HR 3210 EAS
Resolved, That the bill from the House of Representatives (H.R. 3210) entitled `An Act to ensure the continued financial capacity of insurers to provide coverage for risks from terrorism.', do pass with the following
Strike out all after the enacting clause and insert:
SECTION 1. SHORT TITLE.
This Act may be cited as the `Terrorism Risk Insurance Act of 2002'.
SEC. 2. CONGRESSIONAL FINDINGS AND PURPOSE.
(a) FINDINGS- The Congress finds that--
(1) property and casualty insurance firms are important financial institutions, the products of which allow mutualization of risk and the efficient use of financial resources and enhance the ability of the economy to maintain stability, while responding to a variety of economic, political, environmental, and other risks with a minimum of disruption;
(2) the ability of businesses and individuals to obtain property and casualty insurance at reasonable and predictable prices, in order to spread the risk of both routine and catastrophic loss, is critical to economic growth, urban development, and the construction and maintenance of public and private housing, as well as to the promotion of United States exports and foreign trade in an increasingly interconnected world;
(3) the ability of the insurance industry to cover the unprecedented financial risks presented by potential acts of terrorism in the United States can be a major factor in the recovery from terrorist attacks, while maintaining the stability of the economy;
(4) widespread financial market uncertainties have arisen following the terrorist attacks of September 11, 2001, including the absence of information from which financial institutions can make statistically valid estimates of the probability and cost of future terrorist events, and therefore the size, funding, and allocation of the risk of loss caused by such acts of terrorism;
(5) a decision by property and casualty insurers to deal with such uncertainties, either by terminating property and casualty coverage for losses arising from terrorist events, or by radically escalating premium coverage to compensate for risks of loss that are not readily predictable, could seriously hamper ongoing and planned construction, property acquisition, and other business projects, generate a dramatic increase in rents, and otherwise suppress economic activity; and
(6) the United States Government should provide temporary financial compensation to insured parties, contributing to the stabilization of the United States economy in a time of national crisis, while the financial services industry develops the systems, mechanisms, products, and programs necessary to create a viable financial services market for private terrorism risk insurance.
(b) PURPOSE- The purpose of this Act is to establish a temporary Federal program that provides for a transparent system of shared public and private compensation for insured losses resulting from acts of terrorism, in order to--
(1) protect consumers by addressing market disruptions and ensure the continued widespread availability and affordability of property and casualty insurance for terrorism risk; and
(2) allow for a transitional period for the private markets to stabilize, resume pricing of such insurance, and build capacity to absorb any future losses, while preserving State insurance regulation and consumer protections.
SEC. 3. DEFINITIONS.
In this Act, the following definitions shall apply:
(1) Act of terrorism-
(A) CERTIFICATION- The term `act of terrorism' means any act that is certified by the Secretary, in concurrence with the Secretary of State, and the Attorney General of the United States--
(i) to be a violent act or an act that is dangerous to--
(I) human life;
(II) property; or
(ii) to have resulted in damage within the United States, or outside the United States in the case of an air carrier or vessel described in paragraph (3)(A)(ii); and
(iii) to have been committed by an individual or individuals acting on behalf of any foreign person or foreign interest, as part of an effort to coerce the civilian population of the United States or to influence the policy or affect the conduct of the United States Government by coercion.
(B) LIMITATION- No act or event shall be certified by the Secretary as an act of terrorism if--
(i) the act or event is committed in the course of a war declared by the Congress; or
(ii) losses resulting from the act or event, in the aggregate, do not exceed $5,000,000.
(C) DETERMINATIONS FINAL- Any certification of, or determination not to certify, an act or event as an act of terrorism under this paragraph shall be final, and shall not be subject to judicial review.
(2) BUSINESS INTERRUPTION COVERAGE- The term `business interruption coverage'--
(A) means coverage of losses for temporary relocation expenses and ongoing expenses, including ordinary wages, where--
(i) there is physical damage to the business premises of such magnitude that the business cannot open for business;
(ii) there is physical damage to other property that totally prevents customers or employees from gaining access to the business premises; or
(iii) the Federal, State, or local government shuts down an area due to physical or environmental damage, thereby preventing customers or employees from gaining access to the business premises; and
(B) does not include lost profits, other than in the case of a small business concern (as defined in section 3 of the Small Business Act (15 U.S.C. 632) and applicable regulations thereunder) in any case described in clause (i), (ii), or (iii) of subparagraph (A).
(3) INSURED LOSS- The term `insured loss'--
(A) means any loss resulting from an act of terrorism that is covered by primary property and casualty insurance, including business interruption coverage, issued by a participating insurance company, if such loss--
(i) occurs within the United States; or
(ii) occurs to an air carrier (as defined in section 40102 of title 49, United States Code) or to a United States flag vessel (or a vessel based principally in the United States, on which United States income tax is paid and whose insurance coverage is subject to regulation in the United States), regardless of where the loss occurs; and
(B) excludes coverage under any life or health insurance.
(4) MARKET SHARE-
(A) IN GENERAL- The `market share' of a participating insurance company shall be calculated using the total amount of direct written property and casualty insurance premiums for the participating insurance company during the 2-year period preceding the year in which the subject act of terrorism occurred (or during such other period for which adequate data are available, as determined by the Secretary), as a percentage of the aggregate of all such property and casualty insurance premiums industry-wide during that period.
(B) ADJUSTMENTS- The Secretary may adjust the market share of a participating insurance company under subparagraph (A), as necessary to reflect current market participation of that participating insurance company.
(5) NAIC- The term `NAIC' means the National Association of Insurance Commissioners.
(6) PARTICIPATING INSURANCE COMPANY- The term `participating insurance company' means any insurance company, including any subsidiary or affiliate thereof--
(i) is licensed or admitted to engage in the business of providing primary insurance in any State, and was so licensed or admitted on September 11, 2001; or
(ii) is not licensed or admitted as described in clause (i), if it is an eligible surplus line carrier listed on the Quarterly Listing of Alien Insurers of the NAIC, or any successor thereto;
(B) that receives direct premiums for any type of commercial property and casualty insurance coverage or that, not later than 21 days after the date of enactment of this Act, submits written notification to the Secretary of its intent to participate in the Program with regard to personal lines of property and casualty insurance; and
(C) that meets any other criteria that the Secretary may reasonably prescribe.
(7) PARTICIPATING INSURANCE COMPANY DEDUCTIBLE- The term `participating insurance company deductible' means--
(A) a participating insurance company's market share, multiplied by $10,000,000,000, with respect to insured losses resulting from an act of terrorism occurring during the 1-year period beginning on the date of enactment of this Act; and
(B) a participating insurance company's market share, multiplied by $15,000,000,000, with respect to insured losses resulting from an act of terrorism occurring during the 1-year period beginning on the day after the date of expiration of the period described in subparagraph (A), if the Program is extended in accordance with section 6.
(8) PERSON- The term `person' means any individual, business or nonprofit entity (including those organized in the form of a partnership, limited liability company, corporation, or association), trust or estate, or a State or political subdivision of a State or other governmental unit.
(9) PROGRAM- The term `Program' means the Terrorism Insured Loss Shared Compensation Program established by this Act.
(10) PROPERTY AND CASUALTY INSURANCE- The term `property and casualty insurance'--
(A) means commercial lines of property and casualty insurance, including workers' compensation insurance;
(B) includes personal lines of property and casualty insurance, if a notification is made in accordance with paragraph (6)(B); and
(C) does not include--
(i) Federal crop insurance issued or reinsured under the Federal Crop Insurance Act (7 U.S.C. 1501 et seq.);
(ii) private mortgage insurance, as that term is defined in section 2 of the Homeowners Protection Act of 1998 (12 U.S.C. 4901); or
(iii) financial guaranty insurance.
(11) SECRETARY- The term `Secretary' means the Secretary of the Treasury.
(12) STATE- The term `State' means any State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, American Samoa, Guam, and each of the United States Virgin Islands.
(13) UNITED STATES- The term `United States' means the several States, and includes the territorial sea of the United States.
(14) RULE OF CONSTRUCTION FOR DATES- With respect to any reference to a date in this Act, such day shall be construed--
(A) to begin at 12:01 a.m. on that date; and
(B) to end at midnight on that date.
SEC. 4. TERRORISM INSURED LOSS SHARED COMPENSATION PROGRAM.
(a) ESTABLISHMENT OF PROGRAM-
(1) IN GENERAL- There is established in the Department of the Treasury the Terrorism Insured Loss Shared Compensation Program.
(2) AUTHORITY OF THE SECRETARY- Notwithstanding any other provision of State or Federal law, the Secretary shall administer the Program, and shall pay the Federal share of compensation for insured losses in accordance with subsection (e).
(b) CONDITIONS FOR FEDERAL PAYMENTS- No payment may be made by the Secretary under subsection (e), unless--
(1) a person that suffers an insured loss, or a person acting on behalf of that person, files a claim with a participating insurance company;
(2) the participating insurance company provides clear and conspicuous disclosure to the policyholder of the premium charged for insured losses covered by the Program and the Federal share of compensation for insured losses under the Program--
(A) in the case of any policy covering an insured loss that is issued on or after the date of enactment of this Act, on a separate line item in the policy, at the time of offer, purchase, and renewal of the policy; and
(B) in the case of any policy that is issued before the date of enactment of this Act, as a line item described in subparagraph (A), not later than 90 days after that date of enactment;
(3) the participating insurance company processes the claim for the insured loss in accordance with its standard business practices, and any reasonable procedures that the Secretary may prescribe; and
(4) the participating insurance company submits to the Secretary, in accordance with such reasonable procedures as the Secretary may establish--
(A) a claim for payment of the Federal share of compensation for insured losses under the Program;
(B) written verification and certification--
(i) of the underlying claim; and
(ii) of all payments made for insured losses; and
(C) certification of its compliance with the provisions of this subsection.
(c) MANDATORY PARTICIPATION; MANDATORY AVAILABILITY- Each insurance company that meets the definition of a participating insurance company under section 3--
(1) shall participate in the Program;
(2) shall make available in all of its property and casualty insurance policies (in all of its participating lines), coverage for insured losses; and
(3) shall make available property and casualty insurance coverage for insured losses that does not differ materially from the terms, amounts, and other coverage limitations applicable to losses arising from events other than acts of terrorism.
(d) PARTICIPATION BY SELF INSURED ENTITIES-
(1) DETERMINATION BY THE SECRETARY- The Secretary may, in consultation with the NAIC, establish procedures to allow participation in the Program by municipalities and other governmental or quasi-governmental entities (and by any other entity, as the Secretary deems appropriate) operating through self insurance arrangements that were in existence on September 11, 2001, but only if the Secretary makes a determination with regard to participation by any such entity before the occurrence of an act of terrorism in which the entity incurs an insured loss.
(2) PARTICIPATION- If the Secretary makes a determination to allow an entity described in paragraph (1) to participate in the Program, all reports, conditions, requirements, and standards established by this Act for participating insurance companies shall apply to any such entity, as determined to be appropriate by the Secretary.
(e) Shared Insurance Loss Coverage-
(1) FEDERAL SHARE-
(A) IN GENERAL- Subject to the cap on liability under paragraph (2) and the limitation under paragraph (6), the Federal share of compensation under the Program to be paid by the Secretary for insured losses resulting from an act of terrorism occurring during the 1-year period beginning on the date of enactment of this Act--
(i) shall be equal to 80 percent of that portion of the amount of aggregate insured losses that--
(I) exceeds the participating insurance company deductibles required to be paid for those insured losses; and
(II) does not exceed $10,000,000,000; and
(ii) shall be equal to 90 percent of that portion of the amount of aggregate insured losses that--
(I) exceeds the participating insurance company deductibles required to be paid for those insured losses; and
(II) exceeds $10,000,000,000.
(B) EXTENSION PERIOD- If the Program is extended in accordance with section 6, the Federal share of compensation under the Program to be paid by the Secretary for insured losses resulting from an act of terrorism occurring during the 1-year period beginning on the day after the date of expiration of the period described in subparagraph (A), shall be calculated in accordance with clauses (i) and (ii) of subparagraph (A), subject to the cap on liability in paragraph (2) and the limitation under paragraph (6).
(C) PRO RATA SHARE- If, during the period described in subparagraph (A) (or during the period described in subparagraph (B), if the Program is extended in accordance with section 6), the aggregate insured losses for that period exceed $10,000,000,000, the Secretary shall determine the pro rata share for each participating insurance company of the Federal share of compensation for insured losses calculated under subparagraph (A).
(D) PROHIBITION ON DUPLICATIVE COMPENSATION- The Federal share of compensation for insured losses under the Program shall be reduced by the amount of compensation provided by the Federal Government for those insured losses under any other Federal insurance or reinsurance program.
(2) CAP ON ANNUAL LIABILITY- Notwithstanding paragraph (1), or any other provision of Federal or State law, if the aggregate insured losses exceed $100,000,000,000 during any period referred to in subparagraph (A) or (B) of paragraph (1)--
(A) the Secretary shall not make any payment under this Act for any portion of the amount of such losses that exceeds $100,000,000,000; and
(B) participating insurance companies shall not be liable for the payment of any portion of the amount that exceeds $100,000,000,000.
(3) NOTICE TO CONGRESS- The Secretary shall notify the Congress if estimated or actual aggregate insured losses exceed $100,000,000,000 in any period described in paragraph (1), and the Congress shall determine the procedures for and the source of any such excess payments.
(4) FINAL NETTING- The Secretary shall have sole discretion to determine the time at which claims relating to any insured loss or act of terrorism shall become final.
(5) DETERMINATIONS FINAL- Any determination of the Secretary under this subsection shall be final, and shall not be subject to judicial review.
(6) IN-FORCE REINSURANCE AGREEMENTS- For policies covered by reinsurance contracts in force on the date of enactment of this Act, until the in-force reinsurance contract is renewed, amended, or has reached its 1-year anniversary date, any Federal share of compensation due to a participating insurance company for insured losses during the effective period of the Program shall be shared--
(A) with all reinsurance companies to which the participating insurance company has ceded some share of the insured loss pursuant to an in-force reinsurance contract; and
(B) in a manner that distributes the Federal share of compensation for insured losses between the participating insurance company and the reinsurance company or companies in the same proportion as the insured losses would have been distributed if the Program did not exist.
SEC. 5. GENERAL AUTHORITY AND ADMINISTRATION OF CLAIMS.
(a) GENERAL AUTHORITY- The Secretary shall have the powers and authorities necessary to carry out the Program, including authority--
(1) to investigate and audit all claims under the Program; and
(2) to prescribe regulations and procedures to implement the Program.
(b) INTERIM RULES AND PROCEDURES- The Secretary shall issue interim final rules or procedures specifying the manner in which--
(1) participating insurance companies may file, verify, and certify claims under the Program;
(2) the Secretary shall publish or otherwise publicly announce the applicable percentage of insured losses that is the responsibility of participating insurance companies and the percentage that is the responsibility of the Federal Government under the Program;
(3) the Federal share of compensation for insured losses will be paid under the Program, including payments based on estimates of or actual aggregate insured losses;
(4) the Secretary may, at any time, seek repayment from or reimburse any participating insurance company, based on estimates of insured losses under the Program, to effectuate the insured loss sharing provisions contained in section 4;
(5) each participating insurance company that incurs insured losses shall pay its pro rata share of insured losses, in accordance with section 4; and
(6) the Secretary will determine any final netting of payments for actual insured losses under the Program, including payments owed to the Federal Government from any participating insurance company and any Federal share of compensation for insured losses owed to any participating insurance company, to effectuate the insured loss sharing provisions contained in section 4.
(c) SUBROGATION RIGHTS- The United States shall have the right of subrogation with respect to any payment made by the United States under the Program.
(d) CONTRACTS FOR SERVICES- The Secretary may employ persons or contract for services as may be necessary to implement the Program.
(e) CIVIL PENALTIES- The Secretary may assess civil money penalties for violations of this Act or any rule, regulation, or order issued by the Secretary under this Act relating to the submission of false or misleading information for purposes of the Program, or any failure to repay any amount required to be reimbursed under regulations or procedures described in section 5(b). The authority granted under this subsection shall continue during any period in which the Secretary's authority under section 6(d) is in effect.
SEC. 6. TERMINATION OF PROGRAM; DISCRETIONARY EXTENSION.
(a) TERMINATION OF PROGRAM-
(1) IN GENERAL- The Program shall terminate 1 year after the date of enactment of this Act, unless the Secretary--
(A) determines, after considering the report and finding required by this section, that the Program should be extended for one additional year, beginning on the day after the date of expiration of the initial 1-year period of the Program; and
(B) promptly notifies the Congress of such determination and the reasons therefor.
(2) DETERMINATION FINAL- The determination of the Secretary under paragraph (1) shall be final, and shall not be subject to judicial review.
(3) TERMINATION AFTER EXTENSION- If the Program is extended under paragraph (1), the Program shall terminate 1 year after the date of commencement of such extension period.
(b) REPORT TO CONGRESS- Not later than 9 months after the date of enactment of this Act, the Secretary shall submit a report to Congress--
(A) the availability of insurance coverage for acts of terrorism;
(B) the affordability of such coverage, including the effect of such coverage on premiums; and
(C) the capacity of the insurance industry to absorb future losses resulting from acts of terrorism, taking into account the profitability of the insurance industry; and
(2) that considers--
(A) the impact of the Program on each of the factors described in paragraph (1); and
(B) the probable impact on such factors and on the United States economy if the Program terminates 1 year after the date of enactment of this Act.
(c) FINDING REQUIRED- A determination under subsection (a) to extend the Program shall be based on a finding by the Secretary that--
(1) widespread market uncertainties continue to disrupt the ability of insurance companies to price insurance coverage for losses resulting from acts of terrorism, thereby resulting in the continuing unavailability of affordable insurance for consumers; and
(2) extending the Program for an additional year would likely encourage economic stabilization and facilitate a transition to a viable market for private terrorism risk insurance.
(d) CONTINUING AUTHORITY TO PAY OR ADJUST COMPENSATION- Following the termination of the Program under subsection (a), the Secretary may take such actions as may be necessary to ensure payment, reimbursement, or adjustment of compensation for insured losses arising out of any act of terrorism occurring during the period in which the Program was in effect under this Act, in accordance with the provisions of section 4 and regulations promulgated thereunder.
(e) REPEAL; SAVINGS CLAUSE- This Act is repealed at midnight on the final termination date of the Program under subsection (a), except that such repeal shall not be construed--
(1) to prevent the Secretary from taking, or causing to be taken, such actions under subsection (d) of this section and sections 4(e)(4), 4(e)(5), 5(a)(1), 5(c), 5(d), and 5(e) (as in effect on the day before the date of such repeal), and applicable regulations promulgated thereunder, during any period in which the authority of the Secretary under subsection (d) of this section is in effect; or
(2) to prevent the availability of funding under section 9(b) during any period in which the authority of the Secretary under subsection (d) of this section is in effect.
(f) SENSE OF THE CONGRESS- It is the sense of the Congress that the Secretary should make any determination under subsection (a) in sufficient time to enable participating insurance companies to include coverage for acts of terrorism in their policies for the second year of the Program, if the Program is extended in accordance with this section.
(g) STUDY AND REPORT ON SCOPE OF THE PROGRAM-
(1) STUDY- The Secretary, after consultation with the NAIC, representatives of the insurance industry, and other experts in the insurance field, shall conduct a study of the potential effects of acts of terrorism on the availability of life insurance and other lines of insurance coverage.
(2) REPORT- Not later than 9 months after the date of enactment of this Act, the Secretary shall submit a report to the Congress on the results of the study conducted under paragraph (1).
(h) REPORTS REGARDING TERRORISM RISK INSURANCE PREMIUMS-
(1) REPORT TO THE NAIC- Beginning 6 months after the date of enactment of this Act, and every 6 months thereafter, each participating insurance company shall submit a report to the NAIC that states the premium rates charged by that participating insurance company during the preceding 6-month period for insured losses covered by the Program, and includes an explanation of and justification for those rates.
(2) REPORTS FORWARDED- The NAIC shall promptly forward copies of each report submitted under paragraph (1) to the Secretary, the Secretary of Commerce, the Chairman of the Federal Trade Commission, and the Comptroller General of the United States.
(3) AGENCY REPORTS TO CONGRESS-
(A) IN GENERAL- The Secretary, the Secretary of Commerce, and the Chairman of the Federal Trade Commission shall submit joint reports to Congress and the Comptroller General of the United States summarizing and evaluating the reports forwarded under paragraph (2).
(B) TIMING- The reports required under subparagraph (A) shall be submitted--
(i) 9 months after the date of enactment of this Act; and
(ii) 12 months after the date of submission of the first report under clause (i).
(4) GAO EVALUATION AND REPORT-
(A) EVALUATION- The Comptroller General of the United States shall evaluate each report submitted under paragraph (3), and upon request, the Secretary, the Secretary of Commerce, the Chairman of the Federal Trade Commission, and the NAIC shall provide to the Comptroller all documents, records, and any other information that the Comptroller deems necessary to carry out such evaluation.
(B) REPORT TO CONGRESS- Not later than 90 days after receipt of each report submitted under paragraph (3), the Comptroller General of the United States shall submit to Congress a report of the evaluation required by subparagraph (A).
SEC. 7. PRESERVATION OF STATE LAW.
Nothing in this Act shall affect the jurisdiction or regulatory authority of the insurance commissioner (or any agency or office performing like functions) of any State over any participating insurance company or other person--
(1) except as specifically provided in this Act; and
(2) except that--
(A) the definition of the term `act of terrorism' in section 3 shall be the exclusive definition of that term for purposes of compensation for insured losses under this Act, and shall preempt any provision of State law that is inconsistent with that definition, to the extent that such provision of law would otherwise apply to any type of insurance covered by this Act;
(B) during the period beginning on the date of enactment of this Act and ending at midnight on December 31, 2002, rates for terrorism risk insurance covered by this Act and filed with any State shall not be subject to prior approval or a waiting period, under any law of a State that would otherwise be applicable, except that nothing in this Act affects the ability of any State to invalidate a rate as excessive, inadequate, or unfairly discriminatory; and
(C) during the period beginning on the date of enactment of this Act and for so long as the Program is in effect, as provided in section 6 (including any period during which the authority of the Secretary under section 6(d) is in effect), books and records of any participating insurance company that are relevant to the Program shall be provided, or caused to be provided, to the Secretary or the designee of the Secretary, upon request by the Secretary or such designee, notwithstanding any provision of the laws of any State prohibiting or limiting such access.
SEC. 8. SENSE OF THE CONGRESS REGARDING CAPACITY BUILDING.
It is the sense of the Congress that the insurance industry should build capacity and aggregate risk to provide affordable property and casualty insurance coverage for terrorism risk.
SEC. 9. AUTHORIZATION OF APPROPRIATIONS; PAYMENT AUTHORITY.
(a) ADMINISTRATIVE EXPENSES- There are authorized to be appropriated to the Secretary, out of funds in the Treasury not otherwise appropriated, such sums as may be necessary for administrative expenses of the Program, to remain available until expended.
(b) PAYMENT AUTHORITY- This Act constitutes payment authority in advance of appropriation Acts, and represents the obligation of the Federal Government to provide for the Federal share of compensation for insured losses under the Program.
SEC. 10. PROCEDURES FOR CIVIL ACTIONS.
(a) FEDERAL CAUSE OF ACTION-
(1) IN GENERAL- There shall exist a Federal cause of action for property damage, personal injury, or death arising out of or resulting from an act of terrorism, which shall be the exclusive cause of action and remedy for claims for such property damage, personal injury, or death, except as provided in subsection (d).
(2) PREEMPTION OF STATE ACTIONS- All State causes of action of any kind for property damage, personal injury, or death arising out of or resulting from an act of terrorism that are otherwise available under State law, are hereby preempted, except as provided in subsection (d).
(b) GOVERNING LAW- The substantive law for decision in an action described in subsection (a)(1) shall be derived from the law, including applicable choice of law principles, of the State in which the act of terrorism giving rise to the action occurred, except to the extent that--
(1) the law, including choice of law principles, of another State is determined to be applicable to the action by the district court hearing the action; or
(2) otherwise applicable State law (including that determined pursuant to paragraph (1), is inconsistent with or otherwise preempted by Federal law.
(c) PUNITIVE DAMAGES- Any amounts awarded in a civil action described in subsection (a)(1) that are attributable to punitive damages shall not count as insured losses for purposes of this Act.
(d) CLAIMS AGAINST TERRORISTS- Nothing in this section shall in any way be construed to limit the ability of any plaintiff to seek any form of recovery from any person, government, or other entity that was a participant in, or aider and abettor of, any act of terrorism.
(e) EFFECTIVE PERIOD- This section shall apply only to actions described in subsection (a)(1) arising out of or resulting from acts of terrorism that occur during the effective period of the Program, including, if applicable, any extension period provided for under section 6.
SEC. 11. SATISFACTION OF JUDGMENTS FROM FROZEN ASSETS OF TERRORISTS, TERRORIST ORGANIZATIONS, AND STATE SPONSORS OF TERRORISM.
(a) IN GENERAL- Notwithstanding any other provision of law, and except as provided in subsection (b), in every case in which a person has obtained a judgment against a terrorist party on a claim based upon an act of terrorism or for which a terrorist party is not immune under section 1605(a)(7) of title 28, United States Code, the blocked assets of that terrorist party (including the blocked assets of any agency or instrumentality of that terrorist party) shall be subject to execution or attachment in aid of execution in order to satisfy such judgment to the extent of any compensatory damages for which such terrorist party has been adjudged liable.
(b) PRESIDENTIAL WAIVER-
(1) IN GENERAL- Subject to paragraph (2), upon determining on an asset-by-asset basis that a waiver is necessary in the national security interest, the President may waive the requirements of subsection (a) in connection with (and prior to the enforcement of) any judicial order directing attachment in aid of execution or execution against any property subject to the Vienna Convention on Diplomatic Relations or the Vienna Convention on Consular Relations.
(2) EXCEPTION- A waiver under this subsection shall not apply to--
(A) property subject to the Vienna Convention on Diplomatic Relations or the Vienna Convention on Consular Relations that has been used by the United States for any nondiplomatic purpose (including use as rental property), or the proceeds of such use; or
(B) the proceeds of any sale or transfer for value to a third party of any asset subject to the Vienna Convention on Diplomatic Relations or the Vienna Convention on Consular Relations.
(c) SPECIAL RULE FOR CASES AGAINST IRAN- Section 2002 of the Victims of Trafficking and Violence Protection Act of 2000 (Public Law 106-386; 114 Stat. 1542) is amended--
(1) in subsection (a)(2)(A)(ii), by inserting after `July 27, 2000' the following: `or before October 28, 2000,';
(2) in subsection (b)(2)(B), by inserting after `the date of enactment of this Act' the following: `(less amounts therein as to which the United States has an interest in subrogation pursuant to subsection (c) arising prior to the date of entry of the judgment or judgments to be satisfied in whole or in part hereunder).';
(3) by redesignating subsections (d), (e), and (f) as subsections (e), (f), and (g), respectively; and
(4) by inserting after subsection (c) the following new subsection (d):
`(d) DISTRIBUTION OF FOREIGN MILITARY SALES FUNDS INADEQUATE TO SATISFY FULL AMOUNT OF COMPENSATORY AWARDS AGAINST IRAN-
`(1)(A) In the event that the Secretary determines that the amounts available to be paid under subsection (b)(2) are inadequate to pay the entire amount of compensatory damages awarded in judgments issued as of the date of the enactment of this subsection in cases identified in subsection (a)(2)(A), the Secretary shall, not later than 60 days after such date, make payment from the account specified in subsection (b)(2) to each party to which such judgment has been issued a share of the amounts in that account which are not subject to subrogation to the United States under this Act.
`(B) The amount so paid to each such person shall be calculated by the proportion that the amount of compensatory damages awarded in a judgment issued to that particular person bears to the total amount of all compensatory damages awarded to all persons to whom judgments have been issued in cases identified in subsection (a)(2)(A) as of the date referred to in subparagraph (A).
`(2) Nothing herein shall bar, or require delay in, enforcement of any judgment to which this subsection applies under any procedure or against assets otherwise available under this section or under any other provision of law.
`(3) Any person receiving less than the full amount of compensatory damages awarded to that party in judgments to which this subsection applies shall not be required to make the election set forth in subsection (a)(2)(C) in order to qualify for payment hereunder.'.
(d) DEFINITIONS- In this section:
(1) The term `terrorist party' means a terrorist, a terrorist organization, or a foreign state designated as a state sponsor of terrorism under section 6(j) of the Export Administration Act of 1979 (50 U.S.C. App. 2405(j)) or section 620A of the Foreign Assistance Act of 1961 (22 U.S.C. 2371).
(2) The term `blocked asset' means any asset seized or frozen by the United States in accordance with law, or otherwise held by the United States without claim of ownership by the United States.
(3) The term `property subject to the Vienna Convention on Diplomatic Relations or the Vienna Convention on Consular Relations' and the term `asset subject to the Vienna Convention on Diplomatic Relations or the Vienna Convention on Consular Relations' mean any property or asset, respectively, the attachment in aid of execution or execution of which would result in a violation of an obligation of the United States under the Vienna Convention on Diplomatic Relations or the Vienna Convention on Consular Relations, as the case may be.