[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1835 Introduced in House (IH)]







105th CONGRESS
  1st Session
                                H. R. 1835

    To provide a more just and uniform procedure for Federal civil 
                              forfeitures.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             June 10, 1997

  Mr. Hyde (for himself, Mr. McDermott, Mrs. Kelly, Mr. Hayworth, Mr. 
Stark, Ms. DeGette, Ms. Jackson-Lee of Texas, Mr. Conyers, Mr. Frank of 
Massachusetts, Mr. Barr of Georgia, Mrs. Meek of Florida, Mr. Martinez, 
  Ms. Lofgren, Mr. Wicker, Mr. Graham, Mr. Manzullo, Mr. Schiff, Mr. 
Clay, Mr. Evans, Mr. Foley, Mr. Foglietta, Mr. Parker, Mr. Dellums, Mr. 
Bliley, Mr. Brown of Ohio, Mr. Watt of North Carolina, Mr. Berman, Mr. 
   Baker, and Mr. Cummings) introduced the following bill; which was 
  referred to the Committee on the Judiciary, and in addition to the 
Committee on Ways and Means, for a period to be subsequently determined 
 by the Speaker, in each case for consideration of such provisions as 
        fall within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
    To provide a more just and uniform procedure for Federal civil 
                              forfeitures.

    Be it enacted by the Senate and House of Representatives 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 following:
    ``(j)(1)(A) In any nonjudicial civil forfeiture proceeding 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 proceeding 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 such seized property 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 given.
    ``(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 forfeiture 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.
    ``(3)(A) If the person filing a claim is financially unable 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--
            ``(i) the nature and value of the property subject to 
        forfeiture, including the hardship to the claimant from the 
        loss of the property seized, compared to the expense of 
        appointing counsel;
            ``(ii) the claimant's standing to contest the forfeiture; 
        and
            ``(iii) 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--
            ``(i) be equivalent to that provided for court-appointed 
        representation under section 3006A of this title, and
            ``(ii) be paid from the Justice Assets Forfeiture Fund 
        established under section 524 of title 28, or in a case under 
        the jurisdiction of the Treasury Department, from the Customs 
        Forfeiture Fund established under section 613A of the Tariff 
        Act of 1930.
    ``(4) In all suits or actions (other than those arising under 
section 592 of the Tariff Act of 1930) brought 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.
    ``(5)(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 expected under the 
        circumstances to terminate such use of the property.
    ``(C) With respect to a property interest acquired after the 
conduct giving rise to forfeiture has taken place, the term `innocent 
owner' means a person who, at the time that person acquired the 
interest in the property, did not know--
            ``(i)(I) of the conduct giving rise to the forfeiture; and
            ``(II) that the property was involved in, or the proceeds 
        of, that conduct; or
            ``(ii) that the Government was seeking forfeiture of that 
        property.
    ``(6) For the purposes of paragraph (5) of this subsection--
            ``(A) a person may show that such person did all that 
        reasonably can be expected, among other ways, by 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 permission for 
                those engaging in such conduct to use the property or 
                took reasonable actions in consultation with a law 
                enforcement agency to discourage or prevent the illegal 
                use of the property; and
            ``(B) in order to do all that can reasonably be expected, a 
        person is not required to take steps that the person reasonably 
        believes would be likely to subject the person to physical 
        danger.
    ``(7) As used in this section, the term `civil forfeiture statute' 
means any provision of Federal law providing for the forfeiture of 
property other than as a sentence imposed upon conviction of a criminal 
offense.
    ``(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 hardship to the claimant, 
        such as preventing the functioning 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 Government of the seized 
        property outweighs the risk that the property will be 
        destroyed, damaged, lost, concealed, or transferred if it is 
        returned to the claimant 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 paragraph (3), the 
district court shall order that the property be returned to the 
claimant, pending completion of proceedings by the United States 
Government to obtain forfeiture of the property, if the claimant shows 
that the requirements 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 
              TO THE CONTROLLED SUBSTANCES ACT.

    (a) Use of Assets Forfeiture Fund for Attorney Fees.--Section 
524(c) of title 28, United States Code, is amended--
            (1) by striking out ``law enforcement purposes--'' 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 Forfeiture Reform Act;''; and
            (4) by striking out ``(H)'' in subparagraph (A) of 
        paragraph (9) and inserting ``(I)''.
    (b) In Rem Proceedings.--Paragraph (6) of Rule C of the 
Supplemental Rules for Certain Admiralty and Maritime Claims to the 
Federal Rules of Civil Procedure (28 U.S.C. Appendix) is amended by 
striking ``10 days'' and inserting ``30 days''.
    (c) Controlled Substances Act.--Section 518 of the Controlled 
Substances Act (21 U.S.C. 888) is repealed.

SEC. 4. CONFORMING AMENDMENTS TO REVENUE LAWS.

    (a) In General.--Section 615 of the Tariff Act of 1930 (19 U.S.C. 
1615) is amended to read as follows:

``SEC. 615. APPLICATION OF TITLE 18, UNITED STATES CODE TO FORFEITURE 
              PROCEEDINGS.

    ``Those portions of section 981 of title 18, United States Code, 
that apply generally to civil forfeiture procedures apply also to any 
civil forfeiture proceeding relating to the condemnation or forfeiture 
of property for violation of the customs laws.''.
    (b) Conforming Repeal.--Section 608 of the Tariff Act of 1930 (19 
U.S.C. 1608) is repealed.
    (c) Time for Filing Claims.--Section 609(a) of the Tariff Act of 
1930 (19 U.S.C. 1609) is amended--
            (1) by striking ``twenty'' and inserting ``30''; and
            (2) by striking ``or bond''.
    (d) Treasury Asset Forfeiture Fund.--Section 613A(a)(3) of the 
Tariff Act of 1930 (19 U.S.C. 1613b(a)(3)) is amended--
            (1) by striking ``and'' at the end of subparagraph (E);
            (2) by striking the period at the end of subparagraph (F) 
        and inserting ``; and''; and
            (3) by adding at the end the following:
            ``(G) payment of court-awarded compensation for 
        representation of claimants pursuant to section 981 of title 
        18, United States Code.''.
    (e) Forfeiture of Personal Property.--Section 7325 of the Internal 
Revenue Code of 1986 is amended--
            (1) in paragraph (2), by striking ``for 3 weeks'' through 
        ``such notice'' and inserting ``in accordance with section 
        981(j)(1) of title 18, United States Code'';
            (2) in paragraph (3), by amending the head to read ``Filing 
        of claim'' and by striking ``stating his interest in the 
        articles seized'' through ``description of the goods seized,'' 
        and inserting ``stating such person's interest in the articles 
        seized. Such person shall transmit a duplicate list or 
        description of the goods seized''; and
            (3) in paragraph (4), by amending the heading to read 
        ``Sale'' and by striking ``and no bond is given within the time 
        above specified''.

SEC. 5. COMPENSATION FOR DAMAGE TO SEIZED PROPERTY.

    (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 section 1346(b) 
        of this title do apply to any claim based on the negligent 
        destruction, injury, or loss of goods, merchandise, or other 
        property, while in the possession of any officer of customs or 
        excise or any other law enforcement 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 settle, 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 employment.
            (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. 6. 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 judgment 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 instruments, 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 interest is 
                actually paid, an imputed amount of interest that such 
                currency, instruments, or proceeds 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. 7. 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 6 shall apply to any 
        judgment entered after the date of enactment of this Act.
                                 <all>