To provide compensation for United States citizens taken hostage by terrorists or state sponsors of terrorism.

Authorizes the President to compensate a U.S. national, or his or her estate, who: (1) has a claim pending in U.S. court against a foreign state seeking compensation for injuries caused by an act of hostage-taking, or has obtained a judgment on such a claim that has not been fully satisfied; (2) on or after August 2, 1990, and while not serving on active duty in the U.S. Armed Forces, was taken hostage by a terrorist party; or (3) was a representative plaintiff or class member in Case Number 1:00CV03110 (EGS) or a plaintiff in Case Number 1:00CV00716 (HHK) in the U.S. District Court for the District of Columbia.

Limits an award to $500,000, adjusted to reflect the annual change in the Consumer Price Index.

Bars a person who has accepted compensation under this Act from commencing or maintaining a U.S. civil action seeking compensation for such injuries or damages associated with such hostage taking against a foreign state or its agencies or instrumentalities.

Funds compensation under this Act from the Hostage Victims Fund (as provided by this Act) into which the President shall direct deposits from: (1) blocked assets of terrorist parties; (2) amounts received against any person in connection with the U.N. Oil for Food Program; or (3) amounts received as a result of any fine or forfeiture in connection with a violation of the International Emergency Economic Powers Act, the Trading With the Enemy Act, the USA PATRIOT Act of 2001, the Bank Secrecy Act, or the Export Administration Act.

Provides additional compensation for victims of the 1979 Iranian hostage taking in Tehran, including spouses and children of persons taken captive.

Authorizes the return of a country's funds deposited into the Hostage Victims Fund upon termination of the country's terrorist party designation.