II 

Calendar No. 460 

109TH CONGRESS 

2D SESSION S. 3274 

To create a fair and efficient system to resolve claims of victims for bodily 

injury caused by asbestos exposure, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

MAY 26, 2006 

Mr. SPECTER (for himself and Mr. LEAHY) introduced the following bill; 

which was read the first time 

JUNE 5, 2006 

Read the second time and placed on the calendar 

A BILL 

To create a fair and efficient system to resolve claims of 

victims for bodily injury caused by asbestos exposure, 

and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Fairness in Asbestos Injury Resolution Act of 2006’’ or 

6 the ‘‘FAIR Act of 2006’’. 


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1 (b) TABLE OF CONTENTS.—The table of contents of 

2 this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. Findings and purpose. 

Sec. 3. Definitions. 

TITLE I—ASBESTOS CLAIMS RESOLUTION 

Subtitle A—Office of Asbestos Disease Compensation 

Sec. 101. Establishment of Office of Asbestos Disease Compensation. 

Sec. 102. Advisory Committee on Asbestos Disease Compensation. 

Sec. 103. Medical Advisory Committee. 

Sec. 104. Claimant assistance. 

Sec. 105. Physicians Panels. 

Sec. 106. Program startup. 

Sec. 107. Authority of the Administrator. 

Subtitle B—Asbestos Disease Compensation Procedures 

Sec. 111. Essential elements of eligible claim. 

Sec. 112. General rule concerning no-fault compensation. 

Sec. 113. Filing of claims. 

Sec. 114. Eligibility determinations and claim awards. 

Sec. 115. Auditing procedures. 

Subtitle C—Medical Criteria 

Sec. 121. Medical criteria requirements. 

Subtitle D—Awards 

Sec. 131. Amount. 

Sec. 132. Medical monitoring. 

Sec. 133. Payment. 

Sec. 134. Setoffs for collateral source compensation and prior awards. 

Sec. 135. Certain claims not affected by payment of awards. 

TITLE II—ASBESTOS INJURY CLAIMS RESOLUTION FUND 

Subtitle A—Asbestos Defendants Funding Allocation 

Sec. 201. Definitions. 

Sec. 202. Authority and tiers. 

Sec. 203. Subtiers. 

Sec. 204. Assessment administration. 

Sec. 205. Stepdowns and funding holidays. 

Sec. 206. Accounting treatment. 

Subtitle B—Asbestos Insurers Commission 

Sec. 210. Definition. 

Sec. 211. Establishment of Asbestos Insurers Commission. 

Sec. 212. Duties of Asbestos Insurers Commission. 

Sec. 213. Powers of Asbestos Insurers Commission. 

Sec. 214. Personnel matters. 


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Sec. 215. Termination of Asbestos Insurers Commission. 

Sec. 216. Expenses and costs of Commission. 

Subtitle C—Asbestos Injury Claims Resolution Fund 

Sec. 221. Establishment of Asbestos Injury Claims Resolution Fund. 

Sec. 222. Management of the Fund. 

Sec. 223. Enforcement of payment obligations. 

Sec. 224. Interest on underpayment or nonpayment. 

Sec. 225. Education, consultation, screening, and monitoring. 

Sec. 226. National Mesothelioma Research and Treatment Program. 

TITLE III—JUDICIAL REVIEW 

Sec. 301. Judicial review of rules and regulations. 

Sec. 302. Judicial review of award decisions. 

Sec. 303. Judicial review of participants’ assessments. 

Sec. 304. Other judicial challenges. 

Sec. 305. Stays, exclusivity, and constitutional review. 

TITLE IV—MISCELLANEOUS PROVISIONS 

Sec. 401. False information. 

Sec. 402. Effect on bankruptcy laws. 

Sec. 403. Effect on other laws and existing claims. 

Sec. 404. Effect on insurance and reinsurance contracts. 

Sec. 405. Annual report of the Administrator and sunset of the Act. 

Sec. 406. Rules of construction relating to liability of the United States Government. 

Sec. 407. Rules of construction. 

Sec. 408. Violations of environmental health and safety requirements. 

Sec. 409. Nondiscrimination of health insurance. 

TITLE V—ASBESTOS BAN 

Sec. 501. Prohibition on asbestos containing products. 

Sec. 502. Naturally occurring asbestos. 

1 SEC. 2. FINDINGS AND PURPOSE. 

2 (a) FINDINGS.—Congress finds the following: 

3 (1) Millions of Americans have been exposed to 

4 forms of asbestos that can have devastating health 

5 effects. 

6 (2) Various injuries can be caused by exposure 

7 to some forms of asbestos, including pleural disease 

8 and some forms of cancer. 


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1 (3) The injuries caused by asbestos can have la2 tency periods of up to 40 years, and even limited ex3 posure to some forms of asbestos may result in in4 jury in some cases. 

5 (4) Asbestos litigation has had a significant 

6 detrimental effect on the country’s economy, driving 

7 companies into bankruptcy, diverting resources from 

8 those who are truly sick, and endangering jobs and 

9 pensions. 

10 (5) The scope of the asbestos litigation crisis 

11 cuts across every State and virtually every industry. 

12 (6) The United States Supreme Court has rec13 ognized that Congress must act to create a more ra14 tional asbestos claims system. In 1991, a Judicial 

15 Conference Ad Hoc Committee on Asbestos Litiga16 tion, appointed by Chief Justice William Rehnquist, 

17 found that the ‘‘ultimate solution should be legisla18 tion recognizing the national proportions of the 

19 problem . . . and creating a national asbestos dis20 pute resolution scheme . . .’’. The Court found in 

21 1997 in Amchem Products Inc. v. Windsor, 521 

22 U.S. 591, 595 (1997), that ‘‘[t]he argument is sen23 sibly made that a nationwide administrative claims 

24 processing regime would provide the most secure, 

25 fair, and efficient means of compensating victims of 


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1 asbestos exposure’’. In 1999, the Court in Ortiz v. 

2 Fibreboard Corp., 527 U.S. 819, 821 (1999), found 

3 that the ‘‘elephantine mass of asbestos cases . . . de4 fies customary judicial administration and calls for 

5 national legislation’’. That finding was again recog6 nized in 2003 by the Court in Norfolk & Western 

7 Railway Co. v. Ayers, 123 S. Ct. 1210 (2003). 

8 (7) This crisis, and its significant effect on the 

9 health and welfare of the people of the United 

10 States, on interstate and foreign commerce, and on 

11 the bankruptcy system, compels Congress to exercise 

12 its power to regulate interstate commerce and create 

13 this legislative solution in the form of a national as14 bestos injury claims resolution program to supersede 

15 all existing methods to compensate those injured by 

16 asbestos, except as specified in this Act. 

17 (8) This crisis has also imposed a deleterious 

18 burden upon the United States bankruptcy courts, 

19 which have assumed a heavy burden of admin20 istering complicated and protracted bankruptcies 

21 with limited personnel. 

22 (9) This crisis has devastated many commu23 nities across the country, but hardest hit has been 

24 Libby, Montana, where tremolite asbestos, 1 of the 

25 most deadly forms of asbestos, was contained in the 


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1 vermiculite ore mined from the area and despite on2 going cleanup by the Environmental Protection 

3 Agency, many still suffer from the deadly dust. 

4 (10) The asbestos found in Libby, Montana, 

5 tremolite asbestos, has demonstrated an unusually 

6 high level of toxicity, as compared to chrysotile as7 bestos. Diseases contracted from this tremolite as8 bestos are unique and highly progressive. These dis9 eases typically manifest in a characteristic pleural 

10 disease pattern, and often result in severe impair11 ment or death without radiographic interstitial dis12 ease or typical chrysotile markers of radiographic se13 verity. According to the Agency for Toxic Sub14 stances and Disease Registry previous studies by the 

15 National Institutes of Occupational Safety and 

16 Health document significantly increased rates of pul17 monary abnormalities and disease (asbestosis and 

18 lung cancer) among former workers. 

19 (11) Environmental Protection Agency sup20 ported studies have determined that the raw 

21 vermiculite ore mined and milled in Libby, Montana 

22 contained 21 to 26 percent asbestos, by weight. The 

23 milled ore, resulting from the processing in Libby, 

24 which was shipped out of Libby contained markedly 

25 reduced percentages of asbestos. A 1982 EnvironVerDate Aug 31 2005 00:11 Jun 06, 2006 Jkt 049200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S3274.PCS S3274

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1 mental Protection Agency-supported study concluded 

2 that ore shipped out of Libby contained 0.3 to 7 

3 percent asbestos, by weight. 

4 (12) In Libby, Montana, exposure pathways are 

5 and were not limited to the workplace, rather, for 

6 decades there has been an unprecedented 24 hour 

7 per day contamination of the community’s homes, 

8 playgrounds, gardens, and community air, such that 

9 the entire community of Libby, Montana, has been 

10 designated a Superfund site and is listed on the En11 vironmental Protection Agency’s National Priorities 

12 List. 

13 (13) These multiple exposure pathways have 

14 caused severe asbestos disease and death not only in 

15 former workers at the mine and milling facilities, 

16 but also in the workers’ spouses and children, and 

17 in community members who had no direct contact 

18 with the mine. According to the Environmental Pro19 tection Agency, some potentially important alter20 native pathways for past asbestos exposure include 

21 elevated concentrations of asbestos in ambient air 

22 and recreational exposures from children playing in 

23 piles of vermiculite. Furthermore, the Environmental 

24 Protection Agency has determined that current po25 tential pathways of exposure include vermiculite 


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1 placed in walls and attics as thermal insulation, 

2 vermiculite or ore used as road bed material, ore 

3 used as ornamental landscaping, and vermiculite or 

4 concentrated ore used as a soil and garden amend5 ment or aggregate in driveways. 

6 (14) The Environmental Protection Agency also 

7 concluded, ‘‘Asbestos contamination exists in a num8 ber of potential source materials at multiple loca9 tions in and around the residential and commercial 

10 area of Libby. . . . While data are not yet sufficient 

11 to perform reliable human-health risk evaluations for 

12 all sources and all types of disturbance, it is appar13 ent that releases of fiber concentrations higher than 

14 Occupational Safety and Health Administration 

15 standards may occur in some cases . . . and that 

16 screening-level estimates of lifetime excess cancer 

17 risk can exceed the upper-bound risk range of 1E– 

18 04 usually used by the Environmental Protection 

19 Agency for residents under a variety of exposure sce20 narios. The occurrence of nonoccupational asbestos21 related disease that has been observed among Libby 

22 residents is extremely unusual, and has not been as23 sociated with asbestos mines elsewhere, suggesting 

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1 sures and/or increased toxicity of this form of 

2 amphibole asbestos.’’. 

3 (15) According to a November 2003 article 

4 from the Journal Environmental Health Perspectives 

5 titled, Radiographic Abnormalities and Exposure to 

6 Asbestos-Contaminated Vermiculite in the Commu7 nity of Libby, Montana, USA, Libby residents who 

8 have evidence of ‘‘no apparent exposure’’, i.e., did 

9 not work with asbestos, were not a family member 

10 of a former worker, etc., had a greater rate of pleu11 ral abnormalities (6.7 percent) than did those in 

12 control groups or general populations found in other 

13 studies from other states (which ranged from 0.2 

14 percent to 4.6 percent). ‘‘Given the ubiquitous na15 ture of vermiculite contamination in Libby, along 

16 with historical evidence of elevated asbestos con17 centrations in the air, it would be difficult to find 

18 participants who could be characterized as unex19 posed.’’. 

20 (16) Nothing in this Act is intended to increase 

21 the Federal deficit or impose any burden on the tax22 payer. The Office of Asbestos Disease Compensation 

23 established under this Act shall be privately funded 

24 by annual payments from defendant participants 

25 that have been subject to asbestos liability and their 


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1 insurers. Section 406(b) of this Act expressly pro2 vides that nothing in this Act shall be construed to 

3 create any obligation of funding from the United 

4 States or to require the United States to satisfy any 

5 claims if the amounts in the Fund are inadequate. 

6 Any borrowing by the Fund is limited to monies ex7 pected to be paid into the Fund, and the Adminis8 trator shall have no fiscal authority beyond the 

9 amount of private money coming into the Fund. 

10 This Act provides the Administrator with broad en11 forcement authority to pursue debts to the Fund 

12 owed by defendant participants or insurer partici13 pants and their successors in interest. 

14 (b) PURPOSE.—The purpose of this Act is to— 

15 (1) create a privately funded, publicly adminis16 tered fund to provide the necessary resources for a 

17 fair and efficient system to resolve asbestos injury 

18 claims that will provide compensation for legitimate 

19 present and future claimants of asbestos exposure as 

20 provided in this Act; 

21 (2) provide compensation to those present and 

22 future victims based on the severity of their injuries, 

23 while establishing a system flexible enough to accom24 modate individuals whose conditions worsens; 


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1 (3) relieve the Federal and State courts of the 

2 burden of the asbestos litigation; and 

3 (4) increase economic stability by resolving the 

4 asbestos litigation crisis that has bankrupted compa5 nies with asbestos liability, diverted resources from 

6 the truly sick, and endangered jobs and pensions. 

7 SEC. 3. DEFINITIONS. 

8 In this Act, the following definitions shall apply: 

9 (1) ADMINISTRATOR.—The term ‘‘Adminis10 trator’’ means the Administrator of the Office of As11 bestos Disease Compensation appointed under sec12 tion 101(b). 

13 (2) ASBESTOS.—The term ‘‘asbestos’’ in14 cludes— 

15 (A) chrysotile; 

16 (B) amosite; 

17 (C) crocidolite; 

18 (D) tremolite asbestos; 

19 (E) winchite asbestos; 

20 (F) richterite asbestos; 

21 (G) anthophyllite asbestos; 

22 (H) actinolite asbestos; 

23 (I) asbestiform amphibole minerals; 

24 (J) any of the minerals listed under sub25 paragraphs (A) through (I) that has been 


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1 chemically treated or altered, and any 

2 asbestiform variety, type, or component thereof; 

3 and 

4 (K) asbestos-containing material, such as 

5 asbestos-containing products, automotive or in6 dustrial parts or components, equipment, im7 provements to real property, and any other ma8 terial that contains asbestos in any physical or 

9 chemical form. 

10 (3) ASBESTOS CLAIM.— 

11 (A) IN GENERAL.—The term ‘‘asbestos 

12 claim’’ means any claim, premised on any the13 ory, allegation, or cause of action for damages 

14 or other relief presented in a civil action or 

15 bankruptcy proceeding, directly, indirectly, or 

16 derivatively arising out of, based on, or related 

17 to, in whole or part, the health effects of expo18 sure to asbestos, including loss of consortium, 

19 wrongful death, and any derivative claim made 

20 by, or on behalf of, any exposed person or any 

21 representative, spouse, parent, child, or other 

22 relative of any exposed person. 

23 (B) EXCLUSION.—The term does not in24 clude— 


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1 (i) claims alleging damage or injury to 

2 tangible property; 

3 (ii) claims for benefits under a work4 ers’ compensation law or veterans’ benefits 

5 program; 

6 (iii) claims arising under any govern7 mental or private health, welfare, dis8 ability, death or compensation policy, pro9 gram or plan; 

10 (iv) claims arising under any employ11 ment contract or collective bargaining 

12 agreement; 

13 (v) claims arising out of medical mal14 practice; or 

15 (vi) any claim arising under— 

16 (I) the Americans with Disabil17 ities Act of 1990 (42 U.S.C. 12101 et 

18 seq.); 

19 (II) title VII of the Civil Rights 

20 Act of 1964 (42 U.S.C. 2000e et 

21 seq.); 

22 (III) the Age Discrimination in 

23 Employment Act of 1967 (29 U.S.C. 

24 621 et seq.); 


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1 (IV) the Equal Pay Act of 1963 

2 (29 U.S.C. 206); 

3 (V) the Family and Medical 

4 Leave Act of 1993 (29 U.S.C. 2601 et 

5 seq.); 

6 (VI) section 1979 of the Revised 

7 Statutes of the United States (42 

8 U.S.C. 1983); or 

9 (VII) the Rehabilitation Act of 

10 1973 (29 U.S.C. 701 et seq.). 

11 (4) ASBESTOS CLAIMANT.—The term ‘‘asbestos 

12 claimant’’ means an individual who files a claim 

13 under section 113. 

14 (5) CIVIL ACTION.—The term ‘‘civil action’’ 

15 means all suits of a civil nature in State or Federal 

16 court, whether cognizable as cases at law or in eq17 uity or in admiralty, but does not include an action 

18 relating to any workers’ compensation law, or a pro19 ceeding for benefits under any veterans’ benefits 

20 program. 

21 (6) COLLATERAL SOURCE COMPENSATION.— 

22 The term ‘‘collateral source compensation’’ means 

23 the compensation that the claimant received, or is 

24 entitled to receive, from a defendant or an insurer 

25 of that defendant, or compensation trust as a result 


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1 of a final judgment or settlement for an asbestos-re2 lated injury that is the subject of a claim filed under 

3 section 113. 

4 (7) ELIGIBLE DISEASE OR CONDITION.—The 

5 term ‘‘eligible disease or condition’’ means the extent 

6 that an illness meets the medical criteria require7 ments established under subtitle C of title I. 

8 (8) EMPLOYERS’ LIABILITY ACT.—The term 

9 ‘‘Act of April 22, 1908 (45 U.S.C. 51 et seq.), com10 monly known as the Employer’s Liability Act’’ shall, 

11 for all purposes of this Act, include the Act of June 

12 5, 1920 (46 U.S.C. App. 688), commonly known as 

13 the Jones Act, and the related phrase ‘‘operations as 

14 a common carrier by railroad’’ shall include oper15 ations as an employer of seamen. 

16 (9) FUND.—The term ‘‘Fund’’ means the As17 bestos Injury Claims Resolution Fund established 

18 under section 221. 

19 (10) INSURANCE RECEIVERSHIP PRO20 CEEDING.—The term ‘‘insurance receivership pro21 ceeding’’ means any State proceeding with respect to 

22 a financially impaired or insolvent insurer or rein23 surer including the liquidation, rehabilitation, con24 servation, supervision, or ancillary receivership of an 

25 insurer under State law. 


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1 (11) LAW.—The term ‘‘law’’ includes all law, 

2 judicial or administrative decisions, rules, regula3 tions, or any other principle or action having the ef4 fect of law. 

5 (12) PARTICIPANT.— 

6 (A) IN GENERAL.—The term ‘‘participant’’ 

7 means any person subject to the funding re8 quirements of title II, including— 

9 (i) any defendant participant subject 

10 to liability for payments under subtitle A 

11 of that title; 

12 (ii) any insurer participant subject to 

13 a payment under subtitle B of that title; 

14 and 

15 (iii) any successor in interest of a par16 ticipant. 

17 (B) EXCEPTION.— 

18 (i) IN GENERAL.—A defendant partic19 ipant shall not include any person pro20 tected from any asbestos claim by reason 

21 of an injunction entered in connection with 

22 a plan of reorganization under chapter 11 

23 of title 11, United States Code, that has 

24 been confirmed by a duly entered order or 

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1 ject to any appeal or judicial review, and 

2 the substantial consummation, as such 

3 term is defined in section 1101(2) of title 

4 11, United States Code, of such plan of re5 organization has occurred. 

6 (ii) APPLICABILITY.—Clause (i) shall 

7 not apply to a person who may be liable 

8 under subtitle A of title II based on prior 

9 asbestos expenditures related to asbestos 

10 claims that are not covered by an injunc11 tion described under clause (i). 

12 (13) PERSON.—The term ‘‘person’’— 

13 (A) means an individual, trust, firm, joint 

14 stock company, partnership, association, insur15 ance company, reinsurance company, or cor16 poration; and 

17 (B) does not include the United States, 

18 any State or local government, or subdivision 

19 thereof, including school districts and any gen20 eral or special function governmental unit es21 tablished under State law. 

22 (14) STATE.—The term ‘‘State’’ means any 

23 State of the United States and also includes the Dis24 trict of Columbia, Commonwealth of Puerto Rico, 

25 the Northern Mariana Islands, the Virgin Islands, 


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1 Guam, American Samoa, and any other territory or 

2 possession of the United States or any political sub3 division of any of the entities under this paragraph. 

4 (15) SUBSTANTIALLY CONTINUES.—The term 

5 ‘‘substantially continues’’ means that the business 

6 operations have not been significantly modified by 

7 the change in ownership. 

8 (16) SUCCESSOR IN INTEREST.—The term 

9 ‘‘successor in interest’’ means any person that, in 1 

10 or a series of transactions, acquires all or substan11 tially all of the assets and properties (including, 

12 without limitation, under section 363(b) or 

13 1123(b)(4) of title 11, United States Code), and 

14 substantially continues the business operations, of a 

15 participant. The factors to be considered in deter16 mining whether a person is a successor in interest 

17 include— 

18 (A) retention of the same facilities or loca19 tion; 

20 (B) retention of the same employees; 

21 (C) maintaining the same job under the 

22 same working conditions; 

23 (D) retention of the same supervisory per24 sonnel; 

25 (E) continuity of assets; 


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1 (F) production of the same product or 

2 offer of the same service; 

3 (G) retention of the same name; 

4 (H) maintenance of the same customer 

5 base; 

6 (I) identity of stocks, stockholders, and di7 rectors between the asset seller and the pur8 chaser; or 

9 (J) whether the successor holds itself out 

10 as continuation of previous enterprise, but ex11 pressly does not include whether the person ac12 tually knew of the liability of the participant 

13 under this Act. 

14 (17) VETERANS’ BENEFITS PROGRAM.—The 

15 term ‘‘veterans’ benefits program’’ means any pro16 gram for benefits in connection with military service 

17 administered by the Veterans’ Administration under 

18 title 38, United States Code. 

19 (18) WORKERS’ COMPENSATION LAW.—The 

20 term ‘‘workers’ compensation law’’— 

21 (A) means a law respecting a program ad22 ministered by a State or the United States to 

23 provide benefits, funded by a responsible em24 ployer or its insurance carrier, for occupational 


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1 diseases or injuries or for disability or death 

2 caused by occupational diseases or injuries; 

3 (B) includes the Longshore and Harbor 

4 Workers’ Compensation Act (33 U.S.C. 901 et 

5 seq.) and chapter 81 of title 5, United States 

6 Code; and 

7 (C) does not include the Act of April 22, 

8 1908 (45 U.S.C. 51 et seq.), commonly known 

9 as the Employers’ Liability Act, or damages re10 covered by any employee in a liability action 

11 against an employer. 

12 (19) CLASS ACTION TRUST.—The term ‘‘class 

13 action trust’’ means a trust or similar entity estab14 lished to hold assets for the payment of asbestos 

15 claims asserted against a debtor or participating de16 fendant, under a settlement that— 

17 (A) is a settlement of class action claims 

18 under rule 23 of the Federal Rules of Civil Pro19 cedure; and 

20 (B) has been approved by a final judgment 

21 of a United States district court before the date 

22 of enactment of this Act. 

23 (20) DEBTOR.—The term ‘‘debtor’’— 

24 (A) means— 


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1 (i) a person that is subject to a case 

2 pending under a chapter of title 11, United 

3 States Code, on the date of enactment of 

4 this Act or at any time during the 1-year 

5 period immediately preceding that date, ir6 respective of whether the debtor’s case 

7 under that title has been dismissed; and 

8 (ii) all of the direct or indirect major9 ity-owned subsidiaries of a person de10 scribed under clause (i), regardless of 

11 whether any such majority-owned sub12 sidiary has a case pending under title 11, 

13 United States Code; and 

14 (B) shall not include an entity— 

15 (i) subject to chapter 7 of title 11, 

16 United States Code, if a final decree clos17 ing the estate shall have been entered be18 fore the date of enactment of this Act; or 

19 (ii) subject to chapter 11 of title 11, 

20 United States Code, if a plan of reorga21 nization for such entity shall have been 

22 confirmed by a duly entered order or judg23 ment of a court that is no longer subject 

24 to any appeal or judicial review, and the 

25 substantial consummation, as such term is 


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1 defined in section 1101(2) of title 11, 

2 United States Code, of such plan of reor3 ganization has occurred. 

4 (21) TRUST.—The term ‘‘trust’’ means any 

5 trust, as described in sections 524(g)(2)(B)(i) or 

6 524(h) of title 11, United States Code, or estab7 lished in conjunction with an order issued under sec8 tion 105 of title 11, United States Code, established 

9 or formed under the terms of a chapter 11 plan of 

10 reorganization, which in whole or in part provides 

11 compensation for asbestos claims. 

12 TITLE I—ASBESTOS CLAIMS 

13 RESOLUTION 

14 Subtitle A—Office of Asbestos 

15 Disease Compensation 

16 SEC. 101. ESTABLISHMENT OF OFFICE OF ASBESTOS DIS17 EASE COMPENSATION. 

18 (a) IN GENERAL.— 

19 (1) ESTABLISHMENT.—There is established 

20 within the Department of Labor the Office of Asbes21 tos Disease Compensation (hereinafter referred to in 

22 this Act as the ‘‘Office’’), which shall be headed by 

23 an Administrator. 

24 (2) PURPOSE.—The purpose of the Office is to 

25 provide timely, fair compensation, in the amounts 


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1 and under the terms specified in this Act, on a no2 fault basis and in a nonadversarial manner, to indi3 viduals whose health has been adversely affected by 

4 exposure to asbestos. 

5 (3) TERMINATION OF THE OFFICE.—The Office 

6 of Asbestos Disease Compensation shall terminate 

7 effective not later than 12 months following certifi8 cation by the Administrator that the Fund has nei9 ther paid a claim in the previous 12 months nor has 

10 debt obligations remaining to pay. 

11 (4) EXPENSES.—There shall be available from 

12 the Fund to the Administrator such sums as are 

13 necessary for any and all expenses associated with 

14 the Office of Asbestos Disease Compensation and 

15 necessary to carry out the purposes of this Act. Ex16 penses covered should include— 

17 (A) management of the Fund; 

18 (B) personnel salaries and expenses, in19 cluding retirement and similar benefits; 

20 (C) the sums necessary for conducting the 

21 studies required under this Act; 

22 (D) all administrative and legal expenses; 

23 and 

24 (E) any other sum that could be attrib25 utable to the Fund. 


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1 (b) APPOINTMENT OF ADMINISTRATOR.— 

2 (1) IN GENERAL.—The Administrator of the 

3 Office of Asbestos Disease Compensation shall be 

4 appointed by the President, by and with the advice 

5 and consent of the Senate. The Administrator shall 

6 serve for a term of 5 years. 

7 (2) REPORTING.—The Administrator shall re8 port directly to the Assistant Secretary of Labor for 

9 the Employment Standards Administration. 

10 (c) DUTIES OF ADMINISTRATOR.— 

11 (1) IN GENERAL.—The Administrator shall be 

12 responsible for— 

13 (A) processing claims for compensation for 

14 asbestos-related injuries and paying compensa15 tion to eligible claimants under the criteria and 

16 procedures established under title I; 

17 (B) determining, levying, and collecting as18 sessments on participants under title II; 

19 (C) appointing or contracting for the serv20 ices of such personnel, making such expendi21 tures, and taking any other actions as may be 

22 necessary and appropriate to carry out the re23 sponsibilities of the Office, including entering 

24 into cooperative agreements with other Federal 


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1 agencies or State agencies and entering into 

2 contracts with nongovernmental entities; 

3 (D) conducting such audits and additional 

4 oversight as necessary to assure the integrity of 

5 the program; 

6 (E) managing the Asbestos Injury Claims 

7 Resolution Fund established under section 221, 

8 including— 

9 (i) administering, in a fiduciary capac10 ity, the assets of the Fund for the primary 

11 purpose of providing benefits to asbestos 

12 claimants and their beneficiaries; 

13 (ii) defraying the reasonable expenses 

14 of administering the Fund; 

15 (iii) investing the assets of the Fund 

16 in accordance with section 222(b); 

17 (iv) retaining advisers, managers, and 

18 custodians who possess the necessary fa19 cilities and expertise to provide for the 

20 skilled and prudent management of the 

21 Fund, to assist in the development, imple22 mentation and maintenance of the Fund’s 

23 investment policies and investment activi24 ties, and to provide for the safekeeping and 

25 delivery of the Fund’s assets; and 


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1 (v) borrowing amounts authorized by 

2 section 221(b) on appropriate terms and 

3 conditions, including pledging the assets of 

4 or payments to the Fund as collateral; 

5 (F) promulgating such rules, regulations, 

6 and procedures as may be necessary and appro7 priate to implement the provisions of this Act; 

8 (G) making such expenditures as may be 

9 necessary and appropriate in the administration 

10 of this Act; 

11 (H) excluding evidence and disqualifying or 

12 debarring any attorney, physician, provider of 

13 medical or diagnostic services, including labora14 tories and others who provide evidence in sup15 port of a claimant’s application for compensa16 tion where the Administrator determines that 

17 materially false, fraudulent, or fictitious state18 ments or practices have been submitted or en19 gaged in by such individuals or entities; and 

20 (I) having all other powers incidental, nec21 essary, or appropriate to carrying out the func22 tions of the Office. 

23 (2) CERTAIN ENFORCEMENTS.—For each in24 fraction relating to paragraph (1)(H), the Adminis25 trator also may impose a civil penalty not to exceed 


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1 $10,000 on any person or entity found to have sub2 mitted or engaged in a materially false, fraudulent, 

3 or fictitious statement or practice under this Act. 

4 The Administrator shall prescribe appropriate regu5 lations to implement paragraph (1)(H). 

6 (3) SELECTION OF DEPUTY ADMINISTRA7 TORS.—The Administrator shall select a Deputy Ad8 ministrator for Claims Administration to carry out 

9 the Administrator’s responsibilities under this title 

10 and a Deputy Administrator for Fund Management 

11 to carry out the Administrator’s responsibilities 

12 under title II of this Act. The Deputy Administra13 tors shall report directly to the Administrator and 

14 shall be in the Senior Executive Service. 

15 (d) EXPEDITIOUS DETERMINATIONS.—The Adminis16 trator shall prescribe rules to expedite claims for asbestos 

17 claimants with terminal circumstances in order to expedite 

18 the payment of such claims as soon as possible after start19 up of the Fund. The Administrator shall contract out the 

20 processing of such claims. 

21 (e) AUDIT AND PERSONNEL REVIEW PROCE22 DURES.—The Administrator shall establish audit and per23 sonnel review procedures for evaluating the accuracy of 

24 eligibility recommendations of agency and contract per25 sonnel. 


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1 (f) APPLICATION OF FOIA.— 

2 (1) IN GENERAL.—Section 552 of title 5, 

3 United States Code (commonly referred to as the 

4 Freedom of Information Act) shall apply to the Of5 fice of Asbestos Disease Compensation and the As6 bestos Insurers Commission. 

7 (2) CONFIDENTIALITY OF FINANCIAL

8 RECORDS.— 

9 (A) IN GENERAL.—Any person may label 

10 any record submitted under this section as a 

11 confidential commercial or financial record for 

12 the purpose of requesting exemption from dis13 closure under section 552(b)(4) of title 5, 

14 United States Code. 

15 (B) DUTIES OF ADMINISTRATOR AND

16 CHAIRMAN OF THE ASBESTOS INSURERS COM17 MISSION.—The Administrator and Chairman of 

18 the Asbestos Insurers Commission— 

19 (i) shall adopt procedures for— 

20 (I) handling submitted records 

21 marked confidential; and 

22 (II) protecting from disclosure 

23 records they determine to be confiden24 tial commercial or financial informaVerDate Aug 31 2005 00:11 Jun 06, 2006 Jkt 049200 PO 00000 Frm 00028 Fmt 6652 Sfmt 6201 E:\BILLS\S3274.PCS S3274

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1 tion exempt under section 552(b)(4) 

2 of title 5, United States Code; and 

3 (ii) may establish a pre-submission de4 termination process to protect from disclo5 sure records on reserves and asbestos-re6 lated liabilities submitted by any defendant 

7 participant that is exempt under section 

8 552(b)(4) of title 5, United States Code. 

9 (C) REVIEW OF COMPLAINTS.—Nothing in 

10 this section shall supersede or preempt the de 

11 novo review of complaints filed under section 

12 552(b)(4) of title 5, United States Code. 

13 (3) CONFIDENTIALITY OF MEDICAL

14 RECORDS.—Any claimant may designate any record 

15 submitted under this section as a confidential per16 sonnel or medical file for purposes of section 552 of 

17 title 5, United States Code. The Administrator and 

18 the Chairman of the Asbestos Insurers Commission 

19 shall adopt procedures for designating such records 

20 as confidential. 

21 SEC. 102. ADVISORY COMMITTEE ON ASBESTOS DISEASE 

22 COMPENSATION. 

23 (a) ESTABLISHMENT.— 

24 (1) IN GENERAL.—Not later than 120 days 

25 after the date of enactment of this Act, the AdminisVerDate Aug 31 2005 00:11 Jun 06, 2006 Jkt 049200 PO 00000 Frm 00029 Fmt 6652 Sfmt 6201 E:\BILLS\S3274.PCS S3274

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1 trator shall establish an Advisory Committee on As2 bestos Disease Compensation (hereinafter the ‘‘Advi3 sory Committee’’). 

4 (2) COMPOSITION AND APPOINTMENT.—The 

5 Advisory Committee shall be composed of 20 mem6 bers, appointed as follows— 

7 (A) The majority and minority leaders of 

8 the Senate, the Speaker of the House, and the 

9 minority leader of the House shall each appoint 

10 4 members. Of the 4— 

11 (i) 2 shall be selected to represent the 

12 interests of claimants, at least 1 of whom 

13 shall be selected from among individuals 

14 recommended by recognized national labor 

15 federations; and 

16 (ii) 2 shall be selected to represent the 

17 interests of participants, 1 of whom shall 

18 be selected to represent the interests of the 

19 insurer participants and 1 of whom shall 

20 be selected to represent the interests of the 

21 defendant participants. 

22 (B) The Administrator shall appoint 4 

23 members, who shall be individuals with quali24 fications and expertise in occupational or pul25 monary medicine, occupational health, workers’ 


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1 compensation programs, financial administra2 tion, investment of funds, program auditing, or 

3 other relevant fields. 

4 (3) QUALIFICATIONS.—All of the members de5 scribed in paragraph (2) shall have expertise or ex6 perience relevant to the asbestos compensation pro7 gram, including experience or expertise in diagnosing 

8 asbestos-related diseases and conditions, assessing 

9 asbestos exposure and health risks, filing asbestos 

10 claims, administering a compensation or insurance 

11 program, or as actuaries, auditors, or investment 

12 managers. None of the members described in para13 graph (2)(B) shall be individuals who, for each of 

14 the 5 years before their appointments, earned more 

15 than 15 percent of their income by serving in mat16 ters related to asbestos litigation as consultants or 

17 expert witnesses. 

18 (b) DUTIES.—The Advisory Committee shall advise 

19 the Administrator on— 

20 (1) claims filing and claims processing proce21 dures; 

22 (2) claimant assistance programs; 

23 (3) audit procedures and programs to ensure 

24 the quality and integrity of the compensation pro25 gram; 


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1 (4) the development of a list of industries, occu2 pations and time periods for which there is a pre3 sumption of substantial occupational exposure to as4 bestos; 

5 (5) recommended analyses or research that 

6 should be conducted to evaluate past claims and to 

7 project future claims under the program; 

8 (6) the annual report required to be submitted 

9 to Congress under section 405; and 

10 (7) such other matters related to the implemen11 tation of this Act as the Administrator considers ap12 propriate. 

13 (c) OPERATION OF THE COMMITTEE.— 

14 (1) Each member of the Advisory Committee 

15 shall be appointed for a term of 3 years, except that, 

16 of the members first appointed— 

17 (A) 6 shall be appointed for a term of 1 

18 year; 

19 (B) 7 shall be appointed for a term of 2 

20 years; and 

21 (C) 7 shall be appointed for a term of 3 

22 years, as determined by the Administrator at 

23 the time of appointment. 


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1 (2) Any member appointed to fill a vacancy oc2 curring before the expiration of the term shall be ap3 pointed only for the remainder of such term. 

4 (3) The Administrator shall designate a Chair5 person and Vice Chairperson from among members 

6 of the Advisory Committee appointed under sub7 section (a)(2)(B). 

8 (4) The Advisory Committee shall meet at the 

9 call of the Chairperson or the majority of its mem10 bers, and at a minimum shall meet at least 4 times 

11 per year during the first 5 years of the asbestos 

12 compensation program, and at least 2 times per year 

13 thereafter. 

14 (5) The Administrator shall provide to the 

15 Committee such information as is necessary and ap16 propriate for the Committee to carry out its respon17 sibilities under this section. The Administrator may, 

18 upon request of the Advisory Committee, secure di19 rectly from any Federal, State, or local department 

20 or agency such information as may be necessary and 

21 appropriate to enable the Advisory Committee to 

22 carry out its duties under this section. Upon request 

23 of the Administrator, the head of such department 

24 or agency shall furnish such information to the Advi25 sory Committee. 


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1 (6) The Administrator shall provide the Advi2 sory Committee with such administrative support as 

3 is reasonably necessary to enable it to perform its 

4 functions. 

5 (d) EXPENSES.—Members of the Advisory Com6 mittee, other than full-time employees of the United 

7 States, while attending meetings of the Advisory Com8 mittee or while otherwise serving at the request of the Ad9 ministrator, and while serving away from their homes or 

10 regular places of business, shall be allowed travel and meal 

11 expenses, including per diem in lieu of subsistence, as au12 thorized by section 5703 of title 5, United States Code, 

13 for individuals in the Government serving without pay. 

14 SEC. 103. MEDICAL ADVISORY COMMITTEE. 

15 (a) IN GENERAL.—The Administrator shall establish 

16 a Medical Advisory Committee to provide expert advice re17 garding medical issues arising under the statute. 

18 (b) QUALIFICATIONS.—None of the members of the 

19 Medical Advisory Committee shall be individuals who, for 

20 each of the 5 years before their appointments, earned 

21 more than 15 percent of their income by serving in mat22 ters related to asbestos litigation as consultants or expert 

23 witnesses. 


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1 SEC. 104. CLAIMANT ASSISTANCE. 

2 (a) ESTABLISHMENT.—Not later than 120 days after 

3 the enactment of this Act, the Administrator shall estab4 lish a comprehensive asbestos claimant assistance program 

5 to— 

6 (1) publicize and provide information to poten7 tial claimants about the availability of benefits for 

8 eligible claimants under this Act, and the procedures 

9 for filing claims and for obtaining assistance in fil10 ing claims; 

11 (2) provide assistance to potential claimants in 

12 preparing and submitting claims, including assist13 ance in obtaining the documentation necessary to 

14 support a claim and any other appropriate paralegal 

15 assistance; 

16 (3) respond to inquiries from claimants and po17 tential claimants; 

18 (4) provide training with respect to the applica19 ble procedures for the preparation and filing of 

20 claims to persons who provide assistance or rep21 resentation to claimants; and 

22 (5) provide for the establishment of a website 

23 where claimants may access all relevant forms and 

24 information. 

25 (b) RESOURCE CENTERS.—The claimant assistance 

26 program shall provide for the establishment of resource 


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1 centers in areas where there are determined to be large 

2 concentrations of potential claimants. These centers shall 

3 be located, to the extent feasible, in facilities of the De4 partment of Labor or other Federal agencies. 

5 (c) CONTRACTS.—The claimant assistance program 

6 may be carried out in part through contracts with labor 

7 organizations, community-based organizations, and other 

8 entities which represent or provide services to potential 

9 claimants, except that such organizations may not have 

10 a financial interest in the outcome of claims filed with the 

11 Office. 

12 (d) LEGAL ASSISTANCE.— 

13 (1) IN GENERAL.—As part of the program es14 tablished under subsection (a), the Administrator 

15 shall establish a legal assistance program to provide 

16 assistance to asbestos claimants concerning legal 

17 representation issues. 

18 (2) LIST OF QUALIFIED ATTORNEYS.—As part 

19 of the program, the Administrator shall maintain a 

20 roster of qualified attorneys who have agreed to pro21 vide pro bono services to asbestos claimants under 

22 rules established by the Administrator. The claim23 ants shall not be required to use the attorneys listed 

24 on such roster. 

25 (3) NOTICE.— 


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1 (A) NOTICE BY ADMINISTRATOR.—The 

2 Administrator shall provide asbestos claimants 

3 with notice of, and information relating to— 

4 (i) pro bono services for legal assist5 ance available to those claimants; and 

6 (ii) any limitations on attorneys fees 

7 for claims filed under this title. 

8 (B) NOTICE BY ATTORNEYS.—Before a 

9 person becomes a client of an attorney with re10 spect to an asbestos claim, that attorney shall 

11 provide notice to that person of pro bono serv12 ices for legal assistance available for that claim. 

13 (e) ATTORNEY’S FEES.— 

14 (1) LIMITATION.— 

15 (A) IN GENERAL.—Notwithstanding any 

16 contract, the representative of an individual 

17 may not receive, for services rendered in con18 nection with the claim of an individual under 

19 the Fund, more than 5 percent of a final mone20 tary award made (whether by the Administrator 

21 initially or as a result of administrative review) 

22 under the Fund on such claim. 

23 (B) REVIEW OF PROPOSED DECISION.— 

24 (i) REASONABLE FEE.—If an indi25 vidual seeks a review of a proposed deciVerDate Aug 31 2005 00:11 Jun 06, 2006 Jkt 049200 PO 00000 Frm 00037 Fmt 6652 Sfmt 6201 E:\BILLS\S3274.PCS S3274

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1 sion in accordance with section 114(d) and 

2 is awarded compensation, the representa3 tive of such individual may, in lieu of seek4 ing payment for services rendered subject 

5 to the limitation described under subpara6 graph (A), obtain a reasonable attorney’s 

7 fee to be paid from any compensation re8 covered by the individual. 

9 (ii) CALCULATION OF REASONABLE

10 FEE.—Any fee obtained under clause (i) 

11 shall be calculated by multiplying a reason12 able hourly rate by the number of hours 

13 reasonably expended on the claim of the 

14 individual. 

15 (iii) REQUIREMENTS FOR COMPENSA16 TION.—A representative of an individual 

17 shall not be eligible to receive a fee under 

18 clause (i), unless— 

19 (I) such representative submits 

20 to the Administrator detailed contem21 poraneous billing records for any work 

22 actually performed in the course of 

23 representation of an individual; 

24 (II) the Administrator finds, 

25 based on billing records submitted by 


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1 the representative under subclause (I), 

2 that the work for which compensation 

3 is sought was reasonably performed, 

4 and that the requested hourly fee is 

5 reasonable; and 

6 (III) the claimant seeking a re7 view of a proposed decision has been 

8 awarded monetary compensation by 

9 the Administrator. 

10 (iv) NO FEE FOR NO COMPENSA11 TION.—If the claimant is denied any com12 pensation after review of the claim, the 

13 claimant’s representative may not receive a 

14 fee from either the claimant or the Fund. 

15 (2) PENALTY.—Any representative of an asbes16 tos claimant who violates this subsection shall be 

17 fined not more than the greater of— 

18 (A) $5,000; or 

19 (B) twice the amount received by the rep20 resentative for services rendered in connection 

21 with each such violation. 

22 SEC. 105. PHYSICIANS PANELS. 

23 (a) APPOINTMENT.—The Administrator shall, in ac24 cordance with section 3109 of title 5, United States Code, 

25 appoint physicians with experience and competency in diVerDate Aug 31 2005 00:11 Jun 06, 2006 Jkt 049200 PO 00000 Frm 00039 Fmt 6652 Sfmt 6201 E:\BILLS\S3274.PCS S3274

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1 agnosing asbestos-related diseases to be available to serve 

2 on Physicians Panels, as necessary to carry out this Act. 

3 (b) FORMATION OF PANELS.— 

4 (1) IN GENERAL.—The Administrator shall pe5 riodically determine— 

6 (A) the number of Physicians Panels nec7 essary for the efficient conduct of the medical 

8 review process under section 121; 

9 (B) the number of Physicians Panels nec10 essary for the efficient conduct of the excep11 tional medical claims process under section 121; 

12 and 

13 (C) the particular expertise necessary for 

14 each panel. 

15 (2) EXPERTISE.—Each Physicians Panel shall 

16 be composed of members having the particular ex17 pertise determined necessary by the Administrator, 

18 randomly selected from among the physicians ap19 pointed under subsection (a) having such expertise. 

20 (3) PANEL MEMBERS.—Except as provided 

21 under subparagraph (B), each Physicians Panel 

22 shall consist of 3 physicians, 2 of whom shall be des23 ignated to participate in each case submitted to the 

24 Physicians Panel, and the third of whom shall be 

25 consulted in the event of disagreement. 


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1 (c) QUALIFICATIONS.—To be eligible to serve on a 

2 Physicians Panel under subsection (a), a person shall be— 

3 (1) a physician licensed in any State; 

4 (2) board-certified in pulmonary medicine, occu5 pational medicine, internal medicine, oncology, or 

6 pathology; and 

7 (3) an individual who, for each of the 5 years 

8 before and during his or her appointment to a Phy9 sicians Panel, has earned not more than 15 percent 

10 of his or her income as an employee of a partici11 pating defendant or insurer or a law firm rep12 resenting any party in asbestos litigation or as a 

13 consultant or expert witness in matters related to 

14 asbestos litigation. 

15 (d) DUTIES.—Members of a Physicians Panel shall— 

16 (1) make such medical determinations as are 

17 required to be made by Physicians Panels under sec18 tion 121; and 

19 (2) perform such other functions as required 

20 under this Act. 

21 (e) COMPENSATION.—Notwithstanding any limitation 

22 otherwise established under section 3109 of title 5, United 

23 States Code, the Administrator shall be authorized to pay 

24 members of a Physician Panel such compensation as is 

25 reasonably necessary to obtain their services. 


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1 (f) FEDERAL ADVISORY COMMITTEE ACT.—A Physi2 cians Panel established under this section shall not be sub3 ject to the Federal Advisory Committee Act (5 U.S.C. 

4 App. 2). 

5 SEC. 106. PROGRAM STARTUP. 

6 (a) IMMEDIATE STARTUP.— 

7 (1) IN GENERAL.—Subject to section 101(d), 

8 the Administrator may— 

9 (A) start receiving, reviewing, and deciding 

10 claims immediately upon the date of enactment 

11 of this Act; and 

12 (B) reimburse the Department of Labor 

13 from the Fund for any expense incurred— 

14 (i) before that date of enactment in 

15 preparation for carrying out any of the re16 sponsibilities of the Administrator under 

17 this Act; and 

18 (ii) during the 60-day period following 

19 that date of enactment to carry out such 

20 responsibilities. 

21 (2) INTERIM REGULATIONS.—Not later than 90 

22 days after the date of enactment of this Act, the Ad23 ministrator shall promulgate interim regulations and 

24 procedures for the processing of claims under this 

25 title and the operation of the Fund under title II, 


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1 including procedures for the expediting of terminal 

2 health claims, and processing of claims through the 

3 claims facility. 

4 (b) INTERIM PERSONNEL AND CONTRACTING.—The 

5 Secretary of Labor and the Assistant Secretary of Labor 

6 for the Employment Standards Administration shall make 

7 available to the Administrator on a temporary basis such 

8 personnel and other resources as may be necessary to fa9 cilitate the expeditious startup of the program. The Ad10 ministrator may in addition contract with individuals or 

11 entities having relevant experience to assist in the expedi12 tious startup of the program including entering into con13 tracts on an expedited or sole source basis during the 

14 startup period for the purpose of processing claims or pro15 viding financial analysis or assistance. Such relevant expe16 rience shall include, but not be limited to, experience with 

17 the review of workers’ compensation, occupational disease, 

18 or similar claims and with financial matters relevant to 

19 the operation of the program. 

20 (c) TERMINAL HEALTH CLAIMS.— 

21 (1) IN GENERAL.—The Administrator shall de22 velop procedures, as provided in section 106(f), to 

23 provide for an expedited process to categorize, evalu24 ate, and pay terminal health claims. Such proce25 dures, as provided in section 106(f), shall include, 


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1 pending promulgation of final regulations, adoption 

2 of interim regulations as needed for processing of 

3 terminal health claims. 

4 (2) ELIGIBLE TERMINAL HEALTH CLAIMS.—A 

5 claim shall qualify for treatment as a terminal 

6 health claim if— 

7 (A) the claimant is living and provides a 

8 diagnosis of mesothelioma meeting the require9 ments of section 121(d)(9); 

10 (B) the claimant is living and provides a 

11 credible declaration or affidavit, from a diag12 nosing physician who has examined the claim13 ant within 120 days before the date of such 

14 declaration or affidavit, that the physician has 

15 diagnosed the claimant as being terminally ill 

16 from an asbestos-related illness and having a 

17 life expectancy of less than 1 year due to such 

18 asbestos-related illness; or 

19 (C) the claimant is the spouse or child of 

20 an eligible terminal health claimant who— 

21 (i) was living when the claim was filed 

22 with the Fund, or if before the implemen23 tation of interim regulations for the filing 

24 of claims with the Fund, on the date of en25 actment of this Act; 


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1 (ii) has since died from a malignant 

2 disease or condition; and 

3 (iii) has not received compensation 

4 from the Fund for the disease or condition 

5 for which the claim was filed. 

6 (3) ADDITIONAL TERMINAL HEALTH CLAIMS.— 

7 The Administrator may, in final regulations promul8 gated under section 101(c), designate additional cat9 egories of claims that qualify as terminal health 

10 claims under this subsection except that exceptional 

11 medical claims may not proceed. 

12 (4) CLAIMS FACILITY.—To facilitate the prompt 

13 payment of terminal health claims prior to the Fund 

14 being certified as operational, the Administrator 

15 shall contract with a claims facility, which applying 

16 the medical criteria of section 121, shall process and 

17 pay claims in accordance with section 106(f)(2). The 

18 processing and payment of claims shall be subject to 

19 regulations promulgated under this Act. 

20 (5) AUTHORIZATION FOR CONTRACTS WITH

21 CLAIMS FACILITIES.—The Administrator may enter 

22 into contracts with a claims facility for the proc23 essing of claims (except for exceptional medical 

24 claims) in accordance with this title. 


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1 (d) PRIORITIZATION OF CLAIMS.—The Administrator 

2 shall, in final regulations promulgated under section 

3 101(c), designate categories of claims to be handled on 

4 an expedited basis. The Administrator shall prioritize the 

5 processing and payment of health claims involving claim6 ants with the most serious health claims. The Adminis7 trator shall also prioritize claims from claimants who face 

8 extreme financial hardship. 

9 (e) INTERIM ADMINISTRATOR.—Until an Adminis10 trator is appointed and confirmed under section 101(b), 

11 the responsibilities of the Administrator under this Act 

12 shall be performed by the Assistant Secretary of Labor 

13 for the Employment Standards Administration, who shall 

14 have all the authority conferred by this Act on the Admin15 istrator and who shall be deemed to be the Administrator 

16 for purposes of this Act. Before final regulations being 

17 promulgated relating to claims processing, the Interim Ad18 ministrator may prioritize claims processing, without re19 gard to the time requirements prescribed in subtitle B of 

20 this title, based on severity of illness and likelihood that 

21 exposure to asbestos was a substantial contributing factor 

22 for the illness in question. 

23 (f) STAY OF CLAIMS; RETURN TO TORT SYSTEM.— 

24 (1) STAY OF CLAIMS.—Notwithstanding any 

25 other provision of this Act, any asbestos claim pendVerDate Aug 31 2005 00:11 Jun 06, 2006 Jkt 049200 PO 00000 Frm 00046 Fmt 6652 Sfmt 6201 E:\BILLS\S3274.PCS S3274

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1 ing on the date of enactment of this Act, other than 

2 a claim to which section 403(d)(2) applies or as oth3 erwise provided in section 402(f), stayed. 

4 (2) TERMINAL HEALTH CLAIMS.— 

5 (A) PROCEDURES FOR SETTLEMENT OF

6 TERMINAL HEALTH CLAIMS.— 

7 (i) IN GENERAL.—Any person that 

8 has filed a terminal health claim, as pro9 vided under subsection (c)(2), seeking a 

10 judgment or order for monetary damages 

11 in any Federal or State court before the 

12 date of the enactment of this Act, shall 

13 seek a settlement in accordance with this 

14 paragraph. Any person with a terminal 

15 health claim, as provided under subsection 

16 (c)(2), that arises after such date of enact17 ment shall seek a settlement in accordance 

18 with this paragraph. 

19 (ii) FILING.— 

20 (I) IN GENERAL.—At any time 

21 before the Fund or claims facility is 

22 certified as operational and paying 

23 terminal health claims at a reasonable 

24 rate, any person with a terminal 

25 health claim as described under clause 


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1 (i) shall file a notice of their intent to 

2 seek a settlement or shall file their ex3 igent health claim with the Adminis4 trator or claims facility. Filing of an 

5 exigent health claim with the Admin6 istrator or claims facility may serve as 

7 notice of intent to seek a settlement. 

8 (II) EXCEPTION.—Any person 

9 who seeks compensation for an exi10 gent health claim from a trust in ac11 cordance with section 402(f) shall not 

12 be eligible to seek a settlement or set13 tlement offer under this paragraph. 

14 (iii) TERMINAL HEALTH CLAIM IN15 FORMATION.—To file a terminal health 

16 claim, each individual shall provide all of 

17 the following information: 

18 (I) The amount received or enti19 tled to be received as a result of all 

20 collateral source compensation under 

21 section 134, and copies of all settle22 ment agreements and related docu23 ments sufficient to show the accuracy 

24 of that amount. 


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1 (II) A description of any claims 

2 for compensation for an asbestos re3 lated injury or disease filed by the 

4 claimant with any trust or class action 

5 trust, and the status or disposition or 

6 any such claims. 

7 (III) All information that the 

8 claimant would be required to provide 

9 to the Administrator in support of a 

10 claim under sections 113(c) and 121. 

11 (IV) A certification by the claim12 ant that the information provided is 

13 true and complete. The certification 

14 provided under this subclause shall be 

15 subject to the same penalties for false 

16 or misleading statements that would 

17 be applicable with regard to informa18 tion provided to the Administrator or 

19 claims facility in support of a claim. 

20 (V) For terminal health claims 

21 arising after the date of enactment of 

22 this Act, the claimant shall identify 

23 each defendant that would be an ap24 propriate defendant in a civil action 

25 seeking damages for the asbestos 


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1 claim of the claimant. Identification of 

2 all potential participants shall be 

3 made in good faith by the claimant. 

4 (iv) TIMING.—A claimant who has 

5 filed a notice of their intent to seek a set6 tlement under clause (ii) shall within 60 

7 days after filing notice provide to the Ad8 ministrator or claims facility the informa9 tion required under clause (iii). If a claim10 ant has filed an exigent health claim under 

11 clause (ii) the Administrator shall provide 

12 all affected defendants the information re13 quired under clause (iii). 

14 (v) WEBSITE.— 

15 (I) POSTING.—The Adminis16 trator or claims facility shall post the 

17 information described in subclause 

18 (II) to a secure website, accessible on 

19 a passcode-protected basis to partici20 pants. 

21 (II) REQUIRED INFORMATION.— 

22 The website established under sub23 clause (I) shall contain a listing of— 

24 (aa) each claimant that has 

25 filed a notice of intent to seek a 


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1 settlement or claim under this 

2 clause; 

3 (bb) the name of such claim4 ant; and 

5 (cc) if applicable— 

6 (AA) the name of the 

7 court where such claim was 

8 filed; 

9 (BB) the case or docket 

10 number of such claim; and 

11 (CC) the date such 

12 claim was filed. 

13 (III) PROHIBITIONS.—The 

14 website established under subclause 

15 (I) shall not contain specific health or 

16 medical information or social security 

17 numbers. 

18 (IV) PARTICIPANT ACCESS.—A 

19 participant’s access to the website es20 tablished under subclause (I) shall be 

21 limited on a need to know basis, and 

22 participants shall not disclose or sell 

23 data, or retain data for purposes 

24 other than paying an asbestos claim. 


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1 (V) VIOLATIONS.—Any person or 

2 other entity that violates any provi3 sion of this clause, including by 

4 breaching any data posted on the 

5 website, shall be subject to an injunc6 tion, or civil penalties, or both. 

7 (vi) ADMINISTRATOR OR CLAIMS FA8 CILITY CERTIFICATION OF SETTLEMENT.— 

9 (I) DETERMINATION.—Within 60 

10 days after the information under 

11 clause (iii) is provided, the Adminis12 trator or claims facility shall deter13 mine whether or not the claim meets 

14 the requirements of a terminal health 

15 claim. 

16 (II) REQUIREMENTS MET.—If 

17 the Administrator or claims facility 

18 determines that the claim meets the 

19 requirements of a terminal health 

20 claim, the Administrator or claims fa21 cility shall immediately— 

22 (aa) issue and serve on all 

23 parties a certification of eligi24 bility of such claim; 


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1 (bb) determine the value of 

2 such claim under the Fund by 

3 subtracting from the amount in 

4 section 131 the total amount of 

5 collateral source compensation 

6 received by the claimant; and 

7 (cc) pay the award of com8 pensation to the claimant under 

9 clause (xiii). 

10 (III) REQUIREMENTS NOT

11 MET.—If the requirements under 

12 clause (iii) are not met, the claimant 

13 shall have 30 days to perfect the 

14 claim. If the claimant fails to perfect 

15 the claim within that 30-day period or 

16 the Administrator or claims facility 

17 determines that the claim does not 

18 meet the requirements of a terminal 

19 health claim, the claim shall not be el20 igible to proceed under this para21 graph. A claimant may appeal any de22 cision issued by a claims facility with 

23 the Administrator in accordance with 

24 section 114. 


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1 (vii) FAILURE TO CERTIFY.—If the 

2 Administrator or claims facility is unable 

3 to process the claim and does not make a 

4 determination regarding the certification of 

5 the claim as required under clause (vi), the 

6 Administrator or claims facility shall with7 in 10 days after the end of the 60-day pe8 riod referred to under clause (vi)(I) pro9 vide notice of the failure to act to the 

10 claimant and the defendants in the pend11 ing Federal or State court action or the 

12 defendants identified under clause (iii)(IV). 

13 If the Administrator or claims facility fails 

14 to provide such notice within 10 days, the 

15 claimant may elect to provide the notice to 

16 the affected defendants to prompt a settle17 ment offer. The Administrator or claims 

18 facility shall list all terminal health claims 

19 for which notice has been provided under 

20 this clause on the website established 

21 under clause (v). 

22 (viii) FAILURE TO PAY.—If the Ad23 ministrator or claims facility does not pay 

24 the award as required under clause (xiii), 

25 the Administrator shall refer the certified 


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1 claim within 10 days as a certified ter2 minal health claim to the defendants in the 

3 pending Federal and State court action or 

4 to the potential defendants identified under 

5 clause (iii)(IV) for terminal claims arising 

6 after the date of enactment of this Act. 

7 The Administrator or claims facility shall 

8 list all terminal health claims for which no9 tice has been provided under this clause on 

10 the website established under clause (v). 

11 (ix) SETTLEMENT OFFER.—Any par12 ticipant or participants may, within 30 

13 days after receipt of such notice as pro14 vided under clause (vii) or (viii), file and 

15 serve on all parties and the Administrator 

16 a good faith settlement offer in an aggre17 gate amount not to exceed the total 

18 amount to which the claimant would re19 ceive under section 131. If the aggregate 

20 amount offered by all participants exceeds 

21 the award determined by the Adminis22 trator, all offers shall be deemed reduced 

23 pro rata until the aggregate amount equals 

24 the award amount. An acceptance of such 

25 settlement offer for claims pending before 


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1 the date of enactment of this Act shall be 

2 subject to approval by the trial judge or 

3 authorized magistrate in the court where 

4 the claim is pending. The court shall ap5 prove any such accepted offer within 20 

6 days after a request, unless there is evi7 dence of bad faith or fraud. No court ap8 proval is necessary if the terminal health 

9 claim was certified by the Administrator or 

10 claims facility under clause (vi). 

11 (x) ACCEPTANCE OR REJECTION.— 

12 Within 20 days after receipt of the settle13 ment offer, or the amended settlement 

14 offer, the claimant shall either accept or 

15 reject such offer in writing. If the amount 

16 of the settlement offer made by the Admin17 istrator, claims facility, or participants 

18 equals 100 percent of what the claimant 

19 would receive under the Fund, the claim20 ant shall accept such settlement in writing. 

21 (xi) OPPORTUNITY TO CURE.—If the 

22 settlement offer is rejected for being less 

23 than what the claimant would receive 

24 under the Fund, the participants shall 

25 have 10 business days to make an amendVerDate Aug 31 2005 00:11 Jun 06, 2006 Jkt 049200 PO 00000 Frm 00056 Fmt 6652 Sfmt 6201 E:\BILLS\S3274.PCS S3274

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1 ed offer. If the amended offer equals 100 

2 percent of what the claimant would receive 

3 under the Fund, the claimant shall accept 

4 such settlement offer in writing. If the set5 tlement offer is again rejected as less than 

6 what the claimant would receive under the 

7 Fund or if participants fail to make an 

8 amended offer, the claimant shall recover 

9 150 percent of what the claimant would re10 ceive under the Fund. If the amount of the 

11 amended settlement offer made by the Ad12 ministrator, claims facility, or participants 

13 equals 150 percent of what the claimant 

14 would receive under the Fund, the claim15 ant shall accept such settlement in writing. 

16 (xii) PAYMENT SCHEDULE.— 

17 (I) MESOTHELIOMA CLAIM18 ANTS.—For mesothelioma claim19 ants— 

20 (aa) an initial payment of 

21 50 percent shall be made within 

22 30 days after the date the settle23 ment is accepted and the second 

24 and final payment shall be made 


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1 6 months after date the settle2 ment is accepted; or 

3 (bb) if the Administrator de4 termines that the payment sched5 ule would impose a severe finan6 cial hardship on the Fund, or if 

7 the court determines that the set8 tlement offer would impose a se9 vere financial hardship on the 

10 participant, the payments may be 

11 extended 50 percent in 6 months 

12 and 50 percent 11 months after 

13 the date the settlement offer is 

14 accepted. 

15 (II) OTHER TERMINAL CLAIM16 ANTS.—For other terminal claimants, 

17 as defined under section 106(c)(2)(B) 

18 and (C)— 

19 (aa) the initial payment of 

20 50 percent shall be made within 

21 6 months after the date the set22 tlement is accepted and the sec23 ond and final payment shall be 

24 made 12 months after date the 

25 settlement is accepted; or 


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1 (bb) if the Administrator de2 termines that the payment sched3 ule would impose a severe finan4 cial hardship on the Fund, or if 

5 the court determines that the set6 tlement offer would impose a se7 vere financial hardship on the 

8 participants, the payments may 

9 be extended 50 percent within 1 

10 year after the date the settlement 

11 offer is accepted and 50 percent 

12 in 2 years after date the settle13 ment offer is accepted. 

14 (III) RELEASE.—Once a claim15 ant has received final payment of the 

16 accepted settlement offer, and penalty 

17 payment if applicable, the claimant 

18 shall release any outstanding asbestos 

19 claims. 

20 (xiii) RECOVERY OF COSTS.— 

21 (I) IN GENERAL.—Any partici22 pant whose settlement offer is accept23 ed may recover the cost of such settle24 ment by deducting from the partici25 pant’s next and subsequent contribuVerDate Aug 31 2005 00:11 Jun 06, 2006 Jkt 049200 PO 00000 Frm 00059 Fmt 6652 Sfmt 6201 E:\BILLS\S3274.PCS S3274

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1 tions to the Fund the full amount of 

2 the payment made by such participant 

3 to the terminal health claimant, un4 less the Administrator finds, on the 

5 basis of clear and convincing evidence, 

6 that the participant’s offer is not in 

7 good faith. Any such payment shall be 

8 considered a payment to the Fund for 

9 purposes of section 404(e)(1) and in 

10 response to the payment obligations 

11 imposed on participants in title II. 

12 (II) REIMBURSEMENT.—Notwith13 standing subclause (I), if the deduc14 tions from the participant’s next and 

15 subsequent contributions to the Fund 

16 do not fully recover the cost of such 

17 payments on or before its third an18 nual contribution to the Fund, the 

19 Fund shall reimburse such participant 

20 for such remaining cost not later than 

21 6 months after the date of the third 

22 scheduled Fund contribution. 

23 (xiv) FAILURE TO MAKE OFFER.—If 

24 participants fail to make a settlement offer 

25 within the 30-day period described under 


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1 clause (ix) or make amended offers within 

2 the 10 business day cure period described 

3 under clause (xi), the claimant shall be en4 titled to recover 150 percent of what the 

5 claimant would receive under the Fund be6 fore the stay being lifted under subpara7 graph (B). 

8 (xv) FAILURE TO PAY.—If a partici9 pant fails to pay an accepted settlement 

10 offer within the payment schedule under 

11 clause (xii), the claimant shall be entitled 

12 to recover 150 percent of what the claim13 ant would receive under the Fund before 

14 the stay being lifted under subparagraph 

15 (B). If the stay is lifted under subpara16 graph (B) the claimant may seek a judg17 ment or order for monetary damages from 

18 the court where the case is currently pend19 ing or the appropriate Federal or State 

20 court for claims arising after the date of 

21 enactment of this Act. 

22 (B) STAY TERMINATED AND REVERSION

23 TO COURT.—If 9 months after a terminal 

24 health claim has been filed under subparagraph 

25 (A), a claimant has not received a settlement 


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1 under subparagraph (A)(xii) and the Adminis2 trator has not certified to Congress that the 

3 Fund or claims facility is operational and pay4 ing terminal health claims at a reasonable rate, 

5 the stay of claim provided under paragraph (1) 

6 shall be lifted and such terminal health claim7 ant, may immediately seek a judgment or order 

8 for monetary damages from the court where the 

9 case is currently pending or the appropriate 

10 Federal or State court for claims arising after 

11 the date of enactment of this Act. If a claimant 

12 has failed to file a claim or notice of intent to 

13 seek a settlement, as required under subpara14 graph (A)(ii), the provisions of this subpara15 graph shall not apply. 

16 (C) CREDIT OF CLAIM AND EFFECT OF

17 OPERATIONAL FUND.— 

18 (i) COLLATERAL SOURCE.—If an as19 bestos claim is pursued in Federal or State 

20 court in accordance with this paragraph, 

21 any recovery by the claimant shall be a col22 lateral source compensation for purposes of 

23 section 134. 

24 (ii) RECOVERY OF COSTS.—Any par25 ticipant may recover the cost of any claim 


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1 continued in court for up to the amount 

2 the claimant would receive under the Fund 

3 by deducting from the participant’s next 

4 and subsequent contributions to the Fund 

5 for that amount of the payment made by 

6 such participant to the terminal health 

7 claimant. 

8 (3) PURSUAL OF NONTERMINAL ASBESTOS

9 CLAIMS IN FEDERAL OR STATE COURT.— 

10 (A) IN GENERAL.— 

11 (i) PURSUAL OF CLAIMS.—Notwith12 standing any other provision of this Act, if 

13 not later than 24 months after the date of 

14 enactment of this Act, the Administrator 

15 cannot certify to Congress that the Fund 

16 is operational and paying all valid claims 

17 at a reasonable rate, any person with a 

18 nonterminal asbestos claim stayed, except 

19 for any person whose claim does not exceed 

20 a Level I claim, may pursue that claim in 

21 the Federal district court (if the claim is 

22 otherwise within the jurisdiction of the 

23 court) or State court located within— 

24 (I) the State of residence of the 

25 claimant; or 


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1 (II) the State in which the asbes2 tos exposure occurred. 

3 (ii) RULE OF CONSTRUCTION.—This 

4 subparagraph shall not be construed as 

5 creating a new Federal cause of action. 

6 (B) DEFENDANTS NOT FOUND.—If any 

7 defendant cannot be found in the State de8 scribed under subparagraph (A) (i) or (ii), the 

9 claim may be pursued in the Federal district 

10 court or State court located within any State in 

11 which the defendant may be found. 

12 (C) DETERMINATION OF MOST APPRO13 PRIATE FORUM.—If a person alleges that the 

14 asbestos exposure occurred in more than 1 

15 county (or Federal district), the trial court shall 

16 determine which State and county (or Federal 

17 district) is the most appropriate forum for the 

18 claim. If the court determines that another 

19 forum would be the most appropriate forum for 

20 a claim, the court shall dismiss the claim. Any 

21 otherwise applicable statute of limitations shall 

22 be tolled beginning on the date the claim was 

23 filed and ending on the date the claim is dis24 missed under this subparagraph. 


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1 (D) STATE VENUE REQUIREMENTS.— 

2 Nothing in this paragraph shall preempt or su3 persede any State law relating to venue require4 ments within that State which are more restric5 tive. 

6 (E) CREDIT OF CLAIM AND EFFECT OF

7 OPERATIONAL OR NONOPERATIONAL FUND.— 

8 (i) CREDIT OF CLAIM.—If an asbestos 

9 claim is pursued in Federal or State court 

10 in accordance with this paragraph, any re11 covery by the claimant shall be a collateral 

12 source compensation for purposes of sec13 tion 134. 

14 (ii) OPERATIONAL CERTIFICATION.— 

15 Operational certification shall be a filing in 

16 the Federal Register confirming that the 

17 Fund is capable of operating and paying 

18 all valid asbestos claims at a reasonable 

19 rate. 

20 (iii) OPERATIONAL PRECONDITIONS.— 

21 (I) The Administrator may not 

22 issue a operational certification 

23 until— 

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1 quired under section 221(e) has 

2 been published in the Federal 

3 Register; and 

4 (bb) insurers subject to sec5 tion 212(a)(3) submit their 

6 names and information to the 

7 Administrator within 30 days 

8 after the date of enactment of 

9 this Act and 60 days after the 

10 Administrator publishes such in11 formation in the Federal Reg12 ister. 

13 (iv) OPERATIONAL FUND.—If the Ad14 ministrator issues an operational certifi15 cation and notifies Congress that the Fund 

16 has become operational and paying all 

17 valid asbestos claims at a reasonable rate, 

18 any nonterminal asbestos claim in a civil 

19 action in Federal or State court that is not 

20 on trial before a jury which has been 

21 impaneled and presentation of evidence has 

22 commenced, but before its deliberation, or 

23 before a judge and is at the presentation 

24 of evidence shall be deemed a reinstated 

25 claim against the Fund and the civil action 


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1 before the Federal or State court shall be 

2 null and void. 

3 (v) NONOPERATIONAL FUND.—Not4 withstanding any other provision of this 

5 Act, if the Administrator subsequently 

6 issues a nonoperational certification and 

7 notifies Congress that the Fund is unable 

8 to become operational and pay all valid as9 bestos claims at a reasonable rate, all as10 bestos claims have been stayed or not filed 

11 may be filed or reinstated in the appro12 priate Federal or State court. 

13 (4) RESERVATION OF RIGHTS.—Except as oth14 erwise provided in this Act, participation in the offer 

15 and settlement process under this subsection shall 

16 not affect or prejudice any rights or defenses a party 

17 might have in any litigation. 

18 SEC. 107. AUTHORITY OF THE ADMINISTRATOR. 

19 The Administrator, on any matter within the jurisdic20 tion of the Administrator under this Act, may— 

21 (1) issue subpoenas for and compel the attend22 ance of witnesses within a radius of 200 miles; 

23 (2) administer oaths; 

24 (3) examine witnesses; 


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1 (4) require the production of books, papers, 

2 documents, and other evidence; and 

3 (5) request assistance from other Federal agen4 cies with the performance of the duties of the Ad5 ministrator under this Act. 

6 Subtitle B—Asbestos Disease 

7 Compensation Procedures 

8 SEC. 111. ESSENTIAL ELEMENTS OF ELIGIBLE CLAIM. 

9 To be eligible for an award under this Act for an as10 bestos-related disease or injury, an individual shall— 

11 (1) file a claim in a timely manner in accord12 ance with sections 106(f)(2) and 113; and 

13 (2) prove, by a preponderance of the evidence, 

14 that the claimant suffers from an eligible disease or 

15 condition, as demonstrated by evidence that meets 

16 the requirements established under subtitle C. 

17 SEC. 112. GENERAL RULE CONCERNING NO-FAULT COM18 PENSATION. 

19 An asbestos claimant shall not be required to dem20 onstrate that the asbestos-related injury for which the 

21 claim is being made resulted from the negligence or other 

22 fault of any other person. 

23 SEC. 113. FILING OF CLAIMS. 

24 (a) WHO MAY SUBMIT.— 


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1 (1) IN GENERAL.—Any individual who has suf2 fered from a disease or condition that is believed to 

3 meet the requirements established under subtitle C 

4 (or the personal representative of the individual, if 

5 the individual is deceased or incompetent) may file 

6 a claim with the Office for an award with respect to 

7 such injury. 

8 (2) DEFINITION.—In this Act, the term ‘‘per9 sonal representative’’ shall have the same meaning 

10 as that term is defined in section 104.4 of title 28 

11 of the Code of Federal Regulations, as in effect on 

12 December 31, 2004. 

13 (3) LIMITATION.—A claim may not be filed by 

14 any person seeking contribution or indemnity. 

15 (4) EFFECT OF MULTIPLE INJURIES.— 

16 (A) IN GENERAL.—A claimant who re17 ceives an award for an eligible disease or condi18 tion shall not be precluded from submitting 

19 claims for and receiving additional awards 

20 under this title for any higher disease level for 

21 which the claimant becomes eligible, subject to 

22 appropriate setoffs as provided under section 

23 134. 

24 (B) LIBBY, MONTANA CLAIMS.— 


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1 (i) IN GENERAL.—Notwithstanding 

2 subparagraph (A), if a Libby, Montana 

3 claimant worsens in condition, as measured 

4 by pulmonary function tests, such that a 

5 claimant qualifies for a higher nonmalig6 nant level, the claimant shall be eligible for 

7 an additional award, at the appropriate 

8 level, offset by any award previously paid 

9 under this Act, such that a claimant would 

10 qualify for Level IV if the claimant satis11 fies section 121(f)(8), and would qualify 

12 for Level V if the claimant provides— 

13 (I) a diagnosis of bilateral asbes14 tos related nonmalignant disease; 

15 (II) evidence of TLC or FVC less 

16 than 60 percent; and 

17 (III) supporting medical docu18 mentation establishing asbestos expo19 sure as a substantial contributing fac20 tor in causing the pulmonary condi21 tion in question, and excluding more 

22 likely causes of that pulmonary condi23 tion. 

24 (ii) SUBSEQUENT MALIGNANT DIS25 EASE.—If a Libby, Montana, claimant deVerDate Aug 31 2005 00:11 Jun 06, 2006 Jkt 049200 PO 00000 Frm 00070 Fmt 6652 Sfmt 6201 E:\BILLS\S3274.PCS S3274

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1 velops malignant disease, such that the 

2 claimant qualifies for Level VI, VII, VIII, 

3 or IX, subparagraph (A) shall apply. 

4 (b) STATUTE OF LIMITATIONS.— 

5 (1) IN GENERAL.—If a claim is not filed with 

6 the Office within the limitations period specified in 

7 this subsection for that category of claim, such claim 

8 shall be extinguished, and any recovery thereon shall 

9 be prohibited. 

10 (2) INITIAL CLAIMS.—An initial claim for an 

11 award under this Act shall be filed within 5 years 

12 after the date on which the claimant first received 

13 a medical diagnosis and medical test results suffi14 cient to satisfy the criteria for the disease level for 

15 which the claimant is seeking compensation. 

16 (3) CLAIMS FOR ADDITIONAL AWARDS.— 

17 (A) NONMALIGNANT DISEASES.—If a 

18 claimant has previously filed a timely initial 

19 claim for compensation for any nonmalignant 

20 disease level, there shall be no limitations pe21 riod applicable to the filing of claims by the 

22 claimant for additional awards for higher dis23 ease levels based on the progression of the non24 malignant disease. 


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1 (B) MALIGNANT DISEASES.—Regardless of 

2 whether the claimant has previously filed a 

3 claim for compensation for any other disease 

4 level, a claim for compensation for a malignant 

5 disease level shall be filed within 5 years after 

6 the claimant first obtained a medical diagnosis 

7 and medical test results sufficient to satisfy the 

8 criteria for the malignant disease level for 

9 which the claimant is seeking compensation. 

10 (4) EFFECT ON PENDING CLAIMS.— 

11 (A) IN GENERAL.—Subject to subpara12 graphs (C) and (D), if an asbestos claim that 

13 was timely filed within 10 years before the date 

14 of enactment of this Act is pending as of that 

15 date and is preempted under section 403(e), a 

16 claim under this Act for the same disease or 

17 condition may be filed with the Office under 

18 this section not later than 5 years after such 

19 date of enactment. 

20 (B) VETERANS.—For purposes of subpara21 graph (A), any person with a timely filed asbes22 tos claim shall include any person who— 

23 (i) is a veteran, as that term is de24 fined under section 101(2) of title 38, 

25 United States Code; and 


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1 (ii) on the date of enactment of this 

2 Act— 

3 (I) is receiving benefits for dis4 ability, caused by exposure to asbes5 tos, under sections 1110 (wartime dis6 ability), 1131 (peacetime disability), 

7 or 3102 (training and rehabilitation) 

8 of title 38, United States Code; or 

9 (II) has submitted an application 

10 for such benefits to the Department of 

11 Veterans Affairs that is pending or is 

12 on administrative or judicial appeal. 

13 (C) SPECIAL RULE.—For purposes of this 

14 paragraph, a claim shall not be treated as pend15 ing with a trust established under title 11, 

16 United States Code, solely because a claimant 

17 whose claim was previously compensated by the 

18 trust has or alleges— 

19 (i) a noncontingent right to the pay20 ment of future installments of a fixed 

21 award; or 

22 (ii) a contingent right to recover some 

23 additional amount from the trust on the 

24 occurrence of a future event, such as the 


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1 reevaluation of the trust’s funding ade2 quacy or projected claims experience. 

3 (D) DORMANT CLAIMS.—A claimant shall 

4 have the benefit of the special limitations period 

5 under subparagraph (A) only if the claimant 

6 provides documentation that the claimant has 

7 filed a pleading, served a discovery response or 

8 request for discovery, or taken other action to 

9 prosecute the pending asbestos claim within the 

10 3-year period ending May 25, 2006, except that 

11 the failure to take such action to prosecute the 

12 pending asbestos claim shall not preclude the 

13 application of the special limitations period 

14 under subparagraph (A) if the claimant shows 

15 either— 

16 (i) that prosecution of the claim was 

17 stayed during all or part of the 3-year pe18 riod ending May 25, 2006, by court order 

19 or operation of law; or 

20 (ii) that the claimant has taken rea21 sonable steps to prosecute the claim within 

22 the 3-year period ending May 25, 2006, 

23 and that the period of inactivity is the re24 sult of the ordinary, generally applicable 


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1 procedures or practices of the court in 

2 which such asbestos claim was pending. 

3 (c) REQUIRED INFORMATION.—A claim filed under 

4 subsection (a) shall be in such form, and contain such in5 formation in such detail, as the Administrator shall by 

6 regulation prescribe. At a minimum, a claim shall in7 clude— 

8 (1) the name, social security number, gender, 

9 date of birth, and, if applicable, date of death of the 

10 claimant; 

11 (2) information relating to the identity of de12 pendents and beneficiaries of the claimant; 

13 (3) an employment history sufficient to estab14 lish required asbestos exposure, accompanied by so15 cial security or other payment records or a signed 

16 release permitting access to such records; 

17 (4) a description of the asbestos exposure of the 

18 claimant, including, to the extent known, informa19 tion on the site, or location of exposure, and dura20 tion and intensity of exposure; 

21 (5) a description of the tobacco product use his22 tory of the claimant, including frequency and dura23 tion; 

24 (6) an identification and description of the as25 bestos-related diseases or conditions of the claimant, 


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1 accompanied by a written report by the claimant’s 

2 physician with medical diagnoses and x-ray films, 

3 and other test results necessary to establish eligi4 bility for an award under this Act; 

5 (7) a description of any prior or pending civil 

6 action or other claim brought by the claimant for as7 bestos-related injury or any other pulmonary, paren8 chymal, or pleural injury, including an identification 

9 of any recovery of compensation or damages through 

10 settlement, judgment, or otherwise; and 

11 (8) for any claimant who asserts that he or she 

12 is a nonsmoker or an ex-smoker, as defined in sec13 tion 131, for purposes of an award under Malignant 

14 Level VI, Malignant Level VII, or Malignant Level 

15 VIII, evidence to support the assertion of non16 smoking or ex-smoking, including relevant medical 

17 records. 

18 (d) DATE OF FILING.—A claim shall be considered 

19 to be filed on the date that the claimant mails the claim 

20 to the Office, as determined by postmark, or on the date 

21 that the claim is received by the Office, whichever is the 

22 earliest determinable date. 

23 (e) INCOMPLETE CLAIMS.—If a claim filed under 

24 subsection (a) is incomplete, the Administrator shall notify 

25 the claimant of the information necessary to complete the 


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1 claim and inform the claimant of such services as may 

2 be available through the Claimant Assistance Program es3 tablished under section 104 to assist the claimant in com4 pleting the claim. Any time periods for the processing of 

5 the claim shall be suspended until such time as the claim6 ant submits the information necessary to complete the 

7 claim. If such information is not received within 1 year 

8 after the date of such notification, the claim shall be dis9 missed. 

10 SEC. 114. ELIGIBILITY DETERMINATIONS AND CLAIM 

11 AWARDS. 

12 (a) IN GENERAL.— 

13 (1) REVIEW OF CLAIMS.—The Administrator 

14 shall, in accordance with this section, determine 

15 whether each claim filed under the Fund or claims 

16 facility satisfies the requirements for eligibility for 

17 an award under this Act and, if so, the value of the 

18 award. In making such determinations, the Adminis19 trator shall consider the claim presented by the 

20 claimant, the factual and medical evidence submitted 

21 by the claimant in support of the claim, the medical 

22 determinations of any Physicians Panel to which a 

23 claim is referred under section 121, and the results 

24 of such investigation as the Administrator may deem 


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1 necessary to determine whether the claim satisfies 

2 the criteria for eligibility established by this Act. 

3 (2) ADDITIONAL EVIDENCE.—The Adminis4 trator may request the submission of medical evi5 dence in addition to the minimum requirements of 

6 section 113(c) if necessary or appropriate to make 

7 a determination of eligibility for an award, in which 

8 case the cost of obtaining such additional informa9 tion or testing shall be borne by the Office. 

10 (b) PROPOSED DECISIONS.—Not later than 90 days 

11 after the filing of a claim, the Administrator shall provide 

12 to the claimant (and the claimant’s representative) a pro13 posed decision accepting or rejecting the claim in whole 

14 or in part and specifying the amount of the proposed 

15 award, if any. The proposed decision shall be in writing, 

16 shall contain findings of fact and conclusions of law, and 

17 shall contain an explanation of the procedure for obtaining 

18 review of the proposed decision. 

19 (c) PAYMENTS IF NO TIMELY PROPOSED DECI20 SION.—If the Administrator has received a complete claim 

21 and, after the Fund has been certified subject to section 

22 106(f)(3)(E) has not provided a proposed decision to the 

23 claimant under subsection (b) within 180 days after the 

24 filing of the claim, the claim shall be deemed accepted and 

25 the claimant shall be entitled to payment under section 


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1 133(a)(2). If the Administrator subsequently rejects the 

2 claim the claimant shall receive no further payments under 

3 section 133. If the Administrator subsequently rejects the 

4 claim in part, the Administrator shall adjust future pay5 ments due the claimant under section 133 accordingly. In 

6 no event may the Administrator recover amounts properly 

7 paid under this section from a claimant. 

8 (d) REVIEW OF PROPOSED DECISIONS.— 

9 (1) RIGHT TO HEARING.— 

10 (A) IN GENERAL.—Any claimant not satis11 fied with a proposed decision of the Adminis12 trator under subsection (b) shall be entitled, on 

13 written request made within 90 days after the 

14 date of the issuance of the decision, to a hear15 ing on the claim of that claimant before a rep16 resentative of the Administrator. At the hear17 ing, the claimant shall be entitled to present 

18 oral evidence and written testimony in further 

19 support of that claim. 

20 (B) CONDUCT OF HEARING.—When prac21 ticable, the hearing will be set at a time and 

22 place convenient for the claimant. In conducting 

23 the hearing, the representative of the Adminis24 trator shall not be bound by common law or 

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1 mal rules of procedure, or by section 554 of 

2 title 5, United States Code, except as provided 

3 by this Act, but shall conduct the hearing in 

4 such manner as to best ascertain the rights of 

5 the claimant. For this purpose, the representa6 tive shall receive such relevant evidence as the 

7 claimant adduces and such other evidence as 

8 the representative determines necessary or use9 ful in evaluating the claim. 

10 (C) REQUEST FOR SUBPOENAS.— 

11 (i) IN GENERAL.—A claimant may re12 quest a subpoena but the decision to grant 

13 or deny such a request is within the discre14 tion of the representative of the Adminis15 trator. The representative may issue sub16 poenas for the attendance and testimony of 

17 witnesses, and for the production of books, 

18 records, correspondence, papers, or other 

19 relevant documents. Subpoenas are issued 

20 for documents only if such documents are 

21 relevant and cannot be obtained by other 

22 means, and for witnesses only where oral 

23 testimony is the best way to ascertain the 

24 facts. 


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1 (ii) REQUEST.—A claimant may re2 quest a subpoena only as part of the hear3 ing process. To request a subpoena, the re4 quester shall— 

5 (I) submit the request in writing 

6 and send it to the representative as 

7 early as possible, but no later than 30 

8 days after the date of the original 

9 hearing request; and 

10 (II) explain why the testimony or 

11 evidence is directly relevant to the 

12 issues at hand, and a subpoena is the 

13 best method or opportunity to obtain 

14 such evidence because there are no 

15 other means by which the documents 

16 or testimony could have been ob17 tained. 

18 (iii) FEES AND MILEAGE.—Any per19 son required by such subpoena to attend as 

20 a witness shall be allowed and paid the 

21 same fees and mileage as are paid wit22 nesses in the district courts of the United 

23 States. Such fees and mileage shall be paid 

24 from the Fund. 


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1 (2) REVIEW OF WRITTEN RECORD.—In lieu of 

2 a hearing under paragraph (1), any claimant not 

3 satisfied with a proposed decision of the Adminis4 trator shall have the option, on written request made 

5 within 90 days after the date of the issuance of the 

6 decision, of obtaining a review of the written record 

7 by a representative of the Administrator. If such re8 view is requested, the claimant shall be afforded an 

9 opportunity to submit any written evidence or argu10 ment which the claimant believes relevant. 

11 (e) FINAL DECISIONS.— 

12 (1) IN GENERAL.—If the period of time for re13 questing review of the proposed decision expires and 

14 no request has been filed, or if the claimant waives 

15 any objections to the proposed decision, the Admin16 istrator shall issue a final decision. If such decision 

17 materially differs from the proposed decision, the 

18 claimant shall be entitled to review of the decision 

19 under subsection (d). 

20 (2) TIME AND CONTENT.—If the claimant re21 quests review of all or part of the proposed decision 

22 the Administrator shall issue a final decision on the 

23 claim not later than 180 days after the request for 

24 review is received, if the claimant requests a hearing, 

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1 view is received, if the claimant requests review of 

2 the written record. Such decision shall be in writing 

3 and contain findings of fact and conclusions of law. 

4 (f) REPRESENTATION.—A claimant may authorize an 

5 attorney or other individual to represent him or her in any 

6 proceeding under this Act. 

7 SEC. 115. AUDITING PROCEDURES. 

8 (a) IN GENERAL.— 

9 (1) DEVELOPMENT.—The Administrator shall 

10 develop methods for auditing and evaluating the 

11 medical and exposure evidence submitted as part of 

12 the claims process. The Administrator may develop 

13 additional methods for auditing and evaluating other 

14 types of evidence or information received by the Ad15 ministrator. 

16 (2) REFUSAL TO CONSIDER CERTAIN EVI17 DENCE.— 

18 (A) IN GENERAL.—If the Administrator 

19 determines that an audit conducted in accord20 ance with the methods developed under para21 graph (1) demonstrates that the medical evi22 dence submitted by a specific physician or med23 ical facility is not consistent with prevailing 

24 medical practices or the applicable requirements 

25 of this Act, any medical evidence from such 


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1 physician or facility shall be unacceptable for 

2 purposes of establishing eligibility for an award 

3 under this Act. 

4 (B) NOTIFICATION.—Upon a determina5 tion by the Administrator under subparagraph 

6 (A), the Administrator shall notify the physi7 cian or medical facility involved of the results of 

8 the audit. Such physician or facility shall have 

9 a right to appeal such determination under pro10 cedures issued by the Administrator. 

11 (C) SUBMISSION OF VALID EVIDENCE.— 

12 Claimants shall be allowed to submit valid evi13 dence if prior evidence is found unacceptable 

14 for purposes of establishing eligibility for an 

15 award under this Act. 

16 (b) REVIEW OF CERTIFIED B-READERS.— 

17 (1) IN GENERAL.—The Administrator shall pre18 scribe procedures to randomly evaluate the x-rays 

19 submitted in support of a statistically significant 

20 number of claims by independent certified B-readers, 

21 the cost of which shall be paid by the Fund. 

22 (2) DISAGREEMENT.—If an independent cer23 tified B-reader assigned under paragraph (1) dis24 agrees with the quality grading or ILO level as25 signed to an x-ray submitted in support of a claim, 


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1 the Administrator shall require a review of such x2 rays by a second independent certified B-reader. 

3 (3) EFFECT ON CLAIM.—If neither certified B4 reader under paragraph (2) agrees with the quality 

5 grading and the ILO grade level assigned to an x6 ray as part of the claim, the Administrator shall 

7 take into account the findings of the 2 independent 

8 B readers in making the determination on such 

9 claim. 

10 (4) CERTIFIED B-READERS.—The Adminis11 trator shall maintain a list of a minimum of 50 cer12 tified B-readers eligible to participate in the inde13 pendent reviews, chosen from all certified B-readers. 

14 When an x-ray is sent for independent review, the 

15 Administrator shall choose the certified B-reader at 

16 random from that list. 

17 (5) DISQUALIFICATION.—Any certified B-reader 

18 who has received compensation before the date of 

19 enactment of this Act for assigning an ILO grade 

20 level to an x-ray, where the amount of compensation 

21 depended on the assigned ILO grade level, is dis22 qualified from inclusion on the Administrator’s list. 

23 (c) SMOKING ASSESSMENT.— 

24 (1) IN GENERAL.— 


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1 (A) RECORDS AND DOCUMENTS.—To aid 

2 in the assessment of the accuracy of claimant 

3 representations as to their smoking status for 

4 purposes of determining eligibility and amount 

5 of award under Malignant Level VI, Malignant 

6 Level VII, or Malignant Level VIII, and excep7 tional medical claims, the Administrator shall 

8 have the authority to obtain relevant records 

9 and documents, including— 

10 (i) records of past medical treatment 

11 and evaluation; 

12 (ii) affidavits of appropriate individ13 uals; 

14 (iii) applications for insurance and 

15 supporting materials; and 

16 (iv) employer records of medical ex17 aminations. 

18 (B) CONSENT.—The claimant shall provide 

19 consent for the Administrator to obtain such 

20 records and documents where required. 

21 (2) REVIEW.—The frequency of review of 

22 records and documents submitted under paragraph 

23 (1)(A) shall be at the discretion of the Adminis24 trator, but shall address at least 5 percent of the 


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1 claimants asserting status as nonsmokers or ex2 smokers. 

3 (3) CONSENT.— 

4 (A) IN GENERAL.—The Administrator may 

5 require the performance of blood tests or any 

6 other appropriate medical test, where claimants 

7 assert they are nonsmokers or ex-smokers for 

8 purposes of an award under Malignant Level 

9 VI, VII, or VIII, or as an exceptional medical 

10 claim, the cost of which shall be paid by the 

11 Fund. 

12 (B) SERUM COTININE SCREENING.—The 

13 Administrator shall require the performance of 

14 serum cotinine screening on all claimants who 

15 assert they are nonsmokers or ex-smokers for 

16 purposes of an award under Malignant Level 

17 VI, VII, or VIII, or as an exceptional medical 

18 claim, the cost of which shall be paid by the 

19 Fund. 

20 (4) PENALTY FOR FALSE STATEMENTS.—Any 

21 false information submitted under this subsection 

22 shall be subject to criminal prosecution or civil pen23 alties as provided under section 1348 of title 18, 

24 United States Code (as added by this Act) and sec25 tion 101(c)(2). 


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1 (d) PULMONARY FUNCTION TESTING.—The Admin2 istrator shall develop auditing procedures for pulmonary 

3 function test results submitted as part of a claim, to en4 sure that such tests are conducted in accordance with 

5 American Thoracic Society Criteria, as defined under sec6 tion 121(a)(13). 

7 Subtitle C—Medical Criteria 

8 SEC. 121. MEDICAL CRITERIA REQUIREMENTS. 

9 (a) DEFINITIONS.—In this section, the following defi10 nitions shall apply: 

11 (1) ASBESTOSIS DETERMINED BY PATHOL12 OGY.—The term ‘‘asbestosis determined by pathol13 ogy’’ means indications of asbestosis based on the 

14 pathological grading system for asbestosis described 

15 in the Special Issues of the Archives of Pathology 

16 and Laboratory Medicine, ‘‘Asbestos-associated Dis17 eases’’, Vol. 106, No. 11, App. 3 (October 8, 1982). 

18 (2) BILATERAL ASBESTOS-RELATED NONMALIG19 NANT DISEASE.—The term ‘‘bilateral asbestos-re20 lated nonmalignant disease’’ means a diagnosis of 

21 bilateral asbestos-related nonmalignant disease 

22 based on— 

23 (A) an x-ray reading of 1/0 or higher 

24 based on the ILO grade scale; 

25 (B) bilateral pleural plaques; 


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1 (C) bilateral pleural thickening; or 

2 (D) bilateral pleural calcification. 

3 (3) BILATERAL PLEURAL DISEASE OF B2.—The 

4 term ‘‘bilateral pleural disease of B2’’ means a chest 

5 wall pleural thickening or plaque with a maximum 

6 width of at least 5 millimeters and a total length of 

at least 1 7 ⁄4 of the projection of the lateral chest wall. 

8 (4) CERTIFIED B-READER.—The term ‘‘cer9 tified B-reader’’ means an individual who is certified 

10 by the National Institute of Occupational Safety and 

11 Health and whose certification by the National Insti12 tute of Occupational Safety and Health is up to 

13 date. 

14 (5) DIFFUSE PLEURAL THICKENING.—The 

15 term ‘‘diffuse pleural thickening’’ means blunting of 

16 either costophrenic angle and bilateral pleural plaque 

17 or bilateral pleural thickening. 

18 (6) DLCO.—The term ‘‘DLCO’’ means the sin19 gle-breath diffusing capacity of the lung (carbon 

20 monoxide) technique used to measure the volume of 

21 carbon monoxide transferred from the alveoli to 

22 blood in the pulmonary capillaries for each unit of 

23 driving pressure of the carbon monoxide. 

24 (7) FEV1.—The term ‘‘FEV1’’ means forced 

25 expiratory volume (1 second), which is the maximal 


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1 volume of air expelled in 1 second during perform2 ance of the spirometric test for forced vital capacity. 

3 (8) FVC.—The term ‘‘FVC’’ means forced vital 

4 capacity, which is the maximal volume of air expired 

5 with a maximally forced effort from a position of 

6 maximal inspiration. 

7 (9) ILO GRADE.—The term ‘‘ILO grade’’ 

8 means the radiological ratings for the presence of 

9 lung changes as determined from a chest x-ray, all 

10 as established from time to time by the International 

11 Labor Organization. 

12 (10) LOWER LIMITS OF NORMAL.—The term 

13 ‘‘lower limits of normal’’ means the fifth percentile 

14 of healthy populations as defined in the American 

15 Thoracic Society statement on lung function testing 

16 (Amer. Rev. Resp. Disease 1991, 144:1202–1218) 

17 and any future revision of the same statement. 

18 (11) NONSMOKER.—The term ‘‘nonsmoker’’ 

19 means a claimant who— 

20 (A) never smoked; or 

21 (B) has smoked fewer than 100 cigarettes 

22 or the equivalent amount of other tobacco prod23 ucts during the claimant’s lifetime. 


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1 (12) PO2.—The term ‘‘PO2’’ means the partial 

2 pressure (tension) of oxygen, which measures the 

3 amount of dissolved oxygen in the blood. 

4 (13) PULMONARY FUNCTION TESTING.—The 

5 term ‘‘pulmonary function testing’’ means 

6 spirometry testing that is in material compliance 

7 with the quality criteria established by the American 

8 Thoracic Society and is performed on equipment 

9 which is in material compliance with the standards 

10 of the American Thoracic Society for technical qual11 ity and calibration. 

12 (14) SUBSTANTIAL OCCUPATIONAL EXPOSURE

13 TO ASBESTOS.— 

14 (A) IN GENERAL.—The term ‘‘substantial 

15 occupational exposure’’ means employment in 

16 an industry and an occupation where for a sub17 stantial portion of a normal work year for that 

18 occupation, the claimant— 

19 (i) handled raw asbestos fibers; 

20 (ii) fabricated asbestos-containing 

21 products so that the claimant in the fab22 rication process was exposed to raw asbes23 tos fibers; 

24 (iii) altered, repaired, or otherwise 

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1 uct such that the claimant was exposed on 

2 a regular basis to asbestos fibers; or 

3 (iv) worked in close proximity to other 

4 workers engaged in the activities described 

5 under clause (i), (ii), or (iii), such that the 

6 claimant was exposed on a regular basis to 

7 asbestos fibers. 

8 (B) REGULAR BASIS.—In this paragraph, 

9 the term ‘‘on a regular basis’’ means on a fre10 quent or recurring basis. 

11 (15) TLC.—The term ‘‘TLC’’ means total lung 

12 capacity, which is the total volume of air in the lung 

13 after maximal inspiration. 

14 (16) WEIGHTED OCCUPATIONAL EXPOSURE.— 

15 (A) IN GENERAL.—The term ‘‘weighted oc16 cupational exposure’’ means exposure for a pe17 riod of years calculated according to the expo18 sure weighting formula under subparagraphs 

19 (B) through (E). 

20 (B) MODERATE EXPOSURE.—Subject to 

21 subparagraph (E), each year that a claimant’s 

22 primary occupation, during a substantial por23 tion of a normal work year for that occupation, 

24 involved working in areas immediate to where 

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1 stalled, repaired, or removed under cir2 cumstances that involved regular airborne emis3 sions of asbestos fibers, shall count as 1 year 

4 of substantial occupational exposure. 

5 (C) HEAVY EXPOSURE.—Subject to sub6 paragraph (E), each year that a claimant’s pri7 mary occupation, during a substantial portion 

8 of a normal work year for that occupation, in9 volved the direct installation, repair, or removal 

10 of asbestos-containing products such that the 

11 person was exposed on a regular basis to asbes12 tos fibers, shall count as 2 years of substantial 

13 occupational exposure. 

14 (D) VERY HEAVY EXPOSURE.—Subject to 

15 subparagraph (E), each year that a claimant’s 

16 primary occupation, during a substantial por17 tion of a normal work year for that occupation, 

18 was in primary asbestos manufacturing, a 

19 World War II shipyard, or the asbestos insula20 tion trades, such that the person was exposed 

21 on a regular basis to asbestos fibers, shall count 

22 as 4 years of substantial occupational exposure. 

23 (E) DATES OF EXPOSURE.—Each year of 

24 exposure calculated under subparagraphs (B), 

25 (C), and (D) that occurred before 1976 shall be 


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1 counted at its full value. Each year from 1976 

to 1986 shall be counted as 1 2 ⁄2 of its value. 

Each year after 1986 shall be counted as 1 3 ⁄10

4 of its value. 

5 (F) OTHER CLAIMS.—Individuals who do 

6 not meet the provisions of subparagraphs (A) 

7 through (E) and believe their post-1976 or 

8 post-1986 exposures exceeded the Occupational 

9 Safety and Health Administration standard 

10 may submit evidence, documentation, work his11 tory, or other information to substantiate non12 compliance with the Occupational Safety and 

13 Health Administration standard (such as lack 

14 of engineering or work practice controls, or pro15 tective equipment) such that exposures would 

16 be equivalent to exposures before 1976 or 1986, 

17 or to documented exposures in similar jobs or 

18 occupations where control measures had not 

19 been implemented. Claims under this subpara20 graph shall be evaluated on an individual basis 

21 by a Physicians Panel. 

22 (b) MEDICAL EVIDENCE.— 

23 (1) LATENCY.—Unless otherwise specified, all 

24 diagnoses of an asbestos-related disease for a level 

25 under this section shall be accompanied by— 


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1 (A) a statement by the physician providing 

2 the diagnosis that at least 10 years have 

3 elapsed between the date of first exposure to as4 bestos or asbestos-containing products and the 

5 diagnosis; or 

6 (B) a history of the claimant’s exposure 

7 that is sufficient to establish a 10-year latency 

8 period between the date of first exposure to as9 bestos or asbestos-containing products and the 

10 diagnosis. 

11 (2) DIAGNOSTIC GUIDELINES.—All diagnoses of 

12 asbestos-related diseases shall be based upon— 

13 (A) for disease Levels I through V, in the 

14 case of a claimant who was living at the time 

15 the claim was filed— 

16 (i) a physical examination of the 

17 claimant by the physician providing the di18 agnosis; 

19 (ii) an evaluation of smoking history 

20 and exposure history before making a diag21 nosis; 

22 (iii) an x-ray reading by a certified B23 reader; and 

24 (iv) pulmonary function testing in the 

25 case of disease Levels III, IV, and V; 


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1 (B) for disease Levels I through V, in the 

2 case of a claimant who was deceased at the 

3 time the claim was filed, a report from a physi4 cian based upon a review of the claimant’s med5 ical records which shall include— 

6 (i) pathological evidence of the non7 malignant asbestos-related disease; or 

8 (ii) an x-ray reading by a certified B9 reader; 

10 (C) for disease Levels VI through IX, in 

11 the case of a claimant who was living at the 

12 time the claim was filed— 

13 (i) a physical examination by the 

14 claimant’s physician providing the diag15 nosis; or 

16 (ii) a diagnosis of such a malignant 

17 asbestos-related disease, as described in 

18 this section, by a board-certified patholo19 gist; and 

20 (D) for disease Levels VI through IX, in 

21 the case of a claimant who was deceased at the 

22 time the claim was filed— 

23 (i) a diagnosis of such a malignant as24 bestos-related disease, as described in this 


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1 section, by a board-certified pathologist; 

2 and 

3 (ii) a report from a physician based 

4 upon a review of the claimant’s medical 

5 records. 

6 (3) CREDIBILITY OF MEDICAL EVIDENCE.—To 

7 ensure the medical evidence provided in support of 

8 a claim is credible and consistent with recognized 

9 medical standards, a claimant under this title may 

10 be required to submit— 

11 (A) x-rays or computerized tomography; 

12 (B) detailed results of pulmonary function 

13 tests; 

14 (C) laboratory tests; 

15 (D) tissue samples; 

16 (E) results of medical examinations; 

17 (F) reviews of other medical evidence; and 

18 (G) medical evidence that complies with 

19 recognized medical standards regarding equip20 ment, testing methods, and procedure to ensure 

21 the reliability of such evidence as may be sub22 mitted. 

23 (c) EXPOSURE EVIDENCE.— 

24 (1) IN GENERAL.—To qualify for any disease 

25 level, the claimant shall demonstrate— 


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1 (A) a minimum exposure to asbestos or as2 bestos-containing products; 

3 (B) the exposure occurred in the United 

4 States, its territories or possessions, or while a 

5 United States citizen, while an employee of an 

6 entity organized under any Federal or State law 

7 regardless of location, or while a United States 

8 citizen while serving on any United States 

9 flagged or owned ship, provided the exposure 

10 results from such employment or service; and 

11 (C) any additional asbestos exposure re12 quirement under this section. 

13 (2) PROOF OF EXPOSURE.— 

14 (A) AFFIDAVITS.—Exposure to asbestos 

15 sufficient to satisfy the exposure requirements 

16 for any disease level may be established by a 

17 detailed and specific affidavit that— 

18 (i) is filed by— 

19 (I) the claimant; or 

20 (II) if the claimant is deceased, a 

21 coworker or a family member of the 

22 claimant; and 

23 (ii) is found in proceedings under this 

24 title to be— 


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1 (I) reasonably reliable, attesting 

2 to the claimant’s exposure; and 

3 (II) credible and not contradicted 

4 by other evidence. 

5 (B) OTHER PROOF.—Exposure to asbestos 

6 may alternatively be established by invoices, 

7 construction or other similar records, or any 

8 other reasonably reliable and credible evidence. 

9 (C) ADDITIONAL EVIDENCE.—The Admin10 istrator may require submission of other or ad11 ditional evidence of exposure, if available, for a 

12 particular claim when determined necessary, as 

13 part of the minimum information required 

14 under section 113(c). 

15 (D) EVALUATION.—The Administrator 

16 shall prescribe procedures to randomly evaluate 

17 the affidavits submitted to satisfy the exposure 

18 requirements for any disease level. 

19 (3) TAKE HOME EXPOSURE.— 

20 (A) IN GENERAL.—A claimant may alter21 natively satisfy the medical criteria require22 ments of this section where a claim is filed by 

23 a person who alleges their exposure to asbestos 

24 was the result of living with a person who, if 

25 the claim had been filed by that person, would 


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1 have met the exposure criteria for the given dis2 ease level, and the claimant lived with such per3 son for the time period necessary to satisfy the 

4 exposure requirement, for the claimed disease 

5 level. 

6 (B) REVIEW.—Except for claims for dis7 ease Level IX (mesothelioma), all claims alleg8 ing take home exposure shall be submitted as 

9 an exceptional medical claim under section 

10 121(g) for review by a Physicians Panel. 

11 (4) WAIVER FOR WORKERS AND RESIDENTS OF

12 LIBBY, MONTANA.—Because of the unique nature of 

13 the asbestos exposure related to the vermiculite min14 ing and milling operations in Libby, Montana, the 

15 Administrator shall waive the exposure requirements 

16 under this subtitle for individuals who worked at the 

17 vermiculite mining and milling facility in Libby, 

18 Montana, or lived or worked within a 20-mile radius 

19 of Libby, Montana, for at least 12 consecutive 

20 months before December 31, 2004. Claimants under 

21 this section shall provide such supporting docu22 mentation as the Administrator shall require. 

23 (5) EXPOSURE PRESUMPTIONS.— 

24 (A) IN GENERAL.—The Administrator 

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1 tries, occupations within such industries, and 

2 time periods in which workers employed in 

3 those industries and occupations typically had 

4 substantial occupational exposure to asbestos as 

5 defined under section 121(a). Until 5 years 

6 after the Administrator certifies that the Fund 

7 is paying claims at a reasonable rate, the indus8 tries, occupations and time periods identified by 

9 the Administrator shall at a minimum include 

10 those identified in the 2002 Trust Distribution 

11 Process of the Manville Personal Injury Settle12 ment Trust as of January 1, 2005, as indus13 tries, occupations, including proximity, and time 

14 periods in which workers were presumed to 

15 have had significant occupational exposure to 

16 asbestos. Thereafter, the Administrator may by 

17 rule modify or eliminate those exposure pre18 sumptions required to be adopted from the 

19 Manville Personal Injury Settlement Trust, if 

20 there is evidence that demonstrates that the 

21 typical exposure for workers in such industries 

22 and occupations during such time periods did 

23 not constitute substantial occupational exposure 

24 in asbestos. 


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1 (B) CLAIMANTS ENTITLED TO PRESUMP2 TIONS.—Any claimant who demonstrates 

3 through meaningful and credible evidence that 

4 such claimant was employed during relevant 

5 time periods in industries and occupations iden6 tified under subparagraph (A) shall be entitled 

7 to a presumption that the claimant had sub8 stantial occupational exposure to asbestos dur9 ing those time periods. That presumption shall 

10 not be conclusive, and the Administrator may 

11 find that the claimant does not have substantial 

12 occupational exposure if other information dem13 onstrates that the claimant did not in fact have 

14 substantial occupational exposure during any 

15 part of the relevant time periods. 

16 (C) CRITERIA REQUIREMENTS.—Nothing 

17 in subparagraph (A) or (B) shall negate the ex18 posure or medical criteria requirements in sec19 tion 121, for the purpose of receiving com20 pensation from the Fund. 

21 (6) PENALTY FOR FALSE STATEMENT.—Any 

22 false information submitted under this subsection 

23 shall be subject to section 1348 of title 18, United 

24 States Code (as added by this Act). 

25 (d) ASBESTOS DISEASE LEVELS.— 


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1 (1) NONMALIGNANT LEVEL I.—To receive Level 

2 I compensation, a claimant shall provide— 

3 (A) a diagnosis of bilateral asbestos-related 

4 nonmalignant disease; and 

5 (B) evidence of 5 years cumulative occupa6 tional exposure to asbestos. 

7 (2) NONMALIGNANT LEVEL II.—To receive 

8 Level II compensation, a claimant shall provide— 

9 (A) a diagnosis of bilateral asbestos-related 

10 nonmalignant disease with ILO grade of 1/1 or 

11 greater, and showing small irregular opacities 

12 of shape or size, either ss, st, or tt, and present 

13 in both lower lung zones, or asbestosis deter14 mined by pathology, or blunting of either 

15 costophrenic angle and bilateral pleural plaque 

16 or bilateral pleural thickening of at least grade 

17 B2 or greater, or bilateral pleural disease of 

18 grade B2 or greater; 

19 (B) evidence of TLC less than 80 percent 

20 or FVC less than the lower limits of normal, 

21 and FEV1/FVC ratio less than 65 percent; 

22 (C) evidence of 5 or more weighted years 

23 of substantial occupational exposure to asbes24 tos; and 


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1 (D) supporting medical documentation, 

2 such as a written opinion by the examining or 

3 diagnosing physician, according to the diag4 nostic guidelines in section 121(b)(2), estab5 lishing asbestos exposure as a substantial con6 tributing factor in causing the pulmonary con7 dition in question. 

8 (3) NONMALIGNANT LEVEL III.—To receive 

9 Level III compensation a claimant shall provide— 

10 (A) a diagnosis of bilateral asbestos-related 

11 nonmalignant disease with ILO grade of 1/0 or 

12 greater and showing small irregular opacities of 

13 shape or size, either ss, st, or tt, and present 

14 in both lower lung zones, or asbestosis deter15 mined by pathology, or diffuse pleural thick16 ening, or bilateral pleural disease of B2 or 

17 greater; 

18 (B) evidence of TLC less than 80 percent; 

19 FVC less than the lower limits of normal and 

20 FEV1/FVC ratio greater than or equal to 65 

21 percent; or evidence of a decline in FVC of 20 

22 percent or greater, after allowing for the ex23 pected decrease due to aging, and an FEV1/ 

24 FVC ratio greater than or equal to 65 percent 

25 documented with a second spirometry; 


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1 (C) evidence of 5 or more weighted years 

2 of substantial occupational exposure to asbes3 tos; and 

4 (D) supporting medical documentation, 

5 such as a written opinion by the examining or 

6 diagnosing physician, according to the diag7 nostic guidelines in section 121(b)(2)— 

8 (i) establishing asbestos exposure as a 

9 substantial contributing factor in causing 

10 the pulmonary condition in question; and 

11 (ii) excluding other more likely causes, 

12 other than silica, of that pulmonary condi13 tion. 

14 (4) NONMALIGNANT LEVEL IV.—To receive 

15 Level IV compensation a claimant shall provide— 

16 (A) diagnosis of bilateral asbestos-related 

17 nonmalignant disease with ILO grade of 1/1 or 

18 greater and showing small irregular opacities of 

19 shape or size, either ss, st, or tt, and present 

20 in both lower lung zones, or asbestosis deter21 mined by pathology, or diffuse pleural thick22 ening, or bilateral pleural disease of B2 or 

23 greater; 


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1 (B) evidence of TLC less than 60 percent 

2 or FVC less than 60 percent, and FEV1/FVC 

3 ratio greater than or equal to 65 percent; 

4 (C) evidence of 5 or more weighted years 

5 of substantial occupational exposure to asbestos 

6 before diagnosis; and 

7 (D) supporting medical documentation, 

8 such as a written opinion by the examining or 

9 diagnosing physician, according to the diag10 nostic guidelines in section 121(b)(2)— 

11 (i) establishing asbestos exposure as a 

12 substantial contributing factor in causing 

13 the pulmonary condition in question; and 

14 (ii) excluding other more likely causes, 

15 other than silica, of that pulmonary condi16 tion. 

17 (5) NONMALIGNANT LEVEL V.—To receive 

18 Level V compensation a claimant shall provide— 

19 (A) diagnosis of bilateral asbestos-related 

20 nonmalignant disease with ILO grade of 1/1 or 

21 greater and showing small irregular opacities of 

22 shape or size, either ss, st, or tt, and present 

23 in both lower lung zones, or asbestosis deter24 mined by pathology, or diffuse pleural thickVerDate Aug 31 2005 00:11 Jun 06, 2006 Jkt 049200 PO 00000 Frm 00106 Fmt 6652 Sfmt 6201 E:\BILLS\S3274.PCS S3274

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1 ening, or bilateral pleural disease of B2 or 

2 greater; 

3 (B)(i) evidence of TLC less than 50 per4 cent or FVC less than 50 percent, and FEV1/ 

5 FVC ratio greater than or equal to 65 percent; 

6 (ii) DLCO less than 40 percent of pre7 dicted, plus a FEV1/FVC ratio not less than 65 

8 percent; or 

9 (iii) PO2 less than 55 mm/Hg, plus a 

10 FEV1/FVC ratio not less than 65 percent; 

11 (C) evidence of 5 or more weighted years 

12 of substantial occupational exposure to asbes13 tos; and 

14 (D) supporting medical documentation, 

15 such as a written opinion by the examining or 

16 diagnosing physician, according to the diag17 nostic guidelines in section 121(b)(2)— 

18 (i) establishing asbestos exposure as a 

19 substantial contributing factor in causing 

20 the pulmonary condition in question; and 

21 (ii) excluding other more likely causes, 

22 other than silica, of that pulmonary condi23 tion. 

24 (6) MALIGNANT LEVEL VI.— 


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1 (A) IN GENERAL.—To receive Level VI 

2 compensation a claimant shall provide— 

3 (i) a diagnosis of a primary colorectal, 

4 laryngeal, esophageal, pharyngeal, or stom5 ach cancer on the basis of findings by a 

6 board-certified pathologist; 

7 (ii) evidence of a bilateral asbestos-re8 lated nonmalignant disease; 

9 (iii) evidence of 15 or more weighted 

10 years of substantial occupational exposure 

11 to asbestos; and 

12 (iv) supporting medical documenta13 tion, such as a written opinion by the ex14 amining or diagnosing physician, according 

15 to the diagnostic guidelines in section 

16 121(b)(2), establishing asbestos exposure 

17 as a substantial contributing factor in 

18 causing the cancer in question. 

19 (B) REFERRAL TO PHYSICIANS PANEL.— 

20 All claims filed with respect to Level VI under 

21 this paragraph shall be referred to a Physicians 

22 Panel for a determination that it is more prob23 able than not that asbestos exposure was a sub24 stantial contributing factor in causing the other 

25 cancer in question. If the claimant meets the 


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1 requirements of subparagraph (A), there shall 

2 be a presumption of eligibility for the scheduled 

3 value of compensation unless there is evidence 

4 determined by the Physicians Panel that rebuts 

5 that presumption. In making its determination 

6 under this subparagraph, the Physicians Panel 

7 shall consider the intensity and duration of ex8 posure, smoking history, and the quality of evi9 dence relating to exposure and smoking. Claim10 ants shall bear the burden of producing mean11 ingful and credible evidence of their smoking 

12 history as part of their claim submission. 

13 (7) MALIGNANT LEVEL VII.— 

14 (A) IN GENERAL.—To receive Level VII 

15 compensation, a claimant shall provide— 

16 (i) a diagnosis of a primary lung can17 cer disease on the basis of findings by a 

18 board-certified pathologist; 

19 (ii) evidence of bilateral pleural 

20 plaques or bilateral pleural thickening or 

21 bilateral pleural calcification by chest x-ray 

22 or such diagnostic methodology supported 

23 by the findings of the Institute of Medicine 

24 under subsection (f); 


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1 (iii) evidence of 12 or more weighted 

2 years of substantial occupational exposure 

3 to asbestos; and 

4 (iv) supporting medical documenta5 tion, such as a written opinion by the ex6 amining or diagnosing physician, according 

7 to the diagnostic guidelines in section 

8 121(b)(2), establishing asbestos exposure 

9 as a substantial contributing factor in 

10 causing the lung cancer in question. 

11 (B) PHYSICIANS PANEL.—A claimant filing 

12 a claim relating to Level VII under this para13 graph may request that the claim be referred to 

14 a Physicians Panel for a determination of 

15 whether the claimant qualifies for the disease 

16 category and relevant smoking status. In mak17 ing its determination under this subparagraph, 

18 the Physicians Panel shall consider the inten19 sity and duration of exposure, smoking history, 

20 and the quality of evidence relating to exposure 

21 and smoking. Claimants shall bear the burden 

22 of producing meaningful and credible evidence 

23 of their smoking history as part of their claim 

24 submission. 

25 (8) MALIGNANT LEVEL VIII.— 


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1 (A) IN GENERAL.—To receive Level VIII 

2 compensation, a claimant shall provide a diag3 nosis— 

4 (i) of a primary lung cancer disease 

5 on the basis of findings by a board-cer6 tified pathologist; 

7 (ii)(I) of— 

8 (aa) asbestosis based on a chest 

9 x-ray of at least 1/0 on the ILO scale 

10 and showing small irregular opacities 

11 of shape or size, either ss, st, or tt, 

12 and present in both lower lung zones; 

13 and 

14 (bb) 10 or more weighted years 

15 of substantial occupational exposure 

16 to asbestos; 

17 (II) of— 

18 (aa) asbestosis based on a chest 

19 x-ray of at least 1/1 on the ILO scale 

20 and showing small irregular opacities 

21 of shape or size, either ss, st, or tt, 

22 and present in both lower lung zones; 

23 and 


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1 (bb) 8 or more weighted years of 

2 substantial occupational exposure to 

3 asbestos; 

4 (III) asbestosis determined by pathol5 ogy and 10 or more weighted years of sub6 stantial occupational exposure to asbestos; 

7 or 

8 (IV) asbestosis as determined by CT 

9 Scan, the cost of which shall not be borne 

10 by the Fund. The CT Scan must be inter11 preted by a board-certified radiologist and 

12 confirmed by a board-certified radiologist; 

13 and 

14 (iii) supporting medical documenta15 tion, such as a written opinion by the ex16 amining or diagnosing physician, according 

17 to the diagnostic guidelines in section 

18 121(b)(2), establishing asbestos exposure 

19 as a substantial contributing factor in 

20 causing the lung cancer in question; and 

21 10 or more weighted years of substantial 

22 occupational exposure to asbestos. 

23 (B) PHYSICIANS PANEL.—A claimant filing 

24 a claim with respect to Level VIII under this 

25 paragraph may request that the claim be reVerDate Aug 31 2005 00:11 Jun 06, 2006 Jkt 049200 PO 00000 Frm 00112 Fmt 6652 Sfmt 6201 E:\BILLS\S3274.PCS S3274

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1 ferred to a Physicians Panel for a determina2 tion of whether the claimant qualifies for the 

3 disease category and relevant smoking status. 

4 In making its determination under this sub5 paragraph, the Physicians Panel shall consider 

6 the intensity and duration of exposure, smoking 

7 history, and the quality of evidence relating to 

8 exposure and smoking. Claimants shall bear the 

9 burden of producing meaningful and credible 

10 evidence of their smoking history as part of 

11 their claim submission. 

12 (9) MALIGNANT LEVEL IX.—To receive Level 

13 IX compensation, a claimant shall provide— 

14 (A) a diagnosis of malignant mesothelioma 

15 disease on the basis of findings by a board-cer16 tified pathologist; and 

17 (B) credible evidence of identifiable expo18 sure to asbestos resulting from— 

19 (i) occupational exposure to asbestos; 

20 (ii) exposure to asbestos fibers 

21 brought into the home of the claimant by 

22 a worker occupationally exposed to asbes23 tos; 

24 (iii) exposure to asbestos fibers result25 ing from living or working in the proxiVerDate Aug 31 2005 00:11 Jun 06, 2006 Jkt 049200 PO 00000 Frm 00113 Fmt 6652 Sfmt 6201 E:\BILLS\S3274.PCS S3274

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1 mate vicinity of a factory, shipyard, build2 ing demolition site, or other operation that 

3 regularly released asbestos fibers into the 

4 air due to operations involving asbestos at 

5 that site; or 

6 (iv) other identifiable exposure to as7 bestos fibers, in which case the claim shall 

8 be reviewed by a Physicians Panel under 

9 subsection (g) for a determination of eligi10 bility. 

11 (e) INSTITUTE OF MEDICINE STUDY.—Not later 

12 than April 1, 2006, the Institute of Medicine of the Na13 tional Academy of Sciences shall complete a study con14 tracted with the National Institutes of Health to deter15 mine whether there is a causal link between asbestos expo16 sure and other cancers, including colorectal, laryngeal, 

17 esophageal, pharyngeal, and stomach cancers, except for 

18 mesothelioma and lung cancers. The Institute of Medicine 

19 shall issue a report on its findings on causation, which 

20 shall be transmitted to Congress, the Administrator, the 

21 Advisory Committee on Asbestos Disease Compensation or 

22 the Medical Advisory Committee, and the Physicians Pan23 els. The Institute of Medicine report shall be binding on 

24 the Administrator and the Physicians Panels for purposes 

25 of determining whether asbestos exposure is a substantial 


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1 contributing factor in causing the other cancerous disease 

2 in question under subsection (d)(6). If asbestos is not a 

3 substantial contributing factor to the particular cancerous 

4 disease under subsection (d)(6), subsection (d)(6) shall 

5 not apply with respect to that disease and no claim may 

6 be filed with, or award paid from, the Fund with respect 

7 to that disease under malignant Level VI. 

8 (f) INSTITUTE OF MEDICINE STUDY ON CT 

9 SCANS.— 

10 (1) IN GENERAL.—Not later than April 1, 

11 2006, the Institute of Medicine of the National 

12 Academy of Sciences shall complete a study con13 tracted with the National Institutes of Health of the 

14 use of CT scans as a diagnostic tool for bilateral 

15 pleural plaques, bilateral pleural thickening, or bilat16 eral pleural calcification. 

17 (2) FINDINGS.—The Institute of Medicine shall 

18 make and issue findings based on the study required 

19 under paragraph (1) on whether— 

20 (A) CT scans are generally accepted in the 

21 medical profession to detect bilateral pleural 

22 plaques, bilateral pleural thickening, or bilateral 

23 pleural calcification; and 

24 (B) professional standards of practice exist 

25 to allow for the Administrator’s reasonable reliVerDate Aug 31 2005 00:11 Jun 06, 2006 Jkt 049200 PO 00000 Frm 00115 Fmt 6652 Sfmt 6201 E:\BILLS\S3274.PCS S3274

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1 ance on such as evidence of bilateral pleural 

2 plaques, bilateral pleural thickening, or bilateral 

3 pleural calcification under the Fund. 

4 (3) REPORT.—The Institute of Medicine shall 

5 issue a report on the findings required under para6 graph (2), which shall be transmitted to Congress, 

7 the Administrator, the Advisory Committee on As8 bestos Disease Compensation or the Medical Advi9 sory Committee, and the Physicians Panels. 

10 (4) REPORT BINDING ON THE ADMINIS11 TRATOR.—The Institute of Medicine report required 

12 under paragraph (3) shall be binding on the Admin13 istrator and the Physicians Panels for purposes of 

14 determining reliable and acceptable evidence that 

15 may be submitted for a Level VII claim under sub16 section (d)(7). 

17 (g) EXCEPTIONAL MEDICAL CLAIMS.— 

18 (1) IN GENERAL.—A claimant who does not 

19 meet the medical criteria requirements under this 

20 section may apply for designation of the claim as an 

21 exceptional medical claim. 

22 (2) APPLICATION.—When submitting an appli23 cation for review of an exceptional medical claim, the 

24 claimant shall— 


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1 (A) state that the claim does not meet the 

2 medical criteria requirements under this sec3 tion; or 

4 (B) seek designation as an exceptional 

5 medical claim within 60 days after a determina6 tion that the claim is ineligible solely for failure 

7 to meet the medical criteria requirements under 

8 subsection (d). 

9 (3) REPORT OF PHYSICIAN.— 

10 (A) IN GENERAL.—Any claimant applying 

11 for designation of a claim as an exceptional 

12 medical claim shall support an application filed 

13 under paragraph (1) with a report from a phy14 sician meeting the requirements of this section. 

15 (B) CONTENTS.—A report filed under sub16 paragraph (A) shall include— 

17 (i) a complete review of the claimant’s 

18 medical history and current condition; 

19 (ii) such additional material by way of 

20 analysis and documentation as shall be 

21 prescribed by rule of the Administrator; 

22 and 

23 (iii) a detailed explanation as to why 

24 the claim meets the requirements of para25 graph (4)(B). 


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1 (4) REVIEW.— 

2 (A) IN GENERAL.—The Administrator 

3 shall refer all applications and supporting docu4 mentation submitted under paragraph (2) to a 

5 Physicians Panel for review for eligibility as an 

6 exceptional medical claim. 

7 (B) STANDARD.—A claim shall be des8 ignated as an exceptional medical claim if the 

9 claimant, for reasons beyond the control of the 

10 claimant, cannot satisfy the requirements under 

11 this section, but is able, through comparably re12 liable evidence that meets the standards under 

13 this section, to show that the claimant has an 

14 asbestos-related condition that is substantially 

15 comparable to that of a medical condition that 

16 would satisfy the requirements of a category 

17 under this section. 

18 (C) ADDITIONAL INFORMATION.—A Physi19 cians Panel may request additional reasonable 

20 testing to support the claimant’s application. 

21 (D) CT SCAN.—A claimant may submit a 

22 CT Scan in addition to an x-ray. 

23 (E) MESOTHELIOMA CASES.— 

24 (i) IN GENERAL.—The Physicals 

25 Panel shall grant priority status to— 


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1 (I) all Level IX claims with other 

2 identifiable asbestos exposure as pro3 vided under paragraph (9)(B)(iv); and 

4 (II) all Level IX claims that are 

5 filed as exceptional medical claims. 

6 (ii) PHYSICIAN PANEL.—If the Physi7 cians Panel issues a certificate of medical 

8 eligibility, the claimant shall be deemed to 

9 qualify for Level IX compensation. If the 

10 Physicians Panel rejects the claim, and the 

11 Administrator deems it rejected, the claim12 ant may immediately seek judicial review 

13 under section 302. 

14 (5) APPROVAL.— 

15 (A) IN GENERAL.—If the Physicians Panel 

16 determines that the medical evidence is suffi17 cient to show a comparable asbestos-related 

18 condition, it shall issue a certificate of medical 

19 eligibility designating the category of asbestos20 related injury under this section for which the 

21 claimant shall be eligible to seek compensation. 

22 (B) REFERRAL.—Upon the issuance of a 

23 certificate under subparagraph (A), the Physi24 cians Panel shall submit the claim to the Ad25 ministrator, who shall give due consideration to 


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1 the recommendation of the Physicians Panel in 

2 determining whether the claimant meets the re3 quirements for compensation under this Act. 

4 (6) RESUBMISSION.—Any claimant whose appli5 cation for designation as an exceptional medical 

6 claim is rejected may resubmit an application if new 

7 evidence becomes available. The application shall 

8 identify any prior applications and state the new evi9 dence that forms the basis of the resubmission. 

10 (7) RULES.—The Administrator shall promul11 gate rules governing the procedures for seeking des12 ignation of a claim as an exceptional medical claim. 

13 (8) LIBBY, MONTANA.— 

14 (A) IN GENERAL.—A Libby, Montana, 

15 claimant may elect to have the claimant’s 

16 claims designated as exceptional medical claims 

17 and referred to a Physicians Panel for review. 

18 In reviewing the medical evidence submitted by 

19 a Libby, Montana claimant in support of that 

20 claim, the Physicians Panel shall take into con21 sideration the unique and serious nature of as22 bestos exposure in Libby, Montana, including 

23 the nature of the pleural disease related to as24 bestos exposure in Libby, Montana. 


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1 (B) CLAIMS.—For all claims for Levels II 

2 through IV filed by Libby, Montana claimants, 

3 as described under subsection (c)(4), once the 

4 Administrator or the Physicians Panel issues a 

5 certificate of medical eligibility to a Libby, 

6 Montana claimant, and notwithstanding the dis7 ease category designated in the certificate or 

8 the eligible disease or condition established in 

9 accordance with this section, or the value of the 

10 award determined in accordance with section 

11 114, the Libby, Montana claimant shall be enti12 tled to an award that is not less than that 

13 awarded to claimants who suffer from asbes14 tosis, Level IV. For all malignant claims filed 

15 by Libby, Montana claimants, the Libby, Mon16 tana claimant shall be entitled to an award that 

17 corresponds to the malignant disease category 

18 designated by the Administrator or the Physi19 cians Panel. 

20 (C) EVALUATION OF CLAIMS.—For pur21 poses of evaluating exceptional medical claims 

22 from Libby, Montana, a claimant shall be 

23 deemed to have a comparable asbestos-related 

24 condition to an asbestos disease category Level 

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1 pensation at Level IV, if the claimant pro2 vides— 

3 (i) a diagnosis of bilateral asbestos re4 lated nonmalignant disease; 

5 (ii) evidence of TLC or FVC less than 

6 80 percent; and 

7 (iii) supporting medical documenta8 tion establishing asbestos exposure as a 

9 substantial contributing factor in causing 

10 the pulmonary condition in question, and 

11 excluding more likely causes of that pul12 monary condition. 

13 (9) STUDY OF VERMICULITE PROCESSING FA14 CILITIES.— 

15 (A) IN GENERAL.—As part of the ongoing 

16 National Asbestos Exposure Review (in this 

17 section referred to as ‘‘NAER’’) being con18 ducted by the Agency for Toxic Substances and 

19 Disease Registry (in this section referred to as 

20 ‘‘ATSDR’’) of facilities that received 

21 vermiculite ore from Libby, Montana, the 

22 ATSDR shall conduct a study of all Phase 1 

23 sites where— 

24 (i) the Environmental Protection 

25 Agency has mandated further action at the 


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1 site on the basis of current contamination; 

2 or 

3 (ii) the site was an exfoliation facility 

4 that processed roughly 100,000 tons or 

5 more of vermiculite from the Libby mine. 

6 (B) STUDY BY ATSDR.—The study by the 

7 ATSDR shall evaluate the facilities identified 

8 under subparagraph (A) and compare— 

9 (i) the levels of asbestos emissions 

10 from such facilities; 

11 (ii) the resulting asbestos contamina12 tion in areas surrounding such facilities; 

13 (iii) the levels of exposure to residents 

14 living in the vicinity of such facilities; 

15 (iv) the risks of asbestos-related dis16 ease to the residents living in the vicinity 

17 of such facilities; and 

18 (v) the risk of asbestos-related mor19 tality to residents living in the vicinity of 

20 such facilities, 

21 to the emissions, contamination, exposures, and 

22 risks resulting from the mining of vermiculite 

23 ore in Libby, Montana. 

24 (C) RESULTS OF STUDY.—The results of 

25 the study required under this paragraph shall 


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1 be transmitted to the Administrator. If the 

2 ATSDR finds as a result of such study that, for 

3 any particular facility, the levels of emissions 

4 from, the resulting contamination caused by, 

5 the levels of exposure to nearby residents from, 

6 and the risks of asbestos-related disease and as7 bestos-related mortality to nearby residents 

8 from such facility are substantially equivalent 

9 to those of Libby, Montana, then the Adminis10 trator shall treat claims from residents sur11 rounding such facilities the same as claims of 

12 residents of Libby, Montana, and such residents 

13 shall have all the rights of residents of Libby, 

14 Montana, under this Act. As part of the results 

15 of its study, the ATSDR shall prescribe for any 

16 such facility the relevant geographic and tem17 poral criteria under which the exposures and 

18 risks to the surrounding residents are substan19 tially equivalent to those of residents of Libby, 

20 Montana, and therefore qualify for treatment 

21 under this paragraph. 

22 (10) NATURALLY OCCURRING ASBESTOS.—A 

23 claimant who has been exposed to naturally occur24 ring asbestos may file an exceptional medical claim 

25 with the Fund. 


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1 (11) ASBESTOS EXPOSURE AS THE RESULT OF

2 A NATURAL OR OTHER DISASTER.— 

3 (A) IN GENERAL.—A claimant may file an 

4 exceptional medical claim with the Fund if such 

5 claimant has been exposed to asbestos in any 

6 area that is subject to a declaration by the 

7 President of a major disaster, as defined under 

8 section 102 of the Robert T. Stafford Disaster 

9 Relief and Emergency Assistance Act (42 

10 U.S.C. 5122), as the result of— 

11 (i) the attack on the World Trade 

12 Center in New York, New York on Sep13 tember 11, 2001; or 

14 (ii) Hurricane Katrina or Hurricane 

15 Rita of 2005 in the Gulf Region of the 

16 United States. 

17 (B) REVIEW OF EVIDENCE.—In reviewing 

18 medical evidence submitted by a claimant under 

19 subparagraph (A)(i) or (ii), the Physicians 

20 Panel shall take into consideration the unique 

21 nature of these disasters and the potential for 

22 asbestos exposure resulting from these disas23 ters. 

24 (h) GUIDELINES FOR CT SCANS.—The Adminis25 trator shall commission the American College of Radiology 


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1 to develop, in consultation with the American Thoracic So2 ciety, American College of Chest Physicians, and Institute 

3 of Medicine, guidelines and a methodology for the use of 

4 CT scans as a diagnostic tool for bilateral pleural plaques, 

5 bilateral pleural thickening, or bilateral pleural calcifi6 cation under the Fund. After development, such guidelines 

7 and methodology shall be used for diagnostic purposes 

8 under the Fund. 

9 Subtitle D—Awards 

10 SEC. 131. AMOUNT. 

11 (a) IN GENERAL.—An asbestos claimant who meets 

12 the requirements of section 111 shall be entitled to an 

13 award in an amount determined by reference to the benefit 

14 table and the matrices developed under subsection (b). 

15 (b) BENEFIT TABLE.— 

16 (1) IN GENERAL.—An asbestos claimant with 

17 an eligible disease or condition established in accord18 ance with section 121 shall be eligible for an award 

19 as determined under this subsection. The award for 

20 all asbestos claimants with an eligible disease or con21 dition established in accordance with section 121 

22 shall be according to the following schedule: 

Level Scheduled Condition or Disease Scheduled Value 

I Asbestosis/Pleural 

Disease A 

Medical Monitoring 

II Mixed Disease With 

Impairment 

$25,000 


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III Asbestosis/Pleural 

Disease B 

$100,000 

IV Severe Asbestosis $400,000 

V Disabling Asbestosis $850,000 

VI Other Cancer $200,000 

VII Lung Cancer With 

Pleural Disease 

smokers, $300,000;

ex-smokers, $725,000;

nonsmokers, $800,000 

VIII Lung Cancer With Asbestosis smokers, $600,000;

ex-smokers, $975,000;

nonsmokers, $1,100,000 

IX Mesothelioma $1,100,000 

1 (2) DEFINITIONS.—In this section— 

2 (A) the term ‘‘nonsmoker’’ means a claim3 ant who— 

4 (i) never smoked; or 

5 (ii) has smoked fewer than 100 ciga6 rettes or the equivalent of other tobacco 

7 products during the claimant’s lifetime; 

8 and 

9 (B) the term ‘‘ex-smoker’’ means a claim10 ant who has not smoked during any portion of 

11 the 12-year period preceding the diagnosis of 

12 lung cancer. 

13 (3) LEVEL IX ADJUSTMENTS.— 

14 (A) IN GENERAL.—The Administrator may 

15 increase awards for Level IX claimants who 

16 have dependent children so long as the increase 

17 under this paragraph is cost neutral. Such in18 creased awards shall be paid for by decreasing 

19 awards for claimants other than Level IX, so 


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1 long as no award levels are decreased more 

2 than 10 percent. 

3 (B) IMPLEMENTATION.—Before making 

4 adjustments under this paragraph, the Admin5 istrator shall publish in the Federal Register 

6 notice of, and a plan for, making such adjust7 ments. 

8 (4) SPECIAL ADJUSTMENT FOR FELA CASES.— 

9 (A) IN GENERAL.—A claimant who would 

10 be eligible to bring a claim under the Act of 

11 April 22, 1908 (45 U.S.C. 51 et seq.), com12 monly known as the Employers’ Liability Act, 

13 but for section 403 of this Act, shall be eligible 

14 for a special adjustment under this paragraph. 

15 (B) REGULATIONS.— 

16 (i) IN GENERAL.—Not later than 90 

17 days after the date of enactment of this 

18 Act, the Administrator shall promulgate 

19 regulations relating to special adjustments 

20 under this paragraph. 

21 (ii) JOINT PROPOSAL.—Not later than 

22 45 days after the date of enactment of this 

23 Act, representatives of railroad manage24 ment and representatives of railroad labor 

25 shall submit to the Administrator a joint 


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1 proposal for regulations describing the eli2 gibility for and amount of special adjust3 ments under this paragraph. If a joint pro4 posal is submitted, the Administrator shall 

5 promulgate regulations that reflect the 

6 joint proposal. 

7 (iii) ABSENCE OF JOINT PROPOSAL.— 

8 If railroad management and railroad labor 

9 are unable to agree on a joint proposal 

10 within 45 days after the date of enactment 

11 of this Act, the benefits prescribed in sub12 paragraph (E) shall be the benefits avail13 able to claimants, and the Administrator 

14 shall promulgate regulations containing 

15 such benefits. 

16 (iv) REVIEW.—The parties partici17 pating in the arbitration may file in the 

18 United States District Court for the Dis19 trict of Columbia a petition for review of 

20 the Administrator’s order. The court shall 

21 have jurisdiction to affirm the order of the 

22 Administrator, or to set it aside, in whole 

23 or in part, or it may remand the pro24 ceedings to the Administrator for such fur25 ther action as it may direct. On such reVerDate Aug 31 2005 00:11 Jun 06, 2006 Jkt 049200 PO 00000 Frm 00129 Fmt 6652 Sfmt 6201 E:\BILLS\S3274.PCS S3274

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1 view, the findings and order of the Admin2 istrator shall be conclusive on the parties, 

3 except that the order of the Administrator 

4 may be set aside, in whole or in parts or 

5 remanded to the Administrator, for failure 

6 of the Administrator to comply with the re7 quirements of this section, for failure of 

8 the order to conform, or confine itself, to 

9 matters within the scope of the Adminis10 trator’s jurisdiction, or for fraud or cor11 ruption. 

12 (C) ELIGIBILITY.—An individual eligible to 

13 file a claim under the Act of April 22, 1908 (45 

14 U.S.C. 51 et seq.), commonly known as the 

15 Employers’ Liability Act, shall be eligible for a 

16 special adjustment under this paragraph if such 

17 individual meets the criteria set forth in sub18 paragraph (F). 

19 (D) AMOUNT.— 

20 (i) IN GENERAL.—The amount of the 

21 special adjustment shall be based on the 

22 type and severity of asbestos disease, and 

23 shall be 110 percent of the average amount 

24 an injured individual with a disease caused 

25 by asbestos, as described in section 121(d) 


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1 of this Act, would have received, during 

2 the 5-year period before the enactment of 

3 this Act, adjusted for inflation. This ad4 justment shall be in addition to any other 

5 award for which the claimant is eligible 

6 under this Act. The amount of the special 

7 adjustment shall be reduced by an amount 

8 reasonably calculated to take into account 

9 all expenses of litigation normally borne by 

10 plaintiffs, including attorney’s fees. 

11 (ii) LIMITATION.—The amount under 

12 clause (i) may not exceed the amount the 

13 claimant is eligible to receive before apply14 ing the special adjustment under that 

15 clause. 

16 (E) ARBITRATED BENEFITS.—If railroad 

17 management and railroad labor are unable to 

18 agree on a joint proposal within 45 days after 

19 the date of enactment of this Act, the Adminis20 trator shall appoint an arbitrator to determine 

21 the benefits under subparagraph (D). The Ad22 ministrator shall appoint an arbitrator who 

23 shall be acceptable to both railroad manage24 ment and railroad labor. Railroad management 

25 and railroad labor shall each designate their 


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1 representatives to participate in the arbitration. 

2 The arbitrator shall submit the benefits levels 

3 to the Administrator not later than 30 days 

4 after appointment and such benefits levels shall 

5 be based on information provided by rail labor 

6 and rail management. The information sub7 mitted to the arbitrator by railroad manage8 ment and railroad labor shall be considered con9 fidential and shall be disclosed to the other 

10 party upon execution of an appropriate con11 fidentiality agreement. Unless the submitting 

12 party provides written consent, neither the arbi13 trator nor either party to the arbitration shall 

14 divulge to any third party any information or 

15 data, in any form, submitted to the arbitrator 

16 under this section. Nor shall either party use 

17 such information or data for any purpose other 

18 than participation in the arbitration proceeding, 

19 and each party shall return to the other any in20 formation it has received from the other party 

21 as soon the arbitration is concluded. Informa22 tion submitted to the arbitrator may not be ad23 mitted into evidence, nor discovered, in any civil 

24 litigation in Federal or State court. The nature 

25 of the information submitted to the arbitrator 


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1 shall be within the sole discretion of the submit2 ting party, and the arbitrator may not require 

3 a party to submit any particular information, 

4 including information subject to a prior con5 fidentiality agreement. 

6 (F) DEMONSTRATION OF ELIGIBILITY.— 

7 (i) IN GENERAL.—A claimant under 

8 this paragraph shall be required to dem9 onstrate— 

10 (I) employment of the claimant 

11 in the railroad industry; 

12 (II) exposure of the claimant to 

13 asbestos as part of that employment; 

14 and 

15 (III) the nature and severity of 

16 the asbestos-related injury. 

17 (ii) MEDICAL CRITERIA.—In order to 

18 be eligible for a special adjustment a 

19 claimant shall meet the criteria set forth in 

20 section 121 that would qualify a claimant 

21 for a payment under Level II or greater. 

22 (5) MEDICAL MONITORING.—An asbestos claim23 ant with asymptomatic exposure, based on the cri24 teria under section 121(d)(1), shall only be eligible 


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1 for medical monitoring reimbursement as provided 

2 under section 132. 

3 (6) COST-OF-LIVING ADJUSTMENT.— 

4 (A) IN GENERAL.—Beginning January 1, 

5 2007, award amounts under paragraph (1) 

6 shall be annually increased by an amount equal 

7 to such dollar amount multiplied by the cost-of8 living adjustment, rounded to the nearest 

9 $1,000 increment. 

10 (B) CALCULATION OF COST-OF-LIVING AD11 JUSTMENT.—For the purposes of subparagraph 

12 (A), the cost-of-living adjustment for any cal13 endar year shall be the percentage, if any, by 

14 which the consumer price index for the suc15 ceeding calendar year exceeds the consumer 

16 price index for calendar year 2005. 

17 (C) CONSUMER PRICE INDEX.— 

18 (i) IN GENERAL.—For the purposes of 

19 subparagraph (B), the consumer price 

20 index for any calendar year is the average 

21 of the consumer price index as of the close 

22 of the 12-month period ending on August 

23 31 of such calendar year. 

24 (ii) DEFINITION.—For purposes of 

25 clause (i), the term ‘‘consumer price 


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1 index’’ means the consumer price index 

2 published by the Department of Labor. 

3 The consumer price index series to be used 

4 for award escalations shall include the con5 sumer price index used for all-urban con6 sumers, with an area coverage of the 

7 United States city average, for all items, 

8 based on the 1982–1984 index based pe9 riod, as published by the Department of 

10 Labor. 

11 SEC. 132. MEDICAL MONITORING. 

12 (a) RELATION TO STATUTE OF LIMITATIONS.—The 

13 filing of a claim under this Act that seeks reimbursement 

14 for medical monitoring shall not be considered as evidence 

15 that the claimant has discovered facts that would other16 wise commence the period applicable for purposes of the 

17 statute of limitations under section 113(b). 

18 (b) COSTS.—Reimbursable medical monitoring costs 

19 shall include the costs of a claimant not covered by health 

20 insurance for an examination by the claimant’s physician, 

21 x-ray tests, and pulmonary function tests every 3 years. 

22 (c) REGULATIONS.—The Administrator shall promul23 gate regulations that establish— 

24 (1) the reasonable costs for medical monitoring 

25 that is reimbursable; and 


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1 (2) the procedures applicable to asbestos claim2 ants. 

3 SEC. 133. PAYMENT. 

4 (a) STRUCTURED PAYMENTS.— 

5 (1) IN GENERAL.—An asbestos claimant who is 

6 entitled to an award should receive the amount of 

7 the award through structured payments from the 

8 Fund, made over a period of 3 years, and in no 

9 event more than 4 years after the date of final adju10 dication of the claim. 

11 (2) PAYMENT PERIOD AND AMOUNT.—There 

12 shall be a presumption that any award paid under 

13 this subsection shall provide for payment of— 

14 (A) 40 percent of the total amount in year 

15 1; 

16 (B) 30 percent of the total amount in year 

17 2; and 

18 (C) 30 percent of the total amount in year 

19 3. 

20 (3) EXTENSION OF PAYMENT PERIOD.— 

21 (A) IN GENERAL.—The Administrator 

22 shall develop guidelines to provide for the pay23 ment period of an award under subsection (a) 

24 to be extended to a 4-year period if such action 

25 is warranted in order to preserve the overall solVerDate Aug 31 2005 00:11 Jun 06, 2006 Jkt 049200 PO 00000 Frm 00136 Fmt 6652 Sfmt 6201 E:\BILLS\S3274.PCS S3274

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1 vency of the Fund. Such guidelines shall include 

2 reference to the number of claims made to the 

3 Fund and the awards made and scheduled to be 

4 paid from the Fund as provided under section 

5 405. 

6 (B) LIMITATIONS.—In no event shall less 

7 than 50 percent of an award be paid in the first 

8 2 years of the payment period under this sub9 section. 

10 (4) LUMP-SUM PAYMENTS.— 

11 (A) In general.—The Administrator shall 

12 develop guidelines to provide for 1 lump-sum 

13 payment to asbestos claimants who are meso14 thelioma victims and who are alive on the date 

15 on which the Administrator receives notice of 

16 the eligibility of the claimant. 

17 (B) TIMING OF PAYMENTS.—Lump-sum 

18 payments shall be made within the shorter of— 

19 (i) not later than 30 days after the 

20 date the claim is approved by the Adminis21 trator; or 

22 (ii) not later than 6 months after the 

23 date the claim is filed. 

24 (C) TIMING OF PAYMENTS TO BE AD25 JUSTED WITH RESPECT TO SOLVENCY OF THE


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1 FUND.—If the Administrator determines that 

2 solvency of the Fund would be severely harmed 

3 by the timing of the payments required under 

4 subparagraph (B), the time for such payments 

5 may be extended to the shorter of— 

6 (i) not later than 6 months after the 

7 date the claim is approved by the Adminis8 trator; or 

9 (ii) not later than 11 months after the 

10 date the claim is filed. 

11 (5) EXPEDITED PAYMENTS.— 

12 (A) IN GENERAL.—The Administrator 

13 shall develop guidelines to provide for expedited 

14 payments to asbestos claimants in cases of ter15 minal health claims as described under section 

16 106(c)(2)(B) and (C). 

17 (B) TIMING OF PAYMENTS.—Total pay18 ments shall be made within the shorter of— 

19 (i) not later than 6 months after the 

20 date the claim is approved by the Adminis21 trator; or 

22 (ii) not later than 1 year after the 

23 date the claim is filed. 

24 (C) TIMING OF PAYMENTS TO BE AD25 JUSTED WITH RESPECT TO SOLVENCY OF THE


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1 FUND.—If the Administrator determines that 

2 solvency of the Fund would be severely harmed 

3 by the timing of the payments required under 

4 subparagraph (B), the time for such payments 

5 may be extended to the shorter of— 

6 (i) not later than 1 year after the date 

7 the claim is approved by the Adminis8 trator; or 

9 (ii) not later than 2 years after the 

10 date the claim is filed. 

11 (D) PRIORITIZATION OF CLAIMS.—The Ad12 ministrator shall, in final regulations promul13 gated under section 101(c), designate categories 

14 of claims to be handled on an expedited basis. 

15 The Administrator shall prioritize the proc16 essing and payment of health claims involving 

17 claimants with the most serious health risks. 

18 The Administrator shall also prioritize claims 

19 from claimants who face extreme financial 

20 hardship. 

21 (6) ANNUITY.—An asbestos claimant may elect 

22 to receive any payments to which that claimant is 

23 entitled under this title in the form of an annuity. 


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1 (b) LIMITATION ON TRANSFERABILITY.—A claim 

2 filed under this Act shall not be assignable or otherwise 

3 transferable under this Act. 

4 (c) CREDITORS.—An award under this title shall be 

5 exempt from all claims of creditors and from levy, execu6 tion, and attachment or other remedy for recovery or col7 lection of a debt, and such exemption may not be waived. 

8 (d) MEDICARE AS SECONDARY PAYER.—No award 

9 under this title shall be deemed a payment for purposes 

10 of section 1862 of the Social Security Act (42 U.S.C. 

11 1395y). 

12 (e) EXEMPT PROPERTY IN ASBESTOS CLAIMANT’S

13 BANKRUPTCY CASE.—If an asbestos claimant files a peti14 tion for relief under section 301 of title 11, United States 

15 Code, no award granted under this Act shall be treated 

16 as property of the bankruptcy estate of the asbestos claim17 ant in accordance with section 541(b)(6) of title 11, 

18 United States Code. 

19 (f) EFFECT OF PAYMENT.—The full payment of an 

20 asbestos claim under this section shall be in full satisfac21 tion of such claim and shall be deemed to operate as a 

22 release to such claim. No claimant with an asbestos claim 

23 that has been fully paid under this section may proceed 

24 in the tort system with respect to such claim. 


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1 SEC. 134. SETOFFS FOR COLLATERAL SOURCE COMPENSA2 TION AND PRIOR AWARDS. 

3 (a) IN GENERAL.—The amount of an award other4 wise available to an asbestos claimant under this title shall 

5 be reduced by the amount of any collateral source com6 pensation and by any amounts paid or to be paid to the 

7 claimant for a prior award under this Act. 

8 (b) EXCLUSIONS.— 

9 (1) COLLATERAL SOURCE COMPENSATION.—In 

10 no case shall statutory benefits under workers’ com11 pensation laws, special adjustments made under sec12 tion 131(b)(3), occupational or total disability bene13 fits under the Railroad Retirement Act (45 U.S.C. 

14 201 et seq.), sickness benefits under the Railroad 

15 Unemployment Insurance Act (45 U.S.C. 351 et 

16 seq.), and veterans’ benefits programs be deemed as 

17 collateral source compensation for purposes of this 

18 section. 

19 (2) PRIOR AWARD PAYMENTS.—Any amounts 

20 paid or to be paid for a prior claim for a nonmalig21 nant disease (Levels I through V) filed against the 

22 Fund shall not be deducted as a setoff against 

23 amounts payable for the second injury claims for a 

24 malignant disease (Levels VI through IX), unless 

25 the malignancy was diagnosed before the date on 

26 which the nonmalignancy claim was compensated. 


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1 SEC. 135. CERTAIN CLAIMS NOT AFFECTED BY PAYMENT 

2 OF AWARDS. 

3 (a) IN GENERAL.—The payment of an award under 

4 section 106 or 133 shall not be considered a form of com5 pensation or reimbursement for a loss for purposes of im6 posing liability on any asbestos claimant receiving such 

7 payment to repay any— 

8 (1) insurance carrier for insurance payments; 

9 or 

10 (2) person or governmental entity on account of 

11 worker’s compensation, health care, or disability 

12 payments. 

13 (b) NO EFFECT ON CLAIMS.— 

14 (1) IN GENERAL.—The payment of an award to 

15 an asbestos claimant under section 106 or 133 shall 

16 not affect any claim of an asbestos claimant 

17 against— 

18 (A) an insurance carrier with respect to in19 surance; or 

20 (B) against any person or governmental 

21 entity with respect to worker’s compensation, 

22 healthcare, or disability. 

23 (2) RULE OF CONSTRUCTION.—Nothing in this 

24 subsection shall be construed to authorize the pur25 suit of a claim that is preempted under section 403. 


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1 TITLE II—ASBESTOS INJURY 

2 CLAIMS RESOLUTION FUND 

3 Subtitle A—Asbestos Defendants 

4 Funding Allocation 

5 SEC. 201. DEFINITIONS. 

6 In this subtitle, the following definitions shall apply: 

7 (1) AFFILIATED GROUP.—The term ‘‘affiliated 

8 group’’— 

9 (A) means a defendant participant that is 

10 an ultimate parent and any person whose entire 

11 beneficial interest is directly or indirectly owned 

12 by that ultimate parent on the date of enact13 ment of this Act; and 

14 (B) shall not include any person that is a 

15 debtor or any direct or indirect majority-owned 

16 subsidiary of a debtor. 

17 (2) INDEMNIFIABLE COST.—The term 

18 ‘‘indemnifiable cost’’ means a cost, expense, debt, 

19 judgment, or settlement incurred with respect to an 

20 asbestos claim that, at any time before December 

21 31, 2002, was or could have been subject to indem22 nification, contribution, surety, or guaranty. 

23 (3) INDEMNITEE.—The term ‘‘indemnitee’’ 

24 means a person against whom any asbestos claim 

25 has been asserted before December 31, 2002, who 


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1 has received from any other person, or on whose be2 half a sum has been paid by such other person to 

3 any third person, in settlement, judgment, defense, 

4 or indemnity in connection with an alleged duty with 

5 respect to the defense or indemnification of such 

6 person concerning that asbestos claim, other than 

7 under a policy of insurance or reinsurance. 

8 (4) INDEMNITOR.—The term ‘‘indemnitor’’ 

9 means a person who has paid under a written agree10 ment at any time before December 31, 2002, a sum 

11 in settlement, judgment, defense, or indemnity to or 

12 on behalf of any person defending against an asbes13 tos claim, in connection with an alleged duty with 

14 respect to the defense or indemnification of such 

15 person concerning that asbestos claim, except that 

16 payments by an insurer or reinsurer under a con17 tract of insurance or reinsurance shall not make the 

18 insurer or reinsurer an indemnitor for purposes of 

19 this subtitle. 

20 (5) PRIOR ASBESTOS EXPENDITURES.—The 

21 term ‘‘prior asbestos expenditures’’— 

22 (A) means the gross total amount paid by 

23 or on behalf of a person at any time before De24 cember 31, 2002, in settlement, judgment, deVerDate Aug 31 2005 00:11 Jun 06, 2006 Jkt 049200 PO 00000 Frm 00144 Fmt 6652 Sfmt 6201 E:\BILLS\S3274.PCS S3274

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1 fense, or indemnity costs related to all asbestos 

2 claims against that person; 

3 (B) includes payments made by insurance 

4 carriers to or for the benefit of such person or 

5 on such person’s behalf with respect to such as6 bestos claims, except as provided in section 

7 204(g); 

8 (C) shall not include any payment made by 

9 a person in connection with or as a result of 

10 changes in insurance reserves required by con11 tract or any activity or dispute related to insur12 ance coverage matters for asbestos-related li13 abilities; and 

14 (D) shall not include any payment made by 

15 or on behalf of persons who are or were com16 mon carriers by railroad for asbestos claims 

17 brought under the Act of April 22, 1908 (45 

18 U.S.C. 51 et seq.), commonly known as the 

19 Employers’ Liability Act, as a result of oper20 ations as a common carrier by railroad, includ21 ing settlement, judgment, defense, or indemnity 

22 costs associated with these claims. 

23 (6) ULTIMATE PARENT.—The term ‘‘ultimate 

24 parent’’ means a person— 


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1 (A) that owned, as of December 31, 2002, 

2 the entire beneficial interest, directly or indi3 rectly, of at least 1 other person; and 

4 (B) whose entire beneficial interest was not 

5 owned, on December 31, 2002, directly or indi6 rectly, by any other single person (other than a 

7 natural person). 

8 (7) ASBESTOS PREMISES CLAIM.—The term 

9 ‘‘asbestos premises claim’’— 

10 (A) means an asbestos claim against a cur11 rent or former premises owner or landowner, or 

12 person controlling or possessing premises or 

13 land, alleging injury or death caused by expo14 sure to asbestos on such premises or land or by 

15 exposure to asbestos carried off such premises 

16 or land on the clothing or belongings of another 

17 person; and 

18 (B) includes any such asbestos claim 

19 against a current or former employer alleging 

20 injury or death caused by exposure to asbestos 

21 on premises or land owned, controlled or pos22 sessed by the employer, if such claim is not a 

23 claim for benefits under a workers’ compensa24 tion law or veterans’ benefits program. 


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1 (8) ASBESTOS PREMISES DEFENDANT PARTICI2 PANT.—The term ‘‘asbestos premises defendant par3 ticipant’’ means any defendant participant for which 

4 95 percent or more of its prior asbestos expenditures 

5 relate to asbestos premises claims against that de6 fendant participant. 

7 SEC. 202. AUTHORITY AND TIERS. 

8 (a) LIABILITY FOR PAYMENTS TO THE FUND.— 

9 (1) IN GENERAL.—Defendant participants shall 

10 be liable for payments to the Fund in accordance 

11 with this section based on tiers and subtiers as12 signed to defendant participants. 

13 (2) AGGREGATE PAYMENT OBLIGATIONS

14 LEVEL.—The total payments required of all defend15 ant participants over the life of the Fund shall not 

16 exceed a sum equal to $90,000,000,000 less any 

17 bankruptcy trust credits under section 222(d). The 

18 Administrator shall have the authority to allocate 

19 the payments required of the defendant participants 

20 among the tiers as provided in this title. 

21 (3) ABILITY TO ENTER REORGANIZATION.— 

22 Notwithstanding any other provision of this Act, all 

23 debtors that, together with all of their direct or indi24 rect majority-owned subsidiaries, have prior asbestos 

25 expenditures less than $1,000,000 may proceed with 


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1 the filing, solicitation, and confirmation of a plan of 

2 reorganization that does not comply with the re3 quirements of this Act, including a trust and chan4 neling injunction under section 524(g) of title 11, 

5 United States Code. Any asbestos claim made in 

6 conjunction with a plan of reorganization allowable 

7 under the preceding sentence shall be subject to sec8 tion 403(d) of this Act. 

9 (b) TIER I.—Tier I shall include all debtors that, to10 gether with all of their direct or indirect majority-owned 

11 subsidiaries, have prior asbestos expenditures greater than 

12 $1,000,000. 

13 (c) TREATMENT OF TIER I BUSINESS ENTITIES IN

14 BANKRUPTCY.— 

15 (1) DEFINITION.— 

16 (A) IN GENERAL.—In this subsection, the 

17 term ‘‘bankrupt business entity’’ means a per18 son that is not a natural person that— 

19 (i) filed a petition for relief under 

20 chapter 11, of title 11, United States 

21 Code, before January 1, 2003; 

22 (ii) has not substantially con23 summated, as such term is defined under 

24 section 1101(2) of title 11, United States 


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1 Code, a plan of reorganization as of the 

2 date of enactment of this Act; and 

3 (iii) the bankruptcy court presiding 

4 over the business entity’s case determines, 

5 after notice and a hearing upon motion 

6 filed by the entity within 30 days after the 

7 date of enactment of this Act, that asbes8 tos liability was not the sole or precipi9 tating cause of the entity’s chapter 11 fil10 ing. 

11 (B) MOTION AND RELATED MATTERS.—A 

12 motion under subparagraph (A)(iii) shall be 

13 supported by— 

14 (i) an affidavit or declaration of the 

15 chief executive officer, chief financial offi16 cer, or chief legal officer of the business 

17 entity; and 

18 (ii) copies of the entity’s public state19 ments and securities filings made in con20 nection with the entity’s filing for chapter 

21 11 protection. 

22 Notice of such motion shall be as directed by 

23 the bankruptcy court, and the hearing shall be 

24 limited to consideration of the question of 

25 whether or not asbestos liability was the sole or 


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1 precipitating cause of the entity’s chapter 11 

2 filing. The bankruptcy court shall hold a hear3 ing and make its determination with respect to 

4 the motion within 30 days after the date the 

5 motion is filed. In making its determination, 

6 the bankruptcy court shall take into account 

7 the affidavits, public statements, and securities 

8 filings, and other information, if any, submitted 

9 by the entity and all other facts and cir10 cumstances presented by an objecting party. 

11 Any review of this determination shall be an ex12 pedited appeal and limited to whether the deci13 sion was against the weight of the evidence. 

14 Any appeal of a determination shall be an expe15 dited review to the United States Circuit Court 

16 of Appeals for the circuit in which the bank17 ruptcy is filed. 

18 (2) PROCEEDING WITH REORGANIZATION

19 PLAN.—A bankrupt business entity may proceed 

20 with the filing, solicitation, confirmation, and con21 summation of a plan of reorganization that does not 

22 comply with the requirements of this Act, including 

23 a trust and channeling injunction described in sec24 tion 524(g) of title 11, United States Code, notwith25 standing any other provisions of this Act, if the 


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1 bankruptcy court makes a favorable determination 

2 under paragraph (1)(B), unless the bankruptcy 

3 court’s determination is overruled on appeal and all 

4 appeals are final. Such a bankrupt business entity 

5 may continue to so proceed, if— 

6 (A) on request of a party in interest or on 

7 a motion of the court, and after a notice and 

8 a hearing, the bankruptcy court presiding over 

9 the chapter 11 case of the bankrupt business 

10 entity determines that such confirmation is re11 quired to avoid the liquidation or the need for 

12 further financial reorganization of that entity; 

13 and 

14 (B) an order confirming the plan of reor15 ganization is entered by the bankruptcy court 

16 within 9 months after the date of enactment of 

17 this Act or such longer period of time approved 

18 by the bankruptcy court for cause shown. 

19 (3) APPLICABILITY.—If the bankruptcy court 

20 does not make the determination required under 

21 paragraph (2), or if an order confirming the plan is 

22 not entered within 9 months after the date of enact23 ment of this Act or such longer period of time ap24 proved by the bankruptcy court for cause shown, the 

25 provisions of this Act shall apply to the bankrupt 


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1 business entity notwithstanding the certification. 

2 Any timely appeal under title 11, United States 

3 Code, from a confirmation order entered during the 

4 applicable time period shall automatically extend the 

5 time during which this Act is inapplicable to the 

6 bankrupt business entity, until the appeal is fully 

7 and finally resolved. 

8 (4) OFFSETS.— 

9 (A) PAYMENTS BY INSURERS.—To the ex10 tent that a bankrupt business entity or debtor 

11 successfully confirms a plan of reorganization, 

12 including a trust, and channeling injunction 

13 that involves payments by insurers who are oth14 erwise subject to this Act as described under 

15 section 524(g) of title 11, United States Code, 

16 an insurer who makes payments to the trust 

17 shall obtain a dollar-for-dollar reduction in the 

18 amount otherwise payable by that insurer under 

19 this Act to the Fund. 

20 (B) CONTRIBUTIONS TO FUND.—Any cash 

21 payments by a bankrupt business entity, if any, 

22 to a trust described under section 524(g) of 

23 title 11, United States Code, may be counted as 

24 a contribution to the Fund. 


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1 (d) TIERS II THROUGH VI.—Except as provided in 

2 section 204 and subsection (b) of this section, persons or 

3 affiliated groups are included in Tier II, III, IV, V, or 

4 VI, according to the prior asbestos expenditures paid by 

5 such persons or affiliated groups as follows: 

6 (1) Tier II: $75,000,000 or greater. 

7 (2) Tier III: $50,000,000 or greater, but less 

8 than $75,000,000. 

9 (3) Tier IV: $10,000,000 or greater, but less 

10 than $50,000,000. 

11 (4) Tier V: $5,000,000 or greater, but less than 

12 $10,000,000. 

13 (5) Tier VI: $1,000,000 or greater, but less 

14 than $5,000,000. 

15 (6) ASBESTOS PREMISES DEFENDANT PARTICI16 PANTS.— 

17 (A) IN GENERAL.—Asbestos premises de18 fendant participants that would be included in 

19 Tier II, III, IV or V according to their prior as20 bestos expenditures shall, after 5 years of the 

21 Fund being operational, instead be assigned to 

22 the immediately lower tier, such that— 

23 (i) an asbestos premises defendant 

24 participant that would be assigned to Tier 

25 II shall instead be assigned to Tier III; 


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1 (ii) an asbestos premises defendant 

2 participant that would be assigned to Tier 

3 III shall instead be assigned to Tier IV; 

4 (iii) an asbestos premises defendant 

5 participant that would be assigned to Tier 

6 IV shall instead be assigned to Tier V; and 

7 (iv) an asbestos premises defendant 

8 participant that would be assigned to Tier 

9 V shall instead be assigned to Tier VI. 

10 (B) RETURN TO ORIGINAL TIER.—The Ad11 ministrator may return asbestos premises de12 fendant participants to their original tier, on a 

13 yearly basis, if the Administrator determines 

14 that the additional revenues that would be col15 lected are needed to preserve the solvency of the 

16 Fund. 

17 (e) TIER PLACEMENT AND COSTS.— 

18 (1) PERMANENT TIER PLACEMENT.—After a 

19 defendant participant or affiliated group is assigned 

20 to a tier and subtier under section 204(i)(6), the 

21 participant or affiliated group shall remain in that 

22 tier and subtier throughout the life of the Fund, re23 gardless of subsequent events, including— 

24 (A) the filing of a petition under a chapter 

25 of title 11, United States Code; 


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1 (B) a discharge of debt in bankruptcy; 

2 (C) the confirmation of a plan of reorga3 nization; or 

4 (D) the sale or transfer of assets to any 

5 other person or affiliated group, unless the Ad6 ministrator finds that the information sub7 mitted by the participant or affiliated group to 

8 support its inclusion in that tier was inaccurate. 

9 (2) COSTS.—Payments to the Fund by all per10 sons that are the subject of a case under a chapter 

11 of title 11, United States Code, after the date of en12 actment of this Act— 

13 (A) shall constitute costs and expenses of 

14 administration of the case under section 503 of 

15 title 11, United States Code, and shall be pay16 able in accordance with the payment provisions 

17 under this subtitle notwithstanding the pend18 ency of the case under that title 11; 

19 (B) shall not be stayed or affected as to 

20 enforcement or collection by any stay or injunc21 tion power of any court; and 

22 (C) shall not be impaired or discharged in 

23 any current or future case under title 11, 

24 United States Code. 

25 (f) SUPERSEDING PROVISIONS.— 


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1 (1) IN GENERAL.—All of the following shall be 

2 superseded in their entireties by this Act: 

3 (A) The treatment of any asbestos claim in 

4 any plan of reorganization with respect to any 

5 debtor included in Tier I. 

6 (B) Any asbestos claim against any debtor 

7 included in Tier I. 

8 (C) Any agreement, understanding, or un9 dertaking by any such debtor or any third party 

10 with respect to the treatment of any asbestos 

11 claim filed in a debtor’s bankruptcy case or 

12 with respect to a debtor before the date of en13 actment of this Act, whenever such debtor’s 

14 case is either still pending, if such case is pend15 ing under a chapter other than chapter 11 of 

16 title 11, United States Code, or subject to con17 firmation or substantial consummation of a 

18 plan of reorganization under chapter 11 of title 

19 11, United States Code. 

20 (2) PRIOR AGREEMENTS OF NO EFFECT.—Not21 withstanding section 403(c)(3), any plan of reorga22 nization, agreement, understanding, or undertaking 

23 by any debtor (including any pre-petition agreement, 

24 understanding, or undertaking that requires future 

25 performance) or any third party under paragraph 


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1 (1), and any agreement, understanding, or under2 taking entered into in anticipation, contemplation, or 

3 furtherance of a plan of reorganization, to the extent 

4 it relates to any asbestos claim, shall be of no force 

5 or effect, and no person shall have any right or 

6 claim with respect to any such agreement, under7 standing, or undertaking. 

8 SEC. 203. SUBTIERS. 

9 (a) IN GENERAL.— 

10 (1) SUBTIER LIABILITY.—Except as otherwise 

11 provided under subsections (b), (d), and (l) of sec12 tion 204, persons or affiliated groups shall be in13 cluded within Tiers I through VII and shall pay 

14 amounts to the Fund in accordance with this sec15 tion. 

16 (2) REVENUES.— 

17 (A) IN GENERAL.—For purposes of this 

18 section, revenues shall be determined in accord19 ance with generally accepted accounting prin20 ciples, consistently applied, using the amount 

21 reported as revenues in the annual report filed 

22 with the Securities and Exchange Commission 

23 in accordance with the Securities Exchange Act 

24 of 1934 (15 U.S.C. 78a et seq.) for the most 

25 recent fiscal year ending on or before December 


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1 31, 2002. If the defendant participant or affili2 ated group does not file reports with the Securi3 ties and Exchange Commission, revenues shall 

4 be the amount that the defendant participant or 

5 affiliated group would have reported as reve6 nues under the rules of the Securities and Ex7 change Commission in the event that it had 

8 been required to file. 

9 (B) INSURANCE PREMIUMS.—Any portion 

10 of revenues of a defendant participant that is 

11 derived from insurance premiums shall not be 

12 used to calculate the payment obligation of that 

13 defendant participant under this subtitle. 

14 (C) DEBTORS.—Each debtor’s revenues 

15 shall include the revenues of the debtor and all 

16 of the direct or indirect majority-owned subsidi17 aries of that debtor, except that the pro forma 

18 revenues of a person that is included in Subtier 

19 2 of Tier I shall not be included in calculating 

20 the revenues of any debtor that is a direct or 

21 indirect majority owner of such Subtier 2 per22 son. If a debtor or affiliated group includes a 

23 person in respect of whose liabilities for asbes24 tos claims a class action trust has been estabVerDate Aug 31 2005 00:11 Jun 06, 2006 Jkt 049200 PO 00000 Frm 00158 Fmt 6652 Sfmt 6201 E:\BILLS\S3274.PCS S3274

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1 lished, there shall be excluded from the 2002 

2 revenues of such debtor or affiliated group— 

3 (i) all revenues of the person in re4 spect of whose liabilities for asbestos 

5 claims the class action trust was estab6 lished; and 

7 (ii) all revenues of the debtor and af8 filiated group attributable to the historical 

9 business operations or assets of such per10 son, regardless of whether such business 

11 operations or assets were owned or con12 ducted during the year 2002 by such per13 son or by any other person included within 

14 such debtor and affiliated group. 

15 (b) TIER I SUBTIERS.— 

16 (1) IN GENERAL.—Each debtor in Tier I shall 

17 be included in subtiers and shall pay amounts to the 

18 Fund as provided under this section. 

19 (2) SUBTIER 1.— 

20 (A) IN GENERAL.—All persons that are 

21 debtors with prior asbestos expenditures of 

22 $1,000,000 or greater, shall be included in 

23 Subtier 1. 


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1 (B) PAYMENT.—Each debtor included in 

2 Subtier 1 shall pay on an annual basis 1.67024 

3 percent of the debtor’s 2002 revenues. 

4 (C) OTHER ASSETS.—The Administrator, 

5 at the sole discretion of the Administrator, may 

6 allow a Subtier 1 debtor to satisfy its funding 

7 obligation under this paragraph with assets 

8 other than cash if the Administrator determines 

9 that requiring an all-cash payment of the debt10 or’s funding obligation would render the debt11 or’s reorganization infeasible. 

12 (D) LIABILITY.— 

13 (i) IN GENERAL.—If a person who is 

14 subject to a case pending under a chapter 

15 of title 11, United States Code, as defined 

16 in section 201(3)(A)(i), does not pay when 

17 due any payment obligation for the debtor, 

18 the Administrator shall have the right to 

19 seek payment of all or any portion of the 

20 entire amount due (as well as any other 

21 amount for which the debtor may be liable 

22 under sections 223 and 224) from any of 

23 the direct or indirect majority-owned sub24 sidiaries under section 201(3)(A)(ii). 


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1 (ii) CAUSE OF ACTION.—Notwith2 standing section 221(e), this Act shall not 

3 preclude actions among persons within a 

4 debtor under section 201(3)(A) (i) and (ii) 

5 with respect to the payment obligations 

6 under this Act. 

7 (iii) RIGHT OF CONTRIBUTION.— 

8 (I) IN GENERAL.—Notwith9 standing any other provision of this 

10 Act, if a direct or indirect majority11 owned foreign subsidiary of a debtor 

12 participant (with such relationship to 

13 the debtor participant as determined 

14 on the date of enactment of this Act) 

15 is or becomes subject to any foreign 

16 insolvency proceedings, and such for17 eign direct or indirect-majority owned 

18 subsidiary is liquidated in connection 

19 with such foreign insolvency pro20 ceedings (or if the debtor participant’s 

21 interest in such foreign subsidiary is 

22 otherwise canceled or terminated in 

23 connection with such foreign insol24 vency proceedings), the debtor partici25 pant shall have a claim against such 


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1 foreign subsidiary or the estate of 

2 such foreign subsidiary in an amount 

3 equal to the greater of— 

4 (aa) the estimated amount 

5 of all current and future asbestos 

6 liabilities against such foreign 

7 subsidiary; or 

8 (bb) the foreign subsidiary’s 

9 allocable share of the debtor par10 ticipant’s funding obligations to 

11 the Fund as determined by such 

12 foreign subsidiary’s allocable 

13 share of the debtor participant’s 

14 2002 gross revenue. 

15 (II) DETERMINATION OF CLAIM

16 AMOUNT.—The claim amount under 

17 subclause (I) (aa) or (bb) shall be de18 termined by a court of competent ju19 risdiction in the United States. 

20 (III) EFFECT ON PAYMENT OBLI21 GATION.—The right to, or recovery 

22 under, any such claim shall not re23 duce, limit, delay, or otherwise affect 

24 the debtor participant’s payment obli25 gations under this Act. 


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1 (3) SUBTIER 2.— 

2 (A) IN GENERAL.—Notwithstanding para3 graph (2), all persons that are debtors that 

4 have no material continuing business oper5 ations, other than class action trusts under 

6 paragraph (6), but hold cash or other assets 

7 that have been allocated or earmarked for the 

8 settlement of asbestos claims shall be included 

9 in Subtier 2. 

10 (B) ASSIGNMENT OF ASSETS.—Not later 

11 than 90 days after the date of enactment of 

12 this Act, each person included in Subtier 2 shall 

13 assign all of its unencumbered assets to the 

14 Fund. 

15 (4) SUBTIER 3.— 

16 (A) IN GENERAL.—Notwithstanding para17 graph (2), all persons that are debtors other 

18 than those included in Subtier 2, which have no 

19 material continuing business operations and no 

20 cash or other assets allocated or earmarked for 

21 the settlement of any asbestos claim, shall be 

22 included in Subtier 3. 

23 (B) ASSIGNMENT OF UNENCUMBERED AS24 SETS.—Not later than 90 days after the date of 

25 enactment of this Act, each person included in 


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1 Subtier 3 shall contribute an amount equal to 

2 50 percent of its total unencumbered assets. 

3 (5) CALCULATION OF UNENCUMBERED AS4 SETS.—Unencumbered assets shall be calculated as 

5 the Subtier 2 or 3 person’s total assets, excluding 

6 insurance-related assets, jointly held, in trust or oth7 erwise, with a defendant participant, less— 

8 (A) all allowable administrative expenses; 

9 (B) allowable priority claims under section 

10 507 of title 11, United States Code; and 

11 (C) allowable secured claims. 

12 (6) CLASS ACTION TRUST.—The assets of any 

13 class action trust that has been established in re14 spect of the liabilities for asbestos claims of any per15 son included within a debtor and affiliated group 

16 that has been included in Tier I (exclusive of any as17 sets needed to pay previously incurred expenses and 

18 asbestos claims within the meaning of section 

19 403(d)(1), before the date of enactment of this Act) 

20 shall be transferred to the Fund not later than 60 

21 days after the date of enactment of this Act. 

22 (c) TIER II SUBTIERS.— 

23 (1) IN GENERAL.—Each person or affiliated 

24 group in Tier II shall be included in 1 of the 5 

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1 ated group’s revenues. Such subtiers shall each con2 tain as close to an equal number of total persons 

3 and affiliated groups as possible, with— 

4 (A) those persons or affiliated groups with 

5 the highest revenues included in Subtier 1; 

6 (B) those persons or affiliated groups with 

7 the next highest revenues included in Subtier 2; 

8 (C) those persons or affiliated groups with 

9 the lowest revenues included in Subtier 5; 

10 (D) those persons or affiliated groups with 

11 the next lowest revenues included in Subtier 4; 

12 and 

13 (E) those persons or affiliated groups re14 maining included in Subtier 3. 

15 (2) PAYMENTS.—Each person or affiliated 

16 group within each subtier shall pay, on an annual 

17 basis, the following: 

18 (A) Subtier 1: $27,500,000. 

19 (B) Subtier 2: $24,750,000. 

20 (C) Subtier 3: $22,000,000. 

21 (D) Subtier 4: $19,250,000. 

22 (E) Subtier 5: $16,500,000. 

23 (d) TIER III SUBTIERS.— 

24 (1) IN GENERAL.—Each person or affiliated 

25 group in Tier III shall be included in 1 of the 5 


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1 subtiers of Tier III, based on the person’s or affili2 ated group’s revenues. Such subtiers shall each con3 tain as close to an equal number of total persons 

4 and affiliated groups as possible, with— 

5 (A) those persons or affiliated groups with 

6 the highest revenues included in Subtier 1; 

7 (B) those persons or affiliated groups with 

8 the next highest revenues included in Subtier 2; 

9 (C) those persons or affiliated groups with 

10 the lowest revenues included in Subtier 5; 

11 (D) those persons or affiliated groups with 

12 the next lowest revenues included in Subtier 4; 

13 and 

14 (E) those persons or affiliated groups re15 maining included in Subtier 3. 

16 (2) PAYMENTS.—Each person or affiliated 

17 group within each subtier shall pay, on an annual 

18 basis, the following: 

19 (A) Subtier 1: $16,500,000. 

20 (B) Subtier 2: $13,750,000. 

21 (C) Subtier 3: $11,000,000. 

22 (D) Subtier 4: $8,250,000. 

23 (E) Subtier 5: $5,500,000. 

24 (e) TIER IV SUBTIERS.— 


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1 (1) IN GENERAL.—Each person or affiliated 

2 group in Tier IV shall be included in 1 of the 4 

3 subtiers of Tier IV, based on the person’s or affili4 ated group’s revenues. Such subtiers shall each con5 tain as close to an equal number of total persons 

6 and affiliated groups as possible, with those persons 

7 or affiliated groups with the highest revenues in 

8 Subtier 1, those with the lowest revenues in Subtier 

9 4. Those persons or affiliated groups with the high10 est revenues among those remaining will be included 

11 in Subtier 2 and the rest in Subtier 3. 

12 (2) PAYMENT.—Each person or affiliated group 

13 within each subtier shall pay, on an annual basis, 

14 the following: 

15 (A) Subtier 1: $3,850,000. 

16 (B) Subtier 2: $2,475,000. 

17 (C) Subtier 3: $1,650,000. 

18 (D) Subtier 4: $550,000. 

19 (f) TIER V SUBTIERS.— 

20 (1) IN GENERAL.—Each person or affiliated 

21 group in Tier V shall be included in 1 of the 3 

22 subtiers of Tier V, based on the person’s or affili23 ated group’s revenues. Such subtiers shall each con24 tain as close to an equal number of total persons 

25 and affiliated groups as possible, with those persons 


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1 or affiliated groups with the highest revenues in 

2 Subtier 1, those with the lowest revenues in Subtier 

3 3, and those remaining in Subtier 2. 

4 (2) PAYMENT.—Each person or affiliated group 

5 within each subtier shall pay, on an annual basis, 

6 the following: 

7 (A) Subtier 1: $1,000,000. 

8 (B) Subtier 2: $500,000. 

9 (C) Subtier 3: $200,000. 

10 (g) TIER VI SUBTIERS.— 

11 (1) IN GENERAL.—Each person or affiliated 

12 group in Tier VI shall be included in 1 of the 3 

13 subtiers of Tier VI, based on the person’s or affili14 ated group’s revenues. Such subtiers shall each con15 tain as close to an equal number of total persons 

16 and affiliated groups as possible, with those persons 

17 or affiliated groups with the highest revenues in 

18 Subtier 1, those with the lowest revenues in Subtier 

19 3, and those remaining in Subtier 2. 

20 (2) PAYMENT.—Each person or affiliated group 

21 within each subtier shall pay, on an annual basis, 

22 the following: 

23 (A) Subtier 1: $500,000. 

24 (B) Subtier 2: $250,000. 

25 (C) Subtier 3: $100,000. 


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1 (3) OTHER PAYMENT FOR CERTAIN PERSONS

2 AND AFFILIATED GROUPS.— 

3 (A) IN GENERAL.—Notwithstanding any 

4 other provision of this subsection, and if an ad5 justment authorized by this subsection does not 

6 impair the overall solvency of the Fund, any 

7 person or affiliated group within Tier VI whose 

8 required subtier payment in any given year 

9 would exceed such person’s or group’s average 

10 annual expenditure on settlements, and judg11 ments of asbestos disease-related claims over 

12 the 8 years before the date of enactment of this 

13 Act shall make the payment required of the im14 mediately lower subtier or, if the person’s or 

15 group’s average annual expenditures on settle16 ments and judgments over the 8 years before 

17 the date of enactment of this Act is less than 

18 $100,000, shall not be required to make a pay19 ment under this Act. 

20 (B) NO FURTHER ADJUSTMENT.—Any 

21 person or affiliated group that receives an ad22 justment under this paragraph shall not be eli23 gible to receive any further adjustment under 

24 section 204(d). 

25 (h) TIER VII.— 


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1 (1) IN GENERAL.—Notwithstanding prior as2 bestos expenditures that might qualify a person or 

3 affiliated group to be included in Tiers II, III, IV, 

4 V, or VI, a person or affiliated group shall also be 

5 included in Tier VII, if the person or affiliated 

6 group— 

7 (A) is or has at any time been subject to 

8 asbestos claims brought under the Act of April 

9 22, 1908 (45 U.S.C. 51 et seq.), commonly 

10 known as the Employers’ Liability Act, as a re11 sult of operations as a common carrier by rail12 road; and 

13 (B) has paid (including any payments 

14 made by others on behalf of such person or af15 filiated group) not less than $5,000,000 in set16 tlement, judgment, defense, or indemnity costs 

17 relating to such claims, and such settlement, 

18 judgment, defense, or indemnity costs con19 stitute 75 percent or more of the total prior as20 bestos expenditures by the person or affiliated 

21 group. 

22 (2) ADDITIONAL AMOUNT.—The payment re23 quirement for persons or affiliated groups included 

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1 quirement applicable to such person or affiliated 

2 group under Tiers II through VI. 

3 (3) SUBTIER 1.—Each person or affiliated 

4 group in Tier VII with revenues of $6,000,000,000 

5 or more is included in Subtier 1 and shall make an6 nual payments of $11,000,000 to the Fund. 

7 (4) SUBTIER 2.—Each person or affiliated 

8 group in Tier VII with revenues of less than 

9 $6,000,000,000, but not less than $4,000,000,000 is 

10 included in Subtier 2 and shall make annual pay11 ments of $5,500,000 to the Fund. 

12 (5) SUBTIER 3.—Each person or affiliated 

13 group in Tier VII with revenues of less than 

14 $4,000,000,000, but not less than $500,000,000 is 

15 included in Subtier 3 and shall make annual pay16 ments of $550,000 to the Fund. 

17 (6) JOINT VENTURE REVENUES AND LIABIL18 ITY.— 

19 (A) REVENUES.—For purposes of this sub20 section, the revenues of a joint venture shall be 

21 included on a pro rata basis reflecting relative 

22 joint ownership to calculate the revenues of the 

23 parents of that joint venture. The joint venture 

24 shall not be responsible for a contribution 

25 amount under this subsection. 


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1 (B) LIABILITY.—For purposes of this sub2 section, the liability under the Act of April 22, 

3 1908 (45 U.S.C. 51 et seq.), commonly known 

4 as the Employers’ Liability Act, shall be attrib5 uted to the parent owners of the joint venture 

6 on a pro rata basis, reflecting their relative 

7 share of ownership. The joint venture shall not 

8 be responsible for a payment amount under this 

9 provision. 

10 SEC. 204. ASSESSMENT ADMINISTRATION. 

11 (a) IN GENERAL.— 

12 (1) PAYMENT.—Each defendant participant or 

13 affiliated group shall pay to the Fund in the 

14 amounts provided under this subtitle as appropriate 

15 for its tier and subtier each year until the earlier to 

16 occur of the following: 

17 (A) The participant or affiliated group has 

18 satisfied its obligations under this subtitle dur19 ing the 30 annual payment cycles of the oper20 ation of the Fund. 

21 (B) The amount received by the Fund 

22 from defendant participants, excluding any 

23 amounts rebated to defendant participants 

24 under subsections (d) and (m), equals the maxVerDate Aug 31 2005 00:11 Jun 06, 2006 Jkt 049200 PO 00000 Frm 00172 Fmt 6652 Sfmt 6201 E:\BILLS\S3274.PCS S3274

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1 imum aggregate payment obligation of section 

2 202(a)(2). 

3 (2) LIMITATION.— 

4 (A) DEFINITION.—In this paragraph, the 

5 term ‘‘affiliated group’’ shall include any de6 fendant participant that is an ultimate parent. 

7 (B) IN GENERAL.—For any affiliated 

8 group, the total payment in any year, including 

9 any guaranteed payment surcharge under sub10 section (l) and any bankruptcy trust guarantee 

11 surcharge under section 222(c), shall not exceed 

12 the lesser of $16,702,400 or 1.67024 percent of 

13 the revenues of the affiliated group for the most 

14 recent fiscal year ending on or before December 

15 31, 2002, or for the most recent 12-month fis16 cal year as of the date the limitation is applied, 

17 whichever is greater. 

18 (C) EXCEPTION.—The limitation in this 

19 paragraph shall not apply to defendant partici20 pants in Tier I or to any affiliated group whose 

21 revenues for the most recent fiscal year ending 

22 on or before December 31, 2002, or for the 

23 most recent 12-month fiscal year as of the date 

24 the limitation applied, whichever is greater, ex25 ceeds $1,000,000,000. 


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1 (D) DETERMINATIONS.—The revenues of 

2 the affiliated group shall be determined in ac3 cordance with section 203(a)(2), except for the 

4 applicable date. An affiliated group that claims 

5 a reduction in its payment in any year shall file 

6 with the Administrator, in accordance with pro7 cedures prescribed by the Administrator, suffi8 cient information to allow the Administrator to 

9 determine the amount of any such reduction in 

10 that year. If as a result of the application of the 

11 limitation provided in this paragraph an affili12 ated group is exempt from paying all or part of 

13 a guaranteed payment surcharge or bankruptcy 

14 trust surcharge, then the reduction in the affili15 ated group’s payment obligation due to the limi16 tation in this subsection shall be redistributed 

17 in accordance with subsection (l). 

18 (E) RULE OF CONSTRUCTION.—Nothing in 

19 this paragraph shall be construed as reducing 

20 the minimum aggregate annual payment obliga21 tion of defendant participants as provided 

22 under subsection (h). 

23 (b) SMALL BUSINESS EXEMPTION.—Notwith24 standing any other provision of this subtitle, a person or 

25 affiliated group that is a small business concern (as deVerDate Aug 31 2005 00:11 Jun 06, 2006 Jkt 049200 PO 00000 Frm 00174 Fmt 6652 Sfmt 6201 E:\BILLS\S3274.PCS S3274

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1 fined under section 3 of the Small Business Act (15 

2 U.S.C. 632)), on December 31, 2002, is exempt from any 

3 payment requirement under this subtitle and shall not be 

4 included in the subtier allocations under section 203. 

5 (c) PROCEDURES.—The Administrator shall pre6 scribe procedures on how amounts payable under this sub7 title are to be paid, including, to the extent the Adminis8 trator determines appropriate, procedures relating to pay9 ment in installments. 

10 (d) ADJUSTMENTS.— 

11 (1) IN GENERAL.—Under expedited procedures 

12 established by the Administrator, a defendant partic13 ipant may seek adjustment of the amount of its pay14 ment obligation based on severe financial hardship 

15 or demonstrated inequity. The Administrator may 

16 determine whether to grant an adjustment and the 

17 size of any such adjustment, in accordance with this 

18 subsection. A defendant participant has a right to 

19 obtain a rehearing of the Administrator’s determina20 tion under this subsection under the procedures pre21 scribed in subsection (i)(10). The Administrator may 

22 adjust a defendant participant’s payment obligations 

23 under this subsection, either by forgiving the rel24 evant portion of the otherwise applicable payment 

25 obligation or by providing relevant rebates from the 


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1 defendant hardship and inequity adjustment account 

2 created under subsection (j) after payment of the 

3 otherwise applicable payment obligation, at the dis4 cretion of the Administrator. 

5 (2) FINANCIAL HARDSHIP ADJUSTMENTS.— 

6 (A) IN GENERAL.—Any defendant partici7 pant in any tier may apply for an adjustment 

8 under this paragraph at any time during the 

9 period in which a payment obligation to the 

10 Fund remains outstanding and may qualify for 

11 such an adjustment by demonstrating to the 

12 satisfaction of the Administrator that the 

13 amount of its payment obligation would materi14 ally and adversely affect the defendant partici15 pant’s ability to continue its business and to 

16 pay or satisfy its debts generally as and when 

17 they come due. Such an adjustment shall be in 

18 an amount that in the judgment of the Admin19 istrator is reasonably necessary to prevent such 

20 material and adverse effect on the defendant 

21 participant’s ability to continue its business and 

22 to pay or satisfy its debts generally as and 

23 when they come due. 

24 (B) FACTORS TO CONSIDER.—In deter25 mining whether to make an adjustment under 


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1 subparagraph (A) and the amount thereof, the 

2 Administrator shall consider— 

3 (i) the financial situation of the de4 fendant participant and its affiliated group 

5 as shown in historical audited financial 

6 statements, including income statement, 

7 balance sheet, and statement of cash flow, 

8 for the 3 fiscal years ending immediately 

9 before the application and projected finan10 cial statements for the 3 fiscal years fol11 lowing the application; 

12 (ii) an analysis of capital spending 

13 and fixed charge coverage on a historical 

14 basis for the 3 fiscal years immediately 

15 preceding a defendant participant’s appli16 cation and for the 3 fiscal years following 

17 the application; 

18 (iii) any payments or transfers of 

19 property made, or obligations incurred, 

20 within the preceding 6 years by the defend21 ant participant to or for the benefit of any 

22 insider as defined under section 101(31) of 

23 title 11, United States Code, or any affil24 iate as defined under section 101(2) of 

25 title 11, United States Code; 


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1 (iv) any prior extraordinary trans2 actions within the preceding 6 years involv3 ing the defendant participant, including 

4 payments of extraordinary salaries, bo5 nuses, or dividends; 

6 (v) the defendant participant’s ability 

7 to satisfy its payment obligation to the 

8 Fund by borrowing or financing with eq9 uity capital, or through issuance of securi10 ties of the defendant participant or its af11 filiated group to the Fund; 

12 (vi) the defendant participant’s ability 

13 to delay discretionary capital spending; 

14 and 

15 (vii) any other factor that the Admin16 istrator considers relevant. 

17 (C) TERM.—A financial hardship adjust18 ment under this paragraph shall have a term of 

19 5 years unless the Administrator determines at 

20 the time the adjustment is made that a shorter 

21 or longer period is appropriate in the light of 

22 the financial condition of the defendant partici23 pant and its affiliated group and other relevant 

24 factors, provided that a financial hardship ad25 justment under this paragraph shall terminate 


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1 automatically in the event that the defendant 

2 participant holding the adjustment files a peti3 tion under title 11, United States Code. 

4 (D) RENEWAL.—A defendant participant 

5 may renew a hardship adjustment upon expira6 tion by demonstrating that it remains justified. 

7 Such renewed hardship adjustments shall have 

8 a term of 5 years unless the Administrator de9 termines at the time of the renewed adjustment 

10 that a shorter or longer period is appropriate in 

11 light of the financial condition of the defendant 

12 participant and its affiliated group and other 

13 relevant factors. A renewed financial hardship 

14 adjustment under this paragraph shall termi15 nate automatically in the event that the defend16 ant participant holding the adjustment files a 

17 petition under title 11, United States Code. 

18 (E) PROCEDURE.— 

19 (i) IN GENERAL.—The Administrator 

20 shall prescribe the information to be sub21 mitted in applications for adjustments 

22 under this paragraph. 

23 (ii) FINANCIAL INFORMATION.—All 

24 audited financial information required 

25 under this paragraph shall be as reported 


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1 by the defendant participant in its annual 

2 report filed with the Securities and Ex3 change Commission in accordance with the 

4 Securities Exchange Act of 1934 (15 

5 U.S.C. 78a et seq.). Any defendant partici6 pant that does not file reports with the Se7 curities and Exchange Commission or 

8 which does not have audited financial 

9 statements shall submit financial state10 ments prepared in accordance with gen11 erally accepted accounting principles. The 

12 chairman, chief executive officer, and chief 

13 financial officer of the defendant partici14 pant shall certify under penalty of law the 

15 completeness and accuracy of the financial 

16 statements provided under this subpara17 graph. 

18 (iii) CERTIFICATION.—The chairman, 

19 chief executive officer, and chief financial 

20 officer of the defendant participant shall 

21 certify that any projected information and 

22 analyses submitted to the Administrator 

23 were made in good faith and are reason24 able and attainable. 

25 (3) INEQUITY ADJUSTMENTS.— 


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1 (A) IN GENERAL.—A defendant partici2 pant— 

3 (i) may qualify for an adjustment 

4 based on inequity by demonstrating that 

5 the amount of its payment obligation 

6 under the statutory allocation is exception7 ally inequitable— 

8 (I) when measured against the 

9 amount of the likely cost to the de10 fendant participant net of insurance 

11 of its future liability in the tort sys12 tem in the absence of the Fund; 

13 (II) when measured against the 

14 likely cost of past and potential future 

15 claims in the absence of this Act; 

16 (III) when compared to the me17 dian payment rate for all defendant 

18 participants in the same tier; or 

19 (IV) when measured against the 

20 percentage of the prior asbestos ex21 penditures of the defendant that were 

22 incurred with respect to claims that 

23 neither resulted in an adverse judg24 ment against the defendant, nor were 

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1 quired a payment to a plaintiff by or 

2 on behalf of that defendant; 

3 (ii) shall qualify for a 2-tier main tier 

4 and a 2-tier subtier adjustment reducing 

5 the defendant participant’s payment obli6 gation based on inequity by demonstrating 

7 that not less than 95 percent of such per8 son’s prior asbestos expenditures arose 

9 from claims related to the manufacture 

10 and sale of railroad locomotives and re11 lated products, so long as such person’s 

12 manufacture and sale of railroad loco13 motives and related products is temporally 

14 and causally remote, and for purposes of 

15 this clause, a person’s manufacture and 

16 sale of railroad locomotives and related 

17 products shall be deemed to be temporally 

18 and causally remote if the asbestos claims 

19 historically and generally filed against such 

20 person relate to the manufacture and sale 

21 of railroad locomotives and related prod22 ucts by an entity dissolved more than 25 

23 years before the date of enactment of this 

24 Act; 


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1 (iii) shall be granted a 2-tier adjust2 ment reducing the defendant participant’s 

3 payment obligation based on inequity by 

4 demonstrating that not less than 95 per5 cent of such participant’s prior asbestos 

6 expenditures arose from asbestos claims 

7 based on successor liability arising from a 

8 merger to which the participant or its 

9 predecessor was a party that occurred at 

10 least 30 years before the date of enactment 

11 of this Act, and that such prior asbestos 

12 expenditures exceed the inflation-adjusted 

13 value of the assets of the company from 

14 which such liability was derived in such 

15 merger, and upon such demonstration the 

16 Administrator shall grant such adjustment 

17 for the life of the Fund and amounts paid 

18 by such defendant participant prior to such 

19 adjustment in excess of its adjusted pay20 ment obligation under this clause shall be 

21 credited against next succeeding required 

22 payment obligations; and 

23 (iv) may, subject to the discretion of 

24 the Administrator, be exempt from any 

25 payment obligation if such defendant parVerDate Aug 31 2005 00:11 Jun 06, 2006 Jkt 049200 PO 00000 Frm 00183 Fmt 6652 Sfmt 6201 E:\BILLS\S3274.PCS S3274

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1 ticipant establishes with the Administrator 

2 that— 

3 (I) such participant has satisfied 

4 all past claims; and 

5 (II) there is no reasonable likeli6 hood in the absence of this Act of any 

7 future claims with costs for which the 

8 defendant participant might be re9 sponsible. 

10 (B) GUIDELINES.— 

11 (i) IN GENERAL.—In determining 

12 which defendant participants may receive 

13 inequity adjustments, the Administrator 

14 shall give preference in the following order: 

15 (I) Defendant participants that 

16 have significant insurance coverage 

17 applicable to asbestos claims, such 

18 that on the date of enactment of this 

19 Act, 80 percent or more of their avail20 able primary insurance limits for as21 bestos claims remains available. 

22 (II) Defendant participants for 

23 which, under the guidance in section 

24 404(a)(2)(E), 75 percent of the prior 

25 asbestos expenditures of such defendVerDate Aug 31 2005 00:11 Jun 06, 2006 Jkt 049200 PO 00000 Frm 00184 Fmt 6652 Sfmt 6201 E:\BILLS\S3274.PCS S3274

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1 ant participants were caused by or 

2 arose from premise liability claims. 

3 (III) Defendant participants that 

4 can demonstrate that their prior as5 bestos expenditures are inflated due to 

6 an unusually large, anomalous verdict 

7 and that such verdict has caused such 

8 defendants to be in a higher tier. 

9 (IV) Any other factor determined 

10 reasonable by the Administrator to 

11 have caused a serious inequity. 

12 (ii) CONSIDERATION.—In determining 

13 whether a defendant participant has sig14 nificant insurance coverage applicable to 

15 asbestos claims such that on the date of 

16 enactment of this Act, 80 percent or more 

17 of their available primary insurance limits 

18 for asbestos claims remains available, the 

19 Administrator shall inquire and consider— 

20 (I) the defendant participant’s 

21 expected future liability in the tort 

22 system and the adequacy of insurance 

23 available measured against future li24 ability; and 


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1 (II) whether the insurance cov2 erage is uncontested, or based on a 

3 final judgment or settlement. 

4 (C) PAYMENT RATE.—For purposes of 

5 subparagraph (A), the payment rate of a de6 fendant participant is the payment amount of 

7 the defendant participant as a percentage of 

8 such defendant participant’s gross revenues for 

9 the year ending December 31, 2002. 

10 (D) TERM.—Subject to the annual avail11 ability of funds in the defendant inequity ad12 justment account established under subsection 

13 (j), an inequity adjustment under this sub14 section shall have a term of 3 years. 

15 (E) RENEWAL.—A defendant participant 

16 may renew an inequity adjustment every 3 

17 years by demonstrating that the adjustment re18 mains justified. 

19 (F) REINSTATEMENT.— 

20 (i) IN GENERAL.—Following the ter21 mination of an inequity adjustment under 

22 subparagraph (A), and during the funding 

23 period prescribed under subsection (a), the 

24 Administrator shall annually determine 

25 whether there has been a material change 


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1 in conditions which would support a find2 ing that the amount of the defendant par3 ticipant’s payment under the statutory al4 location was not inequitable. Based on this 

5 determination, the Administrator may, 

6 consistent with the policies and legislative 

7 intent underlying this Act, reinstate any or 

8 all of the payment obligations of the de9 fendant participant as if the inequity ad10 justment had not been granted for that 3- 

11 year period. 

12 (ii) TERMS AND CONDITIONS.—In the 

13 event of a reinstatement under clause (i), 

14 the Administrator may require the defend15 ant participant to pay any part or all of 

16 amounts not paid due to the inequity ad17 justment on such terms and conditions as 

18 established by the Administrator. 

19 (4) TIER II ADJUSTMENTS FOR WELL-INSURED

20 DEFENDANT PARTICIPANTS.— 

21 (A) DEFINITIONS.—In this paragraph— 

22 (i) the term ‘‘adjusted cash flow from 

23 operating activities’’ means audited cash 

24 flows from operating activities as set forth 

25 in the Financial Accounting Standards 


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1 Board Statement of Financial Accounting 

2 Standards No. 95 in effect on the date of 

3 enactment of this Act, adjusted for 

4 amounts— 

5 (I) increased by cash paid for in6 terest and taxes to the extent that 

7 such amounts are included in cash 

8 flows from operating activities; 

9 (II) increased by payments made 

10 for asbestos indemnity, defense costs, 

11 and any payments required under this 

12 Act, to the extent that such amounts 

13 are included in cash flows from oper14 ating activities; 

15 (III) increased by nonrecurring 

16 and unusual cash charges, including 

17 restructuring charges and other non18 operating costs, to the extent that 

19 such amounts are included in cash 

20 flows from operating activities; 

21 (IV) decreased by cash distribu22 tions to minority interests to the ex23 tent that such amounts are included 

24 in cash flows from investing activities 


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1 and cash flows from financing activi2 ties; 

3 (V) increased by cash proceeds 

4 on sales of assets net of related se5 cured debt, affiliates, subsidiaries, and 

6 investments to the extent that such 

7 amounts are included in cash flows 

8 from investing and cash flows from fi9 nancing activities; 

10 (VI) increased by cash distribu11 tions from nonconsolidated affiliates 

12 and investments to the extent that 

13 such amounts are included in cash 

14 flows from investing activities and 

15 cash flows from financing activities; 

16 (VII) increased by net cash flow 

17 used by, and decreased by net cash 

18 flow gained from, working capital 

19 items to the extent such amounts are 

20 not already adjusted under this sub21 paragraph and are included in cash 

22 flows from operating activities; 

23 (VIII) increased by net cash flow 

24 used by, and decreased by net cash 

25 flow gained from, other nonworking 


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1 capital assets and liabilities, to the ex2 tent such amounts are not already ad3 justed under this subparagraph and 

4 are included in cash flows from oper5 ating activities; 

6 (IX) decreased by reimburse7 ments or cash proceeds received from 

8 asbestos insurance policies for related 

9 expenses, to the extent that such 

10 amounts are included in cash flows 

11 from operating activities; and 

12 (X) decreased by other nonop13 erating cash income; and 

14 (ii) the term ‘‘working capital’’ means 

15 current assets (excluding cash and short16 term investments) less current liabilities 

17 (excluding short-term debt). 

18 (B) ELECTION OF ALTERNATIVE ADJUST19 MENT.—Except for defendant participants that 

20 consent to be assigned to Tier II under section 

21 204(i)(7)(A), a defendant participant assigned 

22 to subtier 3, 4, or 5 of Tier II may elect the 

23 adjustment under this paragraph, which shall 

24 apply instead of an adjustment under para25 graph (3). 


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1 (C) ADJUSTMENT.—Subject to subpara2 graphs (D) and (E), the annual payment obli3 gation, taking into consideration the limitation 

4 under subsection (a)(2), of any defendant par5 ticipant that elects the adjustment under this 

6 paragraph shall be adjusted so as not to exceed 

7 the greater of $500,000 or 5 percent of that de8 fendant participant’s adjusted cash flow from 

9 operating activities for the most recent fiscal 

10 year ending on or before December 31, 2002, or 

11 for the most recent fiscal year. 

12 (D) LIMITATION.—The aggregate total of 

13 adjustments under this paragraph in any year 

14 may not exceed $100,000,000. If the aggregate 

15 amount of adjustments authorized under this 

16 paragraph exceeds $100,000,000, the adjust17 ment to which each defendant participant elect18 ing such an adjustment shall be reduced pro 

19 rata until the aggregate of all adjustments 

20 equals $100,000,000. 

21 (E) SURCHARGES.—Defendant partici22 pants receiving an adjustment under this para23 graph shall also be subject to the guaranteed 

24 payment surcharge under subsection (m) and 

25 the bankruptcy trust surcharge under section 


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1 222(c). Such surcharges shall be based on the 

2 full amount of any adjustment to which the de3 fendant participant would be entitled under 

4 subparagraph (C) without regard to the limita5 tion under subparagraph (D). 

6 (5) LIMITATION ON ADJUSTMENTS.—The ag7 gregate total of inequity adjustments under para8 graph (3) in effect in any given year shall not exceed 

9 $200,000,000, except to the extent that additional 

10 monies are available for such adjustments as a re11 sult of carryover of prior years’ funds under sub12 section (j)(3) or as a result of monies being made 

13 available in that year under subsection (k)(1)(A). 

14 (6) RULEMAKING AND ADVISORY PANELS.— 

15 (A) APPOINTMENT.—The Administrator 

16 may appoint a Financial Hardship Adjustment 

17 Panel and an Inequity Adjustment Panel to ad18 vise the Administrator in carrying out this sub19 section. 

20 (B) MEMBERSHIP.—The membership of 

21 the panels appointed under subparagraph (A) 

22 may overlap. 

23 (C) COORDINATION.—The panels ap24 pointed under subparagraph (A) shall coordi25 nate their deliberations and advice. 


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1 (D) RULES.—The Administrator may 

2 adopt rules consistent with this Act to make the 

3 determination of hardship and inequity adjust4 ments more efficient and predictable. 

5 (e) LIMITATION ON LIABILITY.—The liability of each 

6 defendant participant to pay to the Fund shall be limited 

7 to the payment obligations under this Act, and, except as 

8 provided in subsection (f) and section 203(b)(2)(D), no 

9 defendant participant shall have any liability for the pay10 ment obligations of any other defendant participant. 

11 (f) CONSOLIDATION OF PAYMENTS.— 

12 (1) IN GENERAL.—For purposes of determining 

13 the payment levels of defendant participants, any af14 filiated group including 1 or more defendant partici15 pants may irrevocably elect, as part of the submis16 sions to be made under paragraphs (1) and (3) of 

17 subsection (i), to report on a consolidated basis all 

18 of the information necessary to determine the pay19 ment level under this subtitle and pay to the Fund 

20 on a consolidated basis. 

21 (2) ELECTION.—If an affiliated group elects 

22 consolidation as provided in this subsection— 

23 (A) for purposes of this Act other than 

24 this subsection, the affiliated group shall be 

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1 ing with respect to the assessment of a single 

2 annual payment under this subtitle for the en3 tire affiliated group; 

4 (B) the ultimate parent of the affiliated 

5 group shall prepare and submit each submission 

6 to be made under subsection (i) on behalf of the 

7 entire affiliated group and shall be solely liable, 

8 as between the Administrator and the affiliated 

9 group only, for the payment of the annual 

10 amount due from the affiliated group under this 

11 subtitle, except that, if the ultimate parent does 

12 not pay when due any payment obligation for 

13 the affiliated group, the Administrator shall 

14 have the right to seek payment of all or any 

15 portion of the entire amount due (as well as 

16 any other amount for which the affiliated group 

17 may be liable under sections 223 and 224) from 

18 any member of the affiliated group; 

19 (C) all members of the affiliated group 

20 shall be identified in the submission under sub21 section (i) and shall certify compliance with this 

22 subsection and the Administrator’s regulations 

23 implementing this subsection; and 

24 (D) the obligations under this subtitle shall 

25 not change even if, after the date of enactment 


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1 of this Act, the beneficial ownership interest be2 tween any members of the affiliated group shall 

3 change. 

4 (3) CAUSE OF ACTION.—Notwithstanding sec5 tion 221(e), this Act shall not preclude actions 

6 among persons within an affiliated group with re7 spect to the payment obligations under this Act. 

8 (g) DETERMINATION OF PRIOR ASBESTOS EXPENDI9 TURES.— 

10 (1) IN GENERAL.—For purposes of determining 

11 a defendant participant’s prior asbestos expendi12 tures, the Administrator shall prescribe such rules 

13 as may be necessary or appropriate to assure that 

14 payments by indemnitors before December 31, 2002, 

15 shall be counted as part of the indemnitor’s prior as16 bestos expenditures, rather than the indemnitee’s 

17 prior asbestos expenditures, in accordance with this 

18 subsection. 

19 (2) INDEMNIFIABLE COSTS.—If an indemnitor 

20 has paid or reimbursed to an indemnitee any 

21 indemnifiable cost or otherwise made a payment on 

22 behalf of or for the benefit of an indemnitee to a 

23 third party for an indemnifiable cost before Decem24 ber 31, 2002, the amount of such indemnifiable cost 


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1 shall be solely for the account of the indemnitor for 

2 purposes under this Act. 

3 (3) INSURANCE PAYMENTS.—When computing 

4 the prior asbestos expenditures with respect to an 

5 asbestos claim, any amount paid or reimbursed by 

6 insurance shall be solely for the account of the 

7 indemnitor, even if the indemnitor would have no di8 rect right to the benefit of the insurance, if— 

9 (A) such insurance has been paid or reim10 bursed to the indemnitor or the indemnitee, or 

11 paid on behalf of or for the benefit of the 

12 indemnitee; and 

13 (B) the indemnitor has either, with respect 

14 to such asbestos claim or any similar asbestos 

15 claim, paid or reimbursed to its indemnitee any 

16 indemnifiable cost or paid to any third party on 

17 behalf of or for the benefit of the indemnitee 

18 any indemnifiable cost. 

19 (4) TREATMENT OF CERTAIN EXPENDI20 TURES.—Notwithstanding any other provision of 

21 this Act, where— 

22 (A) an indemnitor entered into a stock 

23 purchase agreement in 1988 that involved the 

24 sale of the stock of businesses that produced 

25 friction and other products; and 


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1 (B) the stock purchase agreement provided 

2 that the indemnitor indemnified the indemnitee 

3 and its affiliates for losses arising from various 

4 matters, including asbestos claims— 

5 (i) asserted before the date of the 

6 agreement; and 

7 (ii) filed after the date of the agree8 ment and prior to the 10-year anniversary 

9 of the stock sale, 

10 then the prior asbestos expenditures arising from the 

11 asbestos claims described in clauses (i) and (ii) shall 

12 not be for the account of either the indemnitor or 

13 indemnitee. 

14 (h) MINIMUM ANNUAL PAYMENTS.— 

15 (1) IN GENERAL.—The aggregate annual pay16 ments of defendant participants to the Fund shall be 

17 at least $3,000,000,000 for each calendar year in 

18 the first 30 years of the Fund, or until such shorter 

19 time as the condition set forth in subsection (a)(2) 

20 is attained. 

21 (2) GUARANTEED PAYMENT ACCOUNT.—To the 

22 extent payments in accordance with sections 202 

23 and 203 (as modified by subsections (b), (d), (f), 

24 (g), and (m) of this section) fail in any year to raise 

25 at least $3,000,000,000, after applicable reductions 


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1 or adjustments have been taken according to sub2 sections (d) and (m), the balance needed to meet 

3 this required minimum aggregate annual payment 

4 shall be obtained from the defendant guaranteed 

5 payment account established under subsection (k). 

6 (3) GUARANTEED PAYMENT SURCHARGE.—To 

7 the extent the procedure set forth in paragraph (2) 

8 is insufficient to satisfy the required minimum ag9 gregate annual payment, after applicable reductions 

10 or adjustments have been taken according to sub11 sections (d) and (m), the Administrator shall unless 

12 the Administrator implements a funding holiday 

13 under section 205(b), assess a guaranteed payment 

14 surcharge under subsection (l). 

15 (i) PROCEDURES FOR MAKING PAYMENTS.— 

16 (1) INITIAL YEAR: TIERS II–VI.— 

17 (A) IN GENERAL.—Not later than 90 days 

18 after enactment of this Act, each defendant 

19 participant that is included in Tiers II, III, IV, 

20 V, or VI shall file with the Administrator— 

21 (i) a statement of whether the defend22 ant participant irrevocably elects to report 

23 on a consolidated basis under subsection 

24 (f); 


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1 (ii) a good-faith estimate of its prior 

2 asbestos expenditures; 

3 (iii) a statement of its 2002 revenues, 

4 determined in accordance with section 

5 203(a)(2); 

6 (iv) payment in the amount specified 

7 in section 203 for the lowest subtier of the 

8 tier within which the defendant participant 

9 falls, except that if the defendant partici10 pant, or the affiliated group including the 

11 defendant participant, had 2002 revenues 

12 exceeding $3,000,000,000, it or its affili13 ated group shall pay the amount specified 

14 for Subtier 3 of Tiers II, III, or IV or 

15 Subtier 2 of Tiers V or VI, depending on 

16 the applicable Tier; and 

17 (v) a signature page personally 

18 verifying the truth of the statements and 

19 estimates described under this subpara20 graph, as required under section 404 of 

21 the Sarbanes-Oxley Act of 2002 (15 

22 U.S.C. 7201 et seq.). 

23 (B) RELIEF.— 

24 (i) IN GENERAL.—The Administrator 

25 shall establish procedures to grant a deVerDate Aug 31 2005 00:11 Jun 06, 2006 Jkt 049200 PO 00000 Frm 00199 Fmt 6652 Sfmt 6201 E:\BILLS\S3274.PCS S3274

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1 fendant participant relief from its initial 

2 payment obligation if the participant shows 

3 that— 

4 (I) the participant is likely to 

5 qualify for a financial hardship ad6 justment; and 

7 (II) failure to provide interim re8 lief would cause severe irreparable 

9 harm. 

10 (ii) JUDICIAL RELIEF.—The Adminis11 trator’s refusal to grant relief under clause 

12 (i) is subject to immediate judicial review 

13 under section 303. 

14 (2) INITIAL YEAR: TIER I.—Not later than 60 

15 days after enactment of this Act, each debtor shall 

16 file with the Administrator— 

17 (A) a statement identifying the bankruptcy 

18 case(s) associated with the debtor; 

19 (B) a statement whether its prior asbestos 

20 expenditures exceed $1,000,000; 

21 (C) a statement whether it has material 

22 continuing business operations and, if not, 

23 whether it holds cash or other assets that have 

24 been allocated or earmarked for asbestos settle25 ments; 


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1 (D) in the case of debtors falling within 

2 Subtier 1 of Tier I— 

3 (i) a statement of the debtor’s 2002 

4 revenues, determined in accordance with 

5 section 203(a)(2); and 

6 (ii) a payment under section 

7 203(b)(2)(B); 

8 (E) in the case of debtors falling within 

9 Subtier 2 of Tier I, an assignment of its assets 

10 under section 203(b)(3)(B); 

11 (F) in the case of debtors falling within 

12 Subtier 3 of Tier I, a payment under section 

13 203(b)(4)(B), and a statement of how such 

14 payment was calculated; and 

15 (G) a signature page personally verifying 

16 the truth of the statements and estimates de17 scribed under this paragraph, as required under 

18 section 404 of the Sarbanes-Oxley Act of 2002 

19 (15 U.S.C. 7201 et seq.). 

20 (3) INITIAL YEAR: TIER VII.—Not later than 90 

21 days after enactment of this Act, each defendant 

22 participant in Tier VII shall file with the Adminis23 trator— 


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1 (A) a good faith estimate of all payments 

2 of the type described in section 203(h)(1) (as 

3 modified by section 203(h)(6)); 

4 (B) a statement of revenues calculated in 

5 accordance with sections 203(a)(2) and 203(h); 

6 and 

7 (C) payment in the amount specified in 

8 section 203(h). 

9 (4) NOTICE TO PARTICIPANTS.—Not later than 

10 240 days after enactment of this Act, the Adminis11 trator shall— 

12 (A) directly notify all reasonably identifi13 able defendant participants of the requirement 

14 to submit information necessary to calculate the 

15 amount of any required payment to the Fund; 

16 and 

17 (B) publish in the Federal Register a no18 tice— 

19 (i) setting forth the criteria in this 

20 Act, and as prescribed by the Adminis21 trator in accordance with this Act, for pay22 ing under this subtitle as a defendant par23 ticipant and requiring any person who may 

24 be a defendant participant to submit such 

25 information; and 


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1 (ii) that includes a list of all defend2 ant participants notified by the Adminis3 trator under subparagraph (A), and pro4 vides for 30 days for the submission by the 

5 public of comments or information regard6 ing the completeness and accuracy of the 

7 list of identified defendant participants. 

8 (5) RESPONSE REQUIRED.— 

9 (A) IN GENERAL.—Any person who re10 ceives notice under paragraph (4)(A), and any 

11 other person meeting the criteria specified in 

12 the notice published under paragraph (4)(B), 

13 shall provide the Administrator with an address 

14 to send any notice from the Administrator in 

15 accordance with this Act and all the informa16 tion required by the Administrator in accord17 ance with this subsection no later than the ear18 lier of— 

19 (i) 30 days after the receipt of direct 

20 notice; or 

21 (ii) 30 days after the publication of 

22 notice in the Federal Register. 

23 (B) CERTIFICATION.—The response sub24 mitted under subparagraph (A) shall be signed 

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1 ner, proprietor, or individual of similar author2 ity, who shall certify under penalty of law the 

3 completeness and accuracy of the information 

4 submitted. 

5 (C) CONSENT TO AUDIT AUTHORITY.—The 

6 response submitted under subparagraph (A) 

7 shall include, on behalf of the defendant partici8 pant or affiliated group, a consent to the Ad9 ministrator’s audit authority under section 

10 221(d). 

11 (6) NOTICE OF INITIAL DETERMINATION.— 

12 (A) IN GENERAL.— 

13 (i) NOTICE TO INDIVIDUAL.—Not 

14 later than 60 days after receiving a re15 sponse under paragraph (5), the Adminis16 trator shall send the person a notice of ini17 tial determination identifying the tier and 

18 subtier, if any, into which the person falls 

19 and the annual payment obligation, if any, 

20 to the Fund, which determination shall be 

21 based on the information received from the 

22 person under this subsection and any other 

23 pertinent information available to the Ad24 ministrator and identified to the defendant 

25 participant. 


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1 (ii) PUBLIC NOTICE.—Not later than 

2 7 days after sending the notification of ini3 tial determination to defendant partici4 pants, the Administrator shall publish in 

5 the Federal Register a notice listing the 

6 defendant participants that have been sent 

7 such notification, and the initial deter8 mination identifying the tier and subtier 

9 assignment and annual payment obligation 

10 of each identified participant. 

11 (B) NO RESPONSE; INCOMPLETE RE12 SPONSE.—If no response in accordance with 

13 paragraph (5) is received from a defendant par14 ticipant, or if the response is incomplete, the 

15 initial determination shall be based on the best 

16 information available to the Administrator. 

17 (C) PAYMENTS.—Within 30 days of receiv18 ing a notice of initial determination requiring 

19 payment, the defendant participant shall pay 

20 the Administrator the amount required by the 

21 notice, after deducting any previous payment 

22 made by the participant under this subsection. 

23 If the amount that the defendant participant is 

24 required to pay is less than any previous pay25 ment made by the participant under this subVerDate Aug 31 2005 00:11 Jun 06, 2006 Jkt 049200 PO 00000 Frm 00205 Fmt 6652 Sfmt 6201 E:\BILLS\S3274.PCS S3274

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1 section, the Administrator shall credit any ex2 cess payment against the future payment obli3 gations of that defendant participant. The 

4 pendency of a petition for rehearing under 

5 paragraph (10) shall not stay the obligation of 

6 the participant to make the payment specified 

7 in the Administrator’s notice. 

8 (7) EXEMPTIONS FOR INFORMATION RE9 QUIRED.— 

10 (A) PRIOR ASBESTOS EXPENDITURES.—In 

11 lieu of submitting information related to prior 

12 asbestos expenditures as may be required for 

13 purposes of this subtitle, a nondebtor defendant 

14 participant may consent to be assigned to Tier 

15 II. 

16 (B) REVENUES.—In lieu of submitting in17 formation related to revenues as may be re18 quired for purposes of this subtitle, a nondebtor 

19 defendant participant may consent to be as20 signed to Subtier 1 of the defendant partici21 pant’s applicable tier. 

22 (8) NEW INFORMATION.— 

23 (A) EXISTING PARTICIPANT.—The Admin24 istrator shall adopt procedures for requiring adVerDate Aug 31 2005 00:11 Jun 06, 2006 Jkt 049200 PO 00000 Frm 00206 Fmt 6652 Sfmt 6201 E:\BILLS\S3274.PCS S3274

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1 ditional payment, or refunding amounts already 

2 paid, based on new information received. 

3 (B) ADDITIONAL PARTICIPANT.—If the 

4 Administrator, at any time, receives information 

5 that an additional person may qualify as a de6 fendant participant, the Administrator shall re7 quire such person to submit information nec8 essary to determine whether that person is re9 quired to make payments, and in what amount, 

10 under this subtitle and shall make any deter11 mination or take any other act consistent with 

12 this Act based on such information or any other 

13 information available to the Administrator with 

14 respect to such person. 

15 (9) SUBPOENAS.—The Administrator may re16 quest the Attorney General to subpoena persons to 

17 compel testimony, records, and other information 

18 relevant to its responsibilities under this section. The 

19 Attorney General may enforce such subpoena in ap20 propriate proceedings in the United States district 

21 court for the district in which the person to whom 

22 the subpoena was addressed resides, was served, or 

23 transacts business. 

24 (10) REHEARING.—A defendant participant has 

25 a right to obtain rehearing of the Administrator’s 


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1 determination under this subsection of the applicable 

2 tier or subtier of the Administrator’s determination 

3 under subsection (d) of a financial hardship or in4 equity adjustment, and of the Administrator’s deter5 mination under subsection (m) of a distributor’s ad6 justment, if the request for rehearing is filed within 

7 30 days after the defendant participant’s receipt of 

8 notice from the Administrator of the determination. 

9 A defendant participant may not file an action under 

10 section 303 unless the defendant participant re11 quests a rehearing under this paragraph. The Ad12 ministrator shall publish a notice in the Federal 

13 Register of any change in a defendant participant’s 

14 tier or subtier assignment or payment obligation as 

15 a result of a rehearing. 

16 (j) DEFENDANT INEQUITY ADJUSTMENT AC17 COUNT.— 

18 (1) IN GENERAL.—To the extent the total pay19 ments by defendant participants in any given year 

20 exceed the minimum aggregate annual payments re21 quired under subsection (h), excess monies up to a 

22 maximum of $200,000,000 in any such year shall be 

23 placed in a defendant inequity adjustment account 

24 established within the Fund by the Administrator. 


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1 (2) USE OF ACCOUNT MONIES.—Monies from 

2 the defendant inequity adjustment account shall be 

3 preserved and administered like the remainder of the 

4 Fund, but shall be reserved and may be used only— 

5 (A) to make up for any relief granted to a 

6 defendant participant for demonstrated inequity 

7 under subsection (d) or to reimburse any de8 fendant participant granted such relief after its 

9 payment of the amount otherwise due; and 

10 (B) if the condition set forth in subsection 

11 (a)(2) is met, for any purpose that the Fund 

12 may serve under this Act. 

13 (3) CARRYOVER OF UNUSED FUNDS.—To the 

14 extent the Administrator does not, in any given year, 

15 use all of the funds allocated to the account under 

16 paragraph (1) for adjustments granted under sub17 section (d), remaining funds in the account shall be 

18 carried forward for use by the Administrator for ad19 justments in subsequent years. 

20 (k) DEFENDANT GUARANTEED PAYMENT AC21 COUNT.— 

22 (1) IN GENERAL.—Subject to subsections (h) 

23 and (j), if there are excess monies paid by defendant 

24 participants in any given year, including any bankVerDate Aug 31 2005 00:11 Jun 06, 2006 Jkt 049200 PO 00000 Frm 00209 Fmt 6652 Sfmt 6201 E:\BILLS\S3274.PCS S3274

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1 ruptcy trust credits that may be due under section 

2 222(d), such monies— 

3 (A) at the discretion of the Administrator, 

4 may be used to provide additional adjustments 

5 under subsection (d), up to a maximum aggre6 gate of $50,000,000 in such year; and 

7 (B) to the extent not used under subpara8 graph (A), shall be placed in a defendant guar9 anteed payment account established within the 

10 Fund by the Administrator. 

11 (2) USE OF ACCOUNT MONIES.—Monies from 

12 the defendant guaranteed payment account shall be 

13 preserved and administered like the remainder of the 

14 Fund, but shall be reserved and may be used only— 

15 (A) to ensure the minimum aggregate an16 nual payment required under subsection (h), 

17 after applicable reductions or adjustments have 

18 been taken according to subsections (d) and 

19 (m) is reached each year; and 

20 (B) if the condition set forth in subsection 

21 (a)(2) is met, for any purpose that the Fund 

22 may serve under this Act. 

23 (l) GUARANTEED PAYMENT SURCHARGE.— 

24 (1) IN GENERAL.—To the extent there are in25 sufficient monies in the defendant guaranteed payVerDate Aug 31 2005 00:11 Jun 06, 2006 Jkt 049200 PO 00000 Frm 00210 Fmt 6652 Sfmt 6201 E:\BILLS\S3274.PCS S3274

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1 ment account established in subsection (k) to attain 

2 the minimum aggregate annual payment required 

3 under subsection (h)in any given year, the Adminis4 trator shall, unless the Administrator implements a 

5 funding holiday under section 205(b), impose on 

6 each defendant participant a surcharge as necessary 

7 to raise the balance required to attain the minimum 

8 aggregate annual payment required under subsection 

9 (h) as provided in this subsection. Any such sur10 charge shall be imposed on a pro rata basis, in ac11 cordance with each defendant participant’s relative 

12 annual liability under sections 202 and 203 (as 

13 modified by subsections (b), (d), (f), (g), and (m) of 

14 this section). 

15 (2) LIMITATION.— 

16 (A) DEFINITION.—In this paragraph, the 

17 term ‘‘economically distressed industry’’ means 

18 an industry, defined by a primary 5-digit 

19 NAICS code, wherein 2 or more defendant par20 ticipants are in Subtier 1 of Tier II under sections 202 and 203, and at least 2 21 ⁄3 of such Tier 

22 II defendant participants suffered net operating 

23 losses in their United States manufacturing 

24 business in 2005. 


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1 (B) IN GENERAL.—In no case shall the 

2 Administrator— 

3 (i) impose a surcharge under this sub4 section on any defendant participant in5 cluded in Subtier 3 of Tier V or VI as de6 scribed under section 203; or 

7 (ii) notwithstanding paragraph (1), 

8 impose in any year a surcharge under this 

9 subsection on any defendant participant in 

10 an economically distressed industry in ex11 cess of 15 percent of the amount set forth 

12 for Subtier 1 of Tier II defendant partici13 pants under section 203(c)(2)(A). 

14 (C) REALLOCATION.—Any amount not im15 posed under subparagraph (B) shall be reallo16 cated on a pro rata basis, in accordance with 

17 each defendant participant’s (other than a de18 fendant participant described under subpara19 graph (B) relative annual liability under sec20 tions 202 and 203 (as modified by subsections 

21 (b), (d), (f), and (g) of this section). 

22 (3) CERTIFICATION.— 

23 (A) IN GENERAL.—Before imposing a 

24 guaranteed payment surcharge under this sub25 section, the Administrator shall certify that he 


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1 or she has used all reasonable efforts to collect 

2 mandatory payments for all defendant partici3 pants, including by using the authority in sub4 section (i)(9) of this section and section 223. 

5 (B) NOTICE AND COMMENT.—Before mak6 ing a final certification under subparagraph 

7 (C), the Administrator shall publish a notice in 

8 the Federal Register of a proposed certification 

9 and provide in such notice for a public comment 

10 period of 30 days. 

11 (C) FINAL CERTIFICATION.— 

12 (i) IN GENERAL.—The Administrator 

13 shall publish a notice of the final certifi14 cation in the Federal Register after consid15 eration of all comments submitted under 

16 subparagraph (B). 

17 (ii) WRITTEN NOTICE.—Not later 

18 than 30 days after publishing any final 

19 certification under clause (i), the Adminis20 trator shall provide each defendant partici21 pant with written notice of that defendant 

22 participant’s payment, including the 

23 amount of any surcharge. 

24 (m) ADJUSTMENTS FOR DISTRIBUTORS.— 


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1 (1) DEFINITION.—In this subsection, the term 

2 ‘‘distributor’’ means a person— 

3 (A) whose prior asbestos expenditures arise 

4 exclusively from the sale of products manufac5 tured by others; 

6 (B) who did not prior to December 31, 

7 2002, sell raw asbestos or a product containing 

8 more than 95 percent asbestos by weight; 

9 (C) whose prior asbestos expenditures did 

10 not arise out of— 

11 (i) the manufacture, installation, re12 pair, reconditioning, maintaining, serv13 icing, constructing, or remanufacturing of 

14 any product; 

15 (ii) the control of the design, speci16 fication, or manufacture of any product; or 

17 (iii) the sale or resale of any product 

18 under, as part of, or under the auspices of, 

19 its own brand, trademark, or service mark; 

20 and 

21 (D) who is not subject to assignment 

22 under section 202 to Tier I, II, III or VII. 

23 (2) TIER REASSIGNMENT FOR DISTRIBUTORS.— 

24 (A) IN GENERAL.—Notwithstanding sec25 tion 202, the Administrator shall assign a disVerDate Aug 31 2005 00:11 Jun 06, 2006 Jkt 049200 PO 00000 Frm 00214 Fmt 6652 Sfmt 6201 E:\BILLS\S3274.PCS S3274

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1 tributor to a Tier for purposes of this title 

2 under the procedures set forth in this para3 graph. 

4 (B) DESIGNATION.—After a final deter5 mination by the Administrator under section 

6 204(i), any person who is, or any affiliated 

7 group in which every member is, a distributor 

8 may apply to the Administrator for adjustment 

9 of its Tier assignment under this subsection. 

10 Such application shall be prepared in accord11 ance with such procedures as the Administrator 

12 shall promulgate by rule. Once the Adminis13 trator designates a person or affiliated group as 

14 a distributor under this subsection, such des15 ignation and the adjustment of tier assignment 

16 under this subsection are final. 

17 (C) PAYMENTS.—Any person or affiliated 

18 group that seeks adjustment of its Tier assign19 ment under this subsection shall pay all 

20 amounts required of it under this title until a 

21 final determination by the Administrator is 

22 made under this subsection. Such payments 

23 may not be stayed pending any appeal. The Ad24 ministrator shall grant any person or affiliated 

25 group a refund or credit of any payments made 


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1 if such adjustment results in a lower payment 

2 obligation. 

3 (D) ADJUSTMENT.—Subject to paragraph 

4 (3), any person or affiliated group that the Ad5 ministrator has designated as a distributor 

6 under this subsection shall be given an adjust7 ment of Tier assignment as follows: 

8 (i) A distributor that but for this sub9 section would be assigned to Tier IV shall 

10 be deemed assigned to Tier V. 

11 (ii) A distributor that but for this 

12 subsection would be assigned to Tier V 

13 shall be deemed assigned to Tier VI. 

14 (iii) A distributor that but for this 

15 subsection would be assigned to Tier VI 

16 shall be deemed assigned to no Tier and 

17 shall have no obligation to make any pay18 ment to the Fund under this Act. 

19 (E) EXCLUSIVE TO INEQUITY ADJUST20 MENT.—Any person or affiliated group des21 ignated by the Administrator as a distributor 

22 under this subsection shall not be eligible for an 

23 inequity adjustment under subsection 204(d). 

24 (3) LIMITATION ON ADJUSTMENTS.—The ag25 gregate total of distributor adjustments under this 


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1 subsection in effect in any given year shall not ex2 ceed $50,000,000. If the aggregate total of distribu3 tors adjustments under this subsection would other4 wise exceed $50,000,000, then each distributor’s ad5 justment shall be reduced pro rata until the aggre6 gate of all adjustments equals $50,000,000. 

7 (4) REHEARING.—A defendant participant has 

8 a right to obtain a rehearing of the Administrator’s 

9 determination on an adjustment under this sub10 section under the procedures prescribed in sub11 section (i)(10). 

12 SEC. 205. STEPDOWNS AND FUNDING HOLIDAYS. 

13 (a) STEPDOWNS.— 

14 (1) IN GENERAL.— 

15 (A) REDUCTION.—Subject to paragraph 

16 (2), the minimum aggregate annual funding ob17 ligation under section 204(h) shall be reduced 

18 by 10 percent of the initial minimum aggregate 

19 funding obligation at the end of the 10th, 15th, 

20 20th, and 25th years after the date of enact21 ment of this Act. Except as provided under sub22 paragraph (B), the reductions under this para23 graph shall be applied on an equal pro rata 

24 basis to the funding obligations of all defendant 

25 participants. 


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1 (B) CALCULATION.—The reductions under 

2 this subsection shall not apply to defendant 

3 participants in Tier I, Subtiers 2 and 3, and 

4 class action trusts. For defendant participants 

5 whose payment obligation has been limited 

6 under section 204(a)(2) or who have received a 

7 financial hardship adjustment under section 

8 204(d)(2), aggregate potential reductions under 

9 this subsection shall be calculated on the basis 

10 of the defendant participant’s tier and subtier 

11 without regard to such limitation or adjust12 ment. If the aggregate potential reduction 

13 under this subsection exceeds the reduction in 

14 the defendant participant’s payment obligation 

15 due to the limitation under section 204(a)(2) 

16 and the financial hardship adjustment under 

17 section 204(d)(2), then the defendant partici18 pant’s payment obligation shall be further re19 duced by the difference between the potential 

20 reduction provided under this subsection and 

21 the reductions that the defendant participant 

22 has already received due to the application of 

23 the limitation provided in section 204(a)(2) and 

24 the financial hardship adjustment provided 

25 under section 204(d)(2). If the reduction in the 


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1 defendant participant’s payment obligation due 

2 to the limitation provided in section 204(a)(2) 

3 and any financial hardship adjustment provided 

4 under section 204(d)(2) exceeds the amount of 

5 the reduction provided in this subsection, then 

6 the defendant participant’s payment obligation 

7 shall not be further reduced under this para8 graph. 

9 (2) LIMITATION.—The Administrator shall sus10 pend, cancel, reduce, or delay any reduction under 

11 paragraph (1) if at any time the Administrator 

12 finds, in accordance with subsection (c), that such 

13 action is necessary and appropriate to ensure that 

14 the assets of the Fund and expected future pay15 ments remain sufficient to satisfy the Fund’s antici16 pated obligations. 

17 (b) FUNDING HOLIDAYS.— 

18 (1) IN GENERAL.—If the Administrator deter19 mines, at any time after 10 years following the date 

20 of enactment of this Act, that the assets of the Fund 

21 at the time of such determination and expected fu22 ture payments, taking into consideration any reduc23 tions under subsection (a), are sufficient to satisfy 

24 the Fund’s anticipated obligations without the need 

25 for all, or any portion of, that year’s payment otherVerDate Aug 31 2005 00:11 Jun 06, 2006 Jkt 049200 PO 00000 Frm 00219 Fmt 6652 Sfmt 6201 E:\BILLS\S3274.PCS S3274

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1 wise required under this subtitle, the Administrator 

2 shall reduce or waive all or any part of the payments 

3 required from defendant participants for that year. 

4 (2) ANNUAL REVIEW.—The Administrator shall 

5 undertake the review required by this subsection and 

6 make the necessary determination under paragraph 

7 (1) every year. 

8 (3) LIMITATIONS ON FUNDING HOLIDAYS.— 

9 (A) IN GENERAL.—Except as provided 

10 under subparagraph (B), any reduction or waiv11 er of the defendant participants’ funding obliga12 tions shall— 

13 (i) be made only to the extent the Ad14 ministrator determines that the Fund will 

15 still be able to satisfy all of its anticipated 

16 obligations; and 

17 (ii) be applied on an equal pro rata 

18 basis to the funding obligations of all de19 fendant participants, except with respect to 

20 defendant participants in Subtiers 2 and 3 

21 of Tier I and class action trusts, for that 

22 year. 

23 (B) CALCULATION.—The reductions or 

24 waivers provided under this subsection shall not 

25 apply to defendant participants in Tier I, 


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1 Subtiers 2 and 3, and class action trusts. For 

2 defendant participants whose payment obliga3 tion has been limited under section 204(a)(2) or 

4 who have received a financial hardship adjust5 ment under section 204(d)(2), aggregate poten6 tial reductions under this subsection shall be 

7 calculated on the basis of the defendant partici8 pant’s tier and subtier without regard to such 

9 limitation or adjustment. If the aggregate po10 tential reductions or waivers under this sub11 section exceed the reduction in the defendant 

12 participant’s payment obligation due to the lim13 itation under section 204(a)(2) and the finan14 cial hardship adjustment under section 

15 204(d)(2), then the defendant participant’s pay16 ment obligation shall be further reduced by the 

17 difference between the potential reductions or 

18 waivers provided under this subsection and the 

19 reductions that the defendant participant has 

20 already received due to the application of the 

21 limitation provided in section 204(a)(2) and the 

22 financial hardship adjustment provided under 

23 section 204(d)(2). If the reduction in the de24 fendant participant’s payment obligation due to 

25 the limitation provided in section 204(a)(2) and 


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1 any of the financial hardship adjustment pro2 vided under section 204(d)(2) exceeds the 

3 amount of the reductions or waivers provided in 

4 this subsection, then the defendant participant’s 

5 payment obligation shall not be further reduced 

6 under this paragraph. 

7 (4) NEW INFORMATION.—If at any time the 

8 Administrator determines that a reduction or waiver 

9 under this section may cause the assets of the Fund 

10 and expected future payments to decrease to a level 

11 at which the Fund may not be able to satisfy all of 

12 its anticipated obligations, the Administrator shall 

13 revoke all or any part of such reduction or waiver 

14 to the extent necessary to ensure that the Fund’s 

15 obligations are met. Such revocations shall be ap16 plied on an equal pro rata basis to the funding obli17 gations of all defendant participants, except defend18 ant participants in Subtiers 2 and 3 of Tier I and 

19 class action trusts, for that year. 

20 (c) CERTIFICATION.— 

21 (1) IN GENERAL.—Before suspending, can22 celing, reducing, or delaying any reduction under 

23 subsection (a) or granting or revoking a reduction or 

24 waiver under subsection (b), the Administrator shall 


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1 certify that the requirements of this section are sat2 isfied. 

3 (2) NOTICE AND COMMENT.—Before making a 

4 final certification under this subsection, the Admin5 istrator shall publish a notice in the Federal Reg6 ister of a proposed certification and a statement of 

7 the basis therefor and provide in such notice for a 

8 public comment period of 30 days. 

9 (3) FINAL CERTIFICATION.— 

10 (A) IN GENERAL.—The Administrator 

11 shall publish a notice of the final certification in 

12 the Federal Register after consideration of all 

13 comments submitted under paragraph (2). 

14 (B) WRITTEN NOTICE.—Not later than 30 

15 days after publishing any final certification 

16 under subparagraph (A), the Administrator 

17 shall provide each defendant participant with 

18 written notice of that defendant’s funding obli19 gation for that year. 

20 SEC. 206. ACCOUNTING TREATMENT. 

21 Defendant participants payment obligations to the 

22 Fund shall be subject to discounting under the applicable 

23 accounting guidelines for generally accepted accounting 

24 purposes and statutory accounting purposes for each de25 fendant participant. This section shall in no way reduce 


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1 the amount of monetary payments to the Fund by defend2 ant participants as required under section 202(a)(2). 

3 Subtitle B—Asbestos Insurers 

4 Commission 

5 SEC. 210. DEFINITION. 

6 In this subtitle, the term ‘‘captive insurance com7 pany’’ means a company— 

8 (1) whose entire beneficial interest is owned on 

9 the date of enactment of this Act, directly or indi10 rectly, by a defendant participant or by the ultimate 

11 parent or the affiliated group of a defendant partici12 pant; 

13 (2) whose primary commercial business during 

14 the period from calendar years 1940 through 1986 

15 was to provide insurance to its ultimate parent or 

16 affiliated group, or any portion of the affiliated 

17 group or a combination thereof; and 

18 (3) that was incorporated or operating no later 

19 than December 31, 2003. 

20 SEC. 211. ESTABLISHMENT OF ASBESTOS INSURERS COM21 MISSION. 

22 (a) ESTABLISHMENT.—There is established the As23 bestos Insurers Commission (referred to in this subtitle 

24 as the ‘‘Commission’’) to carry out the duties described 

25 in section 212. 


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1 (b) MEMBERSHIP.— 

2 (1) APPOINTMENT.—The Commission shall be 

3 composed of 5 members who shall be appointed by 

4 the President, by and with the advice and consent 

5 of the Senate. 

6 (2) QUALIFICATIONS.— 

7 (A) EXPERTISE.—Members of the Com8 mission shall have sufficient expertise to fulfill 

9 their responsibilities under this subtitle. 

10 (B) CONFLICT OF INTEREST.— 

11 (i) IN GENERAL.—No member of the 

12 Commission appointed under paragraph 

13 (1) may be an employee or immediate fam14 ily member of an employee of an insurer 

15 participant. No member of the Commission 

16 shall be a shareholder of any insurer par17 ticipant. No member of the Commission 

18 shall be a former officer or director, or a 

19 former employee or former shareholder of 

20 any insurer participant who was such an 

21 employee, shareholder, officer, or director 

22 at any time during the 2-year period end23 ing on the date of the appointment, unless 

24 that is fully disclosed before consideration 


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1 in the Senate of the nomination for ap2 pointment to the Commission. 

3 (ii) DEFINITION.—In clause (i), the 

4 term ‘‘shareholder’’ shall not include a 

5 broadly based mutual fund that includes 

6 the stocks of insurer participants as a por7 tion of its overall holdings. 

8 (C) FEDERAL EMPLOYMENT.—A member 

9 of the Commission may not be an officer or em10 ployee of the Federal Government, except by 

11 reason of membership on the Commission. 

12 (3) PERIOD OF APPOINTMENT.—Members shall 

13 be appointed for the life of the Commission. 

14 (4) VACANCIES.—Any vacancy in the Commis15 sion shall be filled in the same manner as the origi16 nal appointment. 

17 (5) CHAIRMAN.—The President shall select a 

18 Chairman from among the members of the Commis19 sion. 

20 (c) MEETINGS.— 

21 (1) INITIAL MEETING.—Not later than 30 days 

22 after the date on which all members of the Commis23 sion have been appointed, the Commission shall hold 

24 its first meeting. 


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1 (2) SUBSEQUENT MEETINGS.—The Commission 

2 shall meet at the call of the Chairman, as necessary 

3 to accomplish the duties under section 212. 

4 (3) QUORUM.—No business may be conducted 

5 or hearings held without the participation of a ma6 jority of the members of the Commission. 

7 SEC. 212. DUTIES OF ASBESTOS INSURERS COMMISSION. 

8 (a) DETERMINATION OF INSURER PAYMENT OBLIGA9 TIONS.— 

10 (1) IN GENERAL.— 

11 (A) DEFINITIONS.—For the purposes of 

12 this Act, the terms ‘‘insurer’’ and ‘‘insurer par13 ticipant’’ shall, unless stated otherwise, include 

14 direct insurers and reinsurers, as well as any 

15 run-off entity established, in whole or in part, 

16 to review and pay asbestos claims. 

17 (B) PROCEDURES FOR DETERMINING IN18 SURER PAYMENTS.— 

19 (i) AMOUNT OF PAYMENTS.—The 

20 Commission shall determine the amount 

21 that each insurer participant shall be re22 quired to pay into the Fund under the pro23 cedures described in this section. The 

24 Commission shall make the determination 

25 by first promulgating a rule establishing a 


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1 methodology for allocation of payments 

2 among insurer participants and then ap3 plying such methodology to determine the 

4 individual payment for each insurer partic5 ipant. The methodology shall be uniform 

6 for all insurer participants. 

7 (ii) RESERVE STUDY REQUIRED.—The 

8 Commission shall conduct a reserve study 

9 (the ‘‘Reserve Study’’) to determine the 

10 appropriate reserve allocation of each in11 surer participant and may request infor12 mation from each insurer participant, de13 fendant participant, the Securities and Ex14 change Commission or any State regu15 latory agency for the purpose of con16 ducting the Reserve Study. The Reserve 

17 Study shall calculate each insurer’s expo18 sure to current and future asbestos claims 

19 in the asbestos litigation environment be20 fore the date of enactment of this Act. 

21 Such calculation shall be derived from the 

22 following elements: 

23 (I) An estimation of each defend24 ant participant’s current and future 

25 exposure to expense and loss costs in 


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1 the asbestos litigation environment be2 fore the date of enactment of this Act 

3 (‘‘Ultimate Expense and Loss’’). 

4 (II) The application of a uniform 

5 set of assumptions regarding the ap6 plication of insurance and reinsurance 

7 to Ultimate Expense and Loss and an 

8 analysis of each insurer participant’s 

9 unresolved or unexhausted insurance 

10 or reinsurance coverage applicable to 

11 such Ultimate Expense and Loss for 

12 each defendant participant; 

13 (III) A projection of each insur14 er’s exposure to claims by entities 

15 that had not yet become defendants 

16 as of the date of enactment of this 

17 Act, but might reasonably have been 

18 anticipated to become defendants in 

19 the future if the asbestos litigation en20 vironment before the date of enact21 ment of this Act had continued. Not 

22 later than 60 days after the initial 

23 meeting of the Commission, the Com24 mission shall commence a rulemaking 

25 proceeding under section 213(a) to 


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1 propose and adopt a methodology for 

2 conducting the Reserve Study and al3 locating payments among insurer par4 ticipants on the basis of the Reserve 

5 Study. Such methodology shall be con6 sistent with this subparagraph. 

7 (iii) PERMITTED EXTRAPOLATION OF

8 ULTIMATE EXPENSE AND LOSS FOR PE9 RIPHERAL DEFENDANT PARTICIPANTS.— 

10 The Commission may establish an appro11 priate methodology to extrapolate Ultimate 

12 Expense and Loss for Tier VI defendant 

13 participants for the purposes of the Re14 serve Study. Considerations for such meth15 odology shall include the nature of that 

16 Tier VI defendant participant’s asbestos li17 ability, the number of pending and historic 

18 asbestos claims against the Tier VI defend19 ant participant, and the jurisdictions in 

20 which such Tier VI defendant participant 

21 had been sued for asbestos liability. 

22 (iv) RULE OF CONSTRUCTION.—Noth23 ing in this subparagraph shall affect the 

24 initial payment requirement in section 

25 212(e)(1). 


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1 (C) SCOPE.—Every insurer, reinsurer, and 

2 runoff entity with asbestos-related obligations 

3 in the United States shall be subject to the 

4 Commission’s and Administrator’s authority 

5 under this Act, including allocation determina6 tions, and shall be required to fulfill its pay7 ment obligation without regard as to whether it 

8 is licensed in the United States. Every insurer 

9 participant not licensed or domiciled in the 

10 United States shall, upon the first payment to 

11 the Fund, submit a written consent to the Com12 mission’s and Administrator’s authority under 

13 this Act, and to the jurisdiction of the courts of 

14 the United States for purposes of enforcing this 

15 Act, in a form determined by the Adminis16 trator. Any insurer participant refusing to pro17 vide a written consent shall be subject to fines 

18 and penalties as provided in section 223. 

19 (D) ISSUERS OF FINITE RISK POLICIES.— 

20 (i) IN GENERAL.—The issuer of any 

21 policy of retrospective reinsurance pur22 chased by an insurer participant or its af23 filiate after 1990 that provides for a risk 

24 or loss transfer to insure for asbestos 

25 losses and other losses (both known and 


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1 unknown), including those policies com2 monly referred to as ‘‘finite risk’’, ‘‘aggre3 gate stop loss’’, ‘‘aggregate excess of loss’’, 

4 or ‘‘loss portfolio transfer’’ policies, shall 

5 be obligated to make payments required 

6 under this Act directly to the Fund on be7 half of the insurer participant who is the 

8 beneficiary of such policy, subject to the 

9 underlying retention and the limits of li10 ability applicable to such policy. 

11 (ii) PAYMENTS.—Payments to the 

12 Fund required under this Act shall be 

13 treated as loss payments for asbestos bod14 ily injury (as if such payments were in15 curred as liabilities imposed in the tort 

16 system) and shall not be subject to exclu17 sion under policies described under clause 

18 (i) as a liability with respect to tax or as19 sessment. Within 90 days after the sched20 uled date to make an annual payment to 

21 the Fund, the insurer participant shall, at 

22 its discretion, direct the reinsurer issuing 

23 such policy to pay all or a portion of the 

24 annual payment directly to the Fund up to 

25 the full applicable limits of liability under 


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1 the policy. The reinsurer issuing such pol2 icy shall be obligated to make such pay3 ments directly to the Fund and shall be 

4 subject to the enforcement provisions 

5 under section 223. The insurer participant 

6 shall remain obligated to make payment to 

7 the Fund of that portion of the annual 

8 payment not directed to the issuer of such 

9 reinsurance policy. 

10 (2) AMOUNT OF PAYMENTS.— 

11 (A) AGGREGATE PAYMENT OBLIGATION.— 

12 The total payment required of all insurer par13 ticipants over the life of the Fund shall be 

14 equal to $46,025,000,000, less any bankruptcy 

15 trust credits under section 222(d). 

16 (B) ACCOUNTING STANDARDS.—In deter17 mining the payment obligations of participants 

18 that are not licensed or domiciled in the United 

19 States or that are runoff entities, the Commis20 sion shall use accounting standards required for 

21 United States licensed direct insurers. 

22 (C) CAPTIVE INSURANCE COMPANIES.—No 

23 payment to the Fund shall be required from a 

24 captive insurance company, unless and only to 

25 the extent a captive insurance company, on the 


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1 date of enactment of this Act, insures the as2 bestos liability, directly or indirectly, of (and 

3 that arises out of the manufacture, sale, dis4 tribution or installation of materials or products 

5 by, or other conduct of) a person or persons 

6 other than and unaffiliated with its ultimate 

7 parent or affiliated group or pool in which the 

8 ultimate parent participates or participated, or 

9 unaffiliated with a person that was its ultimate 

10 parent or a member of its affiliated group or 

11 pool at the time the relevant insurance or rein12 surance was issued by the captive insurance 

13 company. 

14 (D) SEVERAL LIABILITY.—Unless other15 wise provided under this Act, each insurer par16 ticipant’s obligation to make payments to the 

17 Fund is several. Unless otherwise provided 

18 under this Act, there is no joint liability, and 

19 the future insolvency by any insurer participant 

20 shall not affect the payment required of any 

21 other insurer participant. 

22 (3) PAYMENT OF CRITERIA.— 

23 (A) INCLUSION IN INSURER PARTICIPANT

24 CATEGORY.— 


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1 (i) IN GENERAL.—Insurers that have 

2 paid, or been assessed by a legal judgment 

3 or settlement, at least $1,000,000 in de4 fense and indemnity costs before the date 

5 of enactment of this Act in response to 

6 claims for compensation for asbestos inju7 ries arising from a policy of liability insur8 ance or contract of liability reinsurance or 

9 retrocessional reinsurance shall be insurer 

10 participants in the Fund. Other insurers 

11 shall be exempt from mandatory payments. 

12 (ii) INAPPLICABILITY OF SECTION

13 202.—Since insurers may be subject in cer14 tain jurisdictions to direct action suits, and 

15 it is not the intent of this Act to impose 

16 upon an insurer, due to its operation as an 

17 insurer, payment obligations to the Fund 

18 in situations where the insurer is the sub19 ject of a direct action, no insurer subject 

20 to mandatory payments under this section 

21 shall also be liable for payments to the 

22 Fund as a defendant participant under 

23 section 202. 

24 (B) INSURER PARTICIPANT ALLOCATION

25 METHODOLOGY.— 


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1 (i) IN GENERAL.—The Commission 

2 shall establish the payment obligations of 

3 individual insurer participants to reflect, 

4 on an equitable basis, the relative tort sys5 tem liability of the participating insurers in 

6 the absence of this Act, considering and 

7 weighting, as appropriate (but exclusive of 

8 workers’ compensation), such factors as— 

9 (I) historic premium for lines of 

10 insurance associated with asbestos ex11 posure over relevant periods of time; 

12 (II) recent loss experience for as13 bestos liability; 

14 (III) amounts reserved for asbes15 tos liability; 

16 (IV) the likely cost to each in17 surer participant of its future liabil18 ities under applicable insurance poli19 cies; and 

20 (V) any other factor the Commis21 sion may determine is relevant and 

22 appropriate. 

23 (ii) DETERMINATION OF RESERVES.— 

24 The Commission may establish procedures 

25 and standards for determination of the asVerDate Aug 31 2005 00:11 Jun 06, 2006 Jkt 049200 PO 00000 Frm 00236 Fmt 6652 Sfmt 6201 E:\BILLS\S3274.PCS S3274

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1 bestos reserves of insurer participants. The 

2 reserves of a United States licensed rein3 surer that is wholly owned by, or under 

4 common control of, a United States li5 censed direct insurer shall be included as 

6 part of the direct insurer’s reserves when 

7 the reinsurer’s financial results are in8 cluded as part of the direct insurer’s 

9 United States operations, as reflected in 

10 footnote 33 of its filings with the National 

11 Association of Insurance Commissioners or 

12 in published financial statements prepared 

13 in accordance with generally accepted ac14 counting principles. 

15 (C) PAYMENT SCHEDULE.—The aggregate 

16 annual amount of payments by insurer partici17 pants over the life of the Fund shall be as fol18 lows: 

19 (i) For years 1 and 2, $2,700,000,000 

20 annually. 

21 (ii) For years 3 through 5, 

22 $5,075,000,000 annually. 

23 (iii) For years 6 through 27, 

24 $1,147,000,000 annually. 

25 (iv) For year 28, $166,000,000. 


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1 (D) CERTAIN RUNOFF ENTITIES.—A run2 off entity shall include any direct insurer or re3 insurer whose asbestos liability reserves have 

4 been transferred, directly or indirectly, to the 

5 runoff entity and on whose behalf the runoff 

6 entity handles or adjusts and, where appro7 priate, pays asbestos claims. 

8 (E) FINANCIAL HARDSHIP AND EXCEP9 TIONAL CIRCUMSTANCE ADJUSTMENTS.— 

10 (i) IN GENERAL.—Under the proce11 dures established in subsection (b), an in12 surer participant may seek adjustment of 

13 the amount of its payments based on ex14 ceptional circumstances or severe financial 

15 hardship. 

16 (ii) FINANCIAL ADJUSTMENTS.—An 

17 insurer participant may qualify for an ad18 justment based on severe financial hard19 ship by demonstrating that payment of the 

20 amounts required by the Commission’s 

21 methodology would jeopardize the solvency 

22 of such participant. 

23 (iii) EXCEPTIONAL CIRCUMSTANCE

24 ADJUSTMENT.—An insurer participant 

25 may qualify for an adjustment based on 


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1 exceptional circumstances by dem2 onstrating— 

3 (I) that the amount of its pay4 ments under the Commission’s alloca5 tion methodology is exceptionally in6 equitable when measured against the 

7 amount of the likely cost to the par8 ticipant of its future liability in the 

9 tort system in the absence of the 

10 Fund; 

11 (II) an offset credit as described 

12 in subparagraphs (A) and (C) of sub13 section (b)(4); or 

14 (III) other exceptional cir15 cumstances. 

16 The Commission may determine whether 

17 to grant an adjustment and the size of any 

18 such adjustment, but except as provided 

19 under paragraph (1)(B), subsection (f)(3), 

20 and section 405(f), any such adjustment 

21 shall not affect the aggregate payment ob22 ligations of insurer participants specified 

23 in paragraph (2)(A) and subparagraph (C) 

24 of this paragraph. 


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1 (iv) TIME PERIOD OF ADJUSTMENT.— 

2 Except for adjustments for offset credits, 

3 adjustments granted under this subsection 

4 shall have a term not to exceed 3 years. An 

5 insurer participant may renew its adjust6 ment by demonstrating to the Adminis7 trator that it remains justified. 

8 (F) FUNDING HOLIDAYS.— 

9 (i) IN GENERAL.—If the Adminis10 trator determines, at any time after 10 

11 years following the date of enactment of 

12 this Act, that the assets of the Fund at the 

13 time of such determination and expected 

14 future payments are sufficient to satisfy 

15 the Fund’s anticipated obligations without 

16 the need for all, or any portion of, that 

17 year’s payment otherwise required under 

18 this subtitle, the Administrator shall re19 duce or waive all or any part of the pay20 ments required from insurer participants 

21 for that year. 

22 (ii) ANNUAL REVIEW.—The Adminis23 trator shall undertake the review required 

24 by this subsection and make the necessary 

25 determination under clause (i) every year. 


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1 (iii) LIMITATIONS OF FUNDING HOLI2 DAYS.—Any reduction or waiver of the in3 surer participants’ funding obligations 

4 shall— 

5 (I) be made only to the extent 

6 the Administrator determines that the 

7 Fund will still be able to satisfy all of 

8 its anticipated obligations; and 

9 (II) be applied on an equal pro 

10 rata basis to the funding obligations 

11 of all insurer participants for that 

12 year. 

13 (iv) NEW INFORMATION.—If at any 

14 time the Administrator determines that a 

15 reduction or waiver under this section may 

16 cause the assets of the Fund and expected 

17 future payments to decrease to a level at 

18 which the Fund may not be able to satisfy 

19 all of its anticipated obligations, the Ad20 ministrator shall revoke all or any part of 

21 such reduction or waiver to the extent nec22 essary to ensure that the Fund’s obliga23 tions are met. Such revocations shall be 

24 applied on an equal pro rata basis to the 


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1 funding obligations of all insurer partici2 pants for that year. 

3 (b) PROCEDURE FOR NOTIFYING INSURER PARTICI4 PANTS OF INDIVIDUAL PAYMENT OBLIGATIONS.— 

5 (1) NOTICE TO PARTICIPANTS.—Not later than 

6 30 days after promulgation of the final rule estab7 lishing an allocation methodology under subsection 

8 (a)(1), the Commission shall— 

9 (A) directly notify all reasonably identifi10 able insurer participants of the requirement to 

11 submit information necessary to calculate the 

12 amount of any required payment to the Fund 

13 under the allocation methodology; and 

14 (B) publish in the Federal Register a no15 tice— 

16 (i) requiring any person who may be 

17 an insurer participant (as determined by 

18 criteria outlined in the notice) to submit 

19 such information; and 

20 (ii) that includes a list of all insurer 

21 participants notified by the Commission 

22 under subparagraph (A), and provides for 

23 30 days for the submission of comments or 

24 information regarding the completeness 


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1 and accuracy of the list of identified in2 surer participants. 

3 (2) RESPONSE REQUIRED BY INDIVIDUAL IN4 SURER PARTICIPANTS.— 

5 (A) IN GENERAL.—Any person who re6 ceives notice under paragraph (1)(A), and any 

7 other person meeting the criteria specified in 

8 the notice published under paragraph (1)(B), 

9 shall respond by providing the Commission with 

10 all the information requested in the notice 

11 under a schedule or by a date established by 

12 the Commission. 

13 (B) CERTIFICATION.—The response sub14 mitted under subparagraph (A) shall be signed 

15 by a responsible corporate officer, general part16 ner, proprietor, or individual of similar author17 ity, who shall certify under penalty of law the 

18 completeness and accuracy of the information 

19 submitted. 

20 (3) NOTICE TO INSURER PARTICIPANTS OF INI21 TIAL PAYMENT DETERMINATION.— 

22 (A) IN GENERAL.— 

23 (i) NOTICE TO INSURERS.—Not later 

24 than 120 days after receipt of the informa25 tion required by paragraph (2), the ComVerDate Aug 31 2005 00:11 Jun 06, 2006 Jkt 049200 PO 00000 Frm 00243 Fmt 6652 Sfmt 6201 E:\BILLS\S3274.PCS S3274

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1 mission shall send each insurer participant 

2 a notice of initial determination requiring 

3 payments to the Fund, which shall be 

4 based on the information received from the 

5 participant in response to the Commis6 sion’s request for information. An insurer 

7 participant’s payments shall be payable 

8 over the schedule established in subsection 

9 (a)(3)(C), in annual amounts proportionate 

10 to the aggregate annual amount of pay11 ments for all insurer participants for the 

12 applicable year. 

13 (ii) PUBLIC NOTICE.—Not later than 

14 7 days after sending the notification of ini15 tial determination to insurer participants, 

16 the Commission shall publish in the Fed17 eral Register a notice listing the insurer 

18 participants that have been sent such noti19 fication, and the initial determination on 

20 the payment obligation of each identified 

21 participant. 

22 (B) NO RESPONSE; INCOMPLETE RE23 SPONSE.—If no response is received from an in24 surer participant, or if the response is incom25 plete, the initial determination requiring a payVerDate Aug 31 2005 00:11 Jun 06, 2006 Jkt 049200 PO 00000 Frm 00244 Fmt 6652 Sfmt 6201 E:\BILLS\S3274.PCS S3274

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1 ment from the insurer participant shall be 

2 based on the best information available to the 

3 Commission. 

4 (4) COMMISSION REVIEW, REVISION, AND FI5 NALIZATION OF INITIAL PAYMENT DETERMINA6 TIONS.— 

7 (A) COMMENTS FROM INSURER PARTICI8 PANTS.—Not later than 30 days after receiving 

9 a notice of initial determination from the Com10 mission, an insurer participant may provide the 

11 Commission with additional information to sup12 port adjustments to the required payments to 

13 reflect severe financial hardship or exceptional 

14 circumstances, including the provision of an off15 set credit for an insurer participant for the 

16 amount of any asbestos-related payments it 

17 made or was legally obligated to make, includ18 ing payments released from an escrow, as the 

19 result of a bankruptcy judicially confirmed after 

20 May 22, 2003, but before the date of enactment 

21 of this Act. 

22 (B) ADDITIONAL PARTICIPANTS.—If, be23 fore the final determination of the Commission, 

24 the Commission receives information that an 

25 additional person may qualify as an insurer 


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•S 3274 PCS

1 participant, the Commission shall require such 

2 person to submit information necessary to de3 termine whether payments from that person 

4 should be required, in accordance with the re5 quirements of this subsection. 

6 (C) REVISION PROCEDURES.—The Com7 mission shall adopt procedures for revising ini8 tial payments based on information received 

9 under subparagraphs (A) and (B), including a 

10 provision requiring an offset credit for an in11 surer participant for the amount of any asbes12 tos-related payments it made or was legally ob13 ligated to make, including payments released 

14 from an escrow, as the result of a bankruptcy 

15 confirmed after May 22, 2003, but before the 

16 date of enactment of this Act. 

17 (5) EXAMINATIONS AND SUBPOENAS.— 

18 (A) EXAMINATIONS.—The Commission 

19 may conduct examinations of the books and 

20 records of insurer participants to determine the 

21 completeness and accuracy of information sub22 mitted, or required to be submitted, to the 

23 Commission for purposes of determining partic24 ipant payments. 


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1 (B) SUBPOENAS.—The Commission may 

2 request the Attorney General to subpoena per3 sons to compel testimony, records, and other in4 formation relevant to its responsibilities under 

5 this section. The Attorney General may enforce 

6 such subpoena in appropriate proceedings in 

7 the United States district court for the district 

8 in which the person to whom the subpoena was 

9 addressed resides, was served, or transacts 

10 business. 

11 (6) ESCROW PAYMENTS.—Without regard to an 

12 insurer participant’s payment obligation under this 

13 section, any escrow or similar account established 

14 before the date of enactment of this Act by an in15 surer participant in connection with an asbestos 

16 trust fund that has not been judicially confirmed by 

17 final order by the date of enactment of this Act shall 

18 be the property of the insurer participant and re19 turned to that insurer participant. 

20 (7) NOTICE TO INSURER PARTICIPANTS OF

21 FINAL PAYMENT DETERMINATIONS.—Not later than 

22 60 days after the notice of initial determination is 

23 sent to the insurer participants, the Commission 

24 shall send each insurer participant a notice of final 

25 determination. 


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1 (c) INSURER PARTICIPANTS VOLUNTARY ALLOCA2 TION AGREEMENT.— 

3 (1) IN GENERAL.—Not later than 30 days after 

4 the Commission proposes its rule establishing an al5 location methodology under subsection (a)(1), direct 

6 insurer participants licensed or domiciled in the 

7 United States, other direct insurer participants, re8 insurer participants licensed or domiciled in the 

9 United States, or other reinsurer participants, may 

10 submit an allocation agreement, approved by all of 

11 the participants in the applicable group, to the Com12 mission. 

13 (2) ALLOCATION AGREEMENT.—To the extent 

14 the participants in any such applicable group volun15 tarily agree upon an allocation arrangement, any 

16 such allocation agreement shall only govern the allo17 cation of payments within that group and shall not 

18 determine the aggregate amount due from that 

19 group. 

20 (3) CERTIFICATION.—The Commission shall de21 termine whether an allocation agreement submitted 

22 under subparagraph (A) meets the requirements of 

23 this subtitle and, if so, shall certify the agreement 

24 as establishing the allocation methodology governing 

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1 pants who are parties to the agreement. The author2 ity of the Commission under this subtitle shall, with 

3 respect to participants who are parties to a certified 

4 allocation agreement, terminate on the day after the 

5 Commission certifies such agreement. Under sub6 section (f), the Administrator shall assume responsi7 bility, if necessary, for calculating the individual 

8 payment obligations of participants who are parties 

9 to the certified agreement. 

10 (d) COMMISSION REPORT.— 

11 (1) RECIPIENTS.—Until the work of the Com12 mission has been completed and the Commission ter13 minated, the Commission shall submit an annual re14 port, containing the information described under 

15 paragraph (2), to— 

16 (A) the Committee on the Judiciary of the 

17 Senate; 

18 (B) the Committee on the Judiciary of the 

19 House of Representatives; and 

20 (C) the Administrator. 

21 (2) CONTENTS.—The report under paragraph 

22 (1) shall state the amount that each insurer partici23 pant is required to pay to the Fund, including the 

24 payment schedule for such payments. 

25 (e) INTERIM PAYMENTS.— 


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1 (1) AMOUNT OF INTERIM PAYMENT.—Within 

2 90 days after the date of enactment of this Act, in3 surer participants shall make an aggregate payment 

4 to the Fund not to exceed 50 percent of the aggre5 gate funding obligation specified under subsection 

6 (a)(3)(C) for year 1. 

7 (2) RESERVE INFORMATION.—Within 30 days 

8 after the date of enactment of this Act, each insurer 

9 participant shall submit to the Administrator a cer10 tified statement of its net held reserves for asbestos 

11 liabilities as of December 31, 2004. 

12 (3) ALLOCATION OF INTERIM PAYMENT.—The 

13 Administrator shall allocate the interim payment 

14 among the individual insurer participants on an eq15 uitable basis using the net held asbestos reserve in16 formation provided by insurer participants under 

17 subsection (a)(3)(B). Within 60 days after the date 

18 of enactment of this Act, the Administrator shall 

19 publish in the Federal Register the name of each in20 surer participant, and the amount of the insurer 

21 participant’s allocated share of the interim payment. 

22 The use of net held asbestos reserves as the basis to 

23 determine an interim allocation shall not be binding 

24 on the Administrator in the determination of an ap25 propriate final allocation methodology under this 


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1 section. All payments required under this paragraph 

2 shall be credited against the participant’s ultimate 

3 payment obligation to the Fund established by the 

4 Commission. If an interim payment exceeds the ulti5 mate payment, the Fund shall pay interest on the 

6 amount of the overpayment at a rate determined by 

7 the Administrator. If the ultimate payment exceeds 

8 the interim payment, the participant shall pay inter9 est on the amount of the underpayment at the same 

10 rate. Any participant may seek an exemption from 

11 or reduction in any payment required under this 

12 subsection under the financial hardship and excep13 tional circumstance standards established under sub14 section (a)(3)(E). 

15 (4) APPEAL OF INTERIM PAYMENT DECI16 SIONS.—A decision by the Administrator to establish 

17 an interim payment obligation shall be considered 

18 final agency action and reviewable under section 

19 303, except that the reviewing court may not stay an 

20 interim payment during the pendency of the appeal. 

21 (f) TRANSFER OF AUTHORITY FROM THE COMMIS22 SION TO THE ADMINISTRATOR.— 

23 (1) IN GENERAL.—Upon termination of the 

24 Commission under section 215, the Administrator 

25 shall assume all the responsibilities and authority of 


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1 the Commission, except that the Administrator shall 

2 not have the power to modify the allocation method3 ology established by the Commission or by certified 

4 agreement or to promulgate a rule establishing any 

5 such methodology. 

6 (2) FINANCIAL HARDSHIP AND EXCEPTIONAL

7 CIRCUMSTANCE ADJUSTMENTS.—Upon termination 

8 of the Commission under section 215, the Adminis9 trator shall have the authority, upon application by 

10 any insurer participant, to make adjustments to an11 nual payments upon the same grounds as provided 

12 in subsection (a)(3)(D). Adjustments granted under 

13 this subsection shall have a term not to exceed 3 

14 years. An insurer participant may renew its adjust15 ment by demonstrating that it remains justified. 

16 Upon the grant of any adjustment, the Adminis17 trator shall increase the payments, consistent with 

18 subsection (a)(1)(B), required of all other insurer 

19 participants so that there is no reduction in the ag20 gregate payment required of all insurer participants 

21 for the applicable years. The increase in an insurer 

22 participant’s required payment shall be in proportion 

23 to such participant’s share of the aggregate payment 

24 obligation of all insurer participants. 


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1 (3) CREDITS FOR SHORTFALL ASSESSMENTS.— 

2 If insurer participants are required during the first 

3 5 years of the life of the Fund to make up any 

4 shortfall in required insurer payments under sub5 section (a)(1)(B), then, beginning in year 6, the Ad6 ministrator shall grant each insurer participant a 

7 credit against its annual required payments during 

8 the applicable years that in the aggregate equal the 

9 amount of shortfall assessments paid by such in10 surer participant during the first 5 years of the life 

11 of the Fund. The credit shall be prorated over the 

12 same number of years as the number of years during 

13 which the insurer participant paid a shortfall assess14 ment. Insurer participants which did not pay all re15 quired payments to the Fund during the first 5 

16 years of the life of the Fund shall not be eligible for 

17 a credit. The Administrator shall not grant a credit 

18 for shortfall assessments imposed under section 

19 405(f). 

20 (4) FINANCIAL SECURITY REQUIREMENTS.— 

21 Whenever an insurer participant’s A.M. Best’s 

22 claims payment rating or Standard and Poor’s fi23 nancial strength rating falls below A¥, and until 

24 such time as either the insurer participant’s A.M. 

25 Best’s Rating or Standard and Poor’s rating is 


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•S 3274 PCS

1 equal to or greater than A¥, the Administrator 

2 shall have the authority to require that the partici3 pating insurer either— 

4 (A) pay the present value of its remaining 

5 Fund payments at a discount rate determined 

6 by the Administrator; or 

7 (B) provide an evergreen letter of credit or 

8 financial guarantee for future payments issued 

9 by an institution with an A.M. Best’s claims 

10 payment rating or Standard & Poor’s financial 

11 strength rating of at least A+. 

12 (g) ACCOUNTING TREATMENT.—Insurer partici13 pants’ payment obligations to the Fund shall be subject 

14 to discounting under the applicable accounting guidelines 

15 for generally accepted accounting purposes and statutory 

16 accounting purposes for each insurer participant. This 

17 subsection shall in no way reduce the amount of monetary 

18 payments to the Fund by insurer participants as required 

19 under subsection (a). 

20 (h) JUDICIAL REVIEW.—The Commission’s rule es21 tablishing an allocation methodology, its final determina22 tions of payment obligations and other final action shall 

23 be judicially reviewable as provided in title III. 


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1 SEC. 213. POWERS OF ASBESTOS INSURERS COMMISSION. 

2 (a) RULEMAKING.—The Commission shall promul3 gate such rules and regulations as necessary to implement 

4 its authority under this Act, including regulations gov5 erning an allocation methodology. Such rules and regula6 tions shall be promulgated after providing interested par7 ties with the opportunity for notice and comment. 

8 (b) HEARINGS.—The Commission may hold such 

9 hearings, sit and act at such times and places, take such 

10 testimony, and receive such evidence as the Commission 

11 considers advisable to carry out this Act. The Commission 

12 shall also hold a hearing on any proposed regulation estab13 lishing an allocation methodology, before the Commis14 sion’s adoption of a final regulation. 

15 (c) INFORMATION FROM FEDERAL AND STATE

16 AGENCIES.—The Commission may secure directly from 

17 any Federal or State department or agency such informa18 tion as the Commission considers necessary to carry out 

19 this Act. Upon request of the Chairman of the Commis20 sion, the head of such department or agency shall furnish 

21 such information to the Commission. 

22 (d) POSTAL SERVICES.—The Commission may use 

23 the United States mails in the same manner and under 

24 the same conditions as other departments and agencies of 

25 the Federal Government. 


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1 (e) GIFTS.—The Commission may not accept, use, or 

2 dispose of gifts or donations of services or property. 

3 (f) EXPERT ADVICE.—In carrying out its responsibil4 ities, the Commission may enter into such contracts and 

5 agreements as the Commission determines necessary to 

6 obtain expert advice and analysis. 

7 SEC. 214. PERSONNEL MATTERS. 

8 (a) COMPENSATION OF MEMBERS.—Each member of 

9 the Commission shall be compensated at a rate equal to 

10 the daily equivalent of the annual rate of basic pay pre11 scribed for level IV of the Executive Schedule under sec12 tion 5315 of title 5, United States Code, for each day (in13 cluding travel time) during which such member is engaged 

14 in the performance of the duties of the Commission. 

15 (b) TRAVEL EXPENSES.—The members of the Com16 mission shall be allowed travel expenses, including per 

17 diem in lieu of subsistence, at rates authorized for employ18 ees of agencies under subchapter I of chapter 57 of title 

19 5, United States Code, while away from their homes or 

20 regular places of business in the performance of services 

21 for the Commission. 

22 (c) STAFF.— 

23 (1) IN GENERAL.—The Chairman of the Com24 mission may, without regard to the civil service laws 

25 and regulations, appoint and terminate an executive 


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1 director and such other additional personnel as may 

2 be necessary to enable the Commission to perform 

3 its duties. The employment of an executive director 

4 shall be subject to confirmation by the Commission. 

5 (2) COMPENSATION.—The Chairman of the 

6 Commission may fix the compensation of the execu7 tive director and other personnel without regard to 

8 chapter 51 and subchapter III of chapter 53 of title 

9 5, United States Code, relating to classification of 

10 positions and General Schedule pay rates, except 

11 that the rate of pay for the executive director and 

12 other personnel may not exceed the rate payable for 

13 level V of the Executive Schedule under section 5316 

14 of such title. 

15 (d) DETAIL OF GOVERNMENT EMPLOYEES.—Any 

16 Federal Government employee may be detailed to the 

17 Commission without reimbursement, and such detail shall 

18 be without interruption or loss of civil service status or 

19 privilege. 

20 (e) PROCUREMENT OF TEMPORARY AND INTERMIT21 TENT SERVICES.—The Chairman of the Commission may 

22 procure temporary and intermittent services under section 

23 3109(b) of title 5, United States Code, at rates for individ24 uals which do not exceed the daily equivalent of the annual 


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1 rate of basic pay prescribed for level V of the Executive 

2 Schedule under section 5316 of such title. 

3 SEC. 215. TERMINATION OF ASBESTOS INSURERS COMMIS4 SION. 

5 The Commission shall terminate 90 days after the 

6 last date on which the Commission makes a final deter7 mination of contribution under section 212(b) or 90 days 

8 after the last appeal of any final action by the Commission 

9 is exhausted, whichever occurs later. 

10 SEC. 216. EXPENSES AND COSTS OF COMMISSION. 

11 All expenses of the Commission shall be paid from 

12 the Fund. 

13 Subtitle C—Asbestos Injury Claims 

14 Resolution Fund 

15 SEC. 221. ESTABLISHMENT OF ASBESTOS INJURY CLAIMS 

16 RESOLUTION FUND. 

17 (a) ESTABLISHMENT.—There is established in the 

18 Office of Asbestos Disease Compensation the Asbestos In19 jury Claims Resolution Fund, which shall be available to 

20 pay— 

21 (1) claims for awards for an eligible disease or 

22 condition determined under title I; 

23 (2) claims for reimbursement for medical moni24 toring determined under title I; 


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1 (3) principal and interest on borrowings under 

2 subsection (b); 

3 (4) the remaining obligations to the asbestos 

4 trust of a debtor and the class action trust under 

5 section 405(g)(8); and 

6 (5) administrative expenses to carry out the 

7 provisions of this Act. 

8 (b) BORROWING AUTHORITY.— 

9 (1) IN GENERAL.—The Administrator is au10 thorized to borrow from time to time amounts as set 

11 forth in this subsection, for purposes of enhancing li12 quidity available to the Fund for carrying out the 

13 obligations of the Fund under this Act. The Admin14 istrator may authorize borrowing in such form, over 

15 such term, with such necessary disclosure to its 

16 lenders as will most efficiently enhance the Fund’s 

17 liquidity. 

18 (2) FEDERAL FINANCING BANK.—In addition to 

19 the general authority in paragraph (1), the Adminis20 trator may borrow from the Federal Financing Bank 

21 in accordance with section 6 of the Federal Financ22 ing Bank Act of 1973 (12 U.S.C. 2285), as needed 

23 for performance of the Administrator’s duties under 

24 this Act for the first 5 years. 


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1 (3) BORROWING CAPACITY.—The maximum 

2 amount that may be borrowed under this subsection 

3 at any given time is the amount that, taking into ac4 count all payment obligations related to all previous 

5 amounts borrowed in accordance with this sub6 section and all committed obligations of the Fund at 

7 the time of borrowing, can be repaid in full (with in8 terest) in a timely fashion from— 

9 (A) the available assets of the Fund as of 

10 the time of borrowing; and 

11 (B) all amounts expected to be paid by 

12 participants during the subsequent 10 years. 

13 (4) REPAYMENT OBLIGATIONS.—Repayment of 

14 monies borrowed by the Administrator under this 

15 subsection shall be repaid in full by the Fund con16 tributors and is limited solely to amounts available, 

17 present or future, in the Fund. 

18 (c) LOCKBOX FOR SEVERE ASBESTOS-RELATED IN19 JURY CLAIMANTS.— 

20 (1) IN GENERAL.—Within the Fund, the Ad21 ministrator shall establish the following accounts: 

22 (A) A Mesothelioma Account, which shall 

23 be used solely to make payments to claimants 

24 eligible for an award under the criteria of Level 

25 IX. 


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1 (B) A Lung Cancer Account, which shall 

2 be used solely to make payments to claimants 

3 eligible for an award under the criteria of Level 

4 VIII. 

5 (C) A Severe Asbestosis Account, which 

6 shall be used solely to make payments to claim7 ants eligible for an award under the criteria of 

8 Level V. 

9 (D) A Moderate Asbestosis Account, which 

10 shall be used solely to make payments to claim11 ants eligible for an award under the criteria of 

12 Level IV. 

13 (2) ALLOCATION.—The Administrator shall al14 locate to each of the 4 accounts established under 

15 paragraph (1) a portion of payments made to the 

16 Fund adequate to compensate all anticipated claim17 ants for each account. Within 60 days after the date 

18 of enactment of this Act, and periodically during the 

19 life of the Fund, the Administrator shall determine 

20 an appropriate amount to allocate to each account 

21 after consulting appropriate epidemiological and sta22 tistical studies. 

23 (d) AUDIT AUTHORITY.— 

24 (1) IN GENERAL.—For the purpose of 

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1 vided or payments made to the Fund, or deter2 mining whether a person who has not made a pay3 ment to the Fund was required to do so, or deter4 mining the liability of any person for a payment to 

5 the Fund, or collecting any such liability, or inquir6 ing into any offense connected with the administra7 tion or enforcement of this title, the Administrator 

8 is authorized— 

9 (A) to examine any books, papers, records, 

10 or other data which may be relevant or material 

11 to such inquiry; 

12 (B) to summon the person liable for a pay13 ment under this title, or officer or employee of 

14 such person, or any person having possession, 

15 custody, or care of books of account containing 

16 entries relating to the business of the person 

17 liable or any other person the Administrator 

18 may deem proper, to appear before the Admin19 istrator at a time and place named in the sum20 mons and to produce such books, papers, 

21 records, or other data, and to give such testi22 mony, under oath, as may be relevant or mate23 rial to such inquiry; and 


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1 (C) to take such testimony of the person 

2 concerned, under oath, as may be relevant or 

3 material to such inquiry. 

4 (2) FALSE, FRAUDULENT, OR FICTITIOUS

5 STATEMENTS OR PRACTICES.—If the Administrator 

6 determines that materially false, fraudulent, or ficti7 tious statements or practices have been submitted or 

8 engaged in by persons submitting information to the 

9 Administrator or to the Asbestos Insurers Commis10 sion or any other person who provides evidence in 

11 support of such submissions for purposes of deter12 mining payment obligations under this Act, the Ad13 ministrator may impose a civil penalty not to exceed 

14 $10,000 on any person found to have submitted or 

15 engaged in a materially false, fraudulent, or ficti16 tious statement or practice under this Act. The Ad17 ministrator shall promulgate appropriate regulations 

18 to implement this paragraph. 

19 (e) IDENTITY OF CERTAIN DEFENDANT PARTICI20 PANTS; TRANSPARENCY.— 

21 (1) SUBMISSION OF INFORMATION.—Not later 

22 than 60 days after the date of enactment of this 

23 Act, any person who, acting in good faith, has 

24 knowledge that such person or such person’s affili25 ated group has prior asbestos expenditures of 


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1 $1,000,000 or greater, shall submit to the Adminis2 trator— 

3 (A) either the name of such person, or 

4 such person’s ultimate parent; and 

5 (B) the likely tier to which such person or 

6 affiliated group may be assigned under this Act. 

7 (2) PUBLICATION.—Not later than 20 days 

8 after the end of the 60-day period referred to in 

9 paragraph (1), the Administrator or Interim Admin10 istrator, if the Administrator is not yet appointed, 

11 shall publish in the Federal Register a list of sub12 missions required by this subsection, including the 

13 name of such persons or ultimate parents and the 

14 likely tier to which such persons or affiliated groups 

15 may be assigned. After publication of such list, any 

16 person who, acting in good faith, has knowledge that 

17 any other person has prior asbestos expenditures of 

18 $1,000,000 or greater may submit to the Adminis19 trator or Interim Administrator information on the 

20 identity of that person and the person’s prior asbes21 tos expenditures. 

22 (f) NO PRIVATE RIGHT OF ACTION.—Except as pro23 vided in sections 203(b)(2)(D)(ii) and 204(f)(3), there 

24 shall be no private right of action under any Federal or 

25 State law against any participant based on a claim of comVerDate Aug 31 2005 00:11 Jun 06, 2006 Jkt 049200 PO 00000 Frm 00264 Fmt 6652 Sfmt 6201 E:\BILLS\S3274.PCS S3274

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1 pliance or noncompliance with this Act or the involvement 

2 of any participant in the enactment of this Act. 

3 SEC. 222. MANAGEMENT OF THE FUND. 

4 (a) IN GENERAL.—Amounts in the Fund shall be 

5 held for the exclusive purpose of providing benefits to as6 bestos claimants and their beneficiaries and to otherwise 

7 defray the reasonable expenses of administering the Fund. 

8 (b) INVESTMENTS.— 

9 (1) IN GENERAL.—Amounts in the Fund shall 

10 be administered and invested with the care, skill, 

11 prudence, and diligence, under the circumstances 

12 prevailing at the time of such investment, that a 

13 prudent person acting in a like capacity and manner 

14 would use. 

15 (2) STRATEGY.—The Administrator shall invest 

16 amounts in the Fund in a manner that enables the 

17 Fund to make current and future distributions to or 

18 for the benefit of asbestos claimants. In pursuing an 

19 investment strategy under this subparagraph, the 

20 Administrator shall consider, to the extent relevant 

21 to an investment decision or action— 

22 (A) the size of the Fund; 

23 (B) the nature and estimated duration of 

24 the Fund; 


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1 (C) the liquidity and distribution require2 ments of the Fund; 

3 (D) general economic conditions at the 

4 time of the investment; 

5 (E) the possible effect of inflation or defla6 tion on Fund assets; 

7 (F) the role that each investment or course 

8 of action plays with respect to the overall assets 

9 of the Fund; 

10 (G) the expected amount to be earned (in11 cluding both income and appreciation of cap12 ital) through investment of amounts in the 

13 Fund; and 

14 (H) the needs of asbestos claimants for 

15 current and future distributions authorized 

16 under this Act. 

17 (c) BANKRUPTCY TRUST GUARANTEE.— 

18 (1) IN GENERAL.—Notwithstanding any other 

19 provision of this Act, the Administrator shall have 

20 the authority to impose a pro rata surcharge on all 

21 participants under this subsection to ensure the li22 quidity of the Fund, if— 

23 (A) the declared assets from 1 or more 

24 bankruptcy trusts established under a plan of 

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1 summated on or before July 31, 2004, are not 

2 available to the Fund because a final judgment 

3 that has been entered by a court and is no 

4 longer subject to any appeal or review has en5 joined the transfer of assets required under sec6 tion 524(j)(2) of title 11, United States Code 

7 (as amended by section 402(f) of this Act); and 

8 (B) borrowing is insufficient to assure the 

9 Fund’s ability to meet its obligations under this 

10 Act such that the required borrowed amount is 

11 likely to increase the risk of termination of this 

12 Act under section 405 based on reasonable 

13 claims projections. 

14 (2) ALLOCATION.—Any surcharge imposed 

15 under this subsection shall be imposed over a period 

16 of 5 years on a pro rata basis upon all participants, 

17 in accordance with the relative aggregate funding 

18 obligations under sections 202(a)(2) and 

19 212(a)(2)(A). 

20 (3) CERTIFICATION.— 

21 (A) IN GENERAL.—Before imposing a sur22 charge under this subsection, the Administrator 

23 shall publish a notice in the Federal Register 

24 and provide in such notice for a public comment 

25 period of 30 days. 


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1 (B) CONTENTS OF NOTICE.—The notice 

2 required under subparagraph (A) shall in3 clude— 

4 (i) information explaining the cir5 cumstances that make a surcharge nec6 essary and a certification that the require7 ments under paragraph (1) are met; 

8 (ii) the amount of the declared assets 

9 from any trust established under a plan of 

10 reorganization confirmed and substantially 

11 consummated on or before July 31, 2004, 

12 that was not made, or is no longer, avail13 able to the Fund; 

14 (iii) the total aggregate amount of the 

15 necessary surcharge; and 

16 (iv) the surcharge amount for each 

17 tier and subtier of defendant participants 

18 and for each insurer participant. 

19 (C) FINAL NOTICE.—The Administrator 

20 shall publish a final notice in the Federal Reg21 ister and provide each participant with written 

22 notice of that participant’s schedule of pay23 ments under this subsection. In no event shall 

24 any required surcharge under this subsection be 

25 due before 60 days after the Administrator 


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1 publishes the final notice in the Federal Reg2 ister and provides each participant with written 

3 notice of its schedule of payments. 

4 (4) MAXIMUM AMOUNT.—In no event shall the 

5 total aggregate surcharge imposed by the Adminis6 trator exceed the lesser of— 

7 (A) the total aggregate amount of the de8 clared assets of the trusts established under a 

9 plan of reorganization confirmed and substan10 tially consummated prior to July 31, 2004, that 

11 are no longer available to the Fund; or 

12 (B) $4,000,000,000. 

13 (5) DECLARED ASSETS.— 

14 (A) IN GENERAL.—In this subsection, the 

15 term ‘‘declared assets’’ means— 

16 (i) the amount of assets transferred 

17 by any trust established under a plan of 

18 reorganization confirmed and substantially 

19 consummated on or before July 31, 2004, 

20 to the Fund that is required to be returned 

21 to that trust under the final judgment de22 scribed in paragraph (1)(A); or 

23 (ii) if no assets were transferred by 

24 the trust to the Fund, the amount of as25 sets the Administrator determines would 


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1 have been available for transfer to the 

2 Fund from that trust under section 402(f). 

3 (B) DETERMINATION.—In making a deter4 mination under subparagraph (A)(ii), the Ad5 ministrator may rely on any information rea6 sonably available, and may request, and use 

7 subpoena authority of the Administrator if nec8 essary to obtain, relevant information from any 

9 such trust or its trustees. 

10 (d) BANKRUPTCY TRUST CREDITS.— 

11 (1) IN GENERAL.—Notwithstanding any other 

12 provision of this Act, but subject to paragraph (2) 

13 of this subsection, the Administrator shall provide a 

14 credit toward the aggregate payment obligations 

15 under sections 202(a)(2) and 212(a)(2)(A) for as16 sets received by the Fund from any bankruptcy trust 

17 established under a plan of reorganization confirmed 

18 and substantially consummated after July 31, 2004. 

19 (2) ALLOCATION OF CREDITS.—The Adminis20 trator shall allocate, for each such bankruptcy trust, 

21 the credits for such assets between the defendant 

22 and insurer aggregate payment obligations as fol23 lows: 

24 (A) DEFENDANT PARTICIPANTS.—The ag25 gregate amount that all persons other than inVerDate Aug 31 2005 00:11 Jun 06, 2006 Jkt 049200 PO 00000 Frm 00270 Fmt 6652 Sfmt 6201 E:\BILLS\S3274.PCS S3274

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1 surers contributing to the bankruptcy trust 

2 would have been required to pay as Tier I de3 fendants under section 203(b) if the plan of re4 organization under which the bankruptcy trust 

5 was established had not been confirmed and 

6 substantially consummated and the proceeding 

7 under chapter 11 of title 11, United States 

8 Code, that resulted in the establishment of the 

9 bankruptcy trust had remained pending as of 

10 the date of enactment of this Act. 

11 (B) INSURER PARTICIPANTS.—The aggre12 gate amount of all credits to which insurers are 

13 entitled to under section 202(c)(4)(A) of the 

14 Act. 

15 SEC. 223. ENFORCEMENT OF PAYMENT OBLIGATIONS. 

16 (a) DEFAULT.—If any participant fails to make any 

17 payment in the amount of and according to the schedule 

18 under this Act or as prescribed by the Administrator, after 

19 demand and a 30-day opportunity to cure the default, 

20 there shall be a lien in favor of the United States for the 

21 amount of the delinquent payment (including interest) 

22 upon all property and rights to property, whether real or 

23 personal, belonging to such participant. 

24 (b) BANKRUPTCY.—In the case of a bankruptcy or 

25 insolvency proceeding, the lien imposed under subsection 


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1 (a) shall be treated in the same manner as a lien for taxes 

2 due and owing to the United States for purposes of the 

3 provisions of title 11, United States Code, or section 

4 3713(a) of title 31, United States Code. The United 

5 States Bankruptcy Court shall have jurisdiction over any 

6 issue or controversy regarding lien priority and lien perfec7 tion arising in a bankruptcy case due to a lien imposed 

8 under subsection (a). 

9 (c) CIVIL ACTION.— 

10 (1) IN GENERAL.—In any case in which there 

11 has been a refusal or failure to pay any liability im12 posed under this Act, including a refusal or failure 

13 to provide the information required under section 

14 204 needed to determine liability, the Administrator 

15 may bring a civil action in any appropriate United 

16 States District Court, or any other appropriate law17 suit or proceeding outside of the United States— 

18 (A) to enforce the liability and any lien of 

19 the United States imposed under this section; 

20 (B) to subject any property of the partici21 pant, including any property in which the par22 ticipant has any right, title, or interest to the 

23 payment of such liability; 

24 (C) for temporary, preliminary, or perma25 nent relief; or 


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1 (D) to enforce a subpoena issued under 

2 section 204(i)(9) to compel the production of 

3 documents necessary to determine liability. 

4 (2) ADDITIONAL PENALTIES.—In any action 

5 under paragraph (1) in which the refusal or failure 

6 to pay was willful, the Administrator may seek re7 covery— 

8 (A) of punitive damages; 

9 (B) of the costs of any civil action under 

10 this subsection, including reasonable fees in11 curred for collection, expert witnesses, and at12 torney’s fees; and 

13 (C) in addition to any other penalty, of a 

14 fine equal to the total amount of the liability 

15 that has not been collected. 

16 (d) ENFORCEMENT AUTHORITY AS TO INSURER PAR17 TICIPANTS.— 

18 (1) IN GENERAL.—In addition to or in lieu of 

19 the enforcement remedies described in subsection 

20 (c), the Administrator may seek to recover amounts 

21 in satisfaction of a payment not timely paid by an 

22 insurer participant under the procedures under this 

23 subsection. 

24 (2) SUBROGATION.—To the extent required to 

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1 surer participants, the Administrator shall be 

2 deemed to be subrogated to the contractual rights of 

3 participants to seek recovery from nonpaying insur4 ing participants that are domiciled outside the 

5 United States under the policies of liability insur6 ance or contracts of liability reinsurance or 

7 retrocessional reinsurance applicable to asbestos 

8 claims, and the Administrator may bring an action 

9 or an arbitration against the nonpaying insurer par10 ticipants under the provisions of such policies and 

11 contracts, provided that— 

12 (A) any amounts collected under this sub13 section shall not increase the amount of deemed 

14 erosion allocated to any policy or contract under 

15 section 404, or otherwise reduce coverage avail16 able to a participant; and 

17 (B) subrogation under this subsection shall 

18 have no effect on the validity of the insurance 

19 policies or reinsurance, and any contrary State 

20 law is expressly preempted. 

21 (3) RECOVERABILITY OF CONTRIBUTION.—For 

22 purposes of this subsection— 

23 (A) all contributions to the Fund required 

24 of a participant shall be deemed to be sums leVerDate Aug 31 2005 00:11 Jun 06, 2006 Jkt 049200 PO 00000 Frm 00274 Fmt 6652 Sfmt 6201 E:\BILLS\S3274.PCS S3274

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1 gally required to be paid for bodily injury re2 sulting from exposure to asbestos; 

3 (B) all contributions to the Fund required 

4 of any participant shall be deemed to be a sin5 gle loss arising from a single occurrence under 

6 each contract to which the Administrator is 

7 subrogated; and 

8 (C) with respect to reinsurance contracts, 

9 all contributions to the Fund required of a par10 ticipant shall be deemed to be payments to a 

11 single claimant for a single loss. 

12 (4) NO CREDIT OR OFFSET.—In any action 

13 brought under this subsection, the nonpaying insurer 

14 or reinsurer shall be entitled to no credit or offset 

15 for amounts collectible or potentially collectible from 

16 any participant nor shall such defaulting participant 

17 have any right to collect any sums payable under 

18 this section from any participant. 

19 (5) COOPERATION.—Insureds and cedents shall 

20 cooperate with the Administrator’s reasonable re21 quests for assistance in any such proceeding. The 

22 positions taken or statements made by the Adminis23 trator in any such proceeding shall not be binding 

24 on or attributed to the insureds or cedents in any 

25 other proceeding. The outcome of such a proceeding 


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1 shall not have a preclusive effect on the insureds or 

2 cedents in any other proceeding and shall not be ad3 missible against any subrogee under this section. 

4 The Administrator shall have the authority to settle 

5 or compromise any claims against a nonpaying in6 surer participant under this subsection. 

7 (e) BAR ON UNITED STATES BUSINESS.—If any di8 rect insurer or reinsurer refuses to pay any contribution 

9 required by this Act, then, in addition to any other pen10 alties imposed by this Act, the Administrator shall issue 

11 an order barring such entity and its affiliates from insur12 ing risks located within the United States or otherwise 

13 doing business within the United States unless and until 

14 it complies. If any direct insurer or reinsurer refuses to 

15 furnish any information requested by the Administrator, 

16 the Administrator may issue an order barring such entity 

17 and its affiliates from insuring risks located within the 

18 United States or otherwise doing business within the 

19 United States unless and until it complies. Insurer partici20 pants or their affiliates seeking to obtain a license from 

21 any State to write any type of insurance shall be barred 

22 from obtaining any such license until payment of all con23 tributions required as of the date of license application. 

24 (f) CREDIT FOR REINSURANCE.—If the Adminis25 trator determines that an insurer participant that is a reVerDate Aug 31 2005 00:11 Jun 06, 2006 Jkt 049200 PO 00000 Frm 00276 Fmt 6652 Sfmt 6201 E:\BILLS\S3274.PCS S3274

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1 insurer is in default in paying any required contribution 

2 or otherwise not in compliance with this Act, the Adminis3 trator may issue an order barring any direct insurer par4 ticipant from receiving credit for reinsurance purchased 

5 from the defaulting reinsurer after the date of the Admin6 istrator’s determination of default. Any State law gov7 erning credit for reinsurance to the contrary is preempted. 

8 (g) DEFENSE LIMITATION.—In any proceeding under 

9 this section, the participant shall be barred from bringing 

10 any challenge to any determination of the Administrator 

11 or the Asbestos Insurers Commission regarding its liability 

12 under this Act, or to the constitutionality of this Act or 

13 any provision thereof, if such challenge could have been 

14 made during the review provided under section 204(i)(10), 

15 or in a judicial review proceeding under section 303. 

16 (h) DEPOSIT OF FUNDS.— 

17 (1) IN GENERAL.—Any funds collected under 

18 subsection (c)(2) (A) or (C) shall be— 

19 (A) deposited in the Fund; and 

20 (B) used only to pay— 

21 (i) claims for awards for an eligible 

22 disease or condition determined under title 

23 I; or 

24 (ii) claims for reimbursement for med25 ical monitoring determined under title I. 


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1 (2) NO EFFECT ON OTHER LIABILITIES.—The 

2 imposition of a fine under subsection (c)(2)(C) shall 

3 have no effect on— 

4 (A) the assessment of contributions under 

5 subtitles A and B; or 

6 (B) any other provision of this Act. 

7 (i) PROPERTY OF THE ESTATE.—Section 541(b) of 

8 title 11, United States Code, is amended— 

9 (1) in paragraph (4)(B)(ii), by striking ‘‘or’’ at 

10 the end; 

11 (2) in paragraph (5), by striking ‘‘prohibition.’’ 

12 and inserting ‘‘prohibition; or’’; and 

13 (3) by inserting after paragraph (5) and before 

14 the last undesignated sentence the following: 

15 ‘‘(6) the value of any pending claim against or 

16 the amount of an award granted from the Asbestos 

17 Injury Claims Resolution Fund established under 

18 the Fairness in Asbestos Injury Resolution Act of 

19 2006.’’. 

20 (j) TRANSACTIONS.— 

21 (1) NOTICE OF TRANSACTION.—Any participant 

22 that has engaged in any transaction or series of 

23 transactions under which a significant portion of 

24 such participant’s assets, properties, or business 

25 was, directly or indirectly, transferred by any means 


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1 (including by sale, dividend, contribution to a sub2 sidiary or split-off) to 1 or more persons other than 

3 the participant shall provide written notice to the 

4 Administrator of such transaction (or series of 

5 transactions). 

6 (2) TIMING OF NOTICE AND RELATED AC7 TIONS.— 

8 (A) IN GENERAL.—Any notice that a par9 ticipant is required to give under paragraph (1) 

10 shall be given not later than 30 days after the 

11 date of consummation of the transaction or the 

12 first transaction to occur in a proposed series of 

13 transactions. 

14 (B) OTHER NOTIFICATIONS.— 

15 (i) IN GENERAL.—Not later than the 

16 date in any year by which a participant is 

17 required to make its contribution to the 

18 Fund, the participant shall deliver to the 

19 Administrator a written certification stat20 ing that— 

21 (I) the participant has complied 

22 during the period since the last such 

23 certification or the date of enactment 

24 of this Act with the notice require25 ments under this subsection; or 


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1 (II) the participant was not re2 quired to provide any notice under 

3 this subsection during such period. 

4 (ii) SUMMARY.—The Administrator 

5 shall include in the annual report required 

6 to be submitted to Congress under section 

7 405 a summary of all such notices (after 

8 removing all confidential identifying infor9 mation) received during the most recent 

10 fiscal year. 

11 (C) NOTICE COMPLETION.—The Adminis12 trator shall not consider any notice given under 

13 paragraph (1) as given until such time as the 

14 Administrator receives substantially all the in15 formation required by this subsection. 

16 (3) CONTENTS OF NOTICE.— 

17 (A) IN GENERAL.—The Administrator 

18 shall determine by rule or regulation the infor19 mation to be included in the notice required 

20 under this subsection, which shall include such 

21 information as may be necessary to enable the 

22 Administrator to determine whether— 

23 (i) the person or persons to whom the 

24 assets, properties, or business were trans25 ferred in the transaction (or series of 


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1 transactions) should be considered to be 

2 the successor in interest of the participant 

3 for purposes of this Act; or 

4 (ii) the transaction (or series of trans5 actions) is subject to avoidance by a trust6 ee under section 544(b) or 548 of title 11, 

7 United States Code, as if, but whether or 

8 not, the participant is subject to a case 

9 under title 11, United States Code. 

10 (B) STATEMENTS.—The notice shall also 

11 include— 

12 (i) a statement by the participant as 

13 to whether the participant believes any 

14 person has become a successor in interest 

15 to the participant for purposes of this Act 

16 and, if so, the identity of that person; and 

17 (ii) a statement by the participant as 

18 to whether that person has acknowledged 

19 that it has become a successor in interest 

20 for purposes of this Act. 

21 (4) DEFINITION.—In this subsection, the term 

22 ‘‘significant portion of the assets, properties, or busi23 ness of a participant’’ means assets (including tan24 gible or intangible assets, securities, and cash), 

25 properties or business of such participant (or its afVerDate Aug 31 2005 00:11 Jun 06, 2006 Jkt 049200 PO 00000 Frm 00281 Fmt 6652 Sfmt 6201 E:\BILLS\S3274.PCS S3274

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1 filiated group, to the extent that the participant has 

2 elected to be part of an affiliated group under sec3 tion 204(f)) that, together with any other asset, 

4 property, or business transferred by such participant 

5 in any of the previous completed 5 fiscal years of 

6 such participant (or, as appropriate, its affiliated 

7 group), and as determined in accordance with 

8 United States generally accepted accounting prin9 ciples as in effect from time to time— 

10 (A) generated at least 40 percent of the 

11 revenues of such participant (or its affiliated 

12 group); 

13 (B) constituted at least 40 percent of the 

14 assets of such participant (or its affiliated 

15 group); 

16 (C) generated at least 40 percent of the 

17 operating cash flows of such participant (or its 

18 affiliated group); or 

19 (D) generated at least 40 percent of the 

20 net income or loss of such participant (or its af21 filiated group), 

22 as measured during any of such 5 previous fiscal 

23 years. 

24 (5) RIGHT OF ACTION.— 


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1 (A) IN GENERAL.—Notwithstanding sec2 tion 221(f), if the Administrator or any partici3 pant believes that a participant has engaged, di4 rectly or indirectly, in, or is the subject of, a 

5 transaction (or series of transactions)— 

6 (i) involving a person or persons who, 

7 as a result of such transaction (or series of 

8 transactions), may have or may become the 

9 successor in interest or successors in inter10 est of such participant, where the status as 

11 a successor in interest has not been stated 

12 and acknowledged by the participant and 

13 such person; or 

14 (ii) that may be subject to avoidance 

15 by a trustee under section 544(b) or 548 

16 of title 11, United States Code, as if, but 

17 whether or not, the participant is a subject 

18 to a case under title 11, United States 

19 Code, 

20 then the Administrator or such participant 

21 may, as a deemed creditor under applicable law, 

22 bring a civil action in an appropriate forum 

23 against the participant or any other person who 

24 is either a party to the transaction (or series of 


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1 transactions) or the recipient of any asset, 

2 property, or business of the participant. 

3 (B) RELIEF ALLOWED.—In any action 

4 commenced under this subsection, the Adminis5 trator or a participant, as applicable, may 

6 seek— 

7 (i) with respect to a transaction (or 

8 series of transactions) referenced in clause 

9 (i) of subparagraph (A), a declaratory 

10 judgment regarding whether such person 

11 has become the successor in interest of 

12 such participant; or 

13 (ii) with respect to a transaction (or 

14 series of transactions) referenced in clause 

15 (ii) of subparagraph (A) a temporary re16 straining order or a preliminary or perma17 nent injunction such other relief regarding 

18 such transaction (or series of transactions) 

19 as the court determines to be necessary to 

20 ensure that performance of a participant’s 

21 payment obligations under this Act is not 

22 materially impaired by reason of such 

23 transaction (or series of transactions). 

24 (C) APPLICABILITY.—If the Administrator 

25 or a participant wishes to challenge a statement 


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1 made by a participant that a person has not be2 come a successor in interest for purposes of this 

3 Act, then this paragraph shall be the exclusive 

4 means by which the determination of whether 

5 such person became a successor in interest of 

6 the participant shall be made. This paragraph 

7 shall not preempt any other rights of any per8 son under applicable Federal or State law. 

9 (D) VENUE.—Any action under this para10 graph shall be exclusively brought in any appro11 priate United States district court or, to the ex12 tent necessary to obtain complete relief, any 

13 other appropriate forum outside of the United 

14 States. 

15 (6) RULES AND REGULATIONS.—The Adminis16 trator may promulgate regulations to effectuate the 

17 intent of this subsection, including regulations relat18 ing to the form, timing, and content of notices. 

19 SEC. 224. INTEREST ON UNDERPAYMENT OR NONPAYMENT. 

20 If any amount of payment obligation under this title 

21 is not paid on or before the last date prescribed for pay22 ment, the liable party shall pay interest on such amount 

23 at the Federal short-term rate determined under section 

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1 centage points, for the period from such last date to the 

2 date paid. 

3 SEC. 225. EDUCATION, CONSULTATION, SCREENING, AND 

4 MONITORING. 

5 (a) IN GENERAL.—The Administrator shall establish 

6 a program for the education, consultation, medical screen7 ing, and medical monitoring of persons with exposure to 

8 asbestos. The program shall be funded by the Fund. 

9 (b) OUTREACH AND EDUCATION.— 

10 (1) IN GENERAL.—Not later than 1 year after 

11 the date of enactment of this Act, the Administrator 

12 shall establish an outreach and education program, 

13 including a website designed to provide information 

14 about asbestos-related medical conditions to mem15 bers of populations at risk of developing such condi16 tions. 

17 (2) INFORMATION.—The information provided 

18 under paragraph (1) shall include information 

19 about— 

20 (A) the signs and symptoms of asbestos-re21 lated medical conditions; 

22 (B) the value of appropriate medical 

23 screening programs; and 


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1 (C) actions that the individuals can take to 

2 reduce their future health risks related to as3 bestos exposure. 

4 (3) CONTRACTS.—Preference in any contract 

5 under this subsection shall be given to providers that 

6 are existing nonprofit organizations with a history 

7 and experience of providing occupational health out8 reach and educational programs for individuals ex9 posed to asbestos. 

10 (c) MEDICAL SCREENING PROGRAM.— 

11 (1) ESTABLISHMENT OF PROGRAM.—Not soon12 er than 18 months or later than 24 months after the 

13 Administrator certifies that the Fund is fully oper14 ational and processing claims at a reasonable rate, 

15 the Administrator shall adopt guidelines establishing 

16 a medical screening program for individuals at high 

17 risk of asbestos-related disease resulting from an as18 bestos-related disease. In promulgating such guide19 lines, the Administrator shall consider the views of 

20 the Advisory Committee on Asbestos Disease Com21 pensation, the Medical Advisory Committee, and the 

22 public. 

23 (2) ELIGIBILITY CRITERIA.— 

24 (A) IN GENERAL.—The guidelines promul25 gated under this subsection shall establish criVerDate Aug 31 2005 00:11 Jun 06, 2006 Jkt 049200 PO 00000 Frm 00287 Fmt 6652 Sfmt 6201 E:\BILLS\S3274.PCS S3274

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1 teria for participation in the medical screening 

2 program. 

3 (B) CONSIDERATIONS.—In promulgating 

4 eligibility criteria the Administrator shall take 

5 into consideration all factors relevant to the in6 dividual’s effective cumulative exposure to as7 bestos, including— 

8 (i) any industry in which the indi9 vidual worked; 

10 (ii) the individual’s occupation and 

11 work setting; 

12 (iii) the historical period in which ex13 posure took place; 

14 (iv) the duration of the exposure; 

15 (v) the intensity and duration of non16 occupational exposures; 

17 (vi) the intensity and duration of ex18 posure to risk levels of naturally occurring 

19 asbestos as defined by the Environmental 

20 Protection Agency; and 

21 (vii) any other factors that the Ad22 ministrator determines relevant. 

23 (3) PROTOCOLS.—The guidelines developed 

24 under this subsection shall establish protocols for 

25 medical screening, which shall include— 


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1 (A) administration of a health evaluation 

2 and work history questionnaire; 

3 (B) an evaluation of smoking history; 

4 (C) a physical examination by a qualified 

5 physician with a doctor-patient relationship 

6 with the individual; 

7 (D) a chest x-ray read by a certified B8 reader as defined under section 121(a)(4); and 

9 (E) pulmonary function testing as defined 

10 under section 121(a)(13). 

11 (4) FREQUENCY.—The Administrator shall es12 tablish the frequency with which medical screening 

13 shall be provided or be made available to eligible in14 dividuals, which shall be not less than every 5 years. 

15 (5) PROVISION OF SERVICES.—The Adminis16 trator shall provide medical screening to eligible in17 dividuals directly or by contract with another agency 

18 of the Federal Government, with State or local gov19 ernments, or with private providers of medical serv20 ices. The Administrator shall establish strict quali21 fications for the providers of such services, and shall 

22 periodically audit the providers of services under this 

23 subsection, to ensure their integrity, high degree of 

24 competence, and compliance with all applicable tech25 nical and professional standards. No provider of 


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1 medical screening services may have earned more 

2 than 15 percent of their income from the provision 

3 of services of any kind in connection with asbestos 

4 litigation in any of the 3 years preceding the date 

5 of enactment of this Act. All contracts with pro6 viders of medical screening services under this sub7 section shall contain provisions for reimbursement of 

8 screening services at a reasonable rate and termi9 nation of such contracts for cause if the Adminis10 trator determines that the service provider fails to 

11 meet the qualifications established under this sub12 section. 

13 (6) LIMITATION OF COMPENSATION FOR SERV14 ICES.—The compensation required to be paid to a 

15 provider of medical screening services for such serv16 ices furnished to an eligible individual shall be lim17 ited to the amount that would be reimbursed at the 

18 time of the furnishing of such services under title 

19 XVIII of the Social Security Act (42 U.S.C. 1395 et 

20 seq.) for similar services if such services are covered 

21 under title XVIII of the Social Security Act (42 

22 U.S.C. 1395 et seq.). 

23 (7) FUNDING; PERIODIC REVIEW.— 

24 (A) FUNDING.—The Administrator shall 

25 make such funds available from the Fund to 


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1 implement this section, with a minimum of 

2 $20,000,000 but not more than $30,000,000 

3 each year in each of the 5 years following the 

4 effective date of the medical screening program. 

5 Notwithstanding the preceding sentence, the 

6 Administrator shall suspend the operation of 

7 the program or reduce its funding level if nec8 essary to preserve the solvency of the Fund and 

9 to prevent the sunset of the overall program 

10 under section 405(g). 

11 (B) REVIEW.—The Administrator may re12 duce the amount of funding below $20,000,000 

13 each year if the program is fully implemented. 

14 The Administrator’s first annual report under 

15 section 405 following the close of the 4th year 

16 of operation of the medical screening program 

17 shall include an analysis of the usage of the 

18 program, its cost and effectiveness, its medical 

19 value, and the need to continue that program 

20 for an additional 5-year period. The Adminis21 trator shall also recommend to Congress any 

22 improvements that may be required to make the 

23 program more effective, efficient, and economi24 cal, and shall recommend a funding level for the 

25 program for the 5 years following the period of 


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1 initial funding referred to under subparagraph 

2 (A). 

3 (d) LIMITATION.—In no event shall the total amount 

4 allocated to the medical screening program established 

5 under this subsection over the lifetime of the Fund exceed 

6 $600,000,000. 

7 (e) MEDICAL MONITORING PROGRAM AND PROTO8 COLS.— 

9 (1) IN GENERAL.—The Administrator shall es10 tablish procedures for a medical monitoring program 

11 for persons exposed to asbestos who have been ap12 proved for level I compensation under section 131. 

13 (2) PROCEDURES.—The procedures for medical 

14 monitoring shall include— 

15 (A) specific medical tests to be provided to 

16 eligible individuals and the periodicity of those 

17 tests, which shall initially be provided every 3 

18 years and include— 

19 (i) administration of a health evalua20 tion and work history questionnaire; 

21 (ii) physical examinations, including 

22 blood pressure measurement, chest exam23 ination, and examination for clubbing; 

24 (iii) AP and lateral chest x-ray; and 


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1 (iv) spirometry performed according 

2 to ATS standards; 

3 (B) qualifications of medical providers who 

4 are to provide the tests required under subpara5 graph (A); and 

6 (C) administrative provisions for reim7 bursement from the Fund of the costs of moni8 toring eligible claimants, including the costs as9 sociated with the visits of the claimants to phy10 sicians in connection with medical monitoring, 

11 and with the costs of performing and analyzing 

12 the tests. 

13 (3) PREFERENCES.— 

14 (A) IN GENERAL.—In administering the 

15 monitoring program under this subsection, pref16 erence shall be given to medical and program 

17 providers with— 

18 (i) a demonstrated capacity for identi19 fying, contacting, and evaluating popu20 lations of workers or others previously ex21 posed to asbestos; and 

22 (ii) experience in establishing net23 works of medical providers to conduct med24 ical screening and medical monitoring ex25 aminations. 


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1 (B) PROVISION OF LISTS.—Claimants that 

2 are eligible to participate in the medical moni3 toring program shall be provided with a list of 

4 approved providers in their geographic area at 

5 the time such claimants become eligible to re6 ceive medical monitoring. 

7 (f) CONTRACTS.—The Administrator may enter into 

8 contracts with qualified program providers that would per9 mit the program providers to undertake large-scale med10 ical screening and medical monitoring programs by means 

11 of subcontracts with a network of medical providers, or 

12 other health providers. 

13 (g) REVIEW.—Not later than 5 years after the date 

14 of enactment of this Act, and every 5 years thereafter, 

15 the Administrator shall review, and if necessary update, 

16 the protocols and procedures established under this sec17 tion. 

18 SEC. 226. NATIONAL MESOTHELIOMA RESEARCH AND 

19 TREATMENT PROGRAM. 

20 (a) IN GENERAL.—There is established the National 

21 Mesothelioma Research and Treatment Program (referred 

22 to in this section as the ‘‘Program’’) to investigate and 

23 advance the detection, prevention, treatment, and cure of 

24 malignant mesothelioma. 

25 (b) MESOTHELIOMA CENTERS.— 


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1 (1) IN GENERAL.—The Administrator shall 

2 make available $1,500,000 from the Fund, and the 

3 Director of the National Institutes of Health shall 

4 make available $1,000,000 from amounts available 

5 to the Director, for each of fiscal years 2006 

6 through 2015, for the establishment of each of 10 

7 mesothelioma disease research and treatment cen8 ters. 

9 (2) REQUIREMENTS.—The Director of the Na10 tional Institutes of Health, in consultation with the 

11 Medical Advisory Committee, shall conduct a com12 petitive peer review process to select sites for the 

13 centers described in paragraph (1). The Director 

14 shall ensure that sites selected under this paragraph 

15 are— 

16 (A) geographically distributed throughout 

17 the United States with special consideration 

18 given to areas of high incidence of mesothe19 lioma disease; 

20 (B) closely associated with Department of 

21 Veterans Affairs medical centers, in order to 

22 provide research benefits and care to veterans 

23 who have suffered excessively from mesothe24 lioma; 


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1 (C) engaged in exemplary laboratory and 

2 clinical mesothelioma research, including clin3 ical trials, to provide mechanisms for effective 

4 therapeutic treatments, as well as detection and 

5 prevention, particularly in areas of palliation of 

6 disease symptoms and pain management; 

7 (D) participants in the National Mesothe8 lioma Registry and Tissue Bank under sub9 section (c) and the annual International Meso10 thelioma Symposium under subsection 

11 (d)(2)(E); 

12 (E) with respect to research and treatment 

13 efforts, coordinated with other centers and in14 stitutions involved in exemplary mesothelioma 

15 research and treatment; 

16 (F) able to facilitate transportation and 

17 lodging for mesothelioma patients, so as to en18 able patients to participate in the newest devel19 oping treatment protocols, and to enable the 

20 centers to recruit patients in numbers sufficient 

21 to conduct necessary clinical trials; and 

22 (G) nonprofit hospitals, universities, or 

23 medical or research institutions incorporated or 

24 organized in the United States. 

25 (c) MESOTHELIOMA REGISTRY AND TISSUE BANK.— 


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1 (1) ESTABLISHMENT.—The Administrator shall 

2 make available $1,000,000 from the Fund, and the 

3 Director of the National Institutes of Health shall 

4 make available $1,000,000 from amounts available 

5 to the Director, for each of fiscal years 2006 

6 through 2015 for the establishment, maintenance, 

7 and operation of a National Mesothelioma Registry 

8 to collect data regarding symptoms, pathology, eval9 uation, treatment, outcomes, and quality of life and 

10 a Tissue Bank to include the pre- and post-treat11 ment blood (serum and blood cells) specimens as 

12 well as tissue specimens from biopsies and surgery. 

13 Not less than $500,000 of the amount made avail14 able under the preceding sentence in each fiscal year 

15 shall be allocated for the collection and maintenance 

16 of tissue specimens. 

17 (2) REQUIREMENTS.—The Director of the Na18 tional Institutes of Health, with the advice and con19 sent of the Medical Advisory Committee, shall con20 duct a competitive peer review process to select a 

21 site to administer the Registry and Tissue Bank de22 scribed in paragraph (1). The Director shall ensure 

23 that the site selected under this paragraph— 


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1 (A) is available to all mesothelioma pa2 tients and qualifying physicians throughout the 

3 United States; 

4 (B) is subject to all applicable medical and 

5 patient privacy laws and regulations; 

6 (C) is carrying out activities to ensure that 

7 data is accessible via the Internet; and 

8 (D) provides data and tissue samples to 

9 qualifying researchers and physicians who apply 

10 for such data in order to further the under11 standing, prevention, screening, diagnosis, or 

12 treatment of malignant mesothelioma. 

13 (d) CENTER FOR MESOTHELIOMA EDUCATION.— 

14 (1) ESTABLISHMENT.—The Administrator shall 

15 make available $1,000,000 from the Fund, and the 

16 Director of the National Institutes of Health shall 

17 make available $1,000,000 from amounts available 

18 to the Director, for each of fiscal years 2006 

19 through 2015 for the establishment, with the advice 

20 and consent of the Medical Advisory Committee, of 

21 a Center for Mesothelioma Education (referred to in 

22 this section as the ‘‘Center’’) to— 

23 (A) promote mesothelioma awareness and 

24 education; 


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1 (B) assist mesothelioma patients and their 

2 family members in obtaining necessary informa3 tion; and 

4 (C) work with the centers established 

5 under subsection (b) in advancing mesothelioma 

6 research. 

7 (2) ACTIVITIES.—The Center shall— 

8 (A) educate the public about the new ini9 tiatives contained in this section through a Na10 tional Mesothelioma Awareness Campaign; 

11 (B) develop and maintain a Mesothelioma 

12 Educational Resource Center (referred to in 

13 this section as the ‘‘MERCI’’), that is accessible 

14 via the Internet, to provide mesothelioma pa15 tients, family members, and front-line physi16 cians with comprehensive, current information 

17 on mesothelioma and its treatment, as well as 

18 on the existence of, and general claim proce19 dures for the Asbestos Injury Claims Resolution 

20 Fund; 

21 (C) through the MERCI and otherwise, 

22 educate mesothelioma patients, family members, 

23 and front-line physicians about, and encourage 

24 such individuals to participate in, the centers 


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1 established under subsection (b), the Registry 

2 and the Tissue Bank; 

3 (D) complement the research efforts of the 

4 centers established under subsection (b) by 

5 awarding competitive, peer-reviewed grants for 

6 the training of clinical specialist fellows in 

7 mesothelioma, and for highly innovative, experi8 mental or pre-clinical research; and 

9 (E) conduct an annual International Meso10 thelioma Symposium. 

11 (3) REQUIREMENTS.—The Center shall— 

12 (A) be a nonprofit corporation under sec13 tion 501(c)(3) of the Internal Revenue Code of 

14 1986; 

15 (B) be a separate entity from and not an 

16 affiliate of any hospital, university, or medical 

17 or research institution; and 

18 (C) demonstrate a history of program 

19 spending that is devoted specifically to the mis20 sion of extending the survival of current and fu21 ture mesothelioma patients, including a history 

22 of soliciting, peer reviewing through a competi23 tive process, and funding research grant appli24 cations relating to the detection, prevention, 

25 treatment, and cure of mesothelioma. 


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1 (4) CONTRACTS FOR OVERSIGHT.—The Direc2 tor of the National Institutes of Health may enter 

3 into contracts with the Center for the selection and 

4 oversight of the centers established under subsection 

5 (b), or selection of the director of the Registry and 

6 the Tissue Bank under subsection (c) and oversight 

7 of the Registry and the Tissue Bank. 

8 (e) REPORT AND RECOMMENDATIONS.—Not later 

9 than September 30, 2015, The Director of the National 

10 Institutes of Health shall, after opportunity for public 

11 comment and review, publish and provide to Congress a 

12 report and recommendations on the results achieved and 

13 information gained through the Program, including— 

14 (1) information on the status of mesothelioma 

15 as a national health issue, including— 

16 (A) annual United States incidence and 

17 death rate information and whether such rates 

18 are increasing or decreasing; 

19 (B) the average prognosis; and 

20 (C) the effectiveness of treatments and 

21 means of prevention; 

22 (2) promising advances in mesothelioma treat23 ment and research which could be further developed 

24 if the Program is reauthorized; and 


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1 (3) a summary of advances in mesothelioma 

2 treatment made in the 10-year period prior to the 

3 report and whether those advances would justify 

4 continuation of the Program and whether it should 

5 be reauthorized for an additional 10 years. 

6 (f) SEVERABILITY.—If any provision of this Act, or 

7 amendment made by this Act, or the application of such 

8 provision or amendment to any person or circumstance is 

9 held to be unconstitutional, the remainder of this Act (in10 cluding this section), the amendments made by this Act, 

11 and the application of the provisions of such to any person 

12 or circumstance shall not be affected thereby. 

13 (g) REGULATIONS.—The Director of the National In14 stitutes of Health shall promulgate regulations to provide 

15 for the implementation of this section. 

16 TITLE III—JUDICIAL REVIEW 

17 SEC. 301. JUDICIAL REVIEW OF RULES AND REGULATIONS. 

18 (a) EXCLUSIVE JURISDICTION.—The United States 

19 Court of Appeals for the District of Columbia Circuit shall 

20 have exclusive jurisdiction over any action to review rules 

21 or regulations promulgated by the Administrator or the 

22 Asbestos Insurers Commission under this Act. 

23 (b) PERIOD FOR FILING PETITION.—A petition for 

24 review under this section shall be filed not later than 60 


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1 days after the date notice of such promulgation appears 

2 in the Federal Register. 

3 (c) EXPEDITED PROCEDURES.—The United States 

4 Court of Appeals for the District of Columbia shall provide 

5 for expedited procedures for reviews under this section. 

6 SEC. 302. JUDICIAL REVIEW OF AWARD DECISIONS. 

7 (a) IN GENERAL.—Any claimant adversely affected 

8 or aggrieved by a final decision of the Administrator 

9 awarding or denying compensation under title I may peti10 tion for judicial review of such decision. Any petition for 

11 review under this section shall be filed within 90 days of 

12 the issuance of a final decision of the Administrator. 

13 (b) EXCLUSIVE JURISDICTION.—A petition for review 

14 may only be filed in the United States Court of Appeals 

15 for the circuit in which the claimant resides at the time 

16 of the issuance of the final order. 

17 (c) STANDARD OF REVIEW.—The court shall uphold 

18 the decision of the Administrator unless the court deter19 mines, upon review of the record as a whole, that the deci20 sion is not supported by substantial evidence, is contrary 

21 to law, or is not in accordance with procedure required 

22 by law. 

23 (d) EXPEDITED PROCEDURES.—The United States 

24 Court of Appeals shall provide for expedited procedures 

25 for reviews under this section. 


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1 SEC. 303. JUDICIAL REVIEW OF PARTICIPANTS’ ASSESS2 MENTS. 

3 (a) EXCLUSIVE JURISDICTION.—The United States 

4 Court of Appeals for the District of Columbia Circuit shall 

5 have exclusive jurisdiction over any action to review a final 

6 determination by the Administrator or the Asbestos Insur7 ers Commission regarding the liability of any person to 

8 make a payment to the Fund, including a notice of appli9 cable subtier assignment under section 204(i), a notice of 

10 financial hardship or inequity determination under section 

11 204(d), a notice of a distributor’s adjustment under sec12 tion 204(m), and a notice of insurer participant obligation 

13 under section 212(b). 

14 (b) PERIOD FOR FILING ACTION.—A petition for re15 view under subsection (a) shall be filed not later than 60 

16 days after a final determination by the Administrator or 

17 the Commission giving rise to the action. Any defendant 

18 participant who receives a notice of its applicable subtier 

19 under section 204(i), a notice of financial hardship or in20 equity determination under section 204(d), or a notice of 

21 a distributor’s adjustment under section 204(m), shall 

22 commence any action within 30 days after a decision on 

23 rehearing under section 204(i)(10), and any insurer par24 ticipant who receives a notice of a payment obligation 

25 under section 212(b) shall commence any action within 30 


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1 days after receiving such notice. The court shall give such 

2 action expedited consideration. 

3 SEC. 304. OTHER JUDICIAL CHALLENGES. 

4 (a) EXCLUSIVE JURISDICTION.—The United States 

5 District Court for the District of Columbia shall have ex6 clusive jurisdiction over any action for declaratory or in7 junctive relief challenging any provision of this Act. An 

8 action under this section shall be filed not later than 60 

9 days after the date of enactment of this Act or 60 days 

10 after the final action by the Administrator or the Commis11 sion giving rise to the action, whichever is later. 

12 (b) DIRECT APPEAL.—A final decision in the action 

13 shall be reviewable on appeal directly to the Supreme 

14 Court of the United States. Such appeal shall be taken 

15 by the filing of a notice of appeal within 30 days, and 

16 the filing of a jurisdictional statement within 60 days, of 

17 the entry of the final decision. 

18 (c) EXPEDITED PROCEDURES.—It shall be the duty 

19 of the United States District Court for the District of Co20 lumbia and the Supreme Court of the United States to 

21 advance on the docket and to expedite to the greatest pos22 sible extent the disposition of the action and appeal. 

23 SEC. 305. STAYS, EXCLUSIVITY, AND CONSTITUTIONAL RE24 VIEW. 

25 (a) NO STAYS.— 


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1 (1) PAYMENTS.—No court may issue a stay of 

2 payment by any party into the Fund pending its 

3 final judgment. 

4 (2) LEGAL CHALLENGES.—No court may issue 

5 a stay or injunction pending final judicial action, in6 cluding the exhaustion of all appeals, on a legal chal7 lenge to this Act or any portion of this Act. 

8 (b) EXCLUSIVITY OF REVIEW.—An action of the Ad9 ministrator or the Asbestos Insurers Commission for 

10 which review could have been obtained under section 301, 

11 302, or 303 shall not be subject to judicial review in any 

12 other proceeding. 

13 (c) CONSTITUTIONAL REVIEW.— 

14 (1) IN GENERAL.—The United States District 

15 Court for the District of Columbia shall have exclu16 sive jurisdiction over any action challenging the con17 stitutionality of any provision or application of this 

18 Act. The following rules shall apply: 

19 (A) The action shall be filed in the United 

20 States District Court for the District of Colum21 bia and shall be heard by a 3-judge court con22 vened under section 2284 of title 28, United 

23 States Code. 

24 (B) A final decision in the action shall be 

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1 preme Court of the United States. Such appeal 

2 shall be taken by the filing of a notice of appeal 

3 within 10 days, and the filing of a jurisdictional 

4 statement within 30 days, after the entry of the 

5 final decision. 

6 (C) It shall be the duty of the United 

7 States District Court for the District of Colum8 bia and the Supreme Court of the United 

9 States to advance on the docket and to expedite 

10 to the greatest possible extent the disposition of 

11 the action and appeal. 

12 (2) REPAYMENT TO ASBESTOS TRUST AND

13 CLASS ACTION TRUST.—If the transfer of the assets 

14 of any asbestos trust of a debtor or any class action 

15 trust (or this Act as a whole) is held to be unconsti16 tutional or otherwise unlawful, the Fund shall trans17 fer the remaining balance of such assets (determined 

18 under section 405(f)(1)(A)(iii)) back to the appro19 priate asbestos trust or class action trust within 90 

20 days after final judicial action on the legal challenge, 

21 including the exhaustion of all appeals. 


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1 TITLE IV—MISCELLANEOUS 

2 PROVISIONS 

3 SEC. 401. FALSE INFORMATION. 

4 (a) IN GENERAL.—Chapter 63 of title 18, United 

5 States Code, is amended by adding at the end the fol6 lowing: 

7 ‘‘§ 1351. Fraud and false statements in connection 

8 with participation in Asbestos Injury 

9 Claims Resolution Fund 

10 ‘‘(a) FRAUD RELATING TO ASBESTOS INJURY

11 CLAIMS RESOLUTION FUND.—Whoever knowingly and 

12 willfully executes, or attempts to execute, a scheme or arti13 fice to defraud the Office of Asbestos Disease Compensa14 tion or the Asbestos Insurers Commission under title II 

15 of the Fairness in Asbestos Injury Resolution Act of 2006 

16 shall be fined under this title or imprisoned not more than 

17 20 years, or both. 

18 ‘‘(b) FALSE STATEMENT RELATING TO ASBESTOS

19 INJURY CLAIMS RESOLUTION FUND.— 

20 ‘‘(1) IN GENERAL.—It shall be unlawful for any 

21 person, in any matter involving the Office of Asbes22 tos Disease Compensation or the Asbestos Insurers 

23 Commission, to knowingly and willfully— 

24 ‘‘(A) falsify, conceal, or cover up by any 

25 trick, scheme, or device a material fact; 


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1 ‘‘(B) make any materially false, fictitious, 

2 or fraudulent statement or representation; or 

3 ‘‘(C) make or use any false writing or doc4 ument knowing the same to contain any materi5 ally false, fictitious, or fraudulent statement or 

6 entry, in connection with the award of a claim 

7 or the determination of a participant’s payment 

8 obligation under title I or II of the Fairness in 

9 Asbestos Injury Resolution Act of 2006. 

10 ‘‘(2) PENALTY.—A person who violates this 

11 subsection shall be fined under this title or impris12 oned not more than 10 years, or both.’’. 

13 (b) TECHNICAL AND CONFORMING AMENDMENT.— 

14 The table of sections for chapter 63 of title 18, United 

15 States Code, is amended by adding at the end the fol16 lowing: 

‘‘1351. Fraud and false statements in connection with participation in Asbestos 

Injury Claims Resolution Fund.’’. 

17 SEC. 402. EFFECT ON BANKRUPTCY LAWS. 

18 (a) NO AUTOMATIC STAY.—Section 362(b) of title 

19 11, United States Code, is amended— 

20 (1) in paragraph (17), by striking ‘‘or’’ at the 

21 end; 

22 (2) in paragraph (18), by striking the period at 

23 the end and inserting ‘‘; or’’; and 


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1 (3) by inserting after paragraph (18) the fol2 lowing: 

3 ‘‘(19) under subsection (a) of this section of the 

4 enforcement of any payment obligations under sec5 tion 204 of the Fairness in Asbestos Injury Resolu6 tion Act of 2006, against a debtor, or the property 

7 of the estate of a debtor, that is a participant (as 

8 that term is defined in section 3 of that Act).’’. 

9 (b) ASSUMPTION OF EXECUTORY CONTRACT.—Sec10 tion 365 of title 11, United States Code, is amended by 

11 adding at the end the following: 

12 ‘‘(p) If a debtor is a participant (as that term is de13 fined in section 3 of the Fairness in Asbestos Injury Reso14 lution Act of 2006), the trustee shall be deemed to have 

15 assumed all executory contracts entered into by the partic16 ipant under section 204 of that Act. The trustee may not 

17 reject any such executory contract.’’. 

18 (c) ALLOWED ADMINISTRATIVE EXPENSES.—Section 

19 503 of title 11, United States Code, is amended by adding 

20 at the end the following: 

21 ‘‘(c)(1) Claims or expenses of the United States, the 

22 Attorney General, or the Administrator (as that term is 

23 defined in section 3 of the Fairness in Asbestos Injury 

24 Resolution Act of 2006) based upon the asbestos payment 

25 obligations of a debtor that is a Participant (as that term 


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1 is defined in section 3 of that Act), shall be paid as an 

2 allowed administrative expense. The debtor shall not be 

3 entitled to either notice or a hearing with respect to such 

4 claims. 

5 ‘‘(2) For purposes of paragraph (1), the term ‘asbes6 tos payment obligation’ means any payment obligation 

7 under title II of the Fairness in Asbestos Injury Resolu8 tion Act of 2006.’’. 

9 (d) NO DISCHARGE.—Section 523 of title 11, United 

10 States Code, is amended by adding at the end the fol11 lowing: 

12 ‘‘(f) A discharge under section 727, 1141, 1228, or 

13 1328 of this title does not discharge any debtor that is 

14 a participant (as that term is defined in section 3 of the 

15 Fairness in Asbestos Injury Resolution Act of 2006) of 

16 the debtor’s payment obligations assessed against the par17 ticipant under title II of that Act.’’. 

18 (e) PAYMENT.—Section 524 of title 11, United States 

19 Code, is amended by adding at the end the following: 

20 ‘‘(i) PARTICIPANT DEBTORS.— 

21 ‘‘(1) IN GENERAL.—Paragraphs (2) and (3) 

22 shall apply to a debtor who— 

23 ‘‘(A) is a participant that has made prior 

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1 fined in the Fairness in Asbestos Injury Resolu2 tion Act of 2006); and 

3 ‘‘(B) is subject to a case under this title 

4 that is pending— 

5 ‘‘(i) on the date of enactment of the 

6 Fairness in Asbestos Injury Resolution Act 

7 of 2006; or 

8 ‘‘(ii) at any time during the 1-year pe9 riod preceding the date of enactment of 

10 that Act. 

11 ‘‘(2) TIER I DEBTORS.—A debtor that has been 

12 assigned to Tier I under section 202 of the Fairness 

13 in Asbestos Injury Resolution Act of 2006, shall 

14 make payments in accordance with sections 202 and 

15 203 of that Act. 

16 ‘‘(3) TREATMENT OF PAYMENT OBLIGA17 TIONS.—All payment obligations of a debtor under 

18 sections 202 and 203 of the Fairness in Asbestos In19 jury Resolution Act of 2006 shall— 

20 ‘‘(A) constitute costs and expenses of ad21 ministration of a case under section 503 of this 

22 title; 

23 ‘‘(B) notwithstanding any case pending 

24 under this title, be payable in accordance with 

25 section 202 of that Act; 


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1 ‘‘(C) not be stayed; 

2 ‘‘(D) not be affected as to enforcement or 

3 collection by any stay or injunction of any 

4 court; and 

5 ‘‘(E) not be impaired or discharged in any 

6 current or future case under this title.’’. 

7 (f) TREATMENT OF TRUSTS.—Section 524 of title 

8 11, United States Code, as amended by this Act, is 

9 amended by adding at the end the following: 

10 ‘‘(j) ASBESTOS TRUSTS.— 

11 ‘‘(1) IN GENERAL.—A trust shall assign a por12 tion of the corpus of the trust to the Asbestos Injury 

13 Claims Resolution Fund (referred to in this sub14 section as the ‘Fund’) as established under the Fair15 ness in Asbestos Injury Resolution Act of 2006 if 

16 the trust qualifies as a ‘trust’ under section 201 of 

17 that Act. 

18 ‘‘(2) TRANSFER OF TRUST ASSETS.— 

19 ‘‘(A) IN GENERAL.— 

20 ‘‘(i) Except as provided under clause 

21 (ii) of this subparagraph and subpara22 graphs (B), (C), and (E), the assets in any 

23 trust established to provide compensation 

24 for asbestos claims (as defined in section 3 

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1 tion Act of 2006) shall be transferred to 

2 the Fund not later than 90 days after the 

3 date of enactment of the Fairness in As4 bestos Injury Resolution Act of 2006 or 30 

5 days following funding of a trust estab6 lished under a reorganization plan subject 

7 to section 202(c) of that Act. Except as 

8 provided under subparagraph (B), the Ad9 ministrator of the Fund shall accept such 

10 assets and utilize them for any purposes of 

11 the Fund under section 221 of such Act, 

12 including the payment of claims for awards 

13 under such Act to beneficiaries of the trust 

14 from which the assets were transferred. 

15 ‘‘(ii) Notwithstanding clause (i), and 

16 except as provided under subparagraphs 

17 (B), (C), and (E), any trust established to 

18 provide compensation for asbestos claims 

19 (as defined in section 3 of the Fairness in 

20 Asbestos Injury Resolution Act of 2006), 

21 other than a trust established under a re22 organization plan subject to section 202(c) 

23 of that Act, shall transfer the assets in 

24 such trust to the Fund as follows: 


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1 ‘‘(I) In the case of a trust estab2 lished on or before December 31, 

3 2005, such trust shall transfer 90 

4 percent of the assets in such trust to 

5 the Fund not later than 90 days after 

6 the date of enactment of the Fairness 

7 in Asbestos Injury Resolution Act of 

8 2006. 

9 ‘‘(II) In the case of a trust estab10 lished after December 31, 2005, such 

11 trust shall transfer 88 percent of the 

12 assets in such trust to the Fund not 

13 later than 90 days after the date of 

14 enactment of the Fairness in Asbestos 

15 Injury Resolution Act of 2006. 

16 ‘‘(iii) Not later than 90 days after the 

17 date on which the Administrator of the Of18 fice of Asbestos Disease Compensation (re19 ferred to in this section as the ‘Adminis20 trator’) certifies in accordance with section 

21 106(f)(3)(E)(ii) of the Fairness in Asbes22 tos Injury Resolution Act of 2006 that the 

23 Fund is fully operational and paying all 

24 valid asbestos claims at a reasonable rate, 

25 any trust transferring assets under clause 


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1 (ii) shall transfer all remaining assets in 

2 such trust to the Fund. The transfer re3 quired by this clause shall not include any 

4 trust assets needed to pay— 

5 ‘‘(I) previously incurred expenses; 

6 or 

7 ‘‘(II) claims determined to be eli8 gible for compensation under clause 

9 (vi). 

10 ‘‘(iv) Except as provided under sub11 paragraph (B), the Administrator of the 

12 Fund shall accept any assets transferred 

13 under clauses (ii) or (iii) and utilize them 

14 for any purposes for the Fund under sec15 tion 221 of the Fairness in Asbestos Injury 

16 Resolution Act of 2006, including the pay17 ment of claims for awards under such Act 

18 to beneficiaries of the trust from which the 

19 assets were transferred. 

20 ‘‘(v) Notwithstanding any other provi21 sion of Federal or State law, no liability of 

22 any kind may be imposed on a trustee of 

23 a trust for transferring assets to the Fund 

24 in accordance with clause (i). 


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1 ‘‘(vi) Any trust transferring assets 

2 under clause (ii) shall be subject to the fol3 lowing requirements: 

4 ‘‘(I) The trust may continue to 

5 process asbestos claims, make eligi6 bility determinations, and pay claims 

7 in a manner consistent with this 

8 clause if a claimant— 

9 ‘‘(aa) provides to the trust a 

10 copy of a binding election sub11 mitted to Administrator waiving 

12 the right to secure compensation 

13 under section 106(f)(2) of the 

14 Fairness in Asbestos Injury Res15 olution Act of 2006, unless the 

16 claimant is permitted under sec17 tion 106(f)(2)(B) of such Act to 

18 seek a judgment or order for 

19 monetary damages from a Fed20 eral or State court; 

21 ‘‘(bb) meets the require22 ments for compensation under 

23 the distribution plan for the trust 

24 as of the date of enactment of 


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1 the Fairness in Asbestos Injury 

2 Resolution Act of 2006; 

3 ‘‘(cc) for any condition satis4 fies the medical criteria under 

5 the distribution plan for the trust 

6 that is most nearly equivalent to 

7 the medical criteria described in 

8 paragraph (2), (3), (4), (5), (7), 

9 (8), or (9) of section 121(d) of 

10 the Fairness in Asbestos Injury 

11 Resolution Act of 2006, except 

12 that, notwithstanding any provi13 sion of the distribution plan of 

14 the trust to the contrary, the 

15 trust shall not accept the results 

16 of a DLCO test (as such test is 

17 defined in section 121(a) of the 

18 Fairness in Asbestos Injury Res19 olution Act of 2006) for the pur20 pose of demonstrating respiratory 

21 impairment; and 

22 ‘‘(dd) for any of the cancers 

23 listed in section 121(d)(6) of the 

24 Fairness in Asbestos Injury Res25 olution Act of 2006 does not 


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1 seek, and the trust does not pay, 

2 any compensation until such time 

3 as the Institute of Medicine finds 

4 that there is a causal relationship 

5 between asbestos exposure and 

6 such cancer, in which case such 

7 claims may be paid if such claims 

8 otherwise qualify for compensa9 tion under the distribution plan 

10 of the trust as of the date of en11 actment of the Fairness in As12 bestos Injury Resolution Act of 

13 2006. 

14 ‘‘(II) The trust shall not accept 

15 medical evidence from any physician, 

16 medical facility, or laboratory whose 

17 evidence would be not be accepted as 

18 evidence— 

19 ‘‘(aa) under the Manville 

20 Trust as of the date of enact21 ment of the Fairness in Asbestos 

22 Injury Resolution Act of 2006; or 

23 ‘‘(bb) by the Administrator 

24 under section 115(a)(2) of such 

25 Act. 


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1 ‘‘(III) The trust shall not amend 

2 its scheduled payment amount or pay3 ment percentage as in effect on the 

4 date of enactment of the Fairness in 

5 Asbestos Injury Resolution Act of 

6 2006. 

7 ‘‘(IV) The trust shall not amend 

8 its eligibility criteria after the date of 

9 enactment of the Fairness in Asbestos 

10 Injury Resolution Act of 2006, except 

11 to conform any criteria in any cat12 egory under the distribution plan of 

13 the trust with related criteria in a re14 lated category under section 121 of 

15 the Fairness in Asbestos Injury Reso16 lution Act of 2006. 

17 ‘‘(V) The trust shall notify the 

18 Administrator of the Fund of any 

19 claim determined to be eligible for 

20 compensation after the date of enact21 ment of the Fairness in Asbestos In22 jury Resolution Act of 2006, and the 

23 amount of any such compensation 

24 awarded to the claimant of such 

25 claim. The notification required by 


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1 this subclause shall be made in such 

2 form as the Administrator shall re3 quire, and not later than 15 days 

4 after the date the determination is 

5 made. 

6 ‘‘(VI) The trust shall not pay any 

7 claim without a certification by a 

8 claimant, subject to the penalties de9 scribed in the Fairness in Asbestos 

10 Injury Resolution Act of 2006, stating 

11 the amount of collateral source com12 pensation that such claimant has re13 ceived, or is entitled to receive, under 

14 section 134 of the Fairness in Asbes15 tos Injury Resolution Act of 2006. In 

16 the event that collateral source com17 pensation exceeds the amount that the 

18 claimant would be paid (excluding any 

19 adjustments under section 131(b) (3) 

20 and (4) of the Act) for such condition 

21 under the Act most similar to the 

22 claimant’s claim with the trust, such 

23 trust shall not make any payment to 

24 the claimant. 


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1 ‘‘(VII) Upon finding that the 

2 trust has breached any condition or 

3 conditions of this clause, the Adminis4 trator shall require the immediate 

5 payment of remaining trust assets 

6 into the Fund in accordance with sec7 tion 402(f) of the Fairness in Asbes8 tos Injury Resolution Act of 2006. 

9 The Administrator shall be entitled to 

10 an injunction against further pay11 ments of nonliquidated claims from 

12 the assets of the trust during the 

13 pendency of any dispute regarding the 

14 findings of noncompliance by the Ad15 ministrator. The court in which any 

16 action to enforce the obligations of the 

17 trust is pending shall afford the ac18 tion expedited consideration. 

19 ‘‘(B) AUTHORITY TO REFUSE ASSETS.— 

20 The Administrator of the Fund may refuse to 

21 accept any asset that the Administrator deter22 mines may create liability for the Fund in ex23 cess of the value of the asset. 

24 ‘‘(C) ALLOCATION OF TRUST ASSETS.—If 

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1 ficiaries with claims that are not asbestos 

2 claims, the assets transferred to the Fund 

3 under subparagraph (A) shall not include assets 

4 allocable to such beneficiaries. The trustees of 

5 any such trust shall determine the amount of 

6 such trust assets to be reserved for the con7 tinuing operation of the trust in processing and 

8 paying claims that are not asbestos claims. The 

9 trustees shall demonstrate to the satisfaction of 

10 the Administrator, or by clear and convincing 

11 evidence in a proceeding brought before the 

12 United States District Court for the District of 

13 Columbia in accordance with paragraph (4), 

14 that the amount reserved is properly allocable 

15 to claims other than asbestos claims. 

16 ‘‘(D) SALE OF FUND ASSETS.—The invest17 ment requirements under section 222 of the 

18 Fairness in Asbestos Injury Resolution Act of 

19 2006 shall not be construed to require the Ad20 ministrator of the Fund to sell assets trans21 ferred to the Fund under subparagraph (A). 

22 ‘‘(E) LIQUIDATED CLAIMS.—Except as 

23 specifically provided in this subparagraph, all 

24 asbestos claims against a trust are superseded 

25 and preempted as of the date of enactment of 


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1 the Fairness in Asbestos Injury Resolution Act 

2 of 2006, and a trust shall not make any pay3 ment relating to asbestos claims after that date. 

4 If, in the ordinary course and the normal and 

5 usual administration of the trust consistent 

6 with past practices, a trust had before the date 

7 of enactment of the Fairness in Asbestos Injury 

8 Resolution Act of 2006, made all determina9 tions necessary to entitle an individual claimant 

10 to a noncontingent cash payment from the 

11 trust, the trust shall (i) make any lump-sum 

12 cash payment due to that claimant, and (ii) 

13 make or provide for all remaining noncontin14 gent payments on any award being paid or 

15 scheduled to be paid on an installment basis, in 

16 each case only to the same extent that the trust 

17 would have made such cash payments in the or18 dinary course and consistent with past practices 

19 before enactment of that Act. A trust shall not 

20 make any payment in respect of any alleged 

21 contingent right to recover any greater amount 

22 than the trust had already paid, or had com23 pleted all determinations necessary to pay, to a 

24 claimant in cash in accordance with its ordinary 


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1 distribution procedures in effect as of June 1, 

2 2003. 

3 ‘‘(3) INJUNCTION.— 

4 ‘‘(A) IN GENERAL.—Any injunction issued 

5 as part of the formation of a trust described in 

6 paragraph (1) shall remain in full force and ef7 fect, except that any provision of such an in8 junction channeling asbestos claims to such a 

9 trust for resolution shall have no force and ef10 fect. No court, Federal or State, may enjoin the 

11 transfer of assets by a trust to the Fund in ac12 cordance with this subsection pending resolu13 tion of any litigation challenging such transfer 

14 or the validity of this subsection or of any pro15 vision of the Fairness in Asbestos Injury Reso16 lution Act of 2006, and an interlocutory order 

17 denying such relief shall not be subject to im18 mediate appeal under section 1291(a) of title 

19 28. 

20 ‘‘(B) AVAILABILITY OF FUND ASSETS.— 

21 Notwithstanding any other provision of law, 

22 once such a transfer has been made, the assets 

23 of the Fund shall be available to satisfy any 

24 final judgment entered in such an action and 


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1 such transfer shall no longer be subject to any 

2 appeal or review— 

3 ‘‘(i) declaring that the transfer ef4 fected a taking of a right or property for 

5 which an individual is constitutionally enti6 tled to just compensation; or 

7 ‘‘(ii) requiring the transfer back to a 

8 trust of any or all assets transferred by 

9 that trust to the Fund. 

10 ‘‘(4) JURISDICTION.—Solely for purposes of im11 plementing this subsection, personal jurisdiction over 

12 every covered trust, the trustees thereof, and any 

13 other necessary party, and exclusive subject matter 

14 jurisdiction over every question arising out of or re15 lated to this subsection, shall be vested in the United 

16 States District Court for the District of Columbia. 

17 Notwithstanding any other provision of law, includ18 ing section 1127 of this title, that court may make 

19 any order necessary and appropriate to facilitate 

20 prompt compliance with this subsection, including 

21 assuming jurisdiction over and modifying, to the ex22 tent necessary, any applicable confirmation order or 

23 other order with continuing and prospective applica24 tion to a covered trust. The court may also resolve 

25 any related challenge to the constitutionality of this 


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1 subsection or of its application to any trust, trustee, 

2 or individual claimant. The Administrator of the 

3 Fund may bring an action seeking such an order or 

4 modification, under the standards of rule 60(b) of 

5 the Federal Rules of Civil Procedure or otherwise, 

6 and shall be entitled to intervene as of right in any 

7 action brought by any other party seeking interpre8 tation, application, or invalidation of this subsection. 

9 Any order denying relief that would facilitate prompt 

10 compliance with the transfer provisions of this sub11 section shall be subject to immediate appeal under 

12 section 304 of the Fairness in Asbestos Injury Reso13 lution Act of 2006.’’. 

14 (g) NO AVOIDANCE OF TRANSFER.—Section 546 of 

15 title 11, United States Code, is amended by adding at the 

16 end the following: 

17 ‘‘(h) Notwithstanding the rights and powers of a 

18 trustee under sections 544, 545, 547, 548, 549, and 550 

19 of this title, if a debtor is a participant (as that term is 

20 defined in section 3 of the Fairness in Asbestos Injury 

21 Resolution Act of 2006), the trustee may not avoid a 

22 transfer made by the debtor under its payment obligations 

23 under section 202 or 203 of that Act.’’. 


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1 (h) CONFIRMATION OF PLAN.—Section 1129(a) of 

2 title 11, United States Code, is amended by adding at the 

3 end the following: 

4 ‘‘(14) If the debtor is a participant (as that 

5 term is defined in section 3 of the Fairness in As6 bestos Injury Resolution Act of 2006), the plan pro7 vides for the continuation after its effective date of 

8 payment of all payment obligations under title II of 

9 that Act.’’. 

10 (i) EFFECT ON INSURANCE RECEIVERSHIP PRO11 CEEDINGS.— 

12 (1) LIEN.—In an insurance receivership pro13 ceeding involving a direct insurer, reinsurer or run14 off participant, there shall be a lien in favor of the 

15 Fund for the amount of any assessment and any 

16 such lien shall be given priority over all other claims 

17 against the participant in receivership, except for the 

18 expenses of administration of the receivership and 

19 the perfected claims of the secured creditors. Any 

20 State law that provides for priorities inconsistent 

21 with this provision is preempted by this Act. 

22 (2) PAYMENT OF ASSESSMENT.—Payment of 

23 any assessment required by this Act shall not be 

24 subject to any automatic or judicially entered stay in 

25 any insurance receivership proceeding. This Act shall 


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1 preempt any State law requiring that payments by 

2 a direct insurer, reinsurer or runoff participant in 

3 an insurance receivership proceeding be approved by 

4 a court, receiver or other person. Payments of as5 sessments by any direct insurer or reinsurer partici6 pant under this Act shall not be subject to the avoid7 ance powers of a receiver or a court in or relating 

8 to an insurance receivership proceeding. 

9 (j) STANDING IN BANKRUPTCY PROCEEDINGS.—The 

10 Administrator shall have standing in any bankruptcy case 

11 involving a debtor participant. No bankruptcy court may 

12 require the Administrator to return property seized to sat13 isfy obligations to the Fund. 

14 SEC. 403. EFFECT ON OTHER LAWS AND EXISTING CLAIMS. 

15 (a) EFFECT ON FEDERAL AND STATE LAW.—The 

16 provisions of this Act shall supersede any Federal or State 

17 law insofar as such law may relate to any asbestos claim, 

18 including any claim described under subsection (e)(2). 

19 (b) EFFECT ON SILICA CLAIMS.— 

20 (1) IN GENERAL.— 

21 (A) RULE OF CONSTRUCTION.—Nothing in 

22 this Act shall be construed to preempt, bar, or 

23 otherwise preclude any personal injury claim at24 tributable to exposure to silica as to which the 

25 plaintiff— 


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1 (i) pleads with particularity and es2 tablishes by a preponderance of evidence 

3 either that— 

4 (I) no claim has been asserted or 

5 filed by or with respect to the exposed 

6 person in any forum for any asbestos7 related condition and the exposed per8 son (or another claiming on behalf of 

9 or through the exposed person) is not 

10 eligible for any monetary award under 

11 this Act; or 

12 (II)(aa) the exposed person suf13 fers or has suffered a functional im14 pairment that was caused by exposure 

15 to silica; and 

16 (bb) asbestos exposure was not a 

17 substantial contributing factor to such 

18 functional impairment; and 

19 (ii) satisfies the requirements of para20 graph (2) . 

21 (B) PREEMPTION.—Claims attributable to 

22 exposure to silica that fail to meet the require23 ments of subparagraph (A) shall be preempted 

24 by this Act. 

25 (2) REQUIRED EVIDENCE.— 


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1 (A) IN GENERAL.—In any claim to which 

2 paragraph (1) applies, the initial pleading (or, 

3 for claims pending on the date of enactment of 

4 this Act, an amended pleading to be filed within 

5 60 days after such date, but not later than 60 

6 days before trial, shall plead with particularity 

7 the elements of subparagraph (A)(i)(I) or (II) 

8 and shall be accompanied by the information 

9 described under subparagraph (B)(i) through 

10 (iv). 

11 (B) PLEADINGS.—If the claim pleads the 

12 elements of paragraph (1)(A)(i)(II) and by the 

13 information described under clauses (i) through 

14 (iv) of this subparagraph if the claim pleads the 

15 elements of paragraph (1)(A)(i)(I)— 

16 (i) admissible evidence, including at a 

17 minimum, a B-reader’s report, the under18 lying x-ray film and such other evidence 

19 showing that the claim may be maintained 

20 and is not preempted under paragraph (1); 

21 (ii) notice of any previous lawsuit or 

22 claim for benefits in which the exposed 

23 person, or another claiming on behalf of or 

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1 jury or disability based wholly or in part 

2 on exposure to asbestos; 

3 (iii) if known by the plaintiff after 

4 reasonable inquiry by the plaintiff or his 

5 representative, the history of the exposed 

6 person’s exposure, if any, to asbestos; and 

7 (iv) copies of all medical and labora8 tory reports pertaining to the exposed per9 son that refer to asbestos or asbestos expo10 sure. 

11 (3) STATUTE OF LIMITATIONS.—In general, the 

12 statute of limitations for a silica claim shall be gov13 erned by applicable State law, except that in any 

14 case under this subsection, the statute of limitations 

15 shall only start to run when the plaintiff becomes 

16 impaired. 

17 (c) SUPERSEDING PROVISIONS.— 

18 (1) IN GENERAL.—Except as provided under 

19 paragraph (3) and section 106(f), any agreement, 

20 understanding, or undertaking by any person or af21 filiated group with respect to the treatment of any 

22 asbestos claim, including a claim described under 

23 subsection (e)(2), that requires future performance 

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1 ministrator, or escrow agent shall be superseded in 

2 its entirety by this Act. 

3 (2) NO FORCE OR EFFECT.—Except as pro4 vided under paragraph (3), any such agreement, un5 derstanding, or undertaking by any such person or 

6 affiliated group shall be of no force or effect, and no 

7 person shall have any rights or claims with respect 

8 to any such agreement, understanding, or under9 taking. 

10 (3) EXCEPTION.— 

11 (A) IN GENERAL.—Except as provided in 

12 section 202(f), nothing in this Act shall abro13 gate a binding and legally enforceable written 

14 settlement agreement between any defendant 

15 participant or its insurer and a specific named 

16 plaintiff with respect to the settlement of an as17 bestos claim of the plaintiff if— 

18 (i) before the date of enactment of 

19 this Act, the settlement agreement was ex20 ecuted by— 

21 (I) the authorized legal rep22 resentative acting on behalf of the set23 tling defendant or insurer, the settling 

24 defendant or the settling insurer; and 


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1 (II)(aa) the specific individual 

2 plaintiff, or the individual’s immediate 

3 relatives; or 

4 (bb) an authorized legal rep5 resentative acting on behalf of the 

6 plaintiff where the plaintiff is inca7 pacitated and the settlement agree8 ment is signed by that authorized 

9 legal representative; 

10 (ii) the settlement agreement contains 

11 an express obligation by the settling de12 fendant or settling insurer to make a fu13 ture direct monetary payment or payments 

14 in a fixed amount or amounts to the indi15 vidual plaintiff; and 

16 (iii) within 30 days after the date of 

17 enactment of this Act, or such shorter time 

18 period specified in the settlement agree19 ment, the plaintiff has fulfilled all condi20 tions to payment under the settlement 

21 agreement. 

22 (B) BANKRUPTCY-RELATED AGREE23 MENTS.—The exception set forth in this para24 graph shall not apply to any bankruptcy-related 

25 agreement. 


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1 (C) COLLATERAL SOURCE.—Any settle2 ment payment under this section is a collateral 

3 source if the plaintiff seeks recovery from the 

4 Fund. 

5 (D) ABROGATION.—Nothing in subpara6 graph (A) shall abrogate a settlement agree7 ment otherwise satisfying the requirements of 

8 that subparagraph if such settlement agreement 

9 expressly anticipates the enactment of this Act 

10 and provides for the effects of this Act. 

11 (E) HEALTH CARE INSURANCE OR EX12 PENSES SETTLEMENTS.—Nothing in this Act 

13 shall abrogate or terminate an otherwise fully 

14 enforceable settlement agreement which was ex15 ecuted before the date of enactment of this Act 

16 directly by the settling defendant or the settling 

17 insurer and a specific named plaintiff to pay 

18 the health care insurance or health care ex19 penses of the plaintiff. 

20 (d) EXCLUSIVE REMEDY.— 

21 (1) IN GENERAL.—Except as provided under 

22 paragraph (2) and section 106(f) of this Act and 

23 section 524(j)(3) of title 11, United States Code, as 

24 amended by this Act, the remedies provided under 

25 this Act shall be the exclusive remedy for any asbesVerDate Aug 31 2005 00:11 Jun 06, 2006 Jkt 049200 PO 00000 Frm 00335 Fmt 6652 Sfmt 6201 E:\BILLS\S3274.PCS S3274

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1 tos claim, including any claim described in sub2 section (e)(2), under any Federal or State law. 

3 (2) CIVIL ACTIONS AT TRIAL.— 

4 (A) IN GENERAL.—This Act shall not 

5 apply to any asbestos claim that— 

6 (i) is a civil action filed in a Federal 

7 or State court (not including a filing in a 

8 bankruptcy court); 

9 (ii) is not part of a consolidation of 

10 actions or a class action; and 

11 (iii) on the date of enactment of this 

12 Act— 

13 (I) in the case of a civil action 

14 which includes a jury trial, is before 

15 the jury after its impaneling and com16 mencement of presentation of evi17 dence, but before its deliberations; 

18 (II) in the case of a civil action 

19 which includes a trial in which a judge 

20 is the trier of fact, is at the presen21 tation of evidence at trial; or 

22 (III) a verdict, final order, or 

23 final judgment has been entered by a 

24 trial court. 


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1 (B) NONAPPLICABILITY.—This Act shall 

2 not apply to a civil action described under sub3 paragraph (A) throughout the final disposition 

4 of the action. 

5 (e) BAR ON ASBESTOS CLAIMS.— 

6 (1) IN GENERAL.—No asbestos claim (including 

7 any claim described in paragraph (2)) may be pur8 sued, and no pending asbestos claim may be main9 tained, in any Federal or State court, except as pro10 vided under subsection (d)(2) and section 106(f) of 

11 this Act and section 524(j)(3) of title 11, United 

12 States Code, as amended by this Act. 

13 (2) CERTAIN SPECIFIED CLAIMS.— 

14 (A) IN GENERAL.—Subject to section 404 

15 (d) and (e)(3) of this Act, no claim may be 

16 brought or pursued in any Federal or State 

17 court or insurance receivership proceeding— 

18 (i) relating to any default, confessed 

19 or stipulated judgment on an asbestos 

20 claim if the judgment debtor expressly 

21 agreed, in writing or otherwise, not to con22 test the entry of judgment against it and 

23 the plaintiff expressly agreed, in writing or 

24 otherwise, to seek satisfaction of the judgVerDate Aug 31 2005 00:11 Jun 06, 2006 Jkt 049200 PO 00000 Frm 00337 Fmt 6652 Sfmt 6201 E:\BILLS\S3274.PCS S3274

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1 ment only against insurers or in bank2 ruptcy; 

3 (ii) relating to the defense, investiga4 tion, handling, litigation, settlement, or 

5 payment of any asbestos claim by any par6 ticipant, including claims for bad faith or 

7 unfair or deceptive claims handling or 

8 breach of any duties of good faith; or 

9 (iii) arising out of or relating to the 

10 asbestos-related injury of any individual 

11 and— 

12 (I) asserting any conspiracy, con13 cert of action, aiding or abetting, act, 

14 conduct, statement, misstatement, un15 dertaking, publication, omission, or 

16 failure to detect, speak, disclose, pub17 lish, or warn relating to the presence 

18 or health effects of asbestos or the 

19 use, sale, distribution, manufacture, 

20 production, development, inspection, 

21 advertising, marketing, or installation 

22 of asbestos; or 

23 (II) asserting any conspiracy, 

24 act, conduct, statement, omission, or 

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1 lating to the presence or health effects 

2 of asbestos or the use, sale, distribu3 tion, manufacture, production, devel4 opment, inspection, advertising, mar5 keting, or installation of asbestos, as6 serted as or in a direct action against 

7 an insurer or reinsurer based upon 

8 any theory, statutory, contract, tort, 

9 or otherwise; or 

10 (iv) by any third party, and premised 

11 on any theory, allegation, or cause of ac12 tion, for reimbursement of healthcare costs 

13 allegedly associated with the use of or ex14 posure to asbestos, whether such claim is 

15 asserted directly, indirectly or derivatively. 

16 (B) EXCEPTIONS.—Subparagraph (A) (ii) 

17 and (iii) shall not apply to claims against par18 ticipants by persons— 

19 (i) with whom the participant is in 

20 privity of contract; 

21 (ii) who have received an assignment 

22 of insurance rights not otherwise voided by 

23 this Act; or 


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1 (iii) who are beneficiaries covered by 

2 the express terms of a contract with that 

3 participant. 

4 (3) PREEMPTION.—Any action asserting an as5 bestos claim (including a claim described in para6 graph (2)) in any Federal or State court is pre7 empted by this Act, except as provided under sub8 section (d)(2) and section 106(f). 

9 (4) DISMISSAL.— 

10 (A) IN GENERAL.—Except as provided 

11 under subsection (d)(2), no judgment other 

12 than a judgment for dismissal may be entered 

13 in any action asserting an asbestos claim (in14 cluding any claim described in paragraph (2)) 

15 in any Federal or State court on or after the 

16 date of enactment of this Act. 

17 (B) DISMISSAL ON MOTION.—A court may 

18 dismiss any action asserting an asbestos claim 

19 (including any claim described in paragraph 

20 (2)) on— 

21 (i) motion by any party to such ac22 tion; or 

23 (ii) its own motion. 

24 (C) DENIAL OF MOTION.—If a court de25 nies a motion to dismiss under subparagraph 


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1 (B)(i), it shall stay further proceedings in any 

2 such action until final disposition of any appeal 

3 taken under this Act. 

4 (D) EXCEPTION FOR PENDING CLAIMS IN

5 COURT.— 

6 (i) IN GENERAL.—Except as provided 

7 under subsection (d)(2) and clause (ii) of 

8 this subparagraph, an action asserting an 

9 asbestos claim that is pending on the date 

10 of enactment of this Act in any Federal or 

11 State court may not be dismissed under 

12 subparagraph (A), but any stay shall con13 tinue in effect, if the plaintiff (or the per14 sonal representative of the plaintiff, if the 

15 plaintiff is deceased or incompetent) in 

16 such action has filed a claim, or is still en17 titled under section 113(b) to file a claim, 

18 with the Fund with respect to the disease, 

19 condition, or injury forming the basis of 

20 such action. 

21 (ii) DISMISSAL ALLOWED IF CLAIM IS

22 ADJUDICATED.—An action exempt from 

23 dismissal under clause (i) shall be dis24 missed if— 


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1 (I) the plaintiff’s claim under the 

2 Fund has been finally adjudicated, 

3 and— 

4 (aa) the award, if any, to 

5 the plaintiff from the Fund has 

6 been paid in whole or in part; or 

7 (bb) the plaintiff has been 

8 determined to be eligible for med9 ical monitoring; 

10 (II) the plaintiff’s claim under 

11 the Fund has been finally adjudicated 

12 and the claimant is not entitled to re13 ceive a monetary award or medical 

14 monitoring under subtitle D of title I; 

15 (III) the plaintiff’s claim has 

16 been resolved and paid in full under 

17 section 106(f); 

18 (IV) after the Administrator cer19 tifies to Congress that the Fund has 

20 become operational and paying all 

21 valid asbestos claims at a reasonable 

22 rate, the plaintiff’s claim is pending in 

23 any venue other than a venue de24 scribed under section 405(h)(3); or 


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1 (V) before the Administrator cer2 tifies to Congress that the Fund has 

3 become operational and paying all 

4 valid asbestos claims at a reasonable 

5 rate, the plaintiff’s claim— 

6 (aa) is subject to section 

7 106(f)(3); and 

8 (bb) would not be permitted 

9 to proceed in the venue in which 

10 that claim is pending under such 

11 paragraph. 

12 (E) NOTICE.—A claimant shall provide no13 tice to the Administrator of any pending action 

14 involving an asbestos claim in any Federal or 

15 State court in which such claimant is a plain16 tiff. The Administrator shall send notice to the 

17 appropriate Federal or State court of any adju18 dication of any claim with the Fund filed by a 

19 plaintiff in an action that has been stayed 

20 under subparagraph (D)(i). 

21 (F) RULE OF CONSTRUCTION.—Nothing in 

22 this paragraph shall be construed to limit dis23 missal, at any time, of a claim pending in Fed24 eral or State court for reasons independent of 

25 the enactment of this Act. 


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1 (5) REMOVAL.— 

2 (A) IN GENERAL.—If an action in any 

3 State court under paragraph (3) is preempted, 

4 barred, or otherwise precluded under this Act, 

5 and not dismissed, or if an order entered after 

6 the date of enactment of this Act purporting to 

7 enter judgment or deny review is not rescinded 

8 and replaced with an order of dismissal within 

9 30 days after the filing of a motion by any 

10 party to the action advising the court of the 

11 provisions of this Act, any party may remove 

12 the case to the district court of the United 

13 States for the district in which such action is 

14 pending. 

15 (B) TIME LIMITS.—For actions originally 

16 filed after the date of enactment of this Act, the 

17 notice of removal shall be filed within the time 

18 limits specified in section 1441(b) of title 28, 

19 United States Code. 

20 (C) PROCEDURES.—The procedures for re21 moval and proceedings after removal shall be in 

22 accordance with sections 1446 through 1450 of 

23 title 28, United States Code, except as may be 

24 necessary to accommodate removal of any acVerDate Aug 31 2005 00:11 Jun 06, 2006 Jkt 049200 PO 00000 Frm 00344 Fmt 6652 Sfmt 6201 E:\BILLS\S3274.PCS S3274

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1 tions pending (including on appeal) on the date 

2 of enactment of this Act. 

3 (D) REVIEW OF REMAND ORDERS.— 

4 (i) IN GENERAL.—Section 1447 of 

5 title 28, United States Code, shall apply to 

6 any removal of a case under this section, 

7 except that notwithstanding subsection (d) 

8 of that section, a court of appeals may ac9 cept an appeal from an order of a district 

10 court granting or denying a motion to re11 mand an action to the State court from 

12 which it was removed if application is 

13 made to the court of appeals not less than 

14 7 days after entry of the order. 

15 (ii) TIME PERIOD FOR JUDGMENT.—If 

16 the court of appeals accepts an appeal 

17 under clause (i), the court shall complete 

18 all action on such appeal, including ren19 dering judgment, not later than 60 days 

20 after the date on which such appeal was 

21 filed, unless an extension is granted under 

22 clause (iii). 

23 (iii) EXTENSION OF TIME PERIOD.— 

24 The court of appeals may grant an extenVerDate Aug 31 2005 00:11 Jun 06, 2006 Jkt 049200 PO 00000 Frm 00345 Fmt 6652 Sfmt 6201 E:\BILLS\S3274.PCS S3274

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1 sion of the 60-day period described in 

2 clause (ii) if— 

3 (I) all parties to the proceeding 

4 agree to such extension, for any pe5 riod of time; or 

6 (II) such extension is for good 

7 cause shown and in the interests of 

8 justice, for a period not to exceed 10 

9 days. 

10 (iv) DENIAL OF APPEAL.—If a final 

11 judgment on the appeal under clause (i) is 

12 not issued before the end of the period de13 scribed in clause (ii), including any exten14 sion under clause (iii), the appeal shall be 

15 denied. 

16 (E) JURISDICTION.—The jurisdiction of 

17 the district court shall be limited to— 

18 (i) determining whether removal was 

19 proper; and 

20 (ii) determining, based on the evi21 dentiary record, whether the claim pre22 sented is preempted, barred, or otherwise 

23 precluded under this Act. 

24 (6) CREDITS.— 


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1 (A) IN GENERAL.—If, notwithstanding the 

2 express intent of Congress stated in this sec3 tion, any court finally determines for any rea4 son that an asbestos claim, including a claim 

5 described under paragraph (2), is not barred 

6 under this subsection and is not subject to the 

7 exclusive remedy or preemption provisions of 

8 this section, then any participant required to 

9 satisfy a final judgment executed with respect 

10 to any such claim may elect to receive a credit 

11 against any assessment owed to the Fund equal 

12 to the amount of the payment made with re13 spect to such executed judgment. 

14 (B) REQUIREMENTS.—The Administrator 

15 shall require participants seeking credit under 

16 this paragraph to demonstrate that the partici17 pant— 

18 (i) timely pursued all available rem19 edies, including remedies available under 

20 this paragraph to obtain dismissal of the 

21 claim; and 

22 (ii) notified the Administrator at least 

23 20 days before the expiration of any period 

24 within which to appeal the denial of a mo25 tion to dismiss based on this section. 


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1 (C) INFORMATION.—The Administrator 

2 may require a participant seeking credit under 

3 this paragraph to furnish such further informa4 tion as is necessary and appropriate to establish 

5 eligibility for, and the amount of, the credit. 

6 (D) INTERVENTION.—The Administrator 

7 may intervene in any action in which a credit 

8 may be due under this paragraph. 

9 SEC. 404. EFFECT ON INSURANCE AND REINSURANCE CON10 TRACTS. 

11 (a) EROSION OF INSURANCE COVERAGE LIMITS.— 

12 (1) DEFINITIONS.—In this section, the fol13 lowing definitions shall apply: 

14 (A) DEEMED EROSION AMOUNT.—The 

15 term ‘‘deemed erosion amount’’ means the 

16 amount of erosion deemed to occur at enact17 ment under paragraph (2). 

18 (B) EARLY SUNSET.—The term ‘‘early 

19 sunset’’ means an event causing termination of 

20 the program under section 405(g) which re21 lieves the insurer participants of paying some 

22 portion of the aggregate payment level of 

23 $46,025,000,000 required under section 

24 212(a)(2)(A). 


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1 (C) EARNED EROSION AMOUNT.—The 

2 term ‘‘earned erosion amount’’ means, in the 

3 event of any early sunset under section 405(g), 

4 the percentage, as set forth in the following 

5 schedule, depending on the year in which the 

6 defendant participants’ funding obligations end, 

7 of those amounts which, at the time of the early 

8 sunset, a defendant participant has paid to the 

9 fund and remains obligated to pay into the 

10 fund. 

Year After Enactment In Which 

Defendant Participant’s Applicable 

Funding Obligation Ends: Percentage: 

2 ............................................................................................... 67.06

3 ............................................................................................... 86.72

4 ............................................................................................... 96.55

5 ............................................................................................... 102.45

6 ............................................................................................... 90.12

7 ............................................................................................... 81.32

8 ............................................................................................... 74.71

9 ............................................................................................... 69.58

10 ............................................................................................. 65.47

11 ............................................................................................. 62.11

12 ............................................................................................. 59.31

13 ............................................................................................. 56.94

14 ............................................................................................. 54.90

15 ............................................................................................. 53.14

16 ............................................................................................. 51.60

17 ............................................................................................. 50.24

18 ............................................................................................. 49.03

19 ............................................................................................. 47.95

20 ............................................................................................. 46.98

21 ............................................................................................. 46.10

22 ............................................................................................. 45.30

23 ............................................................................................. 44.57

24 ............................................................................................. 43.90

25 ............................................................................................. 43.28

26 ............................................................................................. 42.71

27 ............................................................................................. 42.18

28 ............................................................................................. 40.82

29 ............................................................................................. 39.42


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1 (D) REMAINING AGGREGATE PRODUCTS

2 LIMITS.—The term ‘‘remaining aggregate prod3 ucts limits’’ means aggregate limits that apply 

4 to insurance coverage granted under the ‘‘prod5 ucts hazard’’, ‘‘completed operations hazard’’, 

6 or ‘‘Products—Completed Operations Liability’’ 

7 in any comprehensive general liability policy 

8 issued between calendar years 1940 and 1986 

9 to cover injury which occurs in any State, as re10 duced by— 

11 (i) any existing impairment of such 

12 aggregate limits as of the date of enact13 ment of this Act; and 

14 (ii) the resolution of claims for reim15 bursement or coverage of liability or paid 

16 or incurred loss for which notice was pro17 vided to the insurer before the date of en18 actment of this Act. 

19 (E) SCHEDULED PAYMENT AMOUNTS.— 

20 The term ‘‘scheduled payment amounts’’ means 

21 the future payment obligation to the Fund 

22 under this Act from a defendant participant in 

23 the amount established under sections 203 and 

24 204. 


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1 (F) UNEARNED EROSION AMOUNT.—The 

2 term ‘‘unearned erosion amount’’ means, in the 

3 event of any early sunset under section 405(g), 

4 the difference between the deemed erosion 

5 amount and the earned erosion amount. 

6 (2) QUANTUM AND TIMING OF EROSION.— 

7 (A) EROSION UPON ENACTMENT.—The 

8 collective payment obligations to the Fund of 

9 the insurer and reinsurer participants as as10 sessed by the Administrator shall be deemed as 

11 of the date of enactment of this Act to erode re12 maining aggregate products limits available to a 

13 defendant participant only in an amount of 

14 38.1 percent of each defendant participant’s 

15 scheduled payment amount. 

16 (B) NO ASSERTION OF CLAIM.—No insurer 

17 or reinsurer may assert any claim against a de18 fendant participant or captive insurer for insur19 ance, reinsurance, payment of a deductible, or 

20 retrospective premium adjustment arising out 

21 of that insurer’s or reinsurer’s payments to the 

22 Fund or the erosion deemed to occur under this 

23 section. 

24 (C) POLICIES WITHOUT CERTAIN LIMITS

25 OR WITH EXCLUSION.—Except as provided 


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1 under subparagraph (E), nothing in this section 

2 shall require or permit the erosion of any insur3 ance policy or limit that does not contain an ag4 gregate products limit, or that contains an as5 bestos exclusion. 

6 (D) TREATMENT OF CONSOLIDATION

7 ELECTION.—If an affiliated group elects con8 solidation as provided in section 204(f), the 

9 total erosion of limits for the affiliated group 

10 under paragraph (2)(A) shall not exceed 38.1 

11 percent of the scheduled payment amount of 

12 the single payment obligation for the entire af13 filiated group. The total erosion of limits for 

14 any individual defendant participant in the af15 filiated group shall not exceed its individual 

16 share of 38.1 percent of the affiliated group’s 

17 scheduled payment amount, as measured by the 

18 individual defendant participant’s percentage 

19 share of the affiliated group’s prior asbestos ex20 penditures. 

21 (E) RULE OF CONSTRUCTION.—Notwith22 standing any other provision of this section, 

23 nothing in this Act shall be deemed to erode re24 maining aggregate products limits of a defend25 ant participant that can demonstrate by a preVerDate Aug 31 2005 00:11 Jun 06, 2006 Jkt 049200 PO 00000 Frm 00352 Fmt 6652 Sfmt 6201 E:\BILLS\S3274.PCS S3274

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1 ponderance of the evidence that 75 percent of 

2 its prior asbestos expenditures were made in de3 fense or satisfaction of asbestos claims alleging 

4 bodily injury arising exclusively from the expo5 sure to asbestos at premises owned, rented, or 

6 controlled by the defendant participant (a 

7 ‘‘premises defendant’’). In calculating such per8 centage, where expenditures were made in de9 fense or satisfaction of asbestos claims alleging 

10 bodily injury due to exposure to the defendant 

11 participant’s products and to asbestos at prem12 ises owned, rented, or controlled by the defend13 ant participant, half of such expenditures shall 

14 be deemed to be for such premises exposures. If 

15 a defendant participant establishes itself as a 

16 premises defendant, 75 percent of the payments 

17 by such defendant participant shall erode cov18 erage limits, if any, applicable to premises li19 abilities under applicable law. 

20 (3) METHOD OF EROSION.— 

21 (A) ALLOCATION.—The amount of erosion 

22 allocated to each defendant participant shall be 

23 allocated among periods in which policies with 

24 remaining aggregate product limits are avail25 able to that defendant participant pro rata by 


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1 policy period, in ascending order by attachment 

2 point. 

3 (B) OTHER EROSION METHODS.— 

4 (i) IN GENERAL.—Notwithstanding 

5 subparagraph (A), the method of erosion 

6 of any remaining aggregate products limits 

7 which are subject to— 

8 (I) a coverage-in-place or settle9 ment agreement between a defendant 

10 participant and 1 or more insurance 

11 participants as of the date of enact12 ment; or 

13 (II) a final and nonappealable 

14 judgment as of the date of enactment 

15 or resulting from a claim for coverage 

16 or reimbursement pending as of such 

17 date, shall be as specified in such 

18 agreement or judgment with regard to 

19 erosion applicable to such insurance 

20 participants’ policies. 

21 (ii) REMAINING LIMITS.—To the ex22 tent that a final nonappealable judgment 

23 or settlement agreement to which an in24 surer participant and a defendant partici25 pant are parties in effect as of the date of 


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1 enactment of this Act extinguished a de2 fendant participant’s right to seek coverage 

3 for asbestos claims under an insurer par4 ticipant’s policies, any remaining limits in 

5 such policies shall not be considered to be 

6 remaining aggregate products limits under 

7 subsection (a)(1)(A). 

8 (4) RESTORATION OF AGGREGATE PRODUCTS

9 LIMITS UPON EARLY SUNSET.— 

10 (A) RESTORATION.—In the event of an 

11 early sunset, any unearned erosion amount will 

12 be deemed restored as aggregate products limits 

13 available to a defendant participant as of the 

14 date of enactment. 

15 (B) METHOD OF RESTORATION.—The un16 earned erosion amount will be deemed restored 

17 to each defendant participant’s policies in such 

18 a manner that the last limits that were deemed 

19 eroded at enactment under this subsection are 

20 deemed to be the first limits restored upon 

21 early sunset. 

22 (C) TOLLING OF COVERAGE CLAIMS.—In 

23 the event of an early sunset, the applicable stat24 ute of limitations and contractual provisions for 

25 the filing of claims under any insurance policy 


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1 with restored aggregate products limits shall be 

2 deemed tolled after the date of enactment 

3 through the date 6 months after the date of 

4 early sunset. 

5 (5) PAYMENTS BY DEFENDANT PARTICIPANT.— 

6 Payments made by a defendant participant shall be 

7 deemed to erode, exhaust, or otherwise satisfy appli8 cable self-insured retentions, deductibles, retrospec9 tively rated premiums, and limits issued by non10 participating insolvent or captive insurance compa11 nies. Reduction of remaining aggregate limits under 

12 this subsection shall not limit the right of a defend13 ant participant to collect from any insurer not a par14 ticipant. 

15 (6) EFFECT ON OTHER INSURANCE CLAIMS.— 

16 Other than as specified in this subsection, this Act 

17 does not alter, change, modify, or affect insurance 

18 for claims other than asbestos claims. 

19 (b) DISPUTE RESOLUTION PROCEDURE.— 

20 (1) ARBITRATION.—The parties to a dispute re21 garding the erosion of insurance coverage limits 

22 under this section may agree in writing to settle 

23 such dispute by arbitration. Any such provision or 

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1 able, except for any grounds that exist at law or in 

2 equity for revocation of a contract. 

3 (2) TITLE 9, UNITED STATES CODE.—Arbitra4 tion of such disputes, awards by arbitrators, and 

5 confirmation of awards shall be governed by title 9, 

6 United States Code, to the extent such title is not 

7 inconsistent with this section. In any such arbitra8 tion proceeding, the erosion principles provided for 

9 under this section shall be binding on the arbitrator, 

10 unless the parties agree to the contrary. 

11 (3) FINAL AND BINDING AWARD.—An award by 

12 an arbitrator shall be final and binding between the 

13 parties to the arbitration, but shall have no force or 

14 effect on any other person. The parties to an arbi15 tration may agree that in the event a policy which 

16 is the subject matter of an award is subsequently de17 termined to be eroded in a manner different from 

18 the manner determined by the arbitration in a judg19 ment rendered by a court of competent jurisdiction 

20 from which no appeal can or has been taken, such 

21 arbitration award may be modified by any court of 

22 competent jurisdiction upon application by any party 

23 to the arbitration. Any such modification shall gov24 ern the rights and obligations between such parties 

25 after the date of such modification. 


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1 (c) EFFECT ON NONPARTICIPANTS.— 

2 (1) IN GENERAL.—No insurance company or 

3 reinsurance company that is not a participant, other 

4 than a captive insurer, shall be entitled to claim that 

5 payments to the Fund erode, exhaust, or otherwise 

6 limit the nonparticipant’s insurance or reinsurance 

7 obligations. 

8 (2) OTHER CLAIMS.—Nothing in this Act shall 

9 preclude a participant from pursuing any claim for 

10 insurance or reinsurance from any person that is not 

11 a participant other than a captive insurer. 

12 (d) FINITE RISK POLICIES NOT AFFECTED.— 

13 (1) IN GENERAL.—Notwithstanding any other 

14 provision of this Act, except subject to section 

15 212(a)(1)(D), this Act shall not alter, affect or im16 pair any rights or obligations of— 

17 (A) any party to an insurance contract 

18 that expressly provides coverage for govern19 mental charges or assessments imposed to re20 place insurance or reinsurance liabilities in ef21 fect on the date of enactment of this Act; or 

22 (B) subject to paragraph (2), any person 

23 with respect to any insurance purchased by a 

24 participant after December 31, 1990, that ex25 pressly (but not necessarily exclusively) provides 


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1 coverage for asbestos liabilities, including those 

2 policies commonly referred to as ‘‘finite risk’’ 

3 policies. 

4 (2) LIMITATION.—No person may assert that 

5 any amounts paid to the Fund in accordance with 

6 this Act are covered by any policy described under 

7 paragraph (1)(B) purchased by a defendant partici8 pant, unless such policy specifically provides cov9 erage for required payments to a Federal trust fund 

10 established by a Federal statute to resolve asbestos 

11 injury claims. 

12 (e) EFFECT ON CERTAIN INSURANCE AND REINSUR13 ANCE CLAIMS.— 

14 (1) NO COVERAGE FOR FUND ASSESSMENTS.— 

15 Subject to section 212(a)(1)(D), no participant or 

16 captive insurer may pursue an insurance or reinsur17 ance claim against another participant or captive in18 surer for payments to the Fund required under this 

19 Act, except under a written agreement specifically 

20 providing insurance, reinsurance, or other reim21 bursement for required payments to a Federal trust 

22 fund established by a Federal statute to resolve as23 bestos injury claims or, where applicable, under fi24 nite risk policies under subsection (d). 


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1 (2) CERTAIN INSURANCE ASSIGNMENTS VOID2 ED.—Any assignment of any rights to insurance cov3 erage for asbestos claims to any person who has as4 serted an asbestos claim before the date of enact5 ment of this Act, or to any trust, person, or other 

6 entity not part of an affiliated group as defined in 

7 section 201(1) of this Act established or appointed 

8 for the purpose of paying asbestos claims which were 

9 asserted before such date of enactment, or by any 

10 Tier I defendant participant, before any sunset of 

11 this Act, shall be null and void. This subsection shall 

12 not void or affect in any way any assignments of 

13 rights to insurance coverage other than to asbestos 

14 claimants or to trusts, persons, or other entities not 

15 part of an affiliated group as defined in section 

16 201(1) of this Act established or appointed for the 

17 purpose of paying asbestos claims, or by Tier I de18 fendant participants. 

19 (3) INSURANCE CLAIMS PRESERVED.—Notwith20 standing any other provision of this Act, this Act 

21 shall not alter, affect, or impair any rights or obliga22 tions of any person with respect to any insurance or 

23 reinsurance for amounts that any person pays, has 

24 paid, or becomes legally obligated to pay in respect 

25 of asbestos or other claims, including claims filed, 


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1 pursued, or revived under section 405(h), except to 

2 the extent that— 

3 (A) such claims are preempted, barred, or 

4 superseded by section 403; 

5 (B) any such rights or obligations of such 

6 person with respect to insurance or reinsurance 

7 are prohibited by paragraph (1) or (2) of sub8 section (e); or 

9 (C) the limits of insurance otherwise avail10 able to such participant in respect of asbestos 

11 claims are deemed to be eroded under sub12 section (a). 

13 SEC. 405. ANNUAL REPORT OF THE ADMINISTRATOR AND 

14 SUNSET OF THE ACT. 

15 (a) IN GENERAL.—The Administrator shall submit 

16 an annual report to the Committee on the Judiciary of 

17 the Senate and the Committee on the Judiciary of the 

18 House of Representatives on the operation of the Asbestos 

19 Injury Claims Resolution Fund within 6 months after the 

20 close of each fiscal year. 

21 (b) CONTENTS OF REPORT.—The annual report sub22 mitted under this subsection shall include an analysis of— 

23 (1) the claims experience of the program during 

24 the most recent fiscal year, including— 


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1 (A) the number of claims made to the Of2 fice and a description of the types of medical 

3 diagnoses and asbestos exposures underlying 

4 those claims; 

5 (B) the number of claims denied by the 

6 Office and a description of the types of medical 

7 diagnoses and asbestos exposures underlying 

8 those claims, and a general description of the 

9 reasons for their denial; 

10 (C) a summary of the eligibility determina11 tions made by the Office under section 114; 

12 (D) a summary of the awards made from 

13 the Fund, including the amount of the awards; 

14 and 

15 (E) for each disease level, a statement of 

16 the percentage of asbestos claimants who filed 

17 claims during the prior calendar year and were 

18 determined to be eligible to receive compensa19 tion under this Act, who have received the com20 pensation to which such claimants are entitled 

21 according to section 131; 

22 (2) the administrative performance of the pro23 gram, including— 

24 (A) the performance of the program in 

25 meeting the time limits prescribed by law and 


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1 an analysis of the reasons for any systemic 

2 delays; 

3 (B) any backlogs of claims that may exist 

4 and an explanation of the reasons for such 

5 backlogs; 

6 (C) the costs to the Fund of administering 

7 the program; and 

8 (D) any other significant factors bearing 

9 on the efficiency of the program; 

10 (3) the financial condition of the Fund, includ11 ing— 

12 (A) statements of the Fund’s revenues, ex13 penses, assets, and liabilities; 

14 (B) the identity of all participants, the 

15 funding allocations of each participant, and the 

16 total amounts of all payments to the Fund; 

17 (C) a list of all financial hardship or in18 equity adjustments applied for during the fiscal 

19 year, and the adjustments that were made dur20 ing the fiscal year; 

21 (D) a statement of the investments of the 

22 Fund; and 

23 (E) a statement of the borrowings of the 

24 Fund; 


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1 (4) the financial prospects of the Fund, includ2 ing— 

3 (A) an estimate of the number and types 

4 of claims, the amount of awards, and the par5 ticipant payment obligations for the next fiscal 

6 year; 

7 (B) an analysis of the financial condition 

8 of the Fund, including an estimation of the 

9 Fund’s ability to pay claims for the subsequent 

10 5 years in full and over the predicted lifetime 

11 of the program as and when required, an eval12 uation of the Fund’s ability to retire its existing 

13 debt and assume additional debt, and an eval14 uation of the Fund’s ability to satisfy other ob15 ligations under the program; and 

16 (C) a report on any changes in projections 

17 made in earlier annual reports or sunset anal18 yses regarding the Fund’s ability to meet its fi19 nancial obligations; 

20 (5) a summary of any legal actions brought or 

21 penalties imposed under section 223, any referrals 

22 made to law enforcement authorities under section 

23 408 (a) and (b), and any contributions to the Fund 

24 collected under section 408(e); 


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1 (6) any recommendations from the Advisory 

2 Committee on Asbestos Disease Compensation and 

3 the Medical Advisory Committee of the Fund to im4 prove the diagnostic, exposure, and medical criteria 

5 so as to pay those claimants who suffer from dis6 eases or conditions for which exposure to asbestos 

7 was a substantial contributing factor; 

8 (7) a summary of the results of audits con9 ducted under section 115; and 

10 (8) a summary of prosecutions under section 

11 1348 of title 18, United States Code (as added by 

12 this Act). 

13 (c) CERTIFICATION.—The Administrator shall certify 

14 in the annual report required under subsection (a) wheth15 er, in the best judgment of the Administrator, the Fund 

16 will have sufficient resources for the fiscal year in which 

17 the report is issued to make all required payments— 

18 (1) with respect to all claims determined eligible 

19 for compensation that have been filed and that the 

20 Administrator projects will be filed with the Office 

21 for the fiscal year; and 

22 (2) to satisfy the Fund’s debt repayment obliga23 tion, administrative costs, and other financial obliga24 tions. 


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1 (d) CLAIMS ANALYSIS AND VERIFICATION OF UNAN2 TICIPATED CLAIMS.— 

3 (1) IN GENERAL.—If the Administrator con4 cludes, on the basis of the annual report submitted 

5 under this section, that— 

6 (A) the average number of claims that 

7 qualify for compensation under a claim level or 

8 designation exceeds 125 percent of the number 

9 of claims expected to qualify for compensation 

10 under that claim level or designation in the 

11 most recent Congressional Budget Office esti12 mate of asbestos-injury claims for any 3-year 

13 period, the Administrator shall conduct a review 

14 of a statistically significant sample of claims 

15 qualifying for compensation under the appro16 priate claim level or designation; or 

17 (B) the average number of claims that 

18 qualify for compensation under a claim level or 

19 designation is less than 75 percent of the num20 ber of claims expected to qualify for compensa21 tion under that claim level or designation in the 

22 most recent Congressional Budget Office esti23 mate of asbestos-injury claims for any 3-year 

24 period, the Administrator shall conduct a review 

25 of a statistically significant sample of claims 


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1 deemed ineligible for compensation under the 

2 appropriate claim level or designation. 

3 (2) DETERMINATIONS.—The Administrator 

4 shall examine the best available medical evidence 

5 and any recommendation made under subsection 

6 (b)(5) in order to determine which 1 or more of the 

7 following is true: 

8 (A) Without a significant number of excep9 tions, all of the claimants who qualified for 

10 compensation under the claim level or designa11 tion suffer from an injury or disease for which 

12 exposure to asbestos was a substantial contrib13 uting factor. 

14 (B) A significant number of claimants who 

15 qualified for compensation under the claim level 

16 or designation do not suffer from an injury or 

17 disease for which exposure to asbestos was a 

18 substantial contributing factor. 

19 (C) A significant number of claimants who 

20 were denied compensation under the claim level 

21 of designation did suffer from an injury or dis22 ease for which exposure to asbestos was a sub23 stantial contributing factor. 

24 (D) The Congressional Budget Office pro25 jections underestimated or overestimated the 


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1 actual number of persons who suffer from an 

2 injury or disease for which exposure to asbestos 

3 was a substantial contributing factor. 

4 (3) RECOMMENDATIONS CONCERNING CLAIMS

5 CRITERIA.—If the Administrator determines that a 

6 significant number of the claimants who qualified for 

7 compensation under the claim level under review do 

8 not suffer from an injury or disease for which expo9 sure to asbestos was a substantial contributing fac10 tor, or that a significant number of the claimants 

11 who were denied compensation under the claim level 

12 under review suffered from an injury or disease for 

13 which exposure to asbestos was a substantial con14 tributing factor, the Administrator shall recommend 

15 to Congress, under subsection (f), changes to the 

16 compensation criteria in order to ensure that the 

17 Fund provides compensation for injury or disease for 

18 which exposure to asbestos was a substantial con19 tributing factor, but does not provide compensation 

20 to claimants who do not suffer from an injury or 

21 disease for which asbestos exposure was a substan22 tial contributing factor. 

23 (e) RECOMMENDATIONS OF ADMINISTRATOR AND

24 ADVISORY COMMITTEE.— 


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1 (1) REFERRAL.—If the Administrator rec2 ommends changes to this Act under subsection (d), 

3 the recommendations and accompanying analysis 

4 shall be referred to the Advisory Committee on As5 bestos Disease Compensation established under sec6 tion 102 (in this subsection referred to as the ‘‘Advi7 sory Committee’’). 

8 (2) ADVISORY COMMITTEE RECOMMENDA9 TIONS.—The Advisory Committee shall hold expe10 dited public hearings on the alternatives and rec11 ommendations of the Administrator and make its 

12 own recommendations for reform of the program 

13 under titles I and II. 

14 (3) TRANSMITTAL TO CONGRESS.—Not later 

15 than 90 days after receiving the recommendations of 

16 the Administrator, the Advisory Committee shall 

17 transmit the recommendations of the Administrator 

18 and the recommendations of the Advisory Committee 

19 to the Committee on the Judiciary of the Senate and 

20 the Committee on the Judiciary of the House of 

21 Representatives. 

22 (f) SHORTFALL ANALYSIS.— 

23 (1) IN GENERAL.— 

24 (A) ANALYSIS.—If the Administrator con25 cludes, at any time, that the Fund may not be 


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1 able to pay claims as such claims become due 

2 at any time within the next 5 years and to sat3 isfy its other obligations, the Administrator 

4 shall prepare an analysis of the reasons for the 

5 situation, an estimation of when the Fund will 

6 no longer be able to pay claims as such claims 

7 become due, a description of the range of rea8 sonable alternatives for responding to the situa9 tion, and a recommendation as to which alter10 native best serves the interest of claimants and 

11 the public. The report may include a description 

12 of changes in the diagnostic, exposure, or med13 ical criteria of section 121 that the Adminis14 trator believes may be necessary to protect the 

15 Fund. The Administrator shall submit such 

16 analysis to the Committee on the Judiciary of 

17 the Senate and the Committee on the Judiciary 

18 of the House of Representatives. Any rec19 ommendations made by the Administrator for 

20 changes to the program shall, in addition, be 

21 referred to the Advisory Committee on Asbestos 

22 Disease Compensation established under section 

23 102 for review. 


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1 (B) RANGE OF ALTERNATIVES.—The 

2 range of alternatives under subparagraph (A) 

3 may include— 

4 (i) termination of the program set 

5 forth in titles I and II of this Act in its en6 tirety; 

7 (ii) reform of the program set forth in 

8 titles I and II of this Act (including 

9 changes in the diagnostic, exposure, or 

10 medical criteria, changes in the enforce11 ment or application of those criteria, en12 hancement of enforcement authority, 

13 changes in the timing of payments, 

14 changes in contributions by defendant par15 ticipants, insurer participants (or both 

16 such participants), or changes in award 

17 values); or 

18 (iii) any measure that the Adminis19 trator considers appropriate. 

20 (C) INSURER SHORTFALL ASSESSMENTS.— 

21 Beginning in year 6 of the life of the Fund, if 

22 the Administrator determines that a shortfall in 

23 payment of the annual amounts required to be 

24 paid by insurer participants under section 

25 212(a)(3)(C) is the substantial factor that 


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1 would cause the Administrator to recommend 

2 the termination of this Act under subsection 

3 (g), then the Administrator may impose short4 fall assessments on insurer participants in addi5 tion to the payments imposed under section 

6 212, except that the Administrator shall not 

7 impose such assessments if the additional 

8 amounts would not be sufficient to permit the 

9 Administrator to avoid recommending termi10 nation of this Act. During any given year, the 

11 total of such shortfall assessments shall not ex12 ceed the amount by which, during the prior 

13 year, total payments by insurer participants fell 

14 short of the aggregate amounts required to be 

15 paid under section 212(a)(3)(C). Shortfall as16 sessments shall be allocated among insurer par17 ticipants using the methodology adopted by the 

18 Asbestos Insurers Commission under section 

19 212(a)(1)(B). 

20 (2) CONSIDERATIONS.—In formulating rec21 ommendations, the Administrator shall take into ac22 count the reasons for any shortfall, actual or pro23 jected, which may include— 

24 (A) financial factors, including return on 

25 investments, borrowing capacity, interest rates, 


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1 ability to collect contributions, and other rel2 evant factors; 

3 (B) the operation of the Fund generally, 

4 including administration of the claims proc5 essing, the ability of the Administrator to col6 lect contributions from participants, potential 

7 problems of fraud, the adequacy of the criteria 

8 to rule out idiopathic mesothelioma, and inad9 equate flexibility to extend the timing of pay10 ments; 

11 (C) the appropriateness of the diagnostic, 

12 exposure, and medical criteria, including the 

13 adequacy of the criteria to rule out idiopathic 

14 mesothelioma; 

15 (D) the actual incidence of asbestos-related 

16 diseases, including mesothelioma, based on epi17 demiological studies and other relevant data; 

18 (E) compensation of diseases with alter19 native causes; and 

20 (F) other factors that the Administrator 

21 considers relevant. 

22 (3) RECOMMENDATION OF TERMINATION.—Any 

23 recommendation of termination should include a 

24 plan for winding up the affairs of the Fund (and the 

25 program generally) within a defined period, includVerDate Aug 31 2005 00:11 Jun 06, 2006 Jkt 049200 PO 00000 Frm 00373 Fmt 6652 Sfmt 6201 E:\BILLS\S3274.PCS S3274

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1 ing paying in full all claims resolved at the time the 

2 report is prepared. Any plan under this paragraph 

3 shall provide for priority in payment to the claim4 ants with the most serious illnesses. 

5 (4) RESOLVED CLAIMS.—For purposes of this 

6 section, a claim shall be deemed resolved when the 

7 Administrator has determined the amount of the 

8 award due the claimant, and either the claimant has 

9 waived judicial review or the time for judicial review 

10 has expired. 

11 (g) SUNSET OF ACT.— 

12 (1) IN GENERAL.— 

13 (A) TERMINATION.—Subject to paragraph 

14 (4), titles I (except subtitle A) and II and sec15 tions 403 and 404(e)(2) shall terminate as pro16 vided under paragraph (2), if— 

17 (i) the Administrator has begun the 

18 processing of claims; and 

19 (ii) as part of the review conducted to 

20 prepare an annual report under this sec21 tion, the Chief Financial Officer of the De22 partment of Labor, giving due consider23 ation to the audit conducted under sub24 section (h), determines that if any addi25 tional claims are resolved, the Fund will 


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1 not have sufficient nontaxpayer resources 

2 and borrowing authorized under section 

3 221 when needed to pay 100 percent of all 

4 resolved claims while also meeting all other 

5 obligations of the Fund under this Act, in6 cluding the payment of— 

7 (I) debt repayment obligations; 

8 and 

9 (II) remaining obligations to the 

10 asbestos trust of a debtor and the 

11 class action trust. 

12 (B) REMAINING OBLIGATIONS.—For pur13 poses of subparagraph (A)(ii)(II), the remain14 ing obligations to the asbestos trust of the debt15 or and the class action trust shall be deter16 mined by multiplying the amount of assets 

17 transferred to the Fund by such debtor or class 

18 action trust by the applicable percentage set 

19 forth in the following schedule depending on the 

20 year in which a termination shall take effect 

21 under paragraph (2). The applicable percentage 

22 shall be adjusted between years by quarter-an23 nual increments. 

Year After Enactment in Which Applicable

the Termination is Effective Percentage: 

1 ............................................................................................... 100.00

2 ............................................................................................... 93.95

3 ............................................................................................... 87.98


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Year After Enactment in Which Applicable

the Termination is Effective Percentage: 

4 ............................................................................................... 82.40

5 ............................................................................................... 76.97

6 ............................................................................................... 71.66

7 ............................................................................................... 66.50

8 ............................................................................................... 61.48

9 ............................................................................................... 56.61

10 ............................................................................................. 52.01

11 ............................................................................................. 47.65

12 ............................................................................................. 43.52

13 ............................................................................................. 39.62

14 ............................................................................................. 35.96

15 ............................................................................................. 32.55

16 ............................................................................................. 29.36

17 ............................................................................................. 26.39

18 ............................................................................................. 23.65

19 ............................................................................................. 21.11

20 ............................................................................................. 18.76

21 ............................................................................................. 16.62

22 ............................................................................................. 14.66

23 ............................................................................................. 12.86

24 ............................................................................................. 11.24

25 ............................................................................................. 9.78

26 ............................................................................................. 8.48

27 ............................................................................................. 7.32

28 ............................................................................................. 6.29

29 ............................................................................................. 5.37

30 ............................................................................................. 4.55

31 ............................................................................................. 3.83

32 ............................................................................................. 3.20

33 ............................................................................................. 2.66

34 ............................................................................................. 2.18

35 ............................................................................................. 1.77

36 ............................................................................................. 1.42

37 ............................................................................................. 1.13

38 ............................................................................................. 0.89

39 ............................................................................................. 0.70

40 ............................................................................................. 0.54

41 ............................................................................................. 0.40

42 ............................................................................................. 0.29

43 ............................................................................................. 0.19

44 ............................................................................................. 0.12

45 ............................................................................................. 0.05

46 and thereafter ..................................................................... 0.00

1 (2) EFFECTIVE DATE OF TERMINATION.—A 

2 termination under paragraph (1) shall take effect 

3 180 days after the date of a determination of the 

4 Administrator under paragraph (1) and shall apply 


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1 to all asbestos claims that have not been resolved by 

2 the Fund as of the date of the determination. 

3 (3) RESOLVED CLAIMS.—If a termination takes 

4 effect under this subsection, all resolved claims shall 

5 be paid in full by the Fund. 

6 (4) EXTINGUISHED CLAIMS.—A claim that is 

7 extinguished under the statute of limitations provi8 sions in section 113(b) is not revived at the time of 

9 sunset under this subsection. 

10 (5) CONTINUED FUNDING.—If a termination 

11 takes effect under this subsection, participants will 

12 still be required to make payments as provided 

13 under subtitles A and B of title II. If the full 

14 amount of payments required by title II is not nec15 essary for the Fund to pay claims that have been re16 solved as of the date of termination, pay the Fund’s 

17 debt and obligations to the asbestos trusts and class 

18 action trust, and support the Fund’s continued oper19 ation as needed to pay such claims, debt, and obliga20 tions, the Administrator may reduce such payments. 

21 Any such reductions shall be allocated among par22 ticipants in approximately the same proportion as 

23 the liability under subtitles A and B of title II. 

24 (6) SUNSET CLAIMS.— 

25 (A) DEFINITIONS.—In this paragraph— 


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1 (i) the term ‘‘sunset claims’’ means 

2 claims filed with the Fund, but not yet re3 solved, when this Act has terminated; and 

4 (ii) the term ‘‘sunset claimants’’ 

5 means persons asserting sunset claims. 

6 (B) IN GENERAL.—If a termination takes 

7 effect under this subsection, the applicable stat8 ute of limitations for the filing of sunset claims 

9 under subsection (h) shall be tolled for any past 

10 or pending sunset claimants while such claim11 ants were pursuing claims filed under this Act. 

12 For those claimants who decide to pursue a 

13 sunset claim in accordance with subsection (h), 

14 the applicable statute of limitations shall apply, 

15 except that claimants who filed a claim against 

16 the Fund under this Act before the date of ter17 mination shall have 2 years after the date of 

18 termination to file a sunset claim in accordance 

19 with subsection (h). 

20 (7) ESTABLISHMENT OF MASTER ASBESTOS

21 TRUST.— 

22 (A) CREATION.—Within 120 days after the 

23 determination of the Administrator under para24 graph (1), the Administrator shall create a 

25 trust to be the successor to the asbestos trusts 


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1 and any class action trust, to receive funds 

2 equal to the amount determined by the Admin3 istrator to be necessary to pay the remaining 

4 aggregate obligations to the asbestos trusts and 

5 any class action trust under paragraph (1) 

6 (A)(iii) and (B), and to use such funds for the 

7 exclusive purpose of providing benefits in ac8 cordance with the terms of this paragraph to 

9 persons who would have held valid asbestos 

10 claims against the asbestos trusts or any class 

11 action trust had this Act not been enacted and 

12 to otherwise defray the reasonable expenses of 

13 administering the master trust. 

14 (B) JURISDICTION.—The United States 

15 District Court for the District of Columbia shall 

16 have exclusive jurisdiction, without regard to 

17 amount in controversy, over the master trust 

18 and all civil actions involving the application 

19 and construction of this subparagraph and the 

20 trust documents, including any action for the 

21 payment of benefits due under the terms of this 

22 subparagraph after exhaustion of trust rem23 edies and any action for breach of fiduciary 

24 duty on the part of any fiduciary of the master 

25 trust. 


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1 (C) TRUSTEES.—The district court shall 

2 appoint, upon petition by the Administrator 

3 after consultation with the Advisory Committee, 

4 3 trustees to administer the master trust. Each 

5 trustee, and any successor to each trustee, must 

6 be independent, free of any adverse interest and 

7 have sufficient qualifications and experience to 

8 fulfill the responsibilities described in this sec9 tion. 

10 (D) TRUST ADVISORY COMMITTEE.—The 

11 Administrator, in consultation with the Advi12 sory Committee, shall appoint 3 persons to rep13 resent the interests of trust beneficiaries as 

14 members of a trust advisory committee to con15 sult with and advise the trustees respecting the 

16 administration of the master trust and resolu17 tion of asbestos claims. At least 1 of the mem18 bers of the trust advisory committee shall be se19 lected from among individuals recommended by 

20 recognized national labor federations, and at 

21 least 1 of the members of the trust advisory 

22 committee shall be experienced in representing 

23 the interests of trust beneficiaries. 

24 (E) LEGAL REPRESENTATIVE.—The dis25 trict court shall appoint, upon petition by the 


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1 Administrator after consultation with the Advi2 sory Committee, a legal representative of per3 sons who may in the future have claims against 

4 the master trust for the purpose of protecting 

5 the rights of such persons respecting the master 

6 trust and consulting with and advising the 

7 trustees respecting the administration of the 

8 master trust and resolution of asbestos claims. 

9 The legal representative shall have standing to 

10 appear and be heard as a representative of the 

11 future asbestos claimants in any civil action be12 fore the district court relating to the master 

13 trust. The legal representative shall not rep14 resent the interests of any person who has filed 

15 a claim for benefits against the master trust 

16 with respect to such claim. 

17 (F) TRUST DOCUMENTS.—The Adminis18 trator, in consultation with the Advisory Com19 mittee, shall create such trust documents as 

20 may be necessary to create and govern the op21 erations of the master trust. The trust docu22 ments shall contain provisions that— 

23 (i) address the payment of compensa24 tion to and reimbursement of necessary 

25 and reasonable expenses of the trustees, 


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1 trust advisory committee members and 

2 legal representative, and appointment of 

3 successors to such persons, subject to ap4 proval by the district court in the case of 

5 successors to the trustees and legal rep6 resentative; and 

7 (ii) provide for the master trust’s obli8 gation to defend and indemnify the Admin9 istrator, trustees, members of the trust ad10 visory committee, legal representative and 

11 their respective successors against and 

12 from legal actions and related losses to the 

13 extent that a corporation is permitted 

14 under the laws of Delaware to defend and 

15 indemnify its officers and directors. 

16 (G) DUTY OF TRUSTEES.—The trustees 

17 shall administer the master trust in accordance 

18 with the terms of this subparagraph and the 

19 Trust Documents for the exclusive purpose of 

20 providing benefits to persons with valid claims 

21 against the master trust and otherwise defray22 ing the reasonable expenses of administering 

23 the master trust, and shall manage and invest 

24 the assets of the trust with the care, skill, pru25 dence, and diligence, under like circumstances 


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1 prevailing at the time, that a prudent person 

2 acting in like capacity and manner would use. 

3 (H) CLAIMS RESOLUTION PROCEDURES.— 

4 The trustees, in consultation with the trust ad5 visory committee and the legal representative, 

6 shall adopt claims resolution procedures that 

7 provide for fair and expeditious payment of 

8 benefits to all persons described in subpara9 graph (A). The claims resolution procedures 

10 adopted and implemented by the trustees shall 

11 contain— 

12 (i) pro rata distributions of award 

13 amounts that are subject to adjustment, if 

14 necessary, based on periodic evaluations of 

15 the value of the master trust’s assets and 

16 estimates of the numbers and values of 

17 present and future asbestos claims for ben18 efits that may be awarded by the master 

19 trust and other mechanisms that provide 

20 reasonable assurance that the master trust 

21 will value, and be in a financial position to 

22 pay, similarly situated asbestos claims pre23 sented to it that involve similar diseases in 

24 substantially the same manner; 


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1 (ii) proof requirements, claim submis2 sion procedures, and claim evaluation and 

3 allowance procedures that provide for expe4 ditious filing and evaluation of all asbestos 

5 claims submitted to the master trust; 

6 (iii) provisions for priority review and 

7 payment of claimants whose circumstances 

8 require expedited evaluation and com9 pensation; 

10 (iv) exposure requirements for asbes11 tos claimants to qualify for a remedy that 

12 fairly reflect the legal responsibility of at 

13 least 1 entity whose liabilities were chan14 neled to an asbestos trust or any class ac15 tion trust; and 

16 (v) review and dispute resolution pro17 cedures for disputes regarding the master 

18 trust’s disallowance or other treatment of 

19 claims for benefits. 

20 (I) MEDICAL CRITERIA.—The trustees, in 

21 consultation with the trust advisory committee 

22 and the legal representative, shall adopt and 

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1 entific and medical knowledge. The trustees 

2 may adopt the medical criteria of section 121. 

3 (J) AWARD AMOUNTS.—The trustees, in 

4 consultation with the trust advisory committee 

5 and the legal representative, shall adopt a ma6 trix of award amounts for disease categories 

7 that applies to all claimants who qualify for 

8 payment under the medical criteria and claims 

9 resolution procedures. The trustees may adopt 

10 the matrix of award amounts of section 131 or 

11 such other matrix that the trustees determine 

12 provides similar benefits for similar claims and 

13 fairly reflects the liability of the entities whose 

14 liabilities were channeled to the asbestos trusts 

15 and any class action trust. 

16 (K) PAYMENTS TO CLAIMANTS.—The 

17 trustees shall pay each qualifying claimant a 

18 benefit equal to the product of the master trust 

19 payment percentage and the award amount to 

20 such claimant. The master trust payment per21 centage at any given time shall be determined 

22 by the trustees based on their periodic evalua23 tion of the master trust’s assets and projected 

24 claims as described in subparagraph (H)(i). 


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1 (L) AMENDMENTS.—The trustees, in con2 sultation with the trust advisory committee and 

3 legal representative, may amend the trust docu4 ments, the claims resolution procedures, the 

5 medical criteria and the award matrix to the ex6 tent necessary to more effectively and efficiently 

7 carry out the purpose of the master trust. If 

8 the substantive consolidation of the asbestos 

9 trusts and any class action trust effected by 

10 this subsection is held to be unconstitutional, 

11 the trustees shall adopt amendments to the 

12 trust documents, claims resolution procedures, 

13 medical criteria and award matrix as may be 

14 necessary to bring the master trust in compli15 ance with the Constitution, including if nec16 essary, amendments requiring, for each such 

17 trust, separate claims resolution procedures, 

18 award amounts and accounting of assets and li19 abilities. 

20 (8) PAYMENT TO MASTER TRUST.—The amount 

21 determined by the Administrator to be necessary to 

22 pay the remaining aggregate obligations to the as23 bestos trusts and any class action trust under para24 graph (1) (A)(iii) and (B) shall be transferred to the 

25 master trust within 90 days of termination under 


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1 this subsection. Any individual with a valid asbestos 

2 claim against any asbestos trust or class action trust 

3 shall be entitled to seek relief on account of such 

4 claim from the master trust described in paragraph 

5 (7) in accordance with that paragraph. 

6 (h) NATURE OF CLAIM AFTER SUNSET.— 

7 (1) IN GENERAL.— 

8 (A) RELIEF.— 

9 (i) IN GENERAL.—On and after the 

10 date of termination under subsection (g), 

11 any individual with an asbestos claim who 

12 has not previously had a claim resolved by 

13 the Fund, may in a civil action obtain re14 lief in damages subject to the terms and 

15 conditions under this subsection and para16 graph (6) of subsection (g), except that 

17 any individual who would have held a valid 

18 asbestos claim against any asbestos trust 

19 or class action trust had this Act not been 

20 enacted may obtain relief on account of 

21 such claim only from the master trust de22 scribed in subsection (g)(7) in accordance 

23 with the provisions of such subsection. 


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1 (ii) RULE OF CONSTRUCTION.—This 

2 subparagraph shall not be construed as 

3 creating a new Federal cause of action. 

4 (B) RESOLVED CLAIMS.—An individual 

5 who has had a claim resolved by the Fund may 

6 not pursue a court action, except that an indi7 vidual who received an award for a nonmalig8 nant disease (Levels I through V) from the 

9 Fund may assert a claim for a subsequent or 

10 progressive disease under this subsection, unless 

11 the disease was diagnosed or the claimant had 

12 discovered facts that would have led a reason13 able person to obtain such a diagnosis before 

14 the date on which the previous claim against 

15 the Fund was disposed. 

16 (C) MESOTHELIOMA CLAIM.—An indi17 vidual who received an award for a nonmalig18 nant or malignant disease (except mesothe19 lioma) (Levels I through VIII) from the Fund 

20 may assert a claim for mesothelioma under this 

21 subsection, unless the mesothelioma was diag22 nosed or the claimant had discovered facts that 

23 would have led a reasonable person to obtain 

24 such a diagnosis before the date on which the 


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1 nonmalignant or other malignant claim was dis2 posed. 

3 (2) EXCLUSIVE REMEDY.—As of the effective 

4 date of a termination of this Act under subsection 

5 (g), an action under paragraph (1) shall be the ex6 clusive remedy for any asbestos claim that might 

7 otherwise exist under Federal, State, or other law, 

8 regardless of whether such claim arose before or 

9 after the date of enactment of this Act or of the ter10 mination of this Act, except that claims against the 

11 Fund that have been resolved before the date of the 

12 termination determination under subsection (f) may 

13 be paid by the Fund. 

14 (3) VENUE.— 

15 (A) IN GENERAL.—Actions under para16 graph (1) may be brought in— 

17 (i) any Federal district court; 

18 (ii) any State court in the State where 

19 the claimant resides; or 

20 (iii) any State court in a State where 

21 the asbestos exposure occurred. 

22 (B) DEFENDANTS NOT FOUND.—If any 

23 defendant cannot be found in the State de24 scribed in clause (ii) or (iii) of subparagraph 

25 (A), the claim may be pursued only against that 


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1 defendant in the Federal district court or the 

2 State court located within any State in which 

3 the defendant may be found. 

4 (C) DETERMINATION OF MOST APPRO5 PRIATE FORUM.—If a person alleges that the 

6 asbestos exposure occurred in more than 1 

7 county (or Federal district), the trial court shall 

8 determine which State and county (or Federal 

9 district) is the most appropriate forum for the 

10 claim. If the court determines that another 

11 forum would be the most appropriate forum for 

12 a claim, the court shall dismiss the claim. Any 

13 otherwise applicable statute of limitations shall 

14 be tolled beginning on the date the claim was 

15 filed and ending on the date the claim is dis16 missed under this subparagraph. 

17 (D) STATE VENUE REQUIREMENTS.— 

18 Nothing in this paragraph shall preempt or su19 persede any State’s law relating to venue re20 quirements within that State which are more 

21 restrictive. 

22 (4) CLASS ACTION TRUSTS.—Notwithstanding 

23 any other provision of this section, after the assets 

24 of any class action trust have been transferred to 

25 the Fund in accordance with section 203(b)(5), no 


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1 asbestos claim may be maintained with respect to 

2 asbestos liabilities arising from the operations of a 

3 person with respect to whose liabilities for asbestos 

4 claims a class action trust has been established, 

5 whether such claim names the person or its succes6 sors or affiliates as defendants. 

7 (5) EXPERT WITNESSES.—If scientific, tech8 nical, or other specialized knowledge will assist the 

9 trier of fact to understand the evidence or to deter10 mine a fact in issue in an action permitted under 

11 paragraph (1), a witness qualified as an expert by 

12 knowledge, skill, experience, training, or education, 

13 may testify thereto in the form of an opinion or oth14 erwise, if— 

15 (A) the testimony is based upon sufficient 

16 facts or data; 

17 (B) the testimony is the product of reliable 

18 principles and methods; and 

19 (C) the witness has applied the principles 

20 and methods reliably to the facts of the case. 

21 (i) AUDIT.—Any annual report to Congress required 

22 under this section shall be reviewed and certified as fairly 

23 representing the financial condition of the Fund by an 

24 independent auditor. 


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1 SEC. 406. RULES OF CONSTRUCTION RELATING TO LIABIL2 ITY OF THE UNITED STATES GOVERNMENT. 

3 (a) CAUSES OF ACTIONS.—Except as otherwise spe4 cifically provided in this Act, nothing in this Act shall be 

5 construed as creating a cause of action against the United 

6 States Government, any entity established under this Act, 

7 or any officer or employee of the United States Govern8 ment or such entity. 

9 (b) FUNDING LIABILITY.—Nothing in this Act shall 

10 be construed to— 

11 (1) create any obligation of funding from the 

12 United States Government, including any borrowing 

13 authorized under section 221(b)(2); or 

14 (2) obligate the United States Government to 

15 pay any award or part of an award, if amounts in 

16 the Fund are inadequate. 

17 SEC. 407. RULES OF CONSTRUCTION. 

18 (a) LIBBY, MONTANA CLAIMANTS.—Nothing in this 

19 Act shall preclude the formation of a fund for the payment 

20 of eligible medical expenses related to treating asbestos21 related disease for current and former residents of Libby, 

22 Montana. The payment of any such medical expenses shall 

23 not be collateral source compensation as defined under 

24 section 134(a). 

25 (b) HEALTHCARE FROM PROVIDER OF CHOICE.— 

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1 gible claimant from receiving healthcare from the provider 

2 of their choice. 

3 SEC. 408. VIOLATIONS OF ENVIRONMENTAL HEALTH AND 

4 SAFETY REQUIREMENTS. 

5 (a) ASBESTOS IN COMMERCE.—If the Administrator 

6 receives information concerning conduct occurring after 

7 the date of enactment of this Act that may have been a 

8 violation of standards issued by the Environmental Protec9 tion Agency under the Toxic Substances Control Act (15 

10 U.S.C. 2601 et seq.), relating to the manufacture, impor11 tation, processing, disposal, and distribution in commerce 

12 of asbestos-containing products, the Administrator shall 

13 refer the matter in writing within 30 days after receiving 

14 that information to the Administrator of the Environ15 mental Protection Agency and the United States attorney 

16 for possible civil or criminal penalties, including those 

17 under section 17 of the Toxic Substances Control Act (15 

18 U.S.C. 2616), and to the appropriate State authority with 

19 jurisdiction to investigate asbestos matters. 

20 (b) ASBESTOS AS AIR POLLUTANT.—If the Adminis21 trator receives information concerning conduct occurring 

22 after the date of enactment of this Act that may have been 

23 a violation of standards issued by the Environmental Pro24 tection Agency under the Clean Air Act (42 U.S.C. 7401 

25 et seq.), relating to asbestos as a hazardous air pollutant, 


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1 the Administrator shall refer the matter in writing within 

2 30 days after receiving that information to the Adminis3 trator of the Environmental Protection Agency and the 

4 United States attorney for possible criminal and civil pen5 alties, including those under section 113 of the Clean Air 

6 Act (42 U.S.C. 7413), and to the appropriate State au7 thority with jurisdiction to investigate asbestos matters. 

8 (c) OCCUPATIONAL EXPOSURE.—If the Adminis9 trator receives information concerning conduct occurring 

10 after the date of enactment of this Act that may have been 

11 a violation of standards issued by the Occupational Safety 

12 and Health Administration under the Occupational Safety 

13 and Health Act of 1970 (29 U.S.C. 651 et seq.), relating 

14 to occupational exposure to asbestos, the Administrator 

15 shall refer the matter in writing within 30 days after re16 ceiving that information and refer the matter to the Sec17 retary of Labor or the appropriate State agency with au18 thority to enforce occupational safety and health stand19 ards, for investigation for possible civil or criminal pen20 alties under section 17 of the Occupational Safety and 

21 Health Act of 1970 (29 U.S.C. 666). 

22 (d) ENHANCED CRIMINAL PENALTIES FOR WILLFUL

23 VIOLATIONS OF OCCUPATIONAL STANDARDS FOR ASBES24 TOS.—Section 17(e) of the Occupational Safety and 

25 Health Act of 1970 (29 U.S.C. 656(e)) is amended— 


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1 (1) by striking ‘‘Any’’ and inserting ‘‘(1) Ex2 cept as provided in paragraph (2), any’’; and 

3 (2) by adding at the end the following: 

4 ‘‘(2) Any employer who willfully violates any standard 

5 issued under section 6 with respect to the control of occu6 pational exposure to asbestos, shall upon conviction be 

7 punished by a fine in accordance with section 3571 of title 

8 18, United States Code, or by imprisonment for not more 

9 than 5 years, or both, except that if the conviction is for 

10 a violation committed after a first conviction of such per11 son, punishment shall be by a fine in accordance with sec12 tion 3571 of title 18, United States Code, or by imprison13 ment for not more than 10 years, or both.’’. 

14 (e) CONTRIBUTIONS TO THE ASBESTOS TRUST FUND

15 BY EPA AND OSHA ASBESTOS VIOLATORS.— 

16 (1) IN GENERAL.—The Administrator shall as17 sess employers or other individuals determined to 

18 have violated asbestos statutes, standards, or regula19 tions administered by the Department of Labor, the 

20 Environmental Protection Agency, and their State 

21 counterparts, for contributions to the Asbestos In22 jury Claims Resolution Fund (in this section re23 ferred to as the ‘‘Fund’’). 

24 (2) IDENTIFICATION OF VIOLATORS.—Each 

25 year, the Administrator shall— 


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1 (A) in consultation with the Assistant Sec2 retary of Labor for Occupational Safety and 

3 Health, identify all employers that, during the 

4 previous year, were subject to final orders find5 ing that they violated standards issued by the 

6 Occupational Safety and Health Administration 

7 for control of occupational exposure to asbestos 

8 (29 C.F.R. 1910.1001, 1915.1001, and 

9 1926.1101) or the equivalent asbestos stand10 ards issued by any State under section 18 of 

11 the Occupational Safety and Health Act (29 

12 U.S.C. 668); and 

13 (B) in consultation with the Administrator 

14 of the Environmental Protection Agency, iden15 tify all employers or other individuals who, dur16 ing the previous year, were subject to final or17 ders finding that they violated asbestos regula18 tions administered by the Environmental Pro19 tection Agency (including the National Emis20 sions Standard for Asbestos established under 

21 the Clean Air Act (42 U.S.C. 7401 et seq.), the 

22 asbestos worker protection standards estab23 lished under part 763 of title 40, Code of Fed24 eral Regulations, and the regulations banning 


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1 asbestos promulgated under section 501 of this 

2 Act), or equivalent State asbestos regulations. 

3 (3) ASSESSMENT FOR CONTRIBUTION.—The 

4 Administrator shall assess each such identified em5 ployer or other individual for a contribution to the 

6 Fund for that year in an amount equal to— 

7 (A) 2 times the amount of total penalties 

8 assessed for the first violation of occupational 

9 health and environmental statutes, standards, 

10 or regulations; 

11 (B) 4 times the amount of total penalties 

12 for a second violation of such statutes, stand13 ards, or regulations; and 

14 (C) 6 times the amount of total penalties 

15 for any violations thereafter. 

16 (4) LIABILITY.—Any assessment under this 

17 subsection shall be considered a liability under this 

18 Act. 

19 (5) PAYMENTS.—Each such employer or other 

20 individual assessed for a contribution to the Fund 

21 under this subsection shall make the required con22 tribution to the Fund within 90 days of the date of 

23 receipt of notice from the Administrator requiring 

24 payment. 


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1 (6) ENFORCEMENT.—The Administrator is au2 thorized to bring a civil action under section 223(c) 

3 against any employer or other individual who fails to 

4 make timely payment of contributions assessed 

5 under this section. 

6 (f) REVIEW OF FEDERAL SENTENCING GUIDELINES

7 FOR ENVIRONMENTAL CRIMES RELATED TO ASBES8 TOS.—Under section 994 of title 28, United States Code, 

9 and in accordance with this section, the United States 

10 Sentencing Commission shall review and amend, as appro11 priate, the United States Sentencing Guidelines and re12 lated policy statements to ensure that— 

13 (1) appropriate changes are made within the 

14 guidelines to reflect any statutory amendments that 

15 have occurred since the time that the current guide16 line was promulgated; 

17 (2) the base offense level, adjustments, and spe18 cific offense characteristics contained in section 

19 2Q1.2 of the United States Sentencing Guidelines 

20 (relating to mishandling of hazardous or toxic sub21 stances or pesticides; recordkeeping, tampering, and 

22 falsification; and unlawfully transporting hazardous 

23 materials in commerce) are increased as appropriate 

24 to ensure that future asbestos-related offenses re25 flect the seriousness of the offense, the harm to the 


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1 community, the need for ongoing reform, and the 

2 highly regulated nature of asbestos; 

3 (3) the base offense level, adjustments, and spe4 cific offense characteristics are sufficient to deter 

5 and punish future activity and are adequate in cases 

6 in which the relevant offense conduct— 

7 (A) involves asbestos as a hazardous or 

8 toxic substance; and 

9 (B) occurs after the date of enactment of 

10 this Act; 

11 (4) the adjustments and specific offense charac12 teristics contained in section 2B1.1 of the United 

13 States Sentencing Guidelines related to fraud, de14 ceit, and false statements, adequately take into ac15 count that asbestos was involved in the offense, and 

16 the possibility of death or serious bodily harm as a 

17 result; 

18 (5) the guidelines that apply to organizations in 

19 chapter 8 of the United States Sentencing Guide20 lines are sufficient to deter and punish organiza21 tional criminal misconduct that involves the use, 

22 handling, purchase, sale, disposal, or storage of as23 bestos; and 

24 (6) the guidelines that apply to organizations in 

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1 lines are sufficient to deter and punish organiza2 tional criminal misconduct that involves fraud, de3 ceit, or false statements against the Office of Asbes4 tos Disease Compensation. 

5 SEC. 409. NONDISCRIMINATION OF HEALTH INSURANCE. 

6 (a) DENIAL, TERMINATION, OR ALTERATION OF

7 HEALTH COVERAGE.—No health insurer offering a health 

8 plan may deny or terminate coverage, or in any way alter 

9 the terms of coverage, of any claimant or the beneficiary 

10 of a claimant, on account of the participation of the claim11 ant or beneficiary in a medical monitoring program under 

12 this Act, or as a result of any information discovered as 

13 a result of such medical monitoring. 

14 (b) DEFINITIONS.—In this section: 

15 (1) HEALTH INSURER.—The term ‘‘health in16 surer’’ means— 

17 (A) an insurance company, healthcare 

18 service contractor, fraternal benefit organiza19 tion, insurance agent, third-party administrator, 

20 insurance support organization, or other person 

21 subject to regulation under the laws related to 

22 health insurance of any State; 

23 (B) a managed care organization; or 


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1 (C) an employee welfare benefit plan regu2 lated under the Employee Retirement Income 

3 Security Act of 1974 (29 U.S.C. 1001 et seq.). 

4 (2) HEALTH PLAN.—The term ‘‘health plan’’ 

5 means— 

6 (A) a group health plan (as such term is 

7 defined in section 607 of the Employee Retire8 ment Income Security Act of 1974 (29 U.S.C. 

9 1167)), and a multiple employer welfare ar10 rangement (as defined in section 3(4) of such 

11 Act) that provides health insurance coverage; or 

12 (B) any contractual arrangement for the 

13 provision of a payment for healthcare, including 

14 any health insurance arrangement or any ar15 rangement consisting of a hospital or medical 

16 expense incurred policy or certificate, hospital 

17 or medical service plan contract, or health 

18 maintenance organizing subscriber contract. 

19 (c) CONFORMING AMENDMENTS.— 

20 (1) ERISA.—Section 702(a)(1) of the Em21 ployee Retirement Income Security Act of 1974 (29 

22 U.S.C. 1182(a)(1)), is amended by adding at the 

23 end the following: 


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1 ‘‘(I) Participation in a medical monitoring 

2 program under the Fairness in Asbestos Injury 

3 Resolution Act of 2006.’’. 

4 (2) PUBLIC SERVICE HEALTH ACT.—Section 

5 2702(a)(1) of the Public Health Service Act (42 

6 U.S.C. 300gg–1(a)(1)) is amended by adding at the 

7 end the following: 

8 ‘‘(I) Participation in a medical monitoring 

9 program under the Fairness in Asbestos Injury 

10 Resolution Act of 2006.’’. 

11 (3) INTERNAL REVENUE CODE OF 1986.—Sec12 tion 9802(a)(1) of the Internal Revenue Code of 

13 1986 is amended by adding at the end the following: 

14 ‘‘(I) Participation in a medical monitoring 

15 program under the Fairness in Asbestos Injury 

16 Resolution Act of 2006.’’. 

17 TITLE V—ASBESTOS BAN 

18 SEC. 501. PROHIBITION ON ASBESTOS CONTAINING PROD19 UCTS. 

20 (a) IN GENERAL.—Title II of the Toxic Substances 

21 Control Act (15 U.S.C. 2641 et seq.) is amended— 

22 (1) by inserting before section 201 (15 U.S.C. 

23 2641) the following: 

24 ‘‘Subtitle A—General Provisions’’; 

25 and 


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1 (2) by adding at the end the following: 

2 ‘‘Subtitle B—Ban of Asbestos 

3 Containing Products 

4 ‘‘SEC. 221. BAN OF ASBESTOS CONTAINING PRODUCTS. 

5 ‘‘(a) DEFINITIONS.—In this chapter: 

6 ‘‘(1) ADMINISTRATOR.—The term ‘Adminis7 trator’ means the Administrator of the Environ8 mental Protection Agency. 

9 ‘‘(2) ASBESTOS.—The term ‘asbestos’ in10 cludes— 

11 ‘‘(A) chrysotile; 

12 ‘‘(B) amosite; 

13 ‘‘(C) crocidolite; 

14 ‘‘(D) tremolite asbestos; 

15 ‘‘(E) winchite asbestos; 

16 ‘‘(F) richterite asbestos; 

17 ‘‘(G) anthophyllite asbestos; 

18 ‘‘(H) actinolite asbestos; 

19 ‘‘(I) asbestiform amphibole minerals; and 

20 ‘‘(J) any of the minerals listed under sub21 paragraphs (A) through (I) that has been 

22 chemically treated or altered, and any 

23 asbestiform variety, type, or component thereof. 

24 ‘‘(3) ASBESTOS CONTAINING PRODUCT.—The 

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1 uct (including any part) to which asbestos is delib2 erately or knowingly added or used because the spe3 cific properties of asbestos are necessary for product 

4 use or function. Under no circumstances shall the 

5 term ‘asbestos containing product’ be construed to 

6 include products that contain de minimus levels of 

7 naturally occurring asbestos as defined by the Ad8 ministrator not later than 1 year after the date of 

9 enactment of this chapter. 

10 ‘‘(4) DISTRIBUTE IN COMMERCE.—The term 

11 ‘distribute in commerce’— 

12 ‘‘(A) has the meaning given the term in 

13 section 3 of the Toxic Substances Control Act 

14 (15 U.S.C. 2602); and 

15 ‘‘(B) shall not include— 

16 ‘‘(i) an action taken with respect to 

17 an asbestos containing product in connec18 tion with the end use of the asbestos con19 taining product by a person that is an end 

20 user, or an action taken by a person who 

21 purchases or receives a product, directly or 

22 indirectly, from an end user; or 

23 ‘‘(ii) distribution of an asbestos con24 taining product by a person solely for the 

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1 taining product in compliance with applica2 ble Federal, State, and local requirements. 

3 ‘‘(b) IN GENERAL.—Subject to subsection (c), the 

4 Administrator shall promulgate— 

5 ‘‘(1) not later than 1 year after the date of en6 actment of this chapter, proposed regulations that— 

7 ‘‘(A) prohibit persons from manufacturing, 

8 processing, or distributing in commerce asbes9 tos containing products; and 

10 ‘‘(B) provide for implementation of sub11 sections (c) and (d); and 

12 ‘‘(2) not later than 2 years after the date of en13 actment of this chapter, final regulations that, effec14 tive 60 days after the date of promulgation, prohibit 

15 persons from manufacturing, processing, or distrib16 uting in commerce asbestos containing products. 

17 ‘‘(c) EXEMPTIONS.— 

18 ‘‘(1) IN GENERAL.—Any person may petition 

19 the Administrator for, and the Administrator may 

20 grant, an exemption from the requirements of sub21 section (b), if the Administrator determines that— 

22 ‘‘(A) the exemption would not result in an 

23 unreasonable risk of injury to public health or 

24 the environment; and 


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1 ‘‘(B) the person has made good faith ef2 forts to develop, but has been unable to develop, 

3 a substance, or identify a mineral that does not 

4 present an unreasonable risk of injury to public 

5 health or the environment and may be sub6 stituted for an asbestos containing product. 

7 ‘‘(2) TERMS AND CONDITIONS.—Except for an 

8 exception authorized under paragraph (3)(A)(i), an 

9 exemption granted under this subsection shall be in 

10 effect for such period (not to exceed 5 years) and 

11 subject to such terms and conditions as the Adminis12 trator may prescribe. 

13 ‘‘(3) GOVERNMENTAL USE.— 

14 ‘‘(A) IN GENERAL.— 

15 ‘‘(i) DEPARTMENT OF DEFENSE.— 

16 Nothing in this section or in the regula17 tions promulgated by the Administrator 

18 under subsection (b) shall prohibit or limit 

19 the manufacture, processing, or distribu20 tion in commerce of asbestos containing 

21 products by or for the Department of De22 fense or the use of asbestos containing 

23 products by or for the Department of De24 fense if the Secretary of Defense certifies 

25 (or recertifies within 10 years of a prior 


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1 certification), and provides a copy of the 

2 certification to Congress, that— 

3 ‘‘(I) use of asbestos containing 

4 product is necessary to the critical 

5 functions of the Department, which 

6 includes the use of the asbestos con7 taining product in any weaponry, 

8 equipment, aircraft, vehicles, or other 

9 classes or categories of property which 

10 are owned or operated by the Armed 

11 Forces of the United States (including 

12 the Coast Guard) or by the National 

13 Guard of any State and which are 

14 uniquely military in nature; 

15 ‘‘(II) no reasonably available and 

16 equivalent alternatives to the asbestos 

17 containing product exist for the in18 tended purpose; and 

19 ‘‘(III) use of the asbestos con20 taining product will not result in a 

21 known unreasonable risk to health or 

22 the environment. 

23 ‘‘(ii) NATIONAL AERONAUTICS AND

24 SPACE ADMINISTRATION.—The Adminis25 trator of the Environmental Protection 


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1 Agency shall provide an exemption from 

2 the requirements of subsection (b), without 

3 review or limit on duration, if such exemp4 tion for an asbestos containing product is 

5 sought by the Administrator of the Na6 tional Aeronautics and Space Administra7 tion and the Administrator of the National 

8 Aeronautics and Space Administration cer9 tifies, and provides a copy of that certifi10 cation to Congress, that— 

11 ‘‘(I) the asbestos containing 

12 product is necessary to the critical 

13 functions of the National Aeronautics 

14 and Space Administration; 

15 ‘‘(II) no reasonable alternatives 

16 to the asbestos containing product 

17 exist for the intended purpose; and 

18 ‘‘(III) the use of the asbestos 

19 containing product will not result in 

20 an unreasonable risk to health or the 

21 environment. 

22 ‘‘(B) ADMINISTRATIVE PROCEDURE ACT.— 

23 Any certification required under subparagraph 

24 (A) shall not be subject to chapter 5 of title 5, 


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1 United States Code (commonly referred to as 

2 the ‘Administrative Procedure Act’). 

3 ‘‘(4) SPECIFIC EXEMPTIONS.—The following 

4 are exempted: 

5 ‘‘(A) Asbestos diaphragms for use in the 

6 manufacture of chlor-alkali and the products 

7 and derivative therefrom. 

8 ‘‘(B) Roofing cements, coatings, and 

9 mastics utilizing asbestos that is totally encap10 sulated with asphalt, subject to a determination 

11 by the Administrator of the Environmental Pro12 tection Agency under paragraph (5). 

13 ‘‘(5) ENVIRONMENTAL PROTECTION AGENCY

14 REVIEW.— 

15 ‘‘(A) REVIEW IN 18 MONTHS.—Not later 

16 than 18 months after the date of enactment of 

17 this chapter, the Administrator of the Environ18 mental Protection Agency shall complete a re19 view of the exemption for roofing cements, coat20 ings, and mastics utilizing asbestos that are to21 tally encapsulated with asphalt to determine 

22 whether— 

23 ‘‘(i) the exemption would result in an 

24 unreasonable risk of injury to public health 

25 or the environment; and 


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1 ‘‘(ii) there are reasonable, commercial 

2 alternatives to the roofing cements, coat3 ings, and mastics utilizing asbestos that is 

4 totally encapsulated with asphalt. 

5 ‘‘(B) REVOCATION OF EXEMPTION.—Upon 

6 completion of the review, the Administrator of 

7 the Environmental Protection Agency shall have 

8 the authority to revoke the exemption for the 

9 products exempted under paragraph (4)(B), if 

10 warranted. 

11 ‘‘(d) DISPOSAL.— 

12 ‘‘(1) IN GENERAL.—Except as provided in para13 graph (2), not later than 3 years after the date of 

14 enactment of this chapter, each person that pos15 sesses an asbestos containing product that is subject 

16 to the prohibition established under this section shall 

17 dispose of the asbestos containing product, by a 

18 means that is in compliance with applicable Federal, 

19 State, and local requirements. 

20 ‘‘(2) EXEMPTION.—Nothing in paragraph (1)— 

21 ‘‘(A) applies to an asbestos containing 

22 product that— 

23 ‘‘(i) is no longer in the stream of com24 merce; or 


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1 ‘‘(ii) is in the possession of an end 

2 user or a person who purchases or receives 

3 an asbestos containing product directly or 

4 indirectly from an end user; or 

5 ‘‘(B) requires that an asbestos containing 

6 product described in subparagraph (A) be re7 moved or replaced.’’. 

8 (b) TECHNICAL AND CONFORMING AMENDMENTS.— 

9 The table of contents in section 1 of the Toxic Substances 

10 Control Act (15 U.S.C. prec. 2601) is amended— 

11 (1) by inserting before the item relating to sec12 tion 201 the following: 

‘‘Subtitle A—General Provisions’’; 

13 and 

14 (2) by adding at the end of the items relating 

15 to title II the following: 

‘‘Subtitle B—Ban of Asbestos Containing Products 

‘‘Sec. 221. Ban of asbestos containing products.’’. 

16 SEC. 502. NATURALLY OCCURRING ASBESTOS. 

17 (a) STUDY.— 

18 (1) IN GENERAL.—Not later than 12 months 

19 after the date of enactment of this Act, the Adminis20 trator of the Environmental Protection Agency 

21 shall— 

22 (A) conduct a study to assess the risks of 

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1 cluding the appropriateness of the existing risk 

2 assessment values for asbestos and methods of 

3 assessing exposure; and 

4 (B) submit a report that contains a de5 tailed statement of the findings and conclusions 

6 of such study to— 

7 (i) the majority and minority leaders 

8 of the Senate; 

9 (ii) the Speaker and the minority 

10 leader of the House of Representatives; 

11 and 

12 (iii) the relevant committees of juris13 diction of the Senate and House of Rep14 resentatives, including— 

15 (I) the Environment and Public 

16 Works Committee of the Senate; 

17 (II) the Appropriations Com18 mittee of the Senate; 

19 (III) the Judiciary Committee of 

20 the Senate; 

21 (IV) the Energy and Commerce 

22 Committee of the House of Represent23 atives; 

24 (V) the Judiciary Committee of 

25 the House of Representatives; and 


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1 (VI) the Appropriations Com2 mittee of the House of Representa3 tives. 

4 (2) DEVELOPMENT REQUIREMENTS.— 

5 (A) IN GENERAL.—Not later than 18 

6 months after the date of enactment of this Act, 

7 the Administrator of the Environmental Protec8 tion Agency, in consultation with appropriate 

9 Federal and State agencies and other interested 

10 parties after appropriate notice, shall establish 

11 dust management guidelines, and model State 

12 regulations that States can choose to adopt, for 

13 commercial and residential development, and 

14 road construction in areas where naturally oc15 curring asbestos is present and considered a 

16 risk. Such dust management guidelines may at 

17 a minimum incorporate provisions consistent 

18 with the relevant California Code of Regulation 

19 (17 C.C.R. 93105–06). 

20 (B) DUST MANAGEMENT GUIDELINES.— 

21 Guidelines under this paragraph shall include— 

22 (i) site management practices to mini23 mize the disturbance of naturally occurring 

24 asbestos and contain asbestos mobilized 

25 from the source at the development site; 


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1 (ii) air and soil monitoring programs 

2 to assess asbestos exposure levels at the 

3 development site and to determine whether 

4 asbestos is migrating from the site; and 

5 (iii) appropriate disposal options for 

6 asbestos-containing materials to be re7 moved from the site during development. 

8 (b) TESTING PROTOCOLS.— 

9 (1) IN GENERAL.—Not later than 18 months 

10 after the date of enactment of this Act, the Adminis11 trator of the Environmental Protection Agency, in 

12 consultation with appropriate State agencies, shall 

13 establish comprehensive protocols for testing for the 

14 presence of naturally occurring asbestos. 

15 (2) PROTOCOLS.—The protocols under this sub16 section shall address both ambient air monitoring 

17 and activity-based personal sampling and include— 

18 (A) suggested sampling devices and guide19 lines to address the issues of methods com20 parability, sampler operation, performance spec21 ifications, and quality control and quality assur22 ance; 

23 (B) a national laboratory and air sampling 

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1 yses of air and soil for naturally occurring as2 bestos; 

3 (C) recommended laboratory analytical 

4 procedures, including fiber types, fiber lengths, 

5 and fiber aspect ratios; and 

6 (D) protocols for collecting and analyzing 

7 aggregate and soil samples for asbestos content, 

8 including proper and consistent sample prepara9 tion practices suited to the activity likely to 

10 occur on the soils of the study area. 

11 (c) EXISTING BUILDINGS AND AREAS.—Not later 

12 than 1 year after the date of enactment of this Act, the 

13 Administrator of the Environmental Protection Agency 

14 shall issue public education materials, recommended best 

15 management practices and recommended remedial meas16 ures for areas containing naturally occurring asbestos in17 cluding existing— 

18 (1) schools and parks; and 

19 (2) commercial and residential development. 

20 (d) MAPPING.—The Secretary of the Interior shall— 

21 (1) acquire infrared mapping data for naturally 

22 occurring asbestos, prioritizing California counties 

23 experiencing rapid population growth; 

24 (2) process that data into map images; and 


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1 (3) collaborate with the California Geological 

2 Survey and any other appropriate State agencies in 

3 producing final maps of asbestos zones. 

4 (e) RESEARCH GRANTS.—The Director of the Na5 tional Institutes of Health shall administer 1 or more re6 search grants to qualified entities for studies that focus 

7 on better understanding the health risks of exposure to 

8 naturally occurring asbestos. Grants under this subsection 

9 shall be awarded through a competitive peer-reviewed, 

10 merit-based process. 

11 (f) TASK FORCE PARTICIPATION.—Representatives 

12 of Region IX of the United States Environmental Protec13 tion Agency, and the Agency for Toxic Substances and 

14 Disease Registry of the United States Department of 

15 Health and Human Services shall participate in any task 

16 force convened by the State of California to evaluate poli17 cies and adopt guidelines for the mitigation of risks associ18 ated with naturally occurring asbestos. 

19 (g) MATCHING GRANTS.—The Administrator of the 

20 Environmental Protection Agency is authorized to award 

21 50 percent matching Federal grants to States and munici22 palities. Not later than 4 months after the date of enact23 ment of this Act, the Administrator of the Environmental 

24 Protection Agency shall establish criteria to award such 

25 grants— 


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1 (1) for monitoring and remediation of naturally 

2 occurring asbestos— 

3 (A) at schools, parks, and other public 

4 areas; and 

5 (B) in serpentine aggregate roads gener6 ating significant public exposure; and 

7 (2) for development, implementation, and en8 forcement of State and local dust management regu9 lations concerning naturally occurring asbestos, pro10 vided that after the Administrator has issued model 

11 State regulations under subsection (a)(2), such State 

12 and local regulations shall be at least as protective 

13 as the model regulations to be eligible for the match14 ing grants. 

15 (h) AVAILABILITY OF FUNDS.—An amount of 

16 $40,000,000 from the Fund shall be made available to 

17 carry out the requirements of this section, including up 

18 to $9,000,000 for the Secretary of the Interior to carry 

19 out subsection (d), up to $4,000,000 for the Director of 

20 the National Institutes of Health to carry out subsection 

21 (e), and the remainder for the Administrator of the Envi22 ronmental Protection Agency, at least $15,000,000 of 

23 which shall be used for the matching grants under sub24 section (g). 

25 (i) CONSTRUCTION.— 


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1 (1) GUIDELINES AND PROTOCOLS.—The guide2 lines and protocols issued by the Administrator of 

3 the Environmental Protection Agency under the spe4 cific authorities in subsections (a), (b), and (c) shall 

5 be construed as nonbinding best practices unless 

6 adopted as a mandatory requirement by a State or 

7 local government. Notwithstanding the preceding 

8 sentence, accreditation for testing will not be grant9 ed except in accordance with the guidelines issued 

10 under subsection (b)(2)(B). 

11 (2) FEDERAL CAUSES OF ACTION.—This sec12 tion shall not be construed as creating any new Fed13 eral cause of action for civil, criminal, or punitive 

14 damages. 

15 (3) FEDERAL CLAIMS.—This section shall not 

16 be construed as creating any new Federal claim for 

17 injunctive or declaratory relief against a State, local, 

18 or private party. 

19 (4) STATES AND LOCALITIES.—Nothing in this 

20 section shall limit the authority of States or local21 ities concerning naturally occurring asbestos. 


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Calendar No. 460 

109TH CONGRESS 

2D SESSION S. 3274 

A BILL 

To create a fair and efficient system to resolve 

bestos exposure, and for other purposes. claims of victims for bodily injury caused by asJUNE 5, 2006 

Read the second time and placed on the calendar 


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