SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Terrorist Asset Seizure Reform Act 
of 2016''.

SEC. 2. CONFISCATION OF ASSETS.

    (a) Confiscation of Interest.--
            (1) Initial confiscation.--As soon as practicable after the 
        date of the enactment of this Act, but in no case later than 18 
        months after the date of the enactment of this Act, the 
        Secretary shall require each financial institution to transfer 
        to the Secretary all amounts of interest paid by such financial 
        institution on frozen bank accounts.
            (2) Ongoing confiscation.--One year after the initial 
        confiscation under paragraph (1), and annually thereafter, the 
        Secretary shall require each financial institution to transfer 
        to the Secretary all amounts of interest paid by such financial 
        institution on frozen bank accounts in the previous year.
            (3) Interest deposited into confiscated assets fund.--The 
        Secretary shall deposit all amounts received under this 
        subsection into the Confiscated Assets Fund.
            (4) Rule of construction.--Paragraphs (1) and (2) shall 
        only apply to interest paid on an account after the account 
        became a frozen bank account.
    (b) Confiscations Related to Non-State Terrorism.--
            (1) Special rule for confiscations related to non-state 
        terrorism.--
                    (A) In general.--With respect to a frozen asset of 
                a person described in subparagraph (B)--
                            (i) at the time such asset is frozen or 
                        otherwise blocked, or within 6 months of the 
                        date of the enactment of this Act with respect 
                        to an asset frozen or otherwise blocked before 
                        such date of enactment, the Secretary shall--
                                    (I) publish public notice that the 
                                asset is being frozen or otherwise 
                                blocked; and
                                    (II) provide the owner of the asset 
                                and other interested parties with a 1-
                                year period to challenge such freezing 
                                or blocking; and
                            (ii) if such asset remains frozen or 
                        otherwise blocked after the 1-year period 
                        described under clause (i)(II), the Secretary 
                        shall require the financial institution holding 
                        the frozen asset to transfer such asset to the 
                        Secretary.
                    (B) Covered persons.--A person described in this 
                subparagraph is a person that is--
                            (i) designated as a foreign terrorist 
                        organization under section 219(a) of the 
                        Immigration and Nationality Act (8 U.S.C. 
                        1189(a));
                            (ii) designated as a Specially Designated 
                        Global Terrorist by the Department of the 
                        Treasury under Executive Order 13224 (50 U.S.C. 
                        1701); or
                            (iii) a specially designated terrorist, as 
                        that term is defined in section 595.311 of 
                        title 31, Code of Federal Regulations (or any 
                        successor thereto).
            (2) Assets deposited into confiscated assets fund.--The 
        Secretary shall--
                    (A) deposit all money received under this 
                subsection into the Confiscated Assets Fund; and
                    (B) sell any non-monetary assets received under 
                this subsection and deposit the amounts received from 
                such sales into the Confiscated Assets Fund.
    (c) Safe Harbor.--Compliance with this section and any regulation, 
instruction, or direction issued pursuant to this section shall to the 
extent thereof be a full acquittance and discharge for all purposes of 
the obligation of the person making the same. No person shall be held 
liable in any court for or with respect to anything done or omitted in 
good faith in connection with the administration of, or pursuant to and 
in reliance on, this section, or any regulation, instruction, or 
direction issued pursuant to this section.
    (d) Definitions.--For purposes of this section:
            (1) Financial institution.--The term ``financial 
        institution'' has the meaning given that term under section 
        5312 of title 31, United States Code.
            (2) Foreign person.--The term ``foreign person'' has the 
        meaning given that term under section 14 of the Iran Sanctions 
        Act of 1996 (50 U.S.C. 1701 note).
            (3) Frozen asset.--The term ``frozen asset''--
                    (A) means an asset of a foreign person or foreign 
                country that has been frozen or otherwise blocked 
                pursuant to sanctions under any provision of United 
                States law, as determined by the Secretary; and
                    (B) does not include--
                            (i) any asset subject to the Vienna 
                        Convention on Consular Relations (done at 
                        Vienna, April 24, 1963); or
                            (ii) the blocked assets of a terrorist 
                        party that are subject to execution and 
                        attachment pursuant to section 201 of the 
                        Terrorism Risk Insurance Act of 2002 (28 U.S.C. 
                        1610 note).
            (4) Frozen bank account.--The term ``frozen bank account'' 
        means a deposit account maintained at a financial institution 
        that consists of frozen assets.
            (5) Secretary.--The term ``Secretary'' means the Secretary 
        of the Treasury.

SEC. 3. CONFISCATED ASSETS FUND.

    (a) Establishment.--The Secretary of the Treasury shall establish a 
fund to be known as the ``Confiscated Assets Fund''.
    (b) Use of Fund.--Amounts in the Confiscated Assets Fund shall be 
made available to the Administrator of the Federal Emergency Management 
Agency to provide grants under the Urban Area Security Initiative under 
section 2003 of the Homeland Security Act of 2002 (6 U.S.C. 604).

SEC. 4. REPORTS TO CONGRESS.

    (a) GAO Study and Report.--
            (1) In general.--Not later than the end of the 6-month 
        period beginning on the date of the enactment of this Act, the 
        Comptroller General of the United States shall initiate a study 
        on how the Office of Foreign Assets Control of the Department 
        of the Treasury can better track frozen assets, manage data 
        relating to such frozen assets, and improve reporting to 
        Congress regarding frozen assets across all sanctions programs 
        administered by the Office of Foreign Assets Control.
            (2) Report.--Upon the completion of the study required 
        under paragraph (1), the Comptroller General shall issue a 
        report to the Congress and the Office of Foreign Assets Control 
        of the Department of the Treasury containing--
                    (A) all findings and determinations made in 
                carrying out the study required under paragraph (1); 
                and
                    (B) such recommendations that the Comptroller 
                General may determine appropriate.
    (b) Secretary of the Treasury Report.--
            (1) In general.--The Secretary of the Treasury, in 
        consultation with the Attorney General, the Secretary of State, 
        and the heads of other appropriate Federal agencies, shall 
        issue an annual report to the Congress containing--
                    (A) comprehensive and detailed data regarding 
                frozen assets across all sanctions programs 
                administered by the Office of Foreign Assets Control, 
                including, with respect to each sanctions program for 
                the prior calendar year--
                            (i) tables that show changes in frozen 
                        assets totals;
                            (ii) the total amount of frozen assets;
                            (iii) the total amount of frozen assets 
                        that were unblocked;
                            (iv) how many licenses were issued;
                            (v) how many names were added to each list 
                        of sanctioned persons; and
                            (vi) how many names were removed from each 
                        list of sanctioned persons; and
                    (B) a detailed justification for each removal of a 
                name from a list of sanctioned persons under each 
                sanctions program for the prior calendar year.
            (2) Classified annexes.--A report issued under paragraph 
        (1) may contain a classified annex when necessary.
            (3) Consideration of gao study.--Before issuing a report 
        under paragraph (1), the Secretary of the Treasury shall review 
        any recommendations made by the Comptroller General in the 
        report issued under subsection (a)(2) and include in such 
        report any plans for addressing such recommendations.
    (c) Definition.--In this section, the term ``frozen asset'' has the 
meaning given that term in section 2(d) of this Act.
Terrorist Asset Seizure Reform Act of 2016  This bill directs the Department of the Treasury to require each financial institution to transfer annually to it all amounts of interest it has paid on certain frozen bank accounts, which shall be deposited into the Confiscated Assets Fund establish by this bill. With respect to certain frozen assets of a foreign terrorist organization or a specially designated terrorist, including a Specially Designated Global Terrorist, at the time an asset is frozen or otherwise blocked (or within six months of enactment of this bill for an asset already frozen or blocked) Treasury shall:   publish a public notice that the asset is being frozen or otherwise blocked, and  give the owner of the asset and other interested parties one year to challenge such freezing or blocking.   If the asset remains frozen or otherwise blocked after a year, Treasury shall require the financial institution holding the frozen asset to transfer it to Treasury. Treasury shall:    deposit all money received under such asset confiscation requirements into the Confiscated Assets Fund, and   sell any non-monetary assets received under the bill and deposit the proceeds into the Fund.   Treasury shall establish the Confiscated Assets Fund, which shall be made available to the Federal Emergency Management Agency (FEMA) to make grants under the Urban Area Security Initiative (for assisting high-risk urban areas in preventing, preparing for, protecting against, and responding to acts of terrorism).  The Government Accountability Office shall study how Treasury's Office of Foreign Assets Control can better track frozen assets, manage data related to them, and improve reporting to Congress about them across all sanctions programs the Office of Foreign Assets Control administers. 
Terrorist Asset Seizure Reform Act of 2016