SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Libby Health Care Act''.

SEC. 2. EFFECT OF DISCHARGE OF DEBTS IN BANKRUPTCY.

    Section 524(g)(1) of title 11, United States Code, is amended by 
adding at the end the following:
            ``(C)(i) Congress finds that--
                    ``(I) the vermiculite ore mined and milled in 
                Libby, Montana, was contaminated by high levels of 
                asbestos, particularly tremolite asbestos;
                    ``(II) the vermiculite mining and milling processes 
                released thousands of pounds of asbestos-contaminated 
                dust into the air around Libby, Montana, every day, 
                exposing mine workers and Libby residents to high 
                levels of asbestos over a prolonged period of time;
                    ``(III) the responsible party has known for over 50 
                years that there are severe health risks associated 
                with prolonged exposure to asbestos, including higher 
                incidences of asbestos related disease such as 
                asbestosis, lung cancer, and mesothelioma;
                    ``(IV) the responsible party was aware of 
                accumulating asbestos pollution in Libby, Montana, but 
                failed to take any corrective action for decades, and 
                once corrective action was taken, it was inadequate to 
                protect workers and residents and asbestos-contaminated 
                vermiculite dust continued to be released into the air 
                in and around Libby, Montana, until the early 1990s 
                when the vermiculite mining and milling process was 
                finally halted;
                    ``(V) current and former residents of Libby, 
                Montana, and former vermiculite mine workers from the 
                Libby mine suffer from asbestos related diseases at a 
                rate 40 to 60 times the national average, and they 
                suffer from the rare and deadly asbestos-caused cancer, 
                mesothelioma, at a rate 100 times the national average;
                    ``(VI) the State of Montana and the town of Libby, 
                Montana, face an immediate and severe health care 
                crisis because--
                            ``(aa) many sick current and former 
                        residents and workers who have been diagnosed 
                        with asbestos-related exposure or disease 
                        cannot access private health insurance;
                            ``(bb) the costs to the community and State 
                        government related to providing health coverage 
                        for uninsured sick residents and former mine 
                        workers are creating significant pressures on 
                        the State's medicaid program and threaten the 
                        viability of other community businesses;
                            ``(cc) asbestos-related disease can have a 
                        long latency period; and
                            ``(dd) the only significant responsible 
                        party available to compensate sick residents 
                        and workers has filed for bankruptcy 
                        protection; and
                    ``(VII) the responsible party should recognize that 
                it has a responsibility to work in partnership with the 
                State of Montana, the town of Libby, Montana, and 
                appropriate health care organizations to address 
                escalating health care costs caused by decades of 
                asbestos pollution in Libby, Montana.
            ``(ii) In this subparagraph--
                    ``(I) the term `asbestos related disease or 
                illness' means a malignant or non-malignant respiratory 
                disease or illness related to tremolite asbestos 
                exposure;
                    ``(II) the term `eligible medical expense' means an 
                expense related to services for the diagnosis or 
                treatment of an asbestos-related disease or illness, 
                including expenses incurred for hospitalization, 
                prescription drugs, outpatient services, home oxygen, 
                respiratory therapy, nursing visits, or diagnostic 
                evaluations;
                    ``(III) the term `responsible party' means a 
                corporation--
                            ``(aa) that has engaged in mining 
                        vermiculite that was contaminated by tremolite 
                        asbestos;
                            ``(bb) whose officers or directors have 
                        been indicted for knowingly releasing into the 
                        ambient air a hazardous air pollutant, namely 
                        asbestos, and knowingly endangering the 
                        residents of Libby, Montana and the surrounding 
                        communities; and
                            ``(cc) for which the Department of Justice 
                        has intervened in a bankruptcy proceeding; and
                    ``(IV) the term `Trust Fund' means the health care 
                trust fund established pursuant to clause (iii).
            ``(iii) A court may not enter an order confirming a plan of 
        reorganization under chapter 11 involving a responsible party 
        or issue an injunction in connection with such order unless the 
        responsible party--
                    ``(I) has established a health care trust fund for 
                the benefit of individuals suffering from an asbestos 
                related disease or illness; and
                    ``(II) has deposited not less than $250,000,000 
                into the Trust Fund.
            ``(iv) Notwithstanding any other provision of law, any 
        payment received by the United States for recovery of costs 
        associated with the actions to address asbestos contamination 
        in Libby, Montana, as authorized by the Comprehensive 
        Environmental Response, Compensation, and Liability Act of 1980 
        (42 U.S.C. 9601 et seq.), shall be deposited into the Trust 
        Fund.
            ``(v) An individual shall be eligible for medical benefit 
        payments, not to exceed $500,000, from the Trust Fund if the 
        individual--
                    ``(I) has an asbestos related disease or illness;
                    ``(II) has an eligible medical expense; and
                    ``(III)(aa) was a worker at the vermiculite mining 
                and milling facility in Libby, Montana; or
                    ``(bb) lived, worked, or played in Libby, Montana 
                for at least 6 consecutive months before December 31, 
                2004.''.
Libby Health Care Act - Amends federal bankruptcy law to prohibit the court from entering an order confirming a plan of reorganization under chapter 11 involving a responsible party, or issuing an injunction in connection with such order, unless the responsible party: (1) has established a health care trust fund for the benefit of individuals suffering from an asbestos-related disease or illness; and (2) has deposited not less than $250 million into such health care trust fund.

Defines "responsible party" as a corporation: (1) that has engaged in mining vermiculite that was contaminated by tremolite asbestos; (2) whose officers or directors have been indicted for knowingly releasing asbestos into the ambient air and knowingly endangering the residents of Libby, Montana, and the surrounding communities; and (3) for which the Department of Justice has intervened in a bankruptcy proceeding.

Requires any payment received by the United States for recovery of costs associated with the actions to address asbestos contamination in Libby, Montana, to be deposited into such fund.

Sets eligibility criteria for medical benefit payments from the fund.
A bill to amend section 524(g)(1) of title 11, United States Code, to predicate the discharge of debts in bankruptcy by any vermiculite mining company meeting certain criteria on the establishment of a health care trust fund for certain individuals suffering from an asbestos related disease.