutory
language, legislative intent and consistency with New York Law all require the
regulations and the application of this Act should not consider charitable contributions
when making the 'collateral source' adjustment to the compensation awarded to a
claimant under this Act.

Thank you for considering my comments on this important matter. If you have any
questions regarding any of the issues discusses in this letter, please feel free to contact me.

With best wishes.


Michael F. Nozzolio
Senator, 53rd District

Email Date:2001-11-16

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