Never Forget the Victims of Terrorism: Joseph D. Mistrulli and Alan Kleinberg USVSST Fund Solvency Act
- Sponsor
- Rep. Gillen, Laura [D-NY-4]
- Committees
- Judiciary Committee (primary)
- Last action
- Jul 21, 2026
Bottom line
This bill aims to ensure the continued solvency and timely distribution of funds to victims of state-sponsored terrorism by authorizing significant temporary federal loans to the USVSST Fund.
What it actually does
This bill mandates the Secretary of the Treasury to loan $3 billion annually to the United States Victims of State Sponsored Terrorism (USVSST) Fund for fiscal years 2027, 2028, and 2029. These borrowed amounts are to be immediately distributed as part of the Fund's annual payments to victims, ensuring solvency and timely compensation. The loans are treated as direct spending and are to be repaid solely from future criminal and civil fines, penalties, and forfeitures related to state sponsors of terrorism after the Fund's termination.
Proponents argue
Proponents argue that this bill is crucial for ensuring that victims of state-sponsored terrorism receive the compensation they are owed without further delay. They emphasize that the USVSST Fund has faced solvency issues, leading to reduced or delayed payments, and this measure provides a necessary, albeit temporary, infusion of capital to fulfill commitments to victims. Supporters highlight that the loans are ultimately repaid from penalties against state sponsors of terrorism, not general taxpayer funds, making it a just and responsible approach to support victims.
Opponents contend
Potential opponents might argue that mandating significant federal loans, even if temporary and designated for repayment, could set a precedent for other victim compensation funds to seek direct federal borrowing, potentially impacting the federal budget. Concerns could also be raised about the certainty and timeline of repayment, given that it relies on future fines and forfeitures, which can be unpredictable. Some might also question the long-term financial sustainability of the USVSST Fund if it consistently requires such interventions.
The bill is exceptionally short and straightforward, making it highly accessible for any reader to understand its core provisions quickly.
Section 2, amending 34 U.S.C. 20144(l)(1)
Establishment of Mandatory Annual Loans to the USVSST Fund
This provision requires the Secretary of the Treasury to loan $3 billion to the United States Victims of State Sponsored Terrorism (USVSST) Fund at the beginning of fiscal years 2027, 2028, and 2029. These funds must be deposited into the Fund within 30 days of the start of each fiscal year, providing a direct and substantial financial boost to the Fund.
Supporters argue
Supporters argue this provision directly addresses the critical solvency issues of the USVSST Fund, ensuring that victims, who have waited years for justice, receive their rightful compensation without further delays or reductions. They emphasize that this immediate infusion of capital is essential to meet the Fund's obligations.
Critics contend
Critics might express concern that mandating such large loans, even with a repayment mechanism, could create a precedent for other funds to rely on direct federal borrowing rather than sustainable funding models. They might also question the long-term implications for federal fiscal discipline.
Tradeoffs
The provision balances the immediate need to compensate victims with the long-term fiscal responsibility of the federal government. It prioritizes victim compensation by front-loading funds, with the understanding that repayment is contingent on future, potentially uncertain, revenue streams from state sponsors of terrorism.
Section 2, amending 34 U.S.C. 20144(l)(2), (3), (5)
Mandated Distribution and Repayment Structure of Borrowed Funds
This provision requires that the full amount borrowed each fiscal year be included in the annual payment to victims, preventing funds from being reserved or carried forward. It also specifies that the loans bear interest and are to be repaid solely from criminal and civil fines, penalties, and forfeitures involving state sponsors of terrorism, but only after the Fund's termination. The borrowing authority sunsets on September 30, 2029.
Section 2, amending 34 U.S.C. 20144(l)(4)
Direct Spending Authority Classification
This provision specifies that the amounts borrowed under this authority are to be treated as "direct spending authority" and "shall not be scored as new appropriations." This classification has implications for how the loans are accounted for in the federal budget process.
The loans, including interest, "shall be repaid solely from criminal and civil fines, penalties, and forfeitures involving a state sponsor of terrorism that, after such expiration, are directed to the Secretary of the Treasury for the purpose of such repayment."
Section 2, amending 34 U.S.C. 20144(l)(3)(C)
Why it matters:This is likely standard legislative drafting for specifying funding mechanisms and repayment terms. However, the specificity of "solely from" and "after such expiration" (referring to the Fund's termination) is highly consequential and could be easily overlooked.
Case for: Supporters would argue this ensures that the perpetrators of terrorism, through their fines and forfeitures, ultimately bear the cost of compensating their victims, aligning with the principle of justice. It also protects general taxpayer funds.
Case against: Critics might contend that relying solely on future, unpredictable fines and forfeitures, especially after the Fund's termination, makes the repayment highly uncertain. This could effectively transform the loans into a federal expenditure if the designated revenue streams prove insufficient or materialize too slowly.
Estimated impact: Up to $9 billion plus interest, with repayment contingent on future, specific revenue streams.