II 

Calendar No. 472 

108TH CONGRESS 

2D SESSION S. 2290 

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

injury caused by asbestos exposure, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

APRIL 7, 2004 

Mr. HATCH (for himself, Mr. FRIST, Mr. MILLER, Mr. DEWINE, Mr. 

VOINOVICH, Mr. ALLEN, Mr. CHAMBLISS, Mr. HAGEL, and Mr. DOMENICI) introduced the following bill; which was read the first time 

APRIL 8, 2004 

Read the second time and placed on the calendar 

A BILL 

To create a fair and efficient system to resolve claims of 

victims for bodily injury caused by asbestos exposure, 

and for other purposes. 

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

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

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

5 ‘‘Fairness in Asbestos Injury Resolution Act of 2004’’ or 

6 the ‘‘FAIR Act of 2004’’. 
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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 . . . 

2 defies customary judicial administration and calls 

3 for national legislation.’’ That finding was again rec4 ognized 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 services 

2 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 
28 

•S 2290 PCS 

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. 
29 

•S 2290 PCS 

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. 
30 

•S 2290 PCS 

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-
31 

•S 2290 PCS 

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 
32 

•S 2290 PCS 

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 
33 

•S 2290 PCS 

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. 
34 

•S 2290 PCS 

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— 
35 

•S 2290 PCS 

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 
36 

•S 2290 PCS 

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. 
37 

•S 2290 PCS 

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; 
38 

•S 2290 PCS 

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 
39 

•S 2290 PCS 

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 
40 

•S 2290 PCS 

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 
41 

•S 2290 PCS 

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-
42 

•S 2290 PCS 

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 
43 

•S 2290 PCS 

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 
44 

•S 2290 PCS 

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.— 
45 

•S 2290 PCS 

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 
46 

•S 2290 PCS 

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. 
47 

•S 2290 PCS 

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. 
48 

•S 2290 PCS 

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: 
49 

•S 2290 PCS 

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 
50 

•S 2290 PCS 

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 
51 

•S 2290 PCS 

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 
52 

•S 2290 PCS 

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.— 
53 

•S 2290 PCS 

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. 
54 

•S 2290 PCS 

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 
55 

•S 2290 PCS 

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— 
56 

•S 2290 PCS 

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— 
57 

•S 2290 PCS 

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; 
58 

•S 2290 PCS 

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. 
59 

•S 2290 PCS 

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 
60 

•S 2290 PCS 

1 take-home exposure shall be submitted as an ex2 ceptional medical claim under section 121(f) for 

3 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. 
61 

•S 2290 PCS 

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 
62 

•S 2290 PCS 

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— 
63 

•S 2290 PCS 

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 
64 

•S 2290 PCS 

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— 
65 

•S 2290 PCS 

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-
66 

•S 2290 PCS 

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— 
67 

•S 2290 PCS 

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— 
68 

•S 2290 PCS 

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. 
69 

•S 2290 PCS 

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 
70 

•S 2290 PCS 

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— 
71 

•S 2290 PCS 

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-
72 

•S 2290 PCS 

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 
73 

•S 2290 PCS 

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 
74 

•S 2290 PCS 

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. 
75 

•S 2290 PCS 

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. 
76 

•S 2290 PCS 

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 
77 

•S 2290 PCS 

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 A 

Medical Monitoring 

II Mixed Disease With 

Impairment 

$20,000 

III Asbestosis/Pleural 

Disease B 

$85,000 

IV Severe Asbestosis $400,000 

V Disabling Asbestosis $850,000 

VI Other Cancer $150,000 

VII Lung Cancer One individual evaluation; 

smokers receive between 

$25,000–$75,000; 

ex-smokers receive between $75,000– 

$225,000; 

non-smokers receive between $225,000– 

$600,000 

VIII Lung Cancer With 

Pleural Disease 

smokers receive between 

$150,000–$250,000; 

ex-smokers receive between $400,000– 

$600,000; 

non-smokers receive between $600,000– 

$1,000,000 

IX Lung Cancer With 

Asbestosis 

smokers receive between 

$450,000–$550,000; 

ex-smokers receive between $650,000– 

$950,000; 

non-smokers receive between $800,000– 

$1,000,000 

X Mesothelioma $1,000,000 
78 

•S 2290 PCS 

1 (2) DEFINITIONS.—In this section— 

2 (A) the term ‘‘nonsmoker’’ means a claim3 ant who never smoked; and 

4 (B) the term ‘‘ex-smoker’’ means a claim5 ant who has not smoked during any portion of 

6 the 12-year period preceding the diagnosis of 

7 lung cancer. 

8 (3) VALUES WITHIN LEVELS RELATING TO

9 LUNG CANCER.— 

10 (A) IN GENERAL.—In setting values for 

11 levels relating to lung cancer, the Administrator 

12 shall develop a matrix of classes for each of 

13 Levels VII, VIII, and IX based on— 

14 (i) the smoking history of the claim15 ant, including whether the claimant cur16 rently or in the past smoked tobacco prod17 ucts, the duration of smoking, pack years, 

18 and whether the claimant has quit smoking 

19 and for how long; 

20 (ii) the age of the claimant at diag21 nosis with claim values increased propor22 tionately for claimants who are younger 

23 than the average life span and reduced for 

24 those who are older; and 
79 

•S 2290 PCS 

1 (iii) the level and duration of asbestos 

2 exposure with those receiving the highest 

3 total dose (level x duration) receiving 

4 greater values. 

5 (B) DETERMINATION OF EXPOSURE.—Lev6 els of exposure shall be based on research in the 

7 fields of epidemiology and industrial hygiene. 

8 (4) MEDICAL MONITORING.—An asbestos claim9 ant with asymptomatic exposure, based on the cri10 teria under section 121(d)(1), shall only be eligible 

11 for medical monitoring reimbursement as provided 

12 under section 132. 

13 (5) COST-OF-LIVING ADJUSTMENT.— 

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

15 2006, award amounts under paragraph (1) 

16 shall be annually increased by an amount equal 

17 to such dollar amount multiplied by the cost-of18 living adjustment, rounded to the nearest 

19 $1,000 increment. 

20 (B) CALCULATION OF COST-OF-LIVING AD21 JUSTMENT.—For the purposes of subparagraph 

22 (A), the cost-of-living adjustment for any cal23 endar year shall be the percentage, if any, by 

24 which the consumer price index for the suc-
80 

•S 2290 PCS 

1 ceeding calendar year exceeds the consumer 

2 price index for calendar year 2004. 

3 (C) CONSUMER PRICE INDEX.— 

4 (i) IN GENERAL.—For the purposes of 

5 subparagraph (B), the consumer price 

6 index for any calendar year is the average 

7 of the consumer price index as of the close 

8 of the 12-month period ending on August 

9 31 of such calendar year. 

10 (ii) DEFINITION.—For purposes of 

11 clause (i), the term ‘‘consumer price 

12 index’’ means the consumer price index 

13 published by the Department of Labor. 

14 The consumer price index series to be used 

15 for award escalations shall include the con16 sumer price index used for all-urban con17 sumers, with an area coverage of the 

18 United States city average, for all items, 

19 based on the 1982–1984 index based pe20 riod, as published by the Department of 

21 Labor. 

22 SEC. 132. MEDICAL MONITORING. 

23 (a) RELATION TO STATUTE OF LIMITATIONS.—The 

24 filing of a claim under this Act that seeks reimbursement 

25 for medical monitoring shall not be considered as evidence 
81 

•S 2290 PCS 

1 that the claimant has discovered facts that would other2 wise commence the period applicable for purposes of the 

3 statute of limitations under section 113(b). 

4 (b) COSTS.—Reimbursable medical monitoring costs 

5 shall include the costs of a claimant not covered by health 

6 insurance for an examination by the claimant’s physician, 

7 x-ray tests, and pulmonary function tests every 3 years. 

8 (c) REGULATIONS.—The Administrator shall promul9 gate regulations that establish— 

10 (1) the reasonable costs for medical monitoring 

11 that is reimbursable; and 

12 (2) the procedures applicable to asbestos claim13 ants. 

14 SEC. 133. PAYMENT. 

15 (a) STRUCTURED PAYMENTS.— 

16 (1) IN GENERAL.—An asbestos claimant who is 

17 entitled to an award should receive the amount of 

18 the award through structured payments from the 

19 Fund, made over a period of 3 years, and in no 

20 event more than 4 years after the date of final adju21 dication of the claim. 

22 (2) PAYMENT PERIOD AND AMOUNT.—There 

23 shall be a presumption that any award paid under 

24 this subsection shall provide for payment of— 
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1 (A) 40 percent of the total amount in year 

2 1; 

3 (B) 30 percent of the total amount in year 

4 2; and 

5 (C) 30 percent of the total amount in year 

6 3. 

7 (3) EXTENSION OF PAYMENT PERIOD.— 

8 (A) IN GENERAL.—The Administrator 

9 shall develop guidelines to provide for the pay10 ment period of an award under subsection (a) 

11 to be extended to a 4-year period if such action 

12 is warranted in order to preserve the overall sol13 vency of the Fund. Such guidelines shall include 

14 reference to the number of claims made to the 

15 Fund and the awards made and scheduled to be 

16 paid from the Fund as provided under section 

17 405. 

18 (B) LIMITATIONS.—In no event shall less 

19 than 50 percent of an award be paid in the first 

20 2 years of the payment period under this sub21 section. 

22 (4) ACCELERATED PAYMENTS.—The Adminis23 trator shall develop guidelines to provide for acceler24 ated payments to asbestos claimants who are meso25 thelioma victims and who are alive on the date on 
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1 which the Administrator receives notice of the eligi2 bility of the claimant. Such payments shall be cred3 ited against the first regular payment under the 

4 structured payment plan for the claimant. 

5 (5) EXPEDITED PAYMENTS.—The Adminis6 trator shall develop guidelines to provide for expe7 dited payments to asbestos claimants in cases of exi8 gent circumstances or extreme hardship caused by 

9 asbestos-related injury. 

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

11 to receive any payments to which they are entitled 

12 under this title in the form of an annuity. 

13 (b) LIMITATION ON TRANSFERABILITY.—A claim 

14 filed under this Act shall not be assignable or otherwise 

15 transferable under this Act. 

16 (c) CREDITORS.—An award under this title shall be 

17 exempt from all claims of creditors and from levy, execu18 tion, and attachment or other remedy for recovery or col19 lection of a debt, and such exemption may not be waived. 

20 (d) MEDICARE AS SECONDARY PAYER.—No award 

21 under this title shall be deemed a payment for purposes 

22 of section 1862 of the Social Security Act (42 U.S.C. 

23 1395y). 

24 (e) EXEMPT PROPERTY IN ASBESTOS CLAIMANT’S

25 BANKRUPTCY CASE.—If an asbestos claimant files a peti-
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1 tion for relief under section 301 of title 11, United States 

2 Code, no award granted under this Act shall be treated 

3 as property of the bankruptcy estate of the asbestos claim4 ant in accordance with section 541(b)(6) of title 11, 

5 United States Code. 

6 SEC. 134. REDUCTION IN BENEFIT PAYMENTS FOR COLLAT7 ERAL SOURCES. 

8 (a) IN GENERAL.—The amount of an award other9 wise available to an asbestos claimant under this title shall 

10 be reduced by the amount of collateral source compensa11 tion. 

12 (b) EXCLUSIONS.—In no case shall statutory benefits 

13 under workers’ compensation laws and veterans’ benefits 

14 programs be deemed as collateral source compensation for 

15 purposes of this section. 

16 TITLE II—ASBESTOS INJURY 

17 CLAIMS RESOLUTION FUND 

18 Subtitle A—Asbestos Defendants 

19 Funding Allocation 

20 SEC. 201. DEFINITIONS. 

21 In this subtitle, the following definitions shall apply: 

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

23 group’’— 

24 (A) means a defendant participant that is 

25 an ultimate parent and any person whose entire 
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1 beneficial interest is directly or indirectly owned 

2 by that ultimate parent on the date of enact3 ment of this Act; and 

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

5 debtor or any direct or indirect majority-owned 

6 subsidiary of a debtor. 

7 (2) CLASS ACTION TRUST.—The term ‘‘class ac8 tion trust’’ means a trust or similar entity estab9 lished to hold assets for the payment of asbestos 

10 claims asserted against a debtor or participating de11 fendant, under a settlement that— 

12 (A) is a settlement of class action claims 

13 under rule 23 of the Federal Rules of Civil Pro14 cedure; and 

15 (B) has been approved by a final judgment 

16 of a United States district court before the date 

17 of enactment of this Act. 

18 (3) DEBTOR.—The term ‘‘debtor’’— 

19 (A) means— 

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

21 pending under a chapter of title 11, United 

22 States Code, on the date of enactment of 

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

24 period immediately preceding that date, ir-
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1 respective of whether the debtor’s case 

2 under that title has been dismissed; and 

3 (ii) all of the direct or indirect major4 ity-owned subsidiaries of a person de5 scribed under clause (i), regardless of 

6 whether any such majority-owned sub7 sidiary has a case pending under title 11, 

8 United States Code; and 

9 (B) shall not include an entity— 

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

11 United States Code, if a final decree clos12 ing the estate shall have been entered be13 fore the date of enactment of this Act; or 

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

15 United States Code, if a plan of reorga16 nization for such entity shall have been 

17 confirmed by a duly entered order or judg18 ment of a court that is no longer subject 

19 to any appeal or judicial review, and the 

20 substantial consummation, as such term is 

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

22 United States Code, of such plan of reor23 ganization has occurred. 

24 (4) INDEMNIFIABLE COST.—The term 

25 ‘‘indemnifiable cost’’ means a cost, expense, debt, 
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1 judgment, or settlement incurred with respect to an 

2 asbestos claim that, at any time before December 

3 31, 2002, was or could have been subject to indem4 nification, contribution, surety, or guaranty. 

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

6 means a person against whom any asbestos claim 

7 has been asserted before December 31, 2002, who 

8 has received from any other person, or on whose be9 half a sum has been paid by such other person to 

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

11 or indemnity in connection with an alleged duty with 

12 respect to the defense or indemnification of such 

13 person concerning that asbestos claim, other than 

14 under a policy of insurance or reinsurance. 

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

16 means a person who has paid under a written agree17 ment at any time before December 31, 2002, a sum 

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

19 on behalf of any person defending against an asbes20 tos claim, in connection with an alleged duty with 

21 respect to the defense or indemnification of such 

22 person concerning that asbestos claim, except that 

23 payments by an insurer or reinsurer under a con24 tract of insurance or reinsurance shall not make the 
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1 insurer or reinsurer an indemnitor for purposes of 

2 this subtitle. 

3 (7) PRIOR ASBESTOS EXPENDITURES.—The 

4 term ‘‘prior asbestos expenditures’’— 

5 (A) means the gross total amount paid by 

6 or on behalf of a person at any time before De7 cember 31, 2002, in settlement, judgment, de8 fense, or indemnity costs related to all asbestos 

9 claims against that person; 

10 (B) includes payments made by insurance 

11 carriers to or for the benefit of such person or 

12 on such person’s behalf with respect to such as13 bestos claims, except as provided in section 

14 204(g); 

15 (C) shall not include any payment made by 

16 a person in connection with or as a result of 

17 changes in insurance reserves required by con18 tract or any activity or dispute related to insur19 ance coverage matters for asbestos-related li20 abilities; and 

21 (D) shall not include any payment made by 

22 or on behalf of persons who are or were com23 mon carriers by railroad for asbestos claims 

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

25 U.S.C. 51 et seq.), commonly known as the 
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1 Federal Employers’ Liability Act, as a result of 

2 operations as a common carrier by railroad, in3 cluding settlement, judgment, defense, or indem4 nity costs associated with these claims. 

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

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

7 524(h) of title 11, United States Code, or estab8 lished in conjunction with an order issued under sec9 tion 105 of title 11, United States Code, established 

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

11 reorganization, which in whole or in part provides 

12 compensation for asbestos claims. 

13 (9) ULTIMATE PARENT.—The term ‘‘ultimate 

14 parent’’ means a person— 

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

16 the entire beneficial interest, directly or indi17 rectly, of at least 1 other person; and 

18 (B) whose entire beneficial interest was not 

19 owned, on December 31, 2002, directly or indi20 rectly, by any other single person (other than a 

21 natural person). 

22 SEC. 202. AUTHORITY AND TIERS. 

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

24 (1) IN GENERAL.—Defendant participants shall 

25 be liable for payments to the Fund in accordance 
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1 with this section based on tiers and subtiers as2 signed to defendant participants. 

3 (2) AGGREGATE PAYMENT OBLIGATIONS

4 LEVEL.—Subject only to section 204(m), and not5 withstanding any other provision of this Act, the 

6 total payments required of all defendant participants 

7 over the life of the Fund shall not exceed 

8 $57,500,000,000. The Administrator shall have the 

9 authority to allocate the payments required of the 

10 defendant participants among the tiers as provided 

11 in this title. 

12 (3) ABILITY TO ENTER REORGANIZATION.— 

13 Notwithstanding any other provision of this Act, all 

14 debtors that, together with all of their direct or indi15 rect majority-owned subsidiaries, have prior asbestos 

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

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

18 reorganization that does not comply with the re19 quirements of this Act, including a trust and chan20 neling injunction. Any asbestos claim made in con21 junction with a plan of reorganization allowable 

22 under the preceding sentence shall be subject to sec23 tion 403(d) of this Act. 

24 (b) TIER I.—Tier I shall include all debtors that, to25 gether with all of their direct or indirect majority-owned 
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1 subsidiaries, have prior asbestos expenditures greater than 

2 $1,000,000. 

3 (c) TREATMENT OF TIER I BUSINESS ENTITIES IN

4 BANKRUPTCY.— 

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

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

7 not a natural person that— 

8 (A) filed a petition for relief under chapter 

9 11, of title 11, United States Code, before Jan10 uary 1, 2003; 

11 (B) has not confirmed a plan of reorga12 nization as of the date of enactment of this Act; 

13 and 

14 (C) the bankruptcy court presiding over 

15 the business entity’s case determines, after no16 tice and a hearing upon motion filed by the en17 tity within 30 days of the effective date of this 

18 Act, which motion shall be supported by— 

19 (i) an affidavit or declaration of the 

20 Chief Executive Officer, Chief Financial 

21 Officer, or Chief Legal Officer of the busi22 ness entity; and 

23 (ii) copies of the entity’s public state24 ments and securities filings made in con25 nection with the entity’s filing for chapter 
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1 11 protection that asbestos liability was 

2 not the sole or precipitating cause of the 

3 entity’s chapter 11 filing. Notice of such 

4 motion shall be as directed by the bank5 ruptcy court and the hearing shall be lim6 ited to consideration of the question of 

7 whether or not asbestos liability was the 

8 sole or precipitating cause of the entity’s 

9 chapter 11 filing. The bankruptcy court 

10 shall hold a hearing and make its deter11 mination with respect to the motion within 

12 60 days after the date the motion is filed. 

13 In making its determination, the bank14 ruptcy court shall take into account the af15 fidavits, public statements, and securities 

16 filings, and other information, if any, sub17 mitted by the entity and all other facts and 

18 circumstances presented by an objecting 

19 party. Any review of this determination 

20 must be an expedited appeal and limited to 

21 whether the decision was against the 

22 weight of the evidence. 

23 (2) PROCEEDING WITH REORGANIZATION

24 PLAN.—A bankrupt business entity may proceed 

25 with the filing, solicitation, and confirmation of a 
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1 plan of reorganization that does not comply with the 

2 requirements of this Act, including a trust and chan3 neling injunction described in section 524(g) of title 

4 11, United States Code, notwithstanding any other 

5 provisions of this Act, if— 

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

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

8 a hearing, the bankruptcy court presiding over 

9 the chapter 11 case of the bankrupt business 

10 entity determines that— 

11 (i) confirmation is necessary to permit 

12 the reorganization of that entity and as13 sure that all creditors and that entity are 

14 treated fairly and equitably; and 

15 (ii) confirmation is clearly favored by 

16 the balance of the equities; and 

17 (B) an order confirming the plan of reor18 ganization is entered by the bankruptcy court 

19 within 9 months after the date of enactment of 

20 this Act or such longer period of time approved 

21 by the bankruptcy court for cause shown. 

22 (3) APPLICABILITY.—If the bankruptcy court 

23 does not make the required determination, or if an 

24 order confirming the plan is not entered within 9 

25 months after the effective date of this Act or such 
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1 longer period of time approved by the bankruptcy 

2 court for cause shown, the provisions of this Act 

3 shall apply to the bankrupt business entity notwith4 standing the certification. Any timely appeal under 

5 title 11, United States Code, from a confirmation 

6 order entered during the applicable time period shall 

7 automatically extend the time during which this Act 

8 is inapplicable to the bankrupt business entity, until 

9 the appeal is fully and finally resolved. 

10 (4) OFFSETS.— 

11 (A) PAYMENTS BY INSURERS.—To the ex12 tent that a bankrupt business entity or debtor 

13 successfully confirms a plan of reorganization, 

14 including a trust, and channeling injunction 

15 that involves payments by insurers who are oth16 erwise subject to this Act as described in sec17 tion 524(g) of title 11, United States Code, an 

18 insurer who makes payments to the trust, shall 

19 obtain a dollar for dollar reduction in the 

20 amount otherwise payable by that insurer under 

21 this Act to the Fund. 

22 (B) CONTRIBUTIONS TO FUND.—Any cash 

23 payments by a bankrupt business entity, if any, 

24 to a trust described in section 524(g) of title 
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1 11, United States Code, may be counted as a 

2 contribution to the Fund. 

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

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

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

6 VI according to the prior asbestos expenditures paid by 

7 such persons or affiliated groups as follows: 

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

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

10 than $75,000,000. 

11 (3) Tier IV: $10,000,000 or greater, but less 

12 than $50,000,000. 

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

14 $10,000,000. 

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

16 than $5,000,000. 

17 (e) TIER PLACEMENT AND COSTS.— 

18 (1) PERMANENT TIER PLACEMENT.—After a 

19 defendant participant or affiliated group is assigned 

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

21 participant or affiliated group shall remain in that 

22 tier and subtier throughout the life of the Fund, re23 gardless of subsequent events, including— 

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

25 of title 11, United States Code; 
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1 (B) a discharge of debt in bankruptcy; 

2 (C) the confirmation of a plan of reorga3 nization; or 

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

5 other person or affiliated group, 

6 unless the Administrator finds that the information 

7 submitted by the participant or affiliated group to 

8 support its inclusion in that tier was inaccurate. 

9 (2) COSTS.—Payments to the Fund by all per10 sons that are the subject of a case under a chapter 

11 of title 11, United States Code, after the date of en12 actment of this Act— 

13 (A) shall constitute costs and expenses of 

14 administration of the case under section 503 of 

15 title 11, United States Code, and shall be pay16 able in accordance with the payment provisions 

17 under this subtitle notwithstanding the pend18 ency of the case under that title 11; 

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

20 enforcement or collection by any stay or injunc21 tion power of any court; and 

22 (C) shall not be impaired or discharged in 

23 any current or future case under title 11, 

24 United States Code. 

25 (f) SUPERSEDING PROVISIONS.— 
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1 (1) IN GENERAL.—All of the following shall be 

2 superseded in their entireties by this Act: 

3 (A) The treatment of any asbestos claim in 

4 any plan of reorganization with respect to any 

5 debtor included in Tier I. 

6 (B) Any asbestos claim against any debtor 

7 included in Tier I. 

8 (C) Any agreement, understanding, or un9 dertaking by any such debtor or any third party 

10 with respect to the treatment of any asbestos 

11 claim filed in a debtor’s bankruptcy case or 

12 with respect to a debtor before the date of en13 actment of this Act, whenever such debtor’s 

14 case is either still pending, if such case is pend15 ing under a chapter other than chapter 11 of 

16 title 11, United States Code, or subject to con17 firmation or substantial consummation of a 

18 plan of reorganization under chapter 11 of title 

19 11, United States Code. 

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

21 plan of reorganization, agreement, understanding, or 

22 undertaking by any debtor or any third party under 

23 paragraph (1) of this subsection, to the extent it re24 lates to any asbestos claim, shall be of no force or 
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•S 2290 PCS 

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

2 with respect to any of the foregoing. 

3 SEC. 203. SUBTIERS. 

4 (a) IN GENERAL.— 

5 (1) SUBTIER LIABILITY.—Except as otherwise 

6 provided under subsections (b), (d), and (l) of sec7 tion 204, persons or affiliated groups shall be in8 cluded within Tiers I through VII and shall pay 

9 amounts to the Fund in accordance with this sec10 tion. 

11 (2) REVENUES.— 

12 (A) IN GENERAL.—For purposes of this 

13 section, revenues shall be determined in accord14 ance with generally accepted accounting prin15 ciples, consistently applied, using the amount 

16 reported as revenues in the annual report filed 

17 with the Securities and Exchange Commission 

18 in accordance with the Securities Exchange Act 

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

20 recent fiscal year ending on or before December 

21 31, 2002. If the defendant participant or affili22 ated group does not file reports with the Securi23 ties and Exchange Commission, revenues shall 

24 be the amount that the defendant participant or 

25 affiliated group would have reported as reve-
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1 nues under the rules of the Securities and Ex2 change Commission in the event that it had 

3 been required to file. 

4 (B) INSURANCE PREMIUMS.—Any portion 

5 of revenues of a defendant participant that is 

6 derived from insurance premiums shall not be 

7 used to calculate the payment obligation of that 

8 defendant participant under this subtitle. 

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

10 shall include the revenues of the debtor and all 

11 of the direct or indirect majority-owned subsidi12 aries of that debtor, except that the pro forma 

13 revenues of a person that is included in Subtier 

14 2 of Tier I shall not be included in calculating 

15 the revenues of any debtor that is a direct or 

16 indirect majority owner of such Subtier 2 per17 son. If a debtor or affiliated group includes a 

18 person in respect of whose liabilities for asbes19 tos claims a class action trust has been estab20 lished, there shall be excluded from the 2002 

21 revenues of such debtor or affiliated group— 

22 (i) all revenues of the person in re23 spect of whose liabilities for asbestos 

24 claims the class action trust was estab25 lished; and 
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1 (ii) all revenues of the debtor and af2 filiated group attributable to the historical 

3 business operations or assets of such per4 son, regardless of whether such business 

5 operations or assets were owned or con6 ducted during the year 2002 by such per7 son or by any other person included within 

8 such debtor and affiliated group. 

9 (b) TIER I SUBTIERS.— 

10 (1) IN GENERAL.—Each debtor in Tier I shall 

11 be included in subtiers and shall pay amounts to the 

12 Fund as provided under this section. 

13 (2) SUBTIER 1.— 

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

15 debtors with prior asbestos expenditures of 

16 $1,000,000 or greater, shall be included in 

17 Subtier 1. 

18 (B) PAYMENT.—Each debtor included in 

19 Subtier 1 shall pay on an annual basis 1.5184 

20 percent of the debtor’s 2002 revenues. 

21 (C) OTHER ASSETS.—The Administrator, 

22 at the sole discretion of the Administrator, may 

23 allow a Subtier 1 debtor to satisfy its funding 

24 obligation under this paragraph with assets 

25 other than cash if the Administrator determines 
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1 that requiring an all-cash payment of the debt2 or’s funding obligation would render the debtor’s 

3 reorganization infeasible. 

4 (D) LIABILITY.— 

5 (i) IN GENERAL.—If a person who is 

6 subject to a case pending under a chapter 

7 of title 11, United States Code, as defined 

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

9 due any payment obligation for the debtor, 

10 the Administrator shall have the right to 

11 seek payment of all or any portion of the 

12 entire amount due (as well as any other 

13 amount for which the debtor may be liable 

14 under sections 223 and 224) from any of 

15 the direct or indirect majority-owned sub16 sidiaries under section 201(3)(A)(ii). 

17 (ii) CAUSE OF ACTION.—Notwith18 standing section 221(e), this Act shall not 

19 preclude actions among persons within a 

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

21 with respect to the payment obligations 

22 under this Act. 

23 (3) SUBTIER 2.— 

24 (A) IN GENERAL.—Notwithstanding para25 graph (2), all persons that are debtors that 
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1 have no material continuing business operations 

2 but hold cash or other assets that have been al3 located or earmarked for the settlement of as4 bestos claims shall be included in Subtier 2. 

5 (B) ASSIGNMENT OF ASSETS.—Not later 

6 than 90 days after the date of enactment of 

7 this Act, each person included in Subtier 2 shall 

8 assign all of its assets to the Fund. 

9 (4) SUBTIER 3.— 

10 (A) IN GENERAL.—Notwithstanding para11 graph (2), all persons that are debtors other 

12 than those included in Subtier 2, which have no 

13 material continuing business operations and no 

14 cash or other assets allocated or earmarked for 

15 the settlement of any asbestos claim, shall be 

16 included in Subtier 3. 

17 (B) ASSIGNMENT OF UNENCUMBERED AS18 SETS.—Not later than 90 days after the date of 

19 enactment of this Act, each person included in 

20 Subtier 3 shall contribute an amount equal to 

21 50 percent of its total unencumbered assets. 

22 (C) CALCULATION OF UNENCUMBERED AS23 SETS.—Unencumbered assets shall be cal24 culated as the Subtier 3 person’s total assets, 

25 excluding insurance-related assets, less— 
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1 (i) all allowable administrative ex2 penses; 

3 (ii) allowable priority claims under 

4 section 507 of title 11, United States 

5 Code; and 

6 (iii) allowable secured claims. 

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

8 class action trust that has been established in re9 spect of the liabilities for asbestos claims of any per10 son included within a debtor and affiliated group 

11 that has been included in Tier I (exclusive of any as12 sets needed to pay previously incurred expenses and 

13 asbestos claims reduced to a final order or judgment 

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

15 date of enactment of this Act) shall be transferred 

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

17 of enactment of this Act. 

18 (c) TIER II SUBTIERS.— 

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

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

21 subtiers of Tier II, based on the person’s or affili22 ated group’s revenues. Such subtiers shall each con23 tain as close to an equal number of total persons 

24 and affiliated groups as possible, with— 
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1 (A) those persons or affiliated groups with 

2 the highest revenues included in Subtier 1; 

3 (B) those persons or affiliated groups with 

4 the next highest revenues included in Subtier 2; 

5 (C) those persons or affiliated groups with 

6 the lowest revenues included in Subtier 5; 

7 (D) those persons or affiliated groups with 

8 the next lowest revenues included in Subtier 4; 

9 and 

10 (E) those persons or affiliated groups re11 maining included in Subtier 3. 

12 (2) PAYMENTS.—Each person or affiliated 

13 group within each subtier shall pay, on an annual 

14 basis, the following: 

15 (A) Subtier 1: $25,000,000. 

16 (B) Subtier 2: $22,500,000. 

17 (C) Subtier 3: $20,000,000. 

18 (D) Subtier 4: $17,500,000. 

19 (E) Subtier 5: $15,000,000. 

20 (d) TIER III SUBTIERS.— 

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

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

23 subtiers of Tier III, based on the person’s or affili24 ated group’s revenues. Such subtiers shall each con-
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1 tain as close to an equal number of total persons 

2 and affiliated groups as possible, with— 

3 (A) those persons or affiliated groups with 

4 the highest revenues included in Subtier 1; 

5 (B) those persons or affiliated groups with 

6 the next highest revenues included in Subtier 2; 

7 (C) those persons or affiliated groups with 

8 the lowest revenues included in Subtier 5; 

9 (D) those persons or affiliated groups with 

10 the next lowest revenues included in Subtier 4; 

11 and 

12 (E) those persons or affiliated groups re13 maining included in Subtier 3. 

14 (2) PAYMENTS.—Each person or affiliated 

15 group within each subtier shall pay, on an annual 

16 basis, the following: 

17 (A) Subtier 1: $15,000,000. 

18 (B) Subtier 2: $12,500,000. 

19 (C) Subtier 3: $10,000,000. 

20 (D) Subtier 4: $7,500,000. 

21 (E) Subtier 5: $5,000,000. 

22 (e) TIER IV SUBTIERS.— 

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

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

25 subtiers of Tier IV, based on the person’s or affili-
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1 ated group’s revenues. Such subtiers shall each con2 tain as close to an equal number of total persons 

3 and affiliated groups as possible, with those persons 

4 or affiliated groups with the highest revenues in 

5 Subtier 1, those with the lowest revenues in Subtier 

6 4. Those persons or affiliated groups with the high7 est revenues among those remaining will be included 

8 in Subtier 2 and the rest in Subtier 3. 

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

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

11 the following: 

12 (A) Subtier 1: $3,500,000. 

13 (B) Subtier 2: $2,250,000. 

14 (C) Subtier 3: $1,500,000. 

15 (D) Subtier 4: $500,000. 

16 (f) TIER V SUBTIERS.— 

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

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

19 subtiers of Tier V, based on the person’s or affili20 ated group’s revenues. Such subtiers shall each con21 tain as close to an equal number of total persons 

22 and affiliated groups as possible, with those persons 

23 or affiliated groups with the highest revenues in 

24 Subtier 1, those with the lowest revenues in Subtier 

25 3, and those remaining in Subtier 2. 
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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: $1,000,000. 

5 (B) Subtier 2: $500,000. 

6 (C) Subtier 3: $200,000. 

7 (g) TIER VI SUBTIERS.— 

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

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

10 subtiers of Tier VI, based on the person’s or affili11 ated group’s revenues. Such subtiers shall each con12 tain as close to an equal number of total persons 

13 and affiliated groups as possible, with those persons 

14 or affiliated groups with the highest revenues in 

15 Subtier 1, those with the lowest revenues in Subtier 

16 3, and those remaining in Subtier 2. 

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

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

19 the following: 

20 (A) Subtier 1: $500,000. 

21 (B) Subtier 2: $250,000. 

22 (C) Subtier 3: $100,000. 

23 (h) TIER VII.— 

24 (1) IN GENERAL.—Notwithstanding prior as25 bestos expenditures that might qualify a person or 
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1 affiliated group to be included in Tiers II, III, IV, 

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

3 included in Tier VII, if the person or affiliated 

4 group— 

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

6 asbestos claims brought under the Federal Em7 ployers’ Liability Act (45 U.S.C. 51 et seq.) as 

8 a result of operations as a common carrier by 

9 railroad; and 

10 (B) has paid (including any payments 

11 made by others on behalf of such person or af12 filiated group) not less than $5,000,000 in set13 tlement, judgment, defense, or indemnity costs 

14 relating to such claims. 

15 (2) ADDITIONAL AMOUNT.—The payment re16 quirement for persons or affiliated groups included 

17 in Tier VII shall be in addition to any payment re18 quirement applicable to such person or affiliated 

19 group under Tiers II through VI. 

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

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

22 or more is included in Subtier 1 and shall make an23 nual payments of $10,000,000 to the Fund. 

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

25 group in Tier VII with revenues of less than 
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1 $5,000,000,000, but not less than $3,000,000,000 is 

2 included in Subtier 2 and shall make annual pay3 ments of $5,000,000 to the Fund. 

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

5 group in Tier VII with revenues of less than 

6 $3,000,000,000, but not less than $500,000,000 is 

7 included in Subtier 3 and shall make annual pay8 ments of $500,000 to the Fund. 

9 (6) JOINT VENTURE REVENUES AND LIABIL10 ITY.— 

11 (A) REVENUES.—For purposes of this sub12 section, the revenues of a joint venture shall be 

13 included on a pro rata basis reflecting relative 

14 joint ownership to calculate the revenues of the 

15 parents of that joint venture. The joint venture 

16 shall not be responsible for a contribution 

17 amount under this subsection. 

18 (B) LIABILITY.—For purposes of this sub19 section, the liability under the Act of April 22, 

20 1908 (45 U.S.C. 51 et seq.), commonly known 

21 as the Federal Employers’ Liability Act, shall 

22 be attributed to the parent owners of the joint 

23 venture on a pro rata basis, reflecting their rel24 ative share of ownership. The joint venture 
110 

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1 shall not be responsible for a payment amount 

2 under this provision. 

3 SEC. 204. ASSESSMENT ADMINISTRATION. 

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

5 defendant participant or affiliated group shall pay to the 

6 Fund in the amounts provided under this subtitle as ap7 propriate for its tier and subtier each year until the earlier 

8 to occur of the following: 

9 (1) The participant or affiliated group has sat10 isfied its obligations under this subtitle during the 

11 first 23 annual payment cycles of the operation of 

12 the Fund. 

13 (2) The amount received by the Fund from de14 fendant participants, excluding any amounts rebated 

15 to defendant participants under subsection (d), 

16 equals the maximum aggregate payment obligation 

17 of section 202(a)(2). 

18 (b) SMALL BUSINESS EXEMPTION.—Notwith19 standing any other provision of this subtitle, a person or 

20 affiliated group that is a small business concern (as de21 fined under section 3 of the Small Business Act (15 

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

23 payment requirement under this subtitle and shall not be 

24 included in the subtier allocations under section 203. 
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1 (c) PROCEDURES.—The Administrator shall pre2 scribe procedures on how amounts payable under this sub3 title are to be paid, including, to the extent the Adminis4 trator determines appropriate, procedures relating to pay5 ment in installments. 

6 (d) ADJUSTMENTS.— 

7 (1) IN GENERAL.—Under expedited procedures 

8 established by the Administrator, a defendant partic9 ipant may seek adjustment of the amount of its pay10 ment obligation based on severe financial hardship 

11 or demonstrated inequity. The Administrator may 

12 determine whether to grant an adjustment and the 

13 size of any such adjustment, in accordance with this 

14 subsection. A defendant participant has a right to 

15 obtain a rehearing of the Administrator’s determina16 tion under this subsection under the procedures pre17 scribed in subsection (i)(10). The Administrator may 

18 adjust a defendant participant’s payment obligations 

19 under this subsection, either by forgiving the rel20 evant portion of the otherwise applicable payment 

21 obligation or by providing relevant rebates from the 

22 defendant hardship and inequity adjustment account 

23 created under subsection (j) after payment of the 

24 otherwise applicable payment obligation, at the dis25 cretion of the Administrator. 
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1 (2) FINANCIAL HARDSHIP ADJUSTMENTS.— 

2 (A) IN GENERAL.—A defendant partici3 pant may apply for an adjustment based on fi4 nancial hardship at any time during the period 

5 in which a payment obligation to the Fund re6 mains outstanding and may qualify for such ad7 justment by demonstrating that the amount of 

8 its payment obligation under the statutory allo9 cation would constitute a severe financial hard10 ship. 

11 (B) TERM.—Subject to the annual avail12 ability of funds in the defendant hardship and 

13 inequity adjustment account established under 

14 subsection (j), a financial hardship adjustment 

15 under this subsection shall have a term of 3 

16 years. 

17 (C) RENEWAL.—After an initial hardship 

18 adjustment is granted under this paragraph, a 

19 defendant participant may renew its hardship 

20 adjustment by demonstrating that it remains 

21 justified. 

22 (D) REINSTATEMENT.—Following the ex23 piration of the hardship adjustment period pro24 vided for under this section and during the 

25 funding period prescribed under subsection (a) 
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1 or (m), the Administrator shall annually deter2 mine whether there has been a material change 

3 in the financial condition of the defendant par4 ticipant such that the Administrator may, con5 sistent with the policies and legislative intent 

6 underlying this Act, reinstate under terms and 

7 conditions established by the Administrator any 

8 part or all of the defendant participant’s pay9 ment obligation under the statutory allocation 

10 that was not paid during the hardship adjust11 ment term. 

12 (3) INEQUITY ADJUSTMENTS.— 

13 (A) IN GENERAL.—A defendant partici14 pant— 

15 (i) may qualify for an adjustment 

16 based on inequity by demonstrating that 

17 the amount of its payment obligation 

18 under the statutory allocation is exception19 ally inequitable— 

20 (I) when measured against the 

21 amount of the likely cost to the de22 fendant participant net of insurance 

23 of its future liability in the tort sys24 tem in the absence of the Fund; or 
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•S 2290 PCS 

1 (II) when compared to the me2 dian payment rate for all defendant 

3 participants in the same tier; or 

4 (III) when measured against the 

5 percentage of the prior asbestos ex6 penditures of the defendant that were 

7 incurred with respect to claims that 

8 neither resulted in an adverse judg9 ment against the defendant, nor were 

10 the subject of a settlement that re11 quired a payment to a plaintiff by or 

12 on behalf of that defendant; and 

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

14 tier and a two-tier subtier adjustment re15 ducing the defendant participant’s pay16 ment obligation based on inequity by dem17 onstrating that not less than 95 percent of 

18 such person’s prior asbestos expenditures 

19 arose from claims related to the manufac20 ture and sale of railroad locomotives and 

21 related products, so long as such person’s 

22 manufacture and sale of railroad loco23 motives and related products is temporally 

24 and causally remote. For purposes of this 

25 clause, a person’s manufacture and sale of 
115 

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1 railroad locomotives and related products 

2 shall be deemed to be temporally and caus3 ally remote if the asbestos claims histori4 cally and generally filed against such per5 son relate to the manufacture and sale of 

6 railroad locomotives and related products 

7 by an entity dissolved more than 25 years 

8 before the date of enactment of this Act. 

9 (B) PAYMENT RATE.—For purposes of 

10 subparagraph (A), the payment rate of a de11 fendant participant is the payment amount of 

12 the defendant participant as a percentage of 

13 such defendant participant’s gross revenues for 

14 the year ending December 31, 2002. 

15 (C) TERM.—Subject to the annual avail16 ability of funds in the defendant hardship and 

17 inequity adjustment account established under 

18 subsection (j), an inequity adjustment under 

19 this subsection shall have a term of 3 years. 

20 (D) RENEWAL.—A defendant participant 

21 may renew an inequity adjustment every 3 

22 years by demonstrating that the adjustment re23 mains justified. 

24 (E) REINSTATEMENT.— 
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1 (i) IN GENERAL.—Following the ter2 mination of an inequity adjustment under 

3 subparagraph (A), and during the funding 

4 period prescribed under subsection (a) or 

5 (m), the Administrator shall annually de6 termine whether there has been a material 

7 change in conditions which would support 

8 a finding that the amount of the defendant 

9 participant’s payment under the statutory 

10 allocation was not inequitable. Based on 

11 this determination, the Administrator may, 

12 consistent with the policies and legislative 

13 intent underlying this Act, reinstate any or 

14 all of the payment obligations of the de15 fendant participant as if the inequity ad16 justment had not been granted for that 3- 

17 year period. 

18 (ii) TERMS AND CONDITIONS.—In the 

19 event of a reinstatement under clause (i), 

20 the Administrator may require the defend21 ant participant to pay any part or all of 

22 amounts not paid due to the inequity ad23 justment on such terms and conditions as 

24 established by the Administrator. 
117 

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1 (4) LIMITATION ON ADJUSTMENTS.—The ag2 gregate total of financial hardship adjustments 

3 under paragraph (2) and inequity adjustments under 

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

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

6 monies are available for such adjustments as a re7 sult of carryover of prior years’ funds under sub8 section (j)(3) or as a result of monies being made 

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

10 (5) ADVISORY PANELS.— 

11 (A) APPOINTMENT.—The Administrator 

12 shall appoint a Financial Hardship Adjustment 

13 Panel and an Inequity Adjustment Panel to ad14 vise the Administrator in carrying out this sub15 section. 

16 (B) MEMBERSHIP.—The membership of 

17 the panels appointed under subparagraph (A) 

18 may overlap. 

19 (C) COORDINATION.—The panels ap20 pointed under subparagraph (A) shall coordi21 nate their deliberations and advice. 

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

23 defendant participant to pay to the Fund shall be limited 

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

25 provided in subsection (f) and section 203(b)(2)(D), no 
118 

•S 2290 PCS 

1 defendant participant shall have any liability for the pay2 ment obligations of any other defendant participant. 

3 (f) CONSOLIDATION OF PAYMENTS.— 

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

5 the payment levels of defendant participants, any af6 filiated group including 1 or more defendant partici7 pants may irrevocably elect, as part of the submis8 sions to be made under paragraphs (1) and (3) of 

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

10 of the information necessary to determine the pay11 ment level under this subtitle and pay to the Fund 

12 on a consolidated basis. 

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

14 consolidation as provided in this subsection— 

15 (A) for purposes of this Act other than 

16 this subsection, the affiliated group shall be 

17 treated as if it were a single participant, includ18 ing with respect to the assessment of a single 

19 annual payment under this subtitle for the en20 tire affiliated group; 

21 (B) the ultimate parent of the affiliated 

22 group shall prepare and submit each submission 

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

24 entire affiliated group and shall be solely liable, 

25 as between the Administrator and the affiliated 
119 

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1 group only, for the payment of the annual 

2 amount due from the affiliated group under this 

3 subtitle, except that, if the ultimate parent does 

4 not pay when due any payment obligation for 

5 the affiliated group, the Administrator shall 

6 have the right to seek payment of all or any 

7 portion of the entire amount due (as well as 

8 any other amount for which the affiliated group 

9 may be liable under sections 223 and 224) from 

10 any member of the affiliated group; 

11 (C) all members of the affiliated group 

12 shall be identified in the submission under sub13 section (i) and shall certify compliance with this 

14 subsection and the Administrator’s regulations 

15 implementing this subsection; and 

16 (D) the obligations under this subtitle shall 

17 not change even if, after the date of enactment 

18 of this Act, the beneficial ownership interest be19 tween any members of the affiliated group shall 

20 change. 

21 (3) CAUSE OF ACTION.—Notwithstanding sec22 tion 221(e), this Act shall not preclude actions 

23 among persons within an affiliated group with re24 spect to the payment obligations under this Act. 
120 

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1 (g) DETERMINATION OF PRIOR ASBESTOS EXPENDI2 TURES.— 

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

4 a defendant participant’s prior asbestos expendi5 tures, the Administrator shall prescribe such rules 

6 as may be necessary or appropriate to assure that 

7 payments by indemnitors before December 31, 2002, 

8 shall be counted as part of the indemnitor’s prior as9 bestos expenditures, rather than the indemnitee’s 

10 prior asbestos expenditures, in accordance with this 

11 subsection. 

12 (2) INDEMNIFIABLE COSTS.—If an indemnitor 

13 has paid or reimbursed to an indemnitee any 

14 indemnifiable cost or otherwise made a payment on 

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

16 third party for an indemnifiable cost before Decem17 ber 31, 2002, the amount of such indemnifiable cost 

18 shall be solely for the account of the indemnitor for 

19 purposes under this Act. 

20 (3) INSURANCE PAYMENTS.—When computing 

21 the prior asbestos expenditures with respect to an 

22 asbestos claim, any amount paid or reimbursed by 

23 insurance shall be solely for the account of the 

24 indemnitor, even if the indemnitor would have no di25 rect right to the benefit of the insurance, if— 
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•S 2290 PCS 

1 (A) such insurance has been paid or reim2 bursed to the indemnitor or the indemnitee, or 

3 paid on behalf of or for the benefit of the 

4 indemnitee; and 

5 (B) the indemnitor has either, with respect 

6 to such asbestos claim or any similar asbestos 

7 claim, paid or reimbursed to its indemnitee any 

8 indemnifiable cost or paid to any third party on 

9 behalf of or for the benefit of the indemnitee 

10 any indemnifiable cost. 

11 (h) MINIMUM ANNUAL PAYMENTS.— 

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

13 subsection (m), the aggregate annual payments of 

14 defendant participants to the Fund shall be at least 

15 $2,500,000,000 for each calendar year in the first 

16 23 years of the Fund, or until such shorter time as 

17 the condition set forth in subsection (a)(2) of this 

18 section is attained. 

19 (2) GUARANTEED PAYMENT ACCOUNT.—To the 

20 extent payments in accordance with sections 202 

21 and 203 (as modified by subsections (b), (d), (f) and 

22 (g) of this section) fail in any year to raise at least 

23 $2,500,000,000 net of any adjustments under sub24 section (d), the balance needed to meet this required 

25 minimum aggregate annual payment shall be ob-
122 

•S 2290 PCS 

1 tained from the defendant guaranteed payment ac2 count established under subsection (k). 

3 (3) GUARANTEED PAYMENT SURCHARGE.—To 

4 the extent the procedure set forth in paragraph (2) 

5 is insufficient to satisfy the required minimum ag6 gregate annual payment net of any adjustments 

7 under subsection (d), the Administrator may assess 

8 a guaranteed payment surcharge under subsection 

9 (l). 

10 (i) PROCEDURES FOR MAKING PAYMENTS.— 

11 (1) INITIAL YEAR: TIERS II–VI.— 

12 (A) IN GENERAL.—Not later than 180 

13 days after enactment of this Act, each defend14 ant participant that is included in Tiers II, III, 

15 IV, V, or VI shall file with the Administrator— 

16 (i) a statement of whether the defend17 ant participant irrevocably elects to report 

18 on a consolidated basis under subsection 

19 (f); 

20 (ii) a good faith estimate of its prior 

21 asbestos expenditures; 

22 (iii) a statement of its 2002 revenues, 

23 determined in accordance with section 

24 203(a)(2); and 
123 

•S 2290 PCS 

1 (iv) payment in the amount specified 

2 in section 203 for the lowest subtier of the 

3 tier within which the defendant participant 

4 falls, except that if the defendant partici5 pant, or the affiliated group including the 

6 defendant participant, had 2002 revenues 

7 exceeding $3,000,000,000, it or its affili8 ated group shall pay the amount specified 

9 for Subtier 3 of Tiers II, III, or IV or 

10 Subtier 2 of Tiers V or VI, depending on 

11 the applicable Tier. 

12 (B) RELIEF.—The Administrator shall es13 tablish procedures to grant a defendant partici14 pant relief from its initial payment obligation 

15 where the participant shows that it is likely to 

16 qualify for a financial hardship adjustment, and 

17 that failure to provide interim relief would 

18 cause severe irreparable harm. The Administra19 tor’s refusal to grant such relief is subject to 

20 immediate judicial review under section 303. 

21 (2) INITIAL YEAR: TIER I.—Not later than 90 

22 days after enactment of this Act, each debtor shall 

23 file with the Administrator— 

24 (A) a statement identifying the bankruptcy 

25 case(s) associated with the debtor; 
124 

•S 2290 PCS 

1 (B) a statement whether its prior asbestos 

2 expenditures exceed $1,000,000; 

3 (C) a statement whether it has material 

4 continuing business operations and, if not, 

5 whether it holds cash or other assets that have 

6 been allocated or earmarked for asbestos settle7 ments; 

8 (D) in the case of debtors falling within 

9 Subtier 1 of Tier I, a statement of the debtor’s 

10 2002 revenues, determined in accordance with 

11 section 203(a)(2), and a payment under section 

12 203(b)(2)(B); 

13 (E) in the case of debtors falling within 

14 Subtier 2 of Tier I, an assignment of its assets 

15 under section 203(b)(3)(B); and 

16 (F) in the case of debtors falling within 

17 Subtier 3 of Tier I, a payment under section 

18 203(b)(4)(B), and a statement of how such 

19 payment was calculated. 

20 (3) INITIAL YEAR: TIER VII.—Not later than 90 

21 days after enactment of this Act, each defendant 

22 participant in Tier VII shall file with the Adminis23 trator— 
125 

•S 2290 PCS 

1 (A) a good faith estimate of all payments 

2 of the type described in section 203(h)(1) (as 

3 modified by section 203(h)(6)); 

4 (B) a statement of revenues calculated in 

5 accordance with sections 203(a)(2) and 203(h); 

6 and 

7 (C) payment in the amount specified in 

8 section 203(h). 

9 (4) NOTICE TO PARTICIPANTS.—Not later than 

10 240 days after enactment of this Act, the Adminis11 trator shall— 

12 (A) directly notify all reasonably identifi13 able defendant participants of the requirement 

14 to submit information necessary to calculate the 

15 amount of any required payment to the Fund; 

16 and 

17 (B) publish in the Federal Register a no18 tice setting forth the criteria in this Act, and as 

19 prescribed by the Administrator in accordance 

20 with this Act, for paying under this subtitle as 

21 a defendant participant and requiring any per22 son who may be a defendant participant to sub23 mit such information. 

24 (5) RESPONSE REQUIRED.— 
126 

•S 2290 PCS 

1 (A) IN GENERAL.—Any person who re2 ceives notice under paragraph (4)(A), and any 

3 other person meeting the criteria specified in 

4 the notice published under paragraph (4)(B), 

5 shall provide the Administrator with an address 

6 to send any notice from the Administrator in 

7 accordance with this Act and all the informa8 tion required by the Administrator in accord9 ance with this subsection no later than the ear10 lier of— 

11 (i) 30 days after the receipt of direct 

12 notice; or 

13 (ii) 30 days after the publication of 

14 notice in the Federal Register. 

15 (B) CERTIFICATION.—The response sub16 mitted under subparagraph (A) shall be signed 

17 by a responsible corporate officer, general part18 ner, proprietor, or individual of similar author19 ity, who shall certify under penalty of law the 

20 completeness and accuracy of the information 

21 submitted. 

22 (C) CONSENT TO AUDIT AUTHORITY.—The 

23 response submitted under subparagraph (A) 

24 shall include, on behalf of the defendant partici25 pant or affiliated group, a consent to the Ad-
127 

•S 2290 PCS 

1 ministrator’s audit authority under section 

2 221(d). 

3 (6) NOTICE OF INITIAL DETERMINATION.— 

4 (A) IN GENERAL.—Not later than 60 days 

5 after receiving a response under paragraph (5), 

6 the Administrator shall send the person a notice 

7 of initial determination identifying the tier and 

8 subtier, if any, into which the person falls and 

9 the annual payment obligation, if any, to the 

10 Fund, which determination shall be based on 

11 the information received from the person under 

12 this subsection and any other pertinent infor13 mation available to the Administrator and iden14 tified to the defendant participant. 

15 (B) NO RESPONSE; INCOMPLETE RE16 SPONSE.—If no response in accordance with 

17 paragraph (5) is received from a defendant par18 ticipant, or if the response is incomplete, the 

19 initial determination shall be based on the best 

20 information available to the Administrator. 

21 (C) PAYMENTS.—Within 30 days of receiv22 ing a notice of initial determination requiring 

23 payment, the defendant participant shall pay 

24 the Administrator the amount required by the 

25 notice, after deducting any previous payment 
128 

•S 2290 PCS 

1 made by the participant under this subsection. 

2 If the amount that the defendant participant is 

3 required to pay is less than any previous pay4 ment made by the participant under this sub5 section, the Administrator shall credit any ex6 cess payment against the future payment obli7 gations of that defendant participant. The 

8 pendency of a petition for rehearing under 

9 paragraph (10) shall not stay the obligation of 

10 the participant to make the payment specified 

11 in the Administrator’s notice. 

12 (7) EXEMPTIONS FOR INFORMATION RE13 QUIRED.— 

14 (A) PRIOR ASBESTOS EXPENDITURES.—In 

15 lieu of submitting information related to prior 

16 asbestos expenditures as may be required for 

17 purposes of this subtitle, a non-debtor defend18 ant participant may consent to be assigned to 

19 Tier II. 

20 (B) REVENUES.—In lieu of submitting in21 formation related to revenues as may be re22 quired for purposes of this subtitle, a non-debt23 or defendant participant may consent to be as24 signed to Subtier 1 of the defendant partici25 pant’s applicable tier. 
129 

•S 2290 PCS 

1 (8) NEW INFORMATION.— 

2 (A) EXISTING PARTICIPANT.—The Admin3 istrator shall adopt procedures for requiring ad4 ditional payment, or refunding amounts already 

5 paid, based on new information received. 

6 (B) ADDITIONAL PARTICIPANT.—If the 

7 Administrator, at any time, receives information 

8 that an additional person may qualify as a de9 fendant participant, the Administrator shall re10 quire such person to submit information nec11 essary to determine whether that person is re12 quired to make payments, and in what amount, 

13 under this subtitle and shall make any deter14 mination or take any other act consistent with 

15 this Act based on such information or any other 

16 information available to the Administrator with 

17 respect to such person. 

18 (9) SUBPOENAS.—The Administrator may re19 quest the Attorney General to subpoena persons to 

20 compel testimony, records, and other information 

21 relevant to its responsibilities under this section. The 

22 Attorney General may enforce such subpoena in ap23 propriate proceedings in the United States district 

24 court for the district in which the person to whom 
130 

•S 2290 PCS 

1 the subpoena was addressed resides, was served, or 

2 transacts business. 

3 (10) REHEARING.—A defendant participant has 

4 a right to obtain rehearing of the Administrator’s 

5 determination under this subsection of the applicable 

6 tier or subtier and of the Administrator’s determina7 tion under subsection (d) of a financial hardship or 

8 inequity adjustment, if the request for rehearing is 

9 filed within 30 days after the defendant participant’s 

10 receipt of notice from the Administrator of the de11 termination. A defendant participant may not file an 

12 action under section 303 unless the defendant par13 ticipant requests a rehearing under this paragraph. 

14 (j) DEFENDANT HARDSHIP AND INEQUITY ADJUST15 MENT ACCOUNT.— 

16 (1) IN GENERAL.—To the extent the total pay17 ments by defendant participants in any given year 

18 exceed the minimum aggregate annual payments 

19 under subsection (h) of this section, excess monies 

20 up to a maximum of $250,000,000 in any such year 

21 shall be placed in a defendant hardship and inequity 

22 adjustment account established within the Fund by 

23 the Administrator. 

24 (2) USE OF ACCOUNT MONIES.—Monies from 

25 the defendant hardship and inequity adjustment ac-
131 

•S 2290 PCS 

1 count shall be preserved and administered like the 

2 remainder of the Fund, but shall be reserved and 

3 may be used only— 

4 (A) to make up for any relief granted to a 

5 defendant participant for severe financial hard6 ship or demonstrated inequity under subsection 

7 (d) of this section or to reimburse any defend8 ant participant granted such relief after its pay9 ment of the amount otherwise due; and 

10 (B) if the condition set forth in subsection 

11 (a)(2) of this section is met, for any purpose 

12 that the Fund may serve under this Act, unless 

13 the Administrator shall have published a final 

14 certification requiring a contingent call under 

15 subsection (m)(3)(D). 

16 (3) CARRYOVER OF UNUSED FUNDS.—To the 

17 extent the Administrator does not, in any given year, 

18 use all of the funds allocated to the account under 

19 paragraph (1) for adjustments granted under sub20 section (d), remaining funds in the account shall be 

21 carried forward for use by the Administrator for ad22 justments in subsequent years. 

23 (k) DEFENDANT GUARANTEED PAYMENT AC24 COUNT.— 
132 

•S 2290 PCS 

1 (1) IN GENERAL.—Subject to subsections (h) 

2 and (j), in the event there are excess monies paid by 

3 defendant participants in any given year, such mon4 ies— 

5 (A) may be used to provide additional ad6 justments under subsection (d), up to a max7 imum aggregate of $50,000,000 in such year; 

8 and 

9 (B) to the extent not used under subpara10 graph (A), shall be placed in a defendant guar11 anteed payment account established within the 

12 Fund by the Administrator. 

13 (2) USE OF ACCOUNT MONIES.—Monies from 

14 the defendant guaranteed payment account shall be 

15 preserved and administered like the remainder of the 

16 Fund, but shall be reserved and may be used only— 

17 (A) to ensure the minimum aggregate an18 nual payment set forth in subsection (h) net of 

19 any adjustments under subsection (d) is 

20 reached each year; and 

21 (B) if the condition set forth in subsection 

22 (a)(2) of this section is met, for any purpose 

23 that the Fund may serve under this Act, unless 

24 the Administrator shall have published a final 
133 

•S 2290 PCS 

1 certification requiring a contingent call under 

2 subsection (m)(3)(D). 

3 (l) GUARANTEED PAYMENT SURCHARGE.— 

4 (1) IN GENERAL.—To the extent there are in5 sufficient monies in the defendant guaranteed pay6 ment account established in subsection (k) to attain 

7 the minimum aggregate annual payment net of any 

8 adjustments under subsection (d) in any given year, 

9 the Administrator may impose on each defendant 

10 participant a surcharge as necessary to raise the bal11 ance required to attain the minimum aggregate an12 nual payment net of any adjustments under sub13 section (d), as provided in this subsection. Any such 

14 surcharge shall be imposed on a pro rata basis, in 

15 accordance with each defendant participant’s relative 

16 annual liability under sections 202 and 203 (as 

17 modified by subsections (b), (d), (f), and (g) of this 

18 section). 

19 (2) CERTIFICATION.— 

20 (A) IN GENERAL.—Before imposing a 

21 guaranteed payment surcharge under this sub22 section, the Administrator shall certify that he 

23 or she has used all reasonable efforts to collect 

24 mandatory payments for all defendant partici-
134 

•S 2290 PCS 

1 pants, including by using the authority in sub2 section (i)(9) of this section and section 223. 

3 (B) NOTICE AND COMMENT.—Before mak4 ing a final certification under subparagraph 

5 (C), the Administrator shall publish a notice in 

6 the Federal Register of a proposed certification 

7 and provide in such notice for a public comment 

8 period of 30 days. 

9 (C) FINAL CERTIFICATION.— 

10 (i) IN GENERAL.—The Administrator 

11 shall publish a notice of the final certifi12 cation in the Federal Register after consid13 eration of all comments submitted under 

14 subparagraph (B). 

15 (ii) WRITTEN NOTICE.—Not later 

16 than 30 days after publishing any final 

17 certification under clause (i), the Adminis18 trator shall provide each defendant partici19 pant with written notice of that defendant 

20 participant’s payment, including the 

21 amount of any surcharge. 

22 (m) CONTINGENT CALL FOR MANDATORY ADDI23 TIONAL PAYMENTS.— 

24 (1) IN GENERAL.—Notwithstanding section 

25 202(a)(2) and subsection (a) of this section, the Ad-
135 

•S 2290 PCS 

1 ministrator may require additional payments to the 

2 Fund by defendant participants, subsequent to the 

3 payment by defendant participants of the maximum 

4 aggregate payment obligation in section 202(a)(2), 

5 as provided in this subsection. 

6 (2) CONTINGENT CALL PAYMENTS.—If the Ad7 ministrator has certified or certifies the necessity of 

8 additional payments as provided in paragraph (3), 

9 the Administrator may require the defendant partici10 pants to pay in accordance with paragraph (5) up to 

11 an aggregate maximum of $10,000,000,000 of addi12 tional payments subsequent to the payment by de13 fendant participants of the maximum aggregate pay14 ment obligation in section 202(a)(2). 

15 (3) CONTINGENT CALL CERTIFICATION.— 

16 (A) IN GENERAL.—Before invoking the au17 thority to require additional mandatory pay18 ments under this subsection, the Administrator 

19 shall certify, after consultation with appropriate 

20 experts, that the entirety of the contingent call 

21 amount invoked is necessary to meet the 

22 Fund’s obligations. 

23 (B) INITIAL NOTICE.—Before making any 

24 certification under subparagraph (A), the Ad25 ministrator shall publish a notice in the Federal 
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1 Register of the proposed certification, including 

2 a description and explanation of the Adminis3 trator’s analysis supporting the certification of 

4 the Administrator. 

5 (C) COMMENTS FROM DEFENDANT PAR6 TICIPANTS.—Not later than 60 days after the 

7 publication of the notice under subparagraph 

8 (B), a defendant participant may provide the 

9 Administrator with additional information to 

10 support a determination that all or some of the 

11 additional payments from defendant partici12 pants set forth in the notice are or are not re13 quired. 

14 (D) FINAL CERTIFICATION.— 

15 (i) IN GENERAL.—The Administrator 

16 shall publish a final notice in the Federal 

17 Register after consideration of all com18 ments submitted under subparagraph (C). 

19 (ii) WRITTEN NOTICE.—If the Admin20 istrator certifies the need for the contin21 gent call for additional payments, the Ad22 ministrator shall provide each defendant 

23 participant with written notice of that de24 fendant participant’s schedule of payments 

25 under this subsection. 
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1 (4) BORROWING CAPACITY.—To the extent pro2 vided in section 221(b)(3), the Administrator may 

3 borrow against the mandatory additional payments 

4 required under this subsection at any time after 

5 issuing the final certification under paragraph (3). 

6 (5) ALLOCATION.—Any additional payments to 

7 the Fund by defendant participants under this sub8 section shall be allocated among them in proportion 

9 to the amounts provided under sections 202 and 203 

10 (as modified by subsections (b), (d), (f), and (g) of 

11 this section). If the Administrator determines that 

12 the full amount of funding that would otherwise be 

13 generated in any year by the funding provisions of 

14 sections 202, 203, and 204 is not required for pur15 poses of this subsection, the Administrator shall re16 duce the amounts paid by all defendant participants 

17 on the same basis. 

18 (6) ENFORCEMENT.—The additional payments 

19 required under this subsection may be enforced in 

20 the same manner and to the same extent as the en21 forcement of payments under section 223. 
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1 Subtitle B—Asbestos Insurers 

2 Commission 

3 SEC. 210. DEFINITION. 

4 In this subtitle, the term ‘‘captive insurance com5 pany’’ means a company— 

6 (1) whose entire beneficial interest is owned on 

7 the date of enactment of this Act, directly or indi8 rectly, by a defendant participant or by the ultimate 

9 parent or the affiliated group of a defendant partici10 pant; 

11 (2) whose primary commercial business during 

12 the period from calendar years 1940 through 1986 

13 was to provide insurance to its ultimate parent or 

14 affiliated group, or any portion of the affiliated 

15 group or a combination thereof; and 

16 (3) that was incorporated or operating no later 

17 than December 31, 2002. 

18 SEC. 211. ESTABLISHMENT OF ASBESTOS INSURERS COM19 MISSION. 

20 (a) ESTABLISHMENT.—There is established the As21 bestos Insurers Commission (referred to in this subtitle 

22 as the ‘‘Commission’’) to carry out the duties described 

23 in section 212. 

24 (b) MEMBERSHIP.— 
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1 (1) APPOINTMENT.—The Commission shall be 

2 composed of 5 members who shall be appointed by 

3 the President, by and with the advice and consent 

4 of the Senate. 

5 (2) QUALIFICATIONS.— 

6 (A) EXPERTISE.—Members of the Com7 mission shall have sufficient expertise to fulfill 

8 their responsibilities under this subtitle. 

9 (B) CONFLICT OF INTEREST.— 

10 (i) IN GENERAL.—No member of the 

11 Commission appointed under paragraph 

12 (1) may be an employee or immediate fam13 ily member of an employee of an insurer 

14 participant. No member of the Commission 

15 may be a former employee or shareholder 

16 of any insurer participant, unless that is 

17 fully disclosed. 

18 (ii) DEFINITION.—In clause (i), the 

19 term ‘‘shareholder’’ shall not include a 

20 broadly based mutual fund that may, from 

21 time-to-time include the stocks of insurer 

22 participants as a portion of its overall 

23 holdings. 

24 (C) FEDERAL EMPLOYMENT.—A member 

25 of the Commission may not be an officer or em-
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•S 2290 PCS 

1 ployee of the Federal Government, except by 

2 reason of membership on the Commission. 

3 (3) PERIOD OF APPOINTMENT.—Members shall 

4 be appointed for the life of the Commission. 

5 (4) VACANCIES.—Any vacancy in the Commis6 sion shall be filled in the same manner as the origi7 nal appointment. 

8 (5) CHAIRMAN.—The President shall select a 

9 Chairman from among its members. 

10 (c) MEETINGS.— 

11 (1) INITIAL MEETING.—Not later than 30 days 

12 after the date on which all members of the Commis13 sion have been appointed, the Commission shall hold 

14 its first meeting. 

15 (2) SUBSEQUENT MEETINGS.—The Commission 

16 shall meet at the call of the Chairman as necessary 

17 to accomplish the duties under section 212. 

18 (3) QUORUM.—No business may be conducted 

19 or hearings held without the participation of a ma20 jority of the members of the Commission. 

21 SEC. 212. DUTIES OF ASBESTOS INSURERS COMMISSION. 

22 (a) DETERMINATION OF INSURER PAYMENT OBLIGA23 TIONS.— 

24 (1) IN GENERAL.— 
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1 (A) DEFINITIONS.—For the purposes of 

2 this Act, the terms ‘‘insurer’’ and ‘‘insurer par3 ticipant’’ shall, unless stated otherwise, include 

4 direct insurers and reinsurers, as well as any 

5 run-off entity established, in whole or in part, 

6 to review and pay asbestos claims. 

7 (B) PROCEDURES FOR DETERMINING IN8 SURER PAYMENTS.—The Commission shall de9 termine the amount that each insurer partici10 pant shall be required to pay into the Fund 

11 under the procedures described in this section. 

12 The Commission shall make this determination 

13 by first promulgating a rule establishing a 

14 methodology for allocation of payments among 

15 insurer participants and then applying such 

16 methodology to determine the individual pay17 ment for each insurer participant. The method18 ology may include 1 or more allocation formulas 

19 to be applied to all insurer participants or 

20 groups of similarly situated participants. The 

21 Commission’s rule shall include a methodology 

22 for adjusting payments by insurer participants 

23 to make up, during any applicable payment 

24 year, any amount by which aggregate insurer 

25 payments fall below the level required in para-
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•S 2290 PCS 

1 graph (3)(C). Under this procedure, not later 

2 than 120 days after the initial meeting of the 

3 Commission, the Commission shall commence a 

4 rulemaking proceeding under section 213(a) to 

5 propose and adopt a methodology for allocating 

6 payments among insurer participants. In pro7 posing an allocation methodology, the Commis8 sion may consult with such actuaries and other 

9 experts as it deems appropriate. After hearings 

10 and public comment on the proposed allocation 

11 methodology, the Commission shall as promptly 

12 as possible promulgate a final rule establishing 

13 such methodology. After promulgation of the 

14 final rule, the Commission shall determine the 

15 individual payment of each insurer participant 

16 under the procedures set forth in subsection 

17 (b). 

18 (C) SCOPE.—Every insurer, reinsurer, and 

19 runoff entity with asbestos-related obligations 

20 in the United States shall be subject to the 

21 Commission’s and Administrator’s authority 

22 under this Act, including allocation determina23 tions, and shall be required to fulfill its pay24 ment obligation without regard as to whether it 

25 is licensed in the United States. Every insurer 
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•S 2290 PCS 

1 participant not licensed or domiciled in the 

2 United States shall, upon the first payment to 

3 the Fund, submit a written consent to the Com4 mission’s and Administrator’s authority under 

5 this Act, and to the jurisdiction of the courts of 

6 the United States for purposes of enforcing this 

7 Act, in a form determined by the Adminis8 trator. Any insurer participant refusing to pro9 vide a written consent shall be subject to fines 

10 and penalties as provided in section 223. 

11 (2) AMOUNT OF PAYMENTS.— 

12 (A) AGGREGATE PAYMENT OBLIGATION.— 

13 The total payment required of all insurer par14 ticipants over the life of the Fund shall be 

15 equal to $46,025,000,000. 

16 (B) ACCOUNTING STANDARDS.—In deter17 mining the payment obligations of participants 

18 that are not licensed or domiciled in the United 

19 States or that are runoff entities, the Commis20 sion shall use accounting standards required for 

21 United States licensed direct insurers. 

22 (C) CAPTIVE INSURANCE COMPANIES.—No 

23 payment to the Fund shall be required from a 

24 captive insurance company, unless and only to 

25 the extent a captive insurance company, on the 
144 

•S 2290 PCS 

1 date of enactment of this Act, has liability, di2 rectly or indirectly, for any asbestos claim of a 

3 person or persons other than and unaffiliated 

4 with its ultimate parent or affiliated group or 

5 pool in which the ultimate parent participates 

6 or participated, or unaffiliated with a person 

7 that was its ultimate parent or a member of its 

8 affiliated group or pool at the time the relevant 

9 insurance or reinsurance was issued by the cap10 tive insurance company. 

11 (D) SEVERAL LIABILITY.—Unless other12 wise provided under this Act, each insurer par13 ticipant’s obligation to make payments to the 

14 Fund is several. Unless otherwise provided 

15 under this Act, there is no joint liability and the 

16 future insolvency by any insurer participant 

17 shall not affect the payment required of any 

18 other insurer participant. 

19 (3) PAYMENT CRITERIA.— 

20 (A) INCLUSION IN INSURER PARTICIPANT

21 CATEGORY.—Insurers that have paid, or been 

22 assessed by a legal judgment or settlement, at 

23 least $1,000,000 in defense and indemnity costs 

24 before the date of enactment of this Act in re25 sponse to claims for compensation for asbestos 
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1 injuries arising from a policy of liability insur2 ance or contract of liability reinsurance or 

3 retrocessional reinsurance shall be insurer par4 ticipants in the Fund. Other insurers shall be 

5 exempt from mandatory payments. 

6 (B) INSURER PARTICIPANT ALLOCATION

7 METHODOLOGY.— 

8 (i) IN GENERAL.—The Commission 

9 shall establish the payment obligations of 

10 individual insurer participants to reflect, 

11 on an equitable basis, the relative tort sys12 tem liability of the participating insurers in 

13 the absence of this Act, considering and 

14 weighting, as appropriate (but exclusive of 

15 workers’ compensation), such factors as— 

16 (I) historic premium for lines of 

17 insurance associated with asbestos ex18 posure over relevant periods of time; 

19 (II) recent loss experience for as20 bestos liability; 

21 (III) amounts reserved for asbes22 tos liability; 

23 (IV) the likely cost to each in24 surer participant of its future liabil-
146 

•S 2290 PCS 

1 ities under applicable insurance poli2 cies; and 

3 (V) any other factor the Commis4 sion may determine is relevant and 

5 appropriate. 

6 (ii) DETERMINATION OF RESERVES.— 

7 The Commission may establish procedures 

8 and standards for determination of the as9 bestos reserves of insurer participants. The 

10 reserves of a United States licensed rein11 surer that is wholly owned by, or under 

12 common control of, a United States li13 censed direct insurer shall be included as 

14 part of the direct insurer’s reserves when 

15 the reinsurer’s financial results are in16 cluded as part of the direct insurer’s 

17 United States operations, as reflected in 

18 footnote 33 of its filings with the National 

19 Association of Insurance Commissioners or 

20 in published financial statements prepared 

21 in accordance with generally accepted ac22 counting principles. 

23 (C) PAYMENT SCHEDULE.—The aggregate 

24 annual amount of payments by insurer partici-
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•S 2290 PCS 

1 pants over the life of the Fund shall be as fol2 lows: 

3 (i) For year 1, $2,700,000,000. 

4 (ii) For year 2, $7,500,000,000. 

5 (iii) For year 3, $2,175,000,000. 

6 (iv) For years 4 through 17, 

7 $1,625,000,000 annually. 

8 (v) For years 18 through 21, 

9 $1,350,000,000 annually. 

10 (vi) For years 22 through 26, 

11 $1,080,000,000 annually. 

12 (vii) For year 27, $100,000,000. 

13 (D) CERTAIN RUNOFF ENTITIES.— 

14 (i) IN GENERAL.—Whenever the Com15 mission requires payments by a runoff en16 tity that has assumed asbestos-related li17 abilities from a Lloyds syndicate or names 

18 that are members of such a syndicate, the 

19 Commission shall not require payments 

20 from such syndicates and names to the ex21 tent that the runoff entity makes its re22 quired payments. In addition, such syn23 dicates and names shall be required to 

24 make payments to the Fund in the amount 

25 of any adjustment granted to the runoff 
148 

•S 2290 PCS 

1 entity for severe financial hardship or ex2 ceptional circumstances. 

3 (ii) INCLUDED RUNOFF ENTITIES.— 

4 Subject to clause (i), a runoff entity shall 

5 include any direct insurer or reinsurer 

6 whose asbestos liability reserves have been 

7 transferred, directly or indirectly, to the 

8 runoff entity and on whose behalf the run9 off entity handles or adjusts and, where 

10 appropriate, pays asbestos claims. 

11 (E) FINANCIAL HARDSHIP AND EXCEP12 TIONAL CIRCUMSTANCE ADJUSTMENTS.— 

13 (i) IN GENERAL.—Under the proce14 dures established in subsection (b), an in15 surer participant may seek adjustment of 

16 the amount of its payments based on ex17 ceptional circumstances or severe financial 

18 hardship. 

19 (ii) FINANCIAL ADJUSTMENTS.—An 

20 insurer participant may qualify for an ad21 justment based on severe financial hard22 ship by demonstrating that payment of the 

23 amounts required by the Commission’s 

24 methodology would jeopardize the solvency 

25 of such participant. 
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•S 2290 PCS 

1 (iii) EXCEPTIONAL CIRCUMSTANCE

2 ADJUSTMENT.—An insurer participant 

3 may qualify for an adjustment based on 

4 exceptional circumstances by dem5 onstrating— 

6 (I) that the amount of its pay7 ments under the Commission’s alloca8 tion methodology is exceptionally in9 equitable when measured against the 

10 amount of the likely cost to the par11 ticipant of its future liability in the 

12 tort system in the absence of the 

13 Fund; 

14 (II) an offset credit as described 

15 in subsection (b)(4) (A) and (C); or 

16 (III) other exceptional cir17 cumstances. 

18 The Commission may determine whether 

19 to grant an adjustment and the size of any 

20 such adjustment, but adjustments shall not 

21 reduce the aggregate payment obligations 

22 of insurer participants specified in para23 graph (2)(A) and (3)(C). 

24 (iv) TIME PERIOD OF ADJUSTMENT.— 

25 Except for adjustments for offset credits, 
150 

•S 2290 PCS 

1 adjustments granted under this subsection 

2 shall have a term not to exceed 3 years. An 

3 insurer participant may renew its adjust4 ment by demonstrating to the Adminis5 trator that it remains justified. 

6 (b) PROCEDURE FOR NOTIFYING INSURER PARTICI7 PANTS OF INDIVIDUAL PAYMENT OBLIGATIONS.— 

8 (1) NOTICE TO PARTICIPANTS.—Not later than 

9 30 days after promulgation of the final rule estab10 lishing an allocation methodology under subsection 

11 (a)(1), the Commission shall— 

12 (A) directly notify all reasonably identifi13 able insurer participants of the requirement to 

14 submit information necessary to calculate the 

15 amount of any required payment to the Fund 

16 under the allocation methodology; and 

17 (B) publish in the Federal Register a no18 tice requiring any person who may be an in19 surer participant (as determined by criteria out20 lined in the notice) to submit such information. 

21 (2) RESPONSE REQUIRED BY INDIVIDUAL IN22 SURER PARTICIPANTS.— 

23 (A) IN GENERAL.—Any person who re24 ceives notice under paragraph (1)(A), and any 

25 other person meeting the criteria specified in 
151 

•S 2290 PCS 

1 the notice published under paragraph (1)(B), 

2 shall respond by providing the Commission with 

3 all the information requested in the notice under 

4 a schedule or by a date established by the Com5 mission. 

6 (B) CERTIFICATION.—The response sub7 mitted under subparagraph (A) shall be signed 

8 by a responsible corporate officer, general part9 ner, proprietor, or individual of similar author10 ity, who shall certify under penalty of law the 

11 completeness and accuracy of the information 

12 submitted. 

13 (3) NOTICE TO INSURER PARTICIPANTS OF INI14 TIAL PAYMENT DETERMINATION.— 

15 (A) IN GENERAL.—Within 120 days after 

16 receipt of the information required by para17 graph (2), the Commission shall send each in18 surer participant a notice of initial determina19 tion requiring payments to the Fund, which 

20 shall be based on the information received from 

21 the participant in response to the Commission’s 

22 request for information. An insurer partici23 pant’s payments shall be payable over the 

24 schedule established in subsection (a)(3)(C), in 

25 annual amounts proportionate to the aggregate 
152 

•S 2290 PCS 

1 annual amount of payments for all insurer par2 ticipants for the applicable year. 

3 (B) NO RESPONSE; INCOMPLETE RE4 SPONSE.—If no response is received from an in5 surer participant, or if the response is incom6 plete, the initial determination requiring a pay7 ment from the insurer participant shall be 

8 based on the best information available to the 

9 Commission. 

10 (4) COMMISSION REVIEW, REVISION AND FINAL11 IZATION OF INITIAL PAYMENT DETERMINATIONS.— 

12 (A) COMMENTS FROM INSURER PARTICI13 PANTS.—Not later than 30 days after receiving 

14 a notice of initial determination from the Com15 mission, an insurer participant may provide the 

16 Commission with additional information to sup17 port limited adjustments to the required pay18 ments to reflect severe financial hardship or ex19 ceptional circumstances, including the provision 

20 of an offset credit for an insurer participant for 

21 the amount of any asbestos-related payments it 

22 made or was legally obligated to make, includ23 ing payments released from an escrow, as the 

24 result of a bankruptcy judicially confirmed after 
153 

•S 2290 PCS 

1 May 22, 2003, but before the date of enactment 

2 of this Act. 

3 (B) ADDITIONAL PARTICIPANTS.—If, be4 fore the final determination of the Commission, 

5 the Commission receives information that an 

6 additional person may qualify as an insurer 

7 participant, the Commission shall require such 

8 person to submit information necessary to de9 termine whether payments from that person 

10 should be required, in accordance with the re11 quirements of this subsection. 

12 (C) REVISION PROCEDURES.—The Com13 mission shall adopt procedures for revising ini14 tial payments based on information received 

15 under subparagraphs (A) and (B), including a 

16 provision requiring an offset credit for an in17 surer participant for the amount of any asbes18 tos-related payments it made or was legally ob19 ligated to make, including payments released 

20 from an escrow, as the result of a bankruptcy 

21 confirmed after May 22, 2003, but before the 

22 date of enactment of this Act. 

23 (5) EXAMINATIONS AND SUBPOENAS.— 

24 (A) EXAMINATIONS.—The Commission 

25 may conduct examinations of the books and 
154 

•S 2290 PCS 

1 records of insurer participants to determine the 

2 completeness and accuracy of information sub3 mitted, or required to be submitted, to the 

4 Commission for purposes of determining partic5 ipant payments. 

6 (B) SUBPOENAS.—The Commission may 

7 request the Attorney General to subpoena per8 sons to compel testimony, records, and other in9 formation relevant to its responsibilities under 

10 this section. The Attorney General may enforce 

11 such subpoena in appropriate proceedings in 

12 the United States district court for the district 

13 in which the person to whom the subpoena was 

14 addressed resides, was served, or transacts 

15 business. 

16 (6) ESCROW PAYMENTS.—Without regard to an 

17 insurer participant’s payment obligation under this 

18 section, any escrow or similar account established 

19 before the enactment of this Act by an insurer par20 ticipant in connection with an asbestos trust fund 

21 that has not been judicially confirmed by final order 

22 by the date of enactment of this Act shall be the 

23 property of the insurer participant and returned to 

24 that insurer participant. 
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•S 2290 PCS 

1 (7) NOTICE TO INSURER PARTICIPANTS OF

2 FINAL PAYMENT DETERMINATIONS.—Not later than 

3 60 days after the notice of initial determination is 

4 sent to the insurer participants, the Commission 

5 shall send each insurer participant a notice of final 

6 determination. 

7 (c) INSURER PARTICIPANTS VOLUNTARY ALLOCA8 TION AGREEMENT.— 

9 (1) IN GENERAL.—Not later than 30 days after 

10 the Commission proposes its rule establishing an al11 location methodology under subsection (a)(1), direct 

12 insurer participants licensed or domiciled in the 

13 United States, other direct insurer participants, re14 insurer participants licensed or domiciled in the 

15 United States, or other reinsurer participants, may 

16 submit an allocation agreement, approved by all of 

17 the participants in the applicable group, to— 

18 (A) the Commission; 

19 (B) the Committee on the Judiciary of the 

20 Senate; and 

21 (C) the Committee on the Judiciary of the 

22 House of Representatives. 

23 (2) ALLOCATION AGREEMENT.—To the extent 

24 the participants in any such applicable group volun25 tarily agree upon an allocation arrangement, any 
156 

•S 2290 PCS 

1 such allocation agreement shall only govern the allo2 cation of payments within that group and shall not 

3 determine the aggregate amount due from that 

4 group. 

5 (3) CERTIFICATION.—The Commission shall de6 termine whether an allocation agreement submitted 

7 under subparagraph (A) meets the requirements of 

8 this subtitle and, if so, shall certify the agreement 

9 as establishing the allocation methodology governing 

10 the individual payment obligations of the partici11 pants who are parties to the agreement. The author12 ity of the Commission under this subtitle shall, with 

13 respect to participants who are parties to a certified 

14 allocation agreement, terminate on the day after the 

15 Commission certifies such agreement. Under sub16 section (f), the Administrator shall assume responsi17 bility, if necessary, for calculating the individual 

18 payment obligations of participants who are parties 

19 to the certified agreement. 

20 (d) COMMISSION REPORT.— 

21 (1) RECIPIENTS.—Until the work of the Com22 mission has been completed and the Commission ter23 minated, the Commission shall submit an annual re24 port, containing the information described under 

25 paragraph (2), to— 
157 

•S 2290 PCS 

1 (A) the Committee on the Judiciary of the 

2 Senate; 

3 (B) the Committee on the Judiciary of the 

4 House of Representatives; and 

5 (C) the Administrator. 

6 (2) CONTENTS.—The report under paragraph 

7 (1) shall state the amount that each insurer partici8 pant is required to pay to the Fund, including the 

9 payment schedule for such payments. 

10 (e) INTERIM PAYMENTS.— 

11 (1) AUTHORITY OF ADMINISTRATOR.—During 

12 the period between the date of enactment of this Act 

13 and the date when the Commission issues its final 

14 determinations of payments, the Administrator shall 

15 have the authority to require insurer participants to 

16 make interim payments to the Fund to assure ade17 quate funding by insurer participants during such 

18 period. 

19 (2) AMOUNT OF INTERIM PAYMENTS.—During 

20 any applicable year, the Administrator may require 

21 insurer participants to make aggregate interim pay22 ments not to exceed the annual aggregate amount 

23 specified in subsection (a)(3)(C). 

24 (3) ALLOCATION OF PAYMENTS.—Interim pay25 ments shall be allocated among individual insurer 
158 

•S 2290 PCS 

1 participants on an equitable basis as determined by 

2 the Administrator. All payments required under this 

3 subparagraph shall be credited against the partici4 pant’s ultimate payment obligation to the Fund es5 tablished by the Commission. If an interim payment 

6 exceeds the ultimate payment, the Fund shall pay 

7 interest on the amount of the overpayment at a rate 

8 determined by the Administrator. If the ultimate 

9 payment exceeds the interim payment, the partici10 pant shall pay interest on the amount of the under11 payment at the same rate. Any participant may seek 

12 an exemption from or reduction in any payment re13 quired under this subsection under the financial 

14 hardship and exceptional circumstance standards es15 tablished in subsection (a)(3)(D). 

16 (4) APPEAL OF INTERIM PAYMENT DECI17 SIONS.—A decision by the Administrator to establish 

18 an interim payment obligation shall be considered 

19 final agency action and reviewable under section 

20 303, except that the reviewing court may not stay an 

21 interim payment during the pendency of the appeal. 

22 (f) TRANSFER OF AUTHORITY FROM THE COMMIS23 SION TO THE ADMINISTRATOR.— 

24 (1) IN GENERAL.—Upon termination of the 

25 Commission under section 215, the Administrator 
159 

•S 2290 PCS 

1 shall assume all the responsibilities and authority of 

2 the Commission, except that the Administrator shall 

3 not have the power to modify the allocation method4 ology established by the Commission or by certified 

5 agreement or to promulgate a rule establishing any 

6 such methodology. 

7 (2) FINANCIAL HARDSHIP AND EXCEPTIONAL

8 CIRCUMSTANCE ADJUSTMENTS.—Upon termination 

9 of the Commission under section 215, the Adminis10 trator shall have the authority, upon application by 

11 any insurer participant, to make adjustments to an12 nual payments upon the same grounds as provided 

13 in subsection (a)(3)(D). Adjustments granted under 

14 this subsection shall have a term not to exceed 3 

15 years. An insurer participant may renew its adjust16 ment by demonstrating that it remains justified. 

17 Upon the grant of any adjustment, the Adminis18 trator shall increase the payments required of all 

19 other insurer participants so that there is no reduc20 tion in the aggregate payment required of all insurer 

21 participants for the applicable years. The increase in 

22 an insurer participant’s required payment shall be in 

23 proportion to such participant’s share of the aggre24 gate payment obligation of all insurer participants. 
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•S 2290 PCS 

1 (3) FINANCIAL SECURITY REQUIREMENTS.— 

2 Whenever an insurer participant’s A.M. Best’s 

3 claims payment rating or Standard and Poor’s fi4 nancial strength rating falls below A¥, and until 

5 such time as either the insurer participant’s A.M. 

6 Best’s Rating or Standard and Poor’s rating is 

7 equal to or greater than A¥, the Administrator 

8 shall have the authority to require that the partici9 pating insurer either— 

10 (A) pay the present value of its remaining 

11 Fund payments at a discount rate determined 

12 by the Administrator; or 

13 (B) provide an evergreen letter of credit or 

14 financial guarantee for future payments issued 

15 by an institution with an A.M. Best’s claims 

16 payment rating or Standard & Poor’s financial 

17 strength rating of at least A+. 

18 (g) JUDICIAL REVIEW.—The Commission’s rule es19 tablishing an allocation methodology, its final determina20 tions of payment obligations and other final action shall 

21 be judicially reviewable as provided in title III. 

22 SEC. 213. POWERS OF ASBESTOS INSURERS COMMISSION. 

23 (a) RULEMAKING.—The Commission shall promul24 gate such rules and regulations as necessary to implement 

25 its authority under this Act, including regulations gov-
161 

•S 2290 PCS 

1 erning an allocation methodology. Such rules and regula2 tions shall be promulgated after providing interested par3 ties with the opportunity for notice and comment. 

4 (b) HEARINGS.—The Commission may hold such 

5 hearings, sit and act at such times and places, take such 

6 testimony, and receive such evidence as the Commission 

7 considers advisable to carry out this Act. The Commission 

8 shall also hold a hearing on any proposed regulation estab9 lishing an allocation methodology, before the Commis10 sion’s adoption of a final regulation. 

11 (c) INFORMATION FROM FEDERAL AGENCIES.—The 

12 Commission may secure directly from any Federal depart13 ment or agency such information as the Commission con14 siders necessary to carry out this Act. Upon request of 

15 the Chairman of the Commission, the head of such depart16 ment or agency shall furnish such information to the Com17 mission. 

18 (d) POSTAL SERVICES.—The Commission may use 

19 the United States mails in the same manner and under 

20 the same conditions as other departments and agencies of 

21 the Federal Government. 

22 (e) GIFTS.—The Commission may not accept, use, or 

23 dispose of gifts or donations of services or property. 

24 (f) EXPERT ADVICE.—In carrying out its responsibil25 ities, the Commission may enter into such contracts and 
162 

•S 2290 PCS 

1 agreements as the Commission determines necessary to 

2 obtain expert advice and analysis. 

3 SEC. 214. PERSONNEL MATTERS. 

4 (a) COMPENSATION OF MEMBERS.—Each member of 

5 the Commission shall be compensated at a rate equal to 

6 the daily equivalent of the annual rate of basic pay pre7 scribed for level IV of the Executive Schedule under sec8 tion 5315 of title 5, United States Code, for each day (in9 cluding travel time) during which such member is engaged 

10 in the performance of the duties of the Commission. 

11 (b) TRAVEL EXPENSES.—The members of the Com12 mission shall be allowed travel expenses, including per 

13 diem in lieu of subsistence, at rates authorized for employ14 ees of agencies under subchapter I of chapter 57 of title 

15 5, United States Code, while away from their homes or 

16 regular places of business in the performance of services 

17 for the Commission. 

18 (c) STAFF.— 

19 (1) IN GENERAL.—The Chairman of the Com20 mission may, without regard to the civil service laws 

21 and regulations, appoint and terminate an executive 

22 director and such other additional personnel as may 

23 be necessary to enable the Commission to perform 

24 its duties. The employment of an executive director 

25 shall be subject to confirmation by the Commission. 
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1 (2) COMPENSATION.—The Chairman of the 

2 Commission may fix the compensation of the execu3 tive director and other personnel without regard to 

4 chapter 51 and subchapter III of chapter 53 of title 

5 5, United States Code, relating to classification of 

6 positions and General Schedule pay rates, except 

7 that the rate of pay for the executive director and 

8 other personnel may not exceed the rate payable for 

9 level V of the Executive Schedule under section 5316 

10 of such title. 

11 (d) DETAIL OF GOVERNMENT EMPLOYEES.—Any 

12 Federal Government employee may be detailed to the 

13 Commission without reimbursement, and such detail shall 

14 be without interruption or loss of civil service status or 

15 privilege. 

16 (e) PROCUREMENT OF TEMPORARY AND INTERMIT17 TENT SERVICES.—The Chairman of the Commission may 

18 procure temporary and intermittent services under section 

19 3109(b) of title 5, United States Code, at rates for individ20 uals which do not exceed the daily equivalent of the annual 

21 rate of basic pay prescribed for level V of the Executive 

22 Schedule under section 5316 of such title. 
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1 SEC. 215. TERMINATION OF ASBESTOS INSURERS COMMIS2 SION. 

3 The Commission shall terminate 90 days after the 

4 last date on which the Commission makes a final deter5 mination of contribution under section 212(b) or 90 days 

6 after the last appeal of any final action by the Commission 

7 is exhausted, whichever occurs later. 

8 SEC. 216. EXPENSES AND COSTS OF COMMISSION. 

9 All expenses of the Commission shall be paid from 

10 the Fund. 

11 Subtitle C—Asbestos Injury Claims 

12 Resolution Fund 

13 SEC. 221. ESTABLISHMENT OF ASBESTOS INJURY CLAIMS 

14 RESOLUTION FUND. 

15 (a) ESTABLISHMENT.—There is established in the 

16 Office of Asbestos Disease Compensation the Asbestos In17 jury Claims Resolution Fund, which shall be available to 

18 pay— 

19 (1) claims for awards for an eligible disease or 

20 condition determined under title I; 

21 (2) claims for reimbursement for medical moni22 toring determined under title I; 

23 (3) principal and interest on borrowings under 

24 subsection (b); and 

25 (4) administrative expenses to carry out the 

26 provisions of this Act. 
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1 (b) BORROWING AUTHORITY.— 

2 (1) IN GENERAL.—The Administrator is au3 thorized to borrow from time-to-time amounts as set 

4 forth in this subsection, for purposes of enhancing li5 quidity available to the Fund for carrying out the 

6 obligations of the Fund under this Act. The Admin7 istrator may authorize borrowing in such form, over 

8 such term, with such necessary disclosure to its 

9 lenders as will most efficiently enhance the Fund’s 

10 liquidity. 

11 (2) FEDERAL FINANCING BANK.—In addition to 

12 the general authority in paragraph (1), the Adminis13 trator may borrow from the Federal Financing Bank 

14 in accordance with section 6 of the Federal Financ15 ing Bank Act of 1973 (12 U.S.C. 2285) as needed 

16 for performance of the Administrator’s duties under 

17 this Act for the first 2 years. 

18 (3) BORROWING CAPACITY.—The maximum 

19 amount that may be borrowed under this subsection 

20 at any given time is the amount that, taking into ac21 count all payment obligations related to all previous 

22 amounts borrowed in accordance with this sub23 section and all committed obligations of the Fund at 

24 the time of borrowing, can be repaid in full (with in25 terest) in a timely fashion from— 
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1 (A) the available assets of the Fund as of 

2 the time of borrowing; and 

3 (B) all amounts expected to be paid by 

4 participants (including any contingent call man5 datory additional payments under section 

6 204(m)) during the subsequent 7 years. 

7 (4) REPAYMENT OBLIGATIONS.—Repayment of 

8 monies borrowed by the Administrator under this 

9 subsection is limited solely to amounts available in 

10 the Asbestos Injury Claims Resolution Fund estab11 lished under this section. 

12 (c) LOCKBOX FOR SEVERE ASBESTOS-RELATED IN13 JURY CLAIMANTS.— 

14 (1) IN GENERAL.—Within the Fund, the Ad15 ministrator shall establish the following accounts: 

16 (A) A Mesothelioma Account, which shall 

17 be used solely to make payments to claimants 

18 eligible for an award under the criteria of Level 

19 X. 

20 (B) A Lung Cancer Account, which shall 

21 be used solely to make payments to claimants 

22 eligible for an award under the criteria of Level 

23 IX. 

24 (C) A Severe Asbestosis Account, which 

25 shall be used solely to make payments to claim-
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1 ants eligible for an award under the criteria of 

2 Level V. 

3 (D) A Moderate Asbestosis Account, which 

4 shall be used solely to make payments to claim5 ants eligible for an award under the criteria of 

6 Level IV. 

7 (2) ALLOCATION.—The Administrator shall al8 locate to each of the 4 accounts established under 

9 paragraph (1) a portion of payments made to the 

10 Fund adequate to compensate all anticipated claim11 ants for each account. Within 60 days after the date 

12 of enactment of this Act, and periodically during the 

13 life of the Fund, the Administrator shall determine 

14 an appropriate amount to allocate to each account 

15 after consulting appropriate epidemiological and sta16 tistical studies. 

17 (d) AUDIT AUTHORITY.— 

18 (1) IN GENERAL.—For the purpose of 

19 ascertaining the correctness of any information pro20 vided or payments made to the Fund, or deter21 mining whether a person who has not made a pay22 ment to the Fund was required to do so, or deter23 mining the liability of any person for a payment to 

24 the Fund, or collecting any such liability, or inquir25 ing into any offense connected with the administra-
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1 tion or enforcement of this title, the Administrator 

2 is authorized— 

3 (A) to examine any books, papers, records 

4 or other data which may be relevant or material 

5 to such inquiry; 

6 (B) to summon the person liable for a pay7 ment under this title, or officer or employee of 

8 such person, or any person having possession, 

9 custody, or care of books of account containing 

10 entries relating to the business of the person 

11 liable or any other person the Administrator 

12 may deem proper, to appear before the Admin13 istrator at a time and place named in the sum14 mons and to produce such books, papers, 

15 records, or other data, and to give such testi16 mony, under oath, as may be relevant or mate17 rial to such inquiry; and 

18 (C) to take such testimony of the person 

19 concerned, under oath, as may be relevant or 

20 material to such inquiry. 

21 (2) FALSE, FRAUDULENT, OR FICTITIOUS

22 STATEMENTS OR PRACTICES.—If the Administrator 

23 determines that materially false, fraudulent, or ficti24 tious statements or practices have been submitted or 

25 engaged in by persons submitting information to the 
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1 Administrator or to the Asbestos Insurers Commis2 sion or any other person who provides evidence in 

3 support of such submissions for purposes of deter4 mining payment obligations under this Act, the Ad5 ministrator may impose a civil penalty not to exceed 

6 $10,000 on any person found to have submitted or 

7 engaged in a materially false, fraudulent, or ficti8 tious statement or practice under this Act. The Ad9 ministrator shall promulgate appropriate regulations 

10 to implement this paragraph. 

11 (e) NO PRIVATE RIGHT OF ACTION.—Except as pro12 vided in sections 203(b)(2)(D)(ii) and 204(f)(3), there 

13 shall be no private right of action under any Federal or 

14 State law against any participant based on a claim of com15 pliance or noncompliance with this Act or the involvement 

16 of any participant in the enactment of this Act. 

17 SEC. 222. MANAGEMENT OF THE FUND. 

18 (a) IN GENERAL.—Amounts in the Fund shall be 

19 held for the exclusive purpose of providing benefits to as20 bestos claimants and their beneficiaries, including those 

21 provided in subsection (c), and to otherwise defray the rea22 sonable expenses of administering the Fund. 

23 (b) INVESTMENTS.— 

24 (1) IN GENERAL.—Amounts in the Fund shall 

25 be administered and invested with the care, skill, 
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1 prudence, and diligence, under the circumstances 

2 prevailing at the time of such investment, that a 

3 prudent person acting in a like capacity and manner 

4 would use. 

5 (2) STRATEGY.—The Administrator shall invest 

6 amounts in the Fund in a manner that enables the 

7 Fund to make current and future distributions to or 

8 for the benefit of asbestos claimants. In pursuing an 

9 investment strategy under this subparagraph, the 

10 Administrator shall consider, to the extent relevant 

11 to an investment decision or action— 

12 (A) the size of the Fund; 

13 (B) the nature and estimated duration of 

14 the Fund; 

15 (C) the liquidity and distribution require16 ments of the Fund; 

17 (D) general economic conditions at the 

18 time of the investment; 

19 (E) the possible effect of inflation or defla20 tion on Fund assets; 

21 (F) the role that each investment or course 

22 of action plays with respect to the overall assets 

23 of the Fund; 

24 (G) the expected amount to be earned (in25 cluding both income and appreciation of cap-
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1 ital) through investment of amounts in the 

2 Fund; and 

3 (H) the needs of asbestos claimants for 

4 current and future distributions authorized 

5 under this Act. 

6 (c) MESOTHELIOMA RESEARCH AND TREATMENT

7 CENTERS.— 

8 (1) IN GENERAL.—The Administrator shall pro9 vide $1,000,000 from the Fund for each of fiscal 

10 years 2004 through 2008 for each of up to 10 meso11 thelioma disease research and treatment centers. 

12 (2) REQUIREMENTS.—The Centers shall— 

13 (A) be chosen by the Director of the Na14 tional Institutes of Health; 

15 (B) be chosen through competitive peer re16 view; 

17 (C) be geographically distributed through18 out the United States with special consideration 

19 given to areas of high incidence of mesothe20 lioma disease; 

21 (D) be closely associated with Department 

22 of Veterans Affairs medical centers to provide 

23 research benefits and care to veterans, who 

24 have suffered excessively from mesothelioma; 
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1 (E) be engaged in research to provide 

2 mechanisms for detection and prevention of 

3 mesothelioma, particularly in the areas of pain 

4 management and cures; 

5 (F) be engaged in public education about 

6 mesothelioma and prevention, screening, and 

7 treatment; 

8 (G) be participants in the National Meso9 thelioma Registry; and 

10 (H) be coordinated in their research and 

11 treatment efforts with other Centers and insti12 tutions involved in exemplary mesothelioma re13 search. 

14 SEC. 223. ENFORCEMENT OF PAYMENT OBLIGATIONS. 

15 (a) DEFAULT.—If any participant fails to make any 

16 payment in the amount of and according to the schedule 

17 under this Act or as prescribed by the Administrator, after 

18 demand and 30 days opportunity to cure the default, there 

19 shall be a lien in favor of the United States for the amount 

20 of the delinquent payment (including interest) upon all 

21 property and rights to property, whether real or personal, 

22 belonging to such participant. 

23 (b) BANKRUPTCY.—In the case of a bankruptcy or 

24 insolvency proceeding, the lien imposed under subsection 

25 (a) shall be treated in the same manner as a lien for taxes 
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1 due and owing to the United States for purposes of the 

2 provisions of title 11, United States Code, or section 

3 3713(a) of title 31, United States Code. The United 

4 States Bankruptcy Court shall have jurisdiction over any 

5 issue or controversy regarding lien priority and lien perfec6 tion arising in a bankruptcy case due to a lien imposed 

7 under subsection (a). 

8 (c) CIVIL ACTION.— 

9 (1) IN GENERAL.—In any case in which there 

10 has been a refusal or failure to pay any liability im11 posed under this Act, the Administrator may bring 

12 a civil action in the United States District Court for 

13 the District of Columbia, or any other appropriate 

14 lawsuit or proceeding outside of the United States— 

15 (A) to enforce the liability and any lien of 

16 the United States imposed under this section; 

17 (B) to subject any property of the partici18 pant, including any property in which the par19 ticipant has any right, title, or interest, to the 

20 payment of such liability; or 

21 (C) for temporary, preliminary, or perma22 nent relief. 

23 (2) ADDITIONAL PENALTIES.—In any action 

24 under paragraph (1) in which the refusal or failure 
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1 to pay was willful, the Administrator may seek re2 covery— 

3 (A) of punitive damages; 

4 (B) of the costs of any civil action under 

5 this subsection, including reasonable fees in6 curred for collection, expert witnesses, and at7 torney’s fees; and 

8 (C) in addition to any other penalty, of a 

9 fine equal to the total amount of the liability 

10 that has not been collected. 

11 (d) ENFORCEMENT AUTHORITY AS TO INSURER PAR12 TICIPANTS.— 

13 (1) IN GENERAL.—In addition to or in lieu of 

14 the enforcement remedies described in subsection 

15 (c), the Administrator may seek to recover amounts 

16 in satisfaction of a payment not timely paid by an 

17 insurer participant under the procedures under this 

18 subsection. 

19 (2) SUBROGATION.—To the extent required to 

20 establish personal jurisdiction over nonpaying in21 surer participants, the Administrator shall be 

22 deemed to be subrogated to the contractual rights of 

23 participants to seek recovery from nonpaying insur24 ing participants that are domiciled outside the 

25 United States under the policies of liability insur-
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1 ance or contracts of liability reinsurance or 

2 retrocessional reinsurance applicable to asbestos 

3 claims, and the Administrator may bring an action 

4 or an arbitration against the nonpaying insurer par5 ticipants under the provisions of such policies and 

6 contracts, provided that— 

7 (A) any amounts collected under this sub8 section shall not increase the amount of deemed 

9 erosion allocated to any policy or contract under 

10 section 404, or otherwise reduce coverage avail11 able to a participant; and 

12 (B) subrogation under this subsection shall 

13 have no effect on the validity of the insurance 

14 policies or reinsurance, and any contrary State 

15 law is expressly preempted. 

16 (3) RECOVERABILITY OF CONTRIBUTION.—For 

17 purposes of this subsection— 

18 (A) all contributions to the Fund required 

19 of a participant shall be deemed to be sums le20 gally required to be paid for bodily injury re21 sulting from exposure to asbestos; 

22 (B) all contributions to the Fund required 

23 of any participant shall be deemed to be a sin24 gle loss arising from a single occurrence under 
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1 each contract to which the Administrator is 

2 subrogated; and 

3 (C) with respect to reinsurance contracts, 

4 all contributions to the Fund required of a par5 ticipant shall be deemed to be payments to a 

6 single claimant for a single loss. 

7 (4) NO CREDIT OR OFFSET.—In any action 

8 brought under this subsection, the nonpaying insurer 

9 or reinsurer shall be entitled to no credit or offset 

10 for amounts collectible or potentially collectible from 

11 any participant nor shall such defaulting participant 

12 have any right to collect any sums payable under 

13 this section from any participant. 

14 (5) COOPERATION.—Insureds and cedents shall 

15 cooperate with the Administrator’s reasonable re16 quests for assistance in any such proceeding. The 

17 positions taken or statements made by the Adminis18 trator in any such proceeding shall not be binding 

19 on or attributed to the insureds or cedents in any 

20 other proceeding. The outcome of such a proceeding 

21 shall not have a preclusive effect on the insureds or 

22 cedents in any other proceeding and shall not be ad23 missible against any subrogee under this section. 

24 The Administrator shall have the authority to settle 
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1 or compromise any claims against a nonpaying in2 surer participant under this subsection. 

3 (e) BAR ON UNITED STATES BUSINESS.—If any di4 rect insurer or reinsurer refuses to furnish any informa5 tion requested by or to pay any contribution required by 

6 this Act, then, in addition to any other penalties imposed 

7 by this Act, the Administrator may issue an order barring 

8 such entity and its affiliates from insuring risks located 

9 within the United States or otherwise doing business with10 in the United States. Insurer participants or their affili11 ates seeking to obtain a license from any State to write 

12 any type of insurance shall be barred from obtaining any 

13 such license until payment of all contributions required as 

14 of the date of license application. 

15 (f) CREDIT FOR REINSURANCE.—If the Adminis16 trator determines that an insurer participant that is a re17 insurer is in default in paying any required contribution 

18 or otherwise not in compliance with this Act, the Adminis19 trator may issue an order barring any direct insurer par20 ticipant from receiving credit for reinsurance purchased 

21 from the defaulting reinsurer. Any State law governing 

22 credit for reinsurance to the contrary is preempted. 

23 (g) DEFENSE LIMITATION.—In any proceeding under 

24 this section, the participant shall be barred from bringing 

25 any challenge to any determination of the Administrator 
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1 or the Asbestos Insurers Commission regarding its liability 

2 under this Act, or to the constitutionality of this Act or 

3 any provision thereof, if such challenge could have been 

4 made during the review provided under section 204(i)(10), 

5 or in a judicial review proceeding under section 303. 

6 (h) DEPOSIT OF FUNDS.— 

7 (1) IN GENERAL.—Any funds collected under 

8 subsection (c)(2) (A) or (C) shall be— 

9 (A) deposited in the Fund; and 

10 (B) used only to pay— 

11 (i) claims for awards for an eligible 

12 disease or condition determined under title 

13 I; or 

14 (ii) claims for reimbursement for med15 ical monitoring determined under title I. 

16 (2) NO EFFECT ON OTHER LIABILITIES.—The 

17 imposition of a fine under subsection (c)(2)(C) shall 

18 have no effect on— 

19 (A) the assessment of contributions under 

20 subtitles A and B; or 

21 (B) any other provision of this Act. 

22 (i) PROPERTY OF THE ESTATE.—Section 541(b) of 

23 title 11, United States Code, is amended— 

24 (1) in paragraph (4)(B)(ii), by striking ‘‘or’’ at 

25 the end; 
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1 (2) in paragraph (5), by striking ‘‘prohibition.’’ 

2 and inserting ‘‘prohibition; or’’; and 

3 (3) by inserting after paragraph (5) and before 

4 the last undesignated sentence the following: 

5 ‘‘(6) the value of any pending claim against or 

6 the amount of an award granted from the Asbestos 

7 Injury Claims Resolution Fund established under 

8 the Fairness in Asbestos Injury Resolution Act of 

9 2004.’’. 

10 SEC. 224. INTEREST ON UNDERPAYMENT OR NONPAYMENT. 

11 If any amount of payment obligation under this title 

12 is not paid on or before the last date prescribed for pay13 ment, the liable party shall pay interest on such amount 

14 at the Federal short-term rate determined under section 

15 6621(b) of the Internal Revenue Code of 1986, plus 5 per16 centage points, for the period from such last date to the 

17 date paid. 

18 TITLE III—JUDICIAL REVIEW 

19 SEC. 301. JUDICIAL REVIEW OF RULES AND REGULATIONS. 

20 (a) EXCLUSIVE JURISDICTION.—The United States 

21 Court of Appeals for the District of Columbia Circuit shall 

22 have exclusive jurisdiction over any action to review rules 

23 or regulations promulgated by the Administrator or the 

24 Asbestos Insurers Commission under this Act. 
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1 (b) PERIOD FOR FILING PETITION.—A petition for 

2 review under this section shall be filed not later than 60 

3 days after the date notice of such promulgation appears 

4 in the Federal Register. 

5 SEC. 302. JUDICIAL REVIEW OF AWARD DECISIONS. 

6 (a) IN GENERAL.—Any claimant adversely affected 

7 or aggrieved by a final decision of the Administrator 

8 awarding or denying compensation under title I may peti9 tion for judicial review of such decision. Any petition for 

10 review under this section shall be filed within 90 days of 

11 the issuance of a final decision of the Administrator. 

12 (b) EXCLUSIVE JURISDICTION.—A petition for review 

13 may only be filed in the United States Court of Appeals 

14 for the circuit in which the claimant resides at the time 

15 of the issuance of the final order. 

16 (c) STANDARD OF REVIEW.—The court shall uphold 

17 the decision of the Administrator unless the court deter18 mines, upon review of the record as a whole, that the deci19 sion is not supported by substantial evidence, is contrary 

20 to law, or is not in accordance with procedure required 

21 by law. 

22 SEC. 303. JUDICIAL REVIEW OF PARTICIPANTS’ ASSESS23 MENTS. 

24 (a) EXCLUSIVE JURISDICTION.—The United States 

25 Court of Appeals for the District of Columbia Circuit shall 
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1 have exclusive jurisdiction over any action to review a final 

2 determination by the Administrator or the Asbestos Insur3 ers Commission regarding the liability of any person to 

4 make a payment to the Fund, including a notice of appli5 cable subtier assignment under section 204(i), a notice of 

6 financial hardship or inequity determination under section 

7 204(d), and a notice of insurer participant obligation 

8 under section 212(b). 

9 (b) PERIOD FOR FILING ACTION.—A petition for re10 view under subsection (a) shall be filed not later than 60 

11 days after a final determination by the Administrator or 

12 the Commission giving rise to the action. Any defendant 

13 participant who receives a notice of its applicable subtier 

14 under section 204(i) or a notice of financial hardship or 

15 inequity determination under section 204(d) shall com16 mence any action within 30 days after a decision on re17 hearing under section 204(i)(10), and any insurer partici18 pant who receives a notice of a payment obligation under 

19 section 212(b) shall commence any action within 30 days 

20 after receiving such notice. 

21 SEC. 304. OTHER JUDICIAL CHALLENGES. 

22 (a) EXCLUSIVE JURISDICTION.—The United States 

23 District Court for the District of Columbia shall have ex24 clusive jurisdiction over any action for declaratory or in25 junctive relieve challenging any provision of this Act. An 
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1 action under this section shall be filed not later than 60 

2 days after the date of enactment of this Act or 60 days 

3 after the final action by the Administrator or the Commis4 sion giving rise to the action, whichever is later. 

5 (b) DIRECT APPEAL.—A final decision in the action 

6 shall be reviewable on appeal directly to the Supreme 

7 Court of the United States. Such appeal shall be taken 

8 by the filing of a notice of appeal within 30 days, and 

9 the filing of a jurisdictional statement within 60 days, of 

10 the entry of the final decision. 

11 (c) EXPEDITED PROCEDURES.—It shall be the duty 

12 of the United States District Court for the District of Co13 lumbia and the Supreme Court of the United States to 

14 advance on the docket and to expedite to the greatest pos15 sible extent the disposition of the action and appeal. 

16 SEC. 305. STAYS, EXCLUSIVITY, AND CONSTITUTIONAL RE17 VIEW. 

18 (a) NO STAYS.—No court may issue a stay of pay19 ment by any party into the Fund pending its final judg20 ment. 

21 (b) EXCLUSIVITY OF REVIEW.—An action of the Ad22 ministrator or the Asbestos Insurers Commission for 

23 which review could have been obtained under section 301, 

24 302, or 303 shall not be subject to judicial review in any 

25 other proceeding. 
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1 (c) CONSTITUTIONAL REVIEW.— 

2 (1) IN GENERAL.—Notwithstanding any other 

3 provision of law, any interlocutory or final judgment, 

4 decree, or order of a Federal court holding this Act, 

5 or any provision or application thereof, unconstitu6 tional shall be reviewable as a matter of right by di7 rect appeal to the Supreme Court. 

8 (2) PERIOD FOR FILING APPEAL.—Any such 

9 appeal shall be filed not more than 30 days after 

10 entry of such judgment, decree, or order. 

11 TITLE IV—MISCELLANEOUS 

12 PROVISIONS 

13 SEC. 401. FALSE INFORMATION. 

14 (a) IN GENERAL.—Chapter 63 of title 18, United 

15 States Code, is amended by adding at the end the fol16 lowing: 

17 ‘‘§ 1348. Fraud and false statements in connection 

18 with participation in Asbestos Injury 

19 Claims Resolution Fund 

20 ‘‘(a) FRAUD RELATING TO ASBESTOS INJURY

21 CLAIMS RESOLUTION FUND.—Whoever knowingly and 

22 willfully executes, or attempts to execute, a scheme or arti23 fice to defraud the Office of Asbestos Disease Compensa24 tion or the Asbestos Insurers Commission under title II 

25 of the Fairness in Asbestos Injury Resolution Act of 2004 
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1 shall be fined under this title or imprisoned not more than 

2 20 years, or both. 

3 ‘‘(b) FALSE STATEMENT RELATING TO ASBESTOS

4 INJURY CLAIMS RESOLUTION FUND.—Whoever, in any 

5 matter involving the Office of Asbestos Disease Compensa6 tion or the Asbestos Insurers Commission, knowingly and 

7 willfully— 

8 ‘‘(1) falsifies, conceals, or covers up by any 

9 trick, scheme, or device a material fact; 

10 ‘‘(2) makes any materially false, fictitious, or 

11 fraudulent statements or representations; or 

12 ‘‘(3) makes or uses any false writing or docu13 ment knowing the same to contain any materially 

14 false, fictitious, or fraudulent statement or entry, in 

15 connection with the award of a claim or the deter16 mination of a participant’s payment obligation under 

17 title I or II of the Fairness in Asbestos Injury Reso18 lution Act of 2004 shall be fined under this title or 

19 imprisoned not more than 10 years, or both.’’. 

20 (b) TECHNICAL AND CONFORMING AMENDMENT.— 

21 The table of sections for chapter 63 of title 18, United 

22 States Code, is amended by adding at the end the fol23 lowing: 

‘‘1348. Fraud and false statements in connection with participation in Asbestos 

Injury Claims Resolution Fund.’’. 
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1 SEC. 402. EFFECT ON BANKRUPTCY LAWS. 

2 (a) NO AUTOMATIC STAY.—Section 362(b) of title 

3 11, United States Code, is amended— 

4 (1) in paragraph (17), by striking ‘‘or’’ at the 

5 end; 

6 (2) in paragraph (18), by striking the period at 

7 the end and inserting ‘‘; or’’; and 

8 (3) by inserting after paragraph (18) the fol9 lowing: 

10 ‘‘(19) under subsection (a) of this section of the 

11 enforcement of any payment obligations under sec12 tion 204 of the Fairness in Asbestos Injury Resolu13 tion Act of 2004, against a debtor, or the property 

14 of the estate of a debtor, that is a participant (as 

15 that term is defined in section 3 of that Act).’’. 

16 (b) ASSUMPTION OF EXECUTORY CONTRACT.—Sec17 tion 365 of title 11, United States Code, is amended by 

18 adding at the end the following: 

19 ‘‘(p) If a debtor is a participant (as that term is de20 fined in section 3 of the Fairness in Asbestos Injury Reso21 lution Act of 2004), the trustee shall be deemed to have 

22 assumed all executory contracts entered into by the partic23 ipant under section 204 of that Act. The trustee may not 

24 reject any such executory contract.’’. 
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1 (c) ALLOWED ADMINISTRATIVE EXPENSES.—Section 

2 503 of title 11, United States Code, is amended by adding 

3 at the end the following: 

4 ‘‘(c)(1) Claims or expenses of the United States, the 

5 Attorney General, or the Administrator (as that term is 

6 defined in section 3 of the Fairness in Asbestos Injury 

7 Resolution Act of 2004) based upon the asbestos payment 

8 obligations of a debtor that is a Participant (as that term 

9 is defined in section 3 of that Act), shall be paid as an 

10 allowed administrative expense. The debtor shall not be 

11 entitled to either notice or a hearing with respect to such 

12 claims. 

13 ‘‘(2) For purposes of paragraph (1), the term ‘asbes14 tos payment obligation’ means any payment obligation 

15 under title II of the Fairness in Asbestos Injury Resolu16 tion Act of 2004.’’. 

17 (d) NO DISCHARGE.—Section 523 of title 11, United 

18 States Code, is amended by adding at the end the fol19 lowing: 

20 ‘‘(f) A discharge under section 727, 1141, 1228, or 

21 1328 of this title does not discharge any debtor that is 

22 a participant (as that term is defined in section 3 of the 

23 Fairness in Asbestos Injury Resolution Act of 2004) of 

24 the debtor’s payment obligations assessed against the par25 ticipant under title II of that Act.’’. 
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1 (e) PAYMENT.—Section 524 of title 11, United States 

2 Code, is amended by adding at the end the following: 

3 ‘‘(i) PARTICIPANT DEBTORS.— 

4 ‘‘(1) IN GENERAL.—Paragraphs (2) and (3) 

5 shall apply to a debtor who— 

6 ‘‘(A) is a participant that has made prior 

7 asbestos expenditures (as such terms are de8 fined in the Fairness in Asbestos Injury Resolu9 tion Act of 2004); and 

10 ‘‘(B) is subject to a case under this title 

11 that is pending— 

12 ‘‘(i) on the date of enactment of the 

13 Fairness in Asbestos Injury Resolution Act 

14 of 2004; or 

15 ‘‘(ii) at any time during the 1-year pe16 riod preceding the date of enactment of 

17 that Act. 

18 ‘‘(2) TIER I DEBTORS.—A debtor that has been 

19 assigned to Tier I under section 202 of the Fairness 

20 in Asbestos Injury Resolution Act of 2004 shall 

21 make payments in accordance with sections 202 and 

22 203 of that Act. 

23 ‘‘(3) TREATMENT OF PAYMENT OBLIGA24 TIONS.—All payment obligations of a debtor under 
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1 sections 202 and 203 of the Fairness in Asbestos In2 jury Resolution Act of 2004 shall— 

3 ‘‘(A) constitute costs and expenses of ad4 ministration of a case under section 503 of this 

5 title; 

6 ‘‘(B) notwithstanding any case pending 

7 under this title, be payable in accordance with 

8 section 202 of that Act; 

9 ‘‘(C) not be stayed; 

10 ‘‘(D) not be affected as to enforcement or 

11 collection by any stay or injunction of any 

12 court; and 

13 ‘‘(E) not be impaired or discharged in any 

14 current or future case under this title.’’. 

15 (f) TREATMENT OF TRUSTS.—Section 524 of title 

16 11, United States Code, as amended by this Act, is 

17 amended by adding at the end the following: 

18 ‘‘(j) ASBESTOS TRUSTS.— 

19 ‘‘(1) IN GENERAL.—A trust shall assign a por20 tion of the corpus of the trust to the Asbestos Injury 

21 Claims Resolution Fund (referred to in this sub22 section as the ‘Fund’) as established under the Fair23 ness in Asbestos Injury Resolution Act of 2004 if 

24 the trust qualifies as a ‘trust’ under section 201 of 

25 that Act. 
189 

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1 ‘‘(2) TRANSFER OF TRUST ASSETS.— 

2 ‘‘(A) IN GENERAL.— 

3 ‘‘(i) Except as provided under sub4 paragraphs (B), (C), and (E), the assets in 

5 any trust established to provide compensa6 tion for asbestos claims (as defined in sec7 tion 3 of the Fairness in Asbestos Injury 

8 Resolution Act of 2004) shall be trans9 ferred to the Fund not later than 6 

10 months after the date of enactment of the 

11 Fairness in Asbestos Injury Resolution Act 

12 of 2004 or 30 days following funding of a 

13 trust established under a reorganization 

14 plan subject to section 202(c) of that Act. 

15 Except as provided under subparagraph 

16 (B), the Administrator of the Fund shall 

17 accept such assets and utilize them for any 

18 purposes of the Fund under section 221 of 

19 such Act, including the payment of claims 

20 for awards under such Act to beneficiaries 

21 of the trust from which the assets were 

22 transferred. 

23 ‘‘(ii) Notwithstanding any other provi24 sion of Federal or State law, no liability of 

25 any kind may be imposed on a trustee of 
190 

•S 2290 PCS 

1 a trust for transferring assets to the Fund 

2 in accordance with clause (i). 

3 ‘‘(B) AUTHORITY TO REFUSE ASSETS.— 

4 The Administrator of the Fund may refuse to 

5 accept any asset that the Administrator deter6 mines may create liability for the Fund in ex7 cess of the value of the asset. 

8 ‘‘(C) ALLOCATION OF TRUST ASSETS.—If 

9 a trust under subparagraph (A) has bene10 ficiaries with claims that are not asbestos 

11 claims, the assets transferred to the Fund 

12 under subparagraph (A) shall not include assets 

13 allocable to such beneficiaries. The trustees of 

14 any such trust shall determine the amount of 

15 such trust assets to be reserved for the con16 tinuing operation of the trust in processing and 

17 paying claims that are not asbestos claims. The 

18 trustees shall demonstrate to the satisfaction of 

19 the Administrator, or by clear and convincing 

20 evidence in a proceeding brought before the 

21 United States District Court for the District of 

22 Columbia in accordance with paragraph (4), 

23 that the amount reserved is properly allocable 

24 to claims other than asbestos claims. 
191 

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1 ‘‘(D) SALE OF FUND ASSETS.—The invest2 ment requirements under section 222 of the 

3 Fairness in Asbestos Injury Resolution Act of 

4 2004 shall not be construed to require the Ad5 ministrator of the Fund to sell assets trans6 ferred to the Fund under subparagraph (A). 

7 ‘‘(E) LIQUIDATED CLAIMS.—Except as 

8 specifically provided in this subparagraph, all 

9 asbestos claims against a trust are superseded 

10 and preempted as of the date of enactment of 

11 the Fairness in Asbestos Injury Resolution Act 

12 of 2004, and a trust shall not make any pay13 ment relating to asbestos claims after that date. 

14 If, in the ordinary course and the normal and 

15 usual administration of the trust consistent 

16 with past practices, a trust had before the date 

17 of enactment of the Fairness in Asbestos Injury 

18 Resolution Act of 2004, made all determina19 tions necessary to entitle an individual claimant 

20 to a noncontingent cash payment from the 

21 trust, the trust shall (i) make any lump-sum 

22 cash payment due to that claimant, and (ii) 

23 make or provide for all remaining noncontin24 gent payments on any award being paid or 

25 scheduled to be paid on an installment basis, in 
192 

•S 2290 PCS 

1 each case only to the same extent that the trust 

2 would have made such cash payments in the or3 dinary course and consistent with past practices 

4 before enactment of that Act. A trust shall not 

5 make any payment in respect of any alleged 

6 contingent right to recover any greater amount 

7 than the trust had already paid, or had com8 pleted all determinations necessary to pay, to a 

9 claimant in cash in accordance with its ordinary 

10 distribution procedures in effect as of June 1, 

11 2003. 

12 ‘‘(3) INJUNCTION.—Any injunction issued as 

13 part of the formation of a trust described in para14 graph (1) shall remain in full force and effect. No 

15 court, Federal or State, may enjoin the transfer of 

16 assets by a trust to the Fund in accordance with 

17 this subsection pending resolution of any litigation 

18 challenging such transfer or the validity of this sub19 section or of any provision of the Fairness in Asbes20 tos Injury Resolution Act of 2004, and an interlocu21 tory order denying such relief shall not be subject to 

22 immediate appeal under section 1291(a) of title 28. 

23 Notwithstanding any other provision of law, once 

24 such a transfer has been made, the assets of the 

25 Fund shall be available to satisfy any final judgment 
193 

•S 2290 PCS 

1 entered in such an action and no longer subject to 

2 any appeal or review, (i) declaring that the transfer 

3 effected a taking of a right or property for which an 

4 individual is constitutionally entitled to just com5 pensation, or (ii) requiring the transfer back to a 

6 trust of any or all assets transferred by that trust 

7 to the Fund. 

8 ‘‘(4) JURISDICTION.—Solely for purposes of im9 plementing this subsection, personal jurisdiction over 

10 every covered trust, the trustees thereof, and any 

11 other necessary party, and exclusive subject matter 

12 jurisdiction over every question arising out of or re13 lated to this subsection, shall be vested in the United 

14 States District Court for the District of Columbia. 

15 Notwithstanding any other provision of law, includ16 ing section 1127 of this title, that court may make 

17 any order necessary and appropriate to facilitate 

18 prompt compliance with this subsection, including 

19 assuming jurisdiction over and modifying, to the ex20 tent necessary, any applicable confirmation order or 

21 other order with continuing and prospective applica22 tion to a covered trust. The court may also resolve 

23 any related challenge to the constitutionality of this 

24 subsection or of its application to any trust, trustee, 

25 or individual claimant. The Administrator of the 
194 

•S 2290 PCS 

1 Fund may bring an action seeking such an order or 

2 modification, under the standards of rule 60(b) of 

3 the Federal Rules of Civil Procedure or otherwise, 

4 and shall be entitled to intervene as of right in any 

5 action brought by any other party seeking interpre6 tation, application, or invalidation of this subsection. 

7 Any order denying relief that would facilitate prompt 

8 compliance with the transfer provisions of this sub9 section shall be subject to immediate appeal under 

10 section 1291(a) of title 28.’’. 

11 (g) NO AVOIDANCE OF TRANSFER.—Section 546 of 

12 title 11, United States Code, is amended by adding at the 

13 end the following: 

14 ‘‘(h) Notwithstanding the rights and powers of a 

15 trustee under sections 544, 545, 547, 548, 549, and 550 

16 of this title, if a debtor is a participant (as that term is 

17 defined in section 3 of the Fairness in Asbestos Injury 

18 Resolution Act of 2004), the trustee may not avoid a 

19 transfer made by the debtor under its payment obligations 

20 under section 202 or 203 of that Act.’’. 

21 (h) CONFIRMATION OF PLAN.—Section 1129(a) of 

22 title 11, United States Code, is amended by adding at the 

23 end the following: 

24 ‘‘(14) If the debtor is a participant (as that 

25 term is defined in section 3 of the Fairness in As-
195 

•S 2290 PCS 

1 bestos Injury Resolution Act of 2004), the plan pro2 vides for the continuation after its effective date of 

3 payment of all payment obligations under title II of 

4 that Act.’’. 

5 (i) EFFECT ON INSURANCE RECEIVERSHIP PRO6 CEEDINGS.— 

7 (1) LIEN.—In an insurance receivership pro8 ceeding involving a direct insurer, reinsurer or run9 off participant, there shall be a lien in favor of the 

10 Fund for the amount of any assessment and any 

11 such lien shall be given priority over all other claims 

12 against the participant in receivership, except for the 

13 expenses of administration of the receivership. Any 

14 State law that provides for priorities inconsistent 

15 with this provision is preempted by this Act. 

16 (2) PAYMENT OF ASSESSMENT.—Payment of 

17 any assessment required by this Act shall not be 

18 subject to any automatic or judicially entered stay in 

19 any insurance receivership proceeding. This Act shall 

20 preempt any State law requiring that payments by 

21 a direct insurer, reinsurer or runoff participant in 

22 an insurance receivership proceeding be approved by 

23 a court, receiver or other person. Payments of as24 sessments by any direct insurer or reinsurer partici25 pant under this Act shall not be subject to the avoid-
196 

•S 2290 PCS 

1 ance powers of a receiver or a court in or relating 

2 to an insurance receivership proceeding. 

3 SEC. 403. EFFECT ON OTHER LAWS AND EXISTING CLAIMS. 

4 (a) EFFECT ON FEDERAL AND STATE LAW.—The 

5 provisions of this Act shall supersede any and all Federal 

6 and State laws insofar as they may relate to any asbestos 

7 claim, including any claim described in subsection (d)(2). 

8 (b) SUPERSEDING PROVISIONS.— 

9 (1) IN GENERAL.—Any agreement, under10 standing, or undertaking by any person or affiliated 

11 group with respect to the treatment of any asbestos 

12 claim that requires future performance by any party, 

13 insurer of such party, settlement administrator, or 

14 escrow agent shall be superseded in its entirety by 

15 this Act. 

16 (2) NO FORCE OR EFFECT.—Any such agree17 ment, understanding, or undertaking by any such 

18 person or affiliated group shall be of no force or ef19 fect, and no person shall have any rights or claims 

20 with respect to any of the foregoing. 

21 (c) EXCLUSIVE REMEDY.—The remedies provided 

22 under this Act shall be the exclusive remedy for any asbes23 tos claim, including any claim described in subsection 

24 (d)(2), under any Federal or State law. 

25 (d) BAR ON ASBESTOS CLAIMS.— 
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1 (1) IN GENERAL.—No asbestos claim, including 

2 any claim described in subsection (d)(2), may be 

3 pursued and no pending asbestos claim may be 

4 maintained in any Federal or State court, except for 

5 enforcement of claims for which an order or judg6 ment has been duly entered by a court that is no 

7 longer subject to any appeal or judicial review before 

8 the date of enactment of this Act. 

9 (2) CERTAIN SPECIFIED CLAIMS.— 

10 (A) IN GENERAL.—Subject to section 404 

11 (d) and (e)(3) of this Act, no claim may be 

12 brought or pursued in any Federal or State 

13 court or insurance receivership proceeding— 

14 (i) relating to any default, confessed 

15 or stipulated judgment on an asbestos 

16 claim if the judgment debtor expressly 

17 agreed, in writing or otherwise, not to con18 test the entry of judgment against it and 

19 the plaintiff expressly agreed, in writing or 

20 otherwise, to seek satisfaction of the judg21 ment only against insurers or in bank22 ruptcy; 

23 (ii) relating to the defense, investiga24 tion, handling, litigation, settlement or 

25 payment of any asbestos claim by any par-
198 

•S 2290 PCS 

1 ticipant, including claims for bad faith or 

2 unfair or deceptive claims handling or 

3 breach of any duties of good faith; or 

4 (iii) arising out of or relating to the 

5 asbestos-related injury of any individual 

6 and— 

7 (I) asserting any conspiracy, con8 cert of action, aiding or abetting, act, 

9 conduct, statement, misstatement, un10 dertaking, publication, omission, or 

11 failure to detect, speak, disclose, pub12 lish or warn relating to the presence 

13 or health effects of asbestos or the 

14 use, sale, distribution, manufacture, 

15 production, development, inspection, 

16 advertising, marketing or installation 

17 of asbestos; or 

18 (II) asserting any conspiracy, 

19 act, conduct, statement, omission or 

20 failure to detect, disclose or warn re21 lating to the presence or health effects 

22 of asbestos or the use, sale, distribu23 tion, manufacture, production, devel24 opment, inspection, advertising, mar25 keting or installation of asbestos, as-
199 

•S 2290 PCS 

1 serted as or in a direct action against 

2 an insurer or reinsurer based upon 

3 any theory, statutory, contract, tort or 

4 otherwise; or 

5 (iv) by any third party, and premised 

6 on any theory, allegation or cause of ac7 tion, for reimbursement of health care 

8 costs allegedly associated with the use of 

9 or exposure to asbestos, whether such 

10 claim is asserted directly, indirectly or de11 rivatively. 

12 (B) EXCEPTIONS.—Subparagraph (A) (ii) 

13 and (iii) shall not apply to claims against par14 ticipants by persons— 

15 (i) with whom the participant is in 

16 privity of contract; 

17 (ii) who have received an assignment 

18 of insurance rights not otherwise voided by 

19 this Act; or 

20 (iii) who are beneficiaries covered by 

21 the express terms of a contract with that 

22 participant. 

23 (3) PREEMPTION.—Any action asserting an as24 bestos claim, including a claim described in sub25 section (d)(2), in any Federal or State court, except 
200 

•S 2290 PCS 

1 actions for which an order or judgment has been 

2 duly entered by a court that is no longer subject to 

3 any appeal or judicial review before the date of en4 actment of this Act, is preempted by this Act. 

5 (4) DISMISSAL.—No judgment other than a 

6 judgment of dismissal may be entered in any such 

7 action, including an action pending on appeal, or on 

8 petition or motion for discretionary review, on or 

9 after the date of enactment of this Act. A court may 

10 dismiss any such action on its motion. If the court 

11 denies the motion to dismiss, it shall stay further 

12 proceedings until final disposition of any appeal 

13 taken under this Act. 

14 (5) REMOVAL.— 

15 (A) IN GENERAL.—If an action in any 

16 State court under paragraph (3) is not dis17 missed, or if an order entered after the date of 

18 enactment of this Act purporting to enter judg19 ment or deny review is not rescinded and re20 placed with an order of dismissal within 30 

21 days after the filing of a motion by any party 

22 to the action advising the court of the provi23 sions of this Act, any party may remove the 

24 case to the district court of the United States 

25 for the district in which such action is pending. 
201 

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1 (B) TIME LIMITS.—For actions originally 

2 filed after the date of enactment of this Act, the 

3 notice of removal shall be filed within the time 

4 limits specified in section 1441(b) of title 28, 

5 United States Code. 

6 (C) PROCEDURES.—The procedures for re7 moval and proceedings after removal shall be in 

8 accordance with sections 1446 through 1450 of 

9 title 28, United States Code, except as may be 

10 necessary to accommodate removal of any ac11 tions pending (including on appeal) on the date 

12 of enactment of this Act. 

13 (D) JURISDICTION.—The jurisdiction of 

14 the district court shall be limited to— 

15 (i) determining whether removal was 

16 proper; and 

17 (ii) determining whether the claim 

18 presented is an asbestos claim as defined 

19 by this Act. 

20 (6) CREDITS.—If, notwithstanding the express 

21 intent of Congress stated in this section, any court 

22 finally determines for any reason that an asbestos 

23 claim including a claim described under paragraph 

24 (2) for which, before the date of enactment of this 

25 Act, there had been no order or judgment duly en-
202 

•S 2290 PCS 

1 tered by a court no longer subject to any appeal or 

2 review, is not subject to the exclusive remedy or pre3 emption provisions of this section, then any partici4 pant required to satisfy a final judgment executed 

5 with respect to any such claim may elect to receive 

6 a credit against any assessment owed to the Fund 

7 equal to the amount of the payment made with re8 spect to such executed judgment. The Administrator 

9 shall require participants seeking credit under this 

10 section to demonstrate that the participant timely 

11 pursued all available remedies, including remedies 

12 available under this section to obtain dismissal of 

13 the claim, and that the participant notified the Ad14 ministrator at least 20 days before the expiration of 

15 any period within which to appeal the denial of a 

16 motion to dismiss based on this section. The Admin17 istrator may require such participant to furnish such 

18 further information as is necessary and appropriate 

19 to establish eligibility for and the amount of the 

20 credits. The Administrator may intervene in any ac21 tion in which a credit may be due under this section. 

22 SEC. 404. EFFECT ON INSURANCE AND REINSURANCE CON23 TRACTS. 

24 (a) EROSION OF INSURANCE COVERAGE LIMITS.— 
203 

•S 2290 PCS 

1 (1) DEFINITIONS.—In this section, the fol2 lowing definitions shall apply: 

3 (A) DEEMED EROSION AMOUNT.—The 

4 term ‘‘deemed erosion amount’’ means the 

5 amount of erosion deemed to occur at enact6 ment under paragraph (2). 

7 (B) EARLY SUNSET.—The term ‘‘early 

8 sunset’’ means an event causing termination of 

9 the program under section 405(f) which relieves 

10 the insurer participants of paying some portion 

11 of the aggregate payment level of 

12 $46,025,000,000 required in section 

13 212(a)(2)(A). 

14 (C) EARNED EROSION AMOUNT.—The 

15 term ‘‘earned erosion amount’’ means, in the 

16 event of any early sunset under section 405(f), 

17 the percentage, as set forth in the following 

18 schedule, depending on the year in which the 

19 defendant participants’ funding obligations end, 

20 of those amounts which, at the time of the early 

21 sunset, a defendant participant has paid to the 

22 fund and remains obligated to pay into the 

23 fund. 

Year After Enactment In Which Applicable 

Defendant Participant’s Percentage: 

Funding Obligation Ends: 

10 ............................................................................................. 70.78
204 

•S 2290 PCS 

Year After Enactment In Which Applicable 

Defendant Participant’s Percentage: 

Funding Obligation Ends: 

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

1 (D) REMAINING AGGREGATE PRODUCTS

2 LIMITS.—The term ‘‘remaining aggregate prod3 ucts limits’’ means aggregate limits that apply 

4 to insurance coverage granted under the ‘‘prod5 ucts hazard’’, ‘‘completed operations hazard’’, 

6 or ‘‘Products—Completed Operations Liability’’ 

7 in any comprehensive general liability policy 

8 issued between calendar years 1940 and 1986 

9 to cover injury which occurs in any State, as re10 duced by— 

11 (i) any existing impairment of such 

12 aggregate limits as of the date of enact13 ment of this Act; and 

14 (ii) the resolution of claims for reim15 bursement or coverage of liability or paid 

16 or incurred loss for which notice was pro-
205 

•S 2290 PCS 

1 vided to the insurer before the date of en2 actment of this Act. 

3 (E) SCHEDULED PAYMENT AMOUNTS.— 

4 The term ‘‘scheduled payment amounts’’ means 

5 the future payment obligation to the Fund 

6 under this Act from a defendant participant in 

7 the amount established under sections 203 and 

8 204. 

9 (F) UNEARNED EROSION AMOUNT.—The 

10 term ‘‘unearned erosion amount’’ means, in the 

11 event of any early sunset under section 405(f), 

12 the difference between the deemed erosion 

13 amount and the earned erosion amount. 

14 (2) QUANTUM AND TIMING OF EROSION.— 

15 (A) EROSION UPON ENACTMENT.—The 

16 collective payment obligations to the Fund of 

17 the insurer and reinsurer participants as as18 sessed by the Administrator shall be deemed as 

19 of the date of enactment of this Act to erode re20 maining aggregate products limits available to a 

21 defendant participant only in an amount of 

22 59.64 percent of each defendant participant’s 

23 scheduled payment amount. 

24 (B) NO EROSION UPON CONTINGENT

25 CALL.—Any contingent payment required by 
206 

•S 2290 PCS 

1 the Administrator of any defendant participant 

2 shall not be deemed to erode remaining aggre3 gate product limits. 

4 (C) NO ASSERTION OF CLAIM.—No insurer 

5 or reinsurer may assert any claim against a de6 fendant participant or captive insurer for insur7 ance, reinsurance, payment of a deductible, or 

8 retrospective premium adjustment arising out 

9 of that insurer or reinsurer’s payments to the 

10 Fund or the erosion deemed to occur under this 

11 section. 

12 (D) POLICIES WITHOUT CERTAIN LIMITS

13 OR WITH EXCLUSION.—Other than under sub14 paragraph (F), nothing in this section shall re15 quire or permit the erosion of any insurance 

16 policy or limit that does not contain an aggre17 gate products limit, or that contains an asbes18 tos exclusion. 

19 (E) TREATMENT OF CONSOLIDATION

20 ELECTION.—If an affiliated group elects con21 solidation as provided in section 204(f), the 

22 total erosion of limits for the affiliated group 

23 under paragraph (2)(A) shall not exceed 59.64 

24 percent of the scheduled payment amount of 

25 the single payment obligation for the entire af-
207 

•S 2290 PCS 

1 filiated group. The total erosion of limits for 

2 any individual defendant participant in the af3 filiated group shall not exceed its individual 

4 share of 59.64 percent of the affiliated group’s 

5 scheduled payment amount, as measured by the 

6 individual defendant participant’s percentage 

7 share of the affiliated group’s prior asbestos ex8 penditures. 

9 (F) RULE OF CONSTRUCTION.—Notwith10 standing any other provision of this section, 

11 nothing in this Act shall be deemed to erode re12 maining aggregate products limits of a defend13 ant participant that can demonstrate by a pre14 ponderance of the evidence that 75 percent of 

15 its prior asbestos expenditures were made in de16 fense or satisfaction of asbestos claims alleging 

17 bodily injury arising exclusively from the expo18 sure to asbestos at premises owned, rented, or 

19 controlled by the defendant participant (a 

20 ‘‘premises defendant’’). In calculating such per21 centage, where expenditures were made in de22 fense or satisfaction of asbestos claims alleging 

23 bodily injury due to exposure to the defendant 

24 participant’s products and to asbestos at prem25 ises owned, rented or controlled by the defend-
208 

•S 2290 PCS 

1 ant participant, half of such expenditures shall 

2 be deemed to be for such premises exposures. 

3 In the event that a defendant participant estab4 lishes itself as a premises defendant, 75 percent 

5 of the payments by such defendant participant 

6 shall erode coverage limits, if any, applicable to 

7 premises liabilities under applicable law. 

8 (3) METHOD OF EROSION.— 

9 (A) ALLOCATION.—The amount of erosion 

10 allocated to each defendant participant shall be 

11 allocated among periods in which policies with 

12 remaining aggregate product limits are avail13 able to that defendant participant pro rata by 

14 policy period, in ascending order by attachment 

15 point. 

16 (B) OTHER EROSION METHODS.— 

17 (i) IN GENERAL.—Notwithstanding 

18 subparagraph (A), the method of erosion 

19 of any remaining aggregate products limits 

20 which are subject to— 

21 (I) a coverage-in-place or settle22 ment agreement between a defendant 

23 participant and 1 or more insurance 

24 participants as of the date of enact25 ment; or 
209 

•S 2290 PCS 

1 (II) a final and nonappealable 

2 judgment as of the date of enactment 

3 or resulting from a claim for coverage 

4 or reimbursement pending as of such 

5 date, shall be as specified in such 

6 agreement or judgment with regard to 

7 erosion applicable to such insurance 

8 participants’ policies. 

9 (ii) REMAINING LIMITS.—To the ex10 tent that a final nonappealable judgment 

11 or settlement agreement to which an in12 surer participant and a defendant partici13 pant are parties in effect as of the date of 

14 enactment of this Act extinguished a de15 fendant participant’s right to seek coverage 

16 for asbestos claims under an insurer par17 ticipant’s policies, any remaining limits in 

18 such policies shall not be considered to be 

19 remaining aggregate products limits under 

20 subsection (a)(1)(A). 

21 (4) RESTORATION OF AGGREGATE PRODUCT

22 LIMITS UPON EARLY SUNSET.— 

23 (A) RESTORATION.—In the event of an 

24 early sunset, any unearned erosion amount will 

25 be deemed restored as aggregate products limits 
210 

•S 2290 PCS 

1 available to a defendant participant as of the 

2 date of enactment. 

3 (B) METHOD OF RESTORATION.—The un4 earned erosion amount will be deemed restored 

5 to each defendant participant’s policies in such 

6 a manner that the last limits that were deemed 

7 eroded at enactment under this subsection are 

8 deemed to be the first limits restored upon 

9 early sunset. 

10 (C) TOLLING OF COVERAGE CLAIMS.—In 

11 the event of an early sunset, the applicable stat12 ute of limitations and contractual provisions for 

13 the filing of claims under any insurance policy 

14 with restored aggregate product limits shall be 

15 deemed tolled after the date of enactment 

16 through the date 6 months after the date of 

17 early sunset. 

18 (5) PAYMENTS BY DEFENDANT PARTICIPANT.— 

19 Payments made by a defendant participant shall be 

20 deemed to erode, exhaust or otherwise satisfy appli21 cable self-insured retentions, deductibles, retrospec22 tively rated premiums, and limits issued by non23 participating insolvent or captive insurance compa24 nies. Reduction of remaining aggregate limits under 

25 this subsection shall not limit the right of a defend-
211 

•S 2290 PCS 

1 ant participant to collect from any insurer not a par2 ticipant. 

3 (6) EFFECT ON OTHER INSURANCE CLAIMS.— 

4 Other than as specified in this subsection, this Act 

5 does not alter, change, modify, or affect insurance 

6 for claims other than asbestos claims. 

7 (b) DISPUTE RESOLUTION PROCEDURE.— 

8 (1) ARBITRATION.—The parties to a dispute re9 garding the erosion of insurance coverage limits 

10 under this section may agree in writing to settle 

11 such dispute by arbitration. Any such provision or 

12 agreement shall be valid, irrevocable, and enforce13 able, except for any grounds that exist at law or in 

14 equity for revocation of a contract. 

15 (2) TITLE 9, UNITED STATES CODE.—Arbitra16 tion of such disputes, awards by arbitrators, and 

17 confirmation of awards shall be governed by title 9, 

18 United States Code, to the extent such title is not 

19 inconsistent with this section. In any such arbitra20 tion proceeding, the erosion principles provided for 

21 under this section shall be binding on the arbitrator, 

22 unless the parties agree to the contrary. 

23 (3) FINAL AND BINDING AWARD.—An award by 

24 an arbitrator shall be final and binding between the 

25 parties to the arbitration, but shall have no force or 
212 

•S 2290 PCS 

1 effect on any other person. The parties to an arbi2 tration may agree that in the event a policy which 

3 is the subject matter of an award is subsequently de4 termined to be eroded in a manner different from 

5 the manner determined by the arbitration in a judg6 ment rendered by a court of competent jurisdiction 

7 from which no appeal can or has been taken, such 

8 arbitration award may be modified by any court of 

9 competent jurisdiction upon application by any party 

10 to the arbitration. Any such modification shall gov11 ern the rights and obligations between such parties 

12 after the date of such modification. 

13 (c) EFFECT ON NONPARTICIPANTS.— 

14 (1) IN GENERAL.—No insurance company or 

15 reinsurance company that is not a participant, other 

16 than a captive insurer, shall be entitled to claim that 

17 payments to the Fund erode, exhaust, or otherwise 

18 limit the nonparticipant’s insurance or reinsurance 

19 obligations. 

20 (2) OTHER CLAIMS.—Nothing in this Act shall 

21 preclude a participant from pursuing any claim for 

22 insurance or reinsurance from any person that is not 

23 a participant other than a captive insurer. 

24 (d) FINITE RISK POLICIES NOT AFFECTED.— 
213 

•S 2290 PCS 

1 (1) IN GENERAL.—Notwithstanding any other 

2 provision of this Act, this Act shall not alter, affect 

3 or impair any rights or obligations of— 

4 (A) any party to an insurance contract 

5 that expressly provides coverage for govern6 mental charges or assessments imposed to re7 place insurance or reinsurance liabilities in ef8 fect on the date of enactment of this Act; or 

9 (B) subject to paragraph (2), any person 

10 with respect to any insurance or reinsurance 

11 purchased by a participant after December 31, 

12 1996, that expressly (but not necessarily exclu13 sively) provides coverage for asbestos liabilities, 

14 including those policies commonly referred to as 

15 ‘‘finite risk’’ policies. 

16 (2) LIMITATION.—No person may assert that 

17 any amounts paid to the Fund in accordance with 

18 this Act are covered by any policy described under 

19 paragraph (1)(B) purchased by a defendant partici20 pant, unless such policy specifically provides cov21 erage for required payments to a Federal trust fund 

22 established by a Federal statute to resolve asbestos 

23 injury claims. 

24 (e) EFFECT ON CERTAIN INSURANCE AND REINSUR25 ANCE CLAIMS.— 
214 

•S 2290 PCS 

1 (1) NO COVERAGE FOR FUND ASSESSMENTS.— 

2 No participant or captive insurer may pursue an in3 surance or reinsurance claim against another partici4 pant or captive insurer for payments to the Fund re5 quired under this Act, except under a contract spe6 cifically providing insurance or reinsurance for re7 quired payments to a Federal trust fund established 

8 by a Federal statute to resolve asbestos injury 

9 claims or, where applicable, under finite risk policies 

10 under subsection (d). 

11 (2) CERTAIN INSURANCE ASSIGNMENTS VOID12 ED.—Any assignment of any rights to insurance cov13 erage for asbestos claims to any person who has as14 serted an asbestos claim before the effective date, or 

15 to any trust, person or other entity not part of an 

16 affiliated group as defined in section 201(1) of this 

17 Act established or appointed for the purpose of pay18 ing asbestos claims which were asserted before the 

19 effective date, or by any Tier I defendant partici20 pant, before any sunset of this Act, shall be null and 

21 void. This subsection shall not void or affect in any 

22 way any assignments of rights to insurance coverage 

23 other than to asbestos claimants or to trusts, per24 sons, or other entities not part of an affiliated group 

25 as defined in section 201(1) of this Act established 
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1 or appointed for the purpose of paying asbestos 

2 claims, or by Tier I defendant participants. 

3 (3) INSURANCE CLAIMS PRESERVED.—Notwith4 standing any other provision of this Act, this Act 

5 shall not alter, affect or impair any rights or obliga6 tions of any person with respect to any insurance or 

7 reinsurance for amounts that any person pays, has 

8 paid or becomes legally obligated to pay in respect 

9 of asbestos or other claims, except to the extent 

10 that— 

11 (A) such person pays or becomes legally 

12 obligated to pay claims that are superseded by 

13 section 403 of this Act; 

14 (B) any such rights or obligations of such 

15 person with respect to insurance or reinsurance 

16 are prohibited by subsection (e) (1) or (2) of 

17 this section; or 

18 (C) the limits of insurance otherwise avail19 able to such participant in respect of asbestos 

20 claims are deemed to be eroded under sub21 section (a) of this section. 

22 SEC. 405. ANNUAL REPORT OF THE ADMINISTRATOR. 

23 (a) IN GENERAL.—The Administrator shall submit 

24 an annual report to the Committee on the Judiciary of 

25 the Senate and the Committee on the Judiciary of the 
216 

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1 House of Representatives on the operation of the Asbestos 

2 Injury Claims Resolution Fund within 6 months after the 

3 close of each fiscal year. 

4 (b) CONTENTS OF REPORT.—The annual report sub5 mitted under this subsection shall include— 

6 (1) a summary of the claims made during the 

7 most recent fiscal year, including— 

8 (A) the number of claims made to the Of9 fice and a description of the types of medical 

10 diagnoses and asbestos exposure underlying 

11 those claims; and 

12 (B) the number of claims denied by the 

13 Office and a description of the types of medical 

14 diagnoses and asbestos exposures underlying 

15 those claims, and a general description of the 

16 reasons for their denial; 

17 (2) a summary of the eligibility determinations 

18 made by the Office under section 114; 

19 (3) a summary of the awards made from the 

20 Fund, including the amount of the awards; 

21 (4) an analysis of the financial condition of the 

22 Fund, including an estimation of the Fund’s ability 

23 to pay claims for the subsequent 5 years in full as 

24 and when required, an evaluation of the Fund’s abil25 ity to retire its existing debt and assume additional 
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1 debt, and an evaluation of the Fund’s ability to sat2 isfy other obligations under the program; 

3 (5) a statement of the percentage of asbestos 

4 claimants who filed claims during the prior calendar 

5 year and were determined to be eligible to receive 

6 compensation under this Act, who have received the 

7 compensation to which they are entitled according to 

8 section 133 for each level; 

9 (6) the identity of all participants and a sum10 mary of the funding allocations of each participant, 

11 including the amounts of all payments to the Fund; 

12 (7) a summary of all financial hardship or in13 equity adjustments applied for during the fiscal 

14 year, and a summary of the adjustments that were 

15 made during the fiscal year; 

16 (8) a summary of the investments made under 

17 section 222(b); 

18 (9) a summary of all referrals made to law en19 forcement authorities under section 408 and of any 

20 legal actions brought or penalties imposed under sec21 tion 223; 

22 (10) an estimate of the number and types of 

23 claims, the amount of awards, and the participant 

24 payment obligations for the next fiscal year; 
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1 (11) any recommendations from the Advisory 

2 Committee on Asbestos Disease Compensation and 

3 the Medical Advisory Committee of the Fund to im4 prove the diagnostic, exposure, and medical criteria 

5 so as to pay only those claimants whose injuries are 

6 caused by exposure to asbestos; 

7 (12) a summary of the results of audits con8 ducted under section 115; and 

9 (13) a summary of prosecutions under section 

10 1348 of title 18, United States Code (as added by 

11 this Act). 

12 (c) CLAIMS ANALYSIS.—If the Administrator con13 cludes, on the basis of the annual report submitted under 

14 this section, that the Fund is compensating claims for in15 juries that are not caused by exposure to asbestos and 

16 compensating such claims may, currently or in the future, 

17 undermine the Fund’s ability to compensate persons with 

18 injuries that are caused by exposure to asbestos, he or she 

19 must include in the report an analysis of the reasons for 

20 the situation, a description of the range of reasonable al21 ternatives for responding to the situation, and a rec22 ommendation as to which alternative best serves the inter23 est of claimants and the public. The report may include 

24 a description of changes in the diagnostic, exposure or 

25 medical criteria of section 121 that the Administrator be-
219 

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1 lieves may be necessary to protect the Fund from compen2 sating claims not caused by exposure to asbestos. 

3 (d) SHORTFALL ANALYSIS.— 

4 (1) IN GENERAL.—If the Administrator con5 cludes, on the basis of the information contained in 

6 the annual report submitted under this section, that 

7 the Fund may not be able to pay claims as they be8 come due at any time within the next 5 years, the 

9 Administrator must include in the report an analysis 

10 of the reasons for the situation, an estimation of 

11 when the Fund will no longer be able to pay claims 

12 as they become due, a description of the range of 

13 reasonable alternatives for responding to the situa14 tion, and a recommendation as to which alternative 

15 best serves the interest of claimants and the public. 

16 The report may include a description of changes in 

17 the diagnostic, exposure or medical criteria of sec18 tion 121 that the Administrator believes may be nec19 essary to protect the Fund. The range of alter20 natives may include— 

21 (A) triggering the termination of this Act 

22 under subsection (f) at any time after 7 years 

23 following the date of enactment of this Act, and 

24 (B) reform of the program set forth in ti25 tles I and II of this Act (including changes in 
220 

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1 the diagnostic, exposure or medical criteria, 

2 changes in the enforcement or application of 

3 those criteria, changes in the timing of pay4 ments, or changes in award values). 

5 (2) CONSIDERATIONS.—In formulating rec6 ommendations, the Administrator shall take into ac7 count the reasons for any shortfall, actual or pro8 jected, which may include— 

9 (A) financial factors (such as inadequate 

10 return on investments); 

11 (B) the operation of the Fund generally 

12 (including the operation of the diagnostic, expo13 sure and medical criteria, potential problems of 

14 fraud, the adequacy of the criteria to rule out 

15 idiopathic mesothelioma, and inadequate flexi16 bility to extend the timing of payments); 

17 (C) the actual incidence of diseases such as 

18 mesothelioma; 

19 (D) compensation of diseases with alter20 native causes; and 

21 (E) any other factor that the Adminis22 trator considers relevant. 

23 (3) RECOMMENDATION OF TERMINATION.—Any 

24 recommendation of termination should include a 

25 plan for winding up the affairs of the Fund (and the 
221 

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1 program generally) within a defined period, includ2 ing paying in full all claims resolved at the time the 

3 report is prepared. 

4 (4) RESOLVED CLAIMS.—For purposes of this 

5 section, a claim shall be deemed resolved when the 

6 Administrator has determined the amount of the 

7 award due the claimant, and either the claimant has 

8 waived judicial review or the time for judicial review 

9 has expired. 

10 (e) RECOMMENDATIONS OF ADMINISTRATOR AND

11 COMMISSION.— 

12 (1) IN GENERAL.—If the Administrator rec13 ommends changes to this Act under subsection (c), 

14 the recommendations and accompanying analysis 

15 shall be referred to a special commission consisting 

16 of the Attorney General, the Secretary of Labor, the 

17 Secretary of Health and Human Services, the Sec18 retary of the Treasury, and the Secretary of Com19 merce. The Commission shall hold public hearings 

20 on the Administrator’s alternatives and rec21 ommendations and then make its own recommenda22 tions for reform of the program set forth in titles I 

23 and II of this Act. Within 180 days after receiving 

24 the Administrator’s recommendations, the Commis25 sion shall transmit its own recommendations to the 
222 

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1 Congress in the same manner as set forth in sub2 section (a). 

3 (2) REFERRAL.—If the Administrator rec4 ommends changes to, or termination of, this Act 

5 under subsection (d), the recommendations and ac6 companying analysis shall be referred to the Com7 mission. The Commission shall hold public hearings 

8 on the Administrator’s alternatives and rec9 ommendations and then make its own recommenda10 tions for reform of the program set forth in titles I 

11 and II of this Act. Within 180 days after receiving 

12 the Administrator’s recommendations, the Commis13 sion shall transmit its own recommendations to the 

14 Congress in the same manner as set forth in sub15 section (a). 

16 (f) SUNSET OF ACT.— 

17 (1) IN GENERAL.—At any time after 7 years 

18 following the date on which the Administrator begins 

19 processing claims, if the Administrator determines 

20 that, if any additional claims are resolved, the Fund 

21 will not have sufficient resources when needed to pay 

22 100 percent of all resolved claims while also making 

23 its debt repayment obligations and meeting its other 

24 obligations under this Act, the provisions of this Act 

25 set forth in paragraph (3) shall terminate and be of 
223 

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1 no further effect 180 days after the Administrator’s 

2 determination as to all asbestos claims that have not 

3 been resolved by the Fund as of the date of the de4 termination, unless Congress passes legislation con5 tinuing the Fund. 

6 (2) RESOLVED CLAIMS.—In the event of sunset, 

7 all resolved claims shall be paid in full by the Fund. 

8 (3) TERMINATED PROVISIONS.—Subject to 

9 paragraph (4), the provisions of this Act subject to 

10 termination under paragraph (1) are titles I (except 

11 subtitle A) and II and sections 403 and 404(e)(2). 

12 (4) CONTINUED FUNDING.—If provisions of 

13 this Act terminate under paragraph (1), participants 

14 will still be required to make payments as provided 

15 under subtitles A and B of title II. If the full 

16 amount of payments required by title II is not nec17 essary for the Fund to pay claims that have been re18 solved as of the date of termination, pay the Fund’s 

19 debt, and support the Fund’s continued operation as 

20 needed to pay such claims and debt, the Adminis21 trator may reduce such payments. Any such reduc22 tions shall be allocated among participants in ap23 proximately the same proportion as the liability 

24 under subtitles A and B of title II. 

25 (5) DEFINITIONS.—In this subsection— 
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1 (A) the term ‘‘sunset claims’’ means claims 

2 as to which this Act has terminated; and 

3 (B) the term ‘‘sunset claimants’’ means 

4 persons asserting such claims. 

5 (6) SUNSET CLAIMS.—If this Act terminates in 

6 accordance with paragraph (1), then the applicable 

7 statute of limitations for the filing of sunset claims 

8 under subsection (g) shall be deemed tolled for any 

9 past or pending sunset claimants while they were 

10 pursuing claims filed under this Act. For those 

11 claimants who decide to pursue a sunset claim in ac12 cordance with subsection (g), the applicable statute 

13 of limitations shall apply, except that claimants who 

14 filed a claim against the Fund under this Act before 

15 the date of termination shall have 2 years after the 

16 date of termination to file a sunset claim in accord17 ance with subsection (g), whichever is longer. 

18 (g) NATURE OF CLAIM AFTER SUNSET.— 

19 (1) IN GENERAL.—On and after the date of ter20 mination under subsection (f), any individual injured 

21 as a result of exposure to asbestos, who has not pre22 viously had a claim resolved by the Fund, may in a 

23 civil action obtain relief in damages subject to the 

24 terms and conditions under this subsection and 

25 paragraph (6) of subsection (f), except— 
225 

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1 (A) an individual who received an award 

2 for a nonmalignant disease (Levels I through 

3 V) from the Fund may assert a claim for a ma4 lignant disease under this subsection, unless the 

5 malignancy was diagnosed or the claimant had 

6 discovered facts that would have led a reason7 able person to obtain such a diagnosis before 

8 the date on which the nonmalignant claim was 

9 settled; and 

10 (B) an individual who received an award 

11 for a nonmalignant or malignant disease (ex12 cept mesothelioma) (Levels I through IX) from 

13 the Fund may assert a claim for mesothelioma 

14 under this subsection, unless the mesothelioma 

15 was diagnosed or the claimant had discovered 

16 facts that would have led a reasonable person to 

17 obtain such a diagnosis before the date on 

18 which the nonmalignant or other malignant 

19 claim was settled. 

20 (2) EXCLUSIVE JURISDICTION.—The United 

21 States district courts shall have exclusive jurisdiction 

22 of all actions under paragraph (1), to the exclusion 

23 of State courts and any other forum. As of the effec24 tive date of a termination of this Act under sub25 section (f), an action under paragraph (1) shall be 
226 

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1 the exclusive remedy for any asbestos claim that 

2 might otherwise exist under Federal, State or other 

3 law, regardless of whether such claim arose before or 

4 after the effective date of this Act or of the termi5 nation of this Act, except that claims against the 

6 Fund that have been resolved before the date of the 

7 termination determination under subsection (f) may 

8 be paid by the Fund. 

9 (3) VENUE.—Actions under paragraph (1) shall 

10 be brought only in the United States district court 

11 for the judicial district where the claimant resides or 

12 the exposure is alleged to have occurred. 

13 (4) APPLICABLE LAW.—An action under para14 graph (1) shall be governed by Federal common law, 

15 except that where national uniformity is not required 

16 the court must utilize otherwise applicable State law, 

17 including State statutes, to provide the appropriate 

18 rule of Federal common law. 

19 SEC. 406. RULES OF CONSTRUCTION RELATING TO LIABIL20 ITY OF THE UNITED STATES GOVERNMENT. 

21 (a) CAUSES OF ACTIONS.—Except as otherwise spe22 cifically provided in this Act, nothing in this Act may be 

23 construed as creating a cause of action against the United 

24 States Government, any entity established under this Act, 
227 

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1 or any officer or employee of the United States Govern2 ment or such entity. 

3 (b) FUNDING LIABILITY.—Nothing in this Act may 

4 be construed to— 

5 (1) create any obligation of funding from the 

6 United States Government, other than the funding 

7 for personnel and support as provided under this 

8 Act; or 

9 (2) obligate the United States Government to 

10 pay any award or part of an award, if amounts in 

11 the Fund are inadequate. 

12 SEC. 407. RULES OF CONSTRUCTION. 

13 (a) LIBBY, MONTANA CLAIMANTS.—Nothing in this 

14 Act shall preclude the formation of a fund for the payment 

15 of eligible medical expenses related to treating asbestos16 related disease for current and former residents of Libby, 

17 Montana. 

18 (b) HEALTH CARE FROM PROVIDER OF CHOICE.— 

19 Nothing in this Act shall be construed to preclude any eli20 gible claimant from receiving health care from the pro21 vider of their choice. 
228 

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1 SEC. 408. VIOLATIONS OF ENVIRONMENTAL AND OCCUPA2 TIONAL HEALTH AND SAFETY REQUIRE3 MENTS. 

4 (a) ASBESTOS IN COMMERCE.—If the Administrator 

5 receives information concerning conduct occurring after 

6 the date of enactment of this Act that may have been a 

7 violation of standards issued by the Environmental Protec8 tion Agency under the Toxic Substances Control Act (15 

9 U.S.C. 2601 et seq.), relating to the manufacture, impor10 tation, processing, disposal and distribution in commerce 

11 of asbestos-containing products, the Administrator shall 

12 refer the matter in writing within 30 days after receiving 

13 that information to the Administrator of the Environ14 mental Protection Agency and the United States Attorney 

15 for possible civil or criminal penalties, including those 

16 under section 17 of the Toxic Substances Control Act (15 

17 U.S.C. 2616), and to the appropriate State authority with 

18 jurisdiction to investigate asbestos matters. 

19 (b) ASBESTOS AS AIR POLLUTANT.—If the Adminis20 trator receives information concerning conduct occurring 

21 after the date of enactment of this Act that may have been 

22 a violation of standards issued by the Environmental Pro23 tection Agency under the Clean Air Act (42 U.S.C. 7401 

24 et seq.), relating to asbestos as a hazardous air pollutant, 

25 the Administrator shall refer the matter in writing within 

26 30 days after receiving that information to the Adminis-
229 

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1 trator of the Environmental Protection Agency and the 

2 United States Attorney for possible criminal and civil pen3 alties, including those under section 113 of the Clean Air 

4 Act (42 U.S.C. 7413), and to the appropriate State au5 thority with jurisdiction to investigate asbestos matters. 

6 (c) OCCUPATIONAL EXPOSURE.—If the Adminis7 trator receives information concerning conduct occurring 

8 after the date of enactment of this Act that may have been 

9 a violation of standards issued by the Occupational Safety 

10 and Health Administration under the Occupational Safety 

11 and Health Act of 1970 (29 U.S.C. 651 et seq.), relating 

12 to occupational exposure to asbestos, the Administrator 

13 shall refer the matter in writing within 30 days after re14 ceiving that information and refer the matter to— 

15 (1) the United States Attorney for possible 

16 criminal prosecution under section 5(a) of such Act 

17 (29 U.S.C. 654(a)); 

18 (2) the Secretary of Labor for possible civil 

19 penalties under section 17 (a) through (d) of such 

20 Act (29 U.S.C. 666 (a) through (d)); and 

21 (3) the Assistant Secretary for the Occupational 

22 Safety and Health Commission, and the appropriate 

23 State authority with jurisdiction to investigate asbes24 tos matters, for possible civil or criminal penalties, 
230 

•S 2290 PCS 

1 including those under section 17 of the Occupational 

2 Safety and Health Act of 1970 (29 U.S.C. 666). 

3 (d) REVIEW OF FEDERAL SENTENCING GUIDELINES

4 FOR ENVIRONMENTAL CRIMES RELATED TO ASBES5 TOS.—Under section 994 of title 28, United States Code, 

6 and in accordance with this section, the United States 

7 Sentencing Commission shall review and amend, as appro8 priate, the United States Sentencing Guidelines and re9 lated policy statements to ensure that— 

10 (1) appropriate changes are made within the 

11 guidelines to reflect any statutory amendments that 

12 have occurred since the time that the current guide13 line was promulgated; 

14 (2) the base offense level, adjustments and spe15 cific offense characteristics contained in section 

16 2Q1.2 of the United States Sentencing Guidelines 

17 (relating to mishandling of hazardous or toxic sub18 stances or pesticides; recordkeeping, tampering, and 

19 falsification; and unlawfully transporting hazardous 

20 materials in commerce) are increased as appropriate 

21 to ensure that future asbestos related-offenses re22 flect the seriousness of the offense, the harm to the 

23 community, the need for ongoing reform, and the 

24 highly regulated nature of asbestos; 
231 

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1 (3) the base offense level, adjustments and spe2 cific offense characteristics are sufficient to deter 

3 and punish future activity and are adequate in cases 

4 in which the relevant offense conduct— 

5 (A) involves asbestos as a hazardous or 

6 toxic substance; and 

7 (B) occurs after the date of enactment of 

8 this Act; 

9 (4) the adjustments and specific offense charac10 teristics contained in section 2B1.1 of the United 

11 States Sentencing Guidelines related to fraud, deceit 

12 and false statements, adequately take into account 

13 that asbestos was involved in the offense, and the 

14 possibility of death or serious bodily harm as a re15 sult; 

16 (5) the guidelines that apply to organizations in 

17 chapter 8 of the United States Sentencing Guide18 lines, are sufficient to deter and punish organiza19 tional criminal misconduct that involves the use, 

20 handling, purchase, sale, disposal, or storage of as21 bestos; and 

22 (6) the guidelines that apply to organizations in 

23 chapter 8 of the United States Sentencing Guide24 lines, are sufficient to deter and punish organiza25 tional criminal misconduct that involves fraud, de-
232 

•S 2290 PCS 

1 ceit, or false statements against the Office of Asbes2 tos Disease Compensation. 

3 SEC. 409. NONDISCRIMINATION OF HEALTH INSURANCE. 

4 (a) DENIAL, TERMINATION, OR ALTERATION OF

5 HEALTH COVERAGE.—No health insurer offering a health 

6 plan may deny or terminate coverage, or in any way alter 

7 the terms of coverage, of any claimant or the beneficiary 

8 of a claimant, on account of the participation of the claim9 ant or beneficiary in a medical monitoring program under 

10 this Act, or as a result of any information discovered as 

11 a result of such medical monitoring. 

12 (b) DEFINITIONS.—In this section: 

13 (1) HEALTH INSURER.—The term ‘‘health in14 surer’’ means— 

15 (A) an insurance company, health care 

16 service contractor, fraternal benefit organiza17 tion, insurance agent, third party adminis18 trator, insurance support organization, or other 

19 person subject to regulation under the laws re20 lated to health insurance of any State; 

21 (B) a managed care organization; or 

22 (C) an employee welfare benefit plan regu23 lated under the Employee Retirement Income 

24 Security Act of 1974 (29 U.S.C. 1001 et seq.). 
233 

•S 2290 PCS 

1 (2) HEALTH PLAN.—The term ‘‘health plan’’ 

2 means— 

3 (A) a group health plan (as such term is 

4 defined in section 607 of the Employee Retire5 ment Income Security Act of 1974 (29 U.S.C. 

6 1167)), and a multiple employer welfare ar7 rangement (as defined in section 3(4) of such 

8 Act) that provides health insurance coverage; or 

9 (B) any contractual arrangement for the 

10 provision of a payment for health care, includ11 ing any health insurance arrangement or any 

12 arrangement consisting of a hospital or medical 

13 expense incurred policy or certificate, hospital 

14 or medical service plan contract, or health 

15 maintenance organizing subscriber contract. 

16 (c) CONFORMING AMENDMENTS.— 

17 (1) ERISA.—Section 702(a)(1) of the Em18 ployee Retirement Income Security Act of 1974 (29 

19 U.S.C. 1182(a)(1)), is amended by adding at the 

20 end the following: 

21 ‘‘(I) Participation in a medical monitoring 

22 program under the Fairness in Asbestos Injury 

23 Resolution Act of 2004.’’. 

24 (2) PUBLIC SERVICE HEALTH ACT.—Section 

25 2702(a)(1) of the Public Health Service Act (42 
234 

•S 2290 PCS 

1 U.S.C. 300gg–1(a)(1)) is amended by adding at the 

2 end the following: 

3 ‘‘(I) Participation in a medical monitoring 

4 program under the Fairness in Asbestos Injury 

5 Resolution Act of 2004.’’. 

6 (3) INTERNAL REVENUE CODE OF 1986.—Sec7 tion 9802(a)(1) of the Internal Revenue Code of 

8 1986 is amended by adding at the end the following: 

9 ‘‘(I) Participation in a medical monitoring 

10 program under the Fairness in Asbestos Injury 

11 Resolution Act of 2004.’’. 

12 TITLE V—ASBESTOS BAN 

13 SEC. 501. PROHIBITION ON ASBESTOS CONTAINING PROD14 UCTS. 

15 (a) IN GENERAL.—Title II of the Toxic Substances 

16 Control Act (15 U.S.C. 2641 et seq.) is amended— 

17 (1) by inserting before section 201 (15 U.S.C. 

18 2641) the following: 

19 ‘‘Subtitle A—General Provisions’’; 

20 and 

21 (2) by adding at the end the following: 

22 ‘‘Subtitle B—Ban of Asbestos 

23 Containing Products 

24 ‘‘SEC. 221. BAN OF ASBESTOS CONTAINING PRODUCTS. 

25 ‘‘(a) DEFINITIONS.—In this chapter: 
235 

•S 2290 PCS 

1 ‘‘(1) ADMINISTRATOR.—The term ‘Adminis2 trator’ means the Administrator of the Environ3 mental Protection Agency. 

4 ‘‘(2) ASBESTOS.—The term ‘asbestos’ in5 cludes— 

6 ‘‘(A) chrysotile; 

7 ‘‘(B) amosite; 

8 ‘‘(C) crocidolite; 

9 ‘‘(D) tremolite asbestos; 

10 ‘‘(E) winchite asbestos; 

11 ‘‘(F) richterite asbestos; 

12 ‘‘(G) anthophyllite asbestos; 

13 ‘‘(H) actinolite asbestos; 

14 ‘‘(I) any of the minerals listed under sub15 paragraphs (A) through (H) that has been 

16 chemically treated or altered, and any 

17 asbestiform variety, type or component thereof. 

18 ‘‘(3) ASBESTOS CONTAINING PRODUCT.—The 

19 term ‘asbestos containing product’ means any prod20 uct (including any part) to which asbestos is delib21 erately or knowingly added or used because the spe22 cific properties of asbestos are necessary for product 

23 use or function. Under no circumstances shall the 

24 term ‘asbestos containing product’ be construed to 

25 include products that contain de minimus levels of 
236 

•S 2290 PCS 

1 naturally occurring asbestos as defined by the Ad2 ministrator not later than 1 year after the date of 

3 enactment of this chapter. 

4 ‘‘(4) DISTRIBUTE IN COMMERCE.—The term 

5 ‘distribute in commerce’— 

6 ‘‘(A) has the meaning given the term in 

7 section 3 of the Toxic Substances Control Act 

8 (15 U.S.C. 2602); and 

9 ‘‘(B) shall not include— 

10 ‘‘(i) an action taken with respect to 

11 an asbestos containing product in connec12 tion with the end use of the asbestos con13 taining product by a person that is an end 

14 user, or an action taken by a person who 

15 purchases or receives a product, directly or 

16 indirectly from an end user; or 

17 ‘‘(ii) distribution of an asbestos con18 taining product by a person solely for the 

19 purpose of disposal of the asbestos con20 taining product in compliance with applica21 ble Federal, State, and local requirements. 

22 ‘‘(b) IN GENERAL.—Subject to subsection (c), the 

23 Administrator shall promulgate— 

24 ‘‘(1) not later than 1 year after the date of en25 actment of this chapter, proposed regulations that— 
237 

•S 2290 PCS 

1 ‘‘(A) prohibit persons, from manufac2 turing, processing, or distributing in commerce 

3 asbestos containing products; and 

4 ‘‘(B) provide for implementation of sub5 sections (c) and (d); and 

6 ‘‘(2) not later than 2 years after the date of en7 actment of this chapter, final regulations that, effec8 tive 60 days after the date of promulgation, prohibit 

9 persons from manufacturing, processing, or distrib10 uting in commerce asbestos containing products. 

11 ‘‘(c) EXEMPTIONS.— 

12 ‘‘(1) IN GENERAL.—Any person may petition 

13 the Administrator for, and the Administrator may 

14 grant an exemption from the requirements of sub15 section (b), if the Administrator determines that— 

16 ‘‘(A) the exemption would not result in an 

17 unreasonable risk of injury to public health or 

18 the environment; and 

19 ‘‘(B) the person has made good faith ef20 forts to develop, but has been unable to develop, 

21 a substance, or identify a mineral that does not 

22 present an unreasonable risk of injury to public 

23 health or the environment and may be sub24 stituted for an asbestos containing product. 
238 

•S 2290 PCS 

1 ‘‘(2) TERMS AND CONDITIONS.—An exemption 

2 granted under this subsection shall be in effect for 

3 such period (not to exceed 5 years) and subject to 

4 such terms and conditions as the Administrator may 

5 prescribe. 

6 ‘‘(3) GOVERNMENTAL USE.— 

7 ‘‘(A) IN GENERAL.—The Administrator of 

8 the Environmental Protection Agency shall pro9 vide an exemption from the requirements of 

10 subsection (b), without review or limit on dura11 tion, if such exemption for an asbestos con12 taining product is— 

13 ‘‘(i) sought by the Secretary of De14 fense and the Secretary certifies, and pro15 vides a copy of that certification to Con16 gress, that— 

17 ‘‘(I) use of the asbestos con18 taining product is necessary to the 

19 critical functions of the Department; 

20 ‘‘(II) no reasonable alternatives 

21 to the asbestos containing product 

22 exist for the intended purpose; and 

23 ‘‘(III) use of the asbestos con24 taining product will not result in an 
239 

•S 2290 PCS 

1 unreasonable risk to health or the en2 vironment; or 

3 ‘‘(ii) sought by the Administrator of 

4 the National Aeronautics and Space Ad5 ministration and the Administrator of the 

6 National Aeronautics and Space Adminis7 tration certifies, and provides a copy of 

8 that certification to Congress, that— 

9 ‘‘(I) the asbestos containing 

10 product is necessary to the critical 

11 functions of the National Aeronautics 

12 and Space Administration; 

13 ‘‘(II) no reasonable alternatives 

14 to the asbestos containing product 

15 exist for the intended purpose; and 

16 ‘‘(III) the use of the asbestos 

17 containing product will not result in 

18 an unreasonable risk to health or the 

19 environment. 

20 ‘‘(B) ADMINISTRATIVE PROCEDURE ACT.— 

21 Any certification required under subparagraph 

22 (A) shall not be subject to chapter 5 of title 5, 

23 United States Code (commonly referred to as 

24 the ‘Administrative Procedure Act’). 
240 

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1 ‘‘(4) SPECIFIC EXEMPTIONS.—The following 

2 are exempted: 

3 ‘‘(A) Asbestos diaphragms for use in the 

4 manufacture of chlor-alkali and the products 

5 and derivative therefrom. 

6 ‘‘(B) Roofing cements, coatings and 

7 mastics utilizing asbestos that is totally encap8 sulated with asphalt, subject to a determination 

9 by the Administrator of the Environmental Pro10 tection Agency under paragraph (5). 

11 ‘‘(5) ENVIRONMENTAL PROTECTION AGENCY

12 REVIEW.— 

13 ‘‘(A) REVIEW IN 18 MONTHS.—Not later 

14 than 18 months after the date of enactment of 

15 this chapter, the Administrator of the Environ16 mental Protection Agency shall complete a re17 view of the exemption for roofing cements, coat18 ings, and mastics utilizing asbestos that are to19 tally encapsulated with asphalt to determine 

20 whether— 

21 ‘‘(i) the exemption would result in an 

22 unreasonable risk of injury to public health 

23 or the environment; and 

24 ‘‘(ii) there are reasonable, commercial 

25 alternatives to the roofing cements, coat-
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1 ings, and mastics utilizing asbestos that is 

2 totally encapsulated with asphalt. 

3 ‘‘(B) REVOCATION OF EXEMPTION.—Upon 

4 completion of the review, the Administrator of 

5 the Environmental Protection Agency shall have 

6 the authority to revoke the exemption for the 

7 products exempted under paragraph (4)(B) if 

8 warranted. 

9 ‘‘(d) DISPOSAL.— 

10 ‘‘(1) IN GENERAL.—Except as provided in para11 graph (2), not later than 3 years after the date of 

12 enactment of this chapter, each person that pos13 sesses an asbestos containing product that is subject 

14 to the prohibition established under this section shall 

15 dispose of the asbestos containing product, by a 

16 means that is in compliance with applicable Federal, 

17 State, and local requirements. 

18 ‘‘(2) EXEMPTION.—Nothing in paragraph (1)— 

19 ‘‘(A) applies to an asbestos containing 

20 product that— 

21 ‘‘(i) is no longer in the stream of com22 merce; or 

23 ‘‘(ii) is in the possession of an end 

24 user or a person who purchases or receives 
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•S 2290 PCS 

1 an asbestos containing product directly or 

2 indirectly from an end user; or 

3 ‘‘(B) requires that an asbestos containing 

4 product described in subparagraph (A) be re5 moved or replaced.’’. 

6 (b) TECHNICAL AND CONFORMING AMENDMENTS.— 

7 The table of contents in section 1 of the Toxic Substances 

8 Control Act (15 U.S.C. prec. 2601) is amended— 

9 (1) by inserting before the item relating to sec10 tion 201 the following: 

‘‘Subtitle A—General Provisions’’; 

11 and 

12 (2) by adding at the end of the items relating 

13 to title II the following: 

‘‘Subtitle B—Ban of Asbestos Containing Products 

‘‘Sec. 221. Ban of asbestos containing products.’’. 

Calendar No. 472 

108TH CONGRESS 

2D SESSION S. 2290 

A BILL 

To create a fair and efficient system to resolve 

bestos exposure, and for other purposes. claims of victims for bodily injury caused by asAPRIL 8, 2004 

Read the second time and placed on the calendar