IB
Union Calendar No. 110
106TH CONGRESS
1ST SESSION
H. R. 1658
[Report No. 106–192]
To provide a more just and uniform procedure for Federal civil forfeitures,
and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
MAY 4, 1999
Mr. HYDE (for himself, Mr. CONYERS, Mr. BARR of Georgia, Mr. FRANK of
Massachusetts, Mr. BACHUS, Ms. LOFGREN, Mr. SMITH of Texas, Mr.
BROWN
of Ohio, Mr. CLAY, Mr. CRANE, Mr. CUMMINGS, Mr.
CUNNINGHAM, Mr. EWING, Mr. FARR of California, Mr. FOLEY, Mr.
GILLMOR, Mr. HAYWORTH, Mr. HINCHEY, Mr. HOLDEN, Mrs. JONES of
Ohio, Mr. MCDERMOTT, Mr. MANZULLO, Mr. MARTINEZ, Ms. NORTON,
Ms. RIVERS, Mr. SCOTT, Mr. SHOWS, Mr. TAYLOR of North Carolina,
Mr. WELDON of Pennsylvania, and Mr. YOUNG of Alaska) introduced the
following bill; which was referred to the Committee on the Judiciary
JUNE 18, 1999
Additional sponsors: Mr. WALDEN of Oregon, Mr. WAMP, Mr. CANADY of
Florida, Mrs. CHRISTENSEN, Mr. KING, Mr. PHELPS, Mr. RAHALL, Ms.
BALDWIN, Mr. CAMPBELL, Mr. ENGLISH, Mrs. KELLY, Mr. LOBIONDO,
Mr. GARY MILLER of California, Mr. GEORGE MILLER of California, Mrs.
MINK of Hawaii, Mr. STARK, Mr. BLUNT, Mr. PACKARD, Mr. TERRY,
Mr. DEFAZIO, Ms. KILPATRICK, Mr. METCALF, Mr. MURTHA, Mr. NAD-
LER, Mr. NETHERCUTT, Mr. STUMP, Mr. BRADY of Pennsylvania, Mrs.
BONO, Mr. COBLE, and Mr. PAUL
JUNE 18, 1999
Reported with amendments, committed to the Committee of the Whole House
on the State of the Union, and ordered to be printed
[Omit the part struck through and insert the part printed in italic]
A BILL
To provide a more just and uniform procedure for Federal
civil forfeitures, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Civil Asset Forfeiture
Reform Act’’.
SEC. 2. CREATION OF GENERAL RULES RELATING TO CIVIL
FORFEITURE PROCEEDINGS.
Section 981 of title 18, United States Code, is
amended—
(1) by inserting after subsection (i) the fol-
lowing:
‘‘(j)(1)(A) In any nonjudicial civil forfeiture pro-
ceeding under a civil forfeiture statute, with respect to
which the agency conducting a seizure of property must
give written notice to interested parties, such notice shall
be given as soon as practicable and in no case more than
60 days after the later of the date of the seizure or the
date the identity of the interested party is first known or
discovered by the agency, except that the court may extend
the period for filing a notice for good cause shown.
‘‘(B) A person entitled to written notice in such pro-
ceeding to whom written notice is not given may on motion
void the forfeiture with respect to that person’s interest
in the property, unless the agency shows—
‘‘(i) good cause for the failure to give notice to
that person; or
‘‘(ii) that the person otherwise had actual notice
of the seizure.
‘‘(C) If the government does not provide notice of a
seizure of property in accordance with subparagraph (A),
it shall return the property and may not take any further
action to effect the forfeiture of such property.
‘‘(2)(A) Any person claiming property seized in a
nonjudicial forfeiture proceeding may file a claim with the
appropriate official after the seizure.
‘‘(B) A claim under subparagraph (A) may not be
filed later than 30 days after—
‘‘(i) the date of final publication of notice of
seizure; or
‘‘(ii) in the case of a person entitled to written
notice, the date that notice is received.
‘‘(C) The claim shall state the claimant’s interest in
the property.
‘‘(D) Not later than 90 days after a claim has been
filed, the Attorney General shall file a complaint for for-
feiture in the appropriate court or return the property,
except that a court in the district in which the complaint
will be filed may extend the period for filing a complaint
for good cause shown or upon agreement of the parties.
‘‘(E) If the government does not file a complaint for
forfeiture of property in accordance with subparagraph
(D), it shall return the property and may not take any
further action to effect the forfeiture of such property.
‘‘(F) Any person may bring a claim under subpara-
graph (A) without posting bond with respect to the prop-
erty which is the subject of the claim.
‘‘(3)(A) In any case where the Government files in
the appropriate United States district court a complaint
for forfeiture of property, any person claiming an interest
in the seized property may file a claim asserting such per-
son’s interest in the property within 30 days of service
of the Government’s complaint or, where applicable, within
30 days of alternative publication notice.
‘‘(B) A person asserting an interest in seized property
in accordance with subparagraph (A) shall file an answer
to the Government’s complaint for forfeiture within 20
days of the filing of the claim.
‘‘(4)(A) If the person filing a claim is financially un-
able to obtain representation by counsel, the court may
appoint counsel to represent that person with respect to
the claim.
‘‘(B) In determining whether to appoint counsel to
represent the person filing the claim, the court shall take
into account such factors as—
‘‘(i) the claimant’s standing to contest the for-
feiture; and
‘‘(ii) whether the claim appears to be made in
good faith or to be frivolous.
‘‘(C) The court shall set the compensation for that
representation, which shall be equivalent to that provided
for court-appointed representation under section 3006A of
this title, and to pay such cost there are authorized to
be appropriated such sums as are necessary as an addition
to the funds otherwise appropriated for the appointment
of counsel under such section.
‘‘(5) In all suits or actions brought under any civil
forfeiture statute for the civil forfeiture of any property,
the burden of proof is on the United States Government
to establish, by clear and convincing evidence, that the
property is subject to forfeiture.
‘‘(6)(A) An innocent owner’s interest in property
shall not be forfeited under any civil forfeiture statute.
‘‘(B) With respect to a property interest in existence
at the time the illegal conduct giving rise to forfeiture took
place, the term ‘innocent owner’ means an owner who—
‘‘(i) did not know of the conduct giving rise to
forfeiture; or
‘‘(ii) upon learning of the conduct giving rise to
the forfeiture, did all that reasonably could be ex-
pected under the circumstances to terminate such
use of the property.
‘‘(C) With respect to a property interest acquired
after the conduct giving rise to the forfeiture has taken
place, the term ‘innocent owner’ means a person who, at
the time that person acquired the interest in the property,
was—
‘‘(i)(I) a bona fide purchaser or seller for value
(including a purchaser or seller of goods or services
for value); or
‘‘(II) a person who received acquired an interest
in property through probate or inheritance; and
‘‘(ii) at the time of the purchase or receipt ac-
quisition reasonably without cause to believe that
the property was subject to forfeiture.
‘‘(D) Where the property subject to forfeiture is real
property, and the claimant uses the property as the claim-
ant’s primary residence and is the spouse or minor child
of the person who committed the offense giving rise to the
forfeiture, an otherwise valid innocent owner claim shall
not be denied on the ground that the claimant acquired
the interest in the property—
‘‘(i) in the case of a spouse, through dissolution
of marriage or by operation of law, or
‘‘(ii) in the case of a minor child, as an inherit-
ance upon the death of a parent,
and not through a purchase. However, the claimant must
establish, in accordance with subparagraph (C), that at
the time of the acquisition of the property interest, the
claimant was reasonably without cause to believe that the
property was subject to forfeiture.
‘‘(7) For the purposes of paragraph (6)—
‘‘(A) ways in which a person may show that
such person did all that reasonably can be expected
may include demonstrating that such person, to the
extent permitted by law—
‘‘(i) gave timely notice to an appropriate
law enforcement agency of information that led
the person to know the conduct giving rise to
a forfeiture would occur or has occurred; and
‘‘(ii) in a timely fashion revoked or at-
tempted to revoke permission for those engag-
ing in such conduct to use the property or took
‘‘(ii) a bailee unless the bailor is identified
and the bailee shows a colorable legitimate in-
terest in the property seized; or
‘‘(iii) a nominee who exercises no dominion
or control over the property.
‘‘(k)(1) A claimant under subsection (j) is entitled to
immediate release of seized property if—
‘‘(A) the claimant has a possessory interest in
the property;
‘‘(B) the continued possession by the United
States Government pending the final disposition of
forfeiture proceedings will cause substantial hard-
ship to the claimant, such as preventing the func-
tioning of a business, preventing an individual from
working, or leaving an individual homeless; and
‘‘(C) the claimant’s likely hardship from the
continued possession by the United States Govern-
ment of the seized property outweighs the risk that
the property will be destroyed, damaged, lost, con-
cealed, or transferred if it is returned to the claim-
ant during the pendency of the proceeding.
‘‘(2) A claimant seeking release of property under
this subsection must request possession of the property
from the appropriate official, and the request must set
forth the basis on which the requirements of paragraph
(1) are met.
‘‘(3) If within 10 days after the date of the request
the property has not been released, the claimant may file
a motion or complaint in any district court that would
have jurisdiction of forfeiture proceedings relating to the
property setting forth—
‘‘(A) the basis on which the requirements of
paragraph (1) are met; and
‘‘(B) the steps the claimant has taken to secure
release of the property from the appropriate official.
‘‘(4) If a motion or complaint is filed under para-
graph (3), the district court shall order that the property
be returned to the claimant, pending completion of pro-
ceedings by the United States Government to obtain for-
feiture of the property, if the claimant shows that the re-
quirements of paragraph (1) have been met. The court
may place such conditions on release of the property as
it finds are appropriate to preserve the availability of the
property or its equivalent for forfeiture.
‘‘(5) The district court shall render a decision on a
motion or complaint filed under paragraph (3) no later
than 30 days after the date of the filing, unless such 30-
day limitation is extended by consent of the parties or by
the court for good cause shown.’’; and
(2) by redesignating existing subsection (j) as
subsection (l).
SEC. 3. CONFORMING
AMENDMENTS
TO
TITLE
28,
TO
RULES OF PROCEDURE, AND AMENDMENT TO
THE CONTROLLED SUBSTANCES ACT.
(a) USE OF ASSETS FORFEITURE FUND FOR ATTOR-
NEY FEES.—Section 524(c) of title 28, United States
Code, is amended—
(1) by striking out ‘‘law enforcement pur-
poses—’’ in the matter preceding subparagraph (A)
in paragraph (1) and inserting ‘‘purposes—’’;
(2) by redesignating the final 3 subparagraphs
in paragraph (1) as subparagraphs (J), (K), and
(L), respectively;
(3) by inserting after subparagraph (G) of
paragraph (1) the following new subparagraph:
‘‘(H) payment of court-awarded compensation
for representation of claimants pursuant to section
981 of title 18;
‘‘(I) payment of compensation for damages to
property under section 5(b) of the Civil Asset For-
feiture Reform Act;’’; and
(4) by striking out ‘‘(H)’’ in subparagraph (A)
of paragraph (9) and inserting ‘‘(I)’’.
(b) CONTROLLED SUBSTANCES ACT.—Section 518 of
the Controlled Substances Act (21 U.S.C. 888) is re-
pealed.
SEC. 4. COMPENSATION FOR DAMAGE TO SEIZED PROP-
ERTY.
(a) TORT CLAIMS ACT.—Section 2680(c) of title 28,
United States Code, is amended—
(1) by striking ‘‘law-enforcement’’ and inserting
‘‘law enforcement’’; and
(2) by inserting before the period the following:
‘‘, except that the provisions of this chapter and sec-
tion 1346(b) of this title do apply to any claim based
on the destruction, injury, or loss of goods, merchan-
dise, or other property, while in the possession of
any officer of customs or excise or any other law en-
forcement officer, if the property was seized for the
purpose of forfeiture but the interest of the claimant
is not forfeited’’.
(b) DEPARTMENT OF JUSTICE.—
(1) IN GENERAL.—With respect to a claim that
cannot be settled under chapter 171 of title 28,
United States Code, the Attorney General may set-
tle, for not more than $50,000 in any case, a claim
for damage to, or loss of, privately owned property
caused by an investigative or law enforcement officer
(as defined in section 2680(h) of title 28, United
States Code) who is employed by the Department of
Justice acting within the scope of his or her employ-
ment.
(2) LIMITATIONS.—The Attorney General may
not pay a claim under paragraph (1) that—
(A) is presented to the Attorney General
more than 1 year after it occurs; or
(B) is presented by an officer or employee
of the United States Government and arose
within the scope of employment.
SEC. 5. PREJUDGMENT AND POSTJUDGMENT INTEREST.
Section 2465 of title 28, United States Code, is
amended—
(1) by inserting ‘‘(a)’’ before ‘‘Upon’’; and
(2) adding at the end the following:
‘‘(b) INTEREST.—
‘‘(1) POST-JUDGMENT.—Upon entry of judg-
ment for the claimant in any proceeding to condemn
or forfeit property seized or arrested under any Act
of Congress, the United States shall be liable for
post-judgment interest as set forth in section 1961
of this title.
‘‘(2) PRE-JUDGMENT.—The United States shall
not be liable for prejudgment interest, except that in
cases involving currency, other negotiable instru-
ments, or the proceeds of an interlocutory sale, the
United States shall disgorge to the claimant any
funds representing—
‘‘(A) interest actually paid to the United
States from the date of seizure or arrest of the
property that resulted from the investment of
the property in an interest-bearing account or
instrument; and
‘‘(B) for any period during which no inter-
est is actually paid, an imputed amount of in-
terest that such currency, instruments, or pro-
ceeds would have earned at the rate described
in section 1961.
‘‘(3) LIMITATION ON OTHER PAYMENTS.—The
United States shall not be required to disgorge the
value of any intangible benefits nor make any other
payments to the claimant not specifically authorized
by this subsection.’’.
SEC. 6. APPLICABILITY.
(a) IN GENERAL.—Unless otherwise specified in this
Act, the amendments made by this Act apply with respect
to claims, suits, and actions filed on or after the date of
the enactment of this Act.
(b) EXCEPTIONS.—
(1) The standard for the required burden of
proof set forth in section 981 of title 18, United
States Code, as amended by section 2, shall apply in
cases pending on the date of the enactment of this
Act.
(2) The amendment made by section 5 shall
apply to any judgment entered after the date of en-
actment of this Act.