I 

109TH CONGRESS 

1ST SESSION H. R. 1360

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 HOUSE OF REPRESENTATIVES 

MARCH 17, 2005

Mr. KIRK (for himself, Mr. BASS, Mr. PLATTS, Mr. SHIMKUS, Mr. KENNEDY

of Minnesota, and Mr. DENT) introduced the following bill; which was referred to the Committee on the Judiciary, and in addition to the Committees on Energy and Commerce, Ways and Means, Education and the 

Workforce, and Financial Services, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions 

as fall within the jurisdiction of the committee concerned 

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 2005’’ or 

6 the ‘‘FAIR Act of 2005’’. 
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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. Medical evidence 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. Reduction in benefit payments for collateral sources. 

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. 

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. 

Sec. 215. Termination of Asbestos Insurers Commission. 

Sec. 216. Expenses and costs of Commission. 
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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. 

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. 

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

Sec. 407. Rules of construction. 

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

Sec. 409. Nondiscrimination of health insurance. 

TITLE V—ASBESTOS BAN 

Sec. 501. Prohibition on asbestos containing products.

1 SEC. 2. FINDINGS AND PURPOSE. 

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

3 (1) A great number of Americans have been ex4 posed to forms of asbestos that can have devastating 

5 health 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. 

9 (3) The injuries caused by asbestos can have la10 tency periods of up to 40 years, and even limited ex-
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1 posure to some forms of asbestos may result in in2 jury in some cases. 

3 (4) Asbestos litigation has had a significant 

4 detrimental effect on the country’s economy, driving 

5 companies into bankruptcy, diverting resources from 

6 those who are truly sick, and endangering jobs and 

7 pensions. 

8 (5) The scope of the asbestos litigation crisis 

9 cuts across every State and virtually every industry. 

10 (6) The United States Supreme Court has rec11 ognized that Congress must act to create a more ra12 tional asbestos claims system. In 1991, a Judicial 

13 Conference Ad Hoc Committee on Asbestos Litiga14 tion, appointed by Chief Justice William Rehnquist, 

15 found that the ‘‘ultimate solution should be legisla16 tion recognizing the national proportions of the 

17 problem . . . and creating a national asbestos dis18 pute resolution scheme . . .’’. The Court found in 

19 1997 in Amchem Products Inc. v. Windsor, 521 

20 U.S. 591, 595 (1997), that ‘‘[t]he argument is sen21 sibly made that a nationwide administrative claims 

22 processing regime would provide the most secure, 

23 fair, and efficient means of compensating victims of 

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

25 Fibreboard Corp., 527 U.S. 819, 821 (1999), found 
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1 that the ‘‘elephantine mass of asbestos cases . . . de2 fies customary judicial administration and calls for 

3 national legislation.’’ That finding was again recog4 nized in 2003 by the Court in Norfolk & Western 

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

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

7 health and welfare of the people of the United 

8 States, on interstate and foreign commerce, and on 

9 the bankruptcy system, compels Congress to exercise 

10 its power to regulate interstate commerce and create 

11 this legislative solution in the form of a national as12 bestos injury claims resolution program to supersede 

13 all existing methods to compensate those injured by 

14 asbestos, except as specified in this Act. 

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

16 (1) create a privately funded, publicly adminis17 tered fund to provide the necessary resources for a 

18 fair and efficient system to resolve asbestos injury 

19 claims that will provide compensation for legitimate 

20 present and future claimants of asbestos exposure as 

21 provided in this Act; 

22 (2) provide compensation to those present and 

23 future victims based on the severity of their injuries, 

24 while establishing a system flexible enough to accom25 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) any of the minerals listed under sub24 paragraphs (A) through (H) that has been 

25 chemically treated or altered, and any 
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1 asbestiform variety, type, or component thereof; 

2 and 

3 (J) asbestos-containing material, such as 

4 asbestos-containing products, automotive or in5 dustrial parts or components, equipment, im6 provements to real property, and any other ma7 terial that contains asbestos in any physical or 

8 chemical form. 

9 (3) ASBESTOS CLAIM.—

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

11 claim’’ means any claim, premised on any the12 ory, allegation, or cause of action for damages 

13 or other relief presented in a civil action or 

14 bankruptcy proceeding, directly, indirectly, or 

15 derivatively arising out of, based on, or related 

16 to, in whole or part, the health effects of expo17 sure to asbestos, including loss of consortium, 

18 wrongful death, and any derivative claim made 

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

20 representative, spouse, parent, child or other 

21 relative of any exposed person. 

22 (B) EXCLUSION.—The term does not in23 clude claims alleging damage or injury to tan24 gible property, or claims for benefits under a 
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1 workers’ compensation law or veterans’ benefits 

2 program. 

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

4 claimant’’ means an individual who files a claim 

5 under section 113. 

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

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

8 court, whether cognizable as cases at law or in eq9 uity or in admiralty, but does not include an action 

10 relating to any workers’ compensation law, or a pro11 ceeding for benefits under any veterans’ benefits 

12 program. 

13 (6) COLLATERAL SOURCE COMPENSATION.—

14 The term ‘‘collateral source compensation’’ means 

15 the compensation that the claimant received, or is 

16 entitled to receive, from a defendant or an insurer 

17 of that defendant, or compensation trust as a result 

18 of a judgment or settlement for an asbestos-related 

19 injury that is the subject of a claim filed under sec20 tion 113. 

21 (7) ELIGIBLE DISEASE OR CONDITION.—The 

22 term ‘‘eligible disease or condition’’ means, to the 

23 extent that the illness meets the medical criteria re24 quirements established under subtitle C of title I, as25 bestosis/pleural disease, severe asbestosis disease, 
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1 disabling asbestosis disease, mesothelioma, lung can2 cer I, lung cancer II, lung cancer III, and other can3 cers. 

4 (8) FUND.—The term ‘‘Fund’’ means the As5 bestos Injury Claims Resolution Fund established 

6 under section 221. 

7 (9) INSURANCE RECEIVERSHIP PROCEEDING.—

8 The term ‘‘insurance receivership proceeding’’ means 

9 any State proceeding with respect to a financially 

10 impaired or insolvent insurer or reinsurer including 

11 the liquidation, rehabilitation, conservation, super12 vision or ancillary receivership of an insurer under 

13 State law. 

14 (10) LAW.—The term ‘‘law’’ includes all law, 

15 judicial or administrative decisions, rules, regula16 tions, or any other principle or action having the ef17 fect of law. 

18 (11) PARTICIPANT.—

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

20 means any person subject to the funding re21 quirements of title II, including—

22 (i) any defendant participant subject 

23 to liability for payments under subtitle A 

24 of that title; 
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1 (ii) any insurer participant subject to 

2 a payment under subtitle B of that title; 

3 and 

4 (iii) any successor in interest of a par5 ticipant. 

6 (B) EXCEPTION.—

7 (i) IN GENERAL.—A defendant partic8 ipant shall not include any person pro9 tected from any asbestos claim by reason 

10 of an injunction entered in connection with 

11 a plan of reorganization under chapter 11 

12 of title 11, United States Code, that has 

13 been confirmed by a duly entered order or 

14 judgment of a court that is no longer sub15 ject to any appeal or judicial review, and 

16 the substantial consummation, as such 

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

18 11, United States Code, of such plan of re19 organization has occurred. 

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

21 not apply to a person who may be liable 

22 under subtitle A of title II based on prior 

23 asbestos expenditures related to asbestos 

24 claims that are not covered by an injunc25 tion described under clause (i). 
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1 (12) PERSON.—The term ‘‘person’’—

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

3 stock company, partnership, association, insur4 ance company, reinsurance company, or cor5 poration; and 

6 (B) does not include the United States, 

7 any State or local government, or subdivision 

8 thereof, including school districts and any gen9 eral or special function governmental unit es10 tablished under State law. 

11 (13) STATE.—The term ‘‘State’’ means any 

12 State of the United States and also includes the Dis13 trict of Columbia, Commonwealth of Puerto Rico, 

14 the Northern Mariana Islands, the Virgin Islands, 

15 Guam, American Samoa, and any other territory or 

16 possession of the United States or any political sub17 division of any of the entities under this paragraph. 

18 (14) SUBSTANTIALLY CONTINUES.—The term 

19 ‘‘substantially continues’’ means that the business 

20 operations have not been significantly modified by 

21 the change in ownership. 

22 (15) SUCCESSOR IN INTEREST.—The term 

23 ‘‘successor in interest’’ means any person that ac24 quires assets, and substantially continues the busi25 ness operations, of a participant. The factors to be 
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1 considered in determining whether a person is a suc2 cessor in interest include—

3 (A) retention of the same facilities or loca4 tion; 

5 (B) retention of the same employees; 

6 (C) maintaining the same job under the 

7 same working conditions; 

8 (D) retention of the same supervisory per9 sonnel; 

10 (E) continuity of assets; 

11 (F) production of the same product or 

12 offer of the same service; 

13 (G) retention of the same name; 

14 (H) maintenance of the same customer 

15 base; 

16 (I) identity of stocks, stockholders, and di17 rectors between the asset seller and the pur18 chaser; or 

19 (J) whether the successor holds itself out 

20 as continuation of previous enterprise, but ex21 pressly does not include whether the person ac22 tually knew of the liability of the participant 

23 under this Act. 

24 (16) VETERANS’ BENEFITS PROGRAM.—The 

25 term ‘‘veterans’ benefits program’’ means any pro-
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1 gram for benefits in connection with military service 

2 administered by the Veterans’ Administration under 

3 title 38, United States Code. 

4 (17) WORKERS’ COMPENSATION LAW.—The 

5 term ‘‘workers’ compensation law’’—

6 (A) means a law respecting a program ad7 ministered by a State or the United States to 

8 provide benefits, funded by a responsible em9 ployer or its insurance carrier, for occupational 

10 diseases or injuries or for disability or death 

11 caused by occupational diseases or injuries; 

12 (B) includes the Longshore and Harbor 

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

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

15 Code; and 

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

17 1908 (45 U.S.C. 51 et seq.), commonly known 

18 as the Federal Employers’ Liability Act, or 

19 damages recovered by any employee in a liabil20 ity action against an employer. 
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1 TITLE I—ASBESTOS CLAIMS 

2 RESOLUTION 

3 Subtitle A—Office of Asbestos 

4 Disease Compensation 

5 SEC. 101. ESTABLISHMENT OF OFFICE OF ASBESTOS DIS6 EASE COMPENSATION. 

7 (a) IN GENERAL.—

8 (1) ESTABLISHMENT.—There is established 

9 within the Department of Labor the Office of Asbes10 tos Disease Compensation (hereinafter referred to in 

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

12 an Administrator. 

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

14 provide timely, fair compensation, in the amounts 

15 and under the terms specified in this Act, on a no16 fault basis and in a non-adversarial manner, to indi17 viduals whose health has been adversely affected by 

18 exposure to asbestos. 

19 (3) EXPENSES.—There shall be available from 

20 the Asbestos Injury Claims Resolution Fund to the 

21 Administrator such sums as are necessary for the 

22 administrative expenses of the Office, including the 

23 sums necessary for conducting the studies provided 

24 for in section 121(e). 

25 (b) APPOINTMENT OF ADMINISTRATOR.—
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1 (1) IN GENERAL.—The Administrator of the 

2 Office of Asbestos Disease Compensation shall be 

3 appointed by the President, by and with the advice 

4 and consent of the Senate. The Administrator shall 

5 serve for a term of 5 years. 

6 (2) REPORTING.—The Administrator shall re7 port directly to the Assistant Secretary of Labor for 

8 the Employment Standards Administration. 

9 (c) DUTIES OF ADMINISTRATOR.—

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

11 responsible for—

12 (A) processing claims for compensation for 

13 asbestos-related injuries and paying compensa14 tion to eligible claimants under the criteria and 

15 procedures established under title I; 

16 (B) determining, levying, and collecting as17 sessments on participants under title II; 

18 (C) appointing or contracting for the serv19 ices of such personnel, making such expendi20 tures, and taking any other actions as may be 

21 necessary and appropriate to carry out the re22 sponsibilities of the Office, including entering 

23 into cooperative agreements with other Federal 

24 agencies or State agencies and entering into 

25 contracts with non-governmental entities; 
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1 (D) conducting such audits and additional 

2 oversight as necessary to assure the integrity of 

3 the program; 

4 (E) managing the Asbestos Injury Claims 

5 Resolution Fund established under section 221, 

6 including—

7 (i) administering, in a fiduciary capac8 ity, the assets of the Fund for the exclu9 sive purpose of providing benefits to asbes10 tos claimants and their beneficiaries; 

11 (ii) defraying the reasonable expenses 

12 of administering the Fund; 

13 (iii) investing the assets of the Fund 

14 in accordance with section 222(b); 

15 (iv) retaining advisers, managers, and 

16 custodians who possess the necessary fa17 cilities and expertise to provide for the 

18 skilled and prudent management of the 

19 Fund, to assist in the development, imple20 mentation and maintenance of the Fund’s 

21 investment policies and investment activi22 ties, and to provide for the safekeeping and 

23 delivery of the Fund’s assets; and 

24 (v) borrowing amounts authorized by 

25 section 221(b) on appropriate terms and 
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1 conditions, including pledging the assets of 

2 or payments to the Fund as collateral; 

3 (F) promulgating such rules, regulations, 

4 and procedures as may be necessary and appro5 priate to implement the provisions of this Act; 

6 (G) making such expenditures as may be 

7 necessary and appropriate in the administration 

8 of this Act; 

9 (H) excluding evidence and disqualifying or 

10 debarring any attorney, physician, provider of 

11 medical or diagnostic services, including labora12 tories and others who provide evidence in sup13 port of a claimant’s application for compensa14 tion where the Administrator determines that 

15 materially false, fraudulent or fictitious state16 ments or practices have been submitted or en17 gaged in by such individuals or entities; and 

18 (I) having all other powers incidental, nec19 essary, or appropriate to carrying out the func20 tions of the Office. 

21 (2) CERTAIN ENFORCEMENTS.—For each in22 fraction relating to paragraph (1)(H), the Adminis23 trator also may impose a civil penalty not to exceed 

24 $10,000 on any person or entity found to have sub25 mitted or engaged in a materially false, fraudulent 
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1 or fictitious statement or practice under this Act. 

2 The Administrator shall prescribe appropriate regu3 lations to implement paragraph (1)(H). 

4 (3) SELECTION OF DEPUTY ADMINISTRA5 TORS.—The Administrator shall select a Deputy Ad6 ministrator for Claims Administration to carry out 

7 the Administrator’s responsibilities under this title 

8 and a Deputy Administrator for Fund Management 

9 to carry out the Administrator’s responsibilities 

10 under title II of this Act. The Deputy Administra11 tors shall report directly to the Administrator and 

12 shall be in the Senior Executive Service. 

13 (d) EXPEDITIOUS DETERMINATIONS.—The Adminis14 trator shall prescribe rules to expedite claims for asbestos 

15 claimants with exigent circumstances. 

16 (e) AUDIT AND PERSONNEL REVIEW PROCE17 DURES.—The Administrator shall establish audit and per18 sonnel review procedures for evaluating the accuracy of 

19 eligibility recommendations of agency and contract per20 sonnel. 

21 (f) APPLICATION OF FOIA.—

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

23 United States Code (commonly referred to as the 

24 Freedom of Information Act) shall apply to the Of-
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1 fice of Asbestos Disease Compensation and the As2 bestos Insurers Commission. 

3 (2) CONFIDENTIALITY.—Any person may des4 ignate any record submitted under this section as a 

5 confidential commercial or financial record for pur6 poses of section 552 of title 5, United States Code. 

7 The Administrator and the Chairman of the Asbes8 tos Insurers Commission shall adopt procedures for 

9 designating such records as confidential. Information 

10 on reserves and asbestos-related liabilities submitted 

11 by any participant for the purpose of the allocation 

12 of payments under subtitles A and B of title II shall 

13 be deemed to be confidential financial records. 

14 SEC. 102. ADVISORY COMMITTEE ON ASBESTOS DISEASE 

15 COMPENSATION. 

16 (a) ESTABLISHMENT.—

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

18 after the date of enactment of this Act, the Adminis19 trator shall establish an Advisory Committee on As20 bestos Disease Compensation (hereinafter the ‘‘Advi21 sory Committee’’). 

22 (2) COMPOSITION AND APPOINTMENT.—The 

23 Advisory Committee shall be composed of 24 mem24 bers, appointed as follows—
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1 (A) The Majority and Minority Leaders of 

2 the Senate, the Speaker of the House, and the 

3 Minority Leader of the House shall each ap4 point 4 members. Of the 4—

5 (i) 2 shall be selected to represent the 

6 interests of claimants, at least 1 of whom 

7 shall be selected from among individuals 

8 recommended by recognized national labor 

9 federations; and 

10 (ii) 2 shall be selected to represent the 

11 interests of participants, 1 of whom shall 

12 be selected to represent the interests of the 

13 insurer participants and 1 of whom shall 

14 be selected to represent the interests of the 

15 defendant participants. 

16 (B) The Administrator shall appoint 8 

17 members, who shall be individuals with quali18 fications and expertise in occupational or pul19 monary medicine, occupational health, workers 

20 compensation programs, financial administra21 tion, investment of funds, program auditing, or 

22 other relevant fields. 

23 (3) QUALIFICATIONS.—All of the members de24 scribed in paragraph (2) shall have expertise or ex25 perience relevant to the asbestos compensation pro-
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1 gram, including experience or expertise in diagnosing 

2 asbestos-related diseases and conditions, assessing 

3 asbestos exposure and health risks, filing asbestos 

4 claims, or administering a compensation or insur5 ance program. None of the members described in 

6 paragraph (2)(B) shall be individuals who, for each 

7 of the 5 years before their appointments, earned 

8 more than 25 percent of their income by serving in 

9 matters related to asbestos litigation as consultants 

10 or expert witnesses. 

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

12 the Administrator on—

13 (1) claims filing and claims processing proce14 dures; 

15 (2) claimant assistance programs; 

16 (3) audit procedures and programs to ensure 

17 the quality and integrity of the compensation pro18 gram; 

19 (4) the development of a list of industries, occu20 pations and time periods for which there is a pre21 sumption of substantial occupational exposure to as22 bestos; 

23 (5) recommended analyses or research that 

24 should be conducted to evaluate past claims and to 

25 project future claims under the program; 
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1 (6) the annual report required to be submitted 

2 to Congress under section 405; and 

3 (7) such other matters related to the implemen4 tation of this Act as the Administrator considers ap5 propriate. 

6 (c) OPERATION OF THE COMMITTEE.—

7 (1) Each member of the Advisory Committee 

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

9 of the members first appointed—

10 (A) 8 shall be appointed for a term of 1 

11 year; 

12 (B) 8 shall be appointed for a term of 2 

13 years; and 

14 (C) 8 shall be appointed for a term of 3 

15 years, 

16 as determined by the Administrator at the time of 

17 appointment. 

18 (2) Any member appointed to fill a vacancy oc19 curring before the expiration of the term shall be ap20 pointed only for the remainder of such term. 

21 (3) The Administrator shall designate a Chair22 person and Vice Chairperson from among members 

23 of the Advisory Committee appointed under sub24 section (a)(2)(B). 
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1 (4) The Advisory Committee shall meet at the 

2 call of the Chairperson or the majority of its mem3 bers, and at a minimum shall meet at least 4 times 

4 per year during the first 5 years of the asbestos 

5 compensation program, and at least 2 times per year 

6 thereafter. 

7 (5) The Administrator shall provide to the 

8 Committee such information as is necessary and ap9 propriate for the Committee to carry out its respon10 sibilities under this section. The Administrator may, 

11 upon request of the Advisory Committee, secure di12 rectly from any Federal department or agency such 

13 information as may be necessary and appropriate to 

14 enable the Advisory Committee to carry out its du15 ties under this section. Upon request of the Admin16 istrator, the head of such department or agency 

17 shall furnish such information to the Advisory Com18 mittee. 

19 (6) The Administrator shall provide the Advi20 sory Committee with such administrative support as 

21 is reasonably necessary to enable it to perform its 

22 functions. 

23 (d) EXPENSES.—Members of the Advisory Com24 mittee, other than full-time employees of the United 

25 States, while attending meetings of the Advisory Com-
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1 mittee or while otherwise serving at the request of the Ad2 ministrator, and while serving away from their homes or 

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

4 expenses, including per diem in lieu of subsistence, as au5 thorized by section 5703 of title 5, United States Code, 

6 for individuals in the Government serving without pay. 

7 SEC. 103. MEDICAL ADVISORY COMMITTEE. 

8 (a) IN GENERAL.—The Administrator may establish 

9 a Medical Advisory Committee to provide expert advice re10 garding medical issues arising under the statute. 

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

12 Medical Advisory Committee shall be individuals who, for 

13 each of the 5 years before their appointments, earned 

14 more than 25 percent of their income by serving in mat15 ters related to asbestos litigation as consultants or expert 

16 witnesses. 

17 SEC. 104. CLAIMANT ASSISTANCE. 

18 (a) ESTABLISHMENT.—Not later than 180 days after 

19 the enactment of this Act, the Administrator shall estab20 lish a comprehensive asbestos claimant assistance program 

21 to—

22 (1) publicize and provide information to poten23 tial claimants about the availability of benefits for 

24 eligible claimants under this Act, and the procedures 
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1 for filing claims and for obtaining assistance in fil2 ing claims; 

3 (2) provide assistance to potential claimants in 

4 preparing and submitting claims, including assist5 ance in obtaining the documentation necessary to 

6 support a claim; 

7 (3) respond to inquiries from claimants and po8 tential claimants; and 

9 (4) provide training with respect to the applica10 ble procedures for the preparation and filing of 

11 claims to persons who provide assistance or rep12 resentation to claimants. 

13 (b) RESOURCE CENTERS.—The claimant assistance 

14 program shall provide for the establishment of resource 

15 centers in areas where there are determined to be large 

16 concentrations of potential claimants. These centers shall 

17 be located, to the extent feasible, in facilities of the De18 partment of Labor or other Federal agencies. 

19 (c) CONTRACTS.—The claimant assistance program 

20 may be carried out in part through contracts with labor 

21 organizations, community-based organizations, and other 

22 entities which represent or provide services to potential 

23 claimants, except that such organizations may not have 

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

25 Office. 
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1 (d) LEGAL ASSISTANCE.—

2 (1) IN GENERAL.—As part of the program es3 tablished under subsection (a), the Administrator 

4 shall establish a legal assistance program to provide 

5 assistance to asbestos claimants concerning legal 

6 representation issues. 

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

8 of the program, the Administrator shall maintain a 

9 roster of qualified attorneys who have agreed to pro10 vide pro bono services to asbestos claimants under 

11 rules established by the Administrator. The claim12 ants shall not be required to use the attorneys listed 

13 on such roster. 

14 (3) NOTICE.—

15 (A) NOTICE BY ADMINISTRATOR.—The 

16 Administrator shall provide asbestos claimants 

17 with notice of, and information relating to—

18 (i) pro bono services for legal assist19 ance available to those claimants; and 

20 (ii) any limitations on attorneys fees 

21 for claims filed under this title. 

22 (B) NOTICE BY ATTORNEYS.—Before a 

23 person becomes a client of an attorney with re24 spect to an asbestos claim that attorney shall 
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1 provide notice to that person of pro bono serv2 ices for legal assistance available for that claim. 

3 (e) ATTORNEY’S FEES.—

4 (1) IN GENERAL.—Notwithstanding any con5 tract, the representative of an individual may not re6 ceive, for services rendered in connection with the 

7 claim of an individual under this Act, more than 

8 that percentage specified in paragraph (2) of an 

9 award made under this Act on such claim. 

10 (2) APPLICABLE PERCENTAGE LIMITATIONS.—

11 (A) IN GENERAL.—The percentage limita12 tion under paragraph (1) shall be—

13 (i) 2 percent for the filing of an initial 

14 claim; and 

15 (ii) 10 percent with respect to any 

16 claim under appellate review. 

17 (B) EXCEPTION.—The Administrator may 

18 by rule adopt a lower percentage limitation for 

19 particular classes of cases if the Administrator 

20 finds that—

21 (i) the percentage limitation otherwise 

22 applicable under this paragraph would re23 sult in unreasonably high compensation to 

24 claimants’ representatives in such cases; 

25 and 
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1 (ii) such lower percentage limitation 

2 would be reasonable and would not unduly 

3 limit the availability of representatives to 

4 claimants. 

5 (3) PENALTY.—Any representative of an asbes6 tos claimant who violates this subsection shall be 

7 fined not more than $5,000. 

8 SEC. 105. PHYSICIANS PANELS. 

9 (a) APPOINTMENT.—The Administrator shall, in ac10 cordance with section 3109 of title 5, United States Code, 

11 appoint physicians with experience and competency in di12 agnosing asbestos-related diseases to be available to serve 

13 on Physicians Panels as necessary to carry out this Act. 

14 (b) FORMATION OF PANELS.—

15 (1) IN GENERAL.—The Administrator shall pe16 riodically determine—

17 (A) the number of Physicians Panels nec18 essary for the efficient conduct of the medical 

19 review process under section 121; 

20 (B) the number of Physicians Panels nec21 essary for the efficient conduct of the excep22 tional medical claims process under section 121; 

23 and 

24 (C) the particular expertise necessary for 

25 each panel. 
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1 (2) EXPERTISE.—Each panel shall be composed 

2 of members having the particular expertise deter3 mined necessary by the Administrator, randomly se4 lected from among the physicians appointed under 

5 subsection (a) having such expertise. 

6 (3) PANEL MEMBERS.—Each panel shall consist 

7 of 3 physicians, 2 of whom shall be designated to 

8 participate in each case submitted to the panel, and 

9 the third of whom shall be consulted in the event of 

10 disagreement. 

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

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

13 (1) a physician licensed in any State; 

14 (2) board-certified in pulmonary medicine, occu15 pational medicine, internal medicine, oncology, or 

16 pathology; and 

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

18 before and during his or her appointment to a Phy19 sicians Panel, has earned no more than 25 percent 

20 of his or her income as an employee of a partici21 pating defendant or insurer or a law firm rep22 resenting any party in asbestos litigation or as a 

23 consultant or expert witness in matters related to 

24 asbestos litigation. 
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1 (d) DUTIES.—Members of the Physicians Panel 

2 shall—

3 (1) make such medical determinations as are 

4 required to be made by Physicians Panels under sec5 tion 121; and 

6 (2) perform such other functions as required 

7 under this Act. 

8 (e) COMPENSATION.—Notwithstanding any limitation 

9 otherwise established under section 3109 of title 5, United 

10 States Code, the Administrator shall be authorized to pay 

11 members of the Physician Panel such compensation as is 

12 reasonably necessary to obtain their services. 

13 (f) FEDERAL ADVISORY COMMITTEE ACT.—A panel 

14 established under this section shall not be subject to the 

15 Federal Advisory Committee Act (5 U.S.C. App. 2). 

16 SEC. 106. PROGRAM STARTUP. 

17 (a) INTERIM REGULATIONS.—Not later than 90 days 

18 after the enactment of this Act, the Administrator shall 

19 promulgate interim regulations and procedures for the 

20 processing of claims under title I and the operation of the 

21 Fund under title II, including procedures for the expe22 diting of exigent claims. 

23 (b) INTERIM PERSONNEL.—The Secretary of Labor 

24 and the Assistant Secretary of Labor for the Employment 

25 Standards Administration may make available to the Ad-
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1 ministrator on a temporary basis such personnel and other 

2 resources as may be necessary to facilitate the expeditious 

3 startup of the program. The Administrator may in addi4 tion contract with individuals or entities having relevant 

5 experience to assist in the expeditious startup of the pro6 gram. Such relevant experience shall include, but not be 

7 limited to, experience with the review of workers’ com8 pensation, occupational disease, or similar claims and with 

9 financial matters relevant to the operation of the program. 

10 (c) EXIGENT HEALTH CLAIMS.—

11 (1) IN GENERAL.—The Administrator shall de12 velop procedures to provide for an expedited process 

13 to categorize, evaluate, and pay exigent health 

14 claims. Such procedures shall include, pending pro15 mulgation of final regulations, adoption of interim 

16 regulations as needed for processing of exigent 

17 claims. 

18 (2) ELIGIBLE EXIGENT HEALTH CLAIMS.—A 

19 claim shall qualify for treatment as an exigent 

20 health claim if the claimant is living and the claim21 ant provides—

22 (A) documentation that a physician has di23 agnosed the claimant as having mesothelioma; 

24 or 
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1 (B) a declaration or affidavit, from a phy2 sician who has examined the claimant within 

3 120 days before the date of such declaration or 

4 affidavit, that the physician has diagnosed the 

5 claimant as being terminally ill from an asbes6 tos-related illness and having a life expectancy 

7 of less than 1 year. 

8 (3) ADDITIONAL EXIGENT HEALTH CLAIMS.—

9 The Administrator may, in final regulations promul10 gated under section 101(c), designate additional cat11 egories of claims that qualify as exigent health 

12 claims under this subsection. 

13 (d) EXTREME FINANCIAL HARDSHIP CLAIMS.—The 

14 Administrator may, in final regulations promulgated 

15 under section 101(c), designate categories of claims to be 

16 handled on an expedited basis as a result of extreme finan17 cial hardship. 

18 (e) INTERIM ADMINISTRATOR.—Until an Adminis19 trator is appointed and confirmed under section 101(b), 

20 the responsibilities of the Administrator under this Act 

21 shall be performed by the Assistant Secretary of Labor 

22 for the Employment Standards Administration, who shall 

23 have all the authority conferred by this Act on the Admin24 istrator and who shall be deemed to be the Administrator 

25 for purposes of this Act. Before final regulations being 
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1 promulgated relating to claims processing, the Interim Ad2 ministrator may prioritize claims processing, without re3 gard to the time requirements prescribed in subtitle B of 

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

5 the illness in question was caused by exposure to asbestos. 

6 SEC. 107. AUTHORITY OF THE ADMINISTRATOR. 

7 The Administrator, on any matter within the jurisdic8 tion of the Administrator under this Act, may—

9 (1) issue subpoenas for and compel the attend10 ance of witnesses within a radius of 100 miles; 

11 (2) administer oaths; 

12 (3) examine witnesses; and 

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

14 documents, and other evidence. 

15 Subtitle B—Asbestos Disease 

16 Compensation Procedures 

17 SEC. 111. ESSENTIAL ELEMENTS OF ELIGIBLE CLAIM. 

18 To be eligible for an award under this Act for an as19 bestos-related disease or injury, an individual shall—

20 (1) file a claim in a timely manner in accord21 ance with section 113; and 

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

23 that the claimant suffers from an eligible disease or 

24 condition, as demonstrated by evidence that meets 

25 the requirements established under subtitle C. 
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1 SEC. 112. GENERAL RULE CONCERNING NO-FAULT COM2 PENSATION. 

3 An asbestos claimant shall not be required to dem4 onstrate that the asbestos-related injury for which the 

5 claim is being made resulted from the negligence or other 

6 fault of any other person. 

7 SEC. 113. FILING OF CLAIMS. 

8 (a) WHO MAY SUBMIT.—

9 (1) IN GENERAL.—Any individual who has suf10 fered from a disease or condition that is believed to 

11 meet the requirements established under subtitle C 

12 (or the personal representative of the individual, if 

13 the individual is deceased) may file a claim with the 

14 Office for an award with respect to such injury. 

15 (2) DEFINITION.—In this Act, the term ‘‘per16 sonal representative’’ shall have the same meaning 

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

18 of the Code of Federal Regulations, as in effect De19 cember 31, 2003. 

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

21 any person seeking contribution or indemnity. 

22 (b) STATUTE OF LIMITATIONS.—

23 (1) IN GENERAL.—Except as provided in para24 graphs (2) and (3), if an individual fails to file a 

25 claim with the Office under this section within 4 

26 years after the date on which the individual first—
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1 (A) received a medical diagnosis of an eli2 gible disease or condition as provided for under 

3 this subtitle and subtitle C; or 

4 (B) discovered facts that would have led a 

5 reasonable person to obtain a medical diagnosis 

6 with respect to an eligible disease or condition, 

7 any claim relating to that injury, and any other as8 bestos claim related to that injury, shall be extin9 guished, and any recovery thereon shall be prohib10 ited. 

11 (2) EFFECT ON PENDING CLAIMS.—If an asbes12 tos claimant has any timely filed asbestos claim that 

13 is pending in a Federal or State court or with a 

14 trust established under title 11, United States Code, 

15 on the date of enactment of this Act, such claimant 

16 shall file a claim under this section within 4 years 

17 after such date of enactment or be barred from re18 ceiving any award under this title. For purposes of 

19 this paragraph, a claim shall not be treated as pend20 ing with a trust established under title 11, United 

21 States Code, solely because a claimant whose claim 

22 was previously compensated by the trust has or al23 leges—

24 (A) a non-contingent right to the payment 

25 of future installments of a fixed award; or 
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1 (B) a contingent right to recover some ad2 ditional amount from the trust on the occur3 rence of a future event, such as the reevaluation 

4 of the trust’s funding adequacy or projected 

5 claims experience. 

6 (3) EFFECT OF MULTIPLE INJURIES.—

7 (A) IN GENERAL.—An asbestos claimant 

8 who receives an award under this title for an el9 igible disease or condition, and who subse10 quently develops another such injury, shall be 

11 eligible for additional awards under this title 

12 (subject to appropriate setoffs for such prior re13 covery of any award under this title and from 

14 any other collateral source) and the statute of 

15 limitations under paragraph (1) shall not begin 

16 to run with respect to such subsequent injury 

17 until such claimant obtains a medical diagnosis 

18 of such other injury or discovers facts that 

19 would have led a reasonable person to obtain 

20 such a diagnosis. 

21 (B) SETOFFS.—Except as provided in sub22 paragraph (C), any amounts paid or to be paid 

23 for a prior award under this Act shall be de24 ducted as a setoff against amounts payable for 

25 the second injury claim. 
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1 (C) EXCEPTION.—Any amounts paid or to 

2 be paid for a prior claim for a non-malignant 

3 disease (Levels I through V) filed against the 

4 Fund shall not be deducted as a setoff against 

5 amounts payable for the second injury claim for 

6 a malignant disease (Levels VI through X), un7 less the malignancy was diagnosed, or the as8 bestos claimant had discovered facts that would 

9 have led a reasonable person to obtain such a 

10 diagnosis, before the date on which the non-ma11 lignancy claim was compensated. 

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

13 subsection (a) shall be in such form, and contain such in14 formation in such detail, as the Administrator shall by 

15 regulation prescribe. At a minimum, a claim shall in16 clude—

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

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

19 claimant; 

20 (2) information relating to the identity of de21 pendents and beneficiaries of the claimant; 

22 (3) a complete employment history of the claim23 ant, accompanied by social security records or a 

24 signed release permitting access to such records; 
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1 (4) a description of the asbestos exposure of the 

2 claimant, including, to the extent known, informa3 tion on the site, or location of exposure, and dura4 tion and intensity of exposure; 

5 (5) a description of the tobacco product use his6 tory of the claimant, including frequency and dura7 tion; 

8 (6) an identification and description of the as9 bestos-related diseases or conditions of the claimant, 

10 accompanied by a written report by the claimant’s 

11 physician with medical diagnoses and x-ray films, 

12 and other test results necessary to establish eligi13 bility for an award under this Act; 

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

15 action or other claim brought by the claimant for as16 bestos-related injury or any other pulmonary, paren17 chymal or pleural injury, including an identification 

18 of any recovery of compensation or damages through 

19 settlement, judgment, or otherwise; and 

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

21 is a nonsmoker or an ex-smoker, as defined in sec22 tion 131, for purposes of an award under Malignant 

23 Level VI, Malignant Level VII, Malignant Level 

24 VIII, or Malignant Level IX, evidence to support the 
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1 assertion of nonsmoking or ex-smoking, including 

2 relevant medical records. 

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

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

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

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

7 earliest determinable date. 

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

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

10 the claimant of the information necessary to complete the 

11 claim and inform the claimant of such services as may 

12 be available through the Claimant Assistance Program es13 tablished under section 104 to assist the claimant in com14 pleting the claim. Any time periods for the processing of 

15 the claim shall be suspended until such time as the claim16 ant submits the information necessary to complete the 

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

18 after the date of such notification, the claim shall be dis19 missed. 

20 SEC. 114. ELIGIBILITY DETERMINATIONS AND CLAIM 

21 AWARDS. 

22 (a) IN GENERAL.—

23 (1) REVIEW OF CLAIMS.—The Administrator 

24 shall, in accordance with this section, determine 

25 whether each claim filed under this Act satisfies the 
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1 requirements for eligibility for an award under this 

2 Act and, if so, the value of the award. In making 

3 such determinations, the Administrator shall con4 sider the claim presented by the claimant, the fac5 tual and medical evidence submitted by the claimant 

6 in support of the claim, the medical determinations 

7 of any Physicians Panel to which a claim is referred 

8 under section 121, and the results of such investiga9 tion as the Administrator may deem necessary to de10 termine whether the claim satisfies the criteria for 

11 eligibility established by this Act. 

12 (2) ADDITIONAL EVIDENCE.—The Adminis13 trator may request the submission of medical evi14 dence in addition to the minimum requirements of 

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

16 a determination of eligibility for an award, in which 

17 case the cost of obtaining such additional informa18 tion or testing shall be borne by the Office. 

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

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

21 to the claimant (and the claimant’s representative) a pro22 posed decision accepting or rejecting the claim in whole 

23 or in part and specifying the amount of the proposed 

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

25 shall contain findings of fact and conclusions of law, and 
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1 shall contain an explanation of the procedure for obtaining 

2 review of the proposed decision. 

3 (c) REVIEW OF PROPOSED DECISIONS.—

4 (1) RIGHT TO HEARING.—

5 (A) IN GENERAL.—Any claimant not satis6 fied with a proposed decision of the Adminis7 trator under subsection (b) shall be entitled, on 

8 written request made within 90 days after the 

9 date of the issuance of the decision, to a hear10 ing on the claim of that claimant before a rep11 resentative of the Administrator. At the hear12 ing, the claimant shall be entitled to present 

13 oral evidence and written testimony in further 

14 support of that claim. 

15 (B) CONDUCT OF HEARING.—When prac16 ticable, the hearing will be set at a time and 

17 place convenient for the claimant. In conducting 

18 the hearing, the representative of the Adminis19 trator shall not be bound by common law or 

20 statutory rules of evidence, by technical or for21 mal rules of procedure, or by section 554 of 

22 title 5, United States Code, except as provided 

23 by this Act, but shall conduct the hearing in 

24 such manner as to best ascertain the rights of 

25 the claimant. For this purpose, the representa-
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1 tive shall receive such relevant evidence as the 

2 claimant adduces and such other evidence as 

3 the representative determines necessary or use4 ful in evaluating the claim. 

5 (C) REQUEST FOR SUBPOENAS.—

6 (i) IN GENERAL.—A claimant may re7 quest a subpoena but the decision to grant 

8 or deny such a request is within the discre9 tion of the representative of the Adminis10 trator. The representative may issue sub11 poenas for the attendance and testimony of 

12 witnesses, and for the production of books, 

13 records, correspondence, papers or other 

14 relevant documents. Subpoenas are issued 

15 for documents only if they are relevant and 

16 cannot be obtained by other means, and 

17 for witnesses only where oral testimony is 

18 the best way to ascertain the facts. 

19 (ii) REQUEST.—A claimant may re20 quest a subpoena only as part of the hear21 ing process. To request a subpoena, the re22 quester shall—

23 (I) submit the request in writing 

24 and send it to the representative as 

25 early as possible, but no later than 30 
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1 days after the date of the original 

2 hearing request; and 

3 (II) explain why the testimony or 

4 evidence is directly relevant to the 

5 issues at hand, and a subpoena is the 

6 best method or opportunity to obtain 

7 such evidence because there are no 

8 other means by which the documents 

9 or testimony could have been ob10 tained. 

11 (iii) FEES AND MILEAGE.—Any per12 son required by such subpoena to attend as 

13 a witness shall be allowed and paid the 

14 same fees and mileage as are paid wit15 nesses in the district courts of the United 

16 States. 

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

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

19 satisfied with a proposed decision of the Adminis20 trator shall have the option, on written request made 

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

22 decision, of obtaining a review of the written record 

23 by a representative of the Administrator. If such re24 view is requested, the claimant shall be afforded an 
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1 opportunity to submit any written evidence or argu2 ment which he or she believes relevant. 

3 (d) FINAL DECISIONS.—

4 (1) IN GENERAL.—If the period of time for re5 questing review of the proposed decision expires and 

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

7 any objections to the proposed decision, the Admin8 istrator shall issue a final decision. If such decision 

9 materially differs from the proposed decision, the 

10 claimant shall be entitled to review of the decision 

11 under subsection (c). 

12 (2) TIME AND CONTENT.—If the claimant re13 quests review of all or part of the proposed decision 

14 the Administrator shall issue a final decision on the 

15 claim not later than 180 days after the request for 

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

17 or not later than 90 days after the request for re18 view is received, if the claimant requests review of 

19 the written record. Such decision shall be in writing 

20 and contain findings of fact and conclusions of law. 

21 (e) REPRESENTATION.—A claimant may authorize 

22 an attorney or other individual to represent him or her 

23 in any proceeding under this Act. 

24 SEC. 115. MEDICAL EVIDENCE AUDITING PROCEDURES. 

25 (a) IN GENERAL.—
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1 (1) DEVELOPMENT.—The Administrator shall 

2 develop methods for auditing and evaluating the 

3 medical evidence submitted as part of a claim. The 

4 Administrator may develop additional methods for 

5 auditing and evaluating other types of evidence or 

6 information received by the Administrator. 

7 (2) REFUSAL TO CONSIDER CERTAIN EVI8 DENCE.—

9 (A) IN GENERAL.—If the Administrator 

10 determines that an audit conducted in accord11 ance with the methods developed under para12 graph (1) demonstrates that the medical evi13 dence submitted by a specific physician or med14 ical facility is not consistent with prevailing 

15 medical practices or the applicable requirements 

16 of this Act, any medical evidence from such 

17 physician or facility shall be unacceptable for 

18 purposes of establishing eligibility for an award 

19 under this Act. 

20 (B) NOTIFICATION.—Upon a determina21 tion by the Administrator under subparagraph 

22 (A), the Administrator shall notify the physi23 cian or medical facility involved of the results of 

24 the audit. Such physician or facility shall have 
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1 a right to appeal such determination under pro2 cedures issued by the Administrator. 

3 (b) REVIEW OF CERTIFIED B-READERS.—

4 (1) IN GENERAL.—At a minimum, the Adminis5 trator shall prescribe procedures to randomly assign 

6 claims for evaluation by an independent certified B7 reader of x-rays submitted in support of a claim, the 

8 cost of which shall be borne by the Office. 

9 (2) DISAGREEMENT.—If an independent cer10 tified B-reader assigned under paragraph (1) dis11 agrees with the quality grading or ILO level as12 signed to an x-ray submitted in support of a claim, 

13 the Administrator shall require a review of such x14 rays by a second independent certified B-reader. 

15 (3) EFFECT ON CLAIM.—If neither certified B16 reader under paragraph (2) agrees with the quality 

17 grading and the ILO grade level assigned to an x18 ray as part of the claim, the Administrator shall 

19 take into account the findings of the 2 independent 

20 B readers in making the determination on such 

21 claim. 

22 (4) CERTIFIED B-READERS.—The Adminis23 trator shall maintain a list of a minimum of 50 cer24 tified B-readers eligible to participate in the inde25 pendent reviews, chosen from all certified B-readers. 
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1 When an x-ray is sent for independent review, the 

2 Administrator shall choose the certified B-reader at 

3 random from that list. 

4 (c) SMOKING ASSESSMENT.—

5 (1) IN GENERAL.—

6 (A) RECORDS AND DOCUMENTS.—To aid 

7 in the assessment of the accuracy of claimant 

8 representations as to their smoking status for 

9 purposes of determining eligibility and amount 

10 of award under Malignant Level VI, Malignant 

11 Level VII, Malignant Level VIII, Malignant 

12 Level IX, and exceptional medical claims, the 

13 Administrator shall have the authority to obtain 

14 relevant records and documents, including—

15 (i) records of past medical treatment 

16 and evaluation; 

17 (ii) affidavits of appropriate individ18 uals; 

19 (iii) applications for insurance and 

20 supporting materials; and 

21 (iv) employer records of medical ex22 aminations. 

23 (B) CONSENT.—The claimant shall provide 

24 consent for the Administrator to obtain such 

25 records and documents where required. 
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1 (2) REVIEW.—The frequency of review of 

2 records and documents submitted under paragraph 

3 (1)(A) shall be at the discretion of the Adminis4 trator, but shall address at least 5 percent of the 

5 claimants asserting status as nonsmokers or ex6 smokers. 

7 (3) CONSENT.—The Administrator may require 

8 the performance of blood tests or any other appro9 priate medical test where claimants assert they are 

10 nonsmokers or ex-smokers for purposes of an award 

11 under Malignant Level VI, Malignant Level VII, 

12 Malignant Level VIII, Malignant Level IX, or as an 

13 exceptional medical claim, the cost of which shall be 

14 borne by the Office. 

15 (4) PENALTY FOR FALSE STATEMENTS.—Any 

16 false information submitted under this subsection 

17 shall be subject to criminal prosecution or civil pen18 alties as provided under section 1348 of title 18, 

19 United States Code (as added by this Act) and sec20 tion 101(c)(2). 

21 Subtitle C—Medical Criteria 

22 SEC. 121. MEDICAL CRITERIA REQUIREMENTS. 

23 (a) DEFINITIONS.—In this section, the following defi24 nitions shall apply: 
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1 (1) ASBESTOSIS DETERMINED BY PATHOL2 OGY.—The term ‘‘asbestosis determined by pathol3 ogy’’ means indications of asbestosis based on the 

4 pathological grading system for asbestosis described 

5 in the Special Issues of the Archives of Pathology 

6 and Laboratory Medicine, ‘‘Asbestos-associated Dis7 eases’’, Vol. 106, No. 11, App. 3 (October 8, 1982). 

8 (2) BILATERAL ASBESTOS-RELATED NONMALIG9 NANT DISEASE.—The term ‘‘bilateral asbestos-re10 lated nonmalignant disease’’ means a diagnosis of 

11 bilateral asbestos-related nonmalignant disease 

12 based on—

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

14 based on the ILO grade scale; 

15 (B) bilateral pleural plaques; 

16 (C) bilateral pleural thickening; or 

17 (D) bilateral pleural calcification. 

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

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

20 wall pleural thickening or plaque with a maximum 

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

at least 1 22 ⁄4 of the projection of the lateral chest wall. 

23 (4) CERTIFIED B-READER.—The term ‘‘cer24 tified B-reader’’ means an individual who is certified 

25 by the National Institute of Occupational Safety and 
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1 Health and whose certification by the National Insti2 tute of Occupational Safety and Health is up to 

3 date. 

4 (5) DIFFUSE PLEURAL THICKENING.—The 

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

6 either costophrenic angle and bilateral pleural plaque 

7 or bilateral pleural thickening. 

8 (6) DLCO.—The term ‘‘DLCO’’ means the sin9 gle-breath diffusing capacity of the lung (carbon 

10 monoxide) technique used to measure the volume of 

11 carbon monoxide transferred from the alveoli to 

12 blood in the pulmonary capillaries for each unit of 

13 driving pressure of the carbon monoxide. 

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

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

16 volume of air expelled in 1 second during perform17 ance of the spirometric test for forced vital capacity. 

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

19 capacity, which is the maximal volume of air expired 

20 with a maximally forced effort from a position of 

21 maximal inspiration. 

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

23 means the radiological ratings for the presence of 

24 lung changes as determined from a chest x-ray, all 
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1 as established from time to time by the International 

2 Labor Organization. 

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

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

5 of healthy populations as defined in the American 

6 Thoracic Society statement on lung function testing 

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

8 and any future revision of the same statement. 

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

10 means that the claimant never smoked. 

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

12 pressure (tension) of oxygen, which measures the 

13 amount of dissolved oxygen in the blood. 

14 (13) PULMONARY FUNCTION TESTING.—The 

15 term ‘‘pulmonary function testing’’ means 

16 spirometry testing that is in material compliance 

17 with the quality criteria established by the American 

18 Thoracic Society and is performed on equipment 

19 which is in material compliance with the standards 

20 of the American Thoracic Society for technical qual21 ity and calibration. 

22 (14) SUBSTANTIAL OCCUPATIONAL EXPOSURE

23 TO ASBESTOS.—

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

25 occupational exposure’’ means employment in 
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1 an industry and an occupation where for a sub2 stantial portion of a normal work year for that 

3 occupation, the claimant—

4 (i) handled raw asbestos fibers; 

5 (ii) fabricated asbestos-containing 

6 products so that the claimant in the fab7 rication process was exposed to raw asbes8 tos fibers; 

9 (iii) altered, repaired, or otherwise 

10 worked with an asbestos-containing prod11 uct such that the claimant was exposed on 

12 a regular basis to asbestos fibers; or 

13 (iv) worked in close proximity to other 

14 workers engaged in the activities described 

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

16 claimant was exposed on a regular basis to 

17 asbestos fibers. 

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

19 the term ‘‘on a regular basis’’ means on a fre20 quent or recurring basis. 

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

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

23 after maximal inspiration. 

24 (16) WEIGHTED OCCUPATIONAL EXPOSURE.—
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1 (A) IN GENERAL.—The term ‘‘weighted oc2 cupational exposure’’ means exposure for a pe3 riod of years calculated according to the expo4 sure weighting formula under subparagraphs 

5 (B) through (E). 

6 (B) MODERATE EXPOSURE.—Subject to 

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

8 primary occupation, during a substantial por9 tion of a normal work year for that occupation, 

10 involved working in areas immediate to where 

11 asbestos-containing products were being in12 stalled, repaired, or removed under cir13 cumstances that involved regular airborne emis14 sions of asbestos fibers, shall count as 1 year 

15 of substantial occupational exposure. 

16 (C) HEAVY EXPOSURE.—Subject to sub17 paragraph (E), each year that a claimant’s pri18 mary occupation, during a substantial portion 

19 of a normal work year for that occupation, in20 volved the direct installation, repair, or removal 

21 of asbestos-containing products such that the 

22 person was exposed on a regular basis to asbes23 tos fibers, shall count as 2 years of substantial 

24 occupational exposure. 
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1 (D) VERY HEAVY EXPOSURE.—Subject to 

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

3 primary occupation, during a substantial por4 tion of a normal work year for that occupation, 

5 was in primary asbestos manufacturing, a 

6 World War II shipyard, or the asbestos insula7 tion trades, such that the person was exposed 

8 on a regular basis to asbestos fibers, shall count 

9 as 4 years of substantial occupational exposure. 

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

11 exposure calculated under subparagraphs (B), 

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

13 counted at its full value. Each year from 1976 

to 1986 shall be counted as 1 14 ⁄2 its value. Each 

year after 1986 shall be counted as 1 15 ⁄10 its 

16 value. 

17 (F) OTHER CLAIMS.—Individuals who do 

18 not meet the provisions of subparagraphs (A) 

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

20 post-1986 exposures exceeded the Occupational 

21 Safety and Health Administration standard 

22 may submit evidence, documentation, work his23 tory or other information to substantiate non24 compliance with the Occupational Safety and 

25 Health Administration standard (such as lack 
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1 of engineering or work practice controls, or pro2 tective equipment) such that exposures would 

3 be equivalent to exposures before 1976 or 1986 

4 or to documented exposures in similar jobs or 

5 occupations where control measures had not 

6 been implemented. Claims under this subpara7 graph shall be evaluated on an individual basis 

8 by a Physicians Panel. 

9 (b) MEDICAL EVIDENCE.—

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

11 diagnoses of an asbestos-related disease for a level 

12 under this section shall be accompanied by—

13 (A) a statement by the physician providing 

14 the diagnosis that at least 10 years have 

15 elapsed between the date of first exposure to as16 bestos or asbestos-containing products and the 

17 diagnosis; or 

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

19 that is sufficient to establish a 10-year latency 

20 period between the date of first exposure to as21 bestos or asbestos-containing products and the 

22 diagnosis. 

23 (2) DIAGNOSTIC GUIDELINES.—All diagnoses of 

24 asbestos-related diseases shall be based upon—
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1 (A) for disease Levels I through V, in the 

2 case of a claimant who was living at the time 

3 the claim was filed—

4 (i) a physical examination of the 

5 claimant by the physician providing the di6 agnosis; 

7 (ii) an evaluation of smoking history 

8 and exposure history before making a diag9 nosis; 

10 (iii) an x-ray reading by a certified B11 reader; and 

12 (iv) pulmonary function testing in the 

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

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

15 case of a claimant who was deceased at the 

16 time the claim was filed, a report from a physi17 cian based upon a review of the claimant’s med18 ical records which shall include—

19 (i) pathological evidence of the non20 malignant asbestos-related disease; or 

21 (ii) an x-ray reading by a certified B22 reader; 

23 (C) for disease Levels VI through X, in the 

24 case of a claimant who was living at the time 

25 the claim was filed—
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1 (i) a physical examination by the 

2 claimant’s physician providing the diag3 nosis; or 

4 (ii) a diagnosis of such a malignant 

5 asbestos-related disease, as described in 

6 this section, by a board-certified patholo7 gist; and 

8 (D) for disease Levels VI through X, in 

9 the case of a claimant who was deceased at the 

10 time the claim was filed—

11 (i) a diagnosis of such a malignant as12 bestos-related disease, as described in this 

13 section, by a board-certified pathologist; 

14 and 

15 (ii) a report from a physician based 

16 upon a review of the claimant’s medical 

17 records. 

18 (3) CREDIBILITY OF MEDICAL EVIDENCE.—To 

19 ensure the medical evidence provided in support of 

20 a claim is credible and consistent with recognized 

21 medical standards, a claimant under this title may 

22 be required to submit—

23 (A) x-rays or computerized tomography; 

24 (B) detailed results of pulmonary function 

25 tests; 
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1 (C) laboratory tests; 

2 (D) tissue samples; 

3 (E) results of medical examinations; 

4 (F) reviews of other medical evidence; and 

5 (G) medical evidence that complies with 

6 recognized medical standards regarding equip7 ment, testing methods, and procedure to ensure 

8 the reliability of such evidence as may be sub9 mitted. 

10 (c) EXPOSURE EVIDENCE.—

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

12 level, the claimant shall demonstrate—

13 (A) a minimum exposure to asbestos or as14 bestos-containing products; 

15 (B) the exposure occurred in the United 

16 States, its territories or possessions, or while a 

17 United States citizen while an employee of an 

18 entity organized under any Federal or State law 

19 regardless of location, or while a United States 

20 citizen while serving on any United States 

21 flagged or owned ship, provided the exposure 

22 results from such employment or service; and 

23 (C) any additional asbestos exposure re24 quirement under this section. 
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1 (2) GENERAL EXPOSURE REQUIREMENTS.—In 

2 order to establish exposure to asbestos, a claimant 

3 shall present meaningful and credible evidence—

4 (A) by an affidavit of the claimant; 

5 (B) by an affidavit of a coworker or family 

6 member, if the claimant is deceased and such 

7 evidence is found in proceedings under this title 

8 to be reasonably reliable; 

9 (C) by invoices, construction, or similar 

10 records; or 

11 (D) any other credible evidence. 

12 (3) TAKE-HOME EXPOSURE.—

13 (A) IN GENERAL.—A claimant may alter14 natively satisfy the medical criteria require15 ments of this section where a claim is filed by 

16 a person who alleges their exposure to asbestos 

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

18 the claim had been filed by that person, would 

19 have met the exposure criteria for the given dis20 ease level, and the claimant lived with such per21 son for the time period necessary to satisfy the 

22 exposure requirement, for the claimed disease 

23 level. 

24 (B) REVIEW.—Except for claims for dis25 ease Level X (mesothelioma), all claims alleging 
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1 take-home exposure shall be submitted as an 

2 exceptional medical claim under section 121(f) 

3 for review by a Physicians Panel. 

4 (4) WAIVER FOR WORKERS AND RESIDENTS OF

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

6 the asbestos exposure related to the vermiculite min7 ing and milling operations in Libby, Montana, the 

8 Administrator shall waive the exposure requirements 

9 under this subtitle for individuals who worked at the 

10 vermiculite mining and milling facility in Libby, 

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

12 of Libby, Montana, for at least 12 consecutive 

13 months before December 31, 2003. Claimants under 

14 this section shall provide such supporting docu15 mentation as the Administrator shall require. 

16 (5) EXPOSURE PRESUMPTIONS.—The Adminis17 trator shall prescribe rules identifying specific indus18 tries, occupations within those industries, and time 

19 periods for which substantial occupational exposure 

20 (as defined under section 121(a)) shall be a rebut21 table presumption for asbestos claimants who pro22 vide meaningful and credible evidence that the 

23 claimant worked in that industry and occupation 

24 during such time periods. The Administrator may 

25 provide evidence to rebut this presumption. 
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1 (d) ASBESTOS DISEASE LEVELS.—

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

3 I compensation, a claimant shall provide—

4 (A) a diagnosis of bilateral asbestos-related 

5 nonmalignant disease; and 

6 (B) evidence of 5 years cumulative occupa7 tional exposure to asbestos. 

8 (2) NONMALIGNANT LEVEL II.—To receive 

9 Level II compensation, a claimant shall provide—

10 (A) a diagnosis of bilateral asbestos-related 

11 nonmalignant disease with ILO grade of 1/1 or 

12 greater, and showing small irregular opacities 

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

14 in both lower lung zones, or asbestosis deter15 mined by pathology, or blunting of either 

16 costophrenic angle and bilateral pleural plaque 

17 or bilateral pleural thickening of at least grade 

18 B2 or greater, or bilateral pleural disease of 

19 grade B2 or greater; 

20 (B) evidence of TLC less than 80 percent 

21 or FVC less than the lower limits of normal, 

22 and FEV1/FVC ratio less than 65 percent; 

23 (C) evidence of 5 or more weighted years 

24 of substantial occupational exposure to asbes25 tos; and 
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1 (D) supporting medical documentation es2 tablishing asbestos exposure as a contributing 

3 factor in causing the pulmonary condition in 

4 question. 

5 (3) NONMALIGNANT LEVEL III.—To receive 

6 Level III compensation a claimant shall provide—

7 (A) a diagnosis of bilateral asbestos-related 

8 nonmalignant disease with ILO grade of 1/0 or 

9 greater and showing small irregular opacities of 

10 shape or size either ss, st, or tt and present in 

11 both lower lung zones, or asbestosis determined 

12 by pathology, or diffuse pleural thickening, or 

13 bilateral pleural disease of B2 or greater; 

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

15 FVC less than the lower limits of normal and 

16 FEV1/FVC ratio greater than or equal to 65 

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

18 percent or greater, after allowing for the ex19 pected decrease due to aging, and an FEV1/

20 FVC ratio greater than or equal to 65 percent 

21 documented with a second spirometry; 

22 (C) evidence of 5 or more weighted years 

23 of substantial occupational exposure to asbes24 tos; and 

25 (D) supporting medical documentation—
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1 (i) establishing asbestos exposure as a 

2 contributing factor in causing the pul3 monary condition in question; and 

4 (ii) excluding other more likely causes 

5 of that pulmonary condition. 

6 (4) NONMALIGNANT LEVEL IV.—To receive 

7 Level IV compensation a claimant shall provide—

8 (A) diagnosis of bilateral asbestos-related 

9 nonmalignant disease with ILO grade of 1/1 or 

10 greater and showing small irregular opacities of 

11 shape or size either ss, st, or tt and present in 

12 both lower lung zones, or asbestosis determined 

13 by pathology, or diffuse pleural thickening, or 

14 bilateral pleural disease of B2 or greater; 

15 (B) evidence of TLC less than 60 percent 

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

17 ratio greater than or equal to 65 percent; 

18 (C) evidence of 5 or more weighted years 

19 of substantial occupational exposure to asbestos 

20 before diagnosis; and 

21 (D) supporting medical documentation—

22 (i) establishing asbestos exposure as a 

23 contributing factor in causing the pul24 monary condition in question; and 
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1 (ii) excluding other more likely causes 

2 of that pulmonary condition. 

3 (5) NONMALIGNANT LEVEL V.—To receive 

4 Level V compensation a claimant shall provide—

5 (A) diagnosis of bilateral asbestos-related 

6 nonmalignant disease with ILO grade of 1/1 or 

7 greater and showing small irregular opacities of 

8 shape or size either ss, st, or tt and present in 

9 both lower lung zones, or asbestosis determined 

10 by pathology, or diffuse pleural thickening, or 

11 bilateral pleural disease of B2 or greater; 

12 (B)(i) evidence of TLC less than 50 per13 cent or FVC less than 50 percent, and FEV1/

14 FVC ratio greater than or equal to 65 percent; 

15 (ii) DLCO less than 40 percent of pre16 dicted, plus a FEV1/FVC ratio not less than 65 

17 percent; or 

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

19 FEV1/FVC ratio not less than 65 percent; 

20 (C) evidence of 5 or more weighted years 

21 of substantial occupational exposure to asbes22 tos; and 

23 (D) supporting medical documentation—
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1 (i) establishing asbestos exposure as a 

2 contributing factor in causing the pul3 monary condition in question; and 

4 (ii) excluding other more likely causes 

5 of that pulmonary condition. 

6 (6) MALIGNANT LEVEL VI.—

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

8 compensation a claimant shall provide—

9 (i) a diagnosis of a primary colorectal, 

10 laryngeal, esophageal, pharyngeal, or stom11 ach cancer on the basis of findings by a 

12 board certified pathologist; 

13 (ii) evidence of a bilateral asbestos-re14 lated nonmalignant disease; 

15 (iii) evidence of 15 or more weighted 

16 years of substantial occupational exposure 

17 to asbestos; and 

18 (iv) supporting medical documentation 

19 establishing asbestos exposure as a contrib20 uting factor in causing the cancer in ques21 tion. 

22 (B) REFERRAL TO PHYSICIANS PANEL.—

23 All claims filed with respect to Level VI under 

24 this paragraph shall be referred to a Physicians 

25 Panel for a determination that it is more prob-
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1 able than not that asbestos exposure was a sub2 stantial contributing factor in causing the other 

3 cancer in question. If the claimant meets the 

4 requirements of subparagraph (A), there shall 

5 be a presumption of eligibility for the scheduled 

6 value of compensation unless there is evidence 

7 determined by the Physicians Panel that rebuts 

8 that presumption. 

9 (C) REQUEST FOR REFERRAL TO PHYSI10 CIANS PANEL.—A claimant filing a claim with 

11 respect to Level VI under this paragraph may 

12 request that the claim be referred to a Physi13 cians Panel for a determination on amount of 

14 award. In making its determination under this 

15 subparagraph, the Physicians Panel shall con16 sider the intensity and duration of exposure, 

17 smoking history, and the quality of evidence re18 lating to exposure and smoking. Claimants shall 

19 bear the burden of producing meaningful and 

20 credible evidence of their smoking history as 

21 part of their claim submission. 

22 (7) MALIGNANT LEVEL VII.—

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

24 compensation a claimant shall provide—
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1 (i) a diagnosis of a primary lung can2 cer disease on the basis of findings by a 

3 board certified pathologist; 

4 (ii) evidence of 15 or more weighted 

5 years of substantial occupational exposure 

6 to asbestos; and 

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

9 contributing factor in causing the lung 

10 cancer in question. 

11 (B) PHYSICIANS PANEL.—All claims filed 

12 relating to Level VII under this paragraph shall 

13 be referred to a Physicians Panel for a deter14 mination on the amount of award. In making 

15 its determination under this subparagraph, the 

16 Physicians Panel shall consider the intensity 

17 and duration of exposure, smoking history, and 

18 the quality of evidence relating to exposure and 

19 smoking. Claimants shall bear the burden of 

20 producing meaningful and credible evidence of 

21 their smoking history as part of their claim 

22 submission. 

23 (8) MALIGNANT LEVEL VIII.—

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

25 compensation, a claimant shall provide—
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1 (i) a diagnosis of a primary lung can2 cer disease on the basis of findings by a 

3 board certified pathologist; 

4 (ii) evidence of bilateral pleural 

5 plaques or bilateral pleural thickening or 

6 bilateral pleural calcification; 

7 (iii) evidence of 12 or more weighted 

8 years of substantial occupational exposure 

9 to asbestos; and 

10 (iv) supporting medical documentation 

11 establishing asbestos exposure as a contrib12 uting factor in causing the lung cancer in 

13 question. 

14 (B) PHYSICIANS PANEL.—A claimant filing 

15 a claim relating to Level VIII under this para16 graph may request that the claim be referred to 

17 a Physicians Panel for a determination on 

18 amount of award. In making its determination 

19 under this subparagraph, the Physicians Panel 

20 shall consider the intensity and duration of ex21 posure, smoking history, and the quality of evi22 dence relating to exposure and smoking. Claim23 ants shall bear the burden of producing mean24 ingful and credible evidence of their smoking 

25 history as part of their claim submission. 
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1 (9) MALIGNANT LEVEL IX.—

2 (A) IN GENERAL.—To receive Level IX 

3 compensation, a claimant shall provide—

4 (i) a diagnosis of a primary lung can5 cer disease on the basis of findings by a 

6 board certified pathologist; 

7 (ii)(I) evidence 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 and 

12 present in both lower lung zones; and 

13 (bb) 10 or more weighted years 

14 of substantial occupational exposure 

15 to asbestos; 

16 (II) evidence of—

17 (aa) asbestosis based on a chest 

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

19 and showing small irregular opacities 

20 of shape or size either ss, st, or tt and 

21 present in both lower lung zones; and 

22 (bb) 8 or more weighted years of 

23 substantial occupational exposure to 

24 asbestos; or 
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1 (III) asbestosis determined by pathol2 ogy and 10 or more weighted years of sub3 stantial occupational exposure to asbestos; 

4 and 

5 (iii) supporting medical documenta6 tion establishing asbestos exposure as a 

7 contributing factor in causing the lung 

8 cancer in question. 

9 (B) PHYSICIANS PANEL.—A claimant filing 

10 a claim with respect to Level IX under this 

11 paragraph may request that the claim be re12 ferred to a Physicians Panel for a determina13 tion on amount of award. In making its deter14 mination under this subparagraph, the Physi15 cians Panel shall consider the intensity and du16 ration of exposure, smoking history, and the 

17 quality of evidence relating to exposure and 

18 smoking. Claimants shall bear the burden of 

19 producing meaningful and credible evidence of 

20 their smoking history as part of their claim 

21 submission. 

22 (10) MALIGNANT LEVEL X.—To receive Level 

23 X compensation, a claimant shall provide—
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1 (A) a diagnosis of malignant mesothelioma 

2 disease on the basis of findings by a board cer3 tified pathologist; and 

4 (B) credible evidence of identifiable expo5 sure to asbestos resulting from—

6 (i) occupational exposure to asbestos; 

7 (ii) exposure to asbestos fibers 

8 brought into the home of the claimant by 

9 a worker occupationally exposed to asbes10 tos; 

11 (iii) exposure to asbestos fibers result12 ing from living or working in the proxi13 mate vicinity of a factory, shipyard, build14 ing demolition site, or other operation that 

15 regularly released asbestos fibers into the 

16 air due to operations involving asbestos at 

17 that site; or 

18 (iv) other identifiable exposure to as19 bestos fibers, in which case the claim shall 

20 be reviewed by a Physicians Panel under 

21 section 121(f) for a determination of eligi22 bility. 

23 (e) INSTITUTE OF MEDICINE STUDY.—

24 (1) IN GENERAL.—Not later than 2 years after 

25 date of enactment of this Act, the Institute of Medi-
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1 cine of the National Academy of Sciences shall com2 plete a study of the causal link between asbestos ex3 posure and other cancers, including colorectal, laryn4 geal, esophageal, pharyngeal, and stomach cancers, 

5 except for mesothelioma and lung cancers. The In6 stitute of Medicine shall issue a report on its find7 ings on causation, which shall be transmitted to 

8 Congress, the Administrator, the Advisory Com9 mittee on Asbestos Disease Compensation or the 

10 Medical Advisory Committee, and the Physicians 

11 Panels. The Administrator and the Physicians Pan12 els may consider the results of the report for pur13 poses of determining whether asbestos exposure is a 

14 substantial contributing factor under section 

15 121(d)(6)(B). 

16 (2) SUBSEQUENT STUDIES.—If the Adminis17 trator has evidence that there have been advance18 ments in science that would require additional study, 

19 the Administrator may request that the Institute of 

20 Medicine conduct a subsequent study to determine if 

21 asbestos exposure is a cause of other cancers. 

22 (f) EXCEPTIONAL MEDICAL CLAIMS.—

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

24 meet the medical criteria requirements under this 
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1 section may apply for designation of the claim as an 

2 exceptional medical claim. 

3 (2) APPLICATION.—When submitting an appli4 cation for review of an exceptional medical claim, the 

5 claimant shall—

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

7 medical criteria requirements under this sec8 tion; or 

9 (B) seek designation as an exceptional 

10 medical claim within 60 days after a determina11 tion that the claim is ineligible solely for failure 

12 to meet the medical criteria requirements under 

13 subsection (d). 

14 (3) REPORT OF PHYSICIAN.—

15 (A) IN GENERAL.—Any claimant applying 

16 for designation of a claim as an exceptional 

17 medical claim shall support an application filed 

18 under paragraph (1) with a report from a phy19 sician meeting the requirements of this section. 

20 (B) CONTENTS.—A report filed under sub21 paragraph (A) shall include—

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

23 medical history and current condition; 

24 (ii) such additional material by way of 

25 analysis and documentation as shall be 
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1 prescribed by rule of the Administrator; 

2 and 

3 (iii) a detailed explanation as to why 

4 the claim meets the requirements of para5 graph (4)(B). 

6 (4) REVIEW.—

7 (A) IN GENERAL.—The Administrator 

8 shall refer all applications and supporting docu9 mentation submitted under paragraph (2) to a 

10 Physicians Panel for review for eligibility as an 

11 exceptional medical claim. 

12 (B) STANDARD.—A claim shall be des13 ignated as an exceptional medical claim if the 

14 claimant, for reasons beyond the control of the 

15 claimant, cannot satisfy the requirements under 

16 this section, but is able, through comparably re17 liable evidence that meets the standards under 

18 this section, to show that the claimant has an 

19 asbestos-related condition that is substantially 

20 comparable to that of a medical condition that 

21 would satisfy the requirements of a category 

22 under this section. 

23 (C) ADDITIONAL INFORMATION.—A Physi24 cians Panel may request additional reasonable 

25 testing to support the claimant’s application. 
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1 (D) CT SCAN.—A claimant may submit a 

2 CT Scan in addition to an x-ray. 

3 (5) APPROVAL.—

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

5 determines that the medical evidence is suffi6 cient to show a comparable asbestos-related 

7 condition, it shall issue a certificate of medical 

8 eligibility designating the category of asbestos9 related injury under this section for which the 

10 claimant may be eligible to seek compensation. 

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

12 certificate under subparagraph (A), the Physi13 cians Panel shall submit the claim to the Ad14 ministrator, who shall proceed to determine 

15 whether the claimant meets the requirements 

16 for compensation under this Act. 

17 (6) RESUBMISSION.—Any claimant whose appli18 cation for designation as an exceptional medical 

19 claim is rejected may resubmit an application if new 

20 evidence becomes available. The application shall 

21 identify any prior applications and state the new evi22 dence that forms the basis of the resubmission. 

23 (7) RULES.—The Administrator shall promul24 gate rules governing the procedures for seeking des25 ignation of a claim as an exceptional medical claim. 
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1 (8) LIBBY, MONTANA.—All claims filed by 

2 Libby, Montana claimants shall be designated as ex3 ceptional medical claims and referred to a Physi4 cians Panel for review. In reviewing the medical evi5 dence submitted by a Libby, Montana claimant in 

6 support of that claim, and before making an eligi7 bility determination for a Libby, Montana claimant, 

8 the Physicians Panel shall review the current med9 ical and scientific literature relating to the study, di10 agnosis, and treatment of asbestos-related diseases 

11 resulting from exposure to asbestos and other fibers 

12 found in and around Libby, Montana, including pub13 lic health assessments prepared by the Agency for 

14 Toxic Substances and Disease Registry for the 

15 Libby Asbestos Site. The Physicians Panel shall 

16 take into consideration the unique and serious na17 ture of asbestos exposure in Libby, Montana, includ18 ing the nature of the pleural disease related to as19 bestos exposure in Libby, when making a determina20 tion of eligibility and designating the disease cat21 egory. 

22 Subtitle D—Awards 

23 SEC. 131. AMOUNT. 

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

25 the requirements of section 111 shall be entitled to an 
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1 award in an amount determined by reference to the benefit 

2 table contained in subsection (b). 

3 (b) BENEFIT TABLE.—

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

5 an eligible disease or condition established in accord6 ance with section 121, shall be eligible for an award 

7 according to the following schedule:

Level Scheduled Condition 

or Disease Scheduled Value

I Asbestosis/Pleural Disease Medical Monitoring 

II Mixed Disease With Impairment $35,000

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 One individual evaluation; smokers receive $50,000; ex-smokers receive $150,000; non-smokers 

receive $625,000

VIII Lung Cancer With Pleural 

Disease 

smokers receive $275,000; exsmokers $700,000; non-smokers receive $800,000

IX Lung Cancer With Asbestosis smokers receive $575,000; exsmokers receive $950,000; nonsmokers receive $1,050,000

X Mesothelioma $1,050,000

8 (2) DEFINITIONS.—In this section—

9 (A) the term ‘‘nonsmoker’’ means a claim10 ant who never smoked; and 

11 (B) the term ‘‘ex-smoker’’ means a claim12 ant who has not smoked during any portion of 

13 the 12-year period preceding the diagnosis of 

14 lung cancer. 

15 (3) VALUES WITHIN LEVELS RELATING TO

16 LUNG CANCER.—
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1 (A) IN GENERAL.—In setting values for 

2 levels relating to lung cancer, the Administrator 

3 shall develop a matrix of classes for each of 

4 Levels VII, VIII, and IX based on—

5 (i) the smoking history of the claim6 ant, including whether the claimant cur7 rently or in the past smoked tobacco prod8 ucts, the duration of smoking, pack years, 

9 and whether the claimant has quit smoking 

10 and for how long; 

11 (ii) the age of the claimant at diag12 nosis with claim values increased propor13 tionately for claimants who are younger 

14 than the average life span and reduced for 

15 those who are older; and 

16 (iii) the level and duration of asbestos 

17 exposure with those receiving the highest 

18 total dose (level x duration) receiving 

19 greater values. 

20 (B) DETERMINATION OF EXPOSURE.—Lev21 els of exposure shall be based on research in the 

22 fields of epidemiology and industrial hygiene. 

23 (4) MEDICAL MONITORING.—An asbestos claim24 ant with asymptomatic exposure, based on the cri25 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 (5) COST-OF-LIVING ADJUSTMENT.—

4 (A) IN GENERAL.—Beginning January 1, 

5 2006, 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 2004. 

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 sol-
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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) ACCELERATED PAYMENTS.—The Adminis11 trator shall develop guidelines to provide for acceler12 ated payments to asbestos claimants who are meso13 thelioma victims and who are alive on the date on 

14 which the Administrator receives notice of the eligi15 bility of the claimant. Such payments shall be cred16 ited against the first regular payment under the 

17 structured payment plan for the claimant. 

18 (5) EXPEDITED PAYMENTS.—The Adminis19 trator shall develop guidelines to provide for expe20 dited payments to asbestos claimants in cases of exi21 gent circumstances or extreme hardship caused by 

22 asbestos-related injury. 

23 (6) ANNUITY.—An asbestos claimant may elect 

24 to receive any payments to which they are entitled 

25 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 SEC. 134. REDUCTION IN BENEFIT PAYMENTS FOR COLLAT20 ERAL SOURCES. 

21 (a) IN GENERAL.—The amount of an award other22 wise available to an asbestos claimant under this title shall 

23 be reduced by the amount of collateral source compensa24 tion. 
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1 (b) EXCLUSIONS.—In no case shall statutory benefits 

2 under workers’ compensation laws and veterans’ benefits 

3 programs be deemed as collateral source compensation for 

4 purposes of this section. 

5 TITLE II—ASBESTOS INJURY 

6 CLAIMS RESOLUTION FUND 

7 Subtitle A—Asbestos Defendants 

8 Funding Allocation 

9 SEC. 201. DEFINITIONS. 

10 In this subtitle, the following definitions shall apply: 

11 (1) AFFILIATED GROUP.—The term ‘‘affiliated 

12 group’’—

13 (A) means a defendant participant that is 

14 an ultimate parent and any person whose entire 

15 beneficial interest is directly or indirectly owned 

16 by that ultimate parent on the date of enact17 ment of this Act; and 

18 (B) shall not include any person that is a 

19 debtor or any direct or indirect majority-owned 

20 subsidiary of a debtor. 

21 (2) CLASS ACTION TRUST.—The term ‘‘class ac22 tion trust’’ means a trust or similar entity estab23 lished to hold assets for the payment of asbestos 

24 claims asserted against a debtor or participating de25 fendant, under a settlement that—
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1 (A) is a settlement of class action claims 

2 under rule 23 of the Federal Rules of Civil Pro3 cedure; and 

4 (B) has been approved by a final judgment 

5 of a United States district court before the date 

6 of enactment of this Act. 

7 (3) DEBTOR.—The term ‘‘debtor’’—

8 (A) means—

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

10 pending under a chapter of title 11, United 

11 States Code, on the date of enactment of 

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

13 period immediately preceding that date, ir14 respective of whether the debtor’s case 

15 under that title has been dismissed; and 

16 (ii) all of the direct or indirect major17 ity-owned subsidiaries of a person de18 scribed under clause (i), regardless of 

19 whether any such majority-owned sub20 sidiary has a case pending under title 11, 

21 United States Code; and 

22 (B) shall not include an entity—

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

24 United States Code, if a final decree clos-
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1 ing the estate shall have been entered be2 fore the date of enactment of this Act; or 

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

4 United States Code, if a plan of reorga5 nization for such entity shall have been 

6 confirmed by a duly entered order or judg7 ment of a court that is no longer subject 

8 to any appeal or judicial review, and the 

9 substantial consummation, as such term is 

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

11 United States Code, of such plan of reor12 ganization has occurred. 

13 (4) INDEMNIFIABLE COST.—The term 

14 ‘‘indemnifiable cost’’ means a cost, expense, debt, 

15 judgment, or settlement incurred with respect to an 

16 asbestos claim that, at any time before December 

17 31, 2002, was or could have been subject to indem18 nification, contribution, surety, or guaranty. 

19 (5) INDEMNITEE.—The term ‘‘indemnitee’’ 

20 means a person against whom any asbestos claim 

21 has been asserted before December 31, 2002, who 

22 has received from any other person, or on whose be23 half a sum has been paid by such other person to 

24 any third person, in settlement, judgment, defense, 

25 or indemnity in connection with an alleged duty with 
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1 respect to the defense or indemnification of such 

2 person concerning that asbestos claim, other than 

3 under a policy of insurance or reinsurance. 

4 (6) INDEMNITOR.—The term ‘‘indemnitor’’ 

5 means a person who has paid under a written agree6 ment at any time before December 31, 2002, a sum 

7 in settlement, judgment, defense, or indemnity to or 

8 on behalf of any person defending against an asbes9 tos claim, in connection with an alleged duty with 

10 respect to the defense or indemnification of such 

11 person concerning that asbestos claim, except that 

12 payments by an insurer or reinsurer under a con13 tract of insurance or reinsurance shall not make the 

14 insurer or reinsurer an indemnitor for purposes of 

15 this subtitle. 

16 (7) PRIOR ASBESTOS EXPENDITURES.—The 

17 term ‘‘prior asbestos expenditures’’—

18 (A) means the gross total amount paid by 

19 or on behalf of a person at any time before De20 cember 31, 2002, in settlement, judgment, de21 fense, or indemnity costs related to all asbestos 

22 claims against that person; 

23 (B) includes payments made by insurance 

24 carriers to or for the benefit of such person or 

25 on such person’s behalf with respect to such as-
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1 bestos claims, except as provided in section 

2 204(g); 

3 (C) shall not include any payment made by 

4 a person in connection with or as a result of 

5 changes in insurance reserves required by con6 tract or any activity or dispute related to insur7 ance coverage matters for asbestos-related li8 abilities; and 

9 (D) shall not include any payment made by 

10 or on behalf of persons who are or were com11 mon carriers by railroad for asbestos claims 

12 brought under the Act of April 22, 1908 (45 

13 U.S.C. 51 et seq.), commonly known as the 

14 Federal Employers’ Liability Act, as a result of 

15 operations as a common carrier by railroad, in16 cluding settlement, judgment, defense, or in17 demnity costs associated with these claims. 

18 (8) TRUST.—The term ‘‘trust’’ means any 

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

20 524(h) of title 11, United States Code, or estab21 lished in conjunction with an order issued under sec22 tion 105 of title 11, United States Code, established 

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

24 reorganization, which in whole or in part provides 

25 compensation for asbestos claims. 
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1 (9) ULTIMATE PARENT.—The term ‘‘ultimate 

2 parent’’ means a person—

3 (A) that owned, as of December 31, 2002, 

4 the entire beneficial interest, directly or indi5 rectly, of at least 1 other person; and 

6 (B) whose entire beneficial interest was not 

7 owned, on December 31, 2002, directly or indi8 rectly, by any other single person (other than a 

9 natural person). 

10 SEC. 202. AUTHORITY AND TIERS. 

11 (a) LIABILITY FOR PAYMENTS TO THE FUND.—

12 (1) IN GENERAL.—Defendant participants shall 

13 be liable for payments to the Fund in accordance 

14 with this section based on tiers and subtiers as15 signed to defendant participants. 

16 (2) AGGREGATE PAYMENT OBLIGATIONS

17 LEVEL.—Subject only to section 204(m), and not18 withstanding any other provision of this Act, the 

19 total payments required of all defendant participants 

20 over the life of the Fund shall not exceed 

21 $90,000,000,000. The Administrator shall have the 

22 authority to allocate the payments required of the 

23 defendant participants among the tiers as provided 

24 in this title. 
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1 (3) ABILITY TO ENTER REORGANIZATION.—

2 Notwithstanding any other provision of this Act, all 

3 debtors that, together with all of their direct or indi4 rect majority-owned subsidiaries, have prior asbestos 

5 expenditures less than $1,000,000 may proceed with 

6 the filing, solicitation, and confirmation of a plan of 

7 reorganization that does not comply with the re8 quirements of this Act, including a trust and chan9 neling injunction. Any asbestos claim made in con10 junction with a plan of reorganization allowable 

11 under the preceding sentence shall be subject to sec12 tion 403(d) of this Act. 

13 (b) TIER I.—Tier I shall include all debtors that, to14 gether with all of their direct or indirect majority-owned 

15 subsidiaries, have prior asbestos expenditures greater than 

16 $1,000,000. 

17 (c) TREATMENT OF TIER I BUSINESS ENTITIES IN

18 BANKRUPTCY.—

19 (1) DEFINITION.—In this subsection, the term 

20 ‘‘bankrupt business entity’’ means a person that is 

21 not a natural person that—

22 (A) filed a petition for relief under chapter 

23 11, of title 11, United States Code, before Jan24 uary 1, 2003; 
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1 (B) has not confirmed a plan of reorga2 nization as of the date of enactment of this Act; 

3 and 

4 (C) the bankruptcy court presiding over 

5 the business entity’s case determines, after no6 tice and a hearing upon motion filed by the en7 tity within 30 days of the effective date of this 

8 Act, which motion shall be supported by—

9 (i) an affidavit or declaration of the 

10 Chief Executive Officer, Chief Financial 

11 Officer, or Chief Legal Officer of the busi12 ness entity; and 

13 (ii) copies of the entity’s public state14 ments and securities filings made in con15 nection with the entity’s filing for chapter 

16 11 protection that asbestos liability was 

17 not the sole or precipitating cause of the 

18 entity’s chapter 11 filing. Notice of such 

19 motion shall be as directed by the bank20 ruptcy court and the hearing shall be lim21 ited to consideration of the question of 

22 whether or not asbestos liability was the 

23 sole or precipitating cause of the entity’s 

24 chapter 11 filing. The bankruptcy court 

25 shall hold a hearing and make its deter-
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1 mination with respect to the motion within 

2 60 days after the date the motion is filed. 

3 In making its determination, the bank4 ruptcy court shall take into account the af5 fidavits, public statements, and securities 

6 filings, and other information, if any, sub7 mitted by the entity and all other facts and 

8 circumstances presented by an objecting 

9 party. Any review of this determination 

10 must be an expedited appeal and limited to 

11 whether the decision was against the 

12 weight of the evidence. 

13 (2) PROCEEDING WITH REORGANIZATION

14 PLAN.—A bankrupt business entity may proceed 

15 with the filing, solicitation, and confirmation of a 

16 plan of reorganization that does not comply with the 

17 requirements of this Act, including a trust and chan18 neling injunction described in section 524(g) of title 

19 11, United States Code, notwithstanding any other 

20 provisions of this Act, if—

21 (A) on request of a party in interest or on 

22 a motion of the court, and after a notice and 

23 a hearing, the bankruptcy court presiding over 

24 the chapter 11 case of the bankrupt business 

25 entity determines that—
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1 (i) confirmation is necessary to permit 

2 the reorganization of that entity and as3 sure that all creditors and that entity are 

4 treated fairly and equitably; and 

5 (ii) confirmation is clearly favored by 

6 the balance of the equities; and 

7 (B) an order confirming the plan of reor8 ganization is entered by the bankruptcy court 

9 within 9 months after the date of enactment of 

10 this Act or such longer period of time approved 

11 by the bankruptcy court for cause shown. 

12 (3) APPLICABILITY.—If the bankruptcy court 

13 does not make the required determination, or if an 

14 order confirming the plan is not entered within 9 

15 months after the effective date of this Act or such 

16 longer period of time approved by the bankruptcy 

17 court for cause shown, the provisions of this Act 

18 shall apply to the bankrupt business entity notwith19 standing the certification. Any timely appeal under 

20 title 11, United States Code, from a confirmation 

21 order entered during the applicable time period shall 

22 automatically extend the time during which this Act 

23 is inapplicable to the bankrupt business entity, until 

24 the appeal is fully and finally resolved. 

25 (4) OFFSETS.—
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1 (A) PAYMENTS BY INSURERS.—To the ex2 tent that a bankrupt business entity or debtor 

3 successfully confirms a plan of reorganization, 

4 including a trust, and channeling injunction 

5 that involves payments by insurers who are oth6 erwise subject to this Act as described in sec7 tion 524(g) of title 11, United States Code, an 

8 insurer who makes payments to the trust, shall 

9 obtain a dollar for dollar reduction in the 

10 amount otherwise payable by that insurer under 

11 this Act to the Fund. 

12 (B) CONTRIBUTIONS TO FUND.—Any cash 

13 payments by a bankrupt business entity, if any, 

14 to a trust described in section 524(g) of title 

15 11, United States Code, may be counted as a 

16 contribution to the Fund. 

17 (d) TIERS II THROUGH VI.—Except as provided in 

18 subsection (b) of this section and section 204, persons or 

19 affiliated groups are included in Tier II, III, IV, V, or 

20 VI according to the prior asbestos expenditures paid by 

21 such persons or affiliated groups as follows: 

22 (1) Tier II: $75,000,000 or greater. 

23 (2) Tier III: $50,000,000 or greater, but less 

24 than $75,000,000. 
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1 (3) Tier IV: $10,000,000 or greater, but less 

2 than $50,000,000. 

3 (4) Tier V: $5,000,000 or greater, but less than 

4 $10,000,000. 

5 (5) Tier VI: $1,000,000 or greater, but less 

6 than $5,000,000. 

7 (e) TIER PLACEMENT AND COSTS.—

8 (1) PERMANENT TIER PLACEMENT.—After a 

9 defendant participant or affiliated group is assigned 

10 to a tier and subtier under section 204(i)(6), the 

11 participant or affiliated group shall remain in that 

12 tier and subtier throughout the life of the Fund, re13 gardless of subsequent events, including—

14 (A) the filing of a petition under a chapter 

15 of title 11, United States Code; 

16 (B) a discharge of debt in bankruptcy; 

17 (C) the confirmation of a plan of reorga18 nization; or 

19 (D) the sale or transfer of assets to any 

20 other person or affiliated group, 

21 unless the Administrator finds that the information 

22 submitted by the participant or affiliated group to 

23 support its inclusion in that tier was inaccurate. 

24 (2) COSTS.—Payments to the Fund by all per25 sons that are the subject of a case under a chapter 
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1 of title 11, United States Code, after the date of en2 actment of this Act—

3 (A) shall constitute costs and expenses of 

4 administration of the case under section 503 of 

5 title 11, United States Code, and shall be pay6 able in accordance with the payment provisions 

7 under this subtitle notwithstanding the pend8 ency of the case under that title 11; 

9 (B) shall not be stayed or affected as to 

10 enforcement or collection by any stay or injunc11 tion power of any court; and 

12 (C) shall not be impaired or discharged in 

13 any current or future case under title 11, 

14 United States Code. 

15 (f) SUPERSEDING PROVISIONS.—

16 (1) IN GENERAL.—All of the following shall be 

17 superseded in their entireties by this Act: 

18 (A) The treatment of any asbestos claim in 

19 any plan of reorganization with respect to any 

20 debtor included in Tier I. 

21 (B) Any asbestos claim against any debtor 

22 included in Tier I. 

23 (C) Any agreement, understanding, or un24 dertaking by any such debtor or any third party 

25 with respect to the treatment of any asbestos 
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1 claim filed in a debtor’s bankruptcy case or 

2 with respect to a debtor before the date of en3 actment of this Act, whenever such debtor’s 

4 case is either still pending, if such case is pend5 ing under a chapter other than chapter 11 of 

6 title 11, United States Code, or subject to con7 firmation or substantial consummation of a 

8 plan of reorganization under chapter 11 of title 

9 11, United States Code. 

10 (2) PRIOR AGREEMENTS OF NO EFFECT.—Any 

11 plan of reorganization, agreement, understanding, or 

12 undertaking by any debtor or any third party under 

13 paragraph (1) of this subsection, to the extent it re14 lates to any asbestos claim, shall be of no force or 

15 effect, and no person shall have any right or claim 

16 with respect to any of the foregoing. 

17 SEC. 203. SUBTIERS. 

18 (a) IN GENERAL.—

19 (1) SUBTIER LIABILITY.—Except as otherwise 

20 provided under subsections (b), (d), and (l) of sec21 tion 204, persons or affiliated groups shall be in22 cluded within Tiers I through VII and shall pay 

23 amounts to the Fund in accordance with this sec24 tion. 

25 (2) REVENUES.—
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1 (A) IN GENERAL.—For purposes of this 

2 section, revenues shall be determined in accord3 ance with generally accepted accounting prin4 ciples, consistently applied, using the amount 

5 reported as revenues in the annual report filed 

6 with the Securities and Exchange Commission 

7 in accordance with the Securities Exchange Act 

8 of 1934 (15 U.S.C. 78a et seq.) for the most 

9 recent fiscal year ending on or before December 

10 31, 2002. If the defendant participant or affili11 ated group does not file reports with the Securi12 ties and Exchange Commission, revenues shall 

13 be the amount that the defendant participant or 

14 affiliated group would have reported as reve15 nues under the rules of the Securities and Ex16 change Commission in the event that it had 

17 been required to file. 

18 (B) INSURANCE PREMIUMS.—Any portion 

19 of revenues of a defendant participant that is 

20 derived from insurance premiums shall not be 

21 used to calculate the payment obligation of that 

22 defendant participant under this subtitle. 

23 (C) DEBTORS.—Each debtor’s revenues 

24 shall include the revenues of the debtor and all 

25 of the direct or indirect majority-owned subsidi-
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1 aries of that debtor, except that the pro forma 

2 revenues of a person that is included in Subtier 

3 2 of Tier I shall not be included in calculating 

4 the revenues of any debtor that is a direct or 

5 indirect majority owner of such Subtier 2 per6 son. If a debtor or affiliated group includes a 

7 person in respect of whose liabilities for asbes8 tos claims a class action trust has been estab9 lished, there shall be excluded from the 2002 

10 revenues of such debtor or affiliated group—

11 (i) all revenues of the person in re12 spect of whose liabilities for asbestos 

13 claims the class action trust was estab14 lished; and 

15 (ii) all revenues of the debtor and af16 filiated group attributable to the historical 

17 business operations or assets of such per18 son, regardless of whether such business 

19 operations or assets were owned or con20 ducted during the year 2002 by such per21 son or by any other person included within 

22 such debtor and affiliated group. 

23 (b) TIER I SUBTIERS.—
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1 (1) IN GENERAL.—Each debtor in Tier I shall 

2 be included in subtiers and shall pay amounts to the 

3 Fund as provided under this section. 

4 (2) SUBTIER 1.—

5 (A) IN GENERAL.—All persons that are 

6 debtors with prior asbestos expenditures of 

7 $1,000,000 or greater, shall be included in 

8 Subtier 1. 

9 (B) PAYMENT.—Each debtor included in 

10 Subtier 1 shall pay on an annual basis 1.5184 

11 percent of the debtor’s 2002 revenues. 

12 (C) OTHER ASSETS.—The Administrator, 

13 at the sole discretion of the Administrator, may 

14 allow a Subtier 1 debtor to satisfy its funding 

15 obligation under this paragraph with assets 

16 other than cash if the Administrator determines 

17 that requiring an all-cash payment of the debt18 or’s funding obligation would render the debt19 or’s reorganization infeasible. 

20 (D) LIABILITY.—

21 (i) IN GENERAL.—If a person who is 

22 subject to a case pending under a chapter 

23 of title 11, United States Code, as defined 

24 in section 201(3)(A)(i), does not pay when 

25 due any payment obligation for the debtor, 
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1 the Administrator shall have the right to 

2 seek payment of all or any portion of the 

3 entire amount due (as well as any other 

4 amount for which the debtor may be liable 

5 under sections 223 and 224) from any of 

6 the direct or indirect majority-owned sub7 sidiaries under section 201(3)(A)(ii). 

8 (ii) CAUSE OF ACTION.—Notwith9 standing section 221(e), this Act shall not 

10 preclude actions among persons within a 

11 debtor under section 201(3)(A) (i) and (ii) 

12 with respect to the payment obligations 

13 under this Act. 

14 (3) SUBTIER 2.—

15 (A) IN GENERAL.—Notwithstanding para16 graph (2), all persons that are debtors that 

17 have no material continuing business operations 

18 but hold cash or other assets that have been al19 located or earmarked for the settlement of as20 bestos claims shall be included in Subtier 2. 

21 (B) ASSIGNMENT OF ASSETS.—Not later 

22 than 90 days after the date of enactment of 

23 this Act, each person included in Subtier 2 shall 

24 assign all of its assets to the Fund. 

25 (4) SUBTIER 3.—
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1 (A) IN GENERAL.—Notwithstanding para2 graph (2), all persons that are debtors other 

3 than those included in Subtier 2, which have no 

4 material continuing business operations and no 

5 cash or other assets allocated or earmarked for 

6 the settlement of any asbestos claim, shall be 

7 included in Subtier 3. 

8 (B) ASSIGNMENT OF UNENCUMBERED AS9 SETS.—Not later than 90 days after the date of 

10 enactment of this Act, each person included in 

11 Subtier 3 shall contribute an amount equal to 

12 50 percent of its total unencumbered assets. 

13 (C) CALCULATION OF UNENCUMBERED AS14 SETS.—Unencumbered assets shall be cal15 culated as the Subtier 3 person’s total assets, 

16 excluding insurance-related assets, less—

17 (i) all allowable administrative ex18 penses; 

19 (ii) allowable priority claims under 

20 section 507 of title 11, United States 

21 Code; and 

22 (iii) allowable secured claims. 

23 (5) CLASS ACTION TRUST.—The assets of any 

24 class action trust that has been established in re25 spect of the liabilities for asbestos claims of any per-
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1 son included within a debtor and affiliated group 

2 that has been included in Tier I (exclusive of any as3 sets needed to pay previously incurred expenses and 

4 asbestos claims reduced to a final order or judgment 

5 within the meaning of section 403(d)(1) before the 

6 date of enactment of this Act) shall be transferred 

7 to the Fund not later than 6 months after the date 

8 of enactment of this Act. 

9 (c) TIER II SUBTIERS.—

10 (1) IN GENERAL.—Each person or affiliated 

11 group in Tier II shall be included in 1 of the 5 

12 subtiers of Tier II, based on the person’s or affili13 ated group’s revenues. Such subtiers shall each con14 tain as close to an equal number of total persons 

15 and affiliated groups as possible, with—

16 (A) those persons or affiliated groups with 

17 the highest revenues included in Subtier 1; 

18 (B) those persons or affiliated groups with 

19 the next highest revenues included in Subtier 2; 

20 (C) those persons or affiliated groups with 

21 the lowest revenues included in Subtier 5; 

22 (D) those persons or affiliated groups with 

23 the next lowest revenues included in Subtier 4; 

24 and 
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1 (E) those persons or affiliated groups re2 maining included in Subtier 3. 

3 (2) PAYMENTS.—Each person or affiliated 

4 group within each subtier shall pay, on an annual 

5 basis, the following: 

6 (A) Subtier 1: $27,500,000. 

7 (B) Subtier 2: $24,750,000. 

8 (C) Subtier 3: $22,000,000. 

9 (D) Subtier 4: $19,250,000. 

10 (E) Subtier 5: $16,500,000. 

11 (d) TIER III SUBTIERS.—

12 (1) IN GENERAL.—Each person or affiliated 

13 group in Tier III shall be included in 1 of the 5 

14 subtiers of Tier III, based on the person’s or affili15 ated group’s revenues. Such subtiers shall each con16 tain as close to an equal number of total persons 

17 and affiliated groups as possible, with—

18 (A) those persons or affiliated groups with 

19 the highest revenues included in Subtier 1; 

20 (B) those persons or affiliated groups with 

21 the next highest revenues included in Subtier 2; 

22 (C) those persons or affiliated groups with 

23 the lowest revenues included in Subtier 5; 
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1 (D) those persons or affiliated groups with 

2 the next lowest revenues included in Subtier 4; 

3 and 

4 (E) those persons or affiliated groups re5 maining included in Subtier 3. 

6 (2) PAYMENTS.—Each person or affiliated 

7 group within each subtier shall pay, on an annual 

8 basis, the following: 

9 (A) Subtier 1: $16,500,000. 

10 (B) Subtier 2: $13,750,000. 

11 (C) Subtier 3: $11,000,000. 

12 (D) Subtier 4: $8,250,000. 

13 (E) Subtier 5: $5,500,000. 

14 (e) TIER IV SUBTIERS.—

15 (1) IN GENERAL.—Each person or affiliated 

16 group in Tier IV shall be included in 1 of the 4 

17 subtiers of Tier IV, based on the person’s or affili18 ated group’s revenues. Such subtiers shall each con19 tain as close to an equal number of total persons 

20 and affiliated groups as possible, with those persons 

21 or affiliated groups with the highest revenues in 

22 Subtier 1, those with the lowest revenues in Subtier 

23 4. Those persons or affiliated groups with the high24 est revenues among those remaining will be included 

25 in Subtier 2 and the rest in Subtier 3. 
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1 (2) PAYMENT.—Each person or affiliated group 

2 within each subtier shall pay, on an annual basis, 

3 the following: 

4 (A) Subtier 1: $3,850,000. 

5 (B) Subtier 2: $2,475,000. 

6 (C) Subtier 3: $1,650,000. 

7 (D) Subtier 4: $550,000. 

8 (f) TIER V SUBTIERS.—

9 (1) IN GENERAL.—Each person or affiliated 

10 group in Tier V shall be included in 1 of the 3 

11 subtiers of Tier V, based on the person’s or affili12 ated group’s revenues. Such subtiers shall each con13 tain as close to an equal number of total persons 

14 and affiliated groups as possible, with those persons 

15 or affiliated groups with the highest revenues in 

16 Subtier 1, those with the lowest revenues in Subtier 

17 3, and those remaining in Subtier 2. 

18 (2) PAYMENT.—Each person or affiliated group 

19 within each subtier shall pay, on an annual basis, 

20 the following: 

21 (A) Subtier 1: $1,100,000. 

22 (B) Subtier 2: $550,000. 

23 (C) Subtier 3: $220,000. 

24 (g) TIER VI SUBTIERS.—
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1 (1) IN GENERAL.—Each person or affiliated 

2 group in Tier VI shall be included in 1 of the 3 

3 subtiers of Tier VI, 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 3, and those remaining in Subtier 2. 

10 (2) PAYMENT.—Each person or affiliated group 

11 within each subtier shall pay, on an annual basis, 

12 the following: 

13 (A) Subtier 1: $550,000. 

14 (B) Subtier 2: $275,000. 

15 (C) Subtier 3: $110,000. 

16 (h) TIER VII.—

17 (1) IN GENERAL.—Notwithstanding prior as18 bestos expenditures that might qualify a person or 

19 affiliated group to be included in Tiers II, III, IV, 

20 V, or VI, a person or affiliated group shall also be 

21 included in Tier VII, if the person or affiliated 

22 group—

23 (A) is or has at any time been subject to 

24 asbestos claims brought under the Federal Em25 ployers’ Liability Act (45 U.S.C. 51 et seq.) as 
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1 a result of operations as a common carrier by 

2 railroad; and 

3 (B) has paid (including any payments 

4 made by others on behalf of such person or af5 filiated group) not less than $5,000,000 in set6 tlement, judgment, defense, or indemnity costs 

7 relating to such claims. 

8 (2) ADDITIONAL AMOUNT.—The payment re9 quirement for persons or affiliated groups included 

10 in Tier VII shall be in addition to any payment re11 quirement applicable to such person or affiliated 

12 group under Tiers II through VI. 

13 (3) SUBTIER 1.—Each person or affiliated 

14 group in Tier VII with revenues of $5,000,000,000 

15 or more is included in Subtier 1 and shall make an16 nual payments of $10,000,000 to the Fund. 

17 (4) SUBTIER 2.—Each person or affiliated 

18 group in Tier VII with revenues of less than 

19 $5,000,000,000, but not less than $3,000,000,000 is 

20 included in Subtier 2 and shall make annual pay21 ments of $5,000,000 to the Fund. 

22 (5) SUBTIER 3.—Each person or affiliated 

23 group in Tier VII with revenues of less than 

24 $3,000,000,000, but not less than $500,000,000 is 
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1 included in Subtier 3 and shall make annual pay2 ments of $500,000 to the Fund. 

3 (6) JOINT VENTURE REVENUES AND LIABIL4 ITY.—

5 (A) REVENUES.—For purposes of this sub6 section, the revenues of a joint venture shall be 

7 included on a pro rata basis reflecting relative 

8 joint ownership to calculate the revenues of the 

9 parents of that joint venture. The joint venture 

10 shall not be responsible for a contribution 

11 amount under this subsection. 

12 (B) LIABILITY.—For purposes of this sub13 section, the liability under the Act of April 22, 

14 1908 (45 U.S.C. 51 et seq.), commonly known 

15 as the Federal Employers’ Liability Act, shall 

16 be attributed to the parent owners of the joint 

17 venture on a pro rata basis, reflecting their rel18 ative share of ownership. The joint venture 

19 shall not be responsible for a payment amount 

20 under this provision. 

21 SEC. 204. ASSESSMENT ADMINISTRATION. 

22 (a) IN GENERAL.—Subject to subsection (m), each 

23 defendant participant or affiliated group shall pay to the 

24 Fund in the amounts provided under this subtitle as ap-
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1 propriate for its tier and subtier each year until the earlier 

2 to occur of the following: 

3 (1) The participant or affiliated group has sat4 isfied its obligations under this subtitle during the 

5 first 23 annual payment cycles of the operation of 

6 the Fund. 

7 (2) The amount received by the Fund from de8 fendant participants, excluding any amounts rebated 

9 to defendant participants under subsection (d), 

10 equals the maximum aggregate payment obligation 

11 of section 202(a)(2). 

12 (b) SMALL BUSINESS EXEMPTION.—Notwith13 standing any other provision of this subtitle, a person or 

14 affiliated group that is a small business concern (as de15 fined under section 3 of the Small Business Act (15 

16 U.S.C. 632)), on December 31, 2002, is exempt from any 

17 payment requirement under this subtitle and shall not be 

18 included in the subtier allocations under section 203. 

19 (c) PROCEDURES.—The Administrator shall pre20 scribe procedures on how amounts payable under this sub21 title are to be paid, including, to the extent the Adminis22 trator determines appropriate, procedures relating to pay23 ment in installments. 

24 (d) ADJUSTMENTS.—
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1 (1) IN GENERAL.—Under expedited procedures 

2 established by the Administrator, a defendant partic3 ipant may seek adjustment of the amount of its pay4 ment obligation based on severe financial hardship 

5 or demonstrated inequity. The Administrator may 

6 determine whether to grant an adjustment and the 

7 size of any such adjustment, in accordance with this 

8 subsection. A defendant participant has a right to 

9 obtain a rehearing of the Administrator’s determina10 tion under this subsection under the procedures pre11 scribed in subsection (i)(10). The Administrator may 

12 adjust a defendant participant’s payment obligations 

13 under this subsection, either by forgiving the rel14 evant portion of the otherwise applicable payment 

15 obligation or by providing relevant rebates from the 

16 defendant hardship and inequity adjustment account 

17 created under subsection (j) after payment of the 

18 otherwise applicable payment obligation, at the dis19 cretion of the Administrator. 

20 (2) FINANCIAL HARDSHIP ADJUSTMENTS.—

21 (A) IN GENERAL.—A defendant partici22 pant may apply for an adjustment based on fi23 nancial hardship at any time during the period 

24 in which a payment obligation to the Fund re25 mains outstanding and may qualify for such ad-
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1 justment by demonstrating that the amount of 

2 its payment obligation under the statutory allo3 cation would constitute a severe financial hard4 ship. 

5 (B) TERM.—Subject to the annual avail6 ability of funds in the defendant hardship and 

7 inequity adjustment account established under 

8 subsection (j), a financial hardship adjustment 

9 under this subsection shall have a term of 3 

10 years. 

11 (C) RENEWAL.—After an initial hardship 

12 adjustment is granted under this paragraph, a 

13 defendant participant may renew its hardship 

14 adjustment by demonstrating that it remains 

15 justified. 

16 (D) REINSTATEMENT.—Following the ex17 piration of the hardship adjustment period pro18 vided for under this section and during the 

19 funding period prescribed under subsection (a) 

20 or (m), the Administrator shall annually deter21 mine whether there has been a material change 

22 in the financial condition of the defendant par23 ticipant such that the Administrator may, con24 sistent with the policies and legislative intent 

25 underlying this Act, reinstate under terms and 
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1 conditions established by the Administrator any 

2 part or all of the defendant participant’s pay3 ment obligation under the statutory allocation 

4 that was not paid during the hardship adjust5 ment term. 

6 (3) INEQUITY ADJUSTMENTS.—

7 (A) IN GENERAL.—A defendant partici8 pant—

9 (i) may qualify for an adjustment 

10 based on inequity by demonstrating that 

11 the amount of its payment obligation 

12 under the statutory allocation is exception13 ally inequitable—

14 (I) when measured against the 

15 amount of the likely cost to the de16 fendant participant net of insurance 

17 of its future liability in the tort sys18 tem in the absence of the Fund; or 

19 (II) when compared to the me20 dian payment rate for all defendant 

21 participants in the same tier; or 

22 (III) when measured against the 

23 percentage of the prior asbestos ex24 penditures of the defendant that were 

25 incurred with respect to claims that 
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1 neither resulted in an adverse judg2 ment against the defendant, nor were 

3 the subject of a settlement that re4 quired a payment to a plaintiff by or 

5 on behalf of that defendant; and 

6 (ii) shall qualify for a two-tier main 

7 tier and a two-tier subtier adjustment re8 ducing the defendant participant’s pay9 ment obligation based on inequity by dem10 onstrating that not less than 95 percent of 

11 such person’s prior asbestos expenditures 

12 arose from claims related to the manufac13 ture and sale of railroad locomotives and 

14 related products, so long as such person’s 

15 manufacture and sale of railroad loco16 motives and related products is temporally 

17 and causally remote. For purposes of this 

18 clause, a person’s manufacture and sale of 

19 railroad locomotives and related products 

20 shall be deemed to be temporally and caus21 ally remote if the asbestos claims histori22 cally and generally filed against such per23 son relate to the manufacture and sale of 

24 railroad locomotives and related products 
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1 by an entity dissolved more than 25 years 

2 before the date of enactment of this Act. 

3 (B) PAYMENT RATE.—For purposes of 

4 subparagraph (A), the payment rate of a de5 fendant participant is the payment amount of 

6 the defendant participant as a percentage of 

7 such defendant participant’s gross revenues for 

8 the year ending December 31, 2002. 

9 (C) TERM.—Subject to the annual avail10 ability of funds in the defendant hardship and 

11 inequity adjustment account established under 

12 subsection (j), an inequity adjustment under 

13 this subsection shall have a term of 3 years. 

14 (D) RENEWAL.—A defendant participant 

15 may renew an inequity adjustment every 3 

16 years by demonstrating that the adjustment re17 mains justified. 

18 (E) REINSTATEMENT.—

19 (i) IN GENERAL.—Following the ter20 mination of an inequity adjustment under 

21 subparagraph (A), and during the funding 

22 period prescribed under subsection (a) or 

23 (m), the Administrator shall annually de24 termine whether there has been a material 

25 change in conditions which would support 
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1 a finding that the amount of the defendant 

2 participant’s payment under the statutory 

3 allocation was not inequitable. Based on 

4 this determination, the Administrator may, 

5 consistent with the policies and legislative 

6 intent underlying this Act, reinstate any or 

7 all of the payment obligations of the de8 fendant participant as if the inequity ad9 justment had not been granted for that 3-

10 year period. 

11 (ii) TERMS AND CONDITIONS.—In the 

12 event of a reinstatement under clause (i), 

13 the Administrator may require the defend14 ant participant to pay any part or all of 

15 amounts not paid due to the inequity ad16 justment on such terms and conditions as 

17 established by the Administrator. 

18 (4) LIMITATION ON ADJUSTMENTS.—The ag19 gregate total of financial hardship adjustments 

20 under paragraph (2) and inequity adjustments under 

21 paragraph (3) in effect in any given year shall not 

22 exceed $250,000,000, except to the extent additional 

23 monies are available for such adjustments as a re24 sult of carryover of prior years’ funds under sub-
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1 section (j)(3) or as a result of monies being made 

2 available in that year under subsection (k)(1)(A). 

3 (5) ADVISORY PANELS.—

4 (A) APPOINTMENT.—The Administrator 

5 shall appoint a Financial Hardship Adjustment 

6 Panel and an Inequity Adjustment Panel to ad7 vise the Administrator in carrying out this sub8 section. 

9 (B) MEMBERSHIP.—The membership of 

10 the panels appointed under subparagraph (A) 

11 may overlap. 

12 (C) COORDINATION.—The panels ap13 pointed under subparagraph (A) shall coordi14 nate their deliberations and advice. 

15 (e) LIMITATION ON LIABILITY.—The liability of each 

16 defendant participant to pay to the Fund shall be limited 

17 to the payment obligations under this Act, and, except as 

18 provided in subsection (f) and section 203(b)(2)(D), no 

19 defendant participant shall have any liability for the pay20 ment obligations of any other defendant participant. 

21 (f) CONSOLIDATION OF PAYMENTS.—

22 (1) IN GENERAL.—For purposes of determining 

23 the payment levels of defendant participants, any af24 filiated group including 1 or more defendant partici25 pants may irrevocably elect, as part of the submis-
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1 sions to be made under paragraphs (1) and (3) of 

2 subsection (i), to report on a consolidated basis all 

3 of the information necessary to determine the pay4 ment level under this subtitle and pay to the Fund 

5 on a consolidated basis. 

6 (2) ELECTION.—If an affiliated group elects 

7 consolidation as provided in this subsection—

8 (A) for purposes of this Act other than 

9 this subsection, the affiliated group shall be 

10 treated as if it were a single participant, includ11 ing with respect to the assessment of a single 

12 annual payment under this subtitle for the en13 tire affiliated group; 

14 (B) the ultimate parent of the affiliated 

15 group shall prepare and submit each submission 

16 to be made under subsection (i) on behalf of the 

17 entire affiliated group and shall be solely liable, 

18 as between the Administrator and the affiliated 

19 group only, for the payment of the annual 

20 amount due from the affiliated group under this 

21 subtitle, except that, if the ultimate parent does 

22 not pay when due any payment obligation for 

23 the affiliated group, the Administrator shall 

24 have the right to seek payment of all or any 

25 portion of the entire amount due (as well as 
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1 any other amount for which the affiliated group 

2 may be liable under sections 223 and 224) from 

3 any member of the affiliated group; 

4 (C) all members of the affiliated group 

5 shall be identified in the submission under sub6 section (i) and shall certify compliance with this 

7 subsection and the Administrator’s regulations 

8 implementing this subsection; and 

9 (D) the obligations under this subtitle shall 

10 not change even if, after the date of enactment 

11 of this Act, the beneficial ownership interest be12 tween any members of the affiliated group shall 

13 change. 

14 (3) CAUSE OF ACTION.—Notwithstanding sec15 tion 221(e), this Act shall not preclude actions 

16 among persons within an affiliated group with re17 spect to the payment obligations under this Act. 

18 (g) DETERMINATION OF PRIOR ASBESTOS EXPENDI19 TURES.—

20 (1) IN GENERAL.—For purposes of determining 

21 a defendant participant’s prior asbestos expendi22 tures, the Administrator shall prescribe such rules 

23 as may be necessary or appropriate to assure that 

24 payments by indemnitors before December 31, 2002, 

25 shall be counted as part of the indemnitor’s prior as-
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1 bestos expenditures, rather than the indemnitee’s 

2 prior asbestos expenditures, in accordance with this 

3 subsection. 

4 (2) INDEMNIFIABLE COSTS.—If an indemnitor 

5 has paid or reimbursed to an indemnitee any 

6 indemnifiable cost or otherwise made a payment on 

7 behalf of or for the benefit of an indemnitee to a 

8 third party for an indemnifiable cost before Decem9 ber 31, 2002, the amount of such indemnifiable cost 

10 shall be solely for the account of the indemnitor for 

11 purposes under this Act. 

12 (3) INSURANCE PAYMENTS.—When computing 

13 the prior asbestos expenditures with respect to an 

14 asbestos claim, any amount paid or reimbursed by 

15 insurance shall be solely for the account of the 

16 indemnitor, even if the indemnitor would have no di17 rect right to the benefit of the insurance, if—

18 (A) such insurance has been paid or reim19 bursed to the indemnitor or the indemnitee, or 

20 paid on behalf of or for the benefit of the 

21 indemnitee; and 

22 (B) the indemnitor has either, with respect 

23 to such asbestos claim or any similar asbestos 

24 claim, paid or reimbursed to its indemnitee any 

25 indemnifiable cost or paid to any third party on 
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1 behalf of or for the benefit of the indemnitee 

2 any indemnifiable cost. 

3 (h) MINIMUM ANNUAL PAYMENTS.—

4 (1) IN GENERAL.—Except as provided under 

5 subsection (m), the aggregate annual payments of 

6 defendant participants to the Fund shall be at least 

7 $2,500,000,000 for each calendar year in the first 

8 23 years of the Fund, or until such shorter time as 

9 the condition set forth in subsection (a)(2) of this 

10 section is attained. 

11 (2) GUARANTEED PAYMENT ACCOUNT.—To the 

12 extent payments in accordance with sections 202 

13 and 203 (as modified by subsections (b), (d), (f) and 

14 (g) of this section) fail in any year to raise at least 

15 $2,500,000,000 net of any adjustments under sub16 section (d), the balance needed to meet this required 

17 minimum aggregate annual payment shall be ob18 tained from the defendant guaranteed payment ac19 count established under subsection (k). 

20 (3) GUARANTEED PAYMENT SURCHARGE.—To 

21 the extent the procedure set forth in paragraph (2) 

22 is insufficient to satisfy the required minimum ag23 gregate annual payment net of any adjustments 

24 under subsection (d), the Administrator may assess 
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1 a guaranteed payment surcharge under subsection 

2 (l). 

3 (i) PROCEDURES FOR MAKING PAYMENTS.—

4 (1) INITIAL YEAR: TIERS II–VI.—

5 (A) IN GENERAL.—Not later than 180 

6 days after enactment of this Act, each defend7 ant participant that is included in Tiers II, III, 

8 IV, V, or VI shall file with the Administrator—

9 (i) a statement of whether the defend10 ant participant irrevocably elects to report 

11 on a consolidated basis under subsection 

12 (f); 

13 (ii) a good faith estimate of its prior 

14 asbestos expenditures; 

15 (iii) a statement of its 2002 revenues, 

16 determined in accordance with section 

17 203(a)(2); and 

18 (iv) payment in the amount specified 

19 in section 203 for the lowest subtier of the 

20 tier within which the defendant participant 

21 falls, except that if the defendant partici22 pant, or the affiliated group including the 

23 defendant participant, had 2002 revenues 

24 exceeding $3,000,000,000, it or its affili25 ated group shall pay the amount specified 
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1 for Subtier 3 of Tiers II, III, or IV or 

2 Subtier 2 of Tiers V or VI, depending on 

3 the applicable Tier. 

4 (B) RELIEF.—The Administrator shall es5 tablish procedures to grant a defendant partici6 pant relief from its initial payment obligation 

7 where the participant shows that it is likely to 

8 qualify for a financial hardship adjustment, and 

9 that failure to provide interim relief would 

10 cause severe irreparable harm. The Administra11 tor’s refusal to grant such relief is subject to 

12 immediate judicial review under section 303. 

13 (2) INITIAL YEAR: TIER I.—Not later than 90 

14 days after enactment of this Act, each debtor shall 

15 file with the Administrator—

16 (A) a statement identifying the bankruptcy 

17 case(s) associated with the debtor; 

18 (B) a statement whether its prior asbestos 

19 expenditures exceed $1,000,000; 

20 (C) a statement whether it has material 

21 continuing business operations and, if not, 

22 whether it holds cash or other assets that have 

23 been allocated or earmarked for asbestos settle24 ments; 
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1 (D) in the case of debtors falling within 

2 Subtier 1 of Tier I, a statement of the debtor’s 

3 2002 revenues, determined in accordance with 

4 section 203(a)(2), and a payment under section 

5 203(b)(2)(B); 

6 (E) in the case of debtors falling within 

7 Subtier 2 of Tier I, an assignment of its assets 

8 under section 203(b)(3)(B); and 

9 (F) in the case of debtors falling within 

10 Subtier 3 of Tier I, a payment under section 

11 203(b)(4)(B), and a statement of how such 

12 payment was calculated. 

13 (3) INITIAL YEAR: TIER VII.—Not later than 90 

14 days after enactment of this Act, each defendant 

15 participant in Tier VII shall file with the Adminis16 trator—

17 (A) a good faith estimate of all payments 

18 of the type described in section 203(h)(1) (as 

19 modified by section 203(h)(6)); 

20 (B) a statement of revenues calculated in 

21 accordance with sections 203(a)(2) and 203(h); 

22 and 

23 (C) payment in the amount specified in 

24 section 203(h). 
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1 (4) NOTICE TO PARTICIPANTS.—Not later than 

2 240 days after enactment of this Act, the Adminis3 trator shall—

4 (A) directly notify all reasonably identifi5 able defendant participants of the requirement 

6 to submit information necessary to calculate the 

7 amount of any required payment to the Fund; 

8 and 

9 (B) publish in the Federal Register a no10 tice setting forth the criteria in this Act, and as 

11 prescribed by the Administrator in accordance 

12 with this Act, for paying under this subtitle as 

13 a defendant participant and requiring any per14 son who may be a defendant participant to sub15 mit such information. 

16 (5) RESPONSE REQUIRED.—

17 (A) IN GENERAL.—Any person who re18 ceives notice under paragraph (4)(A), and any 

19 other person meeting the criteria specified in 

20 the notice published under paragraph (4)(B), 

21 shall provide the Administrator with an address 

22 to send any notice from the Administrator in 

23 accordance with this Act and all the informa24 tion required by the Administrator in accord-
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1 ance with this subsection no later than the ear2 lier of—

3 (i) 30 days after the receipt of direct 

4 notice; or 

5 (ii) 30 days after the publication of 

6 notice in the Federal Register. 

7 (B) CERTIFICATION.—The response sub8 mitted under subparagraph (A) shall be signed 

9 by a responsible corporate officer, general part10 ner, proprietor, or individual of similar author11 ity, who shall certify under penalty of law the 

12 completeness and accuracy of the information 

13 submitted. 

14 (C) CONSENT TO AUDIT AUTHORITY.—The 

15 response submitted under subparagraph (A) 

16 shall include, on behalf of the defendant partici17 pant or affiliated group, a consent to the Ad18 ministrator’s audit authority under section 

19 221(d). 

20 (6) NOTICE OF INITIAL DETERMINATION.—

21 (A) IN GENERAL.—Not later than 60 days 

22 after receiving a response under paragraph (5), 

23 the Administrator shall send the person a notice 

24 of initial determination identifying the tier and 

25 subtier, if any, into which the person falls and 
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1 the annual payment obligation, if any, to the 

2 Fund, which determination shall be based on 

3 the information received from the person under 

4 this subsection and any other pertinent infor5 mation available to the Administrator and iden6 tified to the defendant participant. 

7 (B) NO RESPONSE; INCOMPLETE RE8 SPONSE.—If no response in accordance with 

9 paragraph (5) is received from a defendant par10 ticipant, or if the response is incomplete, the 

11 initial determination shall be based on the best 

12 information available to the Administrator. 

13 (C) PAYMENTS.—Within 30 days of receiv14 ing a notice of initial determination requiring 

15 payment, the defendant participant shall pay 

16 the Administrator the amount required by the 

17 notice, after deducting any previous payment 

18 made by the participant under this subsection. 

19 If the amount that the defendant participant is 

20 required to pay is less than any previous pay21 ment made by the participant under this sub22 section, the Administrator shall credit any ex23 cess payment against the future payment obli24 gations of that defendant participant. The 

25 pendency of a petition for rehearing under 
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1 paragraph (10) shall not stay the obligation of 

2 the participant to make the payment specified 

3 in the Administrator’s notice. 

4 (7) EXEMPTIONS FOR INFORMATION RE5 QUIRED.—

6 (A) PRIOR ASBESTOS EXPENDITURES.—In 

7 lieu of submitting information related to prior 

8 asbestos expenditures as may be required for 

9 purposes of this subtitle, a non-debtor defend10 ant participant may consent to be assigned to 

11 Tier II. 

12 (B) REVENUES.—In lieu of submitting in13 formation related to revenues as may be re14 quired for purposes of this subtitle, a non-debt15 or defendant participant may consent to be as16 signed to Subtier 1 of the defendant partici17 pant’s applicable tier. 

18 (8) NEW INFORMATION.—

19 (A) EXISTING PARTICIPANT.—The Admin20 istrator shall adopt procedures for requiring ad21 ditional payment, or refunding amounts already 

22 paid, based on new information received. 

23 (B) ADDITIONAL PARTICIPANT.—If the 

24 Administrator, at any time, receives information 

25 that an additional person may qualify as a de-
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1 fendant participant, the Administrator shall re2 quire such person to submit information nec3 essary to determine whether that person is re4 quired to make payments, and in what amount, 

5 under this subtitle and shall make any deter6 mination or take any other act consistent with 

7 this Act based on such information or any other 

8 information available to the Administrator with 

9 respect to such person. 

10 (9) SUBPOENAS.—The Administrator may re11 quest the Attorney General to subpoena persons to 

12 compel testimony, records, and other information 

13 relevant to its responsibilities under this section. The 

14 Attorney General may enforce such subpoena in ap15 propriate proceedings in the United States district 

16 court for the district in which the person to whom 

17 the subpoena was addressed resides, was served, or 

18 transacts business. 

19 (10) REHEARING.—A defendant participant has 

20 a right to obtain rehearing of the Administrator’s 

21 determination under this subsection of the applicable 

22 tier or subtier and of the Administrator’s determina23 tion under subsection (d) of a financial hardship or 

24 inequity adjustment, if the request for rehearing is 

25 filed within 30 days after the defendant participant’s 
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1 receipt of notice from the Administrator of the de2 termination. A defendant participant may not file an 

3 action under section 303 unless the defendant par4 ticipant requests a rehearing under this paragraph. 

5 (j) DEFENDANT HARDSHIP AND INEQUITY ADJUST6 MENT ACCOUNT.—

7 (1) IN GENERAL.—To the extent the total pay8 ments by defendant participants in any given year 

9 exceed the minimum aggregate annual payments 

10 under subsection (h) of this section, excess monies 

11 up to a maximum of $250,000,000 in any such year 

12 shall be placed in a defendant hardship and inequity 

13 adjustment account established within the Fund by 

14 the Administrator. 

15 (2) USE OF ACCOUNT MONIES.—Monies from 

16 the defendant hardship and inequity adjustment ac17 count shall be preserved and administered like the 

18 remainder of the Fund, but shall be reserved and 

19 may be used only—

20 (A) to make up for any relief granted to a 

21 defendant participant for severe financial hard22 ship or demonstrated inequity under subsection 

23 (d) of this section or to reimburse any defend24 ant participant granted such relief after its pay25 ment of the amount otherwise due; and 
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1 (B) if the condition set forth in subsection 

2 (a)(2) of this section is met, for any purpose 

3 that the Fund may serve under this Act, unless 

4 the Administrator shall have published a final 

5 certification requiring a contingent call under 

6 subsection (m)(3)(D). 

7 (3) CARRYOVER OF UNUSED FUNDS.—To the 

8 extent the Administrator does not, in any given year, 

9 use all of the funds allocated to the account under 

10 paragraph (1) for adjustments granted under sub11 section (d), remaining funds in the account shall be 

12 carried forward for use by the Administrator for ad13 justments in subsequent years. 

14 (k) DEFENDANT GUARANTEED PAYMENT AC15 COUNT.—

16 (1) IN GENERAL.—Subject to subsections (h) 

17 and (j), in the event there are excess monies paid by 

18 defendant participants in any given year, such mon19 ies—

20 (A) may be used to provide additional ad21 justments under subsection (d), up to a max22 imum aggregate of $50,000,000 in such year; 

23 and 

24 (B) to the extent not used under subpara25 graph (A), shall be placed in a defendant guar-
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1 anteed payment account established within the 

2 Fund by the Administrator. 

3 (2) USE OF ACCOUNT MONIES.—Monies from 

4 the defendant guaranteed payment account shall be 

5 preserved and administered like the remainder of the 

6 Fund, but shall be reserved and may be used only—

7 (A) to ensure the minimum aggregate an8 nual payment set forth in subsection (h) net of 

9 any adjustments under subsection (d) is 

10 reached each year; and 

11 (B) if the condition set forth in subsection 

12 (a)(2) of this section is met, for any purpose 

13 that the Fund may serve under this Act, unless 

14 the Administrator shall have published a final 

15 certification requiring a contingent call under 

16 subsection (m)(3)(D). 

17 (l) GUARANTEED PAYMENT SURCHARGE.—

18 (1) IN GENERAL.—To the extent there are in19 sufficient monies in the defendant guaranteed pay20 ment account established in subsection (k) to attain 

21 the minimum aggregate annual payment net of any 

22 adjustments under subsection (d) in any given year, 

23 the Administrator may impose on each defendant 

24 participant a surcharge as necessary to raise the bal25 ance required to attain the minimum aggregate an-
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1 nual payment net of any adjustments under sub2 section (d), as provided in this subsection. Any such 

3 surcharge shall be imposed on a pro rata basis, in 

4 accordance with each defendant participant’s relative 

5 annual liability under sections 202 and 203 (as 

6 modified by subsections (b), (d), (f), and (g) of this 

7 section). 

8 (2) CERTIFICATION.—

9 (A) IN GENERAL.—Before imposing a 

10 guaranteed payment surcharge under this sub11 section, the Administrator shall certify that he 

12 or she has used all reasonable efforts to collect 

13 mandatory payments for all defendant partici14 pants, including by using the authority in sub15 section (i)(9) of this section and section 223. 

16 (B) NOTICE AND COMMENT.—Before mak17 ing a final certification under subparagraph 

18 (C), the Administrator shall publish a notice in 

19 the Federal Register of a proposed certification 

20 and provide in such notice for a public comment 

21 period of 30 days. 

22 (C) FINAL CERTIFICATION.—

23 (i) IN GENERAL.—The Administrator 

24 shall publish a notice of the final certifi25 cation in the Federal Register after consid-
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1 eration of all comments submitted under 

2 subparagraph (B). 

3 (ii) WRITTEN NOTICE.—Not later 

4 than 30 days after publishing any final 

5 certification under clause (i), the Adminis6 trator shall provide each defendant partici7 pant with written notice of that defendant 

8 participant’s payment, including the 

9 amount of any surcharge. 

10 (m) CONTINGENT CALL FOR MANDATORY ADDI11 TIONAL PAYMENTS.—

12 (1) IN GENERAL.—Notwithstanding section 

13 202(a)(2) and subsection (a) of this section, the Ad14 ministrator may require additional payments to the 

15 Fund by defendant participants, subsequent to the 

16 payment by defendant participants of the maximum 

17 aggregate payment obligation in section 202(a)(2), 

18 as provided in this subsection. 

19 (2) CONTINGENT CALL PAYMENTS.—If the Ad20 ministrator has certified or certifies the necessity of 

21 additional payments as provided in paragraph (3), 

22 the Administrator may require the defendant partici23 pants to pay in accordance with paragraph (5) up to 

24 an aggregate maximum of $10,000,000,000 of addi25 tional payments subsequent to the payment by de-
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1 fendant participants of the maximum aggregate pay2 ment obligation in section 202(a)(2). 

3 (3) CONTINGENT CALL CERTIFICATION.—

4 (A) IN GENERAL.—Before invoking the au5 thority to require additional mandatory pay6 ments under this subsection, the Administrator 

7 shall certify, after consultation with appropriate 

8 experts, that the entirety of the contingent call 

9 amount invoked is necessary to meet the 

10 Fund’s obligations. 

11 (B) INITIAL NOTICE.—Before making any 

12 certification under subparagraph (A), the Ad13 ministrator shall publish a notice in the Federal 

14 Register of the proposed certification, including 

15 a description and explanation of the Adminis16 trator’s analysis supporting the certification of 

17 the Administrator. 

18 (C) COMMENTS FROM DEFENDANT PAR19 TICIPANTS.—Not later than 60 days after the 

20 publication of the notice under subparagraph 

21 (B), a defendant participant may provide the 

22 Administrator with additional information to 

23 support a determination that all or some of the 

24 additional payments from defendant partici-
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1 pants set forth in the notice are or are not re2 quired. 

3 (D) FINAL CERTIFICATION.—

4 (i) IN GENERAL.—The Administrator 

5 shall publish a final notice in the Federal 

6 Register after consideration of all com7 ments submitted under subparagraph (C). 

8 (ii) WRITTEN NOTICE.—If the Admin9 istrator certifies the need for the contin10 gent call for additional payments, the Ad11 ministrator shall provide each defendant 

12 participant with written notice of that de13 fendant participant’s schedule of payments 

14 under this subsection. 

15 (4) BORROWING CAPACITY.—To the extent pro16 vided in section 221(b)(3), the Administrator may 

17 borrow against the mandatory additional payments 

18 required under this subsection at any time after 

19 issuing the final certification under paragraph (3). 

20 (5) ALLOCATION.—Any additional payments to 

21 the Fund by defendant participants under this sub22 section shall be allocated among them in proportion 

23 to the amounts provided under sections 202 and 203 

24 (as modified by subsections (b), (d), (f), and (g) of 

25 this section). If the Administrator determines that 
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1 the full amount of funding that would otherwise be 

2 generated in any year by the funding provisions of 

3 sections 202, 203, and 204 is not required for pur4 poses of this subsection, the Administrator shall re5 duce the amounts paid by all defendant participants 

6 on the same basis. 

7 (6) ENFORCEMENT.—The additional payments 

8 required under this subsection may be enforced in 

9 the same manner and to the same extent as the en10 forcement of payments under section 223. 

11 Subtitle B—Asbestos Insurers 

12 Commission 

13 SEC. 210. DEFINITION. 

14 In this subtitle, the term ‘‘captive insurance com15 pany’’ means a company—

16 (1) whose entire beneficial interest is owned on 

17 the date of enactment of this Act, directly or indi18 rectly, by a defendant participant or by the ultimate 

19 parent or the affiliated group of a defendant partici20 pant; 

21 (2) whose primary commercial business during 

22 the period from calendar years 1940 through 1986 

23 was to provide insurance to its ultimate parent or 

24 affiliated group, or any portion of the affiliated 

25 group or a combination thereof; and 
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1 (3) that was incorporated or operating no later 

2 than December 31, 2002. 

3 SEC. 211. ESTABLISHMENT OF ASBESTOS INSURERS COM4 MISSION. 

5 (a) ESTABLISHMENT.—There is established the As6 bestos Insurers Commission (referred to in this subtitle 

7 as the ‘‘Commission’’) to carry out the duties described 

8 in section 212. 

9 (b) MEMBERSHIP.—

10 (1) APPOINTMENT.—The Commission shall be 

11 composed of 5 members who shall be appointed by 

12 the President, by and with the advice and consent 

13 of the Senate. 

14 (2) QUALIFICATIONS.—

15 (A) EXPERTISE.—Members of the Com16 mission shall have sufficient expertise to fulfill 

17 their responsibilities under this subtitle. 

18 (B) CONFLICT OF INTEREST.—

19 (i) IN GENERAL.—No member of the 

20 Commission appointed under paragraph 

21 (1) may be an employee or immediate fam22 ily member of an employee of an insurer 

23 participant. No member of the Commission 

24 may be a former employee or shareholder 
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1 of any insurer participant, unless that is 

2 fully disclosed. 

3 (ii) DEFINITION.—In clause (i), the 

4 term ‘‘shareholder’’ shall not include a 

5 broadly based mutual fund that may, from 

6 time-to-time include the stocks of insurer 

7 participants as a portion of its overall 

8 holdings. 

9 (C) FEDERAL EMPLOYMENT.—A member 

10 of the Commission may not be an officer or em11 ployee of the Federal Government, except by 

12 reason of membership on the Commission. 

13 (3) PERIOD OF APPOINTMENT.—Members shall 

14 be appointed for the life of the Commission. 

15 (4) VACANCIES.—Any vacancy in the Commis16 sion shall be filled in the same manner as the origi17 nal appointment. 

18 (5) CHAIRMAN.—The President shall select a 

19 Chairman from among its members. 

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.—The Commission shall de19 termine the amount that each insurer partici20 pant shall be required to pay into the Fund 

21 under the procedures described in this section. 

22 The Commission shall make this determination 

23 by first promulgating a rule establishing a 

24 methodology for allocation of payments among 

25 insurer participants and then applying such 
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1 methodology to determine the individual pay2 ment for each insurer participant. The method3 ology may include 1 or more allocation formulas 

4 to be applied to all insurer participants or 

5 groups of similarly situated participants. The 

6 Commission’s rule shall include a methodology 

7 for adjusting payments by insurer participants 

8 to make up, during any applicable payment 

9 year, any amount by which aggregate insurer 

10 payments fall below the level required in para11 graph (3)(C). Under this procedure, not later 

12 than 120 days after the initial meeting of the 

13 Commission, the Commission shall commence a 

14 rulemaking proceeding under section 213(a) to 

15 propose and adopt a methodology for allocating 

16 payments among insurer participants. In pro17 posing an allocation methodology, the Commis18 sion may consult with such actuaries and other 

19 experts as it deems appropriate. After hearings 

20 and public comment on the proposed allocation 

21 methodology, the Commission shall as promptly 

22 as possible promulgate a final rule establishing 

23 such methodology. After promulgation of the 

24 final rule, the Commission shall determine the 

25 individual payment of each insurer participant 
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1 under the procedures set forth in subsection 

2 (b). 

3 (C) SCOPE.—Every insurer, reinsurer, and 

4 runoff entity with asbestos-related obligations 

5 in the United States shall be subject to the 

6 Commission’s and Administrator’s authority 

7 under this Act, including allocation determina8 tions, and shall be required to fulfill its pay9 ment obligation without regard as to whether it 

10 is licensed in the United States. Every insurer 

11 participant not licensed or domiciled in the 

12 United States shall, upon the first payment to 

13 the Fund, submit a written consent to the Com14 mission’s and Administrator’s authority under 

15 this Act, and to the jurisdiction of the courts of 

16 the United States for purposes of enforcing this 

17 Act, in a form determined by the Adminis18 trator. Any insurer participant refusing to pro19 vide a written consent shall be subject to fines 

20 and penalties as provided in section 223. 

21 (2) AMOUNT OF PAYMENTS.—

22 (A) AGGREGATE PAYMENT OBLIGATION.—

23 The total payment required of all insurer par24 ticipants over the life of the Fund shall be 

25 equal to $46,025,000,000. 
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1 (B) ACCOUNTING STANDARDS.—In deter2 mining the payment obligations of participants 

3 that are not licensed or domiciled in the United 

4 States or that are runoff entities, the Commis5 sion shall use accounting standards required for 

6 United States licensed direct insurers. 

7 (C) CAPTIVE INSURANCE COMPANIES.—No 

8 payment to the Fund shall be required from a 

9 captive insurance company, unless and only to 

10 the extent a captive insurance company, on the 

11 date of enactment of this Act, has liability, di12 rectly or indirectly, for any asbestos claim of a 

13 person or persons other than and unaffiliated 

14 with its ultimate parent or affiliated group or 

15 pool in which the ultimate parent participates 

16 or participated, or unaffiliated with a person 

17 that was its ultimate parent or a member of its 

18 affiliated group or pool at the time the relevant 

19 insurance or reinsurance was issued by the cap20 tive insurance company. 

21 (D) SEVERAL LIABILITY.—Unless other22 wise provided under this Act, each insurer par23 ticipant’s obligation to make payments to the 

24 Fund is several. Unless otherwise provided 

25 under this Act, there is no joint liability and the 
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1 future insolvency by any insurer participant 

2 shall not affect the payment required of any 

3 other insurer participant. 

4 (3) PAYMENT CRITERIA.—

5 (A) INCLUSION IN INSURER PARTICIPANT

6 CATEGORY.—Insurers that have paid, or been 

7 assessed by a legal judgment or settlement, at 

8 least $1,000,000 in defense and indemnity costs 

9 before the date of enactment of this Act in re10 sponse to claims for compensation for asbestos 

11 injuries arising from a policy of liability insur12 ance or contract of liability reinsurance or 

13 retrocessional reinsurance shall be insurer par14 ticipants in the Fund. Other insurers shall be 

15 exempt from mandatory payments. 

16 (B) INSURER PARTICIPANT ALLOCATION

17 METHODOLOGY.—

18 (i) IN GENERAL.—The Commission 

19 shall establish the payment obligations of 

20 individual insurer participants to reflect, 

21 on an equitable basis, the relative tort sys22 tem liability of the participating insurers in 

23 the absence of this Act, considering and 

24 weighting, as appropriate (but exclusive of 

25 workers’ compensation), such factors as—
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1 (I) historic premium for lines of 

2 insurance associated with asbestos ex3 posure over relevant periods of time; 

4 (II) recent loss experience for as5 bestos liability; 

6 (III) amounts reserved for asbes7 tos liability; 

8 (IV) the likely cost to each in9 surer participant of its future liabil10 ities under applicable insurance poli11 cies; and 

12 (V) any other factor the Commis13 sion may determine is relevant and 

14 appropriate. 

15 (ii) DETERMINATION OF RESERVES.—

16 The Commission may establish procedures 

17 and standards for determination of the as18 bestos reserves of insurer participants. The 

19 reserves of a United States licensed rein20 surer that is wholly owned by, or under 

21 common control of, a United States li22 censed direct insurer shall be included as 

23 part of the direct insurer’s reserves when 

24 the reinsurer’s financial results are in25 cluded as part of the direct insurer’s 
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1 United States operations, as reflected in 

2 footnote 33 of its filings with the National 

3 Association of Insurance Commissioners or 

4 in published financial statements prepared 

5 in accordance with generally accepted ac6 counting principles. 

7 (C) PAYMENT SCHEDULE.—The aggregate 

8 annual amount of payments by insurer partici9 pants over the life of the Fund shall be as fol10 lows: 

11 (i) For year 1, $2,700,000,000. 

12 (ii) For year 2, $2,700,000,000. 

13 (iii) For year 3 through 5, 

14 $5,075,000,000 annually. 

15 (iv) For years 6 through 17, 

16 $1,625,000,000 annually. 

17 (v) For years 18 through 21, 

18 $1,350,000,000 annually. 

19 (vi) For years 22 through 26, 

20 $1,080,000,000 annually. 

21 (vii) For year 27, $100,000,000. 

22 (D) CERTAIN RUNOFF ENTITIES.—

23 (i) IN GENERAL.—Whenever the Com24 mission requires payments by a runoff en25 tity that has assumed asbestos-related li-
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1 abilities from a Lloyds syndicate or names 

2 that are members of such a syndicate, the 

3 Commission shall not require payments 

4 from such syndicates and names to the ex5 tent that the runoff entity makes its re6 quired payments. In addition, such syn7 dicates and names shall be required to 

8 make payments to the Fund in the amount 

9 of any adjustment granted to the runoff 

10 entity for severe financial hardship or ex11 ceptional circumstances. 

12 (ii) INCLUDED RUNOFF ENTITIES.—

13 Subject to clause (i), a runoff entity shall 

14 include any direct insurer or reinsurer 

15 whose asbestos liability reserves have been 

16 transferred, directly or indirectly, to the 

17 runoff entity and on whose behalf the run18 off entity handles or adjusts and, where 

19 appropriate, pays asbestos claims. 

20 (E) FINANCIAL HARDSHIP AND EXCEP21 TIONAL CIRCUMSTANCE ADJUSTMENTS.—

22 (i) IN GENERAL.—Under the proce23 dures established in subsection (b), an in24 surer participant may seek adjustment of 

25 the amount of its payments based on ex-
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1 ceptional circumstances or severe financial 

2 hardship. 

3 (ii) FINANCIAL ADJUSTMENTS.—An 

4 insurer participant may qualify for an ad5 justment based on severe financial hard6 ship by demonstrating that payment of the 

7 amounts required by the Commission’s 

8 methodology would jeopardize the solvency 

9 of such participant. 

10 (iii) EXCEPTIONAL CIRCUMSTANCE

11 ADJUSTMENT.—An insurer participant 

12 may qualify for an adjustment based on 

13 exceptional circumstances by dem14 onstrating—

15 (I) that the amount of its pay16 ments under the Commission’s alloca17 tion methodology is exceptionally in18 equitable when measured against the 

19 amount of the likely cost to the par20 ticipant of its future liability in the 

21 tort system in the absence of the 

22 Fund; 

23 (II) an offset credit as described 

24 in subsection (b)(4) (A) and (C); or 
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1 (III) other exceptional cir2 cumstances. 

3 The Commission may determine whether 

4 to grant an adjustment and the size of any 

5 such adjustment, but adjustments shall not 

6 reduce the aggregate payment obligations 

7 of insurer participants specified in para8 graph (2)(A) and (3)(C). 

9 (iv) TIME PERIOD OF ADJUSTMENT.—

10 Except for adjustments for offset credits, 

11 adjustments granted under this subsection 

12 shall have a term not to exceed 3 years. An 

13 insurer participant may renew its adjust14 ment by demonstrating to the Adminis15 trator that it remains justified. 

16 (b) PROCEDURE FOR NOTIFYING INSURER PARTICI17 PANTS OF INDIVIDUAL PAYMENT OBLIGATIONS.—

18 (1) NOTICE TO PARTICIPANTS.—Not later than 

19 30 days after promulgation of the final rule estab20 lishing an allocation methodology under subsection 

21 (a)(1), the Commission shall—

22 (A) directly notify all reasonably identifi23 able insurer participants of the requirement to 

24 submit information necessary to calculate the 
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1 amount of any required payment to the Fund 

2 under the allocation methodology; and 

3 (B) publish in the Federal Register a no4 tice requiring any person who may be an in5 surer participant (as determined by criteria out6 lined in the notice) to submit such information. 

7 (2) RESPONSE REQUIRED BY INDIVIDUAL IN8 SURER PARTICIPANTS.—

9 (A) IN GENERAL.—Any person who re10 ceives notice under paragraph (1)(A), and any 

11 other person meeting the criteria specified in 

12 the notice published under paragraph (1)(B), 

13 shall respond by providing the Commission with 

14 all the information requested in the notice 

15 under a schedule or by a date established by 

16 the Commission. 

17 (B) CERTIFICATION.—The response sub18 mitted under subparagraph (A) shall be signed 

19 by a responsible corporate officer, general part20 ner, proprietor, or individual of similar author21 ity, who shall certify under penalty of law the 

22 completeness and accuracy of the information 

23 submitted. 

24 (3) NOTICE TO INSURER PARTICIPANTS OF INI25 TIAL PAYMENT DETERMINATION.—
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1 (A) IN GENERAL.—Within 120 days after 

2 receipt of the information required by para3 graph (2), the Commission shall send each in4 surer participant a notice of initial determina5 tion requiring payments to the Fund, which 

6 shall be based on the information received from 

7 the participant in response to the Commission’s 

8 request for information. An insurer partici9 pant’s payments shall be payable over the 

10 schedule established in subsection (a)(3)(C), in 

11 annual amounts proportionate to the aggregate 

12 annual amount of payments for all insurer par13 ticipants for the applicable year. 

14 (B) NO RESPONSE; INCOMPLETE RE15 SPONSE.—If no response is received from an in16 surer participant, or if the response is incom17 plete, the initial determination requiring a pay18 ment from the insurer participant shall be 

19 based on the best information available to the 

20 Commission. 

21 (4) COMMISSION REVIEW, REVISION AND FINAL22 IZATION OF INITIAL PAYMENT DETERMINATIONS.—

23 (A) COMMENTS FROM INSURER PARTICI24 PANTS.—Not later than 30 days after receiving 

25 a notice of initial determination from the Com-
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1 mission, an insurer participant may provide the 

2 Commission with additional information to sup3 port limited adjustments to the required pay4 ments to reflect severe financial hardship or ex5 ceptional circumstances, including the provision 

6 of an offset credit for an insurer participant for 

7 the amount of any asbestos-related payments it 

8 made or was legally obligated to make, includ9 ing payments released from an escrow, as the 

10 result of a bankruptcy judicially confirmed after 

11 May 22, 2003, but before the date of enactment 

12 of this Act. 

13 (B) ADDITIONAL PARTICIPANTS.—If, be14 fore the final determination of the Commission, 

15 the Commission receives information that an 

16 additional person may qualify as an insurer 

17 participant, the Commission shall require such 

18 person to submit information necessary to de19 termine whether payments from that person 

20 should be required, in accordance with the re21 quirements of this subsection. 

22 (C) REVISION PROCEDURES.—The Com23 mission shall adopt procedures for revising ini24 tial payments based on information received 

25 under subparagraphs (A) and (B), including a 
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1 provision requiring an offset credit for an in2 surer participant for the amount of any asbes3 tos-related payments it made or was legally ob4 ligated to make, including payments released 

5 from an escrow, as the result of a bankruptcy 

6 confirmed after May 22, 2003, but before the 

7 date of enactment of this Act. 

8 (5) EXAMINATIONS AND SUBPOENAS.—

9 (A) EXAMINATIONS.—The Commission 

10 may conduct examinations of the books and 

11 records of insurer participants to determine the 

12 completeness and accuracy of information sub13 mitted, or required to be submitted, to the 

14 Commission for purposes of determining partic15 ipant payments. 

16 (B) SUBPOENAS.—The Commission may 

17 request the Attorney General to subpoena per18 sons to compel testimony, records, and other in19 formation relevant to its responsibilities under 

20 this section. The Attorney General may enforce 

21 such subpoena in appropriate proceedings in 

22 the United States district court for the district 

23 in which the person to whom the subpoena was 

24 addressed resides, was served, or transacts 

25 business. 
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1 (6) ESCROW PAYMENTS.—Without regard to an 

2 insurer participant’s payment obligation under this 

3 section, any escrow or similar account established 

4 before the enactment of this Act by an insurer par5 ticipant in connection with an asbestos trust fund 

6 that has not been judicially confirmed by final order 

7 by the date of enactment of this Act shall be the 

8 property of the insurer participant and returned to 

9 that insurer participant. 

10 (7) NOTICE TO INSURER PARTICIPANTS OF

11 FINAL PAYMENT DETERMINATIONS.—Not later than 

12 60 days after the notice of initial determination is 

13 sent to the insurer participants, the Commission 

14 shall send each insurer participant a notice of final 

15 determination. 

16 (c) INSURER PARTICIPANTS VOLUNTARY ALLOCA17 TION AGREEMENT.—

18 (1) IN GENERAL.—Not later than 30 days after 

19 the Commission proposes its rule establishing an al20 location methodology under subsection (a)(1), direct 

21 insurer participants licensed or domiciled in the 

22 United States, other direct insurer participants, re23 insurer participants licensed or domiciled in the 

24 United States, or other reinsurer participants, may 
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1 submit an allocation agreement, approved by all of 

2 the participants in the applicable group, to—

3 (A) the Commission; 

4 (B) the Committee on the Judiciary of the 

5 Senate; and 

6 (C) the Committee on the Judiciary of the 

7 House of Representatives. 

8 (2) ALLOCATION AGREEMENT.—To the extent 

9 the participants in any such applicable group volun10 tarily agree upon an allocation arrangement, any 

11 such allocation agreement shall only govern the allo12 cation of payments within that group and shall not 

13 determine the aggregate amount due from that 

14 group. 

15 (3) CERTIFICATION.—The Commission shall de16 termine whether an allocation agreement submitted 

17 under subparagraph (A) meets the requirements of 

18 this subtitle and, if so, shall certify the agreement 

19 as establishing the allocation methodology governing 

20 the individual payment obligations of the partici21 pants who are parties to the agreement. The author22 ity of the Commission under this subtitle shall, with 

23 respect to participants who are parties to a certified 

24 allocation agreement, terminate on the day after the 

25 Commission certifies such agreement. Under sub-
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1 section (f), the Administrator shall assume responsi2 bility, if necessary, for calculating the individual 

3 payment obligations of participants who are parties 

4 to the certified agreement. 

5 (d) COMMISSION REPORT.—

6 (1) RECIPIENTS.—Until the work of the Com7 mission has been completed and the Commission ter8 minated, the Commission shall submit an annual re9 port, containing the information described under 

10 paragraph (2), to—

11 (A) the Committee on the Judiciary of the 

12 Senate; 

13 (B) the Committee on the Judiciary of the 

14 House of Representatives; and 

15 (C) the Administrator. 

16 (2) CONTENTS.—The report under paragraph 

17 (1) shall state the amount that each insurer partici18 pant is required to pay to the Fund, including the 

19 payment schedule for such payments. 

20 (e) INTERIM PAYMENTS.—

21 (1) AUTHORITY OF ADMINISTRATOR.—During 

22 the period between the date of enactment of this Act 

23 and the date when the Commission issues its final 

24 determinations of payments, the Administrator shall 

25 have the authority to require insurer participants to 
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1 make interim payments to the Fund to assure ade2 quate funding by insurer participants during such 

3 period. 

4 (2) AMOUNT OF INTERIM PAYMENTS.—During 

5 any applicable year, the Administrator may require 

6 insurer participants to make aggregate interim pay7 ments not to exceed the annual aggregate amount 

8 specified in subsection (a)(3)(C). 

9 (3) ALLOCATION OF PAYMENTS.—Interim pay10 ments shall be allocated among individual insurer 

11 participants on an equitable basis as determined by 

12 the Administrator. All payments required under this 

13 subparagraph shall be credited against the partici14 pant’s ultimate payment obligation to the Fund es15 tablished by the Commission. If an interim payment 

16 exceeds the ultimate payment, the Fund shall pay 

17 interest on the amount of the overpayment at a rate 

18 determined by the Administrator. If the ultimate 

19 payment exceeds the interim payment, the partici20 pant shall pay interest on the amount of the under21 payment at the same rate. Any participant may seek 

22 an exemption from or reduction in any payment re23 quired under this subsection under the financial 

24 hardship and exceptional circumstance standards es25 tablished in subsection (a)(3)(D). 
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1 (4) APPEAL OF INTERIM PAYMENT DECI2 SIONS.—A decision by the Administrator to establish 

3 an interim payment obligation shall be considered 

4 final agency action and reviewable under section 

5 303, except that the reviewing court may not stay an 

6 interim payment during the pendency of the appeal. 

7 (f) TRANSFER OF AUTHORITY FROM THE COMMIS8 SION TO THE ADMINISTRATOR.—

9 (1) IN GENERAL.—Upon termination of the 

10 Commission under section 215, the Administrator 

11 shall assume all the responsibilities and authority of 

12 the Commission, except that the Administrator shall 

13 not have the power to modify the allocation method14 ology established by the Commission or by certified 

15 agreement or to promulgate a rule establishing any 

16 such methodology. 

17 (2) FINANCIAL HARDSHIP AND EXCEPTIONAL

18 CIRCUMSTANCE ADJUSTMENTS.—Upon termination 

19 of the Commission under section 215, the Adminis20 trator shall have the authority, upon application by 

21 any insurer participant, to make adjustments to an22 nual payments upon the same grounds as provided 

23 in subsection (a)(3)(D). Adjustments granted under 

24 this subsection shall have a term not to exceed 3 

25 years. An insurer participant may renew its adjust-
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1 ment by demonstrating that it remains justified. 

2 Upon the grant of any adjustment, the Adminis3 trator shall increase the payments required of all 

4 other insurer participants so that there is no reduc5 tion in the aggregate payment required of all insurer 

6 participants for the applicable years. The increase in 

7 an insurer participant’s required payment shall be in 

8 proportion to such participant’s share of the aggre9 gate payment obligation of all insurer participants. 

10 (3) FINANCIAL SECURITY REQUIREMENTS.—

11 Whenever an insurer participant’s A.M. Best’s 

12 claims payment rating or Standard and Poor’s fi13 nancial strength rating falls below A¥, and until 

14 such time as either the insurer participant’s A.M. 

15 Best’s Rating or Standard and Poor’s rating is 

16 equal to or greater than A¥, the Administrator 

17 shall have the authority to require that the partici18 pating insurer either—

19 (A) pay the present value of its remaining 

20 Fund payments at a discount rate determined 

21 by the Administrator; or 

22 (B) provide an evergreen letter of credit or 

23 financial guarantee for future payments issued 

24 by an institution with an A.M. Best’s claims 
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1 payment rating or Standard & Poor’s financial 

2 strength rating of at least A+. 

3 (g) JUDICIAL REVIEW.—The Commission’s rule es4 tablishing an allocation methodology, its final determina5 tions of payment obligations and other final action shall 

6 be judicially reviewable as provided in title III. 

7 SEC. 213. POWERS OF ASBESTOS INSURERS COMMISSION. 

8 (a) RULEMAKING.—The Commission shall promul9 gate such rules and regulations as necessary to implement 

10 its authority under this Act, including regulations gov11 erning an allocation methodology. Such rules and regula12 tions shall be promulgated after providing interested par13 ties with the opportunity for notice and comment. 

14 (b) HEARINGS.—The Commission may hold such 

15 hearings, sit and act at such times and places, take such 

16 testimony, and receive such evidence as the Commission 

17 considers advisable to carry out this Act. The Commission 

18 shall also hold a hearing on any proposed regulation estab19 lishing an allocation methodology, before the Commis20 sion’s adoption of a final regulation. 

21 (c) INFORMATION FROM FEDERAL AGENCIES.—The 

22 Commission may secure directly from any Federal depart23 ment or agency such information as the Commission con24 siders necessary to carry out this Act. Upon request of 

25 the Chairman of the Commission, the head of such depart-
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1 ment or agency shall furnish such information to the Com2 mission. 

3 (d) POSTAL SERVICES.—The Commission may use 

4 the United States mails in the same manner and under 

5 the same conditions as other departments and agencies of 

6 the Federal Government. 

7 (e) GIFTS.—The Commission may not accept, use, or 

8 dispose of gifts or donations of services or property. 

9 (f) EXPERT ADVICE.—In carrying out its responsibil10 ities, the Commission may enter into such contracts and 

11 agreements as the Commission determines necessary to 

12 obtain expert advice and analysis. 

13 SEC. 214. PERSONNEL MATTERS. 

14 (a) COMPENSATION OF MEMBERS.—Each member of 

15 the Commission shall be compensated at a rate equal to 

16 the daily equivalent of the annual rate of basic pay pre17 scribed for level IV of the Executive Schedule under sec18 tion 5315 of title 5, United States Code, for each day (in19 cluding travel time) during which such member is engaged 

20 in the performance of the duties of the Commission. 

21 (b) TRAVEL EXPENSES.—The members of the Com22 mission shall be allowed travel expenses, including per 

23 diem in lieu of subsistence, at rates authorized for employ24 ees of agencies under subchapter I of chapter 57 of title 

25 5, United States Code, while away from their homes or 
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1 regular places of business in the performance of services 

2 for the Commission. 

3 (c) STAFF.—

4 (1) IN GENERAL.—The Chairman of the Com5 mission may, without regard to the civil service laws 

6 and regulations, appoint and terminate an executive 

7 director and such other additional personnel as may 

8 be necessary to enable the Commission to perform 

9 its duties. The employment of an executive director 

10 shall be subject to confirmation by the Commission. 

11 (2) COMPENSATION.—The Chairman of the 

12 Commission may fix the compensation of the execu13 tive director and other personnel without regard to 

14 chapter 51 and subchapter III of chapter 53 of title 

15 5, United States Code, relating to classification of 

16 positions and General Schedule pay rates, except 

17 that the rate of pay for the executive director and 

18 other personnel may not exceed the rate payable for 

19 level V of the Executive Schedule under section 5316 

20 of such title. 

21 (d) DETAIL OF GOVERNMENT EMPLOYEES.—Any 

22 Federal Government employee may be detailed to the 

23 Commission without reimbursement, and such detail shall 

24 be without interruption or loss of civil service status or 

25 privilege. 
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1 (e) PROCUREMENT OF TEMPORARY AND INTERMIT2 TENT SERVICES.—The Chairman of the Commission may 

3 procure temporary and intermittent services under section 

4 3109(b) of title 5, United States Code, at rates for individ5 uals which do not exceed the daily equivalent of the annual 

6 rate of basic pay prescribed for level V of the Executive 

7 Schedule under section 5316 of such title. 

8 SEC. 215. TERMINATION OF ASBESTOS INSURERS COMMIS9 SION. 

10 The Commission shall terminate 90 days after the 

11 last date on which the Commission makes a final deter12 mination of contribution under section 212(b) or 90 days 

13 after the last appeal of any final action by the Commission 

14 is exhausted, whichever occurs later. 

15 SEC. 216. EXPENSES AND COSTS OF COMMISSION. 

16 All expenses of the Commission shall be paid from 

17 the Fund. 

18 Subtitle C—Asbestos Injury Claims 

19 Resolution Fund 

20 SEC. 221. ESTABLISHMENT OF ASBESTOS INJURY CLAIMS 

21 RESOLUTION FUND. 

22 (a) ESTABLISHMENT.—There is established in the 

23 Office of Asbestos Disease Compensation the Asbestos In24 jury Claims Resolution Fund, which shall be available to 

25 pay—
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1 (1) claims for awards for an eligible disease or 

2 condition determined under title I; 

3 (2) claims for reimbursement for medical moni4 toring determined under title I; 

5 (3) principal and interest on borrowings under 

6 subsection (b); and 

7 (4) administrative expenses to carry out the 

8 provisions of this Act. 

9 (b) BORROWING AUTHORITY.—

10 (1) IN GENERAL.—The Administrator is au11 thorized to borrow from time-to-time amounts as set 

12 forth in this subsection, for purposes of enhancing li13 quidity available to the Fund for carrying out the 

14 obligations of the Fund under this Act. The Admin15 istrator may authorize borrowing in such form, over 

16 such term, with such necessary disclosure to its 

17 lenders as will most efficiently enhance the Fund’s 

18 liquidity. 

19 (2) FEDERAL FINANCING BANK.—In addition to 

20 the general authority in paragraph (1), the Adminis21 trator may borrow from the Federal Financing Bank 

22 in accordance with section 6 of the Federal Financ23 ing Bank Act of 1973 (12 U.S.C. 2285) as needed 

24 for performance of the Administrator’s duties under 

25 this Act for the first 2 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 (including any contingent call man13 datory additional payments under section 

14 204(m)) during the subsequent 7 years. 

15 (4) REPAYMENT OBLIGATIONS.—Repayment of 

16 monies borrowed by the Administrator under this 

17 subsection is limited solely to amounts available in 

18 the Asbestos Injury Claims Resolution Fund estab19 lished under this section. 

20 (c) LOCKBOX FOR SEVERE ASBESTOS-RELATED IN21 JURY CLAIMANTS.—

22 (1) IN GENERAL.—Within the Fund, the Ad23 ministrator shall establish the following accounts: 

24 (A) A Mesothelioma Account, which shall 

25 be used solely to make payments to claimants 
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1 eligible for an award under the criteria of Level 

2 X. 

3 (B) A Lung Cancer Account, which shall 

4 be used solely to make payments to claimants 

5 eligible for an award under the criteria of Level 

6 IX. 

7 (C) A Severe Asbestosis Account, which 

8 shall be used solely to make payments to claim9 ants eligible for an award under the criteria of 

10 Level V. 

11 (D) A Moderate Asbestosis Account, which 

12 shall be used solely to make payments to claim13 ants eligible for an award under the criteria of 

14 Level IV. 

15 (2) ALLOCATION.—The Administrator shall al16 locate to each of the 4 accounts established under 

17 paragraph (1) a portion of payments made to the 

18 Fund adequate to compensate all anticipated claim19 ants for each account. Within 60 days after the date 

20 of enactment of this Act, and periodically during the 

21 life of the Fund, the Administrator shall determine 

22 an appropriate amount to allocate to each account 

23 after consulting appropriate epidemiological and sta24 tistical studies. 

25 (d) AUDIT AUTHORITY.—
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1 (1) IN GENERAL.—For the purpose of 

2 ascertaining the correctness of any information pro3 vided or payments made to the Fund, or deter4 mining whether a person who has not made a pay5 ment to the Fund was required to do so, or deter6 mining the liability of any person for a payment to 

7 the Fund, or collecting any such liability, or inquir8 ing into any offense connected with the administra9 tion or enforcement of this title, the Administrator 

10 is authorized—

11 (A) to examine any books, papers, records 

12 or other data which may be relevant or material 

13 to such inquiry; 

14 (B) to summon the person liable for a pay15 ment under this title, or officer or employee of 

16 such person, or any person having possession, 

17 custody, or care of books of account containing 

18 entries relating to the business of the person 

19 liable or any other person the Administrator 

20 may deem proper, to appear before the Admin21 istrator at a time and place named in the sum22 mons and to produce such books, papers, 

23 records, or other data, and to give such testi24 mony, under oath, as may be relevant or mate25 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) NO PRIVATE RIGHT OF ACTION.—Except as pro20 vided in sections 203(b)(2)(D)(ii) and 204(f)(3), there 

21 shall be no private right of action under any Federal or 

22 State law against any participant based on a claim of com23 pliance or noncompliance with this Act or the involvement 

24 of any participant in the enactment of this Act. 
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1 SEC. 222. MANAGEMENT OF THE FUND. 

2 (a) IN GENERAL.—Amounts in the Fund shall be 

3 held for the exclusive purpose of providing benefits to as4 bestos claimants and their beneficiaries, including those 

5 provided in subsection (c), and to otherwise defray the rea6 sonable expenses of administering the Fund. 

7 (b) INVESTMENTS.—

8 (1) IN GENERAL.—Amounts in the Fund shall 

9 be administered and invested with the care, skill, 

10 prudence, and diligence, under the circumstances 

11 prevailing at the time of such investment, that a 

12 prudent person acting in a like capacity and manner 

13 would use. 

14 (2) STRATEGY.—The Administrator shall invest 

15 amounts in the Fund in a manner that enables the 

16 Fund to make current and future distributions to or 

17 for the benefit of asbestos claimants. In pursuing an 

18 investment strategy under this subparagraph, the 

19 Administrator shall consider, to the extent relevant 

20 to an investment decision or action—

21 (A) the size of the Fund; 

22 (B) the nature and estimated duration of 

23 the Fund; 

24 (C) the liquidity and distribution require25 ments of the Fund; 
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1 (D) general economic conditions at the 

2 time of the investment; 

3 (E) the possible effect of inflation or defla4 tion on Fund assets; 

5 (F) the role that each investment or course 

6 of action plays with respect to the overall assets 

7 of the Fund; 

8 (G) the expected amount to be earned (in9 cluding both income and appreciation of cap10 ital) through investment of amounts in the 

11 Fund; and 

12 (H) the needs of asbestos claimants for 

13 current and future distributions authorized 

14 under this Act. 

15 (c) MESOTHELIOMA RESEARCH AND TREATMENT

16 CENTERS.—

17 (1) IN GENERAL.—The Administrator shall pro18 vide $1,000,000 from the Fund for each of fiscal 

19 years 2004 through 2008 for each of up to 10 meso20 thelioma disease research and treatment centers. 

21 (2) REQUIREMENTS.—The Centers shall—

22 (A) be chosen by the Director of the Na23 tional Institutes of Health; 

24 (B) be chosen through competitive peer re25 view; 
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1 (C) be geographically distributed through2 out the United States with special consideration 

3 given to areas of high incidence of mesothe4 lioma disease; 

5 (D) be closely associated with Department 

6 of Veterans Affairs medical centers to provide 

7 research benefits and care to veterans, who 

8 have suffered excessively from mesothelioma; 

9 (E) be engaged in research to provide 

10 mechanisms for detection and prevention of 

11 mesothelioma, particularly in the areas of pain 

12 management and cures; 

13 (F) be engaged in public education about 

14 mesothelioma and prevention, screening, and 

15 treatment; 

16 (G) be participants in the National Meso17 thelioma Registry; and 

18 (H) be coordinated in their research and 

19 treatment efforts with other Centers and insti20 tutions involved in exemplary mesothelioma re21 search. 

22 SEC. 223. ENFORCEMENT OF PAYMENT OBLIGATIONS. 

23 (a) DEFAULT.—If any participant fails to make any 

24 payment in the amount of and according to the schedule 

25 under this Act or as prescribed by the Administrator, after 
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1 demand and 30 days opportunity to cure the default, there 

2 shall be a lien in favor of the United States for the amount 

3 of the delinquent payment (including interest) upon all 

4 property and rights to property, whether real or personal, 

5 belonging to such participant. 

6 (b) BANKRUPTCY.—In the case of a bankruptcy or 

7 insolvency proceeding, the lien imposed under subsection 

8 (a) shall be treated in the same manner as a lien for taxes 

9 due and owing to the United States for purposes of the 

10 provisions of title 11, United States Code, or section 

11 3713(a) of title 31, United States Code. The United 

12 States Bankruptcy Court shall have jurisdiction over any 

13 issue or controversy regarding lien priority and lien perfec14 tion arising in a bankruptcy case due to a lien imposed 

15 under subsection (a). 

16 (c) CIVIL ACTION.—

17 (1) IN GENERAL.—In any case in which there 

18 has been a refusal or failure to pay any liability im19 posed under this Act, the Administrator may bring 

20 a civil action in the United States District Court for 

21 the District of Columbia, or any other appropriate 

22 lawsuit or proceeding outside of the United States—

23 (A) to enforce the liability and any lien of 

24 the United States imposed under this section; 
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1 (B) to subject any property of the partici2 pant, including any property in which the par3 ticipant has any right, title, or interest, to the 

4 payment of such liability; or 

5 (C) for temporary, preliminary, or perma6 nent relief. 

7 (2) ADDITIONAL PENALTIES.—In any action 

8 under paragraph (1) in which the refusal or failure 

9 to pay was willful, the Administrator may seek re10 covery—

11 (A) of punitive damages; 

12 (B) of the costs of any civil action under 

13 this subsection, including reasonable fees in14 curred for collection, expert witnesses, and at15 torney’s fees; and 

16 (C) in addition to any other penalty, of a 

17 fine equal to the total amount of the liability 

18 that has not been collected. 

19 (d) ENFORCEMENT AUTHORITY AS TO INSURER PAR20 TICIPANTS.—

21 (1) IN GENERAL.—In addition to or in lieu of 

22 the enforcement remedies described in subsection 

23 (c), the Administrator may seek to recover amounts 

24 in satisfaction of a payment not timely paid by an 
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1 insurer participant under the procedures under this 

2 subsection. 

3 (2) SUBROGATION.—To the extent required to 

4 establish personal jurisdiction over nonpaying in5 surer participants, the Administrator shall be 

6 deemed to be subrogated to the contractual rights of 

7 participants to seek recovery from nonpaying insur8 ing participants that are domiciled outside the 

9 United States under the policies of liability insur10 ance or contracts of liability reinsurance or 

11 retrocessional reinsurance applicable to asbestos 

12 claims, and the Administrator may bring an action 

13 or an arbitration against the nonpaying insurer par14 ticipants under the provisions of such policies and 

15 contracts, provided that—

16 (A) any amounts collected under this sub17 section shall not increase the amount of deemed 

18 erosion allocated to any policy or contract under 

19 section 404, or otherwise reduce coverage avail20 able to a participant; and 

21 (B) subrogation under this subsection shall 

22 have no effect on the validity of the insurance 

23 policies or reinsurance, and any contrary State 

24 law is expressly preempted. 
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1 (3) RECOVERABILITY OF CONTRIBUTION.—For 

2 purposes of this subsection—

3 (A) all contributions to the Fund required 

4 of a participant shall be deemed to be sums le5 gally required to be paid for bodily injury re6 sulting from exposure to asbestos; 

7 (B) all contributions to the Fund required 

8 of any participant shall be deemed to be a sin9 gle loss arising from a single occurrence under 

10 each contract to which the Administrator is 

11 subrogated; and 

12 (C) with respect to reinsurance contracts, 

13 all contributions to the Fund required of a par14 ticipant shall be deemed to be payments to a 

15 single claimant for a single loss. 

16 (4) NO CREDIT OR OFFSET.—In any action 

17 brought under this subsection, the nonpaying insurer 

18 or reinsurer shall be entitled to no credit or offset 

19 for amounts collectible or potentially collectible from 

20 any participant nor shall such defaulting participant 

21 have any right to collect any sums payable under 

22 this section from any participant. 

23 (5) COOPERATION.—Insureds and cedents shall 

24 cooperate with the Administrator’s reasonable re25 quests for assistance in any such proceeding. The 
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1 positions taken or statements made by the Adminis2 trator in any such proceeding shall not be binding 

3 on or attributed to the insureds or cedents in any 

4 other proceeding. The outcome of such a proceeding 

5 shall not have a preclusive effect on the insureds or 

6 cedents in any other proceeding and shall not be ad7 missible against any subrogee under this section. 

8 The Administrator shall have the authority to settle 

9 or compromise any claims against a nonpaying in10 surer participant under this subsection. 

11 (e) BAR ON UNITED STATES BUSINESS.—If any di12 rect insurer or reinsurer refuses to furnish any informa13 tion requested by or to pay any contribution required by 

14 this Act, then, in addition to any other penalties imposed 

15 by this Act, the Administrator may issue an order barring 

16 such entity and its affiliates from insuring risks located 

17 within the United States or otherwise doing business with18 in the United States. Insurer participants or their affili19 ates seeking to obtain a license from any State to write 

20 any type of insurance shall be barred from obtaining any 

21 such license until payment of all contributions required as 

22 of the date of license application. 

23 (f) CREDIT FOR REINSURANCE.—If the Adminis24 trator determines that an insurer participant that is a re25 insurer is in default in paying any required contribution 
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1 or otherwise not in compliance with this Act, the Adminis2 trator may issue an order barring any direct insurer par3 ticipant from receiving credit for reinsurance purchased 

4 from the defaulting reinsurer. Any State law governing 

5 credit for reinsurance to the contrary is preempted. 

6 (g) DEFENSE LIMITATION.—In any proceeding under 

7 this section, the participant shall be barred from bringing 

8 any challenge to any determination of the Administrator 

9 or the Asbestos Insurers Commission regarding its liability 

10 under this Act, or to the constitutionality of this Act or 

11 any provision thereof, if such challenge could have been 

12 made during the review provided under section 204(i)(10), 

13 or in a judicial review proceeding under section 303. 

14 (h) DEPOSIT OF FUNDS.—

15 (1) IN GENERAL.—Any funds collected under 

16 subsection (c)(2) (A) or (C) shall be—

17 (A) deposited in the Fund; and 

18 (B) used only to pay—

19 (i) claims for awards for an eligible 

20 disease or condition determined under title 

21 I; or 

22 (ii) claims for reimbursement for med23 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 2005.’’. 

20 SEC. 224. INTEREST ON UNDERPAYMENT OR NONPAYMENT. 

21 If any amount of payment obligation under this title 

22 is not paid on or before the last date prescribed for pay23 ment, the liable party shall pay interest on such amount 

24 at the Federal short-term rate determined under section 

25 6621(b) of the Internal Revenue Code of 1986, plus 5 per-
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1 centage points, for the period from such last date to the 

2 date paid. 

3 TITLE III—JUDICIAL REVIEW 

4 SEC. 301. JUDICIAL REVIEW OF RULES AND REGULATIONS. 

5 (a) EXCLUSIVE JURISDICTION.—The United States 

6 Court of Appeals for the District of Columbia Circuit shall 

7 have exclusive jurisdiction over any action to review rules 

8 or regulations promulgated by the Administrator or the 

9 Asbestos Insurers Commission under this Act. 

10 (b) PERIOD FOR FILING PETITION.—A petition for 

11 review under this section shall be filed not later than 60 

12 days after the date notice of such promulgation appears 

13 in the Federal Register. 

14 SEC. 302. JUDICIAL REVIEW OF AWARD DECISIONS. 

15 (a) IN GENERAL.—Any claimant adversely affected 

16 or aggrieved by a final decision of the Administrator 

17 awarding or denying compensation under title I may peti18 tion for judicial review of such decision. Any petition for 

19 review under this section shall be filed within 90 days of 

20 the issuance of a final decision of the Administrator. 

21 (b) EXCLUSIVE JURISDICTION.—A petition for review 

22 may only be filed in the United States Court of Appeals 

23 for the circuit in which the claimant resides at the time 

24 of the issuance of the final order. 
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1 (c) STANDARD OF REVIEW.—The court shall uphold 

2 the decision of the Administrator unless the court deter3 mines, upon review of the record as a whole, that the deci4 sion is not supported by substantial evidence, is contrary 

5 to law, or is not in accordance with procedure required 

6 by law. 

7 SEC. 303. JUDICIAL REVIEW OF PARTICIPANTS’ ASSESS8 MENTS. 

9 (a) EXCLUSIVE JURISDICTION.—The United States 

10 Court of Appeals for the District of Columbia Circuit shall 

11 have exclusive jurisdiction over any action to review a final 

12 determination by the Administrator or the Asbestos Insur13 ers Commission regarding the liability of any person to 

14 make a payment to the Fund, including a notice of appli15 cable subtier assignment under section 204(i), a notice of 

16 financial hardship or inequity determination under section 

17 204(d), and a notice of insurer participant obligation 

18 under section 212(b). 

19 (b) PERIOD FOR FILING ACTION.—A petition for re20 view under subsection (a) shall be filed not later than 60 

21 days after a final determination by the Administrator or 

22 the Commission giving rise to the action. Any defendant 

23 participant who receives a notice of its applicable subtier 

24 under section 204(i) or a notice of financial hardship or 

25 inequity determination under section 204(d) shall com-
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1 mence any action within 30 days after a decision on re2 hearing under section 204(i)(10), and any insurer partici3 pant who receives a notice of a payment obligation under 

4 section 212(b) shall commence any action within 30 days 

5 after receiving such notice. 

6 SEC. 304. OTHER JUDICIAL CHALLENGES. 

7 (a) EXCLUSIVE JURISDICTION.—The United States 

8 District Court for the District of Columbia shall have ex9 clusive jurisdiction over any action for declaratory or in10 junctive relieve challenging any provision of this Act. An 

11 action under this section shall be filed not later than 60 

12 days after the date of enactment of this Act or 60 days 

13 after the final action by the Administrator or the Commis14 sion giving rise to the action, whichever is later. 

15 (b) DIRECT APPEAL.—A final decision in the action 

16 shall be reviewable on appeal directly to the Supreme 

17 Court of the United States. Such appeal shall be taken 

18 by the filing of a notice of appeal within 30 days, and 

19 the filing of a jurisdictional statement within 60 days, of 

20 the entry of the final decision. 

21 (c) EXPEDITED PROCEDURES.—It shall be the duty 

22 of the United States District Court for the District of Co23 lumbia and the Supreme Court of the United States to 

24 advance on the docket and to expedite to the greatest pos25 sible extent the disposition of the action and appeal. 
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1 SEC. 305. STAYS, EXCLUSIVITY, AND CONSTITUTIONAL RE2 VIEW. 

3 (a) NO STAYS.—No court may issue a stay of pay4 ment by any party into the Fund pending its final judg5 ment. 

6 (b) EXCLUSIVITY OF REVIEW.—An action of the Ad7 ministrator or the Asbestos Insurers Commission for 

8 which review could have been obtained under section 301, 

9 302, or 303 shall not be subject to judicial review in any 

10 other proceeding. 

11 (c) CONSTITUTIONAL REVIEW.—

12 (1) IN GENERAL.—Notwithstanding any other 

13 provision of law, any interlocutory or final judgment, 

14 decree, or order of a Federal court holding this Act, 

15 or any provision or application thereof, unconstitu16 tional shall be reviewable as a matter of right by di17 rect appeal to the Supreme Court. 

18 (2) PERIOD FOR FILING APPEAL.—Any such 

19 appeal shall be filed not more than 30 days after 

20 entry of such judgment, decree, or order. 

21 TITLE IV—MISCELLANEOUS 

22 PROVISIONS 

23 SEC. 401. FALSE INFORMATION. 

24 (a) IN GENERAL.—Chapter 63 of title 18, United 

25 States Code, is amended by adding at the end the fol26 lowing: 
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1 ‘‘§ 1348. Fraud and false statements in connection 

2 with participation in Asbestos Injury 

3 Claims Resolution Fund 

4 ‘‘(a) FRAUD RELATING TO ASBESTOS INJURY

5 CLAIMS RESOLUTION FUND.—Whoever knowingly and 

6 willfully executes, or attempts to execute, a scheme or arti7 fice to defraud the Office of Asbestos Disease Compensa8 tion or the Asbestos Insurers Commission under title II 

9 of the Fairness in Asbestos Injury Resolution Act of 2005 

10 shall be fined under this title or imprisoned not more than 

11 20 years, or both. 

12 ‘‘(b) FALSE STATEMENT RELATING TO ASBESTOS

13 INJURY CLAIMS RESOLUTION FUND.—Whoever, in any 

14 matter involving the Office of Asbestos Disease Compensa15 tion or the Asbestos Insurers Commission, knowingly and 

16 willfully—

17 ‘‘(1) falsifies, conceals, or covers up by any 

18 trick, scheme, or device a material fact; 

19 ‘‘(2) makes any materially false, fictitious, or 

20 fraudulent statements or representations; or 

21 ‘‘(3) makes or uses any false writing or docu22 ment knowing the same to contain any materially 

23 false, fictitious, or fraudulent statement or entry, in 

24 connection with the award of a claim or the deter25 mination of a participant’s payment obligation under 

26 title I or II of the Fairness in Asbestos Injury Reso-
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1 lution Act of 2005 shall be fined under this title or 

2 imprisoned not more than 10 years, or both.’’. 

3 (b) TECHNICAL AND CONFORMING AMENDMENT.—

4 The table of sections for chapter 63 of title 18, United 

5 States Code, is amended by adding at the end the fol6 lowing:

‘‘1348. Fraud and false statements in connection with participation in Asbestos 

Injury Claims Resolution Fund.’’.

7 SEC. 402. EFFECT ON BANKRUPTCY LAWS. 

8 (a) NO AUTOMATIC STAY.—Section 362(b) of title 

9 11, United States Code, is amended—

10 (1) in paragraph (17), by striking ‘‘or’’ at the 

11 end; 

12 (2) in paragraph (18), by striking the period at 

13 the end and inserting ‘‘; or’’; and 

14 (3) by inserting after paragraph (18) the fol15 lowing: 

16 ‘‘(19) under subsection (a) of this section of the 

17 enforcement of any payment obligations under sec18 tion 204 of the Fairness in Asbestos Injury Resolu19 tion Act of 2005, against a debtor, or the property 

20 of the estate of a debtor, that is a participant (as 

21 that term is defined in section 3 of that Act).’’. 

22 (b) ASSUMPTION OF EXECUTORY CONTRACT.—Sec23 tion 365 of title 11, United States Code, is amended by 

24 adding at the end the following: 
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1 ‘‘(p) If a debtor is a participant (as that term is de2 fined in section 3 of the Fairness in Asbestos Injury Reso3 lution Act of 2005), the trustee shall be deemed to have 

4 assumed all executory contracts entered into by the partic5 ipant under section 204 of that Act. The trustee may not 

6 reject any such executory contract.’’. 

7 (c) ALLOWED ADMINISTRATIVE EXPENSES.—Section 

8 503 of title 11, United States Code, is amended by adding 

9 at the end the following: 

10 ‘‘(c)(1) Claims or expenses of the United States, the 

11 Attorney General, or the Administrator (as that term is 

12 defined in section 3 of the Fairness in Asbestos Injury 

13 Resolution Act of 2005) based upon the asbestos payment 

14 obligations of a debtor that is a Participant (as that term 

15 is defined in section 3 of that Act), shall be paid as an 

16 allowed administrative expense. The debtor shall not be 

17 entitled to either notice or a hearing with respect to such 

18 claims. 

19 ‘‘(2) For purposes of paragraph (1), the term ‘asbes20 tos payment obligation’ means any payment obligation 

21 under title II of the Fairness in Asbestos Injury Resolu22 tion Act of 2005.’’. 

23 (d) NO DISCHARGE.—Section 523 of title 11, United 

24 States Code, is amended by adding at the end the fol25 lowing: 
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1 ‘‘(f) A discharge under section 727, 1141, 1228, or 

2 1328 of this title does not discharge any debtor that is 

3 a participant (as that term is defined in section 3 of the 

4 Fairness in Asbestos Injury Resolution Act of 2005) of 

5 the debtor’s payment obligations assessed against the par6 ticipant under title II of that Act.’’. 

7 (e) PAYMENT.—Section 524 of title 11, United States 

8 Code, is amended by adding at the end the following: 

9 ‘‘(i) PARTICIPANT DEBTORS.—

10 ‘‘(1) IN GENERAL.—Paragraphs (2) and (3) 

11 shall apply to a debtor who—

12 ‘‘(A) is a participant that has made prior 

13 asbestos expenditures (as such terms are de14 fined in the Fairness in Asbestos Injury Resolu15 tion Act of 2005); and 

16 ‘‘(B) is subject to a case under this title 

17 that is pending—

18 ‘‘(i) on the date of enactment of the 

19 Fairness in Asbestos Injury Resolution Act 

20 of 2005; or 

21 ‘‘(ii) at any time during the 1-year pe22 riod preceding the date of enactment of 

23 that Act. 

24 ‘‘(2) TIER I DEBTORS.—A debtor that has been 

25 assigned to Tier I under section 202 of the Fairness 
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1 in Asbestos Injury Resolution Act of 2005 shall 

2 make payments in accordance with sections 202 and 

3 203 of that Act. 

4 ‘‘(3) TREATMENT OF PAYMENT OBLIGA5 TIONS.—All payment obligations of a debtor under 

6 sections 202 and 203 of the Fairness in Asbestos In7 jury Resolution Act of 2005 shall—

8 ‘‘(A) constitute costs and expenses of ad9 ministration of a case under section 503 of this 

10 title; 

11 ‘‘(B) notwithstanding any case pending 

12 under this title, be payable in accordance with 

13 section 202 of that Act; 

14 ‘‘(C) not be stayed; 

15 ‘‘(D) not be affected as to enforcement or 

16 collection by any stay or injunction of any 

17 court; and 

18 ‘‘(E) not be impaired or discharged in any 

19 current or future case under this title.’’. 

20 (f) TREATMENT OF TRUSTS.—Section 524 of title 

21 11, United States Code, as amended by this Act, is 

22 amended by adding at the end the following: 

23 ‘‘(j) ASBESTOS TRUSTS.—

24 ‘‘(1) IN GENERAL.—A trust shall assign a por25 tion of the corpus of the trust to the Asbestos Injury 
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1 Claims Resolution Fund (referred to in this sub2 section as the ‘Fund’) as established under the Fair3 ness in Asbestos Injury Resolution Act of 2005 if 

4 the trust qualifies as a ‘trust’ under section 201 of 

5 that Act. 

6 ‘‘(2) TRANSFER OF TRUST ASSETS.—

7 ‘‘(A) IN GENERAL.—

8 ‘‘(i) Except as provided under sub9 paragraphs (B), (C), and (E), the assets in 

10 any trust established to provide compensa11 tion for asbestos claims (as defined in sec12 tion 3 of the Fairness in Asbestos Injury 

13 Resolution Act of 2005) shall be trans14 ferred to the Fund not later than 6 

15 months after the date of enactment of the 

16 Fairness in Asbestos Injury Resolution Act 

17 of 2005 or 30 days following funding of a 

18 trust established under a reorganization 

19 plan subject to section 202(c) of that Act. 

20 Except as provided under subparagraph 

21 (B), the Administrator of the Fund shall 

22 accept such assets and utilize them for any 

23 purposes of the Fund under section 221 of 

24 such Act, including the payment of claims 

25 for awards under such Act to beneficiaries 
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1 of the trust from which the assets were 

2 transferred. 

3 ‘‘(ii) Notwithstanding any other provi4 sion of Federal or State law, no liability of 

5 any kind may be imposed on a trustee of 

6 a trust for transferring assets to the Fund 

7 in accordance with clause (i). 

8 ‘‘(B) AUTHORITY TO REFUSE ASSETS.—

9 The Administrator of the Fund may refuse to 

10 accept any asset that the Administrator deter11 mines may create liability for the Fund in ex12 cess of the value of the asset. 

13 ‘‘(C) ALLOCATION OF TRUST ASSETS.—If 

14 a trust under subparagraph (A) has bene15 ficiaries with claims that are not asbestos 

16 claims, the assets transferred to the Fund 

17 under subparagraph (A) shall not include assets 

18 allocable to such beneficiaries. The trustees of 

19 any such trust shall determine the amount of 

20 such trust assets to be reserved for the con21 tinuing operation of the trust in processing and 

22 paying claims that are not asbestos claims. The 

23 trustees shall demonstrate to the satisfaction of 

24 the Administrator, or by clear and convincing 

25 evidence in a proceeding brought before the 
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1 United States District Court for the District of 

2 Columbia in accordance with paragraph (4), 

3 that the amount reserved is properly allocable 

4 to claims other than asbestos claims. 

5 ‘‘(D) SALE OF FUND ASSETS.—The invest6 ment requirements under section 222 of the 

7 Fairness in Asbestos Injury Resolution Act of 

8 2005 shall not be construed to require the Ad9 ministrator of the Fund to sell assets trans10 ferred to the Fund under subparagraph (A). 

11 ‘‘(E) LIQUIDATED CLAIMS.—Except as 

12 specifically provided in this subparagraph, all 

13 asbestos claims against a trust are superseded 

14 and preempted as of the date of enactment of 

15 the Fairness in Asbestos Injury Resolution Act 

16 of 2005, and a trust shall not make any pay17 ment relating to asbestos claims after that date. 

18 If, in the ordinary course and the normal and 

19 usual administration of the trust consistent 

20 with past practices, a trust had before the date 

21 of enactment of the Fairness in Asbestos Injury 

22 Resolution Act of 2005, made all determina23 tions necessary to entitle an individual claimant 

24 to a noncontingent cash payment from the 

25 trust, the trust shall (i) make any lump-sum 
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1 cash payment due to that claimant, and (ii) 

2 make or provide for all remaining noncontin3 gent payments on any award being paid or 

4 scheduled to be paid on an installment basis, in 

5 each case only to the same extent that the trust 

6 would have made such cash payments in the or7 dinary course and consistent with past practices 

8 before enactment of that Act. A trust shall not 

9 make any payment in respect of any alleged 

10 contingent right to recover any greater amount 

11 than the trust had already paid, or had com12 pleted all determinations necessary to pay, to a 

13 claimant in cash in accordance with its ordinary 

14 distribution procedures in effect as of June 1, 

15 2003. 

16 ‘‘(3) INJUNCTION.—Any injunction issued as 

17 part of the formation of a trust described in para18 graph (1) shall remain in full force and effect. No 

19 court, Federal or State, may enjoin the transfer of 

20 assets by a trust to the Fund in accordance with 

21 this subsection pending resolution of any litigation 

22 challenging such transfer or the validity of this sub23 section or of any provision of the Fairness in Asbes24 tos Injury Resolution Act of 2005, and an interlocu25 tory order denying such relief shall not be subject to 
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1 immediate appeal under section 1291(a) of title 28. 

2 Notwithstanding any other provision of law, once 

3 such a transfer has been made, the assets of the 

4 Fund shall be available to satisfy any final judgment 

5 entered in such an action and no longer subject to 

6 any appeal or review, (i) declaring that the transfer 

7 effected a taking of a right or property for which an 

8 individual is constitutionally entitled to just com9 pensation, or (ii) requiring the transfer back to a 

10 trust of any or all assets transferred by that trust 

11 to the Fund. 

12 ‘‘(4) JURISDICTION.—Solely for purposes of im13 plementing this subsection, personal jurisdiction over 

14 every covered trust, the trustees thereof, and any 

15 other necessary party, and exclusive subject matter 

16 jurisdiction over every question arising out of or re17 lated to this subsection, shall be vested in the United 

18 States District Court for the District of Columbia. 

19 Notwithstanding any other provision of law, includ20 ing section 1127 of this title, that court may make 

21 any order necessary and appropriate to facilitate 

22 prompt compliance with this subsection, including 

23 assuming jurisdiction over and modifying, to the ex24 tent necessary, any applicable confirmation order or 

25 other order with continuing and prospective applica-
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1 tion to a covered trust. The court may also resolve 

2 any related challenge to the constitutionality of this 

3 subsection or of its application to any trust, trustee, 

4 or individual claimant. The Administrator of the 

5 Fund may bring an action seeking such an order or 

6 modification, under the standards of rule 60(b) of 

7 the Federal Rules of Civil Procedure or otherwise, 

8 and shall be entitled to intervene as of right in any 

9 action brought by any other party seeking interpre10 tation, application, or invalidation of this subsection. 

11 Any order denying relief that would facilitate prompt 

12 compliance with the transfer provisions of this sub13 section shall be subject to immediate appeal under 

14 section 1291(a) of title 28.’’. 

15 (g) NO AVOIDANCE OF TRANSFER.—Section 546 of 

16 title 11, United States Code, is amended by adding at the 

17 end the following: 

18 ‘‘(h) Notwithstanding the rights and powers of a 

19 trustee under sections 544, 545, 547, 548, 549, and 550 

20 of this title, if a debtor is a participant (as that term is 

21 defined in section 3 of the Fairness in Asbestos Injury 

22 Resolution Act of 2005), the trustee may not avoid a 

23 transfer made by the debtor under its payment obligations 

24 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 2005), 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. Any 

19 State law that provides for priorities inconsistent 

20 with this provision is preempted by this Act. 

21 (2) PAYMENT OF ASSESSMENT.—Payment of 

22 any assessment required by this Act shall not be 

23 subject to any automatic or judicially entered stay in 

24 any insurance receivership proceeding. This Act shall 

25 preempt any State law requiring that payments by 
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1 a direct insurer, reinsurer or runoff participant in 

2 an insurance receivership proceeding be approved by 

3 a court, receiver or other person. Payments of as4 sessments by any direct insurer or reinsurer partici5 pant under this Act shall not be subject to the avoid6 ance powers of a receiver or a court in or relating 

7 to an insurance receivership proceeding. 

8 SEC. 403. EFFECT ON OTHER LAWS AND EXISTING CLAIMS. 

9 (a) EFFECT ON FEDERAL AND STATE LAW.—The 

10 provisions of this Act shall supersede any and all Federal 

11 and State laws insofar as they may relate to any asbestos 

12 claim, including any claim described in subsection (d)(2). 

13 (b) SUPERSEDING PROVISIONS.—

14 (1) IN GENERAL.—Any agreement, under15 standing, or undertaking by any person or affiliated 

16 group with respect to the treatment of any asbestos 

17 claim that requires future performance by any party, 

18 insurer of such party, settlement administrator, or 

19 escrow agent shall be superseded in its entirety by 

20 this Act. 

21 (2) NO FORCE OR EFFECT.—Any such agree22 ment, understanding, or undertaking by any such 

23 person or affiliated group shall be of no force or ef24 fect, and no person shall have any rights or claims 

25 with respect to any of the foregoing. 
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1 (c) EXCLUSIVE REMEDY.—The remedies provided 

2 under this Act shall be the exclusive remedy for any asbes3 tos claim, including any claim described in subsection 

4 (d)(2), under any Federal or State law. 

5 (d) BAR ON ASBESTOS CLAIMS.—

6 (1) IN GENERAL.—No asbestos claim, including 

7 any claim described in subsection (d)(2), may be 

8 pursued and no pending asbestos claim may be 

9 maintained in any Federal or State court, except for 

10 enforcement of claims for which an order or judg11 ment has been duly entered by a court that is no 

12 longer subject to any appeal or judicial review before 

13 the date of enactment of this Act. 

14 (2) CERTAIN SPECIFIED CLAIMS.—

15 (A) IN GENERAL.—Subject to section 404 

16 (d) and (e)(3) of this Act, no claim may be 

17 brought or pursued in any Federal or State 

18 court or insurance receivership proceeding—

19 (i) relating to any default, confessed 

20 or stipulated judgment on an asbestos 

21 claim if the judgment debtor expressly 

22 agreed, in writing or otherwise, not to con23 test the entry of judgment against it and 

24 the plaintiff expressly agreed, in writing or 

25 otherwise, to seek satisfaction of the judg-
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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 

25 failure to detect, disclose or warn re-
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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 or 

9 otherwise; or 

10 (iv) by any third party, and premised 

11 on any theory, allegation or cause of ac12 tion, for reimbursement of health care 

13 costs allegedly associated with the use of 

14 or exposure to asbestos, whether such 

15 claim is asserted directly, indirectly or de16 rivatively. 

17 (B) EXCEPTIONS.—Subparagraph (A) (ii) 

18 and (iii) shall not apply to claims against par19 ticipants by persons—

20 (i) with whom the participant is in 

21 privity of contract; 

22 (ii) who have received an assignment 

23 of insurance rights not otherwise voided by 

24 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 sub6 section (d)(2), in any Federal or State court, except 

7 actions for which an order or judgment has been 

8 duly entered by a court that is no longer subject to 

9 any appeal or judicial review before the date of en10 actment of this Act, is preempted by this Act. 

11 (4) DISMISSAL.—No judgment other than a 

12 judgment of dismissal may be entered in any such 

13 action, including an action pending on appeal, or on 

14 petition or motion for discretionary review, on or 

15 after the date of enactment of this Act. A court may 

16 dismiss any such action on its motion. If the court 

17 denies the motion to dismiss, it shall stay further 

18 proceedings until final disposition of any appeal 

19 taken under this Act. 

20 (5) REMOVAL.—

21 (A) IN GENERAL.—If an action in any 

22 State court under paragraph (3) is not dis23 missed, or if an order entered after the date of 

24 enactment of this Act purporting to enter judg25 ment or deny review is not rescinded and re-
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1 placed with an order of dismissal within 30 

2 days after the filing of a motion by any party 

3 to the action advising the court of the provi4 sions of this Act, any party may remove the 

5 case to the district court of the United States 

6 for the district in which such action is pending. 

7 (B) TIME LIMITS.—For actions originally 

8 filed after the date of enactment of this Act, the 

9 notice of removal shall be filed within the time 

10 limits specified in section 1441(b) of title 28, 

11 United States Code. 

12 (C) PROCEDURES.—The procedures for re13 moval and proceedings after removal shall be in 

14 accordance with sections 1446 through 1450 of 

15 title 28, United States Code, except as may be 

16 necessary to accommodate removal of any ac17 tions pending (including on appeal) on the date 

18 of enactment of this Act. 

19 (D) JURISDICTION.—The jurisdiction of 

20 the district court shall be limited to—

21 (i) determining whether removal was 

22 proper; and 

23 (ii) determining whether the claim 

24 presented is an asbestos claim as defined 

25 by this Act. 
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1 (6) CREDITS.—If, notwithstanding the express 

2 intent of Congress stated in this section, any court 

3 finally determines for any reason that an asbestos 

4 claim including a claim described under paragraph 

5 (2) for which, before the date of enactment of this 

6 Act, there had been no order or judgment duly en7 tered by a court no longer subject to any appeal or 

8 review, is not subject to the exclusive remedy or pre9 emption provisions of this section, then any partici10 pant required to satisfy a final judgment executed 

11 with respect to any such claim may elect to receive 

12 a credit against any assessment owed to the Fund 

13 equal to the amount of the payment made with re14 spect to such executed judgment. The Administrator 

15 shall require participants seeking credit under this 

16 section to demonstrate that the participant timely 

17 pursued all available remedies, including remedies 

18 available under this section to obtain dismissal of 

19 the claim, and that the participant notified the Ad20 ministrator at least 20 days before the expiration of 

21 any period within which to appeal the denial of a 

22 motion to dismiss based on this section. The Admin23 istrator may require such participant to furnish such 

24 further information as is necessary and appropriate 

25 to establish eligibility for and the amount of the 
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1 credits. The Administrator may intervene in any ac2 tion in which a credit may be due under this section. 

3 SEC. 404. EFFECT ON INSURANCE AND REINSURANCE CON4 TRACTS. 

5 (a) EROSION OF INSURANCE COVERAGE LIMITS.—

6 (1) DEFINITIONS.—In this section, the fol7 lowing definitions shall apply: 

8 (A) DEEMED EROSION AMOUNT.—The 

9 term ‘‘deemed erosion amount’’ means the 

10 amount of erosion deemed to occur at enact11 ment under paragraph (2). 

12 (B) EARLY SUNSET.—The term ‘‘early 

13 sunset’’ means an event causing termination of 

14 the program under section 405(f) which relieves 

15 the insurer participants of paying some portion 

16 of the aggregate payment level of 

17 $46,025,000,000 required in section 

18 212(a)(2)(A). 

19 (C) EARNED EROSION AMOUNT.—The 

20 term ‘‘earned erosion amount’’ means, in the 

21 event of any early sunset under section 405(f), 

22 the percentage, as set forth in the following 

23 schedule, depending on the year in which the 

24 defendant participants’ funding obligations end, 

25 of those amounts which, at the time of the early 
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1 sunset, a defendant participant has paid to the 

2 fund and remains obligated to pay into the 

3 fund.

Year After Enactment In Which Defendant 

Participant’ss Funding Obligation Ends:

Applicable Percentage:

10 .................................................................................................... 70.78

11 .................................................................................................... 68.75

12 .................................................................................................... 67.06

13 .................................................................................................... 65.63

14 .................................................................................................... 64.40

15 .................................................................................................... 63.33

16 .................................................................................................... 62.40

17 .................................................................................................... 61.58

18 .................................................................................................... 60.39

19 .................................................................................................... 59.33

20 .................................................................................................... 58.38

21 .................................................................................................... 57.51

22 .................................................................................................... 56.36

23 .................................................................................................... 55.31

24 .................................................................................................... 56.71

25 .................................................................................................... 58.11

26 .................................................................................................... 59.51

4 (D) REMAINING AGGREGATE PRODUCTS

5 LIMITS.—The term ‘‘remaining aggregate prod6 ucts limits’’ means aggregate limits that apply 

7 to insurance coverage granted under the ‘‘prod8 ucts hazard’’, ‘‘completed operations hazard’’, 

9 or ‘‘Products—Completed Operations Liability’’ 

10 in any comprehensive general liability policy 

11 issued between calendar years 1940 and 1986 

12 to cover injury which occurs in any State, as re13 duced by—

14 (i) any existing impairment of such 

15 aggregate limits as of the date of enact16 ment of this Act; and 
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1 (ii) the resolution of claims for reim2 bursement or coverage of liability or paid 

3 or incurred loss for which notice was pro4 vided to the insurer before the date of en5 actment of this Act. 

6 (E) SCHEDULED PAYMENT AMOUNTS.—

7 The term ‘‘scheduled payment amounts’’ means 

8 the future payment obligation to the Fund 

9 under this Act from a defendant participant in 

10 the amount established under sections 203 and 

11 204. 

12 (F) UNEARNED EROSION AMOUNT.—The 

13 term ‘‘unearned erosion amount’’ means, in the 

14 event of any early sunset under section 405(f), 

15 the difference between the deemed erosion 

16 amount and the earned erosion amount. 

17 (2) QUANTUM AND TIMING OF EROSION.—

18 (A) EROSION UPON ENACTMENT.—The 

19 collective payment obligations to the Fund of 

20 the insurer and reinsurer participants as as21 sessed by the Administrator shall be deemed as 

22 of the date of enactment of this Act to erode re23 maining aggregate products limits available to a 

24 defendant participant only in an amount of 
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1 59.64 percent of each defendant participant’s 

2 scheduled payment amount. 

3 (B) NO EROSION UPON CONTINGENT

4 CALL.—Any contingent payment required by 

5 the Administrator of any defendant participant 

6 shall not be deemed to erode remaining aggre7 gate product limits. 

8 (C) NO ASSERTION OF CLAIM.—No insurer 

9 or reinsurer may assert any claim against a de10 fendant participant or captive insurer for insur11 ance, reinsurance, payment of a deductible, or 

12 retrospective premium adjustment arising out 

13 of that insurer or reinsurer’s payments to the 

14 Fund or the erosion deemed to occur under this 

15 section. 

16 (D) POLICIES WITHOUT CERTAIN LIMITS

17 OR WITH EXCLUSION.—Other than under sub18 paragraph (F), nothing in this section shall re19 quire or permit the erosion of any insurance 

20 policy or limit that does not contain an aggre21 gate products limit, or that contains an asbes22 tos exclusion. 

23 (E) TREATMENT OF CONSOLIDATION

24 ELECTION.—If an affiliated group elects con25 solidation as provided in section 204(f), the 
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1 total erosion of limits for the affiliated group 

2 under paragraph (2)(A) shall not exceed 59.64 

3 percent of the scheduled payment amount of 

4 the single payment obligation for the entire af5 filiated group. The total erosion of limits for 

6 any individual defendant participant in the af7 filiated group shall not exceed its individual 

8 share of 59.64 percent of the affiliated group’s 

9 scheduled payment amount, as measured by the 

10 individual defendant participant’s percentage 

11 share of the affiliated group’s prior asbestos ex12 penditures. 

13 (F) RULE OF CONSTRUCTION.—Notwith14 standing any other provision of this section, 

15 nothing in this Act shall be deemed to erode re16 maining aggregate products limits of a defend17 ant participant that can demonstrate by a pre18 ponderance of the evidence that 75 percent of 

19 its prior asbestos expenditures were made in de20 fense or satisfaction of asbestos claims alleging 

21 bodily injury arising exclusively from the expo22 sure to asbestos at premises owned, rented, or 

23 controlled by the defendant participant (a 

24 ‘‘premises defendant’’). In calculating such per25 centage, where expenditures were made in de-
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1 fense or satisfaction of asbestos claims alleging 

2 bodily injury due to exposure to the defendant 

3 participant’s products and to asbestos at prem4 ises owned, rented or controlled by the defend5 ant participant, half of such expenditures shall 

6 be deemed to be for such premises exposures. 

7 In the event that a defendant participant estab8 lishes itself as a premises defendant, 75 percent 

9 of the payments by such defendant participant 

10 shall erode coverage limits, if any, applicable to 

11 premises liabilities under applicable law. 

12 (3) METHOD OF EROSION.—

13 (A) ALLOCATION.—The amount of erosion 

14 allocated to each defendant participant shall be 

15 allocated among periods in which policies with 

16 remaining aggregate product limits are avail17 able to that defendant participant pro rata by 

18 policy period, in ascending order by attachment 

19 point. 

20 (B) OTHER EROSION METHODS.—

21 (i) IN GENERAL.—Notwithstanding 

22 subparagraph (A), the method of erosion 

23 of any remaining aggregate products limits 

24 which are subject to—
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1 (I) a coverage-in-place or settle2 ment agreement between a defendant 

3 participant and 1 or more insurance 

4 participants as of the date of enact5 ment; or 

6 (II) a final and nonappealable 

7 judgment as of the date of enactment 

8 or resulting from a claim for coverage 

9 or reimbursement pending as of such 

10 date, shall be as specified in such 

11 agreement or judgment with regard to 

12 erosion applicable to such insurance 

13 participants’ policies. 

14 (ii) REMAINING LIMITS.—To the ex15 tent that a final nonappealable judgment 

16 or settlement agreement to which an in17 surer participant and a defendant partici18 pant are parties in effect as of the date of 

19 enactment of this Act extinguished a de20 fendant participant’s right to seek coverage 

21 for asbestos claims under an insurer par22 ticipant’s policies, any remaining limits in 

23 such policies shall not be considered to be 

24 remaining aggregate products limits under 

25 subsection (a)(1)(A). 
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1 (4) RESTORATION OF AGGREGATE PRODUCT

2 LIMITS UPON EARLY SUNSET.—

3 (A) RESTORATION.—In the event of an 

4 early sunset, any unearned erosion amount will 

5 be deemed restored as aggregate products limits 

6 available to a defendant participant as of the 

7 date of enactment. 

8 (B) METHOD OF RESTORATION.—The un9 earned erosion amount will be deemed restored 

10 to each defendant participant’s policies in such 

11 a manner that the last limits that were deemed 

12 eroded at enactment under this subsection are 

13 deemed to be the first limits restored upon 

14 early sunset. 

15 (C) TOLLING OF COVERAGE CLAIMS.—In 

16 the event of an early sunset, the applicable stat17 ute of limitations and contractual provisions for 

18 the filing of claims under any insurance policy 

19 with restored aggregate product limits shall be 

20 deemed tolled after the date of enactment 

21 through the date 6 months after the date of 

22 early sunset. 

23 (5) PAYMENTS BY DEFENDANT PARTICIPANT.—

24 Payments made by a defendant participant shall be 

25 deemed to erode, exhaust or otherwise satisfy appli-
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1 cable self-insured retentions, deductibles, retrospec2 tively rated premiums, and limits issued by non3 participating insolvent or captive insurance compa4 nies. Reduction of remaining aggregate limits under 

5 this subsection shall not limit the right of a defend6 ant participant to collect from any insurer not a par7 ticipant. 

8 (6) EFFECT ON OTHER INSURANCE CLAIMS.—

9 Other than as specified in this subsection, this Act 

10 does not alter, change, modify, or affect insurance 

11 for claims other than asbestos claims. 

12 (b) DISPUTE RESOLUTION PROCEDURE.—

13 (1) ARBITRATION.—The parties to a dispute re14 garding the erosion of insurance coverage limits 

15 under this section may agree in writing to settle 

16 such dispute by arbitration. Any such provision or 

17 agreement shall be valid, irrevocable, and enforce18 able, except for any grounds that exist at law or in 

19 equity for revocation of a contract. 

20 (2) TITLE 9, UNITED STATES CODE.—Arbitra21 tion of such disputes, awards by arbitrators, and 

22 confirmation of awards shall be governed by title 9, 

23 United States Code, to the extent such title is not 

24 inconsistent with this section. In any such arbitra25 tion proceeding, the erosion principles provided for 
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1 under this section shall be binding on the arbitrator, 

2 unless the parties agree to the contrary. 

3 (3) FINAL AND BINDING AWARD.—An award by 

4 an arbitrator shall be final and binding between the 

5 parties to the arbitration, but shall have no force or 

6 effect on any other person. The parties to an arbi7 tration may agree that in the event a policy which 

8 is the subject matter of an award is subsequently de9 termined to be eroded in a manner different from 

10 the manner determined by the arbitration in a judg11 ment rendered by a court of competent jurisdiction 

12 from which no appeal can or has been taken, such 

13 arbitration award may be modified by any court of 

14 competent jurisdiction upon application by any party 

15 to the arbitration. Any such modification shall gov16 ern the rights and obligations between such parties 

17 after the date of such modification. 

18 (c) EFFECT ON NONPARTICIPANTS.—

19 (1) IN GENERAL.—No insurance company or 

20 reinsurance company that is not a participant, other 

21 than a captive insurer, shall be entitled to claim that 

22 payments to the Fund erode, exhaust, or otherwise 

23 limit the nonparticipant’s insurance or reinsurance 

24 obligations. 
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1 (2) OTHER CLAIMS.—Nothing in this Act shall 

2 preclude a participant from pursuing any claim for 

3 insurance or reinsurance from any person that is not 

4 a participant other than a captive insurer. 

5 (d) FINITE RISK POLICIES NOT AFFECTED.—

6 (1) IN GENERAL.—Notwithstanding any other 

7 provision of this Act, this Act shall not alter, affect 

8 or impair any rights or obligations of—

9 (A) any party to an insurance contract 

10 that expressly provides coverage for govern11 mental charges or assessments imposed to re12 place insurance or reinsurance liabilities in ef13 fect on the date of enactment of this Act; or 

14 (B) subject to paragraph (2), any person 

15 with respect to any insurance or reinsurance 

16 purchased by a participant after December 31, 

17 1996, that expressly (but not necessarily exclu18 sively) provides coverage for asbestos liabilities, 

19 including those policies commonly referred to as 

20 ‘‘finite risk’’ policies. 

21 (2) LIMITATION.—No person may assert that 

22 any amounts paid to the Fund in accordance with 

23 this Act are covered by any policy described under 

24 paragraph (1)(B) purchased by a defendant partici25 pant, unless such policy specifically provides cov-
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1 erage for required payments to a Federal trust fund 

2 established by a Federal statute to resolve asbestos 

3 injury claims. 

4 (e) EFFECT ON CERTAIN INSURANCE AND REINSUR5 ANCE CLAIMS.—

6 (1) NO COVERAGE FOR FUND ASSESSMENTS.—

7 No participant or captive insurer may pursue an in8 surance or reinsurance claim against another partici9 pant or captive insurer for payments to the Fund re10 quired under this Act, except under a contract spe11 cifically providing insurance or reinsurance for re12 quired payments to a Federal trust fund established 

13 by a Federal statute to resolve asbestos injury 

14 claims or, where applicable, under finite risk policies 

15 under subsection (d). 

16 (2) CERTAIN INSURANCE ASSIGNMENTS VOID17 ED.—Any assignment of any rights to insurance cov18 erage for asbestos claims to any person who has as19 serted an asbestos claim before the effective date, or 

20 to any trust, person or other entity not part of an 

21 affiliated group as defined in section 201(1) of this 

22 Act established or appointed for the purpose of pay23 ing asbestos claims which were asserted before the 

24 effective date, or by any Tier I defendant partici25 pant, before any sunset of this Act, shall be null and 
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1 void. This subsection shall not void or affect in any 

2 way any assignments of rights to insurance coverage 

3 other than to asbestos claimants or to trusts, per4 sons, or other entities not part of an affiliated group 

5 as defined in section 201(1) of this Act established 

6 or appointed for the purpose of paying asbestos 

7 claims, or by Tier I defendant participants. 

8 (3) INSURANCE CLAIMS PRESERVED.—Notwith9 standing any other provision of this Act, this Act 

10 shall not alter, affect or impair any rights or obliga11 tions of any person with respect to any insurance or 

12 reinsurance for amounts that any person pays, has 

13 paid or becomes legally obligated to pay in respect 

14 of asbestos or other claims, except to the extent 

15 that—

16 (A) such person pays or becomes legally 

17 obligated to pay claims that are superseded by 

18 section 403 of this Act; 

19 (B) any such rights or obligations of such 

20 person with respect to insurance or reinsurance 

21 are prohibited by subsection (e) (1) or (2) of 

22 this section; or 

23 (C) the limits of insurance otherwise avail24 able to such participant in respect of asbestos 
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1 claims are deemed to be eroded under sub2 section (a) of this section. 

3 SEC. 405. ANNUAL REPORT OF THE ADMINISTRATOR. 

4 (a) IN GENERAL.—The Administrator shall submit 

5 an annual report to the Committee on the Judiciary of 

6 the Senate and the Committee on the Judiciary of the 

7 House of Representatives on the operation of the Asbestos 

8 Injury Claims Resolution Fund within 6 months after the 

9 close of each fiscal year. 

10 (b) CONTENTS OF REPORT.—The annual report sub11 mitted under this subsection shall include—

12 (1) a summary of the claims made during the 

13 most recent fiscal year, including—

14 (A) the number of claims made to the Of15 fice and a description of the types of medical 

16 diagnoses and asbestos exposure underlying 

17 those claims; and 

18 (B) the number of claims denied by the 

19 Office and a description of the types of medical 

20 diagnoses and asbestos exposures underlying 

21 those claims, and a general description of the 

22 reasons for their denial; 

23 (2) a summary of the eligibility determinations 

24 made by the Office under section 114; 
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1 (3) a summary of the awards made from the 

2 Fund, including the amount of the awards; 

3 (4) an analysis of the financial condition of the 

4 Fund, including an estimation of the Fund’s ability 

5 to pay claims for the subsequent 5 years in full as 

6 and when required, an evaluation of the Fund’s abil7 ity to retire its existing debt and assume additional 

8 debt, and an evaluation of the Fund’s ability to sat9 isfy other obligations under the program; 

10 (5) a statement of the percentage of asbestos 

11 claimants who filed claims during the prior calendar 

12 year and were determined to be eligible to receive 

13 compensation under this Act, who have received the 

14 compensation to which they are entitled according to 

15 section 133 for each level; 

16 (6) the identity of all participants and a sum17 mary of the funding allocations of each participant, 

18 including the amounts of all payments to the Fund; 

19 (7) a summary of all financial hardship or in20 equity adjustments applied for during the fiscal 

21 year, and a summary of the adjustments that were 

22 made during the fiscal year; 

23 (8) a summary of the investments made under 

24 section 222(b); 
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1 (9) a summary of all referrals made to law en2 forcement authorities under section 408 and of any 

3 legal actions brought or penalties imposed under sec4 tion 223; 

5 (10) an estimate of the number and types of 

6 claims, the amount of awards, and the participant 

7 payment obligations for the next fiscal year; 

8 (11) any recommendations from the Advisory 

9 Committee on Asbestos Disease Compensation and 

10 the Medical Advisory Committee of the Fund to im11 prove the diagnostic, exposure, and medical criteria 

12 so as to pay only those claimants whose injuries are 

13 caused by exposure to asbestos; 

14 (12) a summary of the results of audits con15 ducted under section 115; and 

16 (13) a summary of prosecutions under section 

17 1348 of title 18, United States Code (as added by 

18 this Act). 

19 (c) CLAIMS ANALYSIS.—If the Administrator con20 cludes, on the basis of the annual report submitted under 

21 this section, that the Fund is compensating claims for in22 juries that are not caused by exposure to asbestos and 

23 compensating such claims may, currently or in the future, 

24 undermine the Fund’s ability to compensate persons with 

25 injuries that are caused by exposure to asbestos, he or she 
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1 must include in the report an analysis of the reasons for 

2 the situation, a description of the range of reasonable al3 ternatives for responding to the situation, and a rec4 ommendation as to which alternative best serves the inter5 est of claimants and the public. The report may include 

6 a description of changes in the diagnostic, exposure or 

7 medical criteria of section 121 that the Administrator be8 lieves may be necessary to protect the Fund from compen9 sating claims not caused by exposure to asbestos. 

10 (d) SHORTFALL ANALYSIS.—

11 (1) IN GENERAL.—If the Administrator con12 cludes, on the basis of the information contained in 

13 the annual report submitted under this section, that 

14 the Fund may not be able to pay claims as they be15 come due at any time within the next 5 years, the 

16 Administrator must include in the report an analysis 

17 of the reasons for the situation, an estimation of 

18 when the Fund will no longer be able to pay claims 

19 as they become due, a description of the range of 

20 reasonable alternatives for responding to the situa21 tion, and a recommendation as to which alternative 

22 best serves the interest of claimants and the public. 

23 The report may include a description of changes in 

24 the diagnostic, exposure or medical criteria of sec25 tion 121 that the Administrator believes may be nec-
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1 essary to protect the Fund. The range of alter2 natives may include—

3 (A) triggering the termination of this Act 

4 under subsection (f) at any time after 7 years 

5 following the date of enactment of this Act, and 

6 (B) reform of the program set forth in ti7 tles I and II of this Act (including changes in 

8 the diagnostic, exposure or medical criteria, 

9 changes in the enforcement or application of 

10 those criteria, changes in the timing of pay11 ments, or changes in award values). 

12 (2) CONSIDERATIONS.—In formulating rec13 ommendations, the Administrator shall take into ac14 count the reasons for any shortfall, actual or pro15 jected, which may include—

16 (A) financial factors (such as inadequate 

17 return on investments); 

18 (B) the operation of the Fund generally 

19 (including the operation of the diagnostic, expo20 sure and medical criteria, potential problems of 

21 fraud, the adequacy of the criteria to rule out 

22 idiopathic mesothelioma, and inadequate flexi23 bility to extend the timing of payments); 

24 (C) the actual incidence of diseases such as 

25 mesothelioma; 
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1 (D) compensation of diseases with alter2 native causes; and 

3 (E) any other factor that the Adminis4 trator considers relevant. 

5 (3) RECOMMENDATION OF TERMINATION.—Any 

6 recommendation of termination should include a 

7 plan for winding up the affairs of the Fund (and the 

8 program generally) within a defined period, includ9 ing paying in full all claims resolved at the time the 

10 report is prepared. 

11 (4) RESOLVED CLAIMS.—For purposes of this 

12 section, a claim shall be deemed resolved when the 

13 Administrator has determined the amount of the 

14 award due the claimant, and either the claimant has 

15 waived judicial review or the time for judicial review 

16 has expired. 

17 (e) RECOMMENDATIONS OF ADMINISTRATOR AND

18 COMMISSION.—

19 (1) IN GENERAL.—If the Administrator rec20 ommends changes to this Act under subsection (c), 

21 the recommendations and accompanying analysis 

22 shall be referred to a special commission consisting 

23 of the Attorney General, the Secretary of Labor, the 

24 Secretary of Health and Human Services, the Sec25 retary of the Treasury, and the Secretary of Com-
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1 merce. The Commission shall hold public hearings 

2 on the Administrator’s alternatives and rec3 ommendations and then make its own recommenda4 tions for reform of the program set forth in titles I 

5 and II of this Act. Within 180 days after receiving 

6 the Administrator’s recommendations, the Commis7 sion shall transmit its own recommendations to the 

8 Congress in the same manner as set forth in sub9 section (a). 

10 (2) REFERRAL.—If the Administrator rec11 ommends changes to, or termination of, this Act 

12 under subsection (d), the recommendations and ac13 companying analysis shall be referred to the Com14 mission. The Commission shall hold public hearings 

15 on the Administrator’s alternatives and rec16 ommendations and then make its own recommenda17 tions for reform of the program set forth in titles I 

18 and II of this Act. Within 180 days after receiving 

19 the Administrator’s recommendations, the Commis20 sion shall transmit its own recommendations to the 

21 Congress in the same manner as set forth in sub22 section (a). 

23 (f) SUNSET OF ACT.—

24 (1) IN GENERAL.—At any time after 7 years 

25 following the date on which the Administrator begins 
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1 processing claims, if the Administrator determines 

2 that, if any additional claims are resolved, the Fund 

3 will not have sufficient resources when needed to pay 

4 100 percent of all resolved claims while also making 

5 its debt repayment obligations and meeting its other 

6 obligations under this Act, the provisions of this Act 

7 set forth in paragraph (3) shall terminate and be of 

8 no further effect 180 days after the Administrator’s 

9 determination as to all asbestos claims that have not 

10 been resolved by the Fund as of the date of the de11 termination, unless Congress passes legislation con12 tinuing the Fund. 

13 (2) RESOLVED CLAIMS.—In the event of sunset, 

14 all resolved claims shall be paid in full by the Fund. 

15 (3) TERMINATED PROVISIONS.—Subject to 

16 paragraph (4), the provisions of this Act subject to 

17 termination under paragraph (1) are titles I (except 

18 subtitle A) and II and sections 403 and 404(e)(2). 

19 (4) CONTINUED FUNDING.—If provisions of 

20 this Act terminate under paragraph (1), participants 

21 will still be required to make payments as provided 

22 under subtitles A and B of title II. If the full 

23 amount of payments required by title II is not nec24 essary for the Fund to pay claims that have been re25 solved as of the date of termination, pay the Fund’s 
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1 debt, and support the Fund’s continued operation as 

2 needed to pay such claims and debt, the Adminis3 trator may reduce such payments. Any such reduc4 tions shall be allocated among participants in ap5 proximately the same proportion as the liability 

6 under subtitles A and B of title II. 

7 (5) DEFINITIONS.—In this subsection—

8 (A) the term ‘‘sunset claims’’ means claims 

9 as to which this Act has terminated; and 

10 (B) the term ‘‘sunset claimants’’ means 

11 persons asserting such claims. 

12 (6) SUNSET CLAIMS.—If this Act terminates in 

13 accordance with paragraph (1), then the applicable 

14 statute of limitations for the filing of sunset claims 

15 under subsection (g) shall be deemed tolled for any 

16 past or pending sunset claimants while they were 

17 pursuing claims filed under this Act. For those 

18 claimants who decide to pursue a sunset claim in ac19 cordance with subsection (g), the applicable statute 

20 of limitations shall apply, except that claimants who 

21 filed a claim against the Fund under this Act before 

22 the date of termination shall have 2 years after the 

23 date of termination to file a sunset claim in accord24 ance with subsection (g), whichever is longer. 

25 (g) NATURE OF CLAIM AFTER SUNSET.—
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1 (1) IN GENERAL.—On and after the date of ter2 mination under subsection (f), any individual injured 

3 as a result of exposure to asbestos, who has not pre4 viously had a claim resolved by the Fund, may in a 

5 civil action obtain relief in damages subject to the 

6 terms and conditions under this subsection and 

7 paragraph (6) of subsection (f), except—

8 (A) an individual who received an award 

9 for a nonmalignant disease (Levels I through 

10 V) from the Fund may assert a claim for a ma11 lignant disease under this subsection, unless the 

12 malignancy was diagnosed or the claimant had 

13 discovered facts that would have led a reason14 able person to obtain such a diagnosis before 

15 the date on which the nonmalignant claim was 

16 settled; and 

17 (B) an individual who received an award 

18 for a nonmalignant or malignant disease (ex19 cept mesothelioma) (Levels I through IX) from 

20 the Fund may assert a claim for mesothelioma 

21 under this subsection, unless the mesothelioma 

22 was diagnosed or the claimant had discovered 

23 facts that would have led a reasonable person to 

24 obtain such a diagnosis before the date on 
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1 which the nonmalignant or other malignant 

2 claim was settled. 

3 (2) EXCLUSIVE JURISDICTION.—The United 

4 States district courts shall have exclusive jurisdiction 

5 of all actions under paragraph (1), to the exclusion 

6 of State courts and any other forum. As of the effec7 tive date of a termination of this Act under sub8 section (f), an action under paragraph (1) shall be 

9 the exclusive remedy for any asbestos claim that 

10 might otherwise exist under Federal, State or other 

11 law, regardless of whether such claim arose before or 

12 after the effective date of this Act or of the termi13 nation of this Act, except that claims against the 

14 Fund that have been resolved before the date of the 

15 termination determination under subsection (f) may 

16 be paid by the Fund. 

17 (3) VENUE.—Actions under paragraph (1) shall 

18 be brought only in the United States district court 

19 for the judicial district where the claimant resides or 

20 the exposure is alleged to have occurred. 

21 (4) APPLICABLE LAW.—An action under para22 graph (1) shall be governed by Federal common law, 

23 except that where national uniformity is not required 

24 the court must utilize otherwise applicable State law, 
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1 including State statutes, to provide the appropriate 

2 rule of Federal common law. 

3 SEC. 406. RULES OF CONSTRUCTION RELATING TO LIABIL4 ITY OF THE UNITED STATES GOVERNMENT. 

5 (a) CAUSES OF ACTIONS.—Except as otherwise spe6 cifically provided in this Act, nothing in this Act may be 

7 construed as creating a cause of action against the United 

8 States Government, any entity established under this Act, 

9 or any officer or employee of the United States Govern10 ment or such entity. 

11 (b) FUNDING LIABILITY.—Nothing in this Act may 

12 be construed to—

13 (1) create any obligation of funding from the 

14 United States Government, other than the funding 

15 for personnel and support as provided under this 

16 Act; or 

17 (2) obligate the United States Government to 

18 pay any award or part of an award, if amounts in 

19 the Fund are inadequate. 

20 SEC. 407. RULES OF CONSTRUCTION. 

21 (a) LIBBY, MONTANA CLAIMANTS.—Nothing in this 

22 Act shall preclude the formation of a fund for the payment 

23 of eligible medical expenses related to treating asbestos24 related disease for current and former residents of Libby, 

25 Montana. 
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1 (b) HEALTH CARE FROM PROVIDER OF CHOICE.—

2 Nothing in this Act shall be construed to preclude any eli3 gible claimant from receiving health care from the pro4 vider of their choice. 

5 SEC. 408. VIOLATIONS OF ENVIRONMENTAL AND OCCUPA6 TIONAL HEALTH AND SAFETY REQUIRE7 MENTS. 

8 (a) ASBESTOS IN COMMERCE.—If the Administrator 

9 receives information concerning conduct occurring after 

10 the date of enactment of this Act that may have been a 

11 violation of standards issued by the Environmental Protec12 tion Agency under the Toxic Substances Control Act (15 

13 U.S.C. 2601 et seq.), relating to the manufacture, impor14 tation, processing, disposal and distribution in commerce 

15 of asbestos-containing products, the Administrator shall 

16 refer the matter in writing within 30 days after receiving 

17 that information to the Administrator of the Environ18 mental Protection Agency and the United States Attorney 

19 for possible civil or criminal penalties, including those 

20 under section 17 of the Toxic Substances Control Act (15 

21 U.S.C. 2616), and to the appropriate State authority with 

22 jurisdiction to investigate asbestos matters. 

23 (b) ASBESTOS AS AIR POLLUTANT.—If the Adminis24 trator receives information concerning conduct occurring 

25 after the date of enactment of this Act that may have been 
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1 a violation of standards issued by the Environmental Pro2 tection Agency under the Clean Air Act (42 U.S.C. 7401 

3 et seq.), relating to asbestos as a hazardous air pollutant, 

4 the Administrator shall refer the matter in writing within 

5 30 days after receiving that information to the Adminis6 trator of the Environmental Protection Agency and the 

7 United States Attorney for possible criminal and civil pen8 alties, including those under section 113 of the Clean Air 

9 Act (42 U.S.C. 7413), and to the appropriate State au10 thority with jurisdiction to investigate asbestos matters. 

11 (c) OCCUPATIONAL EXPOSURE.—If the Adminis12 trator receives information concerning conduct occurring 

13 after the date of enactment of this Act that may have been 

14 a violation of standards issued by the Occupational Safety 

15 and Health Administration under the Occupational Safety 

16 and Health Act of 1970 (29 U.S.C. 651 et seq.), relating 

17 to occupational exposure to asbestos, the Administrator 

18 shall refer the matter in writing within 30 days after re19 ceiving that information and refer the matter to—

20 (1) the United States Attorney for possible 

21 criminal prosecution under section 5(a) of such Act 

22 (29 U.S.C. 654(a)); 

23 (2) the Secretary of Labor for possible civil 

24 penalties under section 17 (a) through (d) of such 

25 Act (29 U.S.C. 666 (a) through (d)); and 
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1 (3) the Assistant Secretary for the Occupational 

2 Safety and Health Commission, and the appropriate 

3 State authority with jurisdiction to investigate asbes4 tos matters, for possible civil or criminal penalties, 

5 including those under section 17 of the Occupational 

6 Safety and Health Act of 1970 (29 U.S.C. 666). 

7 (d) REVIEW OF FEDERAL SENTENCING GUIDELINES

8 FOR ENVIRONMENTAL CRIMES RELATED TO ASBES9 TOS.—Under section 994 of title 28, United States Code, 

10 and in accordance with this section, the United States 

11 Sentencing Commission shall review and amend, as appro12 priate, the United States Sentencing Guidelines and re13 lated policy statements to ensure that—

14 (1) appropriate changes are made within the 

15 guidelines to reflect any statutory amendments that 

16 have occurred since the time that the current guide17 line was promulgated; 

18 (2) the base offense level, adjustments and spe19 cific offense characteristics contained in section 

20 2Q1.2 of the United States Sentencing Guidelines 

21 (relating to mishandling of hazardous or toxic sub22 stances or pesticides; recordkeeping, tampering, and 

23 falsification; and unlawfully transporting hazardous 

24 materials in commerce) are increased as appropriate 

25 to ensure that future asbestos related-offenses re-
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1 flect the seriousness of the offense, the harm to the 

2 community, the need for ongoing reform, and the 

3 highly regulated nature of asbestos; 

4 (3) the base offense level, adjustments and spe5 cific offense characteristics are sufficient to deter 

6 and punish future activity and are adequate in cases 

7 in which the relevant offense conduct—

8 (A) involves asbestos as a hazardous or 

9 toxic substance; and 

10 (B) occurs after the date of enactment of 

11 this Act; 

12 (4) the adjustments and specific offense charac13 teristics contained in section 2B1.1 of the United 

14 States Sentencing Guidelines related to fraud, deceit 

15 and false statements, adequately take into account 

16 that asbestos was involved in the offense, and the 

17 possibility of death or serious bodily harm as a re18 sult; 

19 (5) the guidelines that apply to organizations in 

20 chapter 8 of the United States Sentencing Guide21 lines, are sufficient to deter and punish organiza22 tional criminal misconduct that involves the use, 

23 handling, purchase, sale, disposal, or storage of as24 bestos; and 
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1 (6) the guidelines that apply to organizations in 

2 chapter 8 of the United States Sentencing Guide3 lines, are sufficient to deter and punish organiza4 tional criminal misconduct that involves fraud, de5 ceit, or false statements against the Office of Asbes6 tos Disease Compensation. 

7 SEC. 409. NONDISCRIMINATION OF HEALTH INSURANCE. 

8 (a) DENIAL, TERMINATION, OR ALTERATION OF

9 HEALTH COVERAGE.—No health insurer offering a health 

10 plan may deny or terminate coverage, or in any way alter 

11 the terms of coverage, of any claimant or the beneficiary 

12 of a claimant, on account of the participation of the claim13 ant or beneficiary in a medical monitoring program under 

14 this Act, or as a result of any information discovered as 

15 a result of such medical monitoring. 

16 (b) DEFINITIONS.—In this section: 

17 (1) HEALTH INSURER.—The term ‘‘health in18 surer’’ means—

19 (A) an insurance company, health care 

20 service contractor, fraternal benefit organiza21 tion, insurance agent, third party adminis22 trator, insurance support organization, or other 

23 person subject to regulation under the laws re24 lated to health insurance of any State; 

25 (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 health care, includ14 ing any health insurance arrangement or any 

15 arrangement 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 Employee 

21 Retirement Income Security Act of 1974 (29 U.S.C. 

22 1182(a)(1)), is amended by adding at the end the 

23 following: 
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1 ‘‘(I) Participation in a medical monitoring 

2 program under the Fairness in Asbestos Injury 

3 Resolution Act of 2005.’’. 

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 2005.’’. 

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 2005.’’. 

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 (2) by adding at the end the following: 
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1 ‘‘Subtitle B—Ban of Asbestos 

2 Containing Products 

3 ‘‘SEC. 221. BAN OF ASBESTOS CONTAINING PRODUCTS. 

4 ‘‘(a) DEFINITIONS.—In this chapter: 

5 ‘‘(1) ADMINISTRATOR.—The term ‘Adminis6 trator’ means the Administrator of the Environ7 mental Protection Agency. 

8 ‘‘(2) ASBESTOS.—The term ‘asbestos’ in9 cludes—

10 ‘‘(A) chrysotile; 

11 ‘‘(B) amosite; 

12 ‘‘(C) crocidolite; 

13 ‘‘(D) tremolite asbestos; 

14 ‘‘(E) winchite asbestos; 

15 ‘‘(F) richterite asbestos; 

16 ‘‘(G) anthophyllite asbestos; 

17 ‘‘(H) actinolite asbestos; 

18 ‘‘(I) any of the minerals listed under sub19 paragraphs (A) through (H) that has been 

20 chemically treated or altered, and any 

21 asbestiform variety, type or component thereof. 

22 ‘‘(3) ASBESTOS CONTAINING PRODUCT.—The 

23 term ‘asbestos containing product’ means any prod24 uct (including any part) to which asbestos is delib25 erately or knowingly added or used because the spe-
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1 cific properties of asbestos are necessary for product 

2 use or function. Under no circumstances shall the 

3 term ‘asbestos containing product’ be construed to 

4 include products that contain de minimus levels of 

5 naturally occurring asbestos as defined by the Ad6 ministrator not later than 1 year after the date of 

7 enactment of this chapter. 

8 ‘‘(4) DISTRIBUTE IN COMMERCE.—The term 

9 ‘distribute in commerce’—

10 ‘‘(A) has the meaning given the term in 

11 section 3 of the Toxic Substances Control Act 

12 (15 U.S.C. 2602); and 

13 ‘‘(B) shall not include—

14 ‘‘(i) an action taken with respect to 

15 an asbestos containing product in connec16 tion with the end use of the asbestos con17 taining product by a person that is an end 

18 user, or an action taken by a person who 

19 purchases or receives a product, directly or 

20 indirectly from an end user; or 

21 ‘‘(ii) distribution of an asbestos con22 taining product by a person solely for the 

23 purpose of disposal of the asbestos con24 taining product in compliance with applica25 ble Federal, State, and local requirements. 
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1 ‘‘(b) IN GENERAL.—Subject to subsection (c), the 

2 Administrator shall promulgate—

3 ‘‘(1) not later than 1 year after the date of en4 actment of this chapter, proposed regulations that—

5 ‘‘(A) prohibit persons, from manufac6 turing, processing, or distributing in commerce 

7 asbestos containing products; and 

8 ‘‘(B) provide for implementation of sub9 sections (c) and (d); and 

10 ‘‘(2) not later than 2 years after the date of en11 actment of this chapter, final regulations that, effec12 tive 60 days after the date of promulgation, prohibit 

13 persons from manufacturing, processing, or distrib14 uting in commerce asbestos containing products. 

15 ‘‘(c) EXEMPTIONS.—

16 ‘‘(1) IN GENERAL.—Any person may petition 

17 the Administrator for, and the Administrator may 

18 grant an exemption from the requirements of sub19 section (b), if the Administrator determines that—

20 ‘‘(A) the exemption would not result in an 

21 unreasonable risk of injury to public health or 

22 the environment; and 

23 ‘‘(B) the person has made good faith ef24 forts to develop, but has been unable to develop, 

25 a substance, or identify a mineral that does not 
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1 present an unreasonable risk of injury to public 

2 health or the environment and may be sub3 stituted for an asbestos containing product. 

4 ‘‘(2) TERMS AND CONDITIONS.—An exemption 

5 granted under this subsection shall be in effect for 

6 such period (not to exceed 5 years) and subject to 

7 such terms and conditions as the Administrator may 

8 prescribe. 

9 ‘‘(3) GOVERNMENTAL USE.—

10 ‘‘(A) IN GENERAL.—The Administrator of 

11 the Environmental Protection Agency shall pro12 vide an exemption from the requirements of 

13 subsection (b), without review or limit on dura14 tion, if such exemption for an asbestos con15 taining product is—

16 ‘‘(i) sought by the Secretary of De17 fense and the Secretary certifies, and pro18 vides a copy of that certification to Con19 gress, that—

20 ‘‘(I) use of the asbestos con21 taining product is necessary to the 

22 critical functions of the Department; 

23 ‘‘(II) no reasonable alternatives 

24 to the asbestos containing product 

25 exist for the intended purpose; and 
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1 ‘‘(III) use of the asbestos con2 taining product will not result in an 

3 unreasonable risk to health or the en4 vironment; or 

5 ‘‘(ii) sought by the Administrator of 

6 the National Aeronautics and Space Ad7 ministration and the Administrator of the 

8 National Aeronautics and Space Adminis9 tration certifies, and provides a copy of 

10 that certification 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.’’.

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