[Senate Report 114-394]
[From the U.S. Government Publishing Office]
Calendar No. 654
114th Congress } { Report
SENATE
2d Session } { 114-394
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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.
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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).
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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\
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\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\
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\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).
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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).
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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\
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\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).
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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.
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\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.
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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.
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