```

[Senate Report 114-394]
[From the U.S. Government Publishing Office]

                                                      Calendar No. 654
114th Congress     }                                    {       Report
                                 SENATE
 2d Session        }                                    {      114-394

======================================================================

 
            HOLOCAUST EXPROPRIATED ART RECOVERY ACT OF 2016

                                _______
                                

                December 6, 2016.--Ordered to be printed

                                _______
                                

   Mr. Grassley, from the Committee on the Judiciary, submitted the 
                               following

                              R E P O R T

                         [To accompany S. 2763]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on the Judiciary, to which was referred the 
bill (S. 2763) to provide the victims of Holocaust-era 
persecution and their heirs a fair opportunity to recover works 
of art confiscated or misappropriated by the Nazis, having 
considered the same, reports favorably thereon, with an 
amendment, and recommends that the bill, as amended, do pass.

                                CONTENTS

                                                                   Page
  I. Background and Purpose of the Holocaust Expropriated Art Recovery 
     Act..............................................................1
 II. History of the Bill and Committee Consideration..................6
III. Section-by-Section Summary of the Bill...........................7
 IV. Congressional Budget Office Cost Estimate.......................11
  V. Regulatory Impact Evaluation....................................12
 VI. Conclusion......................................................12
VII. Changes to Existing Law Made by the Bill, as Reported...........12

 I. BACKGROUND AND PURPOSE OF THE HOLOCAUST EXPROPRIATED ART RECOVERY 
                              ACT OF 2016

    From 1933, when Hitler and his National Socialist German 
Workers Party, the ``Nazis,'' took power in Germany, until 
1945, when the Allied Forces vanquished the Third Reich, the 
Nazis stole hundreds of thousands of artworks from museums and 
private collections throughout Europe. This systematic looting 
of the artwork and other cultural property of Jews and other 
persecuted groups--one of the Nazis' many crimes against 
humanity--has been described as the ```greatest displacement of 
art in human history.'''\1\ According to the American Alliance 
of Museums:
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    \1\Von Saher v. Norton Simon Museum of Art at Pasadena, 592 F.3d 
954, 957 (9th Cir. 2010) (quoting Michael J. Bazyler, Holocaust 
Justice: The Battle for Restitution in America's Courts 202 (NYU Press 
2003)).

        the Nazi regime orchestrated a system of theft, 
        confiscation, coercive transfer, looting, pillage, and 
        destruction of objects of art and other cultural 
        property in Europe on a massive and unprecedented 
        scale. Millions of such objects were unlawfully and 
        often forcibly taken from their rightful owners, who 
        included private citizens, victims of the Holocaust; 
        public and private museums and galleries; and 
        religious, educational, and other institutions.\2\
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    \2\American Alliance of Museums, Standards Regarding the Unlawful 
Appropriation of Objects During the Nazi Era, http://www.aam-us.org/
resources/ethics-standards-and-best-practices/collections-stewardship/
objects-during-the-nazi-era.

    Since World War II ended, the United States has pursued 
policies to help restore artwork and other cultural property 
lost in the Holocaust to its rightful owners.\3\ The Holocaust 
Expropriated Art Recovery (HEAR) Act is the latest step in that 
pursuit.
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    \3\This policy is not limited to the theft of art by the Nazis. For 
instance, the FREEDOM Support Act, signed into law by President George 
H.W. Bush on October 24, 1992, prohibits assistance to an independent 
state of the former Soviet Union that refuses to comply with a final 
court judgment that it is ``withholding unlawfully books or other 
documents of religious or historical significance that are the property 
of United States persons.'' FREEDOM Support Act, Pub. L. 102-511, 106 
Stat. 3320 (1992). That legislation, which responded to a refusal by 
the Russian government to return the stolen library of the Lubavitcher 
Rebbe in Agudas Chasidei Chabad v. Russian Federation, expressed the 
clear policy of the United States that items of religious and cultural 
significance taken in violation of international law should be returned 
to their rightful owners.
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    The first step was the post-war effort of the United States 
and its allies to return property that was stolen or 
misappropriated by the Nazis and their allies. At the Potsdam 
Conference in 1945, President Truman approved a policy of 
``external restitution,'' under which the United States would 
return the looted art to the countries of origin--not directly 
to the individual owners. Those countries would then be 
responsible for returning the art. But, despite these efforts, 
many pieces were never reunited with their owners.\4\
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    \4\Von Saher, 592 F.3d at 957-58.
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    In the aftermath of the war, many families whose property 
was misappropriated by the Nazis or lost during the Holocaust 
simply lacked the information, resources, and sometimes 
wherewithal to locate and pursue litigation to obtain their 
property.\5\ Even for those with the resources, determining the 
provenance of Nazi-looted art proved to be extremely difficult 
since many changes of ownership went undocumented, and many of 
the transactions took place on the black market.\6\ Adding to 
the difficulty, the Soviet Union also engaged in plundering. 
Responsible for the looted property in the territories they 
controlled, the Soviets often refused to provide any provenance 
information.\7\ The trauma of the Holocaust also made it 
psychologically difficult for victims and their heirs to pursue 
lost property in the aftermath of the war.\8\
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    \5\The Holocaust Expropriated Art Recovery Act--Reuniting Victims 
with Their Lost Heritage: Hearing on S. 2763 The Holocaust Expropriated 
Art Recovery Act Before the S. Comm. on the Judiciary, Subcomm. on the 
Constitution and Subcomm. on Oversight, Agency Action, Federal Rights 
and Federal Courts, 114th Cong., Hr'g Tr. at 40 (2016) (statement of 
Agnes Peresztegi, President, Commission for Art Recovery); id. at 43-46 
(statement of Simon Goodman).
    \6\Von Saher, 592 F.3d at 958.
    \7\Review of the Repatriation of Holocaust Art Assets in the United 
States: Hearing Before the H. Comm. on Financial Services, Subcomm. on 
Domestic and International Monetary Policy, Trade, and Technology, 
109th Cong. 105-6 (2006) (statement of Stuart Eizenstat, Former 
Commissioner, Presidential Advisory Commission on Holocaust Assets in 
the U.S.).
    \8\The Holocaust Expropriated Art Recovery Act--Reuniting Victims 
with Their Lost Heritage: Hearing on S. 2763 The Holocaust Expropriated 
Art Recovery Act Before the S. Comm. on the Judiciary, Subcomm. on the 
Constitution and Subcomm. on Oversight, Agency Action, Federal Rights 
and Federal Courts, 114th Cong., Hr'g Tr. at 25, 27 (2016) (statement 
of Helen Mirren).
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    As the twentieth century came to a close, nations and civil 
society groups expressed a renewed interest in addressing the 
restitution of art lost in the Holocaust. The United States led 
these efforts. In 1998, over 50 years after the end of the war, 
the United States convened a conference with forty-three other 
nations to address the restitution of art lost in the 
Holocaust: the Washington Conference. The participating 
countries unanimously approved what are known as the Washington 
Conference Principles on Nazi-Confiscated Art, which, inter 
alia, declared that Holocaust victims and their heirs ``should 
be encouraged to come forward and make known their claims to 
art that was confiscated by the Nazis and not subsequently 
restituted'' and that ``steps should be taken expeditiously to 
achieve a just and fair solution'' to such claims.\9\
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    \9\Washington Conference Principles on Nazi-Confiscated Art, 
Principles 7 & 8, Bureau of European & Eurasian Affairs (Dec. 3, 1998), 
http://www.state.gov/p/eur/rt/hlcst/122038.htm.
---------------------------------------------------------------------------
    The same year, Congress enacted the Holocaust Victims 
Redress Act, which expressed the sense of Congress that ``all 
governments should undertake good faith efforts to facilitate 
the return of private and public property, such as works of 
art, to the rightful owners in cases where assets were 
confiscated from the claimant during the period of Nazi rule 
and there is reasonable proof that the claimant is the rightful 
owner.''\10\ Congress also enacted the U.S. Holocaust Assets 
Commission Act of 1998, which established the Presidential 
Advisory Commission on Holocaust Assets (PACHA) to conduct 
research on the fate of Holocaust-era property that came into 
the possession of the U.S. Government and to advise the 
President on policies to ensure the restitution of this 
property.\11\
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    \10\Pub. L. No. 105-158, 112 Stat. 15 Sec. 202 (1998).
    \11\Pub. L. No. 105-186, 112 Stat. 611 (1998).
---------------------------------------------------------------------------
    Following the Washington Conference, the Alliance of 
American Museums (AAM) adopted Standards Regarding the Unlawful 
Appropriation of Objects During the Nazi Era. These non-binding 
standards were ``intended to assist museums in addressing 
issues relating to objects that may have been unlawfully 
appropriated during the Nazi era (1933-1945) as a result of 
actions in furtherance of the Holocaust or that were taken by 
the Nazis or their collaborators.''\12\ In order to facilitate 
the discovery and identification of misappropriated art, the 
Alliance, along with the Association of Art Museum Directors 
(AAMD) and the PACHA, agreed
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    \12\American Alliance of Museums, Standards Regarding the Unlawful 
Appropriation of Objects During the Nazi Era.

        that museums should strive to: (1) identify all objects 
        in their collections that were created before 1946 and 
        acquired by the museum after 1932, that underwent a 
        change of ownership between 1932 and 1946, and that 
        were or might reasonably be thought to have been in 
        continental Europe between those dates (hereafter, 
        `covered objects'); (2) make currently available object 
        and provenance (history of ownership) information on 
        those objects accessible; and (3) give priority to 
        continuing provenance research as resources allow.\13\
---------------------------------------------------------------------------
    \13\Id.

    The art museum community, in cooperation with the State 
Department, has established the Nazi-Era Provenance Internet 
Portal, which publishes provenance information on tens of 
thousands of Nazi-era works, to assist potential claimants. 
When a claim of ownership to a covered object is asserted, the 
standards provide that the claim ``should be considered on its 
own merits.''\14\ Furthermore, ``[w]hen appropriate and 
reasonably practical, museums should seek methods other than 
litigation (such as mediation) to resolve claims.''\15\ And the 
historical record reflects that many restitution claims made 
against museums result in amicable purchase or lending 
agreements, or voluntary restitutions.\16\
---------------------------------------------------------------------------
    \14\Id.
    \15\Id.
    \16\Simon J. Frankel & Ethan Forrest, Museums' Initiation of 
Declaratory Judgment Actions and Assertion of Statutes of Limitations 
in Response to Nazi-Era Art Restitution Claims--A Defense, 23 DePaul J. 
Art, Tech. & Intell. Prop. L. 279 (2013).
---------------------------------------------------------------------------
    But if litigation results, the Standards state that 
``museums may elect to waive certain available defenses'' in 
order to ``achieve an equitable and appropriate 
resolution.''\17\ In his 2006 testimony before the Subcommittee 
on Domestic and International Monetary Policy, Trade and 
Technology of the House Committee on Financial Services, Stuart 
E. Eizenstat, former Deputy Secretary of the Treasury and 
former commissioner of the PACHA, testified that American 
museums choosing to litigate cases of art lost in the Holocaust 
should do so ``on the merits, and not to rely upon technical 
defenses, like the statute of limitations.''\18\
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    \17\American Alliance of Museums, Standards Regarding the Unlawful 
Appropriation of Objects During the Nazi Era.
    \18\Review of the Repatriation of Holocaust Art Assets in the 
United States: Hearing Before the H. Comm. on Financial Services, 
Subcomm. on Domestic and International Monetary Policy, Trade, and 
Technology, 109th Cong. 116 (2006) (statement of Stuart Eizenstat, 
Former Commissioner, Presidential Advisory Commission on Holocaust 
Assets in the U.S).
---------------------------------------------------------------------------
    In 2009, 48 nations, including the United States, 
participated in the Prague Holocaust Era Assets Conference to 
follow up on the work of the Washington Conference. 
Participants issued the Terezin Declaration, which urged the 
signatories

        to ensure that their legal systems or alternative 
        processes, while taking into account the different 
        legal traditions, facilitate just and fair solutions 
        with regard to Nazi-confiscated and looted art, and to 
        make certain that claims to recover such art are 
        resolved expeditiously and based on the facts and 
        merits of the claims and all the relevant documents 
        submitted by all parties.\19\
---------------------------------------------------------------------------
    \19\Prague Holocaust Era Assets Conference: Terezin Declaration, 
Bureau of European & Eurasian Affairs (June 30, 2009), http://
www.state.gov/p/eur/rls/or/126162.htm.

    Several years later, in 2013, the State Department's 
Special Envoy for Holocaust Issues, Douglas Davidson, explained 
that the intent of the Terezin Declaration and the Washington 
Principles was ``to coax the parties to a particular dispute to 
seek to determine the facts of the matter and to avoid if 
possible resorting to legal arguments grounded in procedural 
matters.''\20\ ``[W]e believe,'' he went on to say, ``that the 
best way to arrive at a just and fair solution to a dispute 
over Nazi-confiscated art is for the parties to resolve it 
where appropriate, based on the facts of the claims.''\21\
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    \20\Douglas Davidson, Remarks at Bureau of European & Eurasian 
Affairs Symposium on ``Should Stolen Holocaust Art be Returned?'' at 
the New York County Law Association, ``Should Nazi-Looted Art Works Be 
Returned? The View from the State Department'' (Mar. 25, 2013), http://
www.state.gov/p/eur/rls/rm/2013/mar/206719.htm.
    \21\Id.
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    Despite these representations and commitments, the United 
States has not fulfilled its promise to ensure that claims to 
art lost in the Holocaust are resolved on their merits. As the 
U.S. Court of Appeals for the Ninth Circuit observed, ``[m]any 
obstacles face those who attempt to recover Holocaust-era art 
through lawsuits,'' including ``procedural hurdles such as 
statutes of limitations'' that prevent the merits of claims 
from being adjudicated.\22\
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    \22\Von Saher, 592 F.3d at 958.
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    Each State has different rules governing the operation of 
their statutes of limitations, with varying periods and 
different triggering circumstances--e.g., the loss of the 
property or discovery of the identity and location of the 
stolen art, among other things. A victim's knowledge may also 
be imputed to the victim's heirs. As a practical matter, many 
statutes of limitations operate to bar modern claimants seeking 
restitution of art lost in the Holocaust.\23\
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    \23\See, e.g., Toledo Museum of Art v. Ullin, 477 F. Supp. 2d 802, 
806-07 (N.D. Ohio 2006) (explaining that the limitations period for a 
restitution or conversion claim in Ohio begins ``when the claimant 
`discovers or, in the exercise of reasonable care, should have 
discovered the complained-of injury'''); Museum of Fine Arts, Boston v. 
Seger-Thomschitz, Civ. Action No. 08-10097-RWZ, 2009 WL 6506658, *7 (D. 
Mass. June 12, 2009) (same for Massachusetts). New York is an outlier 
in that its statute of limitations does not begin to run until a demand 
for the return of the allegedly stolen property is refused. Solomon R. 
Guggenheim Found. v. Lubell, 77 N.Y.2d 311, 316-18 (1991) (``The rule 
in this State is that a cause of action for replevin against the good-
faith purchaser of a stolen chattel accrues when the true owner makes 
demand for return of the chattel and the person in possession of the 
chattel refused to return it'' (citation omitted)). In some cases, 
application of the statute of limitations may result in the expiration 
of claims before the Holocaust even ended. In Detroit Institute of Arts 
v. Ullin, for instance, the court held that the discovery rule did not 
apply and that Michigan's three-year limitations period began to run in 
1938--when the alleged unlawful taking occurred--and expired well 
before the conclusion of the war. Detroit Institute of Arts v. Ullin, 
No. 06-1033, 2007 WL 1016996, at *3 (E.D. Mich. Mar. 31, 2007).
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    Because of the unique and horrific circumstances of World 
War II and the Holocaust, State statutes of limitations can be 
an unfair impediment to the victims and their heirs, contrary 
to United States policy. Yet states have been unable to remedy 
this injustice because the regulation of war-related disputes 
is within the powers of the Federal Government.\24\ In Von 
Saher, the U.S. Court of Appeals for the Ninth Circuit 
invalidated a California law that extended the State 
limitations period specifically for Nazi-confiscated-art 
claims.\25\ The court held that the law was unconstitutional 
because it infringed on the Federal Government's exclusive 
authority over foreign affairs, including its authority to 
resolve war-related claims.\26\
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    \24\Cf., e.g., Am. Ins. Ass'n v. Garamendi, 539 U.S. 396, 421 
(2003) (``Vindicating victims injured by acts and omissions of enemy 
corporations in wartime is thus within the traditional subject matter 
of foreign policy in which national, not state, interests are 
overriding, and which the National Government has addressed.'').
    \25\Von Saher, 592 F.3d at 957.
    \26\Id. at 965-68. In the wake of the Von Saher decision, the 
California legislature extended the State statute of limitations from 
three to six years for all stolen art claims, not just Holocaust-era 
claims. Because the statute, on its face, had nothing to do with the 
foreign affairs power and there was no ``evidence in the record'' that 
the State was attempting to carry out its own foreign policy with 
respect to the resolution of war-related claims, the Ninth Circuit 
upheld the law. See Cassirer v. Thyssen-Bornemisza Collection 
Foundation, 737 F.3d 613, 619 (9th Cir. 2013).
---------------------------------------------------------------------------
    A Federal limitations period, appropriately tailored to the 
unique circumstances of Holocaust-era claims, is therefore 
needed to guarantee that the United States fulfills the 
promises it has made to the world to ``facilitate just and fair 
solutions with regard to Nazi-confiscated and looted art'' and 
to ``make certain that claims to recover such art are resolved 
expeditiously and based on the facts and merits of the 
claims.''\27\ The HEAR Act thus serves two purposes: first, to 
ensure that laws governing claims to Nazi-confiscated art and 
other property further United States policy as set forth in the 
Washington Conference Principles on Nazi-Confiscated Art, the 
Holocaust Victims Redress Act, and the Terezin Declaration; 
and, second, to ensure that claims to artwork and other 
property stolen or misappropriated by the Nazis are not 
unfairly barred by statutes of limitations but are resolved in 
a just and fair manner.
---------------------------------------------------------------------------
    \27\Prague Holocaust Era Assets Conference: Terezin Declaration, 
Bureau of European & Eurasian Affairs (June 30, 2009), http://
www.state.gov/p/eur/rls/or/126162.htm.
---------------------------------------------------------------------------
    The HEAR Act is not intended to displace other forms of 
dispute resolution for Holocaust-era claims. The legislation 
expresses the sense of Congress that the private resolution of 
claims by parties involved, on the merits and through the use 
of alternative dispute resolution such as mediation panels 
established for this purpose with the aid of experts in 
provenance research and history, will yield just and fair 
resolutions in a more efficient and predictable manner.

          II. HISTORY OF THE BILL AND COMMITTEE CONSIDERATION

    On April 7, 2016, Senator Cornyn introduced S. 2763, the 
Holocaust Expropriated Art Recovery Act of 2016. Senators Cruz, 
Schumer and Blumenthal were original cosponsors. The bill was 
referred to the Committee on the Judiciary.
    The Committee's Subcommittees on the Constitution and 
Oversight, Agency Action, Federal Rights and Federal Courts 
held a hearing on S. 2763 entitled ``S. 2763, the Holocaust 
Expropriated Art Recovery Act--Reuniting Victims with Their 
Lost Heritage'' on June 7, 2016. Testimony was received from 
Ambassador Ronald S. Lauder, Chairman of the Council of the 
World Jewish Restitution Organization; Dame Helen Mirren; Ms. 
Monica Dugot, International Director of Restitution at 
Christie's, Inc.; Ms. Agnes Peresztegi, President of the 
Commission for Art Recovery; and Mr. Simon Goodman. Additional 
material was submitted by Laura L. Lott, President and CEO of 
American Alliance Museums; Brian J. Ferriso, President, 
Association of Art Museum Directors; Richard T. Foltin, 
Director of National and Legislative Affairs, AJC Global Jewish 
Advocacy; Carla Shapreau, Senior Fellow, Institute of European 
Studies, University of California, Berkeley; Karen Silberman, 
Executive Director, Federal Bar Association; Robert Singer, 
Chief Executive Officer, World Jewish Congress; and Gideon 
Taylor, Chair of Operations, World Jewish Restitution 
Organization.
    The Committee considered S. 2763 on September 15, 2016. 
Senator Cornyn offered an amendment in the nature of a 
substitute, which was adopted by voice vote. The amendment adds 
a sense of Congress favoring the resolution of disputed art 
claims without litigation and using alternative dispute 
resolution mechanisms involving experts in art research. It 
specifies the kinds of artwork covered by the operative 
language of the bill, discussed infra. The amendment broadens 
the knowledge standard that triggers the running of the 
limitations period established in Section 5(a). It clarifies 
that members of any group persecuted by the Nazis may avail 
itself of the benefits of S. 2763. The amendment removes the 
reference precluding the availability of equitable defenses and 
the doctrine of laches. It further enables claims previously 
barred to be brought within the period established by the bill. 
The amendment creates an exception that bars claims known on or 
after January 1, 1999 and for which the claimant (or the 
claimant's predecessor in interest) could have brought a claim, 
because the claim was not time barred under the then-applicable 
statute of limitations, but failed to do. Finally, the 
amendment clarifies that the bill sunsets in ten years.
    The amendment was accepted by voice vote without objection.
    The Committee then voted to report the Holocaust 
Expropriated Art Recovery Act, with the amendment in the nature 
of a substitute, favorably to the Senate by voice vote.

              III. SECTION-BY-SECTION SUMMARY OF THE BILL

Section 1. Short title

    This section provides that the legislation may be cited as 
the ``Holocaust Expropriated Art Recovery Act of 2016.''

Section 2. Findings

    This section makes findings about the historical basis of 
and the need for the legislation.
    Congress finds that the Nazis, as part of the Holocaust, 
carried on a massive campaign to expropriate art and other 
cultural property from Jews and other persecuted groups, which 
one historian dubbed the ``greatest displacement of art in 
human history.''
    It finds that, while the United States and its allies 
attempted to return the art and other cultural property to its 
rightful owners after World War II, some was not returned. Some 
of the art and other cultural property expropriated by the 
Nazis has since been discovered in the United States.
    Congress finds that, in 1998, the United States and forty-
three other nations convened in Washington, D.C. for the 
``Washington Conference,'' which produced principles on Nazi-
Confiscated Art. One of the principles stated that ``steps 
should be taken expeditiously to achieve a just and fair 
solution'' to claims involving art or other cultural property 
lost by the victims of the Holocaust.
    It finds that, also in 1998, Congress enacted the Holocaust 
Victims Redress Act (Public Law 105-158, 112 Stat. 15), which 
expressed the sense of Congress that ``all governments should 
undertake good faith efforts to facilitate the return of 
private and public property, such as works of art, to the 
rightful owners in cases where assets were confiscated from the 
claimant during the period of Nazi rule and there is reasonable 
proof that the claimant is the rightful owner.''
    Congress finds that, in 2009, the United States 
participated in a Holocaust Era Assets Conference in Prague, 
Czech Republic, with forty-five other nations, Serbia, and the 
Holy See. At the conclusion of this conference, almost all of 
the participating nations (including the United States) issued 
the Terezin Declaration, which reaffirmed the 1998 Washington 
Conference Principles and urged all participants ``to ensure 
that their legal systems or alternative processes, while taking 
into account the different legal traditions, facilitate just 
and fair solutions with regard to Nazi-confiscated and looted 
art, and to make certain that claims to recover such art are 
resolved expeditiously and based on the facts and merits of the 
claims and all the relevant documents submitted by all 
parties.'' The Declaration also urged participants to 
``consider all relevant issues when applying various legal 
provisions that may impede the restitution of art and cultural 
property, in order to achieve just and fair solutions, as well 
as alternative dispute resolution, where appropriate under 
law.''
    Congress finds that victims of Nazi persecution and their 
heirs have taken legal action in the United States to recover 
art and other cultural property lost in the Holocaust. While 
most such claims are settled amicably, lawsuits that proceed 
may face procedural obstacles due to State statutes of 
limitations. The unique and horrific circumstances of World War 
II and the Holocaust make time-based defenses especially 
burdensome to the victims and their heirs. Those seeking 
recovery of Nazi-confiscated art must painstakingly piece 
together their cases from a fragmentary historical record 
ravaged by persecution, war, and genocide. This costly process 
often cannot be done within the time constraints imposed by 
existing law.
    Congress finds that Federal legislation is needed because 
the only court that has considered the question held that the 
U.S. Constitution prohibits States from making exceptions to 
their statutes of limitations to accommodate claims involving 
the recovery of Nazi-confiscated art.\28\ In light of this 
precedent, the enactment of a Federal law is necessary to 
ensure that claims to Nazi-confiscated art are adjudicated in 
accordance with United States policy as expressed in the 
Washington Conference Principles on Nazi-Confiscated Art, the 
Holocaust Victims Redress Act, and the Terezin Declaration.
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    \28\See Von Saher v. Norton Simon Museum of Art, 592 F.3d 954 (9th 
Cir. 2009).
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    Finally, Congress expresses its sense that the private 
resolution of claims by parties involved, on the merits and 
through the use of alternative dispute resolution such as 
mediation panels established for this purpose with the aid of 
experts in provenance research and history, will yield just and 
fair resolutions in a more efficient and predictable manner 
than litigation.

Section 3. Purposes of the Act

    This section establishes the purposes of the legislation: 
(i) first, to ensure that laws in the United States governing 
claims to art and cultural property confiscated by the Nazis 
further United States policy, as expressed in the Washington 
Conference Principles on Nazi-Confiscated Art, the Holocaust 
Victims Redress Act and the Terezin Declaration; and (ii) 
second, to ensure that such claims are not unfairly barred by 
statutes of limitations and are resolved in a just and fair 
manner.

Section 4. Definitions

    Subsection (1) defines ``actual discovery'' to mean 
knowledge, which in subsection (4) is defined as having actual 
knowledge of a fact or circumstance or sufficient information 
with regard to a relevant fact or circumstance to amount to 
actual knowledge thereof. For purposes of the limitations 
period established in Section 5(a), this is intended to require 
more than access to the information with regard to relevant 
facts and circumstances. The party must have the knowledge 
itself or have sufficient information to constitute actual 
knowledge.
    Subsection (2) defines with specificity what ``artwork and 
other property'' sought by plaintiffs are subject to the 
legislation. The definition extends to include not only fine 
art, but applied art, written texts, musical art and Judaica.
    Subsection (3) defines a ``covered period,'' within which 
losses are covered by the legislation. That period is defined 
as the period beginning on January 1, 1933 and ending on 
December 31, 1945. This period covers the rise of the Nazis to 
power in Germany and concludes following the Allied victory in 
World War II.
    Subsection (5) defines the Nazi persecution that may cause 
the loss of art or other cultural property caused by the bill. 
It applies to ``any persecution of a specific group of 
individuals based on Nazi ideology by the Government of 
Germany, its allies or agents, members of the Nazi Party, or 
their agents and associates, during the ``covered period.'' The 
Nazis persecuted many groups, and that persecution was executed 
by the Nazi Party, the government of Germany at the time, 
governments allied with Germany, private agents and others. 
This definition is intended to be broad, to facilitate the 
restitution of art and other cultural property lost during the 
covered period.

Section 5. Statute of limitations

    Subsection (a) is the focus of the legislation, a uniform, 
national, limitations period for covered claims to recover 
artwork and other cultural property. It applies to claims in 
Federal or State court and applies notwithstanding any other 
provision of Federal or State law, or any defense at law 
relating to the passage of time. Subsection (a) states that ``a 
civil claim or cause of action against a defendant to recover 
any artwork or other property that was lost during the covered 
period because of Nazi persecution'' can be brought within six 
years after the actual discovery by the claimant or their agent 
of two pieces of information:
          (1) the identity and location of the artwork or other 
        cultural property; and
          (2) a possessory interest of the claimant in the 
        artwork or other cultural property.
    The purpose of this section is to open courts to claimants 
to bring covered claims and have them resolved on the merits, 
consistent with the Terezin Declaration. While defenses at law 
related to the passage of time are not merely procedural, the 
special circumstances created by Nazi persecution necessitate 
an opportunity for their temporary waiver. The legislation 
provides that claims may be brought within six years of actual 
knowledge by the claimant or the claimant's agent of the 
identity and location of the artwork, as well as the claimant's 
possessory interest.
            Subsection (b). Possible misidentification
    Subsection (b) addresses the situation where works of art 
are produced in multiples, such as a print of which several 
virtually-identical copies are made. It states that, for cases 
in which the ``artwork or other cultural property is one of a 
group of substantially similar multiple artworks or other 
cultural property,'' ``actual discovery'' is deemed to occur 
when there are facts sufficient to form a basis to believe the 
work discovered is the work that was lost. Thus, if a claimant 
sees an identical print to one that was expropriated by the 
Nazis from the claimant or the claimant's predecessor in 
interest, the six years period will only start to run when the 
claimant has sufficient knowledge that the particular version 
of the artworks is the one that was taken.
            Subsection (c). Preexisting claims
    Because much information about art lost to the Nazis 
surfaced only decades after the fact and because of the 
historical, psychological and other barriers that prevented 
claims from having been brought, subsection (c) gives an 
opportunity to claimants to resuscitate claims that may have 
been barred in the past. It states that claims are deemed to 
have been ``actually discovered'' on the date of enactment if, 
before that date, the claimant had knowledge of the identity 
and location of the property and the possessory interest but 
the claim was barred by an applicable statute of limitations. 
Subsection (2) makes clear that claims that were not barred 
under preexisting law on the date of enactment can also be 
brought within the limitations period established under Section 
5. Claims that were dismissed pursuant to, or litigated to, a 
final judgment from which no appeal lies on the date of 
enactment are unaffected by this provision.
            Subsection (d). Applicability
    Subsection (d) establishes that Section 5 applies to claims 
pending on the date of enactment but that it ceases to apply to 
claims commenced after December 31, 2026.
            Subsection (e). Exception
    While the Holocaust Expropriated Art Recovery Act is 
animated by clear United States policy to facilitate the return 
of artwork and other cultural property lost in the Holocaust, 
Congress also recognizes the importance of quieting title in 
property generally and the importance that claimants assert 
their rights in a timely fashion. Because the events 
surrounding and including the Washington Conference occurred 
decades after the Holocaust and led to the publication of 
information about artwork and other cultural property that may 
have been expropriated by the Nazis, subsection (e) bars the 
application of the subsection (a) national limitations period 
in instances in which claimants acquired the requisite 
knowledge but failed to bring claims within a defined period. 
Subsection (e) states that claims do not benefit from the HEAR 
Act limitations period if the claimant had the relevant actual 
knowledge on or after January 1, 1999, not less than six years 
have passed from the date the claimant (or the claimant's 
predecessor in interest) had such knowledge, during any portion 
of that time the claim was timely and, nonetheless, the 
claimant failed to bring it. Nothing, however, bars the 
claimant from asserting claims that remain timely under 
applicable State law.
    The six year period in subsection 5(e) reflects that in 
subsection 5(a), but it is not intended to extend shorter 
limitations periods that came and went prior to the enactment 
of the HEAR Act. For instance, if the relevant conditions are 
met and the claim arose after 1999; the applicable limitations 
period was three years; and three years elapsed before the HEAR 
Act was enacted, the claim would fall under the 5(e) exception. 
The claimant must have had, however, an opportunity to bring a 
claim that was not time-barred during that six year period.
            Subsection (f). Rule of construction
    This subsection clarifies that nothing in the legislation 
should be construed to create a cause of action, under Federal 
or State law.
            Subsection (g). Sunset
    This subsection states that the limitations period 
established by the legislation comes into effect on January 1, 
2017, and ends on January 1, 2027. After the ten-year window 
created by the legislation, claims that could have been brought 
under it are governed by applicable preexisting Federal or 
State law.

             IV. CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

    The Committee sets forth, with respect to the bill. S, 
2763, the following estimate and comparison prepared by the 
Director of the Congressional Budget Office under section 402 
of the Congressional Budget Act of 1974:

                                                 November 21, 2016.
Hon. Chuck Grassley,
Chairman, Committee on the Judiciary,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 2763, the Holocaust 
Expropriated Art Recovery Act of 2016.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Robert Reese.
            Sincerely,
                                                        Keith Hall.
    Enclosure.

S. 2763--Holocaust Expropriated Art Recovery Act of 2016

    S. 2763 would create a new statute of limitations for 
filing civil claims in state or federal courts to recover 
artwork and other items misappropriated or stolen by the German 
government, or its allies or agents, between 1933 and 1945 in 
connection with the persecution of a specific group of 
individuals based on Nazi ideology. Under the bill, individuals 
could file such claims for up to six years after they discover 
the location of such items or, if discovery occurred prior to 
enactment of this bill, six years after enactment of S. 2763. 
This statute of limitations would remain in effect until 
January 1, 2027, at which point new claims to recover such 
artwork would be subject to any other applicable statutes of 
limitations.
    Based on information provided by the Administrative Office 
of the United States Courts, CBO estimates that implementing S. 
2763 would have no significant effect on the federal budget in 
any year.
    Enacting the bill could increase the number of civil cases 
filed in federal courts and increase the collection of civil 
filing fees, which are recorded in the budget as revenues. A 
portion of those revenues would be spent without further 
appropriation. CBO estimates that any additional fees collected 
would not exceed $500,000 in any year because of the small 
number of anticipated additional case filings under the bill. 
Furthermore, because such amounts would be partially offset by 
a corresponding increase in direct spending, CBO estimates that 
enacting the bill would have a negligible net effect on future 
deficits. Because enacting S. 2763 could affect revenues and 
associated direct spending, pay-as-you-go procedures apply.
    CBO estimates that enacting the legislation would not 
increase net-direct spending or on-budget deficits in any of 
the four consecutive 10-year periods beginning in 2027.
    S. 2763 would preempt state laws governing the passage of 
time for certain civil claims. The preemption would be a 
mandate as defined by the Unfunded Mandates Reform Act (UMRA) 
and may result in a higher number of civil claims in state 
courts. However, because of the small number of claimants for 
such civil cases, CBO estimates that the cost of the mandate 
would be well below the threshold established in UMRA ($77 
million in 2016, adjusted annually for inflation).
    The bill contains no private-sector mandates as defined in 
UMRA.
    The CBO staff contacts for this estimate are Robert Reese 
(for federal costs) and Rachel Austin (for intergovernmental 
mandates). The estimate was approved by H. Samuel Papenfuss, 
Deputy Assistant Director for Budget Analysis.

                    V. REGULATORY IMPACT EVALUATION

    In compliance with rule XXVI of the Standing Rules of the 
Senate, the Committee finds that no significant regulatory 
impact will result from the enactment of S. 2763.

                             VI. CONCLUSION

    The Holocaust Expropriated Art Recovery Act, S. 2673, 
addresses the need to provide the victims of Holocaust-era 
persecution and their heirs a fair opportunity to recover works 
of art confiscated or misappropriated by the Nazis or lost 
during the Holocaust.

       VII. CHANGES TO EXISTING LAW MADE BY THE BILL, AS REPORTED

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, the Committee finds no changes in 
existing law made by S. 2673, as ordered reported.

                                  [all]
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