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                                                       Calendar No. 183
113th Congress  }                                             {  Report
  1st Session   }          SENATE                             { 113-104

=======================================================================
 
                 JUSTICE FOR FORMER AMERICAN HOSTAGES 
                          IN IRAN ACT OF 2013 

                                _______
                                

               September 12, 2013.--Ordered to be printed

                                _______
                                

         Mr. Menendez, from the Committee on Foreign Relations,
                        submitted the following

                              R E P O R T

                         [To accompany S. 559]

    The Committee on Foreign Relations, having had under 
consideration the bill S. 559, to establish a fund to make 
payments to the Americans held hostage in Iran, and to members 
of their families, who are identified as members of the 
proposed class in case number 1:08-CV-00487 (EGS) of the United 
States District Court for the District of Columbia, and for 
other purposes, reports favorably thereon with an amendment and 
an amendment to the title and recommends that the bill, as 
amended, do pass.

                                CONTENTS

                                                                   Page

  I. Purpose..........................................................1
 II. Committee Action.................................................1
III. Discussion.......................................................2
 IV. Cost Estimate....................................................3
  V. Evaluation of Regulatory Impact..................................3
 VI. Changes in Existing Law..........................................3

                               I. PURPOSE

    The purpose of S. 559 is to establish in the Treasury a 
fund to provide compensation to the 52 Americans held hostage 
in the United States embassy in Tehran, Iran, between November 
3, 1979, and January 20, 1981.

                          II. COMMITTEE ACTION

    S. 559 was introduced on March 13, 2013, by Senator Isakson 
and co-sponsored by Senators Blumenthal, Heinrich, Coons, 
Murray, and Wicker. On June 25, 2013, the committee considered 
S. 559 and ordered it reported favorably, with amendments.

                            III. DISCUSSION

    The bill establishes in the Treasury a fund, to be known as 
the ``American Hostages in Iran Compensation Fund'' for the 
purpose of providing compensation to the 52 Americans held 
hostage in the United States embassy in Tehran, Iran, between 
November 3, 1979, and January 20, 1981.
    The 1981 Algiers Accords, which ended the hostage crisis, 
established numerous conditions to secure the hostages' release 
including, among other things, a ban on asserting claims 
against Iran arising from the hostage taking. In 2000, the 
hostages and their families sued Iran in the United States for 
compensatory and punitive damages in federal court for their 
444-day captivity. The courts have held that United States law, 
including the provisions of the Foreign Sovereign Immunities 
Act, does not provide the former hostages with a cause of 
action against Iran. While ruling against the former hostages, 
United States District Judge Emmet Sullivan repeatedly noted 
the compelling nature of the hostages' claims, stating: 
``[These are] heart-wrenching, compelling stories. I've never 
heard of such horror ... No United States citizen should ever 
suffer like that, and if they do, [the state sponsor of 
terrorism] should pay the price ... Someone should pay the 
price for this.'' On May 29, 2012, the Supreme Court denied 
certiorari in Roeder v. Islamic Republic of Iran, letting stand 
the D.C. Circuit Court of Appeal's rejection of the former 
hostages' claims. As a result, the former hostages appear to 
have now exhausted all means of judicial relief.
    The bill provides for funding for the Fund through the 
imposition of a surcharge equal to 30 percent of the amount of 
(1) any fine or other monetary penalty assessed for violations 
of the United States' Iran sanctions laws related to activities 
undertaken on or after the date of enactment; or (2) the 
monetary amount of a settlement associated with such laws 
related to activities undertaken on or after the date of 
enactment. The Secretary of State is authorized to accept 
contributions to the Fund by individuals, business concerns, 
foreign governments, or other entities. The Fund is to be 
administered by the Secretary of State, and payments shall be 
made from the fund in the following amounts: (1) to each living 
former hostage, $150,000, plus $5,000 for each day of captivity 
of the former hostage; and (2) to the estate of each deceased 
former hostage, $150,000, plus $5,000 for each day of captivity 
of the former hostage. Priority of payments shall be first, to 
each living former hostage and second to the estate of each 
deceased former hostage.
    The bill provides for notification by the Secretary of 
State to each individual, and allows an individual to submit 
additional information to the Secretary of State where 
appropriate. The bill clarifies that the actions of the 
Secretary of State in identifying individuals qualified to 
receive payments and in disbursing amounts are not subject to 
review. A recipient of a payment waives and releases all claims 
arising out of the hostage events. Any extra money remaining in 
the Fund after the recipients have been paid shall return to 
the general fund of the Treasury. Finally, the Secretary of 
State must submit an annual report to the appropriate 
committees of Congress on the status of the Fund.
    The Chairman noted that the amendments offered retain the 
innovative framework of the original bill by linking funding to 
compensate the former hostages with violations of U.S.-Iran 
sanctions law, and that the compensation amounts are consistent 
with the past practice in the area of hostage compensation. 
Noting the importance of the bill, he emphasized that the 52 
Americans held hostage in the United States embassy in Tehran 
faced unique circumstances in seeking appropriate redress in 
that the Algiers Accords barred them from pursuing legal 
action.

                           IV. COST ESTIMATE

    In accordance with rule XXVI, paragraph 11(a) of the 
Standing Rules of the Senate, the committee notes that the cost 
estimate provided by the Congressional Budget Office was not 
available for inclusion in this report. The estimate will be 
printed in the Congressional Record when it is available.

                   V. EVALUATION OF REGULATORY IMPACT

    Pursuant to rule XXVI, paragraph 11(b) of the Standing 
Rules of the Senate, the committee has determined that there is 
no regulatory impact as a result of this legislation.

                      VI. CHANGES IN EXISTING LAW

    In compliance with rule XXVI, paragraph 12 of the Standing 
Rules of the Senate, the committee notes that no changes in 
existing legislation will result from the enactment of S. 559.