ว ment of this paragraph and from each payment thereafter into that fund, 5 per centum thereof as reimbursement to the Government of the United States for expenses incurred by the Commission and by the Treasury Department in the administration of this title. The amounts so deducted shall be covered into the Treasury to the credit of miscellaneous receipts. The Secretary shall make payment to the person or persons entitled thereto out of the Polish claims fund on account of any amounts deducted pursuant to subsection (b) of section 7 from payments made pursuant to section 8(c) (1) and (2) prior to the enactment of this paragraph. "(3) The Secretary of the Treasury shall deduct from each payment into any other special fund created pursuant to section 8, subsequent to November 4, 1964, 5 per centum thereof as reimbursement to the Government of the United States for the expenses incurred by the Commission and by the Treasury Department in the administration of this title. The amount so deducted shall be covered into the Treasury to the credit of miscellaneous receipts." (4) Paragraph (1) of subsection (c), section 7, title I, is hereby amended to read as follows: "(1) If any person to whom any payment is to be made pursuant to this title is deceased or is under a legal disability, payment shall be made to his legal representative, except that if any payment to be made is not over $1,000 and there is no qualified executor or administrator, payment may be made to the person or persons found by the Comptroller General to be entitled thereto, without the necessity of compliance with the requirements of law with respect to the administration of estates." (5) Subsection (c) of section 8, title I, is amended by striking out the phrase "any of the funds" and inserting in lieu thereof "the Yugoslav claims fund", and by inserting the phrase "paragraph (1) of” after the phrase "pursuant to" and before the words "subsection (b)”. (6) Section 8, title I, is hereby further amended by adding at the end thereof the following subsection: "(e) The Secretary of the Treasury is authorized and directed out of the sums covered into the Polish claims fund and into any other special fund created pursuant to this section subsequent to November 4, 1964, to make payments on account of awards certified by the Commission pursuant to this title with respect to claims included within the terms of the Polish Claims Agreement of 1960 and of any other similar agreement entered into subsequent to November 4, 1964, as follows and in the following order of priority: "(1) Payment in the amount of $1,000 or in the principal amount of the award, whichever is less; "(2) Thereafter, payments from time to time on account of the unpaid principal balance of each remaining award which shall bear to such unpaid principal balance the same proportion as the total amount in the Polish claims fund and in any other special fund created pursuant to this section subsequent to November 4, 1964, available for distribution at the time such payments are made bears to the aggregate unpaid principal balance of all such awards; and "(3) Thereafter, payments from time to time on account of the unpaid balance of each award of interest which shall bear to such unpaid balance of interest, the same proportion as the total amount in the Polish claims fund and in any other special fund created pursuant to this section subsequent to November 4, 1964. available for distribution at the time such payments are made bears to the aggregate unpaid balance of interest of all such awards." (7) Section 302, title III, is amended by inserting "(a)" after the section number and adding at the end thereof the following subsection: "(b) The Secretary of the Treasury shall cover into each of the Bulgarian and Rumanian claims funds, such sums as may be paid by the Government of the respective country pursuant to the terms of any claims settlement agreement between the Government of the United States and the Government of such country." (8) Section 303, title III, is amended by striking out the word "and" at the end of paragraph (2), and by striking out the period at the end of paragraph (3) and inserting in lieu thereof a semicolon and immediately thereafter, the word "and". (9) Section 303, of title III, is further amended by adding at the end thereof the following new paragraph: "(4) pay effective compensation for the nationalization, compulsory liquidation, or other taking of property of nationals of the United States in Bulgaria and Rumania, between August 9, 1955, and the effective date of the claims agreement between the respective country and the United States." (10) Section 304 of title III is amended by inserting "(a)" after the section number and adding at the end thereof the following subsections: "(b) The Commission shall receive and determine, or redetermine as the case may be, in accordance with applicable substantive law, including international law, the validity and amounts of claims owned by persons who were nationals of the United States on August 9, 1955, which arose out of the war in which Italy was engaged from June 10, 1940, to September 15, 1947, and with respect to which provision was not made in the treaty of peace with Italy: Provided, That no awards shall be made to persons who have received compensation in any amount pursuant to subsection (a) of this section or under section 202 of the War Claims Act of 1948, as amended, or to persons whose claims have been denied by the Commission for reasons other than that they were not filed within the time prescribed by section 306. "(c) The Commission shall receive and determine, or redetermine as the case may be, in accordance with applicable substantive law, including international law, the validity and amounts of claims owned by persons who were nationals of the United States on September 3, 1943, and the date of enactment of this subsection, against the Government of Italy which arose out of the war in which Italy was engaged from June 10, 1940, to September 15, 1947, in territory ceded by Italy pursuant to the treaty of peace with Italy: Provided, That no awards shall be made to persons who have received compensation in any amount pursuant to the treaty of peace with Italy or subsection (a) of this section. "(d) Within thirty days after enactment of this subsection, or within thirty days after the date of enactment of legislation making appropriations to the Commission for payment of administrative expenses incurred in carrying out its functions under subsections (b) and (c) of this section, whichever date is later, the Commission shall publish in the Federal Register the time when and the limit of time within which claims may be filed with the Commission, which limit shall not be more than six months after such publication. "(e) The Commission shall certify awards on claims determined pursuant to subsections (b) and (c) of this section to the Secretary of the Treasury for payment out of remaining balances in the Italian claims fund in accordance with the provisions of section 310 of this title, after payment in full of all awards certified pursuant to subsection (a) of this section. "(f) After payment in full of all awards certified to the Secretary of the Treasury pursuant to subsections (a) and (d) of this section, the Secretary of the Treasury is authorized and directed to transfer the unobligated balance in the Italian claims fund into the war claims fund created by section 13 of the War Claims Act of 1948, as amended." (11) Section 306, title III, is amended by inserting "(a)" after the section number and adding at the end thereof the following subsection: "(b) Within thirty days after enactment of this subsection or the enactment of legislation making appropriations to the Commission for payment of administrative expenses incurred in carrying out its functions under paragraph (4) of section 303 of this title, whichever is later, the Commission shall publish in the Federal Register the time when and the limit of time within which claims may be filed under paragraph (4) of section 303 of this title, which limit shall not be more than six months after such publication." (12) Section 310, title III, is amended by adding at the end of subsection (a) thereof the following paragraph: "(6) Whenever the Commission is authorized to settle claims by the enactment of paragraph (4) of section 303 of this title with respect to Rumania and Bulgaria, no further payments shall be authorized by the Secretary of the Treasury on account of awards certified by the Commission pursuant to paragraphs (1), (2), or (3) of section 303 of the Bulgarian or Rumanian claims funds, as the case may be, until payments on account of awards certified pursuant to paragraph (4) of section 303 with respect to such fund have been authorized in equal proportion to payments previously authorized on existing awards certified pursuant to paragraphs (1), (2), and (3) of section 303." (13) Section 316, title III, is amended by inserting "(a)" after the section number and adding at the end thereof the following subsection: "(b) The Commission shall complete its affairs in connection with the settlement of claims pursuant to paragraph (4) of section 303 and subsections (b) and (c) of section 304 of this title not later than two years following the date of enactment of such paragraph, or following the enactment of legislation making appropriations to the Commission for payment of administrative expenses incurred in carrying out its functions under paragraph (4) of section 303 and subsections (b) and (c) of section 304 of this title, whichever is later." Passed the Senate September 7, 1965. FELTON M. JOHNSTON, Secretary. 1 F 4P Hon. THOMAS E. MORGAN, Chairman, Committee on Foreign Affairs, DEPARTMENT OF STATE, Washington, February 15, 1966. DEAR MR. CHAIRMAN: I refer again to your letter of January 21, 1966, requesting the views of the Department of State on S. 1935, an act "To amend the International Claims Settlement Act of 1949, as amended, to provide for the timely determination of certain claims of American nationals settled by the United States-Polish Claims Agreement of July 16, 1960, and for other purposes." S. 1935 with the exception noted below is the legislative proposal submitted to the 89th Congress by the Foreign Claims Settlement Commission of the United States on behalf of the executive branch. The bill, if enacted, would amend the International Claims Settlement Act of 1949, as amended, to provide for the timely determination of claims of American nationals which are covered by the Polish Claims Agreement of July 16, 1960. In addition, it would provide for the disposition of funds received under the terms of claims settlement agreements concluded with the Governments of Bulgaria, Rumania and Yugoslavia, the determination of claims against Bulgaria and Rumania for the taking of property between August 9, 1955 and the effective date of the respective claims agreements with those countries, and the reopening of the Italian claims program in order to pay certain claims not previously compensable. The bill would further provide for certain administrative changes to enable the Foreign Claims Settlement Commission to proceed in an orderly administration of its programs. As originally introduced. S. 1935 would require the Foreign Claims Settlement Commission to complete the Polish claims program by March 31, 1966, that is, four years from the last day for filing such claims with the Commission. The Senate, however, amended the bill by extending the completion date of the Polish claims program from March 31, 1966 to March 31, 1968 to afford additional time to claimants to obtain evidence from Polish authorities to support claims which they have filed with the Commission. The Department of State favors S. 1935 insofar as it conforms to the legislative proposal recommended by the executive branch. The Department. therefore, is opposed to the Senate amendment extending the Polish claims program until March 31, 1968. The Department understands that all citizens of the United States who were eligible to file claims with the Foreign Claims Settlement Commission were given a period of over four and one-half years within which to submit evidence in support of their claims. Extending the completion date of the Polish claims program not only would entail additional costs of administration to the United States Government, but would result in a delay for a considerable period of time in making prorated payments to the present awardees since inclusion of new awardees as a result of the Senate amendment would require recalculation of existing unpaid awards. Further, it is understood that the fund which will eventually consist of $40 million will be insufficient to pay the principal amount of proposed awards thus far determined by the Commission. The Department, therefore, recommends that the date of March 31, 1966 for the completion of the Polish claims program be restored in S. 1935 to conform to the proposal previously recommended by the executive branch and urges prompt enactment of the bill. The Bureau of the Budget advises that from the standpoint of the Administration's program there is no objection to the submission of this report. DEAR MR. CHAIRMAN: The Treasury Department would like to take this opportunity to point out certain information with respect to S. 1935, now pending before your Committee. The proposed legislation would amend the International Claims Settlement Act of 1949, as amended, to provide for the timely determination of claims of American nationals which are covered by the United States-Polish Claims Agreement of July 16, 1960 and Title I of the above Act. Section 8(c) of the present Act directs the Secretary of the Treasury to pay awards certified by the Foreign Claims Settlement Commission in accordance with the following system of payment priorities established to insure that all awardholders are treated equally: (1) payment in full of the principal of awards of $1,000 or less; (2) payment of $1,000 on the principal of each award of more than $1,000 in principal amount; (3) additional payment of not to exceed 25 per centum of the unpaid principal of awards in excess of $1,000; (4) payments from time to time in ratable proportions, on account of the unpaid principal of all awards of more than $1,000, after completing the payments prescribed by (2) and (3); and (5) pro rata payments on account of interest after payment has been made of the principal amounts of all such awards. The amount of claims filed with the Commission is over $1 billion, far in excess of the funds received and to be received from the Polish Government. At present, we are making payments only under priorities 1 and 2 above. We will be in a position to make payments under priority 3 when the Commission completes its adjudication work under the Polish claims program. Based on estimates by the Commission, this is expected to be March 31, 1966. As introduced, S. 1935 would have fixed the completion date at March 31, 1966. However, during consideration of the proposed legislation by the Subcommittee on Claims Legislation of the Senate Foreign Relations Committee, testimony was received indicating that an extension to March 31, 1968 of the period for the Commission to complete its affairs in connection with the Polish program was warranted because, it was stated, additional time was needed by certain claimants to obtain evidence from Polish authorities to support claims filed with the Commission. The bill was amended to extend the Commission's jurisdiction over the claims program to March 31, 1968, and was passed by the Senate with this amendment. We think it should be brought to the attention of your Committee that any new awardholders that would be created because of the extension would have a priority status equal to that now held by existing awardholders in sharing available moneys in the Polish Claims Fund. To assure equal treatment of all awardholders, it would therefore be necessary to consider the maximum aggregate limit of the new awards under the proposed legislation before pro rata payments could be made. Depending upon when the maximum aggregate limit of new awards can be determined and the amount involved, it is possible that pro rata payments to awardholders (existing and new) would be delayed for a considerable period of time, conceivably until March 1968. This would cause a further delay in paying awardholders who have already waited a number of years for payment of their claims. The Department has been advised by the Bureau of the Budget that there is no objection from the standpoint of the Administration's program to the submission of this report to your Committee. Sincerely yours, FRED B. SMITH, Acting General Counsel. Hon. THOMAS E. MORGAN, FOREIGN CLAIMS SETTLEMENT COMMISSION Chairman, Committee on Foreign Affairs, OF THE UNITED STATES, Washington, D.C., March 1, 1966. DEAR MR. CHAIRMAN: Further reference is made to your letter of January 21, 1966, requesting a report by the Foreign Claims Settlement Commission on S. 1935, 89th Congress, entitled, "A Bill To amend the International Claims Settlement Act of 1949, as amended, to provide for the timely determination of certain claims of American nationals settled by the United States-Polish Claims Agreement of July 16, 1960, and for other purposes." This bill contains essentially the same language as the draft bill which was transmitted to the Speaker of the House of Representatives on April 30, 1965 by the Commission on behalf of the Executive Branch. The main purpose of the bill is designed to establish a statutory completion date for the Polish claims program; to provide for the implementation of the Rumanian Claims Agreement of March 30, 1960, the Bulgarian Claims Agreement of July 2, 1963, and the Yugoslav Claims Agreement of November 5, 1964 ; to provide for the disposition of the unexpended balance in the Italian Claims Fund; and several other housekeeping functions. The bill (S. 1935) as originally presented to the Congress in draft form proposed, among other things, that the Commission complete its affairs in connection with the Polish claims arising under the Polish Claims Agreement not later than March 31, 1966. The bill, however, was amended by the Senate to extend the completion date for an additional two years until March 31, 1968. The bill. S. 1935, was passed by the Senate on September 7, 1965 with this amendment. The Senate amendment counters the Commission proposal to complete its affairs in the program by March 31, 1966. In this connection, the Commission has committed itself over the years both to the Bureau of the Budget and to the Congress through the Appropriations Committees of both Houses and through the Foreign Relations and Foreign Affairs Committees in the form of legislative proposals to close out this program by March 31, 1966. Accordingly, appropriations, staffing and scheduling have been geared to that date. The Polish claims program was initiated with the signing of the Polish Agreement on July 16, 1960. The Commission extended the original deadline filing date of September 30, 1961 until March 31, 1962 because for varied reasons many potential claimants had not filed claims within the allotted time. For additional compelling reasons which would excuse the failure to file within the time limit and the submission of evidence that a valid claim existed under the Agreement, the Commission further permitted the filing of claims until January 31, 1965 provided that appropriate information and evidence establishing the validity of claims be filed not later than sixty days after such date. Over 10,000 claims were accepted by the Commission under the Polish Agreement. Of this number, approximately 3,000 claims have been denied wholly or in part for failure to meet the burden of proof in support of such claims. The Commission permitted claimants to submit the necessary evidence until December 31, 1965. These denials were the subject of public testimony before the Committee on Foreign Relations in connection with the consideration of S. 1935 before that Committee. During the course of these hearings testimony was received from a practicing lawyer indicating the need for the extension of the Polish program for the reason that additional time was required by certain claimants for them to acquire evidence from the Polish authorities in support of their claims. Because of the vastly extensive property damage in Poland during World War II, the obliteration of 60 percent of the land records, and the removal of large segments of former residents from given areas, it is impossible for Polish authorities to furnish some of the information sought by the claimants. The retention of the amendment under S. 1935 by extending the program until March 31, 1968 would not, in the Commission's opinion, warrant the expense and time which would be required to continue the program for an additional time. Moreover, the extension of this program would place the new award-holders on a par with those claimants who diligently pursued their claims within the time allotted and will enable them to share equally in the amounts paid into |