IIB

106TH CONGRESS

1ST SESSION H. R. 1658

IN THE SENATE OF THE UNITED STATES

JUNE 28, 1999

Received; read twice and referred to the Committee on the Judiciary

AN ACT

To provide a more just and uniform procedure for Federal

civil forfeitures, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
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1 SECTION 1. SHORT TITLE.

2 This Act may be cited as the ‘‘Civil Asset Forfeiture

3 Reform Act’’.

4 SEC. 2. CREATION OF GENERAL RULES RELATING TO CIVIL

5 FORFEITURE PROCEEDINGS.

6 Section 981 of title 18, United States Code, is

7 amended—

8 (1) by inserting after subsection (i) the fol9 lowing:

10 ‘‘(j)(1)(A) In any nonjudicial civil forfeiture pro11 ceeding under a civil forfeiture statute, with respect to

12 which the agency conducting a seizure of property must

13 give written notice to interested parties, such notice shall

14 be given as soon as practicable and in no case more than

15 60 days after the later of the date of the seizure or the

16 date the identity of the interested party is first known or

17 discovered by the agency, except that the court may extend

18 the period for filing a notice for good cause shown.

19 ‘‘(B) A person entitled to written notice in such pro20 ceeding to whom written notice is not given may on motion

21 void the forfeiture with respect to that person’s interest

22 in the property, unless the agency shows—

23 ‘‘(i) good cause for the failure to give notice to

24 that person; or

25 ‘‘(ii) that the person otherwise had actual notice

26 of the seizure.
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1 ‘‘(C) If the Government does not provide notice of

2 a seizure of property in accordance with subparagraph

3 (A), it shall return the property and may not take any

4 further action to effect the forfeiture of such property.

5 ‘‘(2)(A) Any person claiming property seized in a

6 nonjudicial forfeiture proceeding may file a claim with the

7 appropriate official after the seizure.

8 ‘‘(B) A claim under subparagraph (A) may not be

9 filed later than 30 days after—

10 ‘‘(i) the date of final publication of notice of

11 seizure; or

12 ‘‘(ii) in the case of a person entitled to written

13 notice, the date that notice is received.

14 ‘‘(C) The claim shall state the claimant’s interest in

15 the property.

16 ‘‘(D) Not later than 90 days after a claim has been

17 filed, the Attorney General shall file a complaint for for18 feiture in the appropriate court or return the property,

19 except that a court in the district in which the complaint

20 will be filed may extend the period for filing a complaint

21 for good cause shown or upon agreement of the parties.

22 ‘‘(E) If the Government does not file a complaint for

23 forfeiture of property in accordance with subparagraph

24 (D), it shall return the property and may not take any

25 further action to effect the forfeiture of such property.
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1 ‘‘(F) Any person may bring a claim under subpara2 graph (A) without posting bond with respect to the prop3 erty which is the subject of the claim.

4 ‘‘(3)(A) In any case where the Government files in

5 the appropriate United States district court a complaint

6 for forfeiture of property, any person claiming an interest

7 in the seized property may file a claim asserting such per8 son’s interest in the property within 30 days of service

9 of the Government’s complaint or, where applicable, within

10 30 days of alternative publication notice.

11 ‘‘(B) A person asserting an interest in seized property

12 in accordance with subparagraph (A) shall file an answer

13 to the Government’s complaint for forfeiture within 20

14 days of the filing of the claim.

15 ‘‘(4)(A) If the person filing a claim is financially un16 able to obtain representation by counsel, the court may

17 appoint counsel to represent that person with respect to

18 the claim.

19 ‘‘(B) In determining whether to appoint counsel to

20 represent the person filing the claim, the court shall take

21 into account such factors as—

22 ‘‘(i) the claimant’s standing to contest the for23 feiture; and

24 ‘‘(ii) whether the claim appears to be made in

25 good faith or to be frivolous.
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1 ‘‘(C) The court shall set the compensation for that

2 representation, which shall be equivalent to that provided

3 for court-appointed representation under section 3006A of

4 this title, and to pay such cost there are authorized to

5 be appropriated such sums as are necessary as an addition

6 to the funds otherwise appropriated for the appointment

7 of counsel under such section.

8 ‘‘(5) In all suits or actions brought under any civil

9 forfeiture statute for the civil forfeiture of any property,

10 the burden of proof is on the United States Government

11 to establish, by clear and convincing evidence, that the

12 property is subject to forfeiture.

13 ‘‘(6)(A) An innocent owner’s interest in property

14 shall not be forfeited under any civil forfeiture statute.

15 ‘‘(B) With respect to a property interest in existence

16 at the time the illegal conduct giving rise to forfeiture took

17 place, the term ‘innocent owner’ means an owner who—

18 ‘‘(i) did not know of the conduct giving rise to

19 forfeiture; or

20 ‘‘(ii) upon learning of the conduct giving rise to

21 the forfeiture, did all that reasonably could be ex22 pected under the circumstances to terminate such

23 use of the property.

24 ‘‘(C) With respect to a property interest acquired

25 after the conduct giving rise to the forfeiture has taken
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1 place, the term ‘innocent owner’ means a person who, at

2 the time that person acquired the interest in the property,

3 was—

4 ‘‘(i)(I) a bona fide purchaser or seller for value

5 (including a purchaser or seller of goods or services

6 for value); or

7 ‘‘(II) a person who acquired an interest in prop8 erty through probate or inheritance; and

9 ‘‘(ii) at the time of the purchase or acquisition

10 reasonably without cause to believe that the property

11 was subject to forfeiture.

12 ‘‘(D) Where the property subject to forfeiture is real

13 property, and the claimant uses the property as the claim14 ant’s primary residence and is the spouse or minor child

15 of the person who committed the offense giving rise to the

16 forfeiture, an otherwise valid innocent owner claim shall

17 not be denied on the ground that the claimant acquired

18 the interest in the property—

19 ‘‘(i) in the case of a spouse, through dissolution

20 of marriage or by operation of law; or

21 ‘‘(ii) in the case of a minor child, as an inherit22 ance upon the death of a parent,

23 and not through a purchase. However, the claimant must

24 establish, in accordance with subparagraph (C), that at

25 the time of the acquisition of the property interest, the
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1 claimant was reasonably without cause to believe that the

2 property was subject to forfeiture.

3 ‘‘(7) For the purposes of paragraph (6)—

4 ‘‘(A) ways in which a person may show that

5 such person did all that reasonably can be expected

6 may include demonstrating that such person, to the

7 extent permitted by law—

8 ‘‘(i) gave timely notice to an appropriate

9 law enforcement agency of information that led

10 the person to know the conduct giving rise to

11 a forfeiture would occur or has occurred; and

12 ‘‘(ii) in a timely fashion revoked or at13 tempted to revoke permission for those engag14 ing in such conduct to use the property or took

15 reasonable actions in consultation with a law

16 enforcement agency to discourage or prevent

17 the illegal use of the property; and

18 ‘‘(B) in order to do all that can reasonably be

19 expected, a person is not required to take steps that

20 the person reasonably believes would be likely to

21 subject any person (other than the person whose

22 conduct gave rise to the forfeiture) to physical dan23 ger.

24 ‘‘(8) As used in this subsection:
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1 ‘‘(1) The term ‘civil forfeiture statute’ means

2 any provision of Federal law (other than the Tariff

3 Act of 1930 or the Internal Revenue Code of 1986)

4 providing for the forfeiture of property other than as

5 a sentence imposed upon conviction of a criminal of6 fense.

7 ‘‘(2) The term ‘owner’ means a person with an

8 ownership interest in the specific property sought to

9 be forfeited, including a leasehold, lien, mortgage,

10 recorded security device, or valid assignment of an

11 ownership interest. Such term does not include—

12 ‘‘(i) a person with only a general unse13 cured interest in, or claim against, the property

14 or estate of another;

15 ‘‘(ii) a bailee unless the bailor is identified

16 and the bailee shows a colorable legitimate in17 terest in the property seized; or

18 ‘‘(iii) a nominee who exercises no dominion

19 or control over the property.

20 ‘‘(k)(1) A claimant under subsection (j) is entitled to

21 immediate release of seized property if—

22 ‘‘(A) the claimant has a possessory interest in

23 the property;

24 ‘‘(B) the continued possession by the United

25 States Government pending the final disposition of
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1 forfeiture proceedings will cause substantial hard2 ship to the claimant, such as preventing the func3 tioning of a business, preventing an individual from

4 working, or leaving an individual homeless; and

5 ‘‘(C) the claimant’s likely hardship from the

6 continued possession by the United States Govern7 ment of the seized property outweighs the risk that

8 the property will be destroyed, damaged, lost, con9 cealed, or transferred if it is returned to the claim10 ant during the pendency of the proceeding.

11 ‘‘(2) A claimant seeking release of property under

12 this subsection must request possession of the property

13 from the appropriate official, and the request must set

14 forth the basis on which the requirements of paragraph

15 (1) are met.

16 ‘‘(3) If within 10 days after the date of the request

17 the property has not been released, the claimant may file

18 a motion or complaint in any district court that would

19 have jurisdiction of forfeiture proceedings relating to the

20 property setting forth—

21 ‘‘(A) the basis on which the requirements of

22 paragraph (1) are met; and

23 ‘‘(B) the steps the claimant has taken to secure

24 release of the property from the appropriate official.
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1 ‘‘(4) If a motion or complaint is filed under para2 graph (3), the district court shall order that the property

3 be returned to the claimant, pending completion of pro4 ceedings by the United States Government to obtain for5 feiture of the property, if the claimant shows that the re6 quirements of paragraph (1) have been met. The court

7 may place such conditions on release of the property as

8 it finds are appropriate to preserve the availability of the

9 property or its equivalent for forfeiture.

10 ‘‘(5) The district court shall render a decision on a

11 motion or complaint filed under paragraph (3) no later

12 than 30 days after the date of the filing, unless such 30-

13 day limitation is extended by consent of the parties or by

14 the court for good cause shown.’’; and

15 (2) by redesignating existing subsection (j) as

16 subsection (l).

17 SEC. 3. COMPENSATION FOR DAMAGE TO SEIZED PROP18 ERTY.

19 (a) TORT CLAIMS ACT.—Section 2680(c) of title 28,

20 United States Code, is amended—

21 (1) by striking ‘‘law-enforcement’’ and inserting

22 ‘‘law enforcement’’; and

23 (2) by inserting before the period the following:

24 ‘‘, except that the provisions of this chapter and sec25 tion 1346(b) of this title do apply to any claim based
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1 on the destruction, injury, or loss of goods, merchan2 dise, or other property, while in the possession of

3 any officer of customs or excise or any other law en4 forcement officer, if the property was seized for the

5 purpose of forfeiture under any provision of Federal

6 law (other than the Tariff Act of 1930 or the Inter7 nal Revenue Code of 1986) providing for the for8 feiture of property other than as a sentence imposed

9 upon conviction of a criminal offense but the interest

10 of the claimant is not forfeited’’.

11 (b) DEPARTMENT OF JUSTICE.—

12 (1) IN GENERAL.—With respect to a claim that

13 cannot be settled under chapter 171 of title 28,

14 United States Code, the Attorney General may set15 tle, for not more than $50,000 in any case, a claim

16 for damage to, or loss of, privately owned property

17 caused by an investigative or law enforcement officer

18 (as defined in section 2680(h) of title 28, United

19 States Code) who is employed by the Department of

20 Justice acting within the scope of his or her employ21 ment.

22 (2) LIMITATIONS.—The Attorney General may

23 not pay a claim under paragraph (1) that—

24 (A) is presented to the Attorney General

25 more than 1 year after it occurs; or
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1 (B) is presented by an officer or employee

2 of the United States Government and arose

3 within the scope of employment.

4 SEC. 4. PRE-JUDGMENT AND POST-JUDGMENT INTEREST.

5 Section 2465 of title 28, United States Code, is

6 amended—

7 (1) by inserting ‘‘(a)’’ before ‘‘Upon’’; and

8 (2) adding at the end the following:

9 ‘‘(b) INTEREST.—

10 ‘‘(1) POST-JUDGMENT.—Upon entry of judg11 ment for the claimant in any proceeding to condemn

12 or forfeit property seized or arrested under any pro13 vision of Federal law (other than the Tariff Act of

14 1930 or the Internal Revenue Code of 1986) pro15 viding for the forfeiture of property other than as a

16 sentence imposed upon conviction of a criminal of17 fense, the United States shall be liable for post-judg18 ment interest as set forth in section 1961 of this

19 title.

20 ‘‘(2) PRE-JUDGMENT.—The United States shall

21 not be liable for pre-judgment interest in a pro22 ceeding under any provision of Federal law (other

23 than the Tariff Act of 1930 or the Internal Revenue

24 Code of 1986) providing for the forfeiture of prop25 erty other than as a sentence imposed upon convic-
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1 tion of a criminal offense, except that in cases in2 volving currency, other negotiable instruments, or

3 the proceeds of an interlocutory sale, the United

4 States shall disgorge to the claimant any funds

5 representing—

6 ‘‘(A) interest actually paid to the United

7 States from the date of seizure or arrest of the

8 property that resulted from the investment of

9 the property in an interest-bearing account or

10 instrument; and

11 ‘‘(B) for any period during which no inter12 est is actually paid, an imputed amount of in13 terest that such currency, instruments, or pro14 ceeds would have earned at the rate described

15 in section 1961.

16 ‘‘(3) LIMITATION ON OTHER PAYMENTS.—The

17 United States shall not be required to disgorge the

18 value of any intangible benefits in a proceeding

19 under any provision of Federal law (than the Tariff

20 Act of 1930 or the Internal Revenue Code of 1986)

21 providing for the forfeiture of property other than as

22 a sentence imposed upon conviction of a criminal of23 fense nor make any other payments to the claimant

24 not specifically authorized by this subsection.’’.
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1 SEC. 5. APPLICABILITY.

2 (a) IN GENERAL.—Unless otherwise specified in this

3 Act, the amendments made by this Act apply with respect

4 to claims, suits, and actions filed on or after the date of

5 the enactment of this Act.

6 (b) EXCEPTIONS.—

7 (1) The standard for the required burden of

8 proof set forth in section 981 of title 18, United

9 States Code, as amended by section 2, shall apply in

10 cases pending on the date of the enactment of this

11 Act.

12 (2) The amendment made by section 4 shall

13 apply to any judgment entered after the date of the

14 enactment of this Act.

Passed the House of Representatives June 24, 1999.

Attest: MARTHA C. MORRISON,

Deputy Clerk.